Managing Operations: Across the Supply Chain, 4th Edition PDF by Morgan Swink, Steven A Melnyk and Janet L Hartley


Managing Operations: Across the Supply Chain, Fourth Edition

By Morgan Swink, Steven A. Melnyk and Janet L. Hartley

Managing Operations: Across the Supply Chain, 4th Edition



CHAPTER 1 Introduction to Managing Operations Across the Supply Chain 2

A Broad Definition of Supply Chain Operations Management 4

Get Real: Why You Need to Study Operations Management 5

Important Decisions in Supply Chain Operations Management 6

Differences in Goods and Services Operations 6

Processes and Process Thinking 8

Operations Management Yesterday and Today:

Growth of the Supply Chain Management Perspective 9

Advances in Technology and Infrastructure 11

Reduction in Governmental Barriers to Trade 11

Focus on Core Capabilities 11

Collaborative Networks 11

Viewing Operations Management from a Supply Chain Management Perspective 12

Operations Management Partners Across the Supply Chain 12

Cross-Functional Relationships in Operations Management 14

Get Real: Jobs in Operations Management 16

The Changing Nature of Supply Chains 18

Levels of Operational Planning Across the Supply Chain 18

How This Book Is Structured 19

Chapter Summary 20

Key Terms 21

Discussion Questions 21

Case: Business Textbook Supply Chain 22

Case: Cemex’s Digital Transformation 23

Selected Readings & Internet Sites 25

CHAPTER 2 Operations and Supply Chain Strategy 26

Levels of Strategic Planning 28

Corporate Strategic Planning 28

Business Unit Strategic Planning 29

Functional Strategic Planning 30

Developing Operations Strategy: Creating Value Through Strategic Choices 31

Key Customers 31

Get Real: Huffy Bikes Targets Its Key Customers 32

Assessing Customer Wants and Needs 32

Value Propositions and Competitive Priorities 33

Get Real: Bosch CS20: Finding a New Order Winner

by Changing the Way Customers Cut Straight Lines 33

Product-Related Competitive Priorities 34

Process-Related Competitive Priorities 35

Get Real: IKEA: Growth through Supply Chain Innovation 36

Capabilities: Strengths and Limitations of Supply Chain Operations 38

Get Real: Seven Cycles: Building a Bicycle Your Way 39

Get Real: Don’t Expect a Salad at Five Guys Burgers and Fries 40

Maintaining the Fit between Customer Outcomes, Value Propositions, and Capabilities 40

Deploying Operations Strategy: Creating Value Through Execution 40

Feedback/Measurement: Communicating and Assessing Operations Strategy 42

The Strategic Profit Model 42

Chapter Summary 46

Key Terms 46

Discussion Questions 47

Solved Problem 48

Problems 49

Case: Otis Toy Trains Explores the Supply Chain 51

Case: Steinway & Sons Piano 52

Case: Trail Frames Chassis 53

Case: Lil’ Me Dolls Deals with the Millions of Toys (MOT) Proposal 54

Selected Readings & Internet Sites 56

Additional Photo Credits 56


CHAPTER 3 Managing Processes and Capacity 58

Cleaning Up Dry Cleaners 59

Processes and Process Thinking 61

Anatomy of a Process 62

Activities of a Process 62

Inputs, Outputs, and Flows 62

Get Real: States Reduce Waiting Times for Car

License Renewals and Registrations 63

Structure 63

Management Policies 64

Capacity Planning 64

Get Real: Capacity Planning Contributes to iPad’s® Success 64

Economies and Diseconomies of Scale 65

Process Capacity and Utilization 66

Principles of Process Performance: The Theory of Constraints 69

Principle 1: Every Process Has a Constraint 69

Estimating Capacity Requirements 72

Principle 2: Every Process Contains Variance That Consumes Capacity 73

Get Real: Storyboarding: The Key to Success at Pixar 75

Principle 3: Every Process Must Be Managed as a System 76

Principle 4: Performance Measures Are Crucial to the Process’s Success 76

Principle 5: Every Process Must Continuously Improve 77

Chapter Summary 78

Key Terms 78

Discussion Questions 79

Solved Problems 79

Problems 84

Case: Evergreen Products 88

Case: Midas Gold Juice Company 89

Case: American Vinyl Products 90

Selected Readings 91

CHAPTER 3 Chapter Supplement: Process Mapping and Analysis 92

The “Process” of Process Mapping and Analysis 93

American Health and Medical Products (AHMP) 93

Step 1: Identify the Desired Outcomes in Advance 94

Step 2: Identify and Bound the Critical Process 95

Step 3: Document the Existing Process (the “Current State” Map) 96

Step 4: Analyze the Process and Identify Opportunities for Improvement 99

Step 5: Recommend Appropriate Changes to the Process (the “Future State” Map) 103

Step 6: Implement the Changes and Monitor Improvements 104

Other Process Mapping Tools 105

Supplement Summary 108

Key Terms 109

Problems 109

Case: Midwestern Lighting 111

Selected Readings 113

CHAPTER 4 Product/Process Innovation 114

The Role of Product/Process Innovation in Supply Chain Operations Management 116

The Product Life Cycle 117

How Product/Process Innovation Affects Firm Performance 118

Innovation Competencies 119

Idea and Opportunity Development 120

Get Real: LEGO: Crowdsourcing for Product Ideas and Customer Engagement 120

Innovation Portfolio Planning 121

Innovation Project Management 122

New Product/Process Launch and Learning 122

Codevelopment 122

Get Real: Codeveloping with a Competitor: Clorox

Aligns Its Business Model with P&G 123

Product/Process Design and Development 124

The Stage-Gate Process 124

Integrated Product/Process Design and Development: Concurrent Engineering 125

Design for the Customer 128

Design for Supply Chain Operations 132

Enabling Technologies for Product/Process Innovation 134

Get Real: Lockheed Martin Makes the Most of VR in

Product Development 135

Chapter Summary 136

Key Terms 136

Discussion Questions 137

Problems 137

Case: The ALPHA Timer Development Project (A) 139

Case: The ALPHA Timer Development Project (B) 140

Case: The ALPHA Timer Development Project (C) 140

Selected Readings & Internet Sites 141

CHAPTER 5 Manufacturing and Service Process Structures 142

Process Structures 144

Product-Process Matrix 144

Processes within a Supply Chain 147

Get Real: Adidas Reinvents Athletic Shoe Manufacturing 148

Aligning Process Structure and Market Orientation 148

Unique Aspects of Service Processes 149

Service Process Matrix 149

Managing Front-Office and Back-Office Processes 150

Operations Layout 151

Fixed-Position Layout 151

Functional Layout 152

Product Layout 153

Line Balancing in Product Layouts 153

Cellular Layout 156

Capability Enabling Technologies 157

Get Real: Shopping Goes Hi-Tech 158

Information Processing and Sharing 158

Process Automation 159

Challenges to Digital Transformation 160

Chapter Summary 160

Key Terms 161

Discussion Questions 161

Solved Problems 162

Problems 163

Case: Coffee Roasters 167

Case: Sonnie’s Gourmet Sandwich Café 168

Selected Readings & Internet Sites 168

CHAPTER 6 Managing Quality 170

Defining the Dimensions of Quality 172

Get Real: Ritz-Carlton: Where Quality Is First and Foremost 173

Functional Roles in Quality Management 174

Core Values and Concepts of Quality Management 174

Get Real: Food Safety in Global Supply Chains—A Real Challenge 177

TQM: A “Total” View of Quality 177

Recognizing the Total Impacts of Quality Performance 178

Get Real: Cost of Quality Analysis Applies to Both Services and Manufacturing 179

An Inverted View of Management 180

Process-Oriented Focus on Prevention and Problem Solving 181

Viewing Quality Management as a Never-Ending Quest 182

Building an Organizational Culture around Quality 182

Quality Goes Digital 182

Get Real: Social Media Are Making Big Impacts on Quality 183

Guiding Methodologies for Quality Management 184

Plan-Do-Check-Act Cycles (Deming Wheel) 184

Six Sigma: A Systematic Approach to Quality Management 184

DMAIC: The Six Sigma Process 186

Design for Six Sigma 187

Get Real: Applying DMAIC to Cough Drops 188

Implementing Six Sigma 188

Certifying Progress in Quality Management 189

ISO 9000: An International Quality Standard 189

Attaining ISO 9000 Certification 189

Industry Interpretations of ISO 9000 191

Chapter Summary 191

Key Terms 192

Discussion Questions 192

Problems 193

Case: Aqua-Fun 194

Case: A Comment on Management Attitude 197

Selected Readings & Internet Sites 199

CHAPTER 6 Chapter Supplement: Quality Improvement Tools 200

Overview 201

Standard Problem Solving Approach 201

Quality Improvement Tools 201

Pear Computers: Using Quality Tools to Improve Performance 201

Histograms 202

Cause-and-Effect Diagrams 204

Check Sheets 205

Pareto Analysis 206

Scatter Diagram 207

Process Flow Diagram 208

Process Capability Analysis: Cp and Cpk 208

Process Control Charts 212

Taguchi Methods/Design of Experiments 219

Moments of Truth Analysis 220

Other Quality Control Tools 220

Supplement Summary 221

Key Terms 221

Solved Problems 221

Problems 226

Case: The Tragedy of RMS Titanic 236

Case: The Bully Boy Bagging Line 238

Selected Readings & Internet Sites 239

CHAPTER 7 Managing Inventories 240

Types and Roles of Inventory 242

Types of Inventory 242

The Roles of Inventory 242

The Financial Impact of Inventory 243

Balance Sheet Considerations 243

Costs Related to Inventory 243

Measures of Inventory Performance 245

Asset Productivity: Inventory Turnover and Days of Supply 246

Service Level 248

Inventory Management Systems 248

The Continuous Review Model 249

The Case of No Variability 249

How Much to Order: Economic Order Quantity 250

When to Order: The Reorder Point 252

EOQ Extensions 253

Enter Variability and Uncertainty 256

Determining the Standard Deviation of Demand During Lead Time 256

Determining a Service Level Policy 257

Revisiting ROP and Average Inventory 259

The Periodic Review Model 260

Single Period Inventory Model 261

Impact of Location on Inventory Requirements 262

Location and Inventory/Service Trade-offs 264

Managing Inventory 264

Managing Cycle Stocks 264

Managing Safety Stocks 265

Managing Locations 267

Inventory Information Systems and Accuracy 268

Get Real: Robots and Drones: Automating Inventory Control 268

Implementing Inventory Models 269

Managing Inventory Across the Supply Chain 269

Inventory Value in the Supply Chain 269

The Bullwhip Effect 269

Integrated Supply Chain Inventory Management 270

Get Real: Supplier-Managed Inventory at Stryker Instruments 271

Chapter Summary 272

Key Terms 273

Discussion Questions 274

Solved Problems 274

Problems 278

Case: Inventory at Champion Electric 284

Case: Tasty Treats 285

Case: Dexter’s Chicken 286

Selected Readings & Internet Sites 287

CHAPTER 8 Lean Systems 288

Lean Systems Defined 290

Origins of Lean Systems and Just-in-Time Production 291

Strategic Benefit of Lean Systems 292

Lean Systems Objectives, Culture, and Guiding Principles 293

Get Real: “Picturing” Waste and Value: A Process Mapping Story 296

Implementing Lean Systems: Tools and Techniques 297

Total Productive Maintenance (TPM) 298

Group Technology—Cellular Manufacturing 298

Focused Factories 298

TAKT Time Flow Balancing 298

Get Real: Applying the Focused Factory Idea to an Insurance Firm 298

Kanban (Pull) Scheduling 299

Get Real: Using Kanbans to Schedule a Steel Mill 299

Level, Mixed-Model Scheduling 300

Setup Reduction 300

Statistical Process Control 301

Visual Control 301

Quality at the Source 301

Get Real: Visual Control in Action: An Andon Board 302

Kaizen Events 302

Get Real: Delta Faucet Uses a Kaizen Event to Improve Quality and Reduce Scrap 303

Process Analysis/Value Stream Mapping 304

Poka-Yoke 304

Get Real: Eliminating Forgetting Cards at ATMs 305

5-S Program 305

Simplification/Standardization 306

Lean Systems: Range of Application 306

Applying Lean Systems within the Firm 306

Applying Lean Systems to Services 307

Applying Lean Systems Across the Supply Chain 307

Applying Lean Systems to Product Innovation 309

Chapter Summary 310

Key Terms 310

Discussion Questions 311

Case: Good Guy Hospital Supply 312

Case: Purchasing at Midwestern State University 312

Case: Western Telephone Manufacturing 313

Selected Readings 315


CHAPTER 9 Customer Service Management 318

Basic Service 321

Product Availability 321

Order-to-Delivery Lead Time 322

Service Reliability 323

Service Information 323

Get Real: JJ’s Dishwasher Delivery Travails 323

The Perfect Order 324

Technology Enablement of Basic Service 325

Limitations of Basic Service 326

Customer Satisfaction 326

Customer Expectations 327

Customer Satisfaction Model 327

Limitations of Customer Satisfaction 329

Get Real: Overpromising Leads to Dissatisfied Customers 329

Customer Success 330

Achieving Customer Success 330

Get Real: Procter & Gamble’s Service Program 330

Customer Relationship Management 331

Get Real: Tesco’s Virtual Store 331

Get Real: Amazon’s Automated CRM Technology 332

Customer Service Strategy 332

Chapter Summary 334

Key Terms 334

Discussion Questions 335

Solved Problem 335

Problems 336

Case: Tiler Industries 337

Case: Johnson Snacks 338

Selected Readings & Internet Sites 339

CHAPTER 10 Sourcing and Supply Management 340

Supply Management’s Impact on Firm and Supply Chain Performance 342

Supply Management Goals 342

Get Real: Resilinc Uses Machine Learning to Increase Supply Chain Resilience 344

Get Real: Airbag Supplier Responsible for Largest Recall in U.S. History 345

Get Real: Sourcing Increases Sustainability for Caribou Coffee 347

Making an Insourcing/Outsourcing Decision 347

Get Real: Boeing Reverses Course on Outsourcing 348

Supply Category Management 350

Identify Purchase Categories 350

Develop Strategies Using Portfolio Analysis 350

Get Real: K’Nex® Reshoring Toy Production 352

Get Real: Self-Driving Cars Are Reshaping Buyer-Supplier Relationships 354

Examining the Sourcing Process 354

Identify Need and Develop Specifications 354

Identify Potential Suppliers 355

Assess and Select Suppliers 355

Manage Ongoing Supplier Relationships 357

Chapter Summary 359

Key Terms 360

Discussion Questions 360

Solved Problems 361

Problems 362

Case: Category Management at Best Banks 365

Case: Trail Frames Chassis: Insourcing/Outsourcing Decision 366

Case: Dining Services Sourcing at Midwest University 367

Selected Readings & Internet Sites 368

CHAPTER 11 Logistics Management 370

The Role of Logistics in Supply Chain Management 372

Order Processing 372

Inventory Management 373

Get Real: Walmart Turns to Suppliers to Reduce Inventory 374

Transportation Management 374

Government’s Role in Transportation 374

Transportation Economics 375

Consolidation 375

Transportation Modes 376

Get Real: Mobile Apps Are Transforming the Trucking Industry 378

Last Mile Delivery 380

Get Real: Tuesday Morning Shifts Modes 380

Transportation Service Selection 381

Distribution/Fulfillment Management 382

Primary Functions of Distribution Centers (DCs) 382

DC/FC Operations 384

Get Real: GameStop Depends upon Reverse Logistics 385

Materials Handling and Packaging 385

Logistics Network Design 386

Number of Facilities 387

Facility Location 388

Get Real: Logistics Change Leaves KFC without Chicken 389

Center-of-Gravity Method 390

Third-Party Logistics Service Providers 391

Chapter Summary 392

Key Terms 392

Discussion Questions 393

Solved Problems 394

Problems 395

Case: Spartan Plastics 398

Case: Lear Corporation 400

Selected Readings & Internet Sites 400


CHAPTER 12 Demand Planning: Forecasting and Demand Management 404

Demand Planning: An Overview 406

The Role That Demand Planning Plays in Operations Management 406

Planning Activities 406

Demand Forecasting 407

Components of Demand 407

Designing a Forecasting Process 409

Judgment-Based Forecasting 410

Get Real: Two Examples of Grassroots Forecasting 411

Statistical Model–Based Forecasting 412

Estimating Trends 417

Adjusting Forecasts for Seasonality 420

Causal Models 423

Simulation Models 425

Artificial Intelligence 425

Get Real: Lennox Uses Artificial Intelligence to Improve Demand Planning 426

Assessing the Performance of the Forecasting Process 426

Tracking Forecast Error Acceptability 429

Situational Drivers of Forecast Accuracy 430

Demand Management 431

Improving the Constraints on Demand Planning 433

Improving Information Breadth, Accuracy, and Timeliness 433

Get Real: Destination Maternity Corporation 434

Reducing Lead Time 435

Redesigning the Product 435

Get Real: Calyx and Corolla Delivers Freshness by Redesigning the Supply Chain 435

Get Real: HP Improves the Constraints on Forecasting through Postponement 436

Collaborating and Sharing Information 436

Chapter Summary 438

Key Terms 438

Discussion Questions 439

Solved Problems 440

Problems 444

Case: Rachel’s Breakfast Café 449

Case: C&F Apparel, Inc. 450

Selected Readings & Internet Sites 451

CHAPTER 13 Sales and Operations Planning 452

Sales and Operations Planning 454

S&OP Benefits 456

Get Real: One-Number Forecasting at Heinz 456

The S&OP Process 457

Get Real: Whirlpool and Lowe’s Integrate Their Planning 458

S&OP: Recent Trends and Developments 458

Aggregate Production Planning 458

Relevant Aggregate Planning Costs 459

Aggregate Production Strategies 460

Get Real: Nintendo Ramps Up Production of the Switch 462

Creating an Aggregate Production Plan 462

Level Production Plan 463

Chase Plan 464

Hybrid Plan 466

Comparing Aggregate Production Plans 467

Aggregate Planning for Service Industries 468

Yield Management 468

Get Real: Yield Management in the Hotel Industry 469

An Example of a Service Aggregate Plan 469

Chapter Summary 471

Key Terms 472

Discussion Questions 472

Solved Problem 473

Problems 474

Case: Med-Chem Products: Hospital Division 479

Case: Fitch and Hughes, P.C. 480

Selected Readings & Internet Sites 481

CHAPTER 14 Materials and Resource Requirements Planning 482

Materials Requirements Planning (MRP) 484

Get Real: MRP in Services: Using MRP for Surgical Kits 485

MRP Inputs 486

Master Production Schedule (MPS) 486

Bill of Materials (BOM) 488

Inventory Records 489

MRP Process 490

MRP Outputs and Use 496

Distribution Requirements Planning (DRP) 496

DRP Planning Process 497

Capacity Requirements Planning (CRP) 497

Advances in Planning Systems 498

Enterprise Resource Planning (ERP) 499

Get Real: ERP Supports Growth at MOD Pizza 499

Advanced Planning and Scheduling (APS) 500

Extending Planning across the Supply Chain 500

Chapter Summary 500

Key Terms 501

Discussion Questions 501

Solved Problems 502

Problems 506

Case: QP Industries—The Challenges of Integration 513

Case: The Casual Furniture Company 514

Selected Readings & Internet Sites 515


CHAPTER 15 Project Management 518

Projects and Project Management 520

How Projects Succeed 521

Stages in the Life of a Project 522

Project Definition 523

Organizing the Project: Pure, Functional, and Matrix Projects 523

Selecting a Project Manager 524

Organizing Project Teams 526

Get Real: The Case of Mistaken Spray-N-Wash 527

Establishing a Project Charter 528

Project Planning 528

Budgeting for Time and Cost 529

Detailed Scheduling Using the Critical Path Method 530

Get Real: Project Management Software Helps Get the Job Done 534

Analyzing Resources and Trade-Offs 534

Making Time-Cost-Scope Trade-Offs 535

Planning for Uncertainty 535

Project Execution 538

When to Kill a Project 539

Project Completion 540

Managing a Portfolio of Projects 540

Chapter Summary 542

Key Terms 543

Discussion Questions 543

Solved Problem 544

Problems 546

Case: Derek’s European Tour 551

Case: Monolith Productions 552

Selected Readings & Internet Sites 553

CHAPTER 15 Chapter Supplement: Advanced Methods for Project Scheduling 554

Project Crashing: Making Time-Cost Trade-Offs 555

Scheduling a Project with Probabilistic Task Duration Estimates 558

Supplement Summary 562

Key Terms 562

Discussion Questions 562

Solved Problem 562

Problems 565

Selected Readings & Internet Sites 567

CHAPTER 16 Sustainable Operations Management—Preparing for the Future 568

The Triple Bottom Line 570

The First P—Planet 571

Get Real: Disney Sustainability 572

Implications for Operations Management: A Broader View of Waste 573

Get Real: Tesco Drops Its Carbon Label Pledge 575

Get Real: Paper or Plastic? 576

ISO 14000—The Standard for Environmental Management Systems 577

Challenges of Being Environmentally Sustainable 577

The Second P—People 578

Get Real: Starbucks and “Fair Trade” 579

Organizational Culture 580

Get Real: Zappos Culture Sows Spirit 580

National Culture 581

Get Real: Dabbawallahs—Managing the Lunchtime Food Supply Chain in Bombay, India 582

The Third P—Profit and Long-Term Competitive Advantage 582

Changes in Key Customers 583

Changes in Value Propositions 584

Changes in Operational Capabilities 584

Get Real: Starbucks Reserve 584

Balancing the 3 Ps 585

Get Real: Patagonia Outdoor Sportswear 586

Measuring and Reporting Sustainability through the Triple Bottom Line 586

Chapter Summary 589

Key Terms 589

Discussion Questions 590

Case: EuroConstellation Electronics 591

Case: The Problem with Plastics 592

Case: The Hypercar 593

Case: Sourcing Outside the Cage 594

Selected Readings & Internet Sites 597

Appendix A 598

Appendix B 599

Key Themes 612


Name Index 618

Subject Index 620

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