APICS OPERATIONS MANAGEMENT BODY OF KNOWLEDGE FRAMEWORK
THIRD EDITIONAPICSOPERATIONS MANAGEMENT BODYOF KNOWLEDGE FRAMEWORK
APICSOperations ManagementBody of KnowledgeFrameworkThird Edition
APICSOperations ManagementBody of Knowledge FrameworkPublication HistoryFirst Edition: 2008Second Edition: 2009Third Edition: 2011Stock No. 01107-2011Copyright 2011 by APICS The Association for Operations ManagementInternational Standard Book Number: 1-55822-200-6All rights reserved. No part of this publication covered by the copyright herein may be reproduced or copied in anyform or by any means—graphic, electronic, or mechanical, including photocopying, taping, or information storage andretrieval systems—without written permission of the publisher.APICS The Association for Operations Management8430 West Bryn Mawr Avenue, Suite 1000Chicago, IL 60631 USA 1-800-444-2742 or 1-773-867-1777apics.org
Table of ContentsPreface and AcknowledgmentsChapter 1Introduction . 11.11.2 1.4Purpose of the APICS OMBOK Framework .1Organization of the APICS OMBOK Framework .12YHUYLHZ RI 3,&6 FHUWL¿FDWLRQ . 2Relevance of operations management . 4Chapter 2Strategy . 72.12.22.32.42.52.62.7Operations strategy . 7Supply chain strategy . 10Sustainability . 13Operations management links to other functional areas .17Product and service design.20Strategic capacity .23Project management strategic uses .23Chapter 3Supply Chain .24 3.23.33.43.53.63.73.83.93.103.115HVSRQVLYHQHVV DJLOLW\ DQG HI¿FLHQF\ .24Supply chain visibility, synchronization,and bullwhip minimization .24Risk management .24Locating facilities .26Distribution . 26Warehousing. 27Logistics .28International regulations .30Strategic sourcing .30Customer relationship management (CRM) . 33Lean management .34Chapter 4Processes . 374.14.24.34.4Process mapping . 37Manufacturing process environments . 37Service processes .40Quality . 42Chapter 5Planning and Control . 475.15.25.35.45.5Enterprise resources planning (ERP) .48Inventory .48Master planning .50Demand management and forecasting .50Sales and operations planning (S&OP) . 53APICS OMBOK Framework, Third Editioni
5.65.75.85.95.105.11Material requirements planning (MRP) . 56Distribution requirements planning (DRP) . 57Inventory management .58Inventory models .58Vendor-managed inventory (VMI) . 61Collaborative planning, forecasting,and replenishment (CPFR) . 61Chapter 6Scheduling .626.16.26.36.46.56.66.76.86.96.106.11Routing . 62Standard time . 62Scheduling techniques .62Master production schedule (MPS)DQG ¿QDO DVVHPEO\ VFKHGXOH ) 6 .62Dispatching . 63Queuing and simulation .63Theory of constraints (TOC) .63Service scheduling (days on/days off) .64Advanced planning and scheduling (APS) .64Production activity control (PAC) .64Manufacturing execution systems management .64Chapter 7Project Management .667.17.27.3Project organization and leadership .66Planning processes .66Project metrics .68Chapter 8Advanced Manufacturing and Service Technology . 698.18.28.3Information technology .69Automated manufacturing .71Advanced service systems .71Chapter 9Emerging Operations Technologies . 739.19.29.39.4Web collaboration/e-business . 73Warehouse management systems (WMS) . 73Virtual team collaboration . 74Rapid prototyping . 74AppendicesAppendix I: Relevancy by Industry (Non-Manufacturing) . 77Appendix II : Relevancy by Job Title .80Index .83ii 2011 APICS The Association for Operations Management
PrefaceIn 2007 and 2008, the members of the APICS Body of Knowledge Professional DevelopmentCommittee, the Operations Management Body of Knowledge Subcommittee, and generousYROXQWHHUV ODLG WKH JURXQGZRUN IRU WKH ¿UVW HGLWLRQ RI WKH APICS Operations ManagementBody of Knowledge (OMBOK) Framework. Their shared goal was to create a high-levelGRFXPHQW RXWOLQLQJ WKH VFRSH RI WKH ¿HOG RI RSHUDWLRQV DQG VXSSO\ FKDLQ PDQDJHPHQW²D reference guide for the profession.The APICS OMBOK Framework can be read from cover to cover or in individual sections.Each topic stands alone; but in sum, they represent operations management as a professionDO GLVFLSOLQH DQG D ¿HOG RI VWXG\ 7KH GRFXPHQW LV QRW LQWHQGHG DV D VWXG\ DLG RU UHSODFHPHQW IRU FHUWL¿FDWLRQ H[DP SUHSDUDWLRQ PDWHULDOV ,W LV DV LWV WLWOH VXJJHVWV D IUDPHZRUN IRU WKH body of knowledge that APICS The Association for Operations Management is committed toLPSDUW WR LWV PHPEHUV FXVWRPHUV DQG SDUWQHUV IRU WKH EHWWHUPHQW RI WKH ¿HOG RI RSHUDWLRQV and supply chain management.:KHQ WKH ¿UVW HGLWLRQ RI WKH APICS OMBOK Framework ZDV UHOHDVHG LW ZDV WKH ¿UVW ZRUN of its kind. The second edition, released in 2009, included a set of appendices compiled fromthe results of a pair of surveys of operations and supply chain management professionals, aswell as professionals in the non-manufacturing industries of distribution, health care, retail,utilities, and hospitality. The mapping of these job functions to relevant APICS OMBOKFramework topics expanded the reach of the document and provided real-world applicability.A comprehensive index also was added, codifying the concepts and terms of the documentand making it more accessible.7KH ¿HOG RI RSHUDWLRQV DQG VXSSO\ FKDLQ PDQDJHPHQW LV FKDQJLQJ FRQVWDQWO\ DQG 3,&6 LV committed to evolving the profession and keeping its members and customers current. Tothat end, the third edition of the APICS OMBOK Framework contains expanded sectionson sustainability and risk management. This edition also includes other features for easierreading, including an updated index and alignment with the APICS Dictionary, 13th Edition.As operations and supply chain management continues to evolve, the APICS OMBOKFramework will continue to be revised and updated to match the new knowledge andWUHQGV GHYHORSHG E\ SUDFWLWLRQHUV RQ WKH OHDGLQJ HGJHV RI WKH ¿HOG APICS OMBOK Framework, Third Editioniii
PrefaceIt is my heartfelt pleasure to introduce the third edition of the APICS Operations Management Body of Knowledge (OMBOK) Framework. ,Q WKH \HDUV VLQFH LWV ¿UVW SXEOLFDWLRQ WKH APICS OMBOK Framework KDV FUHDWHG D VWDQGDUG IRU WKH VFRSH RI NQRZOHGJH RI WKH ¿HOG RI operations and supply chain management. But there still is a journey ahead of us.We must continue our work to raise the level of awareness of the operations and supplychain management topics that comprise the APICS OMBOK Framework. I hope that manyof you share in my vision that someday, we will raise the level of general understanding ofRXU ¿HOG DQG LW ZLOO EH UHFRJQL]HG DV D SURIHVVLRQ RQ D SDU ZLWK DFFRXQWDQW RU DUFKLWHFW 7R DFFRPSOLVK WKLV WKHUH PXVW EH D VWURQJ XQGHUVWDQGLQJ RI WKH VFRSH RI WKH ¿HOG DQG ZKDW needs to be known to be considered an expert. The APICS OMBOK Framework goes a longZD\ WRZDUG GH¿QLQJ WKLV VFRSH In the third edition, we expanded on the two major topics of sustainability and risk management. Sustainability relates to the impact our decisions have on people and the planet. TheLGHD WKDW SUR¿W DORQH VKRXOG GRPLQDWH D ¿UP¶V GHFLVLRQV KDV JLYHQ ZD\ WR WKH H[SDQGHG YLHZ that the fragile resources of our world need to be preserved and fair labor practices need tobe used. All operations and supply chain professionals should recognize these norms.Risk management addresses the mitigation of the threats inherent in supply chains. Manyof the most popular cost-saving ideas also are the most risky. In methodologies such as leanmanagement, where inventory in supply chains is minimized, the risk associated with disruptions potentially increases. Similarly, there may be increased risk associated with globalversus single sourcing and using distribution hubs. When making these types of decisions,business leaders must evaluate from a risk perspective. They must assess potential impactsand enact risk mitigation strategies.We look forward to learning your thoughts about the third edition of the APICS OMBOKFramework. Please feel free to take a moment and complete the feedback form at the end ofthis document. What should be expanded on or added in the future? We are not looking forEX]]ZRUGV RU LGHDV WKDW DUH RQO\ DSSOLFDEOH WR D VSHFL¿F LQGXVWU\ UDWKHU ZH VHHN IXQGDPHQtal concepts that can be used to create real value within our supply chains. Your ideas willhelp shape the structure of the APICS OMBOK Framework in the years to come.F. Robert Jacobs, Ph.D.Professor of Operations and Supply Chain ManagementIndiana Universityiv 2011 APICS The Association for Operations Management
Acknowledgments2008 APICS Body of Knowledge Professional DevelopmentCommitteeDaniel Castle, CFPIM, CIRM, CSCP,Chair; Alan Dunn, CPIM; Karen Eboch, CSCP; Jim Greathouse, CPIM; F. Robert Jacobs,Ph.D.; Erik Larson, Ph.D.; Ted Lloyd, CPIM; Sibyl Melin, CPIM, CIRM, CSCP; Peter W.Stonebraker, Ph.D., CFPIM; Chad Stricklin; Jack Swaim2011 APICS Body of Knowledge Professional DevelopmentCommitteeAnn Gatewood, CFPIM, CIRM, CSCP; Janice Gullo, CFPIM, CSCP; Sybil Melin, CPIM,CIRM, CSCP; Mel Nelson, CFPIM, CIRM, CSCP; Glen Sieja, CSCP; Nicholas Testa, CFPIM,CIRM, CSCP; Donald Sheldon, Chair, CFPIM, CIRM, CSCP; Abhiram Jayaram; Joseph Witkowski, CPIM, CSCP; Bill Lee, CFPIM; Chad StricklinOMBOK SubcommitteeDaniel Castle, CFPIM, CIRM, CSCPVice President of Business Excellence and Corporate Quality HeadTata CommunicationsMumbai, IndiaKaren Eboch, CSCPAPICS BGSU Chapter Faculty AdvisorDepartment of ManagementBowling Green State UniversityBowling Green, OhioF. Robert Jacobs, Ph.D.Chase Faculty FellowProfessor of Operations ManagementKelley School of BusinessIndiana UniversityBloomington, IndianaChad StricklinMerchandise Supply Chain ManagerThe Disneyland ResortAnaheim, CaliforniaSection AuthorsPreston Blevins, CFPIM, CIRM, CSCPBob Collins, CFPIM, CIRM, CSCPBrian Dreckshage, CFPIMHoward Forman, CIRM, CSCPAPICS OMBOK Framework, Third Editionv
Richard Graff, CFPIMAnne Haberkorn, CFPIM, CIRM, CSCPF. Robert Jacobs, Ph.D.Rick Leach, CPIM, CSCPWilliam R. Leedale, CFPIM, CIRM, CSCPDaniel S. Marrone, Ph.D., CFPIM, CIRMSusan A. Neff, CPIM, CIRM, CSCPJohn S. Newlyn, CFPIM, CIRM, CSCPFran Scher, Ph.D.Joseph Schriever, CIRM, CSCPDonald Sheldon, CFPIM, CIRM, CSCPStephen ShifferJoseph Walden, CFPIMTimothy Wilson, CFPIM, CIRM, CSCPEditorsDaniel Castle, CFPIM, CIRM, CSCP;F. Robert Jacobs, Ph.D.ReviewersKaren Eboch, CSCP; William R. Leedale, CFPIM, CIRM, CSCP; Fran Scher, Ph.D.; Peter W.Stonebraker, Ph.D., CFPIM; Roly White, CFPIM, CIRM, CSCPvi 2011 APICS The Association for Operations Management
CHAPTER 1Introduction1.1Purpose of the APICS OMBOK FrameworkThe APICS Operations Management Body of Knowledge (OMBOK) Frameworkprovides an outline of the areas of knowledge required to manage the processes forproducing and delivering common products and services. The descriptions give anRYHUYLHZ RI HDFK DUHD DQG ZKHQ WDNHQ WRJHWKHU GH¿QH D JHQHUDOO\ DFFHSWHG YLHZ RI WKH VFRSH RI RSHUDWLRQV PDQDJHPHQW DV D ¿HOG RI VWXG\ V RSHUDWLRQV PDQDJHPHQW LV D G\QDPLF ¿HOG WKH IUDPHZRUN ZLOO HYROYH RYHU WLPH WR UHÀHFW FKDQJLQJ SHUFHSWLRQV and incorporate new approaches as their usage becomes prevalent.1.1.1Scope of operations managementOperations management focuses on the systematic direction of the processes involvedin the sourcing, production, and delivery of products and services. It calls for a holisticor systems view of the processes with major impact on the costs required to operate a¿UP ,W DVVXPHV WKDW PDQ\ WHFKQLFDO DVSHFWV RI RSHUDWLRQ SDUWLFXODUO\ GHWDLOV UHODWHG to engineering, are handled by specialists. Operations management concepts applyto the complete chain of activities in the production and delivery of products andservices, including those that cross commercial and geographical boundaries. TheseFRQFHSWV DOVR DUH DSSOLFDEOH WR QRQ RSHUDWLRQV ¿HOGV VXFK DV PDUNHWLQJ ¿QDQFH DQG information technology, although this is not the primary focus of this document.1.1.2Taxonomy of major concepts and toolsThe APICS OMBOK Framework includes only the basic concepts and tools that arein common use. Concepts and tools that are starting to enter common usage maybe listed as emerging operations technologies. (See Chapter 9.) Additionally, someFRQFHSWV WRROV DQG WHFKQLTXHV XVHG LQ VSHFL¿F DUHDV RU LQGXVWULHV PD\ RQO\ EH noted tangentially.1.1.3A systems view of the components of operations managementManufacturing products and delivering services involve a complex series of transformational processes. Operations management coordinates these individual processes.Management decisions generally consist of long-range strategic, intermediate-termtactical, and short-term operational and control decisions. The long-range strategicdecisions typically are the focus of high-level operations executives while the intermediate- and short-term operations decisions relate to mid- and entry-level line and staffIXQFWLRQV ZLWKLQ D ¿UP 1.2Organization of the APICS OMBOK FrameworkThe APICS OMBOK Framework is a high-level publication representing the areas ofconcern for the typical operations management professional. It is a convenient wayWR YLHZ WKH VFRSH RI ¿HOG EXW LW LV QRW LQWHQGHG WR EH DQ UHSODFHPHQW IRU RSHUDWLRQV PDQDJHPHQW FRXUVHV RU FHUWL¿FDWLRQ H[DPV (GXFDWLRQDO SHGDJRJ\ GLFWDWHV WKDW WKHVH WRSLFV EH FRYHUHG LQ GLIIHUHQW ZD\V GHSHQGLQJ RQ VSHFL¿F REMHFWLYHV
1.2.1Level of coverageThe APICS OMBOK Framework LV D KLJK OHYHO GRFXPHQW WKDW FRGL¿HV WKH VSHFL¿F elements of operations management. It is not intended as a list of recommendedbest practices or an instructional training guide. Its structure enables greater depthof coverage in areas of particular relevance to operations management. It buildsupon the foundational information in the APICS Dictionary and other preexistingbodies of knowledge. In some cases, the APICS OMBOK Framework referencesthese sources directly.1.2.2Update schedule and processThe APICS OMBOK Framework is maintained and improved through the APICSBody of Knowledge Committee. This committee administers the process of regularlypolling subject matter experts across industries, functions, and geographies to identifyemerging areas for inclusion in the APICS OMBOK Framework and to identify areasof reduced relevance to be considered for reduced emphasis or removal. Where approp
iv 2011 APICS The Association for Operations Management Preface It is my heartfelt pleasure to introduce the third edition of the APICS Operations Manage- ment Body of Knowledge (OMBOK) Framework. ,Q WKH \HDUV VLQFH LWV ¿UVW SXEOLFDWLRQ WKH APICS OMBOK Framework KDV FUHDWHG D VWDQGDUG IRU WKH VFRSH RI NQRZOHGJH RI WKH ¿HOG RI operations and supply chain management.
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adapted from the APICS Operations Management Body of Knowledge (OMBOK) Framework. ACKNOWLEDGMENTS The APICS Supply Chain Manager Competency Model was a research project undertaken by the APICS 2009 Future Leaders. They were supported by the 2009 Body of Knowledge Committee, the 2009 Voice of the Customer Committee, and staff in the Professional
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