ERATIONS AGEMENT (USAGE SCOTT T. YOUNG. DePaul University. Los Angeles London New Delhi Singapore Washington DC

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1 ERATIONS AGEMENT SCOTT T. YOUNG DePaul University (USAGE Los Angeles London New Delhi Singapore Washington DC

2 Detailed Contents Preface Acknowledgments xvii xix Chapter 1 Introduction to Operations Management and Productivity Introduction to Operations Management The Development of the Field Operations Management at Boeing Operations Management at a Luxury Hotel Operations Management at Your University Part I: Management and Strategy Part II: Planning Part III: Supply Chain Management PART I MANAGEMENT AND STRATEGY Chapter 2 Productivity and Process Analysis Productivity National Productivity and Compensation Measurement in Sports Productivity Indexes Time Studies Wiki Productivity Process Analysis Define Measure How to Analyze a Process Streamlining Pitfalls in Process Analysis Process Analysis and Lean?

3 Case 1: Process Diagramming Double-Chocolate Cookies Case 2: The Eight Days a Week Fitness Center Case 3: Mehdi's Car Wash Case 4: Rohit's Pizza Case 5: Hospital Supply Marketing Case 6: Office Productivity Chapter 3 Operations Strategy The Mission Positioning Strategies The Five Forces The Strategy Cycle The Nine Questions for Formulating a Strategy Performance Audit and Gap Analysis Implementing Action Plans Ways to Compete Through Operations Quality Flexibility Inventory Systems Human Resources Management (HRM) Speed Location Vertical Integration Technology The Value Chain The Value "Profit" Chain Dynamic Manufacturing Strategy Maps Global Strategy Conclusion Case 1: The Strategy of a Public Television Station Case 2: The Handheld Computer Case 3: Pizza Wars Corporate With Information on Their Mission and Values Information on Strategic Planning and Operations Strategy

4 Chapter 4 Managing the Operations Workforce 67 Managing People 68 Leadership for Operations Managers 70 Power and Leadership 72 Motivation 72 Managing Change 73 Human-Centered Production 73 Management Control 75 HRM in Production and Operations Management 75 Training and Development 77 Compensation 78 Retention 79 Welch's Bottom 10% 79 Performance Reviews 80 Job Satisfaction 80 Team Building 81 The Toyota Way 83 Southwest Airlines 85 Decision Making in Operations 86 Conclusion Case 1: The Department Chair's Dilemma 89 Case 2: The Hospital Days Off 90 Case 3: Baseball' HR Moneyball Chapter 5 The Balanced Scorecard Approach to Operations 93 The Framework 94 Questions to Answer 94 How to Use the BSC 95 Operations Management and the BSC 96 Linking the BSC to Strategy 97 BSC Implementation 98 Applications of the BSC 99 BSC Benefits 100 The Performance Dashboard 103 Key Performance Indicators for Academic Departments 103 Research Productivity 103 Teaching Dashboard 104 Service Dashboard 104 Sedona 104 Conclusions

5 Case 1: Balanced Scorecard for a Hospital Case 2: Snow Removal in Cook County Chapter 6 Total Quality Management The TQM Movement's History What Is Quality? Service Quality Quality Guides Quality Gaps Service Recovery Deming's Points Lean Operations Management The Quality Tool Kit Define Measure and Analyze Improve and Control: Six Sigma Sampling Plans ISO 9000 The Malcolm Baldrige National Quality Award European Foundation for Quality Management Award Quality and Design Conclusion Problems Chapter 7 Sustainable Operations Why Be Green? Sustainable Development The Triple Bottom Line Environmental Impact Analysis Operations and Waste Operations and the Air The Air: Global Warming and Climate Changes The Water: Pollution, Drinking Water, and the Seas and Lakes Water Pollution

6 Conservation: Waste and Recycling 152 Green Buildings 153 ISO Energy 154 Company Environmental Efforts 155 Wal-Mart 155 Starbucks 155 General Electric 155 Ford Motor Company 156 Toyota 156 Green Hotels PART II PLANNING 159 Chapter 8 Forecasting and Aggregate Planning 161 Why Should Operations Managers Forecast? 162 Qualitative Methods 163 Quantitative Methods 165 Forecasting Error 168 Exponential Smoothing 169 Double-Exponential Smoothing 170 Seasonal Forecasting 172 Trend Plus Seasonality 173 Aggregate Planning 174 Method 1: Even Production 174 Method 2: The "Chase" Strategy 175 Method 3: Paying Overtime 176 Aggregate Planning in Services 176 Capacity Management 178 Yield Management 178 Conclusion Problems 180 Case 1: Hotel Capacity 184 Case 2: Manufacturer and Capacity 184 WebSites 185 Chapter 9 Scheduling for Operations 187 Why Do We Need a Schedule? 188 Job Shop Scheduling 189

7 Machine Loading 196 The Theory of Constraints 197 The Master Production Schedule 197 Other Scheduling Applications 204 Conclusion Problems Case: Office Scheduling 219 WebSites Chapter 10 Facility Location 221 Where Should We Move? 222 Global Location 223 From Global to Region 223 Regional Decisions 223- The City and Site 224 The Factor Rating Method 225 Center-of-Gravity Method 225 Geographic Information Systems (GIS) 226 Fast-Food Locations Cities Rankedand Rated 230 Decision Factors for Two Cities 232 Port Location: Savannah 232 Why Locate in Chicago? 234 Conclusion Problems Chapter 11 Facility Layout and Waiting Lines 243 Process Design and Facility Layout 244 Service-Process Design 245 Facility Layout 245 Types of Layouts 246 Examples 247 Process Layout Approaches 248 Product Layouts 249

8 Service Assembly Lines 251 Cellular Manufacturing 252 Waiting Lines 253 Waiting-Line Psychology 253 Line Etiquette in Hawaii 254 Waiting-Line Statistics 255 Line Structures 257 Basic Principles of Line Structure 257 Simulation of Waiting Lines 257 Conclusion Problems Case: Waiting for Radiohead 267 Chapter Note: Waiting-Line Theory PART III INVENTORY, LOGISTICS, AND SUPPLY CHAIN MANAGEMENT 271 Chapter 12 Supply Chain Management 273 Stages of the Supply Chain 274 Definitions 274 UPS in the Supply Chain 275 Transportation Methods 276 The Bullwhip Effect 277 Electronic Data Interchange 278 Outsourcing 278 Make. 279 Buy 279 Postponement and Mass Customization 279 Warehousing 280 RFID Technology 281 Pick-to-Light Systems 282 Ethics in the Supply Chain 282 Customer Relationship Management (CRM) and the Supply Chain 282 Conclusions Case: Shiraishi Garments Co. 284

9 Shiraishi Garments Co. The Allure and Challenge of China Shiraishi Garments' Chinese Suppliers The Need for a New Approach Chapter 13 Inventory Management and Purchasing The Basics Price Negotiation Principles for Purchasing Agents Negotiation Objectives Negotiation Tactics The Team Approach Chapter 14 Escalating Authority The Street-Smart Negotiator When to Order The Costs of Inventory The Economic Order Quantity Accuracy and Cycle Counting JIT and Lean Inventory Methods JIT in Services Lean and Inventory Professional Organizations Conclusion Problems Resource Planning Dependent Demand The Components of MRP Master Production Scheduling Bill of Materials File MRP Sheets MRP in Services Conclusion Problems Case: Whirloool Corooration Givina ERP a Soin

10 Regional Operations 329 Company Vision and Values 330 ERP at Whirlpool 330 Discussion Questions 339 The SAP R/3 System Overview: Thinking and Acting in Business Processes 339 Companies' Dynamic Strategies to Meet the Challenges of Today's Fast-Paced Business World 339 SAP R/3: Dynamic Information Management for Enterprises of All Sizes From Diverse Industries 340 Overview of the Supply Chain: The SAP Advanced Planner and Optimizer (SAP APO) Notes Chapter 15 Project Management Gantt Charts Project Planning The Work Breakdown Structure Operations Management The Critical Path Method Crashing the Critical Path Program Evaluation and Review Technique Earned-Value Analysis Project Success Factors Project Management Software Conclusion Problems Case 1: Software Installation in a Hospital Discussion Questions Case 2: Trump International Hotel and Towers Case 3: Finding the Photographer Case 4: The Weight Loss Project Discussion Questions Case 5: The Las Vegas Wedding Discussion Questions

11 Appendix A-1 If the Shoe Fits: Wenzhou Aike Shoes Company, Ltd. A-3 Bin Jiang and Patrick J. Murphy Rosenbluth: Supply Chain Management in Services A-9 Sara Allan Wilkins, a Zurn Company: Material Requirements Planning A-27 Renee Reid Index 1-1 About the Author AA-1