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T H E McGRAW-HILL 36-Hour Course OPERATIONS MANAGEMENT Other books in The McGraw-Hill 36-Hour Course series: The McGraw-Hill 36-Hour Course: Accounting The McGraw-Hill 36-Hour Course: Business Writing and Communication, 2E The McGraw-Hill 36-Hour Course: Finance for Nonfinancial Managers The McGraw-Hill 36-Hour Course: Organizational Development The McGraw-Hill 36-Hour Course: Product Development The McGraw-Hill 36-Hour Course: Project Management, 2E The McGraw-Hill 36-Hour Course: Real Estate Investing, 2E The McGraw-Hill 36-Hour Course: Six Sigma T H E McGRAW-HILL 36-Hour Course OPERATIONS MANAGEMENT Linda L Brennan, Ph.D New York Chicago San Francisco Lisbon London Madrid Mexico City Milan New Delhi San Juan Seoul Singapore Sydney Toronto Copyright © 2011 by Linda Brennan All rights reserved Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written permission of the publisher ISBN: 978-0-07-174613-7 MHID: 0-07-174613-7 The material in this eBook also appears in the print version of this title: ISBN: 978-0-07-174383-9, MHID: 0-07-174383-9 All trademarks are trademarks of their respective owners Rather than put a trademark symbol after every occurrence of a trademarked name, we use names in an editorial fashion only, and to the benefit of the trademark owner, with no intention of infringement of the trademark Where such designations appear in this book, they have been printed with initial caps McGraw-Hill eBooks are available at special quantity discounts to use as premiums and sales promotions, or for use in corporate training programs To contact a representative please e-mail us at bulksales@mcgraw-hill.com This publication is designed to provide accurate and authoritative information in regard to the subject matter covered It is sold with the understanding that neither the author nor the publisher is engaged in rendering legal, accounting, securities trading, or other professional services If legal advice or other expert assistance is required, the services of a competent professional person should be sought —From a Declaration of Principles Jointly Adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations Trademarks: McGraw-Hill, the McGraw-Hill Publishing logo, 36-Hour Course, and related trade dress are trademarks or registered trademarks of The McGraw-Hill Companies and/or its affi liates in the United States and other countries and may not be used without written permission All other trademarks are the property of their respective owners The McGraw-Hill Companies is not associated with any product or vendor mentioned in this book TERMS OF USE This is a copyrighted work and The McGraw-Hill Companies, Inc (“McGrawHill”) and its licensors reserve all rights in and to the work Use of this work is subject to these terms Except as permitted under the Copyright Act of 1976 and the right to store and retrieve one copy of the work, you may not decompile, disassemble, reverse engineer, reproduce, modify, create derivative works based upon, transmit, distribute, disseminate, sell, publish or sublicense the work or any part of it without McGrawHill’s prior consent You may use the work for your own noncommercial and personal use; any other use of the work is strictly prohibited Your right to use the work may be terminated if you fail to comply with these terms THE WORK IS PROVIDED “AS IS.” McGRAW-HILL AND ITS LICENSORS MAKE NO GUARANTEES OR WARRANTIES AS TO THE ACCURACY, ADEQUACY OR COMPLETENESS OF OR RESULTS TO BE OBTAINED FROM USING THE WORK, INCLUDING ANY INFORMATION THAT CAN BE ACCESSED THROUGH THE WORK VIA HYPERLINK OR OTHERWISE, AND EXPRESSLY DISCLAIM ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE McGraw-Hill and its licensors not warrant or guarantee that the functions contained in the work will meet your requirements or that its operation will be uninterrupted or error free Neither McGraw-Hill nor its licensors shall be liable to you or anyone else for any inaccuracy, error or omission, regardless of cause, in the work or for any damages resulting therefrom McGraw-Hill has no responsibility for the content of any information accessed through the work Under no circumstances shall McGraw-Hill and/or its licensors be liable for any indirect, incidental, special, punitive, consequential or similar damages that result from the use of or inability to use the work, even if any of them has been advised of the possibility of such damages This limitation of liability shall apply to any claim or cause whatsoever whether such claim or cause arises in contract, tort or otherwise This book is dedicated to Mudge, my very large chocolate lab, who parked himself behind my desk chair whenever I sat down to write— and would not let me out until my job was done This page intentionally left blank CONTENTS Preface Acknowledgments xi xiii Chapter Managing for Results Operations as a Transformation Function Operations as a Competitive Advantage Technique: Identifying Sources of Competitive Advantage Summary 10 Chapter A Practical Approach to Operations Systems Thinking 14 Business Research Framework 17 Technique: Environmental Analysis Summary 24 Chapter Desired Results Measurement Theory 28 Operational Decision Making 30 Technique: The Balanced Scorecard Summary 35 13 23 27 32 vii viii Contents Chapter Organizational Performance Product and Service Design and Development 40 Categories of Services 48 Technique: Quality Function Deployment 50 Summary 53 39 Chapter Quality Across the Organization Definitions of Quality 58 The Quality Movement in Businesses Six Sigma 63 Lean Production 66 Technique: Quality Management Tools Summary 74 57 59 70 Chapter Technology Across the Value Chain Roles of Technology 80 Technology Impact 83 Applications of Technology Across and Beyond the Organization 85 Technique: Capability Maturity Models 92 Summary 95 79 Chapter Process Effectiveness Value Chain Perspective of Processes Process Design 101 Ongoing Process Management 107 Technique: Flowcharting 111 Summary 116 99 100 Chapter Process Quality Theoretical Foundation 120 Control Charts 124 Process Capability 132 Technique: Creating and Interpreting Control Charts Summary 139 Chapter Project Definition for Results The Project Management Body of Knowledge Project Management Foundations 147 Project Success Factors 148 Project Definition 149 119 134 143 144 Contents ix Technique: Developing a Statement of Work Summary 159 151 Chapter 10 Project Planning Work Breakdown Structure 164 Project Scheduling 166 Technique: Critical Path Method 174 Summary 179 163 Chapter 11 Project Control Project Control 184 Project Closings 191 Effective Project Teams 195 Technique: Conducting Effective Meetings Summary 200 183 Chapter 12 Individual Effectiveness You as an Operational System Individual Performance 208 Your Individualized Scorecard Summary 216 195 205 206 214 Notes Index Instructions for Accessing Online Final Exam and Chapter Quiz Answers 219 231 239 Notes 227 Earth Learning Group Accessed online at http://www.endsoftheearth com/SPC/Chap1.htm Op cit McClave et al Hare, L B., R W Hoerl, J D Hromi, and R D Snee “The Role of Statistical Thinking in Management.” The ASQ Reprinted in IEEE Engineering Management Review (Fall 1998), 69–77 Francis, V E “Winning Hearts and Minds: An Argument for Quantitative Management in an Operations Management Course.” Decision Sciences Journal of Innovative Education 7, no (January 2009): 73–79 Krajewski, L J, L P Ritzman, and M K Malhotra Operations Management: Processes and Supply Chains, 9/e Upper Saddle River, NJ: Prentice Hall CHAPTER Pinto, J K., and O P Kharbanda “Lessons for an Accidental Profession.” Business Horizons 38, no (1995), 41–50 Reprinted in Engineering Management Review 23, no (1996), 18–27 Project Management Institute A Guide to the Project Management Body of Knowledge (PMBOK® Guide): 3/e Newtown Square: Project Management Institute, 2004 See, for example, Jang, J., G Klein, and J Balloun “Ranking System Implementation Success Factors.” Project Management Journal, December 1996, 49–53 Gido, J., and J P Clements Successful Project Management, 2/e Mason, OH: Thompson South-Western, 2003 Orwig, R A., and L L Brennan “An Integrated View of Project and Quality Management for Project-based Organizations.” International Journal of Quality & Reliability Management 17, no 4/5 (2000), 351–363 Bailey, A “Uh-Oh It’s a Computer Systems Project ” IEEE Engineering Management Review (winter 1998), 21–25 Goldratt, E M The Critical Chain Great Barrington, MA: North River Press, 1996 228 Notes CHAPTER 10 Raz, T., and S Globerson “Effective Sizing and Content Definition of Work Packages.” Project Management Journal 29, no (December 1998), 17–23 Op cit Goldratt Nevison, J “Up to Speed: The Cost of Learning on a White-Collar Project.” Project Management Journal, June 1994, 45–49 CHAPTER 11 Brennan, L L., and W W Austin “Addressing the Need for Management Processes in Higher Education Accreditation.” Innovative Higher Education 28, no (fall 2003), 49–62 Mantel, Jr., S J., J R Meredith, S M Shafer, and M M Sutton Project Management in Practice New York City: John Wiley & Sons, 2001 Pinto, J “Twelve Ways to Get the Least from Yourself and Your Project.” PM Network (May 1997), 29–31, with permission Baker, B “Great Expectations: Turning Failure Into Success—and Vice Versa.” PM Network (May 1997), 25–28 Lippincott, S Meetings: Do’s, Don’ts and Donuts Pittsburgh: Lighthouse Point Press, 1994 Doyle, M., and D Straus How to Make Meetings Work: The New Interaction Method New York City: Berkley Books, 1993 CHAPTER 12 Covey, S R “Use Your Voice of Influence.” Success from Home 2, no 10 (2006), 513 Pinto, J “Twelve Ways to Get the Least from Yourself and Your Project.” PM Network (May 1997), 29–31, with permission Covey, S R The Habits of Highly Effective People New York City: The Free Press, 2004 Perlow, L A., and J L Porter “Making Time off Predictable—& Required.” Harvard Business Review (October 2009), 1023 Pinto, J “Twelve Ways to Get the Least from Yourself and Your Project.” PM Network (May 1997), 29–31, with permission 109 (reprint R0910M) Crovitz, L G “Unloading Information Overload.” The Wall Street Journal, July 7, 2008 Accessed online at http://online.wsj.com Op cit Covey, 2004 Notes 229 Peters, T The Circle of Innovation: You Can’t Shrink Your Way to Greatness New York City: Alfred A Knopf, 1997 Maxwell, J C Thinking for a Change: 11 Ways Highly Successful People Approach Life and Work Nashville: Center Street, 2005 Kestenbaum, D “Do You Waste Time Walking to the Printer?” Broadcast on National Public Radio, February 18, 2010 Accessed online at npr.org Fiore, N The Now Habit: A Strategic Program for Overcoming Procrastination and Enjoying Guilt-Free Play New York City: Jeremy P Tarcher/Penguin, 2007 10 Rampersad, H K Personal Balance Scorecard: The Way to Individual Happiness, Personal Integrity, and Organizational Effectiveness Greenwich, CT: Information Age Publishing, 2006 This page intentionally left blank INDEX Accountability, 173 Accounts receivable, 69 Acquisition process, 69 Activity-on-arrow/arc (AOA) diagrams, 170 Activity-on-nodes, 169–72 diagrams, 169–70 example, 171–72, 173 finish-to-finish (FF), 169 finish-to-start (FS), 169 process, 170–71 start-to-finish (SF), 169–70 start-to-start (SS), 169 Actual cost of work performed (ACWP), 188–89 “Administrivia,” 143 Aesthetics, 58 Analysis of results, 20–22 Aristotle, 13 Aster Data Systems, 88 Attributes, 125 Audit process, 69 Automated teller machines (ATMs), 84 Automation, 105 Avatars, 91 Bakery bread production, 113 Balanced scorecard, 32–35 business processes, 32 consumers, 32 dashboard format, 33 employee satisfaction, 32, 33, 34 employee turnover rate, 32 financial matters, 32 formats, 33 growth, 32 innovation, 32–33 learning and growth, 32 organization vs department, 33 patents, 32 research projects, 32 Baldridge National Quality Award, 62–63 Bar codes, 105 Bar graph, 73 Behaviorism, 147 Benchmarking, 65 Benefits, recognizing, 107 Benioff, Marc, 79 Better-faster-cheaper, 4, Bic ballpoint pen, 58–59 Big-box realtors, British Petroleum, 67 Budgeted cost of work performed (BCWP), 188–89 Budgeted cost of work scheduled (BCWS), 188–89 Business drivers, 33 Business process reengineering, 84 Business processes, 101 Business research framework, 14, 17–22 action, 22 analysis of results, 20–22 data collection, 20 hypothesis, 19 monitoring, 22 repetition, 22 research question, 18 scientific method, 17 Calence, LLC, Candy wrapping, 135–37 Capability development, 207 Capability maturity model integration (CMMI), 93 Capability maturity models (CMM), 92–95 levels of progression, 94–95 Capacity cushions, 110 Capacity management, 109–11 Capacity utilization, 101 Capital, 2–3 Capital investments, 107 Carnegie Mellon Software Engineering Institute (SEI), 93 231 232 Carroll, Lewis, Cash flow, 69 Causal ambiguity, Causation, 21–22 Cause-and-effect diagram, 72–73 Cell phones Central limit theorem, 121 Chair assembly, 134–35 Champy, J., 105 Change, 104–7 introducing, 34 management, 184–85 Charles Schwab, 102 Cheap convenience, 102 Checklist Manifesto (Gawande), 68–69 Chick-fil-A, China, 44 Christiansen, C M., 44 Chronodrive, 109 Churn rate, 34 Code words, 105–6 Collaboration, 195 See also Teamwork Communication, 102, 185 incoming, 209 Competitive advantage, 4–10 leverage, 8, sources of, 7–10 Complexity, 31, 148 Computer-aided design (CAD), 43 Computer-aided manufacturing (CAM), 43 Conformance to specifications, 58 Consistency, 68–69 Constructs, 28–29 Consumers, 32 Contingency theory, 147 Continuous improvement, 60, 62, 63, 64, 66, 68, 70, 75, 94, 95, 101, 103, 104, 213–14 Control, 65, 119 project, 184–91 (see also Project control) Control charts, 124–32 attributes, 125 calculations, 127, 128 creating, 134–38 illustrations, 129–32 interpreting, 134–38 mechanics, 125–29 sample, 124 variables, 125, 128 Convenience copiers, 44 Corporate culture, Index Correlation, 21 Cost accounting, 107 Cost competitiveness, Cost control, 188–91 Cost leader, 102 Cost management, 145 Cost of warranty, 60 Critical path method (CPM), 174–77 backward pass, 175 example, 176–77 forward pass, 175 process, 175–76 Crosby, Philip B., 60 Customer focus, 101 Customer relationship management (CRM), 87–89 difficult customers, 88 Customer visibility, 102–3 Customers, 32, 34 Data collection, 20 historical data, 110 qualitative data, 125 quantitative data, 125 Dating services, 82 Davenport, T., 84, 100 Deadlines, 168 Death-march projects, 92 Decision making, 30–32, 105 hierarchical, 107 trade-offs in design, 44–48 Decoupling “front office” and “back office,” 102–3 Dedicated service, 102 Delivery, 47 deliverable projects, 165 Dell Computer, Demand patterns, 110 Deming, W Edwards, 60, 99 Department of Energy, U.S (DOE), 83 Dependent variable, 21 Devil shoppers, 88 Disruptive innovation, 44 DMAIC, 64–65, 70, 73 Downsizing, 106 DuPont Corporation, 174 Durability, 58 Duration estimation, 172–74 Dynamic stability, 40 Index E coli, 62 Earned value, 189 Economic issues, 23 See also PESTEL (political, economic, social, technological, environmental, and legal) factors Effectiveness See Individual effectiveness; Process effectiveness Efficiency, 101 See also Process effectiveness 80-20 rule See Pareto principle Einstein, Albert, 27 Eisenhower highway system, 194 “Elevator vision,” 4, E-mail filters, 209 Emerging markets, 44 Employee satisfaction, 32, 33, 34 Engineering consulting firms, 81 Enterprise resource planning (ERP), 86–87, 178 Environment, 14–15, 23 Environmental analysis, 23–24 Estimate at completion (EAC), 188–89 Estimate to completion (ETC), 188–89 Executive sponsorship, 106 Facilitating good, Fail-safes, 67–68, 104 Fear management, 105 Feasibility analysis, 41 Features of quality, 58 Federal Express, 63 Feedback loops, 14–15, 24, 103 Field-replaceable units (FRUs), 44–45 Fishbone diagram, 72–73, 74 Five Dysfunctions of a Team, The (Lencioni), 199 Five Forces model, 23 5S tool (sort, straighten, scrub, systemize, and standardize), 67 Whys, 70–71 Flooring production, 137–38 Flow direction, 66 Flowcharting, 111–15 example (bakery bread production), 113 purpose, 113 sources of meaning, 112 Food service, 34, 45 Foundation for Fair Civil Justice, 46 Free slack, 176 233 Games, 91 Gantt, Henry, 178 Gantt chart, 178 Gawande, Atul, 68–69 GEICO Insurance, 102 General Electric (GE), 43, 69 Gerstner, Louis, Jr., 29 Gestalt, 17 Giraudoux, Jean, 39 Global positioning system (GPS), 84 Goal, The (Goldratt and Cox), 27 Goldratt, Eliyahu, 27, 108 Goods vs services, 48–50 Graphical user interface (GUI), Grid, 83 Hair salons, 80–81 Hammer, M., 105 Hand offs, 104 Hardware stores, 5–6 Historical estimates, 174 Hoerl, R W., 64 Holism, 14, 17 Holmes, Oliver Wendell, Jr., 143 Hoover Dam, 178 House of quality (HOQ), 50–53 Human capital, Human resource management, 145 Humanity, 58 Hypothesis, 19, 24 IBM, 16, 29, 42, 44–45 India, 44 Indicators of success, 28, 33 Individual effectiveness, 205–17 Individual scorecard, 214–16 productivity, 208–10 review questions, 216–17 time management, 209–10 work breakdown schedule (WBS), 213 Individual scorecard, 214–16 Information overload, 83, 208–9 Information technology (IT), 8, 80, 81, 82, 83, 84, 85, 93, 95, 96, 97, 105 In-house process, 101 Inimitability, 7–8, Innovation, 32–33 disruptive innovation, 44 reverse innovation, 43–44 Inputs, 234 Insight Enterprises, 8–9 Inspection, 29 Integration management, 144 Intellectual capital, 3, 89 Interaction and customization (IC), 48, 49 International Standards Organization, 58, 63 “Into production,” 91 Inventory, 101, 110, 210 Investment, Ishikawa, Tenichi, 73 ISO 9000, 63 IT Cortex, 87 Job design, 106 Jobs, Steve, Juran, Joseph M., 60 Just-in-time (JIT), 66, 110 Kaizen, 68 Kaplan, R S., 32 Kelly, K., 81 Kharbanda, O P., 143 Knowledge management systems (KMS), 89–91 Knowledge networks, 90 Labor intensity (LI), 48, 49 Lao-Tzu, 163 Lapsed time, 172 Lead times, 110 Leadership team (LT), 64 Leading Six Sigma (Snee and Hoerl), 64, 69 Lean production, 31, 66–70 Learning curves, 174 learning curve function, 110–11 Legal issues, 23 See also PESTEL (political, economic, social, technological, environmental, and legal) factors Lencioni, Patrick, 199 Leverage, 8, Liability, 46 Life cycle assessment (LCA), 31 Line of visibility, 102–3 Location, Lower specification limits (LSL), 132–33 Loyalty cards, 34 Machine tooling, 50 “Make to inventory” approach, 66 Index Malcolm Baldridge National Quality Award, 62–63 Market pull, 40 Marketing, 16 “Marketplace” (National Public Radio), 88 Mass services, 48 Matters, R., 102 Maturity, 92–93 Maxwell, John, 199 Measurement, 27, 28 See also Balanced scorecard application, 28 auditing, 30 consistency, 30 errors, 60 multidimensional system, 28 theory, 28–30 trends, 30 Medical costs, 60 Meetings, 195–200 agenda, 198 facilitator, 197 participation, 197, 199–200 preparation, 196–98, 197 procedures, 197 purpose, 196–97, 199 scheduling, 199 summaries, 199 Mergers and acquisitions, 105 Metrics, 34 Microchips, 81–82 Milestones, 164, 170 Monitoring, 104 Mont Blanc fountain point, 58–59 Motion studies, 59 Motorola, 63 Nestle, 62 Netflix, 85 Network models, 168–69 New product development (NPD) See Product design stages New service development (NSD) See Service design stages Normal distribution, 120–21 Norton, D P., 32 Olay Regenerist, 91 Olympic management, 187 Index On-demand economy, 42 100 percent complete, 190 Online order processing, 92 Operating costs, 108 Operational Excellence Award, Operational system individuals as, 206–7 Operations competitive advantage, 4–10 decision making, 30–32 definition, measures, 31–32 systems thinking, 15–16 transformation function, 2–4 Operations management, 1, 10–11 Optimization, 94 short-term, 16–17 Order-processing system, 92 Organizational boundaries, 99 Organizational performance, 39–56 categories of services, 48–50 product design stages, 39–48 quality function deployment (QFD), 50–53 review questions, 54–56 Outcomes, 105 Outputs, goods and services, tangible vs intangible, 3, Outsourcing, 101 Overproduction, 210 Owen, J., 84 Pareto principle, 71–73, 103, 183 Pauling, Linus, 40 Payroll accuracy, 69 Perception, 58, 149 Performance, 28, 58 evaluation, 60 individual, 208–17 Performance hierarchy, 206 Performance metrics, 65 Personal digital assistants (PDAs), 208–9 Personalities, 106 PESTEL (political, economic, social, technological, environmental, and legal) factors, 14, 23 Phases, project, 164–66 Pinto, J K., 143 Plan-do-check-act (PDCA), 65 235 Poka yokes, 67, 68, 104 Political issues, 23 See also PESTEL (political, economic, social, technological, environmental, and legal) factors Polymer production, 80–81 Porter, Michael, 15, 23, 100 Precedence diagramming method See Activity-on-nodes Premium service, 102 Printing process, 51 Process capability, 132–34 Process control data, 105, 125 Process design, 101–7 individualized, 107 Process effectiveness, 99–117 flowcharting, 111–15 process design, 101–7 process evaluation, 103–4 Process evaluation, 103–4 Process management, 107–11 Process objectives, 101 Processes changing, 104–7 definition, 100 quality, 119–41 (see also Quality) reconceptualizing, 106–7 value chain, 100–101 Procrastination, 213 Procter & Gamble, 90–91 Procurement management, 145 Product design stages, 39–44, 39–48 feasibility analysis, 41 life cycle, 42 market pull, 40 organizational itch, 41 portfolio of offerings, 41 quality function deployment (QFD), 50–53 research and development (R&D), 43 technology push, 40 trends, 42–44 Production processes, 39, 100, 101 Production waste, Productive capacity, 208 Productivity, 28, 59 distractions, 209 individual, 208–10 Product-process matrix, 47–48 Products, Professional services, 48 236 Program evaluation and review technique (PERT), 170 Project bottom line, 151 complexity, 165 definition, 145–46, 149–51 illustrations, 150–51 performance, 149 planning, 157–59 statement of work, 151–57 success, 148–49 Project closings, 191–95 contributing factors, 191–92 failures, 194–95 terminations, 194 Project communications management, 145 Project control, 183–203 changes, 184–85 closings, 191–95 cost control, 188–91 meetings, 195–200 process, 187–88 review protocol, 192–93 review questions, 201–3 teamwork, 195–200 update formats, 185–86 Project definition, 143–61 Project design, 164 Project development, 164 Project implementation, 164 Project levels, 165 Project management, 69–70 definitions, 145–46 foundations, 147–48 review questions, 160–61 Project management body of knowledge (PMBOK), 144–46 Project Management Institute (PMI), 144 Project management professionals (PMPs), 144 Project management software programs (PMSSs), 87, 178–79 Project navigation See Project control Project planning, 163–81 activity-on-nodes, 169–72 critical path method (CPM), 174–77 network models, 168–69 review questions, 180–81 scheduling, 166–74 Index software programs, 178–79 work breakdown schedule (WBS), 164–66, 167 Project scheduling, 166–74 See also Scheduling activity-on-nodes, 169–72 critical path method (CPM), 174–77 network models, 168–69 Project teams See Teamwork Project testing, 164 “Project Wonderland,” 91 Projectizing, 209–10 “Proof of concept,” 22 Purpose, 60, 113, 196–97, 199 Quaker Oats Company, 16 Quality, 213–14 control charts, 124–32 definition, 58–59 process, 119–41 process capability, 132–34 statistics, 120–23 Quality assurance, 59–62, 104 Quality costs, 60–62 Quality function deployment (QFD), 39, 50–53 Quality management, 57–77, 145, 183 lean production, 66–70 tools, 70–75 total quality management (TQM), 62–63 Quality management tools, 70–75 Quality trilogy, 60 Quick response, 58 Quick-change expertise, 58 Radio frequency identification (RFID), 82 Rareness, Recalls, 61–62 Reduction in forces (RIF), 106 Reengineering, 105–6 Relational management database system, 92 Reliability, 46–47, 58 Requirements analysis, 164 Research and development (R&D), 43 Research question, 18 Resource flexibility, 101, 110 Resource-based view (RBV), example, Responsibilities, defined, 104 Index Results, 27–37 balanced scorecard, 32–35 managing for, 101 measurement, 27–30 Reverse innovation, 43–44 Ricoh, 44 Risk management, 145, 157–58 Rolls-Royce, 47–48 Run chart, 73 impact of time, 73 Samples (data collection), 126–27 Schedule variance, 188–89 Scheduling, 109–10 See also Project scheduling schedule variance, 188–89 Scheduling algorithms, 50 Schneiderman, Art, 33–34 Schwab, Charles, 102 Scientific method, 17, 147 “Scope creep,” 148 Scope management, 144 Scorecard, 32–35, 214–16 Second Life game, 91 Self-segmentation, 88 Self-service, 105 Senge, Peter, 22 Sensitivity analysis, 110 Sensors, 82 Service design stages, 39–44 feasibility analysis, 41 market pull, 40 portfolio of offerings, 41 quality function deployment (QFD), 50–53 research and development (R&D), 43 technology push, 40 trends, 42–44 Service factory, 48 Service flexibility, 102 Service flowcharting, 114 Service matrix, 39 Service process matrix, 48 Service shops, 48 Serviceability, 58 Services See Goods vs services Seventeen Indisputable Laws of Teamwork Workbook, The (Maxwell), 199 Shewhart, Walter, 59–60, 119 Shewhart cycle, 65 237 Short, J., 84, 100 Short-term profits, 60 Six Sigma, 31, 63–65, 70 Snee, R D., 64 Social capital, Social issues, 23 See also PESTEL (political, economic, social, technological, environmental, and legal) factors Social media, 88–89 Social networking, 88 Software programs, 178–79 options, 110 software maturity model, 93 Software Spectrum, Inc., Source data automation, 105 Southwest Airlines, Stakeholders, 153, 189 Standardization, 67 Starbucks, 3–4 Statement of work (SOW), 151–57, 194 assumptions, 153 issues, 153 objectives, 152–53 sample, 156–57 scope, 152 stakeholders, 153 Statistics statistical process control charts, 59 theoretical foundations, 120–23 Stewart, Potter, 57 Strategic management, 4–6 Suboptimization, 14, 16–17, 24 Success indicators, 28 Suicide square, 92 Super Suppers, 67 Supply-chain management (SCM), 31, 85–86 Swiffer Dusters, 91 Synchronous manufacturing, 109 Synthetic worlds, 91 Systems theory, 23, 147 Systems thinking, 13, 14–16 definition, 14 operations, 15–16 origins, 14–15 Tangible outputs, See also Outputs Starbucks example, 3–4 Taylor, Fredrick, 59 238 Teamwork, 62, 101 project, 195–200 Technical capabilities, 51–52 Technology, 23 See also PESTEL (political, economic, social, technological, environmental, and legal) factors capability maturity models (CMM), 92–95 impact, 83–85 roles, 80–83 value chain, 79–98 Technology push, 40 Telephone tag, 172 Theory of constraint, 108–9 Throughput, 101, 104, 108, 208 Time free slack, 176 lapsed, 172 total slack, 175 Time management, 145, 187–88, 209 energy dimension, 209 forty-day plan, 211 planning time, 209 rolling wave planning, 210 time continuum, 209 week-at-a-glance, 209 weekly planner, 212 “Time to teach,” 174 Total cost of ownership (TCO), 46 Total productive maintenance (TPM), 69 Total quality management (TQM), 62–63 Total slack, 175 Toyota, 61 production system, 66 Trade-offs in design, 39, 44–48, 51, 101, 106, 109 flexibility versus efficiency, 47 Training, 110 Transformation functions, 2–4 alter, 3–4 inspect-4, store, 3–4 transport, 3–4 Triangulation, 29 Update alerts, 209 Update formats, 185–86 Upper specification limits (USL), 132–33 “Up-to-speed” learning, 174 Index Vacations, goods vs services, 48–49 Value, 58 Value, rareness, inimitability, and organization (VRIO), 7–8 Value added, 101, 103, 207 Value chain, 15, 39 primary activities, 100 processes, 100–101 secondary activities, 100 technology, 79–98 Value chain analysis (VCA), 15–16 Value matrix, 4, Vargas, V., 102 Variability, 101, 104, 119 assignable causes, 121–23 common causes, 121–23 of resources, 110 schedule variance, 188–89 Variables, 125 Venn of technology, 80–81 Viability, 41 Visibility, 102–3 Visual controls, 104 Visual factory, 67 VRIO (value, rareness, inimitability, and organization), 7–9 “Wacky warnings,” 46–47 Wall Street Journal, 67 Wal-Mart, Warcraft game, 91 Waste, 66, 102 Waste analysis, 101 avoiding waste, 210–13 defects, 210 inventory, 210 overproduction, 210 unnecessary human motions, 210 unnecessary processing, 210 unnecessary transport, 210 waiting, 210 Wedding planning, 164–66, 167 Wireless telephones, 82 Work breakdown schedule (WBS), 164–66, 167, 213 Wright, Frank Lloyd, Xerox, 8, 44 INSTRUCTIONS FOR ACCESSING ONLINE FINAL EXAM AND CHAPTER QUIZ ANSWERS I f you have completed your study of The McGraw-Hill 36-Hour Course: Operations Management, you should be prepared to take the online final examination It is a comprehensive test, consisting of 100 multiple-choice questions You may treat this test as an “open book” exam by consulting this book and any other resources Answers to both the online exam and the chapter-ending quizzes can be found on The McGraw-Hill 36-Hour Course Information Center landing site for each book (please see the instructions below for accessing the site) Instructions for Accessing Online Final Exam Go to www.36hourbooks.com Once you arrive on the home page, scroll down until you find The McGraw-Hill 36-Hour Course: Operations Management and click 239 240 Instructions for Accessing Online Final Exam and Chapter Quiz Answers the link “Test your skills here.” At this point you will be redirected to The McGraw-Hill 36-Hour Course Information Center landing site for the book Click the “Click Here to Begin” button in the center of the landing site You will be brought to a page containing detailed instructions for taking the final exam and obtaining your Certificate of Achievement Click on “Self-Assessment Quiz” in the left-hand navigation bar to begin the exam Instructions for Accessing Answers to Chapter-Ending Quizzes Follow Steps and above Click “Chapter-Ending Quiz Answers” in the left-hand navigation bar ABOUT THE AUTHOR L inda L Brennan, Ph.D., is a professor of management at Mercer University in Macon, Georgia Her teaching portfolio includes graduate and undergraduate courses in operations management, leadership, international business, and strategy She also conducts research and consults in the areas of technology impact assessment, process and project management, and instructional effectiveness for a wide variety of organizations, including Fortune 100 companies, professional services firms, and many not-for-profit organizations Dr Brennan’s prior work experience includes management positions at The Quaker Oats Company and marketing and systems engineering experience with the IBM Corporation A licensed professional engineer, she received her Ph.D in industrial engineering from Northwestern University, her M.B.A in policy studies from the University of Chicago, and her B.I.E in industrial engineering from the Georgia Institute of Technology She lives in Central Georgia with her husband, teenage son, dog, and cat
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