9780130675460

Managing Business Process Flows W/C

by
  • ISBN13:

    9780130675460

  • ISBN10:

    0130675466

  • Edition: 2nd
  • Format: Paperback
  • Copyright: 2004-01-01
  • Publisher: PH
  • View Upgraded Edition

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Supplemental Materials

What is included with this book?

Summary

This unique and comprehensive book presents a unifying paradigm for understanding operations, based in the belief that a large part of operations management is the design and management of business processes. The overall objective of the book is to demonstrate how managers can control process structure and process drivers to achieve desired business process performance. This framework is applied to understand which levels managers have to control: cycle time, capacity, inventory, and quality. Providing a conceptual and logically rigorous approach, Managing Business Process Flows discusses the subject in three steps: model and understand the process and its flows; study causal relationships between process structure and certain performance metrics; and formulate implications for managerial actions by filtering out managerial levers ("process drivers") and their impact on process performance. The book also identifies managerial levers, and establishes a connection between operational and financial measurements. An essential resource for all management professionals, especially Management Consultants specializing in operations and supply chains, Managers and VPs overseeing supply chains, and Plant Managers. ΓΏ

Table of Contents

Preface xi
About iGrafx® Process™ xiv
PART I: PROCESS MANAGEMENT AND STRATEGY
1(38)
Products, Processes, and Performance
2(16)
Introduction
2(1)
The Process View of Organizations
3(3)
Performance Measures
6(3)
The Importance of Measurement: Management by Fact
6(1)
Types of Measures: Financial, External, and Internal
6(3)
Products and Product Attributes
9(3)
Processes and Process Competencies
12(3)
Process Competencies
12(1)
Process Architectures: Job Shop versus Flow Shop
13(2)
Process Design, Planning, Control, and Improvement
15(1)
The Plan of the Book
16(2)
Summary
16(1)
Key Terms
17(1)
Discussion Questions
17(1)
Selected Bibliography
17(1)
Operations Strategy and Management
18(21)
Introduction
18(1)
Strategic Positioning and Operational Effectiveness
19(1)
The Strategy Hierarchy
20(2)
Strategic Fit
22(2)
Focused Operations
24(2)
Matching Products and Processes
26(2)
The Operations Frontier and Trade-Offs
28(4)
The Evolution of Strategy and Operations Management
32(7)
Summary
35(1)
Key Terms
35(1)
Discussion Questions
35(1)
Selected Bibliography
36(3)
PART II: PROCESS FLOW MEASUREMENT
39(126)
Process Flow Measures
40(34)
Introduction
40(1)
The Essence of Process Flow
41(1)
Three Key Process Measures
42(2)
Flow Time, Flow Rate, and Inventory Dynamics
44(5)
Throughput in a Stable Process
49(1)
Little's Law: Relating Average Flow Time, Throughput, and Average Inventory
50(7)
Material Flow
51(1)
Customer Flow
51(1)
Job Flow
52(1)
Cash Flow
52(1)
Cash Flow (Accounts Receivable)
52(1)
Service Flow (Financing Applications at Auto-Moto)
53(4)
Analyzing Financial Flows through Financial Statements
57(7)
Assessing Financial Flow Performance
58(3)
Cash-to-Cash Cycle Performance
61(1)
Targeting Improvement with Detailed Financial Flow Analysis
62(2)
Inventory Turns (Turnover Ratio)
64(1)
Using Operational Measures to Improve Financial Measures: What Do We Mean by ``an Improvement''?
65(9)
Summary
67(1)
Key Equations and Symbols
68(1)
Key Terms
68(1)
Discussion Questions
68(1)
Exercises
68(3)
Modeling Exercise
71(2)
Selected Bibliography
73(1)
Flow-Time Analysis
74(27)
Introduction
74(2)
The Process Flowchart
76(2)
Flow-Time Measurement
78(2)
Theoretical Flow Time
80(8)
Activity Time and Critical Paths
80(2)
Computing Flow Time
82(2)
Value-Adding and Non-Value-Adding Activities
84(1)
Extensions: Rework, Visits, and Work Content
84(2)
Flow-Time Efficiency
86(2)
Levers for Managing Theoretical Flow Time
88(13)
Eliminate: Reducing the Work Content of Critical Activities
89(1)
Work in Parallel: Moving Work Off the Critical Path
90(1)
Select: Modifying the Product Mix
91(1)
Summary
92(1)
Key Equations and Symbols
93(1)
Key Terms
93(1)
Discussion Questions
93(1)
Exercises
94(2)
Modeling Exercise
96(2)
Selected Bibliography
98(1)
Appendix: The Critical Path Method
99(2)
Flow Rate and Capacity Analysis
101(31)
Introduction
101(1)
Resources and Resource Pools
102(2)
Flow Rate Measurement
104(6)
Theoretical Capacity
104(1)
Computing Theoretical Capacity
105(1)
Extensions: Other Factors Affecting Theoretical Capacity
106(1)
Throughput and Capacity Utilization
107(3)
Effect of Product Mix on Theoretical Capacity and Profitability of a Process
110(5)
Unit Load for Product Mix
110(1)
Theoretical Capacity for Product Mix
110(4)
Optimizing Profitability
114(1)
Other Factors Affecting Process Capacity
115(4)
Net Availability
116(1)
Setups
116(2)
Effective Capacity of a Process
118(1)
Levers for Managing Throughput
119(13)
Comparisons
119(1)
Improving Theoretical Capacity
120(3)
Other Improvements
123(1)
Internal and External Bottlenecks
123(1)
The Improvement Spiral
124(1)
Summary
124(1)
Key Equations and Symbols
125(1)
Key Terms
125(1)
Discussion Problems
126(1)
Exercises
126(2)
Modeling Exercise
128(2)
Selected Bibliography
130(1)
Appendix: Optimizing Product Mix with Linear Programming
131(1)
Inventory Analysis
132(33)
Introduction
132(2)
Inventory Classification
134(3)
Inventory Benefits
137(2)
Economies of Scale
137(1)
Production and Capacity Smoothing
138(1)
Stockout Protection
138(1)
Price Speculation
139(1)
Inventory Costs
139(2)
Inventory Dynamics of Batch Purchasing
141(3)
Economies of Scale and Optimal Cycle Inventory
144(6)
Effect of Lead Times on Ordering Decisions
150(2)
Price Discounts: Forward Buying
152(3)
Levers for Managing Inventories
155(10)
Summary
156(1)
Key Equations and Symbols
157(1)
Key Terms
157(1)
Discussion Questions
157(1)
Exercises
157(3)
Modeling Exercise
160(2)
Selected Bibliography
162(1)
Appendix: Derivation of EOQ Formula and Forward-Buying Quantity
163(2)
PART III: PROCESS FLOW VARIABILITY
165(116)
Managing Flow Variability: Safety Inventory
166(36)
Introduction
166(2)
Demand Forecasts and Forecast Errors
168(1)
Safety Inventory and Service Level
169(8)
Service Level Measures
170(1)
Continuous Review, Reorder Point System
171(2)
Service Level Given Safety Inventory
173(2)
Safety Inventory Given Service Level
175(2)
Optimal Service Level: The Newsvendor Problem
177(6)
Lead Time Demand Variability
183(4)
Fixed Replenishment Lead Time
184(1)
Variability in Replenishment Lead Time
185(2)
Pooling Efficiency through Aggregation
187(5)
Physical Centralization
187(4)
Principle of Aggregation and Pooling Inventory
191(1)
Shortening the Forecast Horizon through Postponement
192(1)
Levers for Reducing Safety Inventory
193(9)
Summary
194(1)
Key Equations and Symbols
194(1)
Key Terms
195(1)
Discussion Questions
195(1)
Exercises
195(2)
Modeling Exercise
197(3)
Selected Bibliography
200(1)
Appendix: Calculating Service Level for a Given Safety Inventory
201(1)
Managing Flow Variability: Safety Capacity
202(40)
Introduction
202(2)
Service Process and Its Performance
204(7)
Service Processes
204(2)
Service Process Attributes
206(1)
Service Process Performance
207(3)
Relationships between Performance Measures
210(1)
Effect of Variability on Process Performance
211(3)
Drivers of Process Performance
214(5)
The Queue Length Formula
215(2)
The Exponential Model
217(2)
Performance Improvement Levers
219(3)
Variability Reduction Levers
219(1)
Capacity Utilization Levers
220(1)
Synchronization of Capacity with Demand
221(1)
Effect of Pooling Capacity
222(2)
Effect of Blocking and Abandonment
224(2)
Capacity Investment Decisions
226(3)
The Economics of Buffer Capacity
227(1)
The Economics of Processing Capacity
228(1)
Variability in Process Performance
229(3)
Managing Customer Perceptions and Expectations
232(10)
Summary
233(1)
Key Equations and Symbols
233(1)
Key Terms
234(1)
Discussion Questions
234(1)
Exercises
235(3)
Modeling Exercise
238(2)
Selected Bibliography
240(1)
Appendix: The Exponential Model with Finite Buffer Capacity
241(1)
Managing Flow Variability: Process Control and Capability
242(39)
Introduction
242(2)
Performance Variability
244(2)
Analysis of Variability
246(6)
Check Sheets
246(1)
Pareto Charts
247(1)
Histograms
248(1)
Run Charts
249(1)
Multi-Vari Charts
250(2)
Process Control
252(13)
The Feedback Control Principle
252(1)
Types and Causes of Variability
253(2)
Control Limit Policy
255(1)
Control Charts
256(7)
Cause-Effect Diagrams
263(1)
Scatter Plots
264(1)
Process Capability
265(5)
Fraction of Output within Specifications
266(1)
Process Capability Ratios (Cpk and Cp)
266(2)
Six-Sigma Capability
268(2)
Capability and Control
270(1)
Process Capability Improvement
270(3)
Mean Shift
270(1)
Variability Reduction
270(2)
Effect of Process Improvement on Process Control
272(1)
Product and Process Design
273(8)
Design for Processing
273(1)
Robust Design
274(1)
Summary
274(1)
Key Equations and Symbols
275(1)
Key Terms
276(1)
Discussion Questions
276(1)
Exercises
276(2)
Selected Bibliography
278(3)
PART IV: PROCESS INTEGRATION
281(32)
Lean Operations: Process Synchronization and Improvement
282(31)
Introduction
282(1)
Processing Networks
283(1)
The Process Ideal: Synchronization and Efficiency
284(1)
Waste and Its Sources
285(4)
Improving Flows in a Plant: Basic Principles of Lean Operations
289(10)
Improving Process Architecture: Cellular Layouts
290(1)
Improving Information and Material Flow: Demand Pull
291(3)
Improving Process Flexibility: Batch-Size Reduction
294(1)
Quality at Source: Defect Prevention and Early Detection
295(1)
Reducing Processing Variability: Standardization of Work, Maintenance, and Safety Capacity
296(1)
Visibility of Performance
297(1)
Managing Human Resources: Employee Involvement
297(1)
Supplier Management: Partnerships
298(1)
Improving Flows in a Supply Chain
299(7)
Lack of Synchronization: The Bullwhip Effect
300(1)
Causes of the Bullwhip Effect
301(2)
Levers to Counteract the Bullwhip Effect
303(3)
The Improvement Process
306(7)
Process Stabilization: Standardizing and Controlling the Process
306(1)
Continuous Improvement: Management by Sight and Stress
306(1)
Business Process Reengineering: Process Innovation
307(1)
Benchmarking: Heeding the Voices of the Best
308(1)
Managing Change
309(1)
Summary
309(1)
Key Terms
310(1)
Discussion Questions
311(1)
Selected Bibliography
311(2)
Appendix I MBPF Checklist
313(3)
Process Flow Measures
313(1)
Levers for Managing Theoretical Flow Time
313(1)
Levers for Managing Throughput
313(1)
Levers for Reducing Waiting Time
314(1)
Levers for Controlling Process Variability
314(1)
Levers for Managing Flows in Processing Networks
314(2)
Appendix II Background Material in Probability and Statistics
316(4)
Random Variables, Mean, Variance, and Covariance
316(1)
Random Variable
316(1)
Mean
316(1)
Variance
316(1)
Covariance and Coefficient of Correlation
317(1)
Some Probability Distributions
317(3)
The Poisson Probability Distribution
317(1)
The Exponential Probability Distribution
318(1)
The Normal Probability Distribution
318(2)
Appendix III iGrafx® FlowCharter™ Quick Reference Guide
320(3)
Appendix IV iGrafx® Process Simulation Quick Reference Guide
323(6)
Five-Step Process to Simulation Analysis
323(1)
Step 3: Build a Process Model
323(6)
Create a Process Diagram (Map or Flowchart)
323(1)
Describe the Behavior of Each Shape/Activity
324(2)
Describe the Process Environment in the Scenario
326(1)
Execute Simulation and Analyze Results in the Report
327(2)
Glossary 329(7)
Index 336

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