Introduction to Operations and Supply Chain Management

by Bozarth, Cecil; Handfield, Robert B.

• ISBN13: 9780139446207
• ISBN10: 0139446206
• Format: Hardcover
• Copyright: 2006-01-01
• Publisher: Prentice Hall

Summary

For the core course in Operations Management. This is the first text to provide an integrated and comprehensive treatment of both operations and supply chain management. Students learn how firms must link with their supply chain partners in order to gain a market advantage.

Author Biography

Cecil Bozarth is an Associate Professor at the College of Management at N.C. State University.

Table of Contents

Preface	xix
PART I Creating Value through Operations and Supply Chains	1	(118)
Introduction to Operations and Supply Chain Management	1	(20)
Introduction	2	(2)
Why Study Operations and Supply Chain Management?	4	(6)
Operations Management	5	(2)
Supply Chain Management	7	(3)
Important Trends	10	(1)
Electronic Commerce	10	(1)
Increasing Competition and Globalization	11	(1)
Relationship Management	11	(1)
Operations and Supply Chain Management and You	11	(3)
Professional Organizations	12	(1)
Cross-functional and Interorganizational Linkages	13	(1)
Purpose and Organization of This Book	14	(7)
Chapter Summary	16	(1)
Key Terms	16	(1)
Discussion Questions	16	(1)
Problems	17	(1)
Case Study	17	(2)
References	19	(2)
Operations and Supply Chain Strategies	21	(22)
Dell Computer Corporation	22	(1)
Introduction	23	(1)
Elements of the Business	23	(1)
Strategy	23	(2)
Operations and Supply Chain Strategies	25	(18)
Customer Value	27	(1)
Four Performance Dimensions	28	(2)
Trade-Offs Among Performance Dimensions	30	(1)
Order Winners and Order Qualifiers	31	(1)
Stages of Alignment with the Business Strategy	32	(1)
Core Competencies in Operations and Supply Chains	33	(2)
Chapter Summary	35	(1)
Key Formulas	35	(1)
Key Terms	36	(1)
Solved Problem	36	(2)
Discussion Questions	38	(1)
Problems	38	(2)
Case Study	40	(1)
References	41	(2)
Business Processes	43	(28)
Procter & Gamble	44	(1)
Introduction	45	(1)
Business Processes	46	(2)
Improving Business Processes	47	(1)
Mapping Business Processes	48	(7)
Relationship Maps	49	(2)
Process Maps	51	(4)
Measuring Process Performance	55	(4)
Productivity	55	(2)
Efficiency	57	(1)
Cycle Time	58	(1)
Reducing Cycle Times	59	(2)
Cycle Time Drivers	59	(1)
Organizing for Cycle Time Reduction	60	(1)
Benchmarking	61	(1)
Strategies for Business Process Improvement	62	(9)
Internal and External Business Processes	62	(1)
Continuous Improvement and Business Process Reengineering (BPR)	62	(1)
Chapter Summary	63	(1)
Key Formulas	64	(1)
Key Terms	64	(1)
Solved Problem	64	(2)
Discussion Questions	66	(1)
Problems	67	(2)
Case Study	69	(1)
References	70	(1)
Managing Quality	71	(48)
Decatur Trust Bank	72	(1)
Introduction	73	(1)
Quality Defined	73	(2)
Total Cost of Quality	75	(2)
Total Quality Management	77	(5)
Continuous Improvement Tools	82	(5)
Process Mapping	82	(1)
Root Cause Analysis	82	(4)
PDCA Cycle	86	(1)
Statistical Quality Control	87	(15)
Process Capability	87	(3)
Six-Sigma Quality	90	(1)
Control Charts	91	(8)
Acceptance Sampling	99	(2)
Taguchi's Quality Loss Function	101	(1)
Managing Quality Across the Supply Chain	102	(17)
ISO 9000	102	(1)
External Failures in the Supply Chain	103	(1)
Chapter Summary	104	(1)
Key Formulas	104	(2)
Key Terms	106	(1)
Using Excel in Quality Management	107	(1)
Solved Problem	107	(2)
Discussion Questions	109	(1)
Problems	110	(6)
Case Study	116	(2)
References	118	(1)
PART II Establishing the Operations Environment	119	(124)
Managing Projects	119	(26)
Bechtel Group	120	(1)
Introduction	120	(1)
The Growing Importance of Project Management	121	(1)
Project Phases	122	(2)
Concept Phase	122	(1)
Project Definition Phase	123	(1)
Planning Phase	123	(1)
Performance Phase	124	(1)
Postcompletion Phase	124	(1)
Project Management Tools	124	(11)
Gantt Charts	124	(2)
Network Diagrams	126	(1)
Constructing a Network Diagram	127	(4)
Crashing a Project	131	(4)
Project Management Software	135	(10)
Chapter Summary	138	(1)
Key Formulas	138	(1)
Key Terms	138	(1)
Solved Problem	139	(1)
Discussion Questions	140	(1)
Problems	141	(3)
Case Study	144	(1)
References	144	(1)
Developing Products and Services	145	(22)
Whirlpool	146	(1)
Introduction	147	(1)
Product Design and the Development Process	147	(1)
Four Reasons for Developing New Products and Services	147	(2)
Operations and Supply Chain Perspectives on Design	149	(3)
Robust Design, Testability, and Serviceability	149	(1)
Product Volumes	150	(1)
Product Costs	150	(1)
Match with Existing Capabilities	151	(1)
The Development Process	152	(3)
A Model of the Development Process	153	(1)
Sequential Development versus Concurrent Engineering	154	(1)
Organizational Roles in Product and Service Development	155	(3)
Engineering	155	(1)
Marketing	156	(1)
Accounting	156	(1)
Finance	156	(1)
Designers	156	(1)
Purchasing	157	(1)
Suppliers	158	(1)
Who Leads?	158	(1)
Approaches to Improving Product and Service Designs	158	(9)
Quality Function Deployment (QFD)	158	(2)
Computer-Aided Design (CAD) and Computer-Aided Design/Computer-Aided Manufacturing (CAD/CAM)	160	(1)
Design for Manufacturability (DFM), Design for Maintainability (DFMt), and Design for the Environment (DFE)	160	(1)
Target Costing and Value Analysis	161	(3)
Chapter Summary	164	(1)
Key Terms	164	(1)
Discussion Questions	164	(1)
Case Study	165	(1)
References	166	(1)
Process Choice and Layout Decisions in Manufacturing and Services	167	(40)
Bliven Furniture Company	168	(1)
Introduction	169	(1)
Manufacturing Processes	169	(8)
Production Lines and Continuous Flow Manufacturing	170	(2)
Job Shops	172	(1)
Batch Manufacturing	173	(1)
Fixed-Position Layout	174	(1)
Hybrid Manufacturing Processes	174	(1)
Linking Manufacturing Processes across the Supply Chain	174	(1)
Selecting a Manufacturing Process	175	(1)
The Product-Process Matrix	175	(2)
Product Customization within the Supply Chain	177	(3)
Four Levels of Customization	177	(1)
The Customization Point	177	(3)
Service Processes	180	(5)
The Service Package	180	(1)
Service Customization	181	(1)
Customer Contact	182	(1)
Service Positioning	183	(1)
Services within the Supply Chain	184	(1)
Layout Decision Models	185	(22)
Line Balancing	186	(4)
Assigning Department Locations in Functional Layouts	190	(4)
Chapter Summary	194	(1)
Key Formulas	194	(1)
Key Terms	195	(1)
Solved Problem	195	(3)
Discussion Questions	198	(1)
Problems	199	(4)
Case Study	203	(2)
References	205	(2)
Managing Capacity	207	(36)
Merck and Crixivan	208	(1)
Introduction	209	(1)
Capacity	209	(2)
Measures of Capacity	209	(1)
Factors That Affect Capacity	210	(1)
Supply Chain Considerations	211	(1)
Three Common Capacity Strategies	211	(1)
Methods of Evaluating Capacity Alternatives	212	(9)
Cost	212	(3)
Demand Considerations	215	(1)
Expected Value	216	(1)
Decision Trees	217	(3)
Break-Even Analysis	220	(1)
Other Considerations	220	(1)
Advanced Perspectives on Capacity	221	(22)
The Theory of Constraints (TOC)	221	(1)
Waiting Line Theory	222	(6)
Learning Curves	228	(3)
Chapter Summary	231	(1)
Key Formulas	231	(2)
Key Terms	233	(1)
Using Excel in Capacity Management	233	(1)
Solved Problem	234	(1)
Discussion Questions	235	(1)
Problems	235	(5)
Case Study	240	(1)
References	241	(2)
PART III Establishing Supply Chain Linkages	243	(130)
Forecasting	243	(48)
Ford's Palladium Debacle	244	(1)
Introduction	245	(1)
Forecast Types	245	(1)
Demand Forecasts	245	(1)
Supply Forecasts	245	(1)
Price Forecasts	246	(1)
Laws of Forecasting	246	(1)
Law 1: Forecasts Are Almost Always Wrong	246	(1)
Law 2: Forecasts for the Near Term Tend to Be More Accurate	246	(1)
Law 3: Forecasts for Groups of Products or Services Tend to Be Accurate	246	(1)
Law 4: Forecasts Are No Substitute for Calculated Values	246	(1)
Selecting a Forecasting Method	247	(1)
Qualitative Forecasting Methods	248	(1)
Time Series Forecasting Methods	248	(19)
Last Period	250	(1)
Moving Average	251	(2)
Weighted Moving Average	253	(1)
Exponential Smoothing	254	(3)
Adjusted Exponential Smoothing	257	(2)
Linear Regression	259	(4)
Seasonal Adjustments	263	(4)
Causal Forecasting Models	267	(6)
Linear Regression	268	(3)
Multiple Regression	271	(2)
Measures of Forecast Accuracy	273	(3)
Computer-Based Forecasting Packages	276	(1)
Collaborative Planning, Forecasting, and Replenishment (CPFR)	276	(15)
Chapter Summary	277	(1)
Key Formulas	278	(2)
Key Terms	280	(1)
Solved Problem	281	(3)
Discussion Questions	284	(1)
Problems	284	(6)
Case Study	290	(1)
References	290	(1)
Sourcing Decisions and the Purchasing Process	291	(44)
Dell Computer Corporation	292	(1)
Introduction	292	(1)
Why Purchasing Is Critical	293	(4)
The Changing Global Competitive Landscape	293	(1)
Financial Impact	293	(3)
Performance Impact	296	(1)
The Sourcing Decision	297	(5)
Advantages and Disadvantages of Insourcing and Outsourcing	298	(2)
Total Cost Analysis	300	(2)
Sourcing Strategies	302	(3)
The Purchasing Process	305	(7)
Needs Identification	306	(1)
Description	306	(1)
Supplier Identification and Evaluation	307	(2)
Supplier Selection	309	(1)
Purchase Order Preparation	310	(1)
Follow-Up and Expediting	311	(1)
Receipt and Inspection	311	(1)
Invoice Clearance and Payment	311	(1)
Records Maintenance	312	(1)
Multicriteria Decision Models in Sourcing and Purchasing	312	(10)
Analytic Hierarchy Process	312	(8)
Weighted Point Evaluation System	320	(2)
Trends in Purchasing Management	322	(13)
Long-Term Contracts and Consolidation	322	(1)
Supply Base Reduction	322	(1)
Global Purchasing	323	(1)
Supplier Performance Measurement	323	(1)
Supplier Technology	323	(1)
Information Technology	323	(1)
Professionalism in Purchasing	324	(2)
Chapter Summary	326	(1)
Key Formulas	326	(1)
Key Terms	327	(1)
Solved Problem	327	(1)
Discussion Questions	328	(1)
Problems	329	(4)
Case Study	333	(1)
References	334	(1)
Logistics	335	(38)
Kraft Foods	336	(1)
Introduction	337	(1)
The Logistics Renaissance	337	(1)
Why Logistics Is Critical	338	(1)
Logistics Decision Areas	339	(11)
Transportation	340	(2)
Selecting a Transportation Mode	342	(1)
Multimodal Solutions	343	(1)
Warehousing	344	(3)
Improving Operational Flexibility	347	(1)
Logistics Information Systems	348	(1)
Material Handling and Packaging	349	(1)
Inventory Management	349	(1)
Logistics Strategy	350	(4)
Owning versus Outsourcing	351	(1)
Measuring Logistics Performance	351	(2)
Landed Costs	353	(1)
Logistics Decision Models	354	(19)
Weighted Center of Gravity Method	355	(2)
Optimization Models	357	(1)
The Assignment Problem	357	(6)
Chapter Summary	363	(1)
Key Formulas	363	(1)
Key Terms	364	(1)
Solved Problem	365	(1)
Discussion Questions	366	(1)
Problems	367	(3)
Case Study	370	(1)
References	371	(2)
PART IV Planning and Controlling Operations and Supply Chains	373	(154)
Sales and Operations Planning (Aggregate Planning)	373	(38)
Covolo Diving Gear, Part 1	374	(1)
Introduction	374	(1)
S&OP in the Planning Cycle	375	(1)
Major Approaches to S&OP	376	(13)
Top-Down Planning	378	(3)
Level, Chase, and Mixed Production Plans	381	(4)
Bottom-Up Planning	385	(2)
Cash Flow Analysis	387	(2)
Organizing for and Implementing S&OP	389	(4)
Choosing between Alternative Plans	389	(2)
Rolling Planning Horizons	391	(1)
Implementing S&OP in the Organization	391	(2)
Services Considerations	393	(2)
Making Sales Match Capacity	393	(1)
Making Capacity Match Sales	394	(1)
Linking S&OP throughout the Supply Chain	395	(1)
Applying Optimization Modeling to S&OP	396	(15)
Chapter Summary	400	(1)
Key Formulas	400	(1)
Key Terms	400	(1)
Solved Problem	401	(1)
Discussion Questions	402	(1)
Problems	403	(6)
Case Study	409	(1)
References	410	(1)
Managing Inventory throughout the Supply Chain	411	(40)
Amazon.com	412	(1)
Introduction	412	(1)
The Role of Inventory	413	(5)
Inventory Types	414	(2)
Inventory Drivers	416	(2)
Independent versus Dependent Demand Inventory	418	(1)
Periodic Review Systems	418	(2)
Restocking Levels	419	(1)
Continuous Review Systems	420	(9)
The Economic Order Quantity (EOQ)	421	(3)
Reorder Points and Safety Stock	424	(3)
Quantity Discounts	427	(2)
Single Period Inventory Systems	429	(4)
Target Service Level	430	(1)
Target Stocking Point	431	(2)
Inventory in the Supply Chain	433	(4)
The Bullwhip Effect	433	(1)
Inventory Positioning	434	(3)
Transportation, Packaging, and Material Handling Considerations	437	(1)
Proactive Management of Independent Demand Inventory	437	(14)
Chapter Summary	438	(1)
Key Formulas	439	(1)
Key Terms	440	(1)
Using Excel in Inventory Management	440	(1)
Solved Problems	441	(1)
Discussion Questions	442	(1)
Problems	443	(5)
Case Study	448	(2)
References	450	(1)
Managing Production across the Supply Chain	451	(38)
Herman Miller	452	(1)
Introduction	453	(1)
Master Scheduling	454	(7)
The Master Schedule Record	455	(4)
Using the Master Schedule	459	(2)
Material Requirements Planning	461	(10)
The MRP Record	463	(6)
The Advantages of MRP	469	(1)
Special Considerations in MRP	469	(2)
Production Activity Control and Vendor Order Management Systems	471	(2)
Job Sequencing	471	(2)
Monitoring and Tracking Technologies	473	(1)
Synchronizing Planning and Control across the Supply Chain	473	(16)
Distribution Requirements Planning	474	(2)
Chapter Summary	476	(1)
Key Formulas	476	(1)
Key Terms	477	(1)
Solved Problem	478	(1)
Discussion Questions	479	(1)
Problems	479	(9)
Case Study	488	(1)
References	488	(1)
JIT/Lean Production	489	(20)
Toyota Motor Company	490	(1)
Introduction	491	(1)
The JIT Perspective on Waste	492	(1)
The JIT Perspective on Inventory	493	(2)
Kanban Systems	495	(14)
Controlling Inventory Levels Using Kanbans	498	(2)
Synchronizing the Supply Chain Using Kanbans	500	(1)
Using MRP and Kanban Together	501	(1)
Chapter Summary	502	(1)
Key Formulas	503	(1)
Key Terms	503	(1)
Solved Problem	503	(1)
Discussion Questions	504	(1)
Problems	505	(1)
Case Study	506	(2)
References	508	(1)
Managing Information Technologies across the Supply Chain	509	(18)
SciQuest	510	(1)
Introduction	511	(1)
Understanding Information Needs	511	(3)
Differences across Organizational Levels	511	(2)
Direction of Linkages	513	(1)
Diagnosing and Improving Supply Chain Information Flows	514	(3)
The Information Flow Profile	514	(3)
Supply Chain Information Systems	517	(3)
Software Vendor Profiles	520	(7)
SAP AG	520	(1)
Seibel Systems	520	(1)
i2	521	(1)
SAS	522	(1)
Chapter Summary	522	(1)
Key Terms	523	(1)
Discussion Questions	523	(1)
Case Study	524	(1)
References	525	(2)
Appendices	527	(6)
Glossary	533	(14)
Index	547