Index

ABC classification, 218–21

Acceptable quality level (AQL), 277–8

Acceptance sampling, 276–9

sampling plans, 278–9

Activity-based accounting (ABC), 312–13

Activity-on-arrow (AOA) diagrams, 253–5

Activity-on-node (AON) diagrams, 255

Aggregate demand, 185

Aggregate planning, 210–11, 246

Agile manufacturing, 52, 53–4, 114, 122–3

versus mass customization, 123

Alliances:

Japanese companies, 365

world-class operations, 354–7

Amazon.com, 3, 5–6, 74, 318

American System of Manufacture (ASM), 22–3, 24, 271

Andersen Consulting, 3

Apple Computers, 38, 41, 55, 83, 234–5

Appraisal costs, 279

Arithmetic Integrated Moving Average (AriMA) models, 385

Arrival process, 418–19

Assets, 20

Assignment modelling, 398–403

Attributes, 276

Automation, 172

Automobile industry, 161–2

Averages, 181–2, see also Moving average technique

Back-room operations, 170

Balanced scorecard, 313–14

Batch production, 22–3, 106, 114, 210

Bell Telephone Labs, 271

Benchmarking, 327–32

objectives of, 329–30

stages of benchmarking process, 330–2

types of, 329

Bi-variate data, 372–3

Bin systems, 218

Body Shop, 289–90

Botchit and Leggit, 99–100

Bottlenecks, 232–3

Bradford Health Trust, 329

Bridge model, 269 British Petroleum (BP), 155–6

British Standards Institute (BSI), 287

Buffer inventory, 212

Bullwhip effect, 192–3

Business process re-engineering (BPR), 325–7

process mapping, 326–7

Café Aroma, 213

Calling population, 417–18

Capacity, 163–78

definitions, 164–5

actual capacity, 165

design capacity, 164

theoretical capacity, 164

Capacity (cont.)

inputs to, 166–77

acquiring inputs and distributing outputs, 177, 211

facilities, 167–71

technology, 171

workforce, 171–7

management in service operations, 188–91

demand management, 188–90

supply management, 190–1

management in supply operations, 191–3

measurement of, 165–6

over-capacity, 162

strategic capacity planning, 183–8

chase strategies, 187

demand management strategies, 187–8

level capacity strategies, 186

long-range capacity planning, 185

medium-range capacity planning, 185–6

Capacity requirements planning (CRP), 224

Carrefour, 104 Caterpillar, 40 Causal forecasting methods, 180, 182

Cellular layout, 117–19, 229

Certification, 286–8

Chain-based relatives, 398

Chase strategies, 187

Chief Executive Officer (CEO), 54

role in managing operations, 59–62

Chrysler, 162–3, 356

Co-production, 58

Communications management, in projects, 244

Communications technology, 29

Compaq Corporation, 38, 83

Competition, 14, 49, 52

Computer-aided design (CAD), 89–90

Computer-aided manufacturing (CAM), 89

Computer-integrated Manufacturing (CIM), 123

Computers, 29, see also Technology

Concurrent new product development (CNPD), 87–8

Conformity, 275, see also Quality Consumer's risk, 277

Continuous improvement, 298–9, 318–25

fishbone diagram, 322–3

five-why process, 324–5

Pareto diagrams, 323

PDCA cycle, 321–2

world-class operations, 346–7

Continuous inventory systems, 216–17

economic order quantity (EOQ) systems, 216–17

fixed-order quantity systems, 216

Continuous production, 107–8, 113, 210

Control, 183

Copyright, 94

Core competences, 19

Correlation techniques, 382–4

Costs:

cost transparency, 141

labour costs, 311

management of, 20–1

of inventory, 215–16

of quality, 279–81

overhead costs, 310

project cost management, 244

supply strategy, 141

Craft production, 22, 47, 112, 178, 270

Critical Chain Methods, 241

project planning, 256–8

Critical Path Analysis (CPA), 241, 254–5

Critical ratio (CR), 196

Cross-functional teams, 86–7

Customer attributes, 295

Customer complaints, 293

Customer contact, 16

Customer flows, 205–9

queuing, 206–8, 416–26

services as customer processing, 209

Customer satisfaction, 290

Customer-driven quality, 297

Customization, 78

Daewoo, 162

DaimlerChrysler, 162–3, 351, 356

Delegated sourcing strategy, 153–4

Dell Computers, 3, 30, 41, 55, 221

Delphi technique, 180, 182

Demand, 179

aggregate demand, 185

forecasting, 179–82

causal methods, 180, 182

qualitative methods, 180, 182

time series methods, 180, 181–2

management strategies, 187–8

service operations, 188–90

matching supply and demand, 182–97

planning and control, 183–93

scheduling, 193–7

Deming Prize, 293–4

Dependent variable, 378

Dependent-demand inventory, 221

Design capacity, 164

Design quality, 294–6

Design right law, 94

Direct labour costs, 311

Direct Line, 74

Direct workers, 171

Disney Corp., 80, 345

Double sampling plan, 278

Downsizing, 343–4

Du Pont, 241

Dyson, 81–2

Earliest due date (EDD), 195

Earliest event time (EET), 253

Early conflict resolution (ECR), 88

Economic order quantity (EOQ) systems, 216–17

Economies of scale, 103, 168–70

Economy, 309–10

Effectiveness measures, 141, 311

Efficiency measures, 140, 141, 310–11

Efficient Consumer Response (ECR), 192

EMI, 75

Employees, 28

involvement of, 298

see also Human resource management; Workforce

Enterprise Resource Planning (ERP), 123, 226, 316

Environment, 29

environmental responsibility, 359–62

Ethics, 28

world-class operations, 357–62

environmental responsibility, 359–62

operations management and, 357–9

European Quality Award, 294

External demand, 179

External failure costs, 280, 281

Facilities:

economies of scale, 168–70

layout, 170–1

location, 167–8

Farmhouse Cheesemakers’ Cooperative, 265–7

Federal Express, 58, 345

Finished-goods inventories, 212

Finite loading, 194

First come, first served (FCFS), 195

First Direct Bank, 67–8, 83, 293

First-mover advantage, 74

Fishbone diagram, 322–3

Five-why process, 324–5

Fixed time period systems, 217

Fixed-based relatives, 398

Fixed-order quantity systems, 216

Fixed-position layout, 114–15

Flexible manufacturing systems (FMS), 110–11, 123

Flexible specialization, 52

Flows, see Operations flow management Ford, 23–4, 86, 176, 350–1

Forecasting, 394–5

demand, 179–82

causal methods, 180, 182

qualitative methods, 180, 182

time series methods, 180, 181–2

seasonal variation and, 391–4

calculation of seasonal variation, 391–3

seasonally adjusted time series, 393–4

Front-room operations, 170

Futurists, 182

Gantt chart, 196–7, 251–2

Gaps model, 290–2

General Motors, 23–4, 39, 123–4

Gillette, 78, 107

Globalization, 28

Hewlett Packard, 46, 121

Hollola Roll Finishing plant, 306–7

Honda, 38, 41, 320, 351–2

Hospitals, 203

House of quality matrix, 295, 296

Human resource management, 19–20

downsizing, 343–4

in world-class operations, 342–4

project human resource management, 244

see also Employees; Workforce Hybrid cells, 117–19

IBM, 38, 349

Independent variable, 378

Independent-demand inventory, 221

Index numbers, 395–8

definition of, 396–7

index relatives, 397–8

time series of relatives, 398

notation, 397

Indirect workers, 171

Infinite loading, 194

Information flows, 210–11

Information technology, see Computers; Technology

Innovation, 20, 68, 69, 71

Japanese companies, 365–6

world-class operations, 347–53

see also New product development (NPD)

Inspection:

quality control, 276

regression line calculation, 377

Intangibility, 16

Intellectual property, 94

Internal demand, 179

Internal failure costs, 280

Invention, 69

Inventory, 211–22

costs of, 215–16

location of, 212–14

management of, 215–22

ABC classification, 218–21

continuous inventory systems, 216–17

independent- and dependent-demand inventory, 221–2

periodic inventory systems, 217–18

reasons for, 214–15

Investment, 48–9

Ishikawa diagram, 322

Japanese production systems, 24–5, 75, 272–3, 319–20, 363–6

alliances, 365

innovation, 365–6

making best use of limited resources, 364

manufacturing focus, 363–4

recent trends, 366

strategy, 364–5

Jobbing, 105, 113

Jobs, 173

Just-in-time (JIT) production, 24, 25, 50, 136, 227–32

comparison with manufacturing resources planning (MRP), 231–2

origins of, 227–8

requirements of, 230–1

Kaizen, see Continuous improvement Kanban production control, 229–30

Key Performance Indicators (PKI), 8

KeyLine, 208

Komatsu, 40

Labour costs, 311

Labour specialization, 173

Land Rover, 78

Lane Group, 290

Last arrived, first processed (LAFP), 195–6

Latest event time (LET), 253, 254

Layout, see Facilities; Processes

Leadership, quality and, 298

Lean production, 52, 135

world-class operations and, 338–42

Lean supply management, 135

Learning curves, 176–7

Least slack time, 196

Least squares method, 377–82, 385–6

Lexus, 30

Lincoln Electric, 176

Line operations, 106–7, 113, 210

Linear functions, 374–6

determining the gradient of a given line, 375–6

Linear regression, 182

Loading, 194

Longest processing time (LPT), 195

Lot tolerance percent defective (LTPD) level, 277–8

Lucent Technologies, 257

McDonald's, 3, 29, 207

Make-to-order, 213

Make-to-stock, 213

Malcolm Baldrige National Quality Award (MBNQA), 294

Manufacturing operations, 14–18

capacity measurement, 165

challenges for operations management, 30–2

inventories, 212

Japanese companies, 363–4

materials flows, 209–10

process design trends, 120–3

agile manufacturing, 122–3

mass customization, 121–2, 123

Manufacturing resource planning (MRP), 225–6

comparison with JIT, 231–2

limits of, 226–7

Manufacturing strategy, 47–57

emergence of the strategic importance of operations, 49–51

modern era, 52–5

strategic resonance, 55–7

Manufacturing transformation, 9, 10

Manufacturing-based quality, 268

Market pull, 76

Market segment, 411–12

Market-led strategies, 45

Martin's Aeronautics, 273, 340

Mass customization, 52, 114, 121–2

versus agile manufacturing, 123

Mass production, 24, 47–8, 49, 178, 353

Mass services, 111–12

Materials flows, 209–10

management of, 210

see also Inventory

Materials requirements planning systems (MRP), 222–4

Mazda, 110–11

Mergers and alliances, world-class operations, 354–7

Meta suppliers, 133

Method study, 172, 174–5

Microsoft, 171

Modular design, 96

Mongolian Wok, 59

Monte Carlo simulation, 422–4

Motorola, 74

Moving average technique, 181–2, 385, 388–90

centring a moving average series, 389–90

Multi-skilling, 172, 229

Multi-variate data, 373, 376

Multiple sourcing, 152–3

Mumford's Machine Tools, 198–9

Mystery shopping, 293

National Patent Office, 94

New product development (NPD), 69–72

best practice in, 85–94

concurrent engineering, 87–8

cross-functional teams, 86–7

process integration, 88–90

quality function deployment, 92–4

strategic management of development projects, 90

supplier involvement, 86

importance of, 72–6

failure factor, 75–6

time-to-market, 74–5

process of, 76–85

developing the product concept, 79–82

developing the product design, 82–5

filters, 78, 79

testing and delivery, 85

success measures, 73

tools and techniques, 90–1

NHS Drop-in Centres, 203, 208

Nokia, 3

Non-profit organizations, capacity management, 166

Noodle bars, 406–7

Nordstrom's, 7–8

NUMMI plant, 173, 174

Oakmead Social Services office, 125–7

Obodex Computers Limited, 300–1

Operating characteristics curve (OC), 278

Operational research techniques, 398–403

Operations, 3–4, 21–2

as an open system, 26–8

definition, 5–6

models of, 8–11

manufacturing transformation, 9, 10

service transformation, 9, 10

strategic importance of, 49–51

typology of, 13–18

see also Manufacturing operations; Service operations

Operations flow management, 205–11

computerized systems, 222–7

enterprise resource planning (ERP), 226

manufacturing resource planning (MRP), 225–7

materials requirements planning systems (MRP), 222–4

customer flows, 205–9

queuing, 206–8

services as customer processing, 209

information flows, 210–11

materials flows, 209–10

theory of constraints, 232–4

see also Inventory; Just-in-time production

Operations management, 6–7

current issues, 26–8

new scope of operations management, 26

operations as an open system, 26–8

environmental responsibility and, 359–62

ethics and, 357–9

history of, 21–6

new pressures on, 28–9

role of Chief Executive Officer (CEO), 59–62

Operations managers, 6

new imperatives, 29

responsibilities of, 19–21, 52–3, 100, 203–4, 342

assets, 20

costs, 20–1

human resources, 19–20

role of, 11–13, 100

strategic role, 46–7

Operations researchers, 120

Operations strategy, 101–2

Optimized Production Technology (OPT), 232–4

Orange, 80

Organizational complexity, 243

Organizational structure, 141–2

supply strategy and, 142–3

Over-capacity, 162

Overhead costs, 310

P-chart, 285

Parallel sourcing, 154–5

Pareto principle, 218, 323

Parkway Theatre, Oakland, 187–8

Patents, 94

PDCA cycle, 320, 321–2, 330

Performance, 7, 8

objectives, 29

see also Continuous improvement; Radical performance improvement

Performance measurement, 307–18

designing a performance measurement system, 314–16

enlightened performance measures in practice, 316–18

historical perspective, 309–11

economy, 309–10

effectiveness, 311

efficiency, 310–11

new approaches, 311–14

activity-based accounting (ABC), 312–13

balanced scorecard, 313–14

service operations issues, 317

supply issues, 140–1, 317–18

Periodic inventory systems, 217–18

Phased Delivery Processes (PDP), 249

Pizza Hut, 293

Planning, 183–4, 210

aggregate planning, 210–11

project planning, see Project management

strategic capacity planning, see Capacity

Platform products, 77–8

Policies, 7–8

Practices, 7–8

Pre-determined motion time studies (PMTS), 173

Prêt a Manger, 212–13

Prevention costs, 279

Price relative index, 397

Process control, 282–6

control charts, 283–6

attribute charts, 285–6

for variables, 283–5

process capability, 286

statistical process control (SPC), 282, 286

Process design, 101–3

Process intensive developments, 78

Process mapping, 326–7

Processes, 7, 25–6

definition of, 6

manufacturing process design trends, 120–3

agile manufacturing, 122–3

mass customization, 121–2, 123

physical layout, 103, 113–20

fixed position layout, 114–15

hybrid process/product cell, 117–19

process choice and, 113–14, 119–20

process layout, 115–16

product layout, 116–17

process integration, 88–90

service processes, 111–12

technology role in process design, 123–4

types of, 103–11

batch, 22–3, 106, 114, 210

continuous, 107–8, 113, 210

flexible manufacturing systems (FMS), 110–11, 123

job, 105, 113

line, 106–7, 113, 210

project, 104–5, 113, 210, 239–40

Producer's risk, 277

Product layout, 116–17

Product moment correlation, 382

Product-based quality, 268

Products:

life cycle, 69–71, 108–10

platform products, 77–8

see also New product development (NPD)

Professional services, 111, 114

Programme Evaluation and Review Technology (PERT), 241

Programme of work, 245–6

Project management, 241–2

communications management, 244

cost management, 244

designing the project process, 245–7

human resource management, 244

integration management, 244

key project processes, 242–5

procurement management, 244

project planning, 246–58

activity-on-arrow (AOA) diagrams, 253–5

activity-on-node (AON) diagrams, 255

critical chain project planning, 256–8

Gantt charts, 251–2

overall plan, 247–8

project planning software, 255–6, 260

stage-gate planning, 249–50

work breakdown structure (WBS), 248–9

risk management, 244

scope management, 244

time management, 244

Projects, 104–5, 113, 210, 239–40

project complexity, 243–5

Prototypes, 85, 89

Public Private Finance (PPF), 134

Purchasing, 28, 131, 132–3

definition, 132

evolution to supply management, 133–46

economic factors, 135

political factors, 134–5

social/image changes, 135–6

technology factors, 136

see also Supply

Qualitative forecasting methods, 180, 182

Quality, 231, 267–9

cost of, 279–81

definitions of, 267–9

design quality, 294–6

historical perspective, 270–5

quality assurance, 271

quality control, 270–1

quality management, 272–3

recent trends, 273–5

quality at the source, 288

quality management approaches, 275–86

acceptance sampling, 276–9

inspection, 276

process control, 282–6

service quality, 288–93

resolving problems, 292–3

Servqual model, 290–2

standards and certification, 286–8

total quality management (TQM), 296–300

world-class operations, 344–7

see also Performance measurement Quality awards programmes, 293–4

Quality circles (QCs), 274, 319–20

Quality function deployment (QFD), 92–4, 295

Quantity relative index, 398

Queuing, 205–8, 416–26

importance of analysing queuing systems, 416–17

mathematical analysis of, 417–22

arrival process, 418–19

calling population, 417–18

queue configuration, 419–20

queue discipline, 420

service process, 420

Monte Carlo simulation, 422–4

number of queues versus number of servers, 207

single-stage versus multiple stage queues, 208

Quicken, 83

Radical performance improvement, 325–32

benchmarking, 327–32

objectives of, 329–30

stages of, 330–2

types of, 329

business process re-engineering (BPR), 325–7

process mapping, 326–7

RAND Corporation, 241

Range chart (R-chart), 285

Rank correlation, 382

Raw materials inventories, 212

Regression analysis, 376–82

least squares method, 378–82, 385–6

obtaining a regression line, 377–8

Relationships, in supply chains, 141

Renault, 162, 351

Resource constraints, 84

Resource management, 162, 203–4, 308

Japanese companies, 364

manufacturing resource planning (MRP), 225–6

see also Capacity; Operations flow management

Resource-based strategies, 45–6

Resource-to-order, 213

Reverse engineering, 95–6

Risk management, projects, 244

Rolls-Royce, 268

RS Components, 130–1

Sampling plans, 278–9

Scheduling, 193–7

Gantt chart, 196–7

project time management, 244

shift scheduling, 425–6

Scientific management, 23, 173

Seasonal variation:

calculation, 391–3

seasonally adjusted time series, 393–4

Sega, 4

Self-service, 54

Semi-averages technique, 377, 385, 386–8

Sequencing, 194–6

Sequential sampling plan, 279

Service blueprinting, 414–16

Service factories, 112

Service fail-safing, 292–3

Service guarantees, 58, 292

Service operations, 14–19, 54

analysis of, 414–22

Monte Carlo simulation, 422–4

queuing, 416–22

service blueprinting, 414–16

shift scheduling, 425–6

capacity management, 188–91

demand management, 188–90

supply management, 190–1

capacity measurement, 165–6

challenges for operations management, 29–30

customer processing, 209, see also Queuing

definition of, 18

importance of, 18–19

management system analysis, 410–13

culture and philosophy, 411

market segment, 411–12

service concept, 412

service delivery system, 412–13

service image, 412

materials flows, 209–10

performance measures, 317

service processes, 111–12

strategies, 57–9

Service package, 413

Service quality, 288–93

reliability, 286

resolving problems, 292–3

Servqual model, 290–2

Service recovery, 58, 292, 293

Service shops, 111

Service standards, 288

Service transformation, 9, 10

Servqual model, 290–2

Shell, 28

Shift scheduling, 425–6

Shortest processing time (SPT), 195

Simulation, 422

Monte Carlo simulation, 422–4

Single sampling plan, 278

Single sourcing, 151–2

Sky TV, 3

Small-lot production, 230

Smith, Adam, 22

Social Services, 125–7

Sony, 3

Sourcing strategy, see Supply

Specialization of labour, 173

Specifications, 275–6

Staff, see Employees; Workforce

Stage-gate planning, 249–50

Standard time, 173

Standards, 286–8, 310

environmental standards, 360–2

Statistical approaches, 372–94

correlation techniques, 382–4

linear functions, 374–6

regression analysis, 376–82

time series modelling, 384–91

Statistical process control (SPC), 282, 286

Strategic operations, 52

Strategic positioning matrix, 147–8

Strategic resonance, 55–7

Strategic Transition model, 143–6

Strategy, 39–46

elements of, 46–7

Japanese companies, 364–5

market-led versus resource-based strategies, 45–6

new product development, 90

operations strategy, 101–3

origins of, 40–1

project strategy, 245

responsibility for, 43–4

service operations strategy, 57–9

strategy formulation, 41–3

see also Manufacturing strategy

Subway sandwich shop, 213

Supersonic Transport project, 182

Suppliers:

capacity and capabilities of, 103

capacity management, 191–3

capacity measurement, 166

involvement in new product development, 86

meta suppliers, 133

performance measurement, 317–18

Supplies, 212

Supply, 28, 132–6

as a strategic process, 137–40

definition, 132

management in service operations, 190–1

matching supply and demand, 182–97

planning and control, 183–93

scheduling, 193–7

position in supply chain, 14

project procurement management, 244

sourcing strategies, 146–55

delegated sourcing strategy, 153–4

multiple sourcing, 152–3

parallel sourcing, 154–5

positioning matrix, 147–8

single sourcing, 151–2

strategic supply wheel, 139–43

cost/benefit, 141

organizational structure, 141–3

performance measures, 140–1

relationship portfolio, 141

skills and competencies, 143

Transition model, 143–6

see also Purchasing; Supply chain management

Supply chain management, 27–8, 131, 136–7

evolution from purchasing, 133–46

economic factors, 135

political factors, 134–5

social/image changes, 135–6

technology factors, 136

see also Supply

Swatch watches, 77–8

Sydney Olympic Games, 238–9

Sydney Opera House, 83

Tangibility, 16

Tasks, 173

Taylorism, 23

Technical constraints, 84

Technology, 53–4, 89–90

capacity and, 171

complexity, 243

purchasing and, 136

role in process design, 123–4

Technology push, 77

Tequila, 177

Theoretical capacity, 164

Theory of constraints, 232–4, 256 3M Corporation, 81, 82

Throughput management, see Operations flow management Time and work measurement, 172–3

Time series methods, 180, 181–2, 384–91

comparison of techniques, 391

forecasting, 394–5

method of least squares regression, 385–6

method of semi-averages, 386–8

moving average, 388–90

seasonally adjusted time series, 393–4

techniques for finding the trend, 385

time series of relatives, 398

Time-to-market, 74–5

Toronto Dominion Bank, 292

Total quality control, 273

Total Quality Management (TQM), 25, 136, 274, 296–300, 319

Toyota, 3, 34–5, 86–7, 88, 227–8, 319–20, 324–5, 352–3

Trademark registration, 94

Transcendent quality, 267–8

Transformation process, 8–11

Transition model, 143–6

Triumph Motorcycles, 38, 95–6

User-based quality, 268

Utzon, Jørn, 83

Valmet Corporation, 306

Value analysis, 295–6

Value engineering, 295–6

Value-based quality, 268

Variable measures, 276

Variables, 372–3, 378

Variances, 310–11

Variety of products, 13–14

Vendor assessment schemes, 140

Very Clever Software Company, 258–9

Volkswagen (VW), 71, 86

Volume, 13–14

Volvo Cars, 119–20

Wagamama, 408–9

West Country Farmhouse Cheesemakers’ Cooperative, 265–7

Wok-Wok, 409–10

Work breakdown structure (WBS), 248–9

Work-in-progress (WIP) inventories, 212

Workforce, 171–3

capacity measurement, 172–3

image problem of work study, 173–4

learning curves, 176–7

method study, 174–5

work measurement, 175–6

shift scheduling, 425–6

see also Employees; Human resource management

World-class manufacturing (WCM), 136

World-class operations, 55, 337–66

becoming world-class, 353–4

ethical issues, 357–62

environmental responsibility, 359–62

operations management and, 357–9

human resource management role, 342–4

innovation role, 347–53

lean production and, 338–42

mergers and alliances, 354–7

quality role, 344–7

X-chart, 284–5

Xerox, 328

Yamaha, 41

Yield management, 187–8

Yo! Sushi, 410