Operations Management For Dummies®

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Table of Contents


About This Book

Foolish Assumptions

Icons Used in This Book

Beyond the Book

Where to Go from Here

Part I: Getting Started with Operations Management

Chapter 1: Discovering the Fundamentals of Operations Management

Defining Operations Management

Getting beyond the smokestack

Seeing the relevance of operations management

Understanding the Process of Operations

Driving the business model

Recognizing the diversity of processes

Managing processes

Handling special situations

Meeting the Challenges

Chapter 2: Defining and Evaluating Processes

Mapping Processes

Distinguishing between operations and delays

Identifying waste

Developing a process map

Evaluating the Elements of a System

Checking productivity

Considering capacity

Clocking cycle time

Getting a handle on constraints

Talking thruput and takt time

Going with the flow time

Monitoring utilization

Accounting for variability

Chapter 3: Designing Processes to Meet Goals

Getting Started with Process Improvement

Planning Operations

Considering a serial process

Placing operations in parallel

Improving Processes According to a Goal

Reducing customer flow time

Increasing system capacity

Balancing the line

Utilizing flexible resources

Improving a process that has excess capacity

Managing Bottlenecks

Getting tripped up by overproduction

Increasing process capacity

Chapter 4: Dealing with Shared Resources, Batches, and Rework

Sharing Resources

Assigning a resource to more than one operation

Allocating resources to more than one process

Batching Parts and Setting Up Operations

Working with batches

Maximizing operation batch size

Optimizing transfer batch size

Optimizing batch size with operation setups

Managing Process Disruptions

Putting rework back in the process that created it

Pulling rework out of the main process

Chapter 5: Designing Your Process to Match Your Product or Service

Considering Costs, Standardization, Volume, and Flexibility

Balancing operating costs

Blurring the lines: Making standardized stuff customizable

Improving Face-to-Face and Back-Office Operations

Strengthening the customer interface

Improving efficiencies behind the scenes

Fulfilling Customer Demand: Making to Stock or Making to Order

Making to stock

Making to order

A tale of two companies: Making either method work

Designing for X: Designing Products with Operations in Mind

Part II: Managing Variability and Risk

Chapter 6: Forecasting Demand

Getting Savvy about Forecasts

Building a Forecast to Predict Demand

Recognizing demand variation

Looking to the past to predict the future

Lacking data: No problem

Acknowledging the Error of Your Ways

Hunting down the source of your error

Measuring how inaccurate you are

Chapter 7: Planning Capacity

Considering Capacity

Matching supply and demand

Timing adjustments just right

Balancing Capacity and Inventory

Producing to match demand

Producing at capacity

Increasing capacity

Addressing Wait Time for Services

Getting the why of waiting

Estimating waiting time with queuing theory

Altering customer perceptions

Chapter 8: Managing Inventory

Dealing with the Business of Inventory

Recognizing inventory’s purposes

Measuring the true cost of inventory

Managing Inventory

Continuous review

Periodic review

Single period review

Comparing the options

Getting Baseline Data on Performance

Assessing the inventory management system

Evaluating the quality of customer service

Reducing Inventory without Sacrificing Customer Service

Multitasking inventory: The commonality approach

Holding on: The postponement strategy

Managing Inventory across the Supply Chain

Keeping track of the pipeline inventory

Setting service levels with multiple suppliers

Chapter 9: Planning for Successful Operations

Planning from the Top Down

Determining corporate strategy

Preparing for success

Executing the plan

Exploring the Components of an Aggregate Plan

Putting together a plan

Creating the master schedule

Considering Materials

Gathering information for the system

Getting system results

Taking MRP data to the factory floor

Planning for Services

Seeing the difference in services

Establishing the service plan

Applying Information to the Entire Organization

Chapter 10: Managing the Supply Chain

Seeing the Structure of Supply Chains

Getting through the tiers

Linking in support services

Aligning the Supply Chain with Business Strategy

Defining product demand

Choosing the right supply chain strategy

Exploring the Bullwhip Effect

Finding the bullwhip triggers

Dodging the bullwhip

Improving Supply Chain Management

Communicating better

Outsourcing inventory management

Simplifying the chain by consolidating shipments

Part III: Improving Operations

Chapter 11: Becoming Lean

Evolving to Lean

Mastering the craft

Producing in mass

Trimming the Fat

Eliminating the waste

Involving everyone

Leveling production

Embracing your supplier

Focusing on quality

Implementing continuous improvement

Producing Just in Time

Knowing when to work

Differentiating the customer interface

Implementing pull

Knowing when to JIT

Seeking the Silver Bullet

Chapter 12: Managing Quality

Deciding What Matters

Recognizing the Value of Quality

Assessing the cost of failure

Detecting defects

Getting the perks of high quality

Preventing defects in the first place

Addressing Quality

Considering the customer

Getting all hands on deck

Sticking to the improvement effort

Designing for Quality

Starting with the end in mind

Cascading to production

Measuring Quality

Understanding variation

Measuring “goodness” of a process

Controlling processes

Chapter 13: Creating a Quality Organization

Reaching Beyond Traditional Improvement Programs

Multiplying failures

Raising the bar

Varying skill levels

Adding to the Tool Box

Defining the problem

Measuring the process

Analyzing the problem

Implementing a solution

Maintaining the gain

Overcoming Obstacles

Failing to focus

Prioritizing into paralysis

Avoiding the lure of magical solutions

Lacking employee involvement

Knowing what to do

Learning from the experience

Calling it a program

Giving up

Part IV: Managing Projects

Chapter 14: Using Communication and Leadership Skills When Managing Projects

Defining Success

Prioritizing criteria

Seeing the interaction of factors

Figuring Out Why Projects Fail

Laying Out the Project Management Life Cycle

Detailing the phases of the cycle

Deciding to go or not to go

Documenting the project

Leading a Project

Developing a project proposal with a team

Communicating with stakeholders

Keeping stakeholders in the loop

Managing the team

Chapter 15: Estimating and Scheduling Projects

Estimating Time and Cost

Compiling a list of tasks

Adding up the project costs

Timing: The critical path

Assigning tasks

Presenting the schedule

Working with Uncertainty

Estimating with ranges

Using historical data

Relying on expert knowledge

Putting It All Together

Avoiding the estimation dance

Accelerating the project

Chapter 16: Responding to Risks That Threaten Your Project

Tracking Project Progress

Assessing earned value

Earning value over time

Monitoring the metrics: Who’s responsible?

Realizing your project’s in trouble

Planning Ahead with Risk Registers

Knowing what can go wrong

Prioritizing risks

Developing a contingency plan

Responding Productively to Risk

Staying productive: Parkinson’s law

Recovering from delays: Brook’s law and Homer’s law

Delay the project

Sacrificing functionality

Part V: Scaling and Globalizing Your Operations

Chapter 17: Considering Outsourcing

Seeing the Upsides and Downsides of Outsourcing

Benefiting from the pros

Avoiding the cons

Getting Down to the Basics

Figuring out what to outsource

Choosing the right partner

Developing a lasting relationship

Integrating the product

Chapter 18: Scaling Operations throughout the Product Life Cycle

Managing Operations Age-Appropriately

Swooning Over the Baby

Dealing with low demand

Keeping capacity flexible

Minimizing inventory

Starting off with high pricing

Designing a supply chain for a new product

Defining a market with no competitors

Avoiding failure in incubation

Surviving the Awkward Stage of Quick Growth

Adjusting to growing demand

Increasing capacity

Maintaining enough inventory

Slowly decreasing your pricing

Growing your supply chain

Distinguishing your product from competitors’ products

Upping production to meet increased demand

Getting Comfortable with Market Maturity

Staying the course with steady demand

Exploiting predictable capacity

Reducing your inventory

Offering competitive pricing

Balancing a mature supply chain

Gaining market share over your competitors

Foreseeing the market’s decline

Preparing for the End

Adapting to decreasing demand

Repurposing capacity

Reducing inventory

Making the most of lower pricing

Consolidating the supply chain

Increasing sales as competitors exit

Emerging Anew


Making improvements

Changing the product portfolio

Managing Start-up Operations

Operating on a shoestring

Transitioning to growth

Part VI: The Part of Tens

Chapter 19: Ten Pivotal Operations Management Developments


Division of Labor

Interchangeable Parts

Scientific Management

Mass Production

Statistical Quality Control

Lean Manufacturing

Scientific Project Planning

Electronic Data Interchange

Supply Chain Management

Chapter 20: Ten Mistakes That New Operations Managers Make

Beginning an Improvement Journey without a Map

Running without Metrics

Creating Overly Complex Processes

Missing the Real Bottleneck

Managing Based on Utilization

Not Standardizing

Automating Bad Processes

Misdefining Quality

Not Doing Enough Project Planning Upfront

Not Focusing on the Customer

Chapter 21: Ten Traits of World-Class Operations

Knowing Thyself

Possessing Profound Knowledge of the Customer

Focusing Intensely on Quality

Adapting to Change

Getting Better All the Time

Appreciating Employees

Paying Constant Attention to Product Offerings

Using Relevant Process Metrics

Balancing Respect and Expectations for the Supply Chain

Avoiding Unnecessary Complexity

About the Authors

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