Operations Management: Processes and Supply Chains, 13th Edition PDF by Lee J. Krajewski and Manoj K. Malhotra

By

Operations Management: Processes and Supply Chains, Thirteenth Edition

By Lee J. Krajewski and Manoj K. Malhotra

Operations Management: Processes and Supply Chains, 13th Edition

Contents

Preface 11

1 USING OPERATIONS

TO CREATE VALUE 21

Apple Inc. 21

Role of Operations in an Organization 23

Historical Evolution and Perspectives 24

A Process View 24

How Processes Work 25

Nested Processes 25

Service and Manufacturing Processes 25

A Supply Chain View 27

Core Processes 27

Support Processes 27

Supply Chain Processes 28

Operations Strategy 28

Corporate Strategy 29

Market Analysis 31

Competitive Priorities and Capabilities 32

Managerial Practice 1.1 Zara 33

Order Winners and Qualifiers 34

Using Competitive Priorities: An Airline Example 35

Identifying Gaps Between Competitive Priorities and Capabilities 35

Trends and Challenges in Operations Management 37

Productivity Improvement 37

Global Competition 38

Ethical, Workforce Diversity, and Environmental Issues 40

Fourth Industrial Revolution (Industry 4.0) 41

The Internet of Things 42

Additive Manufacturing 44

Developing Skills for Your Career 46

Adding Value with Process Innovation 47

Learning Objectives in Review 48 Key Equations 49

Key Terms 49 Solved Problems 49 Discussion Questions 50

Problems 51

Case Chad’s Creative Concepts 53

Video Case Using Operations to Create Value at Crayola 54

SUPPLEMENT A Decision Making 55

Break-Even Analysis 55

Evaluating Services or Products 56

Evaluating Processes 58

Preference Matrix 59

Decision Theory 60

Decision Making Under Certainty 61

Decision Making Under Uncertainty 61

Decision Making Under Risk 63

Decision Trees 63

Learning Objectives in Review 65 Key Equations 66

Key Terms 66 Solved Problems 66 Problems 68

PART 1 Managing Processes 73

2 PROCESS STRATEGY AND ANALYSIS 73

CVS Pharmacy 73

Process Structure in Services 77

Customer-Contact Matrix 77

Service Process Structuring 78

Process Structure in Manufacturing 78

Product-Process Matrix 78

Manufacturing Process Structuring 79

Production and Inventory Strategies 80

Layout 81

Process Strategy Decisions 81

Customer Involvement 81

Resource Flexibility 82

Capital Intensity 83

Strategic Fit 84

Decision Patterns for Service Processes 85

Decision Patterns for Manufacturing

Processes 85

Gaining Focus 86

Managerial Practice 2.1 Plants-Within-a-Plant at Ford

Camacari 86

Strategies for Change 87

Process Reengineering 88

Process Improvement 88

Managerial Challenge Marketing 88

Process Analysis 89

Defining, Measuring, and Analyzing the Process 90

Flowcharts 91

Work Measurement Techniques 92

Process Charts 95

Data Analysis Tools 96

Redesigning and Managing Process

Improvements 101

Questioning and Brainstorming 101

Benchmarking 102

Implementing 102

Learning Objectives in Review 104 Key Terms 105

Solved Problems 105 Discussion Questions 108

Problems 109 Active Model Exercise 116

Case Custom Molds, Inc. 117

Case José’s Authentic Mexican Restaurant 119

Video Case Process Strategy and Analysis at Cleveland

Clinic 120

3 QUALITY AND PERFORMANCE 123

Lego 123

Costs of Quality 125

Prevention Costs 125

Appraisal Costs 126

Internal Failure Costs 126

External Failure Costs 126

Ethical Failure Costs 126

Total Quality Management and Six Sigma 127

Total Quality Management 127

Managerial Practice 3.1 Improving Quality Through

Employee Involvement

at Santa Cruz Guitar Company 129

Six Sigma 130

Acceptance Sampling 131

Managerial Challenge Accounting 132

Statistical Process Control 132

Variation of Outputs 133

Control Charts 135

Control Charts for Variables 136

Control Charts for Attributes 140

Process Capability 143

Defining Process Capability 143

Using Continuous Improvement to Determine the Capability of a Process 145

International Quality Documentation Standards and Awards 146

The ISO 9001:2015 Documentation Standards 146

Malcolm Baldrige Performance Excellence Program 146

Systems Approach to Total Quality Management 147

Learning Objectives in Review 147 Key Equations 148

Key Terms 149 Solved Problems 149 Discussion Questions 152

Problems 152 Active Model Exercise 160

Experiential Learning 3.1 Statistical Process Control with a

Coin Catapult 160

Video Case Quality at Axon 162

4 LEAN SYSTEMS 163

Nike, Inc. 163

Continuous Improvement Using a Lean Systems

Approach 166

Managerial Challenge Finance 166

Strategic Characteristics of Lean Systems 168

Supply Chain Considerations in Lean Systems 168

Process Considerations in Lean Systems 169

Managerial Practice 4.1 Alcoa 171

Toyota Production System 174

Designing Lean System Layouts 175

One Worker, Multiple Machines 176

Group Technology 176

The Kanban System 177

General Operating Rules 178

Determining the Number of Containers 178

Other Kanban Signals 180

Value Stream Mapping 180

Current State Map 180

Future State Map 184

Operational Benefits and Implementation Issues 186

Organizational Considerations 186

Process Considerations 186

Inventory and Scheduling 187

Learning Objectives in Review 187 Key Equations 188

Key Terms 188 Solved Problems 188 Discussion Questions 191

Problems 191

Case Copper Kettle Catering 194

Video Case Lean Systems at Autoliv 195

5 CAPACITY PLANNING 197

3M 197

Planning Long-Term Capacity 199

Measures of Capacity and Utilization 200

Economies of Scale 200

Diseconomies of Scale 201

Capacity Timing and Sizing Strategies 201

Sizing Capacity Cushions 201

Timing and Sizing Expansion 202

Linking Capacity and Other Decisions 203

Managerial Challenge Operations 204

A Systematic Approach to Long-Term Capacity

Decisions 204

Step 1: Estimate Capacity Requirements 204

Step 2: Identify Gaps 206

Step 3: Develop Alternatives 206

Step 4: Evaluate the Alternatives 207

Tools for Capacity Planning 208

Managerial Practice 5.1 Capacity Planning at

PacifiCorp 208

Waiting-Line Models 209

Simulation 209

Decision Trees 210

Learning Objectives in Review 210 Key Equations 211

Key Terms 211 Solved Problems 211 Discussion Questions 213

Problems 213

Case Fitness Plus, Part A 219

Video Case Gate Turnaround at Southwest Airlines 219

SUPPLEMENT B Waiting Lines 221

Structure of Waiting-Line Problems 222

Customer Population 222

The Service System 223

Priority Rule 224

Probability Distributions 225

Arrival Distribution 225

Service Time Distribution 225

Using Waiting-Line Models to Analyze Operations 226

Single-Server Model 227

Multiple-Server Model 229

Little’s Law 230

Finite-Source Model 231

Waiting Lines and Simulation 232

SimQuick 232

Decision Areas for Management 233

Learning Objectives in Review 234 Key Equations 234

Key Terms 235 Solved Problem 235 Problems 236

6 CONSTRAINT MANAGEMENT 239

Microsoft Corporation 239

Managerial Challenge Marketing 241

The Theory of Constraints 242

Key Principles of the TOC 243

Managing Bottlenecks in Service Processes 244

Managing Bottlenecks in Manufacturing Processes 245

Identifying Bottlenecks 246

Relieving Bottlenecks 247

Managerial Practice 6.1 Theory of Constraints (TOC) and

Drum-Buffer-Rope (DBR) at Steelo Limited 248

Applying the Theory of Constraints to Product Mix

Decisions 249

Managing Constraints in Line Processes 251

Line Balancing 251

Rebalancing the Assembly Line 255

Managerial Considerations 256

Learning Objectives in Review 256 Key Equations 257

Key Terms 257 Solved Problems 257 Discussion Questions 259

Problems 259

Experiential Learning 6.1 Min-Yo Garment Company 266

Video Case Managing Constraints for Caregivers and Patients

at Cleveland Clinic During COVID-19 270

7 PROJECT MANAGEMENT 273

Burj Khalifa 273

Defining and Organizing Projects 276

Defining the Scope and Objectives of a Project 276

Selecting the Project Manager and Team 277

Recognizing Organizational Structure 277

Managerial Challenge Marketing 278

Constructing Project Networks 278

Defining the Work Breakdown Structure 278

Diagramming the Network 280

Managerial Practice 7.1 Cleveland Clinic 282

Developing the Project Schedule 283

Critical Path 283

Project Schedule 283

Activity Slack 286

Analyzing Cost–Time Trade-Offs 286

Cost to Crash 287

Minimizing Costs 287

Assessing and Analyzing Risks 290

Risk-Management Plans 290

Statistical Analysis 291

Analyzing Probabilities 292

Near-Critical Paths 293

Risk Caused by Changing Requirements: Scrum 294

Monitoring and Controlling Projects 295

Monitoring Project Status 295

Monitoring Project Resources 295

Controlling Projects 296

Learning Objectives in Review 296 Key Equations 297

Key Terms 298 Solved Problems 298 Discussion Questions 302

Problems 302 Active Model Exercise 310

Case The Pert Mustang 310

Video Case Project Management at Choice Hotels

International 312

PART 2 Managing Customer Demand 313

8 FORECASTING 313

Starbucks 313

Managing Demand 315

Demand Patterns 315

Demand Management Options 316

Key Decisions on Making Forecasts 318

Deciding What to Forecast 318

Choosing the Type of Forecasting Technique 318

Managerial Challenge Information Technology 319

Forecast Error 319

Cumulative Sum of Forecast Errors 319

Dispersion of Forecast Errors 320

Mean Absolute Percent Error 321

Computer Support 322

Judgment Methods 322

Causal Methods: Linear Regression 323

Time-Series Methods 325

Naïve Forecast 325

Horizontal Patterns: Estimating the Average 325

Trend Patterns: Using Regression 328

Seasonal Patterns: Using Seasonal Factors 330

Criteria for Selecting Time-Series Methods 332

Big Data and the Forecasting Process 333

Big Data 334

Managerial Practice 8.1 Big Data and Health Care

Forecasting 335

A Typical Forecasting Process 336

Learning Objectives in Review 338 Key Equations 339

Key Terms 340 Solved Problems 340 Discussion Questions 344

Problems 345

Experiential Learning 8.1 Forecasting a Vital Energy

Statistic 353

Case Yankee Fork and Hoe Company 354

Video Case Forecasting and Supply Chain Management at

Deckers Outdoor Corporation 355

9 INVENTORY MANAGEMENT 357

Ford’s Smart Inventory Management System (SIMS) 357

Inventory Trade-Offs 359

Pressures for Small Inventories 360

Pressures for Large Inventories 360

Managerial Challenge Finance 361

Types of Inventory 362

Accounting Inventories 362

Operational Inventories 363

Inventory Reduction Tactics 365

Cycle Inventory 365

Safety Stock Inventory 365

Anticipation Inventory 365

Pipeline Inventory 365

ABC Analysis 366

Economic Order Quantity 367

Calculating the EOQ 368

Managerial Insights from the EOQ 370

Continuous Review System 371

Selecting the Reorder Point When Demand and Lead

Time Are Constant 371

Selecting the Reorder Point When Demand Is

Variable and Lead Time Is Constant 372

Selecting the Reorder Point When Both Demand and

Lead Time Are Variable 376

Systems Based on the Q System 377

Calculating Total Q System Costs 377

Advantages of the Q System 378

Periodic Review System 378

Selecting the Time Between Reviews 379

Selecting the Target Inventory Level When Demand

Is Variable and Lead Time Is Constant 380

Selecting the Target Inventory Level When Demand

and Lead Time Are Variable 381

Calculating Total P System Costs 381

Advantages of the P System 381

Systems Based on the P System 382

Managerial Practice 9.1 Inventory Management at

IKEA 382

Learning Objectives in Review 383 Key Equations 384

Key Terms 385 Solved Problems 386 Discussion Questions 390

Problems 391 Active Model Exercise 396

Experiential Learning 9.1 Swift Electronic Supply, Inc. 397

Case Parts Emporium 398

Video Case Inventory Management at Crayola 400

SUPPLEMENT C Special Inventory Models 401

Noninstantaneous Replenishment 401

Quantity Discounts 404

One-Period Decisions 406

Learning Objectives in Review 409 Key Equations 409

Key Term 409 Solved Problems 410 Problems 412

10 OPERATIONS PLANNING AND

SCHEDULING 415

Cooper Tire and Rubber Company 415

Levels in Operations Planning and Scheduling 418

Level 1: Sales and Operations Planning 418

Level 2: Resource Planning 420

Level 3: Scheduling 420

S&OP Supply Options 421

Managerial Challenge Human Resources 422

S&OP Strategies 422

Chase Strategy 422

Level Strategy 422

Constraints and Costs 423

Sales and Operations Planning as a Process 423

Spreadsheets for Sales and Operations Planning 425

Spreadsheets for a Manufacturer 425

Spreadsheets for a Service Provider 426

Workforce and Workstation Scheduling 429

Workforce Scheduling 429

Managerial Practice 10.1 Scheduling Major League

Baseball Umpires 430

Job and Facility Scheduling 433

Sequencing Jobs at a Workstation 434

Software Support 436

Learning Objectives in Review 437 Key Terms 437

Solved Problems 438 Discussion Questions 441

Problems 441 Active Model Exercise 448

Case Memorial Hospital 448

Video Case Sales and Operations Planning at Starwood 450

SUPPLEMENT D Linear Programming 451

Characteristics of Linear Programming Models 451

Formulating a Linear Programming Model 452

Graphic Analysis 454

Plot the Constraints 454

Identify the Feasible Region 456

Plot the Objective Function Line 457

Find the Visual Solution 458

Find the Algebraic Solution 459

Slack and Surplus Variables 460

Sensitivity Analysis 460

Computer Analysis 461

Simplex Method 461

Computer Output 461

The Transportation Method 464

Transportation Method for Sales and Operations

Planning 464

Learning Objectives in Review 468 Key Terms 468

Solved Problems 468 Discussion Questions 471

Problems 471

11 RESOURCE PLANNING 479

Philips 479

Material Requirements Planning 481

Dependent Demand 481

Managerial Challenge Operations 483

Master Production Scheduling 483

Developing a Master Production Schedule 484

Available-to-Promise Quantities 486

Freezing the MPS 487

Reconciling the MPS with Sales and Operations

Plans 487

MRP Explosion 487

Bill of Materials 487

Inventory Record 489

Planning Factors 491

Outputs from MRP 494

MRP and the Environment 497

MRP, Core Processes, and Supply Chain

Linkages 498

Enterprise Resource Planning 499

How ERP Systems Are Designed 499

Managerial Practice 11.1 ERP Implementation at Valle

del Lili Foundation 500

Resource Planning for Service Providers 501

Dependent Demand for Services 501

Bill of Resources 502

Learning Objectives in Review 505 Key Terms 506

Solved Problems 506 Discussion Questions 511

Problems 512 Active Model Exercise 523

Case Wolverine, Inc. 524

Video Case Resource Planning at Cleveland Clinic 527

PART 3 Managing Supply Chains 529

12 SUPPLY CHAIN DESIGN 529

Amazon.com 529

Creating an Effective Supply Chain 531

Managerial Challenge Operations 533

Measuring Supply Chain Performance 534

Inventory Measures 534

Financial Measures 536

Strategic Options for Supply Chain Design 537

Efficient Supply Chains 537

Responsive Supply Chains 538

Designs for Efficient and Responsive Supply

Chains 539

Autonomous Supply Chains 540

Mass Customization 541

Competitive Advantages 542

Supply Chain Design for Mass Customization 542

Outsourcing Processes 543

Managerial Practice 12.1 Outsourcing in the Food

Delivery Business 543

Outsourcing and Globalization 544

Vertical Integration 545

Make-or-Buy Decisions 546

Learning Objectives in Review 547 Key Equations 547

Key Terms 548 Solved Problem 548 Discussion Questions 549

Problems 549

Experiential Learning 12.1 Sonic Distributors 552

Case Brunswick Distribution, Inc. 553

Video Case Supply Chain Design at Crayola 555

13 SUPPLY CHAIN LOGISTICS

NETWORKS 557

Airbus SAS 557

Factors Affecting Location Decisions 560

Dominant Factors in Manufacturing 560

Dominant Factors in Services 562

Managerial Challenge Human Resources 563

Load–Distance Method 563

Distance Measures 564

Calculating a Load–Distance Score 564

Center of Gravity 565

Break-Even Analysis 567

Transportation Method 569

Setting Up the Initial Tableau 569

Dummy Plants or Warehouses 569

Finding a Solution 570

Geographical Information Systems 571

Using a GIS 571

Managerial Practice 13.1 Fast-Food Site Selection

Using GIS 572

The GIS Method for Locating Multiple

Facilities 573

Warehouse Strategy in Logistics Networks 573

Inventory Placement 573

Autonomous Warehouse Operations 574

A Systematic Location Selection Process 575

Learning Objectives in Review 576 Key Equations 577

Key Terms 577 Solved Problems 577 Discussion Questions 580

Problems 580 Active Model Exercise 586

Case R.U. Reddie for Location 586

Video Case Continental Tire: Pursuing a Winning Plant

Decision 588

14 SUPPLY CHAIN INTEGRATION 589

Oasis of the Seas 589

Supply Chain Disruptions 592

Causes of Supply Chain Disruptions 592

Supply Chain Dynamics 593

Integrated Supply Chains 594

Managerial Challenge Information Technology 595

Supply Chain Risk Management 596

Operational Risks 596

Managerial Practice 14.1 Coronavirus and the Supply

Chain: Where Is the Toilet Paper? 597

Financial Risks 597

Security Risks 598

Cloud Computing and Blockchains 600

Cloud Computing 600

Blockchains 601

New Service or Product Development Process 604

Design 604

Analysis 605

Development 605

Full Launch 605

Supplier Relationship Process 606

Sourcing 606

Design Collaboration 609

Negotiation 609

Buying 611

Vendor-Managed Inventories 611

Key Performance Measures for the Supplier

Relationship Process 612

Order Fulfillment Process 612

Customer Demand Planning 612

Supply Planning 612

Production 612

Logistics 613

Key Performance Measures for the Order

Fulfillment Process 615

Customer Relationship Process 615

Marketing 615

Order Placement 616

Customer Service 616

Key Performance Measures for the Customer

Relationship Process 617

Learning Objectives in Review 617 Key Equations 618

Key Terms 618 Solved Problems 618 Discussion Questions 620

Problems 620

Case Wolf Motors 625

Video Case Integrating the Supply Chain at Cleveland Clinic 626

15 SUPPLY CHAIN

SUSTAINABILITY 629

Coca-Cola 629

The Three Elements of Supply Chain

Sustainability 631

Reverse Logistics 633

Supply Chain Design for Reverse Logistics 633

Managerial Challenge Operations and Logistics 635

Energy Efficiency 635

Transportation Distance 635

Freight Density 638

Transportation Mode 640

Disaster Relief Supply Chains 641

Organizing for Disaster Relief 641

Managing Disaster Relief Operations 642

Managerial Practice 15.1 Using Drones in Disaster

Relief 643

Supply Chain Ethics 644

Buyer–Supplier Relationships 644

Facility Location 645

Inventory Management 646

Managing Sustainable Supply Chains 646

Learning Objectives in Review 647 Key Equation 647

Key Terms 647 Solved Problems 648 Discussion Questions 649

Problems 649

Video Case Supply Chain Sustainability at Clif Bar &

Company 651

Appendix NORMAL DISTRIBUTION 653

Selected References 654

Glossary 661

Name Index 671

Subject Index 675

Online Supplements

Supplement E SIMULATION E-1

Supplement F FINANCIAL ANALYSIS F-1

Supplement G ACCEPTANCE SAMPLING

PLANS G-1

Supplement H MEASURING OUTPUT RATES H-1

Supplement I LEARNING CURVE ANALYSIS I-1

Supplement J OPERATIONS SCHEDULING J-1

Supplement K LAYOUT K-1

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