Contents xxix

Contents

Preface vii
Acknowledgments xi
Note to Instructors xv

Section One strategy, products, and capacity

1 Introduction 2
Introduction 3
Careers in Operations and Supply Chain Management 12
Historical Development of Operations and Supply Chain Management 13
Efficiency, Effectiveness, andValue 18
Concept Connections 23
Discussion Questions 24
Objective Questions 25
Analytics Exercise 26
Practice Exam 27
Selected Bibliography 27
Footnotes 27

2 Strategy 28
A Sustainable Operations andSupply Chain Strategy 29
What is Operations and Supply Chain Strategy? 31
Strategies are Implemented Using Operations and Supply Chain Activities s Strategy 36
Assessing the Risk Associated with Operations and Supply ChainStrategies 39

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Productivity Measurement 40
Concept Connections 43
Solved Problem 45
Discussion Questions 45
Objective Questions 46
Case: Narayana Health An Innovative Healthcare System in India 49
Case: The Tao of Timbuk2 51
Practice Exam 52
Selected Bibliography 52
Footnotes 52

3. Design of Products andServices 53

Product Design 54
Product Design Criteria 61
Designing Service Products 67
Economic Analysis of Product Development Projects 69
Measuring Product Development Performance 73
Concept Connections 74
Solved Problem 75
Discussion Questions 78
Objective Questions 79
Case: Tata Swach: An Innovation for Need is an Innovation Indeed 82
Case: IKEA: Design and Pricing 83
Case: Dental Spa 87
Practice Exam 87
Selected Bibliography 88
Footnotes 88

4. Project Management 89
What is Project Management? 90
Network-Planning Models 98
Managing Projects 107
Project Management Information Systems 118
Concept Connections 119
Solved Problems 120
Discussion Questions 125
Objective Questions 126
Case: Cost Management in Phase-I of Delhi Metro Project 133
Analytics Exercise 134
Practice Exam 136
Selected Bibliography 136
Footnotes 136

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5. Strategic Capacity Management 137

Capacity Management in Operations and Supply Chain Management 138
Capacity Analysis 142
Using Decision Trees to Evaluate Capacity Alternatives 146
Planning Service Capacity 149
Concept Connections 151
Solved Problem 153
Discussion Questions 154
Objective Questions 155
Case: Strategic Capacity Management at Indian Railways 157
Case: Shouldice HospitalA Cut Above 159
Practice Exam 161
Selected Bibliography 162

6. Learning Curves 163

What are Learning Curves? 164
How are Learning CurvesModeled? 166
In Practice, How much Learning Occurs? 173
Concept Connections 176
Solved Problems 177
Discussion Questions 178
Objective Questions 179
Practice Exam 181
Selected Bibliography 182
Footnotes 182

Section Two manufacturing and service processes

7. Manufacturing Processes 184
What are manufacturing Processes? 185
How Manufacturing Processes areOrganized 188
Manufacturing Process Flow Design 192
Concept Connections 198
Solved Problems 199
Discussion Questions 201
Objective Questions 201
Case: Circuit Board Fabricators, Inc. 204
Practice Exam 206
Selected Bibliography 207
Footnote 207

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8. Facility Layout 208

Analyzing the Four most Common Layout Formats 210
Retail Service Layout 226
Concept Connections 230
Solved Problems 231
Discussion Questions 235
Objective Questions 235
Analytics Exercise 243
Practice Exam 246
Selected Bibliography 247
Footnotes 247

9. Service Processes 248

The Nature of Services 249
Designing Service Organizations 251
Service Blueprinting and Fail-Safing 259
Three Contrasting Service Designs 260
Concept Connections 265
Discussion Questions 266
Objective Questions 267
Case: Pizza USA: An Exercise in Translating Customer Requirements into Process Design
Requirements 268
Practice Exam 269
Selected Bibliography 270
Footnotes 270

10. Waiting Line Analysis and Simulation 271

Waiting Line Analysis and Queuing Theory 272
Waiting Line Models 281
Simulating Waiting Lines 294
Concept Connections 303
Solved Problems 305
Discussion Questions 308
Objective Questions 309
Case: Community Hospital Evening Operating Room 314
Analytics Exercise 314
Practice Exam 317
Selected Bibliography 318
Footnotes 318

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11. Process Design and Analysis 319

Process Analysis 320
Understanding Processes 325
Job Design Decisions 335
Process Analysis Examples 336
Concept Connections 346
Solved Problems 348
Discussion Questions 349
Objective Questions 350
Case: Service Design for Mobile Banking 355
Case: Analyzing Casino Money-Handling Processes 358
Practice Exam 360
Selected Bibliography 360
Footnotes 360

12. Six Sigma Quality 361

Total Quality Management 362
Six Sigma Quality 369
ISO 9000 and ISO 14000 377
Concept Connections 379
Discussion Questions 380
Objective Questions 381
Case: Quality Journey of Sundaram Clayton 383
Case: Quality ManagementToyota 385
Practice Exam 387
Selected Bibliography 387
Footnotes 387

13. Statistical Quality Control 388

Statistical Quality Control 389
Statistical Process Control Procedures 397
Acceptance Sampling 403
Concept Connections 409
Solved Problems 411
Discussion Questions 414
Objective Questions 415
Case: Hot Shot Plastics Company 419
Case: Quality ManagementToyota 421
Practice Exam 422
Selected Bibliography 422
Footnotes 422

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Section Three supply chain processes

14. Lean Supply Chains 424
Lean Production 426
Lean Supply Chain Processes 430
Value Stream Mapping 438
Lean Services 441
Concept Connections 444
Solved Problems 445
Discussion Questions 446
Objective Questions 450
Case: Quality Parts Company 451
Case: Value Stream Mapping 453
Case: Pro Fishing BoatsA Value Stream Mapping Exercise 455
Practice Exam 456
Selected Bibliography 456
Footnotes 456

15. Logistics, Distribution, and Transportation 457

Logistics 458
Decisions Related to Logistics 459
Locating Logistics Facilities 461
Concept Connections 473
Solved Problems 475
Discussion Questions 480
Objective Questions 480
Analytics Exercise 484
Practice Exam 486
Selected Bibliography 486
Footnotes 486

16. Global Sourcing and Procurement 487

Strategic Sourcing 488
Outsourcing 497
Total Cost of Ownership 505
Measuring Sourcing Performance 507
Concept Connections 510
Discussion Questions 511
Objective Questions 512
Analytics Exercise 515
Practice Exam 516
Selected Bibliography 517
Footnotes 517

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Section Four supply and demand planning and control

17. Enterprise Resource Planning Systems 520
What is ERP? 522
How ERP Connects theFunctional Units 524
How Supply Chain Planning andControl Fits within ERP 528
Performance Metrics to Evaluate Integrated System Effectiveness 533
Concept Connections 539
Solved Problem 540
Discussion Questions 542
Objective Questions 542
Practice Exam 543
Selected Bibliography 543

18. Forecasting 544

Forecasting in Operations andSupply Chain Management 545
Quantitative Forecasting Models 547
Qualitative Techniques inForecasting 574
Web-Based Forecasting: Collaborative Planning, Forecasting, and Replenishment(CPFR) 576
Concept Connections 578
Solved Problems 580
Discussion Questions 584
Objective Questions 585
Analytics Exercise 594
Practice Exam 596
Selected Bibliography 596

19. Sales and Operations Planning 597

What is Sales and OperationsPlanning? 598
Aggregate Planning Techniques 604
Yield Management 611
Concept Connections 616
Solved Problem 617
Discussion Questions 620
Objective Questions 621
Analytics Exercise 624
Practice Exam 626
Selected Bibliography 626
Footnotes 627

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20. Inventory Management 628

Understanding Inventory Management 629
Inventory Control Systems 635
Inventory Planning andAccuracy 654
Concept Connections 658
Solved Problems 660
Discussion Questions 663
Objective Questions 664
Case: Inventory Management at the Onset of Economic Depression in India 673
Analytics Exercise 674
Practice Exam 677
Selected Bibliography 678
Footnotes 678

21. Material Requirements Planning 679

Understanding Material Requirements Planning 680
Material Requirements Planning SystemStructure 684
An Example Using MRP 689
Lot Sizing in MRP Systems 696
Concept Connections 700
Solved Problems 701
Discussion Questions 707
Objective Questions 708
Analytics Exercise 712
Practice Exam 714
Selected Bibliography 715

22. Workcenter Scheduling 716

Workcenter Scheduling 717
Priority Rules and Techniques 721
Shop-Floor Control 730
Personnel Scheduling inServices 733
Concept Connections 738
Solved Problems 740
Discussion Questions 745
Objective Questions 746
Case: Keep Patients Waiting? Not in My Office 752
Practice Exam 755
Selected Bibliography 755
Footnotes 755

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23. Theory of Constraints 756

ELI Goldratts Theory of Constraints 758
Bottlenecks, Capacity-Constrained Resources, and Synchronous Manufacturing 765
Comparing Synchronous Manufacturing(TOC) toTraditional Approaches 780
Theory of ConstraintsProblems aboutWhat to Produce 782
Concept Connections 791
Solved Problem 792
Discussion Questions 794
Objective Questions 795
Practice Exam 799
Selected Bibliography 800
Footnotes 800

Section Five special topics

24. Health Care 802
The Nature of Health Care Operations 804
Performance Measures 813
Trends in Health Care 814
Concept Connections 816
Discussion Questions 817
Objective Questions 818
Case: Venice Family Clinic: Managing Patient Wait Times 818
Practice Exam 820
Selected Bibliography 821
Footnotes 821

25. Operations Consulting 822

What is Operations Consulting? 824
The Operations Consulting Process 827
Business Process Reengineering (BPR) 838
Concept Connections 842
Discussion Questions 843
Objective Questions 843
Analytics Exercise 844
Practice Exam 844
Selected Bibliography 847
Footnotes 847

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Appendix A Linear Programming Using the Excel Solver 848

Appendix B Operations Technology 871

Appendix C Financial Analysis 879

Appendix D Answers to Selected Objective Questions 899

Appendix E Present Value Table 903

Appendix F Negative Exponential Distribution: Values of ex 905

Appendix G Areas of the Cumulative Standard Normal Distribution 907

Appendix H Uniformly Distributed RandomDigits 909

Appendix I Interest Tables 911

Photo Credit 916

Name Index 918

Subject Index 921

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