Essentials of Operations Management

Front Cover
Half Title Page
Title Page
Copyright Page
Brief Contents
Contents
Guide to ‘Operations in practice’ examples
Preface
To the instructor
To the student
Ten steps to getting a better grade in operations management
About the authors
Acknowledgements
Publisher’s acknowledgements
Operations management and performance
Introduction
Key questions
What is operations management?
Operations can produce both services and products
Operations management in not-for-profit organizations
What is the input–transformation–output process?
Inputs to the process
Why is operations management important to an organization’s performance?
Performance at three levels
What is the processes hierarchy?
Operations management is relevant to all parts of the business
Business processes
How do operations and processes differ?
The volume dimension
The variety dimension
The variation dimension
The visibility dimension
The implications of the four Vs of operations processes
What do operations managers do?
The model of operations management
Summary answers to key questions
Problems and applications
Want to know more?
Operations strategy
Introduction
Key questions
What is strategy and what is operations strategy?
Operations strategy
Hayes and Wheelwright’s four stages of operations contribution
Perspectives on operations strategy
What is the difference between a ‘top-down’ and ‘bottom-up’ view of operations strategy?
‘Top-down’ strategies
‘Bottom-up’ strategies
What is the difference between a market requirements and operations resources view of operations strategy?
Market requirements-based strategies
The operations resources perspective
How can operations strategy form the basis for operations improvement?
The ‘line of fit’ between market requirements and operations capabilities
What is the ‘process’ of operations strategy?
Operation strategy formulation
Operations strategy implementation
Operations strategy monitoring
Operations strategy control
Summary answers to key questions
Problems and applications
Want to know more?
Product and service innovation
Introduction
Key questions
What is product and service innovation?
Innovation, creativity and design
Incremental or radical innovation
What is the strategic role of product and service innovation?
The process of design
Design process objectives
What are the stages of product and service innovation?
Concept generation
Concept screening
Preliminary design
Reducing design complexity
Design evaluation and improvement
Prototyping and final design
What are the benefits of interactive product and service innovation?
Simultaneous development
Early conflict resolution
Project-based organizational structures
Summary answers to key questions
Problems and applications
Want to know more?
Process design – resources
Introduction
Key questions
Why is choosing the right resources important?
Process design and product/service design are interrelated
Do processes match volume–variety requirements?
The ‘product–process’ matrix
Process types
Moving off the natural diagonal
Are process layouts appropriate?
Layout should reflect volume and variety
Layout selection
Advantages and disadvantages of layout types
Layout and ‘servicescapes’
Are process technologies appropriate?
Process technology should reflect volume and variety
Are job designs appropriate?
Job design should reflect volume and variety
To what degree should jobs be defined?
How should job commitment be encouraged?
Summary answers to key questions
Problems and applications
Want to know more?
Process design – analysis
Introduction
Key questions
Why is it important to get the details of process design correct?
What should be the objectives of process design?
‘Micro’ objectives
Standardization of processes
Environmentally sensitive process design
How are processes currently designed?
Process mapping
Are process tasks and capacity configured appropriately?
Throughput time, cycle time and work in progress
Workflow
Process bottlenecks
Arranging the stages
Is process variability recognized?
Summary answers to key questions
Problems and applications
Want to know more?
Supply chain management
Introduction
Key questions
What is supply chain management?
Internal and external supply chains
Tangible and intangible supply chains
How do supply chains compete?
Performance objectives for supply networks
Lean versus agile supply networks
How should you manage supply chain relationships?
Contracting and relationships
Which type of relationship?
How should the supply side be managed?
Sourcing strategy
Global sourcing
Supplier selection
Managing on-going supply
Improving supplier capabilities
How should the demand side be managed?
Logistics services
Customer relationship management (CRM)
Customer development
What are the dynamics of supply chains?
Controlling supply chain dynamics
Summary answers to key questions
Problems and applications
Want to know more?
Capacity management
Introduction
Key questions
What is capacity management?
Long-, medium- and short-term capacity management
What are the main long-term capacity decisions?
Economies of scale and the ‘optimum’ capacity level
The timing of capacity change
What are the main medium-term capacity decisions?
The objectives of capacity management
Understanding medium-term demand
Understanding medium-term capacity
Both demand and capacity can vary
Predictable and unpredictable variation
What are the ways of coping with mismatches between medium-term demand and capacity?
Level capacity plan
Chase demand plan
Demand management plan
Yield management
How can operations understand the consequences of their medium-term capacity decisions?
Considering capacity decisions using cumulative representations
Considering capacity decisions using queuing principles
Considering capacity decisions over time
Summary answers to key questions
Problems and applications
Want to know more?
Inventory management
Introduction
Key questions
What is inventory?
All processes, operations and supply networks have inventories
Why do you need inventory?
So why have inventory?
Reducing physical inventory
Day-to-day inventory decisions
How much should you order? (The volume decision)
The economic order quantity (EOQ) formula
Gradual replacement – the economic batch quantity (EBQ) model
Criticisms of EOQ models
When should you order? (The timing decision)
Continuous and periodic review
How can you control inventory?
Using the ABC system to prioritize inventories
Measuring inventory
Inventory information systems
Common problems with inventory systems
Summary answers to key questions
Problems and applications
Want to know more?
Resource planning and control
Introduction
Key questions
What is resource planning and control?
What is the difference between planning and control?
Long-, medium- and short-term resource planning and control
How do supply and demand affect planning and control?
Uncertainty in supply and demand
Dependent and independent demand
Responding to demand
P:D ratios
What are the activities of planning and control?
Loading
Sequencing
Scheduling
Monitoring and controlling the operation
Drum, buffer, rope
What is enterprise resource planning (ERP)?
How did ERP develop?
Summary answers to key questions
Problems and applications
Want to know more?
Lean operations
Introduction
Key questions
What is lean?
Three perspectives of lean
How lean operations consider flow
How lean operations consider inventory
How lean operations consider capacity utilization
How lean operations consider the role of people
How lean operations consider improvement
How does lean eliminate waste?
Causes of waste – muda, mura, muri
Types of waste
Looking for waste (and kaizen opportunities) – the ‘gemba walk’
Eliminating waste through streamlined flow
Eliminating waste through matching demand and supply exactly
Eliminating waste through flexible processes
Eliminating waste through minimizing variability
Keeping things simple – the 5S method
How does lean apply throughout the supply network?
Summary answers to key questions
Problems and applications
Want to know more?
Operations improvement
Introduction
Key questions
Why is improvement so important in operations management?
Radical, or breakthrough, change
Continuous, or incremental, improvement
Exploitation or exploration
The structure of improvement ideas
Why is failure management also improvement?
Assessing the potential causes and consequences of failure
How can failure be prevented?
How can operations mitigate the effects of failure?
How can operations recover from the effects of failure?
What are the key elements of operations improvement?
Improvement cycles
A process perspective
End-to-end processes
Evidence-based problem solving
Customer-centricity
Systems and procedures
Reduce process variation
Synchronized flow
Emphasize education/training
Perfection is the goal
Waste identification
Include everybody
Develop internal customer–supplier relationships
What are the broad approaches to improvement?
Total quality management as an improvement approach
Lean as an improvement approach
Business process re-engineering (BPR)
Six Sigma
Differences and similarities
What techniques can be used for improvement?
Scatter diagrams
Process maps (flow charts)
Cause–effect diagrams
Pareto diagrams
Why–why analysis
Benchmarking
Summary answers to key questions
Problems and applications
Want to know more?
Quality management
Introduction
Key questions
What is quality and why is it so important?
The operation’s view of quality
Customers’ view of quality
Reconciling the operation’s and the customer’s views of quality
How can quality problems be diagnosed?
What steps lead towards conformance to specification?
Step 1 – define the quality characteristics
Step 2 – decide how to measure each characteristic
Step 3 – set quality standards
Step 4 – control quality against those standards
Steps 5 and 6 – find and correct causes of poor quality and continue to make improvements
What is total quality management (TQM)?
TQM as an extension of previous practice
The principles of TQM
TQM means meeting the needs and expectations of customers
TQM means covering all parts of the organization
TQM means including every person in the organization
TQM means all costs of quality are considered
TQM means developing the systems and procedures that support quality and improvement
Summary answers to key questions
Problems and applications
Want to know more?
Project management
Introduction
Key questions
What is project management?
What do projects have in common?
What is project management exactly?
Not all projects are the same
The stages of project management
What is a project’s ‘environment’?
The role of stakeholders in projects
Project definition
How can projects be planned?
Identify activities – the work breakdown structure
Estimate times and resources
Identify relationships and dependencies
Identify schedule constraints
Fix the schedule
Network analysis
Program evaluation and review technique (PERT)
How can projects be controlled?
Project monitoring
Assessing project performance
Intervening to change the project
Managing matrix tensions
Summary answers to key questions
Problems and applications
Want to know more?
Notes
Index
Back Cover