Operations Management : Processes And Supply Chains
TENTH EDITIONOperationsManagementPROCESSES AND SUPPLY CHAINSLEE J. KRAJEWSKIProfessor Emeritus atThe Ohio StateUniversityand the University of Notre DameLARRY P. RITZMANProfessor Emeritus atThe Ohio StateUniversityand Boston CollegeMANOJ K. MALHOTRAUniversity of South icoTownCityIndianapolisDubaiSao PauloNew YorkLondonSydneyMadridSan FranciscoMilanHong KongMunichSeoulUpper Saddle RiverParisSingaporeMontrealTaipeiTorontoTokyo
ContentsPreface xiiiVideo Case OperationsCompetitive Weaponas aat Starwood 291Case Chad's Creative Concepts 29Selected References 30Creating Value throughOperations Managementpart 1SUPPLEMENT A Decision MakingUSING OPERATIONSTO COMPETEScholastic andHarry PotterEvaluating1Organization1Chain33Decision Theory 36Decision2ManagementProducts 32orPreference Matrix 35acrossHistorical Evolution of Operations andSupplyServicesEvaluating ProcessesOperations and Supply Chain Managementthe3DecisionMaking under Certainty 36Making under Uncertainty 37DecisionMakingunder Risk 38Decision Trees 39A Process View 4How Processes Work 4Learning Goals in ReviewNested Processes 5MyOMLabService andTheManufacturingSupply ChainSolved Problems 42Core Processes 7Problems 45Selected References 48PROJECT MANAGEMENT11Order Winners and Qualifiers 11Using Competitive Priorities: An Airline ExampleOperations Strategy as a Pattern of Decisions 15Trends in Operations Management 16Productivity Improvement 16Global Competition 17Managerial Practice 1.1 Japanese Earthquake andits Supply Chain Impact 19Ethical, Workforce Diversity, andEnvironmental Issues 19Operations Management as a Set of DecisionsComputerized Decision-Making Tools 21Addressing the Challenges in OperationsManagement 21Part 1: Creating Value through OperationsManagement 21Part 2: Managing Processes 21Part 3: Managing Supply Chains 22Adding Value with Process Innovation inSupply Chains 22Managerial Practice 1.2 Operational InnovationIs a Competitive Weapon at Progressive InsuranceGoals in Review 23MyOMLab Resources23Key Equation 23Key41Resources 41Key Equations 42Key Terms 42Processes 5View 6Support Processes 7Operations Strategy 7Corporate Strategy 8Market Analysis 10Competitive Priorities and CapabilitiesLearning31Break-Even Analysis 31Terms 24Solved Problems 24Discussion Questions 25Problems 2620221349XBOX360 49Project Management across the Organization 51Defining and Organizing Projects 51Defining the Scope and Objectives of a ProjectSelecting the Project Manager and Team 52Recognizing Organizational Structure 52Planning Projects 53Defining the51Work Breakdown Structure 53Diagramming the Network 54Developing the Schedule 57AnalyzingCost-Time Trade-Offs 60Assessing Risks 64Managerial Practice 2.1 Boston's Big Dig ProjectPoses Many Challenges 65Analysis 66Monitoring and Controlling Projects 69Monitoring Project Status 69Monitoring Project Resources 70Controlling Projects 70Learning Goals in Review 71MyOMLabResources 71Key EquationsKey Terms 7272Solved Problems 72Discussion Questions 77Problems 77Advanced Problems 82Active Model Exercise 85Advanced Problems 27Video CaseActive Model Exercise 28Case The PertProject Management at the PhoenicianMustang 8786Selected References 88vii
CONTENTSVIIIManaging Processespart 289Documenting the Process 123Flowcharts 123Swim Lane Flowcharts 125PROCESS STRATEGYeBayService Blueprints 12689Work Measurement TechniquesEvaluating Performance 131Data Analysis Tools 13289Process StrategySupplyacrossthe Organization 90Chains Have Processes 90Processes Are Not Just inProcessStrategy DecisionsRedesigningOperations9191Process Structure in Services 92Nature of Service Processes: Customer Contact 92Customer-Contact Matrix 93Service ProcessStructuringProcess Structure inthe Process 135Generating Ideas: Questioning and Brainstorming 135Benchmarking 137Managerial Practice 4.1 Baptist Memorial Hospital 137Managing and Implementing Processes 138Learning Goals in Review 14094ManufacturingMyOMLab Resources94Key TermsProduct-Process Matrix 94140141Solved Problems 141Manufacturing Process Structuring 95DiscussionProduction andProblems 145Layout127Inventory Strategies9697Questions145Advanced Problems 151Gather Information 97Active Model Exercise 152Develop a Block Plan 98Applying the Weighted-Distance MethodDesign a Detailed Layout 100Video Case Process Analysis at Starwood 15298Case Jose's Authentic Mexican Restaurant 154Selected References 155Customer Involvement Flexibility 1021015101Equipment 102Capital Intensity 102Automating Manufacturing ProcessesAutomating Service Processes 103Economies of Scope 104Strategic Fit 104at R.R.Quality and PerformanceCosts of Quality 159103External Failure Costs 159105Total108Improvement 109Learning Goals in ReviewMyOMLab Resources 109Key Equations 110Key Terms 110ProcessEmployee Involvement 161Six109Variation ofControl Charts for Variables 170Control Charts for Attributes 174ProcessCapability 177Defining Process Capability 178Using Continuous Improvement to Determinethe Capability of a Process 179Quality Engineering 179International Quality Documentation Standards 181Selected References 116PROCESS ANALYSIS119119ProcessAnalysis across the OrganizationA Systematic Approach 121Step 1: Identify Opportunities 121Step 2: Define the Scope 122Step 3: Document the Process 122Step 4: Evaluate Performance 1226:166Statistical Process Control Methods 170Active Model Exercise 114Case Custom Molds, Inc. 1155:OutputsControl Charts 169Problems 112StepStepModel 164165Statistical Process Control 166Discussion Questions 111CorporationSigma ImprovementAcceptance SamplingSolved Problems 110McDonald's160Quality ManagementCustomer Satisfaction 160Managerial Practice 5.1 Quality and Performanceat Steinway & Sons 162Continuous Improvement 163Six Sigma 164108ReengineeringCosts 159Ethics and Quality 159Decision Patterns for Manufacturing Processes 106Processthe Organization 158Internal Failure Costs 159Decision Patterns for Service Processes 105Gaining Focus 107Strategies for ChangeacrossPrevention Costs 159AppraisalPractice 3.1 Flexible AutomationDonnelley157Verizon Wireless 157Workforce 102ManagerialQUALITY AND PERFORMANCERedesign the Process 123Implement Changes 123The ISO 9001:2008 Documentation Standards 181121ISO 14000:2004 EnvironmentalSystem.Management181ISO 26000:2010 SocialResponsibilityGuidelines 181Benefits of ISO Certification 182Baldrige Performance Excellence ProgramLearning Goals in Review 183MyOMLabResources 183182
ixCONTENTSKey Equations 184Key Terms 185Little's Law 234Finite-Source Model 235Solved Problems 185DiscussionQuestionsWaiting188Problems 189Active Model Exercise 197Video Case Process Performance andQualityHotels & Resorts 197Solved Problem 240aCoinProblems 240198Advanced ProblemsSelected References 199242Selected References 242CAPACITY PLANNINGSharp CorporationCONSTRAINT MANAGEMENT201201British Petroleum OilPlanning Capacity across the Organization 203Planning Long-Term Capacity 203Measures of Capacity and Utilization 203Spill inManaging ConstraintsTheManagerialin thein Service Processes 247inPractice 7.1 Theat a U.S. MarineManagingCorpsManufacturingDrum-Buffer-Rope SystemMaintenance Center 253Constraints inaLine Process 254Line Balancing 254Managerial Considerations 258Learning Goals in Review 2591:Estimate Capacity Requirements 208MyOMLab ResourcesIdentify Gaps 210Develop AlternativesKey Equations 260Key Terms 2602104: Evaluate the Alternatives 210259Solved Problems 260Tools forCapacity Planning 212Waiting-Line Models 212DiscussionQuestions262Problems 262Simulation 213Advanced Problems 265Decision Trees 213Experiential Learning Min-Yo Garment Company 269Video Case Constraint Management at Southwest AirlinesGoals in Review 213MyOMLab Resources2148Solved Problems 215QuestionsLEAN SYSTEMSPanasonicProblems 217CorporationLean Systems275across theOrganization 276Improvement Using a Lean SystemsVideo Case Gate Turnaround at Southwest Airlines 222ContinuousCase FitnessApproach 277Supply Chain Considerations inClose Supplier Ties 278Part A 223Selected References 224SUPPLEMENT B Waiting Lines225Why Waiting Lines Form 225Uses of Waiting-Line Theory 226Structure of Waiting-Line Problems 226Population 226System 227The ServicePriority Rule229Distributions 229Arrival Distribution 229Service Time Distribution 230Using Waiting-LineModels to Analyze Operations 230Single-Server Model 231Multiple-Server275217Advanced Problems 220Probability272Selected References 273Key Equations 214Key Terms 215Customer245Processes 2482:Plus,Organizationof the TOC 246Managing BottlenecksManaging BottlenecksDecisions 208DiscussionGulf of Mexico 243across theIdentification and Management of Bottlenecks 247Capacity Timing and Sizing Strategies 205Sizing Capacity Cushions 205Timing and Sizing Expansion 206Managerial Practice 6.1 Expansionist Capacity StrategyEthanol Industry 207Linking Capacity and Other Decisions 207A Systematic Approach to Long-Term CapacityLearning243of Constraints 245TheoryKey PrinciplesEconomies of Scale 204Diseconomies of Scale 2043:237Key Equations 239Key Terms 240at StarwoodExperiential Learning Statistical Process Control withStepStepStepStepManagementLearning Goals in Review 238MyOMLab Resources 238Advanced Problems 194CatapultLines and Simulation 236Decision Areas forModel 233LeanSystems 278Small Lot Sizes 279Process Considerations in LeanSystems279Pull Method of Work Flow 279Qualityat the Source 280Uniform Workstation Loads 281StandardizedComponents and WorkMethods 282Flexible Workforce 282Automation 282Five S Practices 282Total Preventive MaintenanceToyota Production System 284House ofToyota284(TPM)283
CONTENTSXDesigningLeanSystem LayoutsSUPPLEMENT C Special Inventory285One Worker, Multiple Machines 285Group Technology 286Value Stream Mapping 287ModelsThe Kanban System 290One-Period Decisions 350GeneralOperating Rules 291Determining the Number of ContainersOther KanbanSignalsLearning Goals in ReviewMyOMLab Resources 353Key Equations 353291293Operational Benefits and Implementation Issues 293Organizational Considerations 293Managerial Practice 8.1 Lean Systems at the University ofPittsburgh Medical Center Shadyside 294Key Term10296Services 362ManufacturingFinancial Measures 365Inventory Placement307SUPPLY CHAIN INVENTORY307Walmart 307Strategic Implications 372Efficient Supply Chains 372Responsive Supply Chains 373The Design of Efficient andResponsive Supply Chains308Pressures for Small Inventories 309Pressures for Large Inventories 310Types of Inventory 311Inventory Reduction Tactics 313ABC Analysis 314QuantityCompetitive Advantages 367Supply Chain Design for Mass Customization 368Outsourcing Processes 369Vertical Integration 370Outsourcing 370Managerial Practice 10.1 Building a Supply Chain for theDreamliner 372Inventory Management across the OrganizationInventory and Supply Chains 309CalculatingLearningGoals in Review 375MyOMLabResources 376Key Equations 376Key Terms 376315Solved Problem 377the EOQ 315Managerial Insights from the EOQInventory Control Systems 319Continuous Review367Mass Customization 367Managing Supply ChainsEconomic Order362Measures of Supply Chain Performance 363Inventory Measures 364Selected References 305MANAGEMENT359Supply Chain Design across the Organization 361Supply Chains for Services and Manufacturing 362Problems 299Advanced Problems 301Video Case Lean Systems at Autoliv 303Case Copper Kettle Catering 304atSUPPLY CHAIN DESIGNNikon 359Discussion Questions 299Inventory Management353Problems 356Selected References 357Solved Problems 297part 3352Solved Problems 354Process Considerations 295Inventory and Scheduling 295Learning Goals in ReviewMyOMLab Resources 296Key Equation 296Key Terms 296345Noninstantaneous Replishment 345Quantity Discounts 348Discussion319Questions377Problems 378Advanced Problems 378System 320Experiential Learning Sonic DistributorsPeriodic ReviewSystem 325Managerial Practice 9.1 The Supply Chain Implications ofPeriodic Review Inventory Systems at Celanese 326Comparative Advantages of the Qand P SystemsHybrid Systems 329Learning Goals in Review 329MyOMLab Resources 330Key Equations 331Key Terms 332Case Brunswick380Distribution, Inc. 381Selected References 38332811SUPPLY CHAIN LOCATIONDECISIONSBavarian Motor Works385(BMW)385Solved Problems 332Location DecisionsDiscussionFactors Affecting Location Decisions 387Dominant Factors in Manufacturing 388Questions 336Problems 336Active Model Exercise 341Selected References 344Organization387Dominant Factors in Services 389Advanced Problems 340Experiential Learning SwiftCase Parts Emporium 343across theElectronicGeographical Information SystemsSupply,Inc. 341and LocationDecisions 390Managerial Practice11.1 How Fast-Food Chains Use GISto Select Their Sites 391LocatingaSingle Facility391Comparing Several Sites 392374
CONTENTSApplying the Load-Distance Method 393Using Break-Even Analysis 395Locating a Facility Within a Supply Chain NetworkManagerial Practice 11.2 General Electric's Expansion13SUPPLY CHAIN SUSTAINABIL1TYAND HUMANITARIAN396LOGISTICSin India 397The GIS Method forLocating MultipleTransportation Method 397Learning Goals in Review 400Facilities 397TheKey EquationsKey Terms 401SupplyQuestionsLogisticsLogisticsSUPPLY CHAIN INTEGRATIONinEastman Kodak 411Integration acrossDynamics 413theOrganization14417ChainSustainabilityat Clif Bar &,FORECASTINGForecasting463465466Forecast Error 467Computer Support 470Judgment425Methods 470Causal Methods: Linear425Regression470Time-Series Methods 472Production 425Naive Forecast 473425Managerial Practice 12.1 Order Fulfillment aboard the CoralPrincess 428The CustomerRelationshipMarketing 428Process 428ChoosingImproved Supply Chain PerformanceThe Levers 430Performance Measures 431Learning Goals in Review431431432432Solved Problems 432434Problems 434Advanced Problems 436Selected References 440476aQuantitative Forecasting Method 481Criteria for Selecting Time-Series Methods 481Customer Service 429Video Case Sourcing StrategyCase Wolf Motors 439Estimating the Average 473Trend Projection with RegressionSeasonal Patterns 479Order Placement 429QuestionsOrganizationKey Decisions on Making Forecasts 466Deciding What to Forecast 466Choosing the Type of Forecasting TechniquePlanningMyOMLab Resourcesacross theDemand Patterns 465The Order Fulfillment Process 425DiscussionSupply461Motorola Mobility 463Sourcing 418Design Collaboration 421Negotiation 421Buying 422Information Exchange 424Key TermsDiscussion Questions 459416417Key EquationsSolved Problems 458Selected References 462Supplier Relationship Process 417Levers forKey EquationsKey Terms 458CompanyFull Launch 417Logistics457Problems 460Implications for Supply Chain Design 414Integrated Supply Chains 415New Service or Product Development ProcessDesign 416Supply PlanningResources458Video CaseInternal Causes 414Customer DemandChains 457Goals in Review 457MyOMLab412External Causes 414DevelopmentChains 453Managing Sustainable SupplyLearningAnalysisSupplyChain Ethics 455SupplySelected References 410Chainat Hewlett-Packard and452Disaster ReliefActive Model Exercise 410ChainRecyclingEnergy Efficiency 447Supply Chains, Social Responsibility, and Humanitarian404Problems 405SupplySupply444Walmart 446Advanced Problems 40812Organization 443Practice 13.1ManagerialSolved Problems 401Discussionacross theChains and Environmental Responsibility 443Reverse401441FedEx 441SustainabilityResources 400MyOMLabxiat Starwood 438430Tracking Signals 481Using Multiple TechniquesManagerial482Practice 14.1 Combination Forecasts and theForecasting Process 483Putting It All Together: Forecasting as a Process 483A Typical Forecasting Process 484Adding Collaboration to the System 485Forecasting as a Nested Process 485Learning Goals in Review 486MyOMLabResources 486Key Equations 487Key Terms 488Solved Problems 488Discussion Questions 492Problems 493Advanced Problems 496
xiiCONTENTSVideo CaseResourceForecasting and Supply Chain ManagementCorporation 500Case Yankee Fork and Hoe Company 502Experiential Learning 14.1 Forecasting with HoldoutSample 503Experiential Learning 14.2 Forecasting a Vital Energyat Deckers OutdoorPlanningfor Service Providers 565Demand for Services 565DependentBill of Resources 566LearningGoals in Review 567MyOMLabResources 567Key Terms 568Statistic 504Solved Problems 568Selected References 505Discussion Questions 572Problems 572Advanced Problems 57715 OPERATIONS PLANNINGSCHEDULINGANDActive Model Exercise 582Case507Flashy Flashers,Inc. 582Selected References 585Air New Zealand 507Operations PlanningandSchedulingacrossSUPPLEMENT D Linear ProgrammingtheOrganization 508Stages in Operations Planning and Scheduling 509Aggregation 509The Relationship of Operations Plans and SchedulesOther Plans 509Managing Demand 511toOperationsas a Process 516Gantt Charts 521Scheduling Employees522SupportLearningGoals in Review 528Key TermsFind the Algebraic Solution 594Slack and Surplus Variables 595600Resources 604Solved Problems 605Discussion Questions 607Problems 607529529Case R.U. Reddie for Location 614Solved Problems 530Selected References 616Discussion Questions 533Problems 533Active Model Exercise 538Video Case Sales andCase Memorial592Line 593Key Terms 604528MyOMLab ResourcesObjective FunctionMyOMLabat a Workstation 525SoftwareanSensitivity Analysis 596Computer Solution 596Simplex Method 596Computer Output 597The Transportation Method 599Transportation Method for Production PlanningApplications 603Learning Goals in Review 604521Sequencing JobsPlot the Constraints 590Find the Visual Solution 594& Hotel 512Plans 513Inputs 514Supply Options 514Planning Strategies 515Constraints and Costs 516Sales and Operations PlanningUsing Spreadsheets 518587587Formulating a Problem 588Graphic Analysis 590PlotInformationSchedulingConceptsIdentify the Feasible RegionDemand Options 511Managerial Practice 15.1 Harrah's Cherokee CasinoSales andBasicOperations PlanningHospital 540atStarwood 539Appendix1Normal Distribution 617Appendix2Table of Random Numbers 618Selected References 541Glossary16 RESOURCE PLANNINGDowCorningResourceSubject IndextheOrganizationPlanning 544Systems Are Designed 545acrossRequirements PlanningDependent DemandMyOMLabSUPPLEMENT FAnalysisF-1Plans G-1Factors 556MRP 559Managerial Practice 16.1 Material Requirements PlanningWinnebago Industries 563FinancialE-iSUPPLEMENT G Acceptance SamplingMaster Production Scheduling 549Inventory Record 553Outputs fromSUPPLEMENTSSUPPLEMENT E Simulation546547Bill of Materials 547Planning637544ResourceHow ERPMaterialName Index 633543543PlanningEnterprise619atMRP, Core Processes, and Supply Chain Linkages 563MRP and the Environment 564SUPPLEMENT H Measuring Output RatesH-1SUPPLEMENT ILearning Curve Analysis1-1SUPPLEMENT JOperations SchedulingJ-1
DefiningtheScopeand ObjectivesofaProject 51 Selectingthe Project ManagerandTeam 52 Recognizing Organizational Structure 52 . SixSigma 164 SixSigmaImprovementModel 164 AcceptanceSampling 165 Statistical ProcessControl 166 . Catapult 198 Selec
Supply chain management 1.1.2.1. Supply chain processes: the integrated supply chain point of view To describe supply chains from a process point of view, we refer to the supply chain operations reference (SCOR) model. SCOR is a cross-industry standard for supply chain management and has been developed and endorsed by the supply-chain council .
companies. In this case, supply chain management mainly focuses on cooperation between the supply chain actors. 1.1.2. Supply chain management 1.1.2.1. Supply chain processes: the integrated supply chain point of view To describe supply chains from a process point of view, we refer to the supply chain operations reference (SCOR) model.
Operations Management, 12e (Heizer/Render/Munson) Chapter 2 Operations Strategy in a Global Environment Section 1 A Global View of Operations and Supply Chains 1) Boeing's development of the 787 Dreamliner is an example of a company obtaining a competitive . Operations Management Sustainability and Supply Chain Management 12th Edition Heizer .
4) Processes, by their nature, are found only in the operations function of an organization. Answer: FALSE Difficulty: Easy Keywords: operations function, process Learning Outcome: Discuss operations and operations management as a competitive advantage for the organization AACSB: Application of Knowledge
Good supply chain management instead attempts to grow the supply chain surplus, which requires each firm to expand the scope beyond internal processes and look at the entire supply chain in terms of the three macro processes to achieve breakthrough performance. A good supply chain coordinates all the macro processes across all stages.
The supply chain is structured around five distinct management processes—plan, source, make, deliver, and return Supply chains from one company overlap with those of their suppliers and customers Supply-Chain Operations Reference-model (SCOR ) Founded on five distinct management processes: Plan, Source, Make, Deliver, and Return
The Supply Chain Operations Reference Digital Standard (SCOR DS) is a model that provides methodology, diagnostic and benchmarking tools that help organizations make dramatic and rapid improvements in supply chain processes. The world of supply chain management never stops advancing, and neither do supply chain professionals and their .
The B.Sc. Logistics and Supply Chain Management is a business degree with a major specialisation in Logistics and Supply Chain Management. During the programme students develop an ability to apply supply chain management and business processes and functions to actual Logistics and Supply Chain Management scenarios. They immerse
