M11B_SLAC0460_06_SE_C11B.QXD 10/20/09 9:43 Supplement to Chapter 11 Page 333 Analytical queuing models Introduction In the main part of Chapter 11 we described how the queuing approach (in the United States it would be called the ‘waiting line approach’) can be useful in thinking about capacity, especially in service operations It is useful because it deals with the issue of variability, both of the arrival of customers (or items) at a process and of how long each customer (or item) takes to process And where variability is present in a process (as it is in most processes, but particularly in service processes) the capacity required by an operation cannot easily be based on averages but must include the effects of the variation Unfortunately, many of the formulae that can be used to understand queuing are extremely complicated, especially for complex systems, and are beyond the scope of this book In fact, computer programs are almost always now used to predict the behaviour of queuing systems However, studying queuing formulae can illustrate some useful characteristics of the way queuing systems behave Notation Unfortunately there are several different conventions for the notation used for different aspects of queuing system behaviour It is always advisable to check the notation used by different authors before using their formulae We shall use the following notation: ta = average time between arrival = arrival rate (items per unit time) = 1/ta ca = coefficient of variation of arrival times m = number of parallel servers at a station te = mean processing time re = processing rate (items per unit time) = m/te ce = coefficient of variation of process time u = utilization of station = ra/re = (ra te)/m WIP = average work-in-progress (number of items) in the queue WIPq = expected work-in-progress (number of times) in the queue Wq = expected waiting time in the queue W = expected waiting time in the system (queue time + processing time) Some of these factors are explained later M11B_SLAC0460_06_SE_C11B.QXD 334 10/20/09 9:43 Page 334 Part Three Planning and control Variability The concept of variability is central to understanding the behaviour of queues If there were no variability there would be no need for queues to occur because the capacity of a process could be relatively easily adjusted to match demand For example, suppose one member of staff (a server) serves at a bank counter customers who always arrive exactly every five minutes (i.e 12 per hour) Also suppose that every customer takes exactly five minutes to be served, then because, (a) the arrival rate is ≤ processing rate, and (b) there is no variation no customer need ever wait because the next customer will arrive when, or before, the previous customer That is, WIPq = Also, in this case, the server is working all the time, again because exactly as one customer leaves the next one is arriving That is, u = Even with more than one server, the same may apply For example, if the arrival time at the counter is five minutes (12 per hour) and the processing time for each customer is now always exactly 10 minutes, the counter would need two servers, and because, (a) arrival rate is ≤ processing rate m, and (b) there is no variation again, WIPq = 0, and u = Of course, it is convenient (but unusual) if arrival rate/processing rate = a whole number When this is not the case (for this simple example with no variation), Utilization = processing rate/(arrival rate multiplied by m) For example, if arrival rate, = minutes processing rate, re = minutes number of servers, m = then, utilization, u = / (5 × 2) = 0.8 or 80% Incorporating variability The previous examples were not realistic because the assumption of no variation in arrival or processing times very rarely occurs We can calculate the average or mean arrival and process times but we also need to take into account the variation around these means To that we need to use a probability distribution Figure S11.1 contrasts two processes with different arrival distributions The units arriving are shown as people, but they could be jobs arriving at a machine, trucks needing servicing, or any other uncertain event The top example shows low variation in arrival time where customers arrive in a relatively predictable manner The bottom example has the same average number of customer arriving but this time they arrive unpredictably with sometimes long gaps between arrivals and at other times two or three customers arriving close together Of course, we could a similar analysis to describe processing times Again, some would have low variation, some higher variation and others be somewhere in between In Figure S11.1 high arrival variation has a distribution with a wider spread (called ‘dispersion’) than the distribution describing lower variability Statistically the usual measure for indicating the spread of a distribution is its standard deviation, σ But variation does not only depend on standard deviation For example, a distribution of arrival times may have a standard deviation of minutes This could indicate very little variation when the average arrival time is 60 minutes But it would mean a very high degree of variation when the M11B_SLAC0460_06_SE_C11B.QXD 10/20/09 9:43 Page 335 Supplement to Chapter 11 Analytical queuing models Figure S11.1 Low and high arrival variation average arrival time is minutes Therefore to normalize standard deviation, it is divided by the mean of its distribution This measure is called the coefficient of variation of the distribution So, ca = coefficient of variation of arrival times = σa /ta ce = coefficient of variation of processing times = σe /te Incorporating Little’s law In Chapter we discussed on of the fundamental laws of processes that describes the relationship between the cycle time of a process (how often something emerges from the process), the working in progress in the process and the throughput time of the process (the total time it takes for an item to move through the whole process including waiting time) It was called Little’s law and it was denoted by the following simple relationship Work-in-progress = cycle time × throughput time Or, WIP = C × T We can make use of Little’s law to help understand queuing behaviour Consider the queue in front of a station Work-in-progress in the queue = the arrival rate at the queue (equivalent to cycle time) × waiting time in the queue (equivalent to throughput time) WIPq = × Wq and Waiting time in the whole system = the waiting time in the queue + the average process time at the station W = Wq + te We will use this relationship later to investigate queuing behaviour 335 M11B_SLAC0460_06_SE_C11B.QXD 336 10/20/09 9:43 Page 336 Part Three Planning and control Types of queuing system Conventionally queuing systems are characterized by four parameters A – the distribution of arrival times (or more properly interarrival times, the elapsed times between arrivals) B – the distribution of process times m – the number of servers at each station b – the maximum number of items allowed in the system The most common distributions used to describe A or B are either (a) the exponential (or Markovian) distribution denoted by M; or (b) the general (for example normal) distribution denoted by G So, for example, an M/G/1/5 queuing system would indicate a system with exponentially distributed arrivals, process times described by a general distribution such as a normal distribution, with one server and a maximum number of items allowed in the system of This type of notation is called Kendall’s notation Queuing theory can help us investigate any type of queuing system, but in order to simplify the mathematics, we shall here deal only with the two most common situations Namely, M/M/m queues ● G/G/m queues ● M/M/m – the exponential arrival and processing times with m servers and no maximum limit to the queue G/G/m – general arrival and processing distributions with m servers and no limit to the queue And first we will start by looking at the simple case when m = For M/M/1 queuing systems The formulae for this type of system are as follows WIP = u 1−u Using Little’s law, WIP = cycle time × throughput time Throughput time = WIP / cycle time Then, Throughput time = u t × = e − u − u and since, throughput time in the queue = total throughput time − average processing time, Wq = W − te = te − te 1−u = te − te(1 − u) te − te − ute = 1−u 1−u = u te (1 − u) M11B_SLAC0460_06_SE_C11B.QXD 10/20/09 9:43 Page 337 Supplement to Chapter 11 Analytical queuing models again, using Little’s law WIPq = × Wq = u tera (1 − u) and since u= = rate re = u te then, WIPq = = u u × te × (1 − u) te u2 (1 − u) For M/M/m systems When there are m servers at a station the formula for waiting time in the queue (and therefore all other formulae) needs to be modified Again, we will not derive these formulae but just state them Wq = u 2(m+1)−1 te m(1 − u) From which the other formulae can be derived as before For G/G/1 systems The assumption of exponential arrival and processing times is convenient as far as the mathematical derivation of various formulae are concerned However, in practice, process times in particular are rarely truly exponential This is why it is important to have some idea of how a G/G/1 and G/G/m queue behaves However, exact mathematical relationships are not possible with such distributions Therefore some kind of approximation is needed The one here is in common use, and although it is not always accurate, it is for practical purposes For G/G/1 systems the formula for waiting time in the queue is as follows Wq = VUT formula A ca2 + ce2 D A u D t C F C (1 − u)F e There are two points to make about this equation The first is that it is exactly the same as the equivalent equation for an M/M/1 system but with a factor to take account of the variability of the arrival and process times The second is that this formula is sometimes known as the VUT formula because it describes the waiting time in a queue as a function of: V – the variability in the queuing system U – the utilization of the queuing system (that is demand versus capacity), and T – the processing times at the station In other words, we can reach the intuitive conclusion that queuing time will increase as variability, utilization or processing time increases 337 M11B_SLAC0460_06_SE_C11B.QXD 338 10/20/09 9:43 Page 338 Part Three Planning and control For G/G/m systems The same modification applies to queuing systems using general equations and m servers The formula for waiting time in the queue is now as follows Wq = A ca2 + ce2 D A u 2(m+1)−1 D t C F C m(1 − u)F e Worked example ‘I can’t understand it We have worked out our capacity figures and I am sure that one member of staff should be able to cope with the demand We know that customers arrive at a rate of around per hour and we also know that any trained member of staff can process them at a rate of per hour So why is the queue so large and the wait so long? Have at look at what is going on there please.’ Sarah knew that it was probably the variation, both in customers arriving and in how long it took each of them to be processed, that was causing the problem Over a two-day period when she was told that demand was more or less normal, she timed the exact arrival times and processing times of every customer Her results were as follows The coefficient of variation, ca of customer arrivals = The coefficient of variation, ce of processing time = 3.5 The average arrival rate of customers, = per hour therefore, the average inter-arrival time = 10 minutes The average processing rate, re = per hour therefore, the average processing time = 7.5 minutes Therefore the utilization of the single server, u = 6/8 = 0.75 Using the waiting time formula for a G/G/1 queuing system Wq = A + 12.25 D A 0.75 D 7.5 C F C − 0.75 F = 6.625 × × 7.5 = 149.06 mins = 2.48 hours Also because, WIPq = cycle time × throughput time WIPq = × 2.48 = 14.68 So, Sarah had found out that the average wait that customers could expect was 2.48 hours and that there would be an average of 14.68 people in the queue ‘Ok, so I see that it’s the very high variation in the processing time that is causing the queue to build up How about investing in a new computer system that would standardize processing time to a greater degree? I have been talking with our technical people and they reckon that, if we invested in a new system, we could cut the coefficient of variation of processing time down to 1.5 What kind of a different would this make?’ Under these conditions with ce = 1.5 Wq = A + 2.25 D A 0.75 D 7.5 C F C − 0.75 F = 1.625 × × 7.5 = 36.56 mins = 0.61 hour M11B_SLAC0460_06_SE_C11B.QXD 10/20/09 9:43 Page 339 Supplement to Chapter 11 Analytical queuing models Therefore, WIPq = × 0.61 = 3.66 In other words, reducing the variation of the process time has reduced average queuing time from 2.48 hours down to 0.61 hour and has reduced the expected number of people in the queue from 14.68 down to 3.66 Worked example A bank wishes to decide how many staff to schedule during its lunch period During this period customers arrive at a rate of per hour and the enquiries that customers have (such as opening new accounts, arranging loans, etc.) take on average 15 minutes to deal with The bank manager feels that four staff should be on duty during this period but wants to make sure that the customers not wait more than minutes on average before they are served The manager has been told by his small daughter that the distributions that describe both arrival and processing times are likely to be exponential Therefore, = per hour, therefore ta = 6.67 minutes re = per hour, therefore te = 15 minutes The proposed number of servers, m = therefore, the utilization of the system, u = 9/(4 × 4) = 0.5625 From the formula for waiting time for a M/M/m system, Wq = u 2(m+1)−1 te m(1 − u) Wq = 0.5625 10−1 × 0.25 4(1 − 0.5625) = 0.56252.162 1.75 × 0.25 = 0.042 hour = 2.52 minutes Therefore the average waiting time with servers would be 2.52 minutes, which is well within the manager’s acceptable waiting tolerance 339 M12_SLAC0460_06_SE_C12.QXD 10/20/09 Chapter 9:45 12 Page 340 Inventory planning and control Introduction Key questions ➤ What is inventory? ➤ Why is inventory necessary? ➤ What are the disadvantages of holding inventory? ➤ How much inventory should an operation hold? ➤ When should an operation replenish its inventory? ➤ How can inventory be controlled? Operations managers often have an ambivalent attitude towards inventories On the one hand, they are costly, sometimes tying up considerable amounts of working capital They are also risky because items held in stock could deteriorate, become obsolete or just get lost, and, furthermore, they take up valuable space in the operation On the other hand, they provide some security in an uncertain environment that one can deliver items in stock, should customers demand them This is the dilemma of inventory management: in spite of the cost and the other disadvantages associated with holding stocks, they facilitate the smoothing of supply and demand In fact they only exist because supply and demand are not exactly in harmony with each other (see Fig 12.1) Figure 12.1 This chapter covers inventory planning and control Check and improve your understanding of this chapter using self assessment questions and a personalised study plan, audio and video downloads, and an eBook – all at www.myomlab.com M12_SLAC0460_06_SE_C12.QXD 10/20/09 9:45 Page 341 Chapter 12 341 Inventory planning and control Operations in practice The UK’s National Blood Service1 Collection, which involves recruiting and retaining blood donors, encouraging them to attend donor sessions (at mobile or fixed locations) and transporting the donated blood to their local blood centre Processing, which breaks blood down into its constituent parts (red cells, platelets and plasma) as well over twenty other blood-based ‘products’ Distribution, which transports blood from blood centres to hospitals in response to both routine and emergency requests Of the Service’s 200,000 deliveries a year, about 2,500 are emergency deliveries Inventory accumulates at all three stages, and in individual hospitals’ blood banks Within the supply chain, around 11.5 per cent of donated red blood cells donated are lost Much of this is due to losses in processing, but around per cent is not used because it has ‘become unavailable’, mainly because it has been stored for too long Part of the Service’s inventory control task is to keep this ‘time-expired’ loss to a minimum In fact, only small losses occur within the NBS, most blood being lost when it is stored in hospital blood banks that are outside its direct control However, it does attempt to provide advice and support to hospitals to enable them to use blood efficiently Blood components and products need to be stored under a variety of conditions, but will deteriorate over time This varies depending on the component; platelets have a shelf life of only five days and demand can fluctuate significantly This makes stock control particularly difficult Even red blood cells that have a Source: Alamy/Van Hilversum No inventory manager likes to run out of stock But for blood services, such as the UK’s National Blood Service (NBS) the consequences of running out of stock can be particularly serious Many people owe their lives to transfusions that were made possible by the efficient management of blood, stocked in a supply network that stretches from donation centres through to hospital blood banks The NBS supply chain has three main stages: shelf life of 35 days may not be acceptable to hospitals if they are close to their ‘use-by date’ Stock accuracy is crucial Giving a patient the wrong type of blood can be fatal At a local level demand can be affected significantly by accidents One serious accident involving a cyclist used 750 units of blood, which completely exhausted the available supply (miraculously, he survived) Large-scale accidents usually generate a surge of offers from donors wishing to make immediate donations There is also a more predictable seasonality to the donating of blood, however, with a low period during the summer vacation Yet there is always an unavoidable tension between maintaining sufficient stocks to provide a very high level of supply dependability to hospitals and minimizing wastage Unless blood stocks are controlled carefully, they can easily go past the ‘use-by date’ and be wasted But avoiding outdated blood products is not the only inventory objective at NBS It also measures the percentage of requests that it was able to meet in full, the percentage emergency requests delivered within two hours, the percentage of units banked to donors bled, the number of new donors enrolled, and the number of donors waiting longer than 30 minutes before they are able to donate The traceability of donated blood is also increasingly important Should any problems with a blood product arise, its source can be traced back to the original donor M12_SLAC0460_06_SE_C12.QXD 342 10/20/09 9:45 Page 342 Part Three Planning and control What is inventory? Inventory Inventory, or ‘stock’ as it is more commonly called in some countries, is defined here as the stored accumulation of material resources in a transformation system Sometimes the term ‘inventory’ is also used to describe any capital-transforming resource, such as rooms in a hotel, or cars in a vehicle-hire firm, but we will not use that definition here Usually the term refers only to transformed resources So a manufacturing company will hold stocks of materials, a tax office will hold stocks of information, and a theme park will hold stocks of customers Note that when it is customers who are being processed we normally refer to the ‘stocks’ of them as ‘queues’ This chapter will deal particularly with inventories of materials Revisiting operations objectives; the roles of inventory Most of us are accustomed to keeping inventory for use in our personal lives, but often we don’t think about it For example, most families have some stocks of food and drinks, so that they don’t have to go out to the shops before every meal Holding a variety of food ingredients in stock in the kitchen cupboard or freezer gives us the ability to respond quickly (with speed) in preparing a meal whenever unexpected guests arrive It also allows us the flexibility to choose a range of menu options without having to go to the time and trouble of purchasing further ingredients We may purchase some items because we have found something of exceptional quality, but intend to save it for a special occasion Many people buy multiple packs to achieve lower costs for a wide range of goods In general, our inventory planning protects us from critical stock-outs; so this approach gives a level of dependability of supplies It is, however, entirely possible to manage our inventory planning differently For example, some people (students?) are short of available cash and/or space, and so cannot ‘invest’ in large inventories of goods They may shop locally for much smaller quantities They forfeit the cost benefits of bulk-buying, but not have to transport heavy or bulky supplies They also reduce the risk of forgetting an item in the cupboard and letting it go out of date Essentially, they purchase against specific known requirements (the next meal) However, they may find that the local shop is temporarily out of stock of a particular item, forcing them, for example, to drink coffee without their usual milk How we control our own supplies is therefore a matter of choice which can affect their quality (e.g freshness), availability or speed of response, dependability of supply, flexibility of choice, and cost It is the same for most organizations Significant levels of inventory can be held for a range of sensible and pragmatic reasons but it must also be tightly controlled for other equally good reasons Why is inventory necessary? No matter what is being stored as inventory, or where it is positioned in the operation, it will be there because there is a difference in the timing or rate of supply and demand If the supply of any item occurred exactly when it was demanded, the item would never be stored A common analogy is the water tank shown in Figure 12.2 If, over time, the rate of supply of water to the tank differs from the rate at which it is demanded, a tank of water (inventory) will be needed if supply is to be maintained When the rate of supply exceeds the rate of demand, inventory increases; when the rate of demand exceeds the rate of supply, inventory decreases So if an operation can match supply and demand rates, it will also succeed in reducing its inventory levels Z03_SLAC0460_06_SE_IDX.QXD 672 10/20/09 10:00 Page 672 Index complementers 142–3 complexity 124 – 5, 221, 285, 459 – 61 components 123 inventories 345 reliability 581 structure see products: structure comprehensiveness 76 compressed working 250–1 computer-aided design (CAD) 117, 129, 211, 659 computer-aided functional layout design 194 computer-assisted project management 486–7 computer-integrated manufacturing (CIM) 211, 659 computer numerically controlled (CNC) machines 209, 210, 659 Computerized Relative Allocation of Facilities Technique (CRAFT) 194, 660 computers industry 139, 145, 151 security 577–8 see also information technology Concept Design Services 27–9 concept generation 117, 118–20, 659 concept screening 117, 120–3 concept–specification gap 501 concurrent engineering 131, 667 condition-based maintenance (CBM) 589, 659 configuring supply networks 142–6 conflict resolution 132 conformance to specification 498, 502–8 connectivity of technology 222, 223, 577–8 consignment stock 347 constituent behaviours 618 constituent component parts 123 constraints capacity 299, 449–51 resources 73, 470, 483 – schedules, identifying 470–1 sequencing 280 theory of TOC 290, 668 time 471 construction companies 448 consultants 94, 416 consumer to business (C2B) 386 contact 390, 502, 504 containment of failures 593 content of strategies 62, 659 continuous flow manufacture see just-in-time continuous improvement (CI) 433, 435, 543 – 4, 618, 659 continuous processes 93–4, 96, 180, 574, 659 continuous reviews, inventories 360–2, 660 control capacity see capacity: planning and control charts 520–1, 524, 527–32, 660 difficulties 291–2 inventories see inventories: planning and control limits 524, 527–32, 660 meaning of 270, 660 mechanisms, projects 461 operations 289–90 planning and, difference between 270–1 process 526, 532–3, 555 projects see projects: planning and control quality (QC) 505–7, 508 supply chains see supply chains: management visual 430 see also planning and control controlled flows of materials and customers 201 co-opetition 142–3 coordination activities 390 inventories 432 Corbett, M 415–16 core competences 73 core functions 4–6, 660 core product/services 116 corporate perspective, risk management 574 corporate social responsibility (CSR) 24, 37, 631–2 definitions 633–4 economic dimension 634, 636–7, 643 –4 environmental dimension 634–5, 638 –41 global sourcing 383–4 influences on operations management 637–45 necessary cost of doing business 645 operations managers’ analyses of issues 646–8 as risk management 646–8 social dimension 634, 636, 641–3 stakeholder dimension 634, 637, 644 sustainability dimension see environmental dimension above trade-offs and 646–7 voluntary dimension 634, 637, 644–5 corporate strategies 65–6, 660 correspondence 77 cost-to-function analysis 660 costs appraisal 511, 512–13, 658 capacity change 321–2 corporate social responsibility 645 dependability and 45, 52 efficiency 55 empowerment 248 ERP projects, planning and management 416 failure 511 flexibility and 20, 47, 52, 53, 96 global sourcing and 383 in-house supply 144 input 643 of inventories see inventories labour 50, 147, 149, 223 layouts and 190–1 materials 48, 378 objectives 40, 48–54, 69, 89, 101, 282, 300 output 643–4 outsourced supply 144 performance measures 607–8 prevention 511, 512–13, 665 process technology 223 processing 643 project objectives 446–7 purchasing 378 quality 40, 52, 511–13, 666 reduction 39, 51–3, 128, 381 sandcone theory 617 spatially variable 148, 667 speed and 52 supply chains 377, 381, 399 technology 48 transformation 643 transport 645 unit 19, 22, 155–6, 189, 190, 300 variable 148, 189 coupling of technology 222, 223 CPA (critical path analysis) 475 CPM (critical path method) 475–81, 660 CRAFT (Computerized Relative Allocation of Facilities Technique 194, 660 crashing 485, 660 create-to-order planning and control see make-to-order planning and control creativity 39, 122, 434 crisis management, ERP 416 critical path analysis (CPA) 475 critical path method (CPM) 475–81, 660 critical paths 470, 475–81, 660 critical success factors (CSF) 415–16 criticality 77 CRM (customer relationship management) 390–1, 415 Croft Port 348 cross-border taxes 383 CRP (capacity requirements plans) 428 CSF (critical success factors) 415–16 CSR see corporate social responsibility cultures of improvement 617–20 organizations as 239 Z03_SLAC0460_06_SE_IDX.QXD 10/20/09 10:00 Page 673 Index cumulative representation 317–22 customer-centricity 546 customer-driven objectives 555 customer-driven technologies 221 customer-focused operations 551 customer priority sequencing 280–1 customer relationship management (CRM) 390–1, 415 customer to customer (C2C) 386 customers contact skills 20, 57–8, 660 controlled flows 201 convenience for 152 expectations 498–501, 508–9, 594 fail-safeing 587 failures and 576, 594 first-tier 140–1, 377, 662 focus groups 118, 662 ideas from 118 influence on performance objectives 68 – inputs of 12 interaction involving technology 219 internal 15, 17, 54, 509, 548, 662 inventories of 432 listening to 118 needs 18, 68, 69 –71, 508 –9, 545, 606, 612 non-operations functions 18 orders 422 perceptions 498–501 processing 12, 20–2 technology 208, 218–21 quality view 498–501 queuing perceptions 498 retention 396 satisfaction 39, 40, 375, 376, 396, 553, 594, 607 second-tier 140–1, 377, 667 services, e-business applications 214 short waiting tolerance 20 source of 323–4 training in technology 220–1 triggering 550 welfare 644 customization 91, 94, 97–9, 100–1, 125, 449, 660 mass 47, 664 cybermediaries 381–2 cycle inventories 343–4, 352–3, 660 cycle time 101, 196, 335, 660 cycles, improvement 544–5, 619, 662 dabbawalas 44–5 Daimler-Chrysler 90 DAN (desk-area networks) 212 Daniel Hersheson 122–3 Davenport, T 551 DD (due date) sequencing 281, 283 decision support system (DSS) 215, 660 decisions infrastructural 74–5, 662 inventories 75, 345–67 layouts 179 operations, globalization and 641 process technology 75 strategic see strategic decisions structural 74–5, 668 supply networks design 141–2 decline stage, products/services 72 de-coupling inventories 344, 432, 660 defects 430, 435 per million 554 per million opportunities (DPMO) 554–5 per unit (DPU) 554 zero 511, 554, 669 define–measure–analyse–improve– control cycle see DMAIC cycle delays 449 delivered information 449 delivery flexibility 46, 223, 660 schedules 445 Dell 47, 51, 61, 139, 145 Delphi method 171 demand aggregate 300, 301, 303 balancing capacity and 156–7, 324–5 changes in 147, 314–15 dependent 274–5, 660 fluctuations, forecasting 301–4 forecast 422 independent 275, 662 management 309, 314–15, 316, 660 seasonality 302, 304, 315, 317 supply and 272–7, 440–2 uncertainty in 273–4 variability in 325 variation 20, 22 demand side 140–1, 148, 151–2, 377, 660 Deming, W Edwards 544, 603 Deming cycle see PDCA cycle Deming Prize 623 dependability 660 capacity planning and control 300 flexibility and 47, 48 in-house supply 144 inventory roles 342 objectives 40, 44–6, 52, 53, 58, 69, 89, 101, 282, 300 outsourced supply 144 performance measures 607–8 process technology 223 quality and 40–1 sandcone theory 616–17 supply chains 376 dependencies, projects 470 dependent demand 274–5, 660 see also materials requirements planning (MRP) dependent relationships 470 design 85 capacity 305–7, 660 computer-aided see computer-aided design e-business applications 214 environmentally sensitive 90–1 information flow 396 jobs see jobs of layouts 189–202 material flow 396 organizations 238–41 package 115, 660 processes see processes products/services see products/services supply networks see supply networks work flow 396 desk-area networks (DAN) 212 deterioration risk 364 developing countries 151 development communities 119 deviation from line of fit 605 DHL 388 diagnostic metrics 395 dimensions of process technology 221–3 direct responsibilities of operations management 660 direction of vertical integration 143 –4 directors’ performance objectives 38 disasters 597–9 disciplinary practices 384 discipline 434 discount rate 225–6 discounting 317 discovery, failures 594–5 discrimination, global sourcing and 384 diseconomies of scale 155, 660 disintermediation 142, 660 Disney Channel 125 Disney World 208 Disneyland Paris 162–6 dispersion 334 disruptive technologies 660 distance travelled 190–1 distributed hypermedia/hypertext 213 distributed processing 660 distribution 384 see also logistics; physical distribution management; supply chains division of labour 95, 242–3, 660 DMAIC cycle 544, 555, 558, 661 or buy decision 142, 143–6, 661 see also vertical integration Dodge-Romig Sampling Inspection Tables 534 double-loop learning 619 Dow Chemical 413 downsizing 553 downstream 141, 144, 391, 661 DPMO (defects per million opportunities) 554–5 673 Z03_SLAC0460_06_SE_IDX.QXD 674 10/20/09 10:00 Page 674 Index DPU (defects per unit) 554 drive-through services 87 driving strategy 63 drugs 115 drum, buffer, rope concept 290–1, 450, 661 DSS (decision support system) 215, 660 due date (DD) sequencing 281, 283 dummy activities 476–7 durability 502, 504 duty costs 383 dynamics capacity planning and control 327 supply chains 392–4, 399 Dyson 116–17 Dyson, James 116–17, 119 e-business 214–15, 397, 661 e-commerce 214, 414, 415, 661 e-procurement 381–2, 661 earliest event times (EET) 477–9 earliest start times 480–1 early conflict resolution 132 earned-value control 661 earnings before investment and tax (EBIT) 36 EBIT (earnings before investment and tax) 36 EBQ (economic batch quantity) 352 – 4, 661 ecological footprints 635 economic batch quantity (EBQ) 352 – 4, 661 economic dimension of corporate social responsibility 634, 636–7, 643 – economic manufacturing quantity (EMQ) see economic batch quantity economic mitigation 593 economic order quantity (EOQ) 349 –52, 354 – 6, 360, 367, 661 econo-political environments 463 economies of scale 51, 155, 661 EDI (electronic data interchange) 213, 367, 397 EET (earliest event times) 477–9 effective capacity 305–7, 325, 661 effectiveness 54–5, 307–9 efficiency 103 – 4, 201, 306, 382, 399, 436, 607– efficient frontiers 54–5, 646–7 efficient supply chains 391 EFQM Excellence Model 623–4, 661 electronic data interchange (EDI) 213, 367, 397 electronic manufacturing services (EMS) 61 electronic marketplaces 381–2 electronic point of sale (EPOS) 208, 397, 661 electronic product codes (ePC) 216 elemental data, synthesis from 254, 668 elevators 592 elimination of waste see waste emergency services 43, 281 emergent strategies 67, 661 Emirates Airline 33–4 employee champions 236 employees see staff empowerment 247–8, 548, 661 EMQ (economic manufacturing quantity) see economic batch quantity EMS (electronic manufacturing services ) 61 enablers 618–19 end-of-life of products 90, 643–4 end-to-end business processes 18–19, 661 end-to-end improvement processes 545 –6 end-to-end system mapping 436–7 energy 90, 150, 643, 645 enlargement, jobs 246, 663 enrichment, jobs 246–7, 663 enterprise project management (EPM) 486–7, 661 enterprise resource planning (ERP) 268, 357, 406–7, 557, 661 benefits 411 changing methods of doing business 413 critical success factors 415–16 development of 408–15 implementation 415–17 investment in, reasons 413 nature of 408 problems 417 selection 416 supply chains 415 web-integrated 409, 414, 669 envelope of capability 210 environmental dimension of corporate social responsibility 634–5, 638 –41 environmental disruption 576 environmental management systems 640–1 environmental protection 661 environmental reporting 640 environmentally sensitive design 90–1 EOQ see economic order quantity ePC (electronic product code) 216 EPM (enterprise project management) 486 –7, 661 EPOS (electronic point of sale) 208, 397, 661 EQA (European Quality Awards) 623, 661 equality 434 equipment costs 48 efficiency 436 maintenance 541 overall effectiveness (OEE) 307–9, 664 Erdington Group 548–9 ergonomics 244–5, 251–2, 661 ERP see enterprise resource planning errors 509, 511–12, 575, 597–9 type I and type II 506–7, 524–5, 533–5 ES (expert systems) 215, 216, 661 estimates of failures see failures ethernet 212, 661 ethics 641, 643, 644, 645, 646, 647–8 European Quality Award (EQA) 623, 661 evaluation design 117, 120–1, 122, 125–8 process technology 221–6 events (critical path method) 475–81, 661 evidence 555 evidence-based problem-solving 545–6 excess zones 614–15 EXL Laboratories 615–16 expectations 390, 498–501, 508–9, 594 expenditure, planned and actual 474 experience, loss of 553 expert systems (ES) 215, 216, 661 exponential smoothing 172, 173–4 exposure 20–2 Express Foods 315 extent of vertical integration 144 external benchmarking 611 external failure costs 511, 512–13, 661 external neutrality 63 external performance-based targets 610 external stakeholders 37 external support 65 extranets 213, 661 Exult 143 facilitating products 13, 661 facilitating services 13, 661 facilities 13 costs 48 failures 576 layouts of environmental issues 639 expert systems applications 216 social issues 642 location 216 ‘factory flow’ surgery 181 fail-safeing 430, 587, 661 failure mode and effect analysis (FMEA) 541, 583–5, 661 failures analysis 661 causes assessments of 573–85 potential, identification 574–8 costs 511, 512–13 Z03_SLAC0460_06_SE_IDX.QXD 10/20/09 10:00 Page 675 Index failures (continued) estimates of objective 578–82 subjective 583 likelihood 578–83 mean time between (MTBF) 581–2, 664 mitigation 573, 592–3 operations 39 post-failure analyses 578 potential occurrences 573 prevention 75, 573, 586–92, 639, 642 rates (FR) 578, 579–80, 661 recovery from 593–43, 666 business continuity 595–6 environmental issues 639 planning 573, 594–5 quality and 502, 504 social issues 642 sources 573 traceability 578 farming 41–2, 328–30 fashion industry 401–4 fast-throughput operating see just-in-time fast fashion 401–4 fast food 87 fault tree analyses 578, 579, 661 FCFS (first come first served) 282, 324 feasibility, designs 120–1, 128, 660 feedback 428, 461 FIFO (first in first out) 282 final design 117, 128–9 finance functions 5–6, 18 financial objectives 607 financial performance 646–7 financial returns 224–6 finished goods inventory 345 finite loading 278–9, 662 Finney, S 415–16 first-tier customers 140–1, 377, 662 first-tier suppliers first-tier see suppliers first come, first served (FCFS) 282, 324 first in first out (FIFO) 282, 283 Fisher, Marshall 391, 392 fit, deviation from line of 605 Fitzsimmons, J.A 432 five Ps of operations strategy formation 78 fixed cost breaks 155, 159–60, 662 fixed costs 189 fixed-position layouts see layouts flexi-time working 249, 662 flexibility 662 basic working practices 434 capacity planning and control 301 costs and 20, 47, 52, 53, 96 dependability and 47, 48 in-house supply 144 inventory roles 342 long-term 179 low 243 networks 212 objectives 40, 46–8, 52, 53, 58, 69, 89, 101 outsourced supply 144 performance measures 607–8 process technology 223–2 processes 443 sandcone theory 616–17 services 449 supply chains 377 see also mix flexibility; volume: flexibility flexible manufacturing systems (FMS) 210, 662 flexible working 249–51 Flextronics 61–2 float 470, 471, 477–9 flows 177–8 charts 559–60 clarity of 179 controlled, customers and materials 201 factory flow surgery 181 length of 179 process charts 99–100 production flow analysis 194–6, 665 rates 89 record chart 190–1, 662 shapes 438 streamlined 436–40 synchronized 431–2, 547, 550 of transformed resources 187 visibility 439 volume-variety 187 fluctuations, demand 301–4 FMEA (failure mode and effect analysis) 541, 583–5, 661 FMS (flexible manufacturing systems) 210, 662 focus groups 118, 171, 662 food-processing industry 230–1 forced labour 384 Ford 379 forecast demand 422 forecasting 168–76, 301–4, 367 Formule hotels 14, 21 forward-looking views, risk management 574 forward passes 480 forward scheduling 285–6, 662 forward vertical integration 144 Four Seasons Hotel 496–7 four-stage model of operations contribution 63–4, 662 FoxMeyer Drug 413 FR (failure rates) 578, 579–80, 661 freedom of association 384 Freeman, Milton 646 front-office environment 22, 662 Fujitsu 145 functional design organisation 133 functional layouts see layouts functional purposes, grouping resources as 240 functional strategies 66, 662 functionality 502, 504 functions basic 128 core 4–6, 660 manage all processes 17–18 non-operations 18 operations see operations operations as 18 secondary 128 support 5–6, 668 G/G/m queues 336, 337–9 GAM (Groupe As Maquilage) 530–2 games 424–8 Gantt charts 286–7, 475, 486, 662 Gap 642–3 gap-based approach 76 garment industry 401–4 Gate Gourmet 388 GE 622 Geneva Construction and Risk 565–8 geo-social environments 463 getting it right first time approach 513 Giordano 68 gliding club 80–1 global alliances 410 global sourcing 382–4, 400 globalization 636, 641, 662 goals perfection 547–8 projects 461 see also objectives; targets Goldratt, Eliyahu 290, 449 goods see products; products/services Google 119, 237 GORE-TEX® 234 –5 governments’ performance objectives 38 gravity analogy 290 green reporting 640 greenfield operations 76 Greenpeace 583 greetings cards 317 Grohman, M.C 176 Groupe As Maquilage (GAM) 530–2 growth stage, products/services 72 Gummesson, E 497 H&M 401–4 Hackman, J.R 245 hairdressers 122–3, 220 Hall, Richard 441 Hallmark Cards 317 Hammer, Michael 550–1 hand tools 203–4 Happy Products 256–7 Harrison, A 452 Hayes, R.H 63–4, 95–6 675 Z03_SLAC0460_06_SE_IDX.QXD 676 10/20/09 10:00 Page 676 Index health, staff health and safety at work 251, 384 heijunka 430, 444 Heineken 541, 620 helicopter ambulances 43 Hersheson 122–3 heuristics 194, 199, 662 Hewlett-Packard 516–18, 638 hidden technologies 219 hierarchy of operations 15–17, 514, 662 high-level process mapping 98, 662 high-level strategic decision-making 67 high received variety 20 high staff utilization 20 high value-added manufacture see just-in-time high-visibility operations 20, 22–3, 147 Hill methodology 662 hire and fire 314, 662 historically based targets 610 Hogarth, R.M 175 Holly Farm 328–30 homeworking 249, 578 Hon Hai Precision Industry 51, 145 Hoover 116 hospitals 41, 42, 44, 46, 48, 49, 270, 281, 440, 507, 586 hot standby 587 hotels 13, 20, 21, 57– 8, 152, 380, 496 –7 house of quality see quality function deployment housekeeping 446 Howard Smith Paper Group 356–7 hows 126–7 HSBC 649 human factors engineering 244, 662 human failures 575 human interface, job design 244–5 human resources 233–5 business process re-engineering and 553 functions 5–6 management 18, 214 strategies 236–8 see also jobs: design; staff Hurricane Katrina 213 Hyatt 152 hype, excessive, avoidance 621–2 hypermedia/hypertext 213 IBM 213, 512 ice-cream 329–30 ideal operations 76 ideas 118 –19, 131 identification, risks 596 idle time 313, 325, 326 IKEA – 4, 13 –14 illumination levels at work 251–2 image of location 151–2 Imai, Masaaki 544 IMF (International Monetary Fund) 636 immediate supply networks 140, 662 implementation enterprise resource planning 415–17 improvement 620–4 planning 396 of process technology 227–8 of strategy 62–3, 78 importance–performance matrices 613–16, 662 improve zones 614 improvement 539–41 approaches to 549–58 awards 622–4 benchmarking as tool for 611 breakthrough 543, 659 continuous see continuous improvement culture 617–20 cycles 544–5, 619, 662 decisions 75 design 117, 125–8 elements of 542–9 implementation 620–4 importance 542 information for 606–12 innovation-based 543 as learning 619–20 organizing for 601–2 reasons for 603 performance 24, 394–400 priorities 612–17 procedures 546–7 of processes 99–101 strategy, linking to 603–5 supply chains 394–400 systems 546–7 techniques 558–63 in-house supplies 143–6 indented bills of materials 424–5 independent demand 275, 662 independent relationships 470 indirect process technology 208, 662 indirect responsibilities of operations management 662 industrial parks 62 infinite loading 279, 662 infomediaries 381–2 information delivered 449 flow design 396 for functional layouts 190–1, 192 for improvement 606–12 inputs of 12 integration 409–10, 411, 414, 415 inventories of 432 possession of 12 processing 12, 20 technology 208, 211–17, 223 see also information technology queues of 432, 448 sharing, supply chains 397–8 sources, master production schedules 422 transparency 390, 415 information systems 6, 97, 126–7 inventories 366–7 management (MIS) 664 information technology 18, 211–17, 390, 416, 551, 662 infrastructural decisions 74–5, 662 injuries 243 innovation 39, 627 innovation-based improvement 543 input capacity measures 304 input costs 643 input resources 11–13, 662 input-transformation-output process 11–15, 24–5, 117 inputs 11–13, 89, 90, 345, 422 inspections 583 intangible resources 73–4, 662 integrated risk management 574 integrating technologies 208 Intel 99–100, 104, 151 interactive design 129–33, 662 intermediaries interaction with technology through 219–21 internal benchmarking 611 internal customers see customers internal effectiveness cost reduction through 51–3 internal environments, projects 463 internal failure costs 511, 512–13, 663 internal neutrality 63 internal stakeholders 37 internal suppliers see suppliers internal support 63–4 International Monetary Fund (IMF) 636 Internet 212–13, 214, 663 connectivity 577–8 open-sourcing 119 physical distribution management 384–5 purchasing 381 security 577–8 web-integrated ERP 409, 414, 669 see also e-business; e-commerce; e-procurement introduction stage, products/services 72 inventories analysis and control systems 362–5 anticipation 311, 344, 658 buffer 290–1, 343, 358– 9, 361–2, 431, 442, 659 carrying costs 383 components 345 control see planning and control below coordination 432 costs 342, 347, 354–6, 432 of customers 432 cycle 343–4, 352–3, 660 decisions 75, 345–67 Z03_SLAC0460_06_SE_IDX.QXD 10/20/09 10:00 Page 677 Index inventories (continued) de-coupling 344, 432, 660 disadvantages of holding 345–6 finished goods 345 forecasting 367 of information 432 information systems 366–7 of materials 432 meaning 342, 663 measuring 365–6 multi-echelon systems 345–6 need for 342–6 pipeline 344, 665 planning and control 340–1 ABC system 362–5 analysis and control systems 362–5 continuous reviews 360–2, 660 day-to-day decisions 345–67 economic batch quantity model 352–4 economic order quantity formula 349 –52, 354 – environmental issues 639 expert systems applications 216 periodic reviews 355, 360–2, 665 perpetual inventory principle 367, 665 problems 367 social issues 642 three-bin systems 362 time interval between orders 361 timing decisions 345, 357–62 two-bin systems 362 volume decisions 345, 346–57 position of 345–6 priorities 362–5 profiles 348–9, 352 push and pull control and 290 quality 432 raw materials 345 records 366, 425 reports 367 roles of 342 safety see buffer above smoothing with 158–9 space 432 speed and 43 stock-outs 347, 358, 360, 361, 364, 367 supply chains and 391, 400 utilization 432 vendor-managed inventory 398 waste from 430, 435 work-in-process 344, 345 investments 39, 413 involvement 434–5 ISO 9000 standard 513–14, 583, 641, 663 ISO 14000 standard 640–1, 663 IT see information technology item master files 425 jidoka 430 JIT see just-in-time jobbing processes 92–3, 96, 180, 663 jobs commitment 245–51 design 201, 233–5, 241 behavioural approaches 245–51, 658 decisions 75 definition 242, 663 environmental issues 639 ergonomics 244–5, 251–2 human interface 244–5 for job commitment 245–51 methods 243–4, 259–65 social issues 642 task allocation 242–3 work times allocation 252–4 working environment 251–2 enlargement 246, 663 enrichment 246–7, 246–7, 663 rotation 246, 663 sharing 247, 250 specified 254 John Lewis Partnership 650 Johnson, Gerry 617 Johnson’s Rule 284 joint coordination of activities 390 joint learning 390 joint problem solving 390 judging sequencing rules 282 just-in-time (JIT) 268, 430 backward scheduling 285 corporate social responsibility and 639 economic order quantities and 355 environmental issues 639 materials requirements planning and 451 meaning 433, 663 see also lean kaizen 435, 544, 663 kanbans 430, 441–2, 663 Karlstad Kakes (KK) 199–200 Kaston Pyral Services Ltd 559, 560, 561, 562, 563 keiretsu 663 Kendall’s notation 336 key performance indicators (KPI) 395, 607 knowledge process 533 technical 17 see also expert systems KPI (key performance indicators) 395, 607 labour costs 48, 50, 147, 149, 223 division of 95, 242–3, 660 efficiency 436 see also human resources; skills; staff lagging, capacity 157–8, 659 land costs 149 landed costs 383 LAN (local area networks) 212, 409, 663 last in first out (LIFO) 282 latest event times (LET) 477–9 latest start times 480–1 layouts 177–8 basic 180–9 cell 180, 183, 187, 188, 194–6, 436, 659 decisions 179 detailed design 189–202 of facilities 216 fixed-position 180–1, 185, 187, 188, 189, 662 functional 180, 181–3, 185, 187, 188, 189–94, 436 line 183, 663 long thin 200–2 meaning 179 mixed 185–6 objectives 179 process see functional above product 180, 183 –4, 187, 188, 196–202, 436, 666 selecting type of 187–9 short fat 200–2 transparency 439 Laz-skan project 488–92 LCL (lower control limits) 525, 527–32 lead logistics providers (LLP) 385 lead time 168, 357–9, 425–6, 451 lead-time usage 358–60, 663 leading, capacity 157–8, 659 lean 355, 433, 551, 663 as improvement approach 550, 557–8 social issues 642 synchronization 347, 429–30 capacity utilization and 433–4 benefits of synchronized flows 431–2 involvement of everyone 434–5 materials requirements planning and 451–2 meaning 431–5 river and rocks analogy 432–3 services 448–9 supply networks 447–9 theory of constraints and 449–51 waste elimination 435–46 see also just-in-time lean Sigma 557 learning 242 double-loop 619 from failures 595 improvement as 619–20 organizations 618 partnership supply relationships 390 potential 227 process control 532–3 single-loop 619 legal services 71 677 Z03_SLAC0460_06_SE_IDX.QXD 678 10/20/09 10:00 Page 678 Index length of flows 179 lens manufacture 488–92 less important competitive factors 69 –71, 613, 663 LET (latest event times) 477–9 level capacity plans 309, 316, 318–21, 663 level master production schedule 423 levelled resources 472 levelled scheduling 430, 444–6, 663 Levi Strauss 383, 384 libraries 182–3 life cycles analysis 91, 663 products/services 72, 91, 666 LIFO (last in first out) 282 lifts 591 lighting 251–2 Andon 658 likelihood of failures 578–83 line balancing 197, 663 line layouts 183, 663 line of fit, deviation from 605 line-stop authority 430 listening to customers 118 Little’s Law 101–3, 335, 663 Lloyd’s of London 556 Lloyds TSB 250–1 LLP (lead logistics providers) 385 loading 277–9, 663 lobby groups’ performance objectives 38 local area networks (LAN) 212, 409, 663 location 663 of capacity 146–54 of customers 12 decisions 147–52 design decisions 142 facilities 216 files 425 flexibility 249 image of 151–2 materials 12 techniques 152–4 Lockheed Martin 129 logistics 356, 377–8, 384, 385, 663 London Eye 309 Long Ridge Gliding Club 80–1 long-term capacity management 142, 155 – 60, 299, 663 long-term capacity planning and control 169 long-term expectations 390 long-term flexibility 179 long-term issues, supply networks and 141 long-term planning and control 270–1 long thin layout 200–2, 663 longest operation time (LOT) sequencing 282 loss reduction 593 lot tolerance percentage defective (LTPD) 534–5 low unit costs 19 low-visibility operations 20–2 lower control limits (LCL) 525, 527–32 Lower Hurst Farm 41–2 LSG Sky Chefs 388 LTPD (lot tolerance percentage defective) 534–5 M-business 215 M-form organizations 240, 241 M/M/m queues 336–7, 339 machines 239 macro level operations 16 Magic Moments 500–1 maintenance 216, 588–92, 663 see also total productive maintenance make-to-order planning and control 275, 663 make-to-stock planning and control 276, 663 Makridakis, S 175 Malaysia Airlines 129 Malcolm Baldrige National Quality Award 623 MAN (metropolitan-area networks) 212 management coordination 179 performance 610–11 projects see projects of risks see risks of stakeholders 463–6 see also top management management information systems (MIS) 664 manufacturing computer integrated (CIM) 211, 659 flexible systems (FMS) 210, 662 process types 91–4, 96, 180 resource planning (MRP II) 409, 664 mapping process see processes: mapping value stream 436–7 market influence on performance objectives 68–9 market objectives 607 market requirements 7–8, 65, 68–75, 223, 604–5, 606, 664 market supply relationships, traditional 388 –9 marketing e-business applications 214 functions 4–6, 17–18 markets, grouping resources as 240 Marks and Spencer 37, 146 martial arts analogy of Six Sigma 555–6 mass customization 47, 664 mass processes 93, 96, 180, 664 mass production 91, 93 mass services 95, 96, 180, 664 master production schedules (MPS) 408, 422 –4, 664 material inputs 12 materials bills of see bills of materials controlled flow 201 costs 48, 378 flow design 396 handling 201 inventories of 432 management 377, 378 processing technology 208, 209–11 queues of 432 materials requirements planning (MRP) 285, 289, 408–9, 664 bills of materials see bills of materials capacity checks 428 closed loop 428 environmental issues 639 inventory records 425 just-in-time and 451 lean synchronization and 451–2 master production schedules 408, 422–4 netting process 425–7, 664 social issues 642 matrix organizations 133, 240, 241 Matsushita 151 Matsushito, Konosuke 511 maturity stage, products/services 72 McDonald’s 19, 87, 247 mean time between failures (MTBF) 581–2, 664 mean time to repair (MTTR) 582 measurement capacity 304–9 inventories 365–6 performance see performance quality characteristics 503–4 medium-term capacity management 169 medium-term capacity planning and control 299–300 medium-term planning and control 270–1 Mercedes-Benz 43 merchandising 664 merge events 480 method study 243, 259–61, 551, 664 metropolitan-area networks (MAN) 212 micro-detailed process map 664 micro level operations 16, 89 milestones 467, 664 milk industry 292, 328–30 milking machines 218 Millau Bridge 458 minimization of waste 639–40 MIS (management information system) 664 miscommunication in supply chains 393 –4 Z03_SLAC0460_06_SE_IDX.QXD 10/20/09 10:00 Page 679 Index mitigation of ethical practice breaches effects 648 of failures 573, 592–3 Mitsubishi 126 mix flexibility 46, 201, 223, 664 mixed capacity plans 315–16 mixed layouts 185–6 mixed modelling 445–6 mobile phones 128, 215, 649–50 mobile working 249 model of operations management 24–5 modular design 124–5, 664 money time value of 224–6 see also costs monitoring operations 289–90, 291 projects 474 monotonous work 202, 243 motion economy principles 261, 665 waste of 430, 435 motor manufacturing see automobile plants Motorola 128, 129, 553 moving-average forecasting 172–3, 174 MPS see master production schedules MRP see materials requirements planning MRP II (manufacturing resource planning) 409, 664 MRP netting 425–7, 664 MTBF (mean time between failures) 581–2, 664 MTTR (mean time to repair) 582 multi-echelon inventory system 345–6 multi-factor productivity 50 multi-skilling 249, 664 multi-sourcing 380–1, 664 Murphy curves 228 Mwagusi Safari Lodge 14, 21, 23 N-form organizations 240, 241 nagare 4330 National Blood Service 341 National Library Board, Singapore 626–7 National Trust 465–6 natural diagonals 96, 436 needs 18, 68, 69 –71, 508 –9, 545, 606, 612 net present value (NPV) 224–6 netting process, MRP 425–7, 664 network form organizations 240, 241 networks analysis 475, 664 design environmental issues 639 social issues 642 extranets 213, 661 internal 15 intranets 213 networked information technology 213 planning 475–87 see also Internet; supply networks neutrality 63 Nicholas, J.M 460 noise at work 252 Nokia 51, 61 non-competitive benchmarking 611 non-operations functions 18 non-productive work 242 non-value-adding activities 437–8 Northamptonshire Police 280 Northern Foods 388 Northrop Grumman 207 not-for-profit organizations 9–10, 37, 148 notebook computers 145 Novotel 314 NPV (net present value) 224–6 nuclear power 586, 597–9 objective estimates of failures 578–82 objectives capacity planning and control 300–1 cost see costs customer-driven 555 dependability see dependability financial 607 flexibility see flexibility layouts 179 of location decisions 148–9 market 607 operations 57–8, 607, 612–13 overall strategic 607 performance see performance process design 88–91 projects 459, 466–7 quality see quality speed see speed strategic 23, 607 supply chains 375–7 obsolescence 347, 349, 364 OC (operating characteristics) 534 occupational health and safety see health and safety at work OEE (operating equipment efficiency) 541 OEE (overall equipment effectiveness) 307–9, 664 OEM (original equipment manufacturers) 392–3, 410 offices ergonomics in 252–3 replacement 596 virtual 249 Ohno, Taiichi 550 Oldham, G 245 one-sided capability indices 522 open communications, risk management 574 open-sourcing 119 operating characteristics (OC) 534 operating equipment efficiency (OEE) 541 operating inefficiency costs 347 operation time sequencing 282 ‘operational’, definition 62 operational efficiency 201, 399, 664 operational equipment efficiency see overall equipment effectiveness operational risks, global sourcing 383 operations as activities 18, 23 –5 analyses 15 broad definition of 5, 659 characteristics 19–23 control 289–90 decisions, globalization and 641 efficiency 608 functions 4–6, 17–18, 664 hierarchy of 15–17, 514, 662 improvements 604–5 managers 4, 664 corporate social responsibility, analyses of issues 646–8 meaning 62 monitoring 289–90 new agenda 10–11 objectives 57–8, 607, 612–13 in organizations 4–6, 17–18 performance objectives see performance quality view 498–501 resource capabilities 65, 73–5, 664 service providers 14 strategies 24–5, 60–81, 664 typology 22 operations contribution, four-stage model of 63–4, 662 operations management corporate social responsibility influences on 637–45 definition 2, 4–6, 664 e-business and 214 expert systems and 216 importance in all types of organization 6–11 make or break activity 34–5 model of 24–5 not-for-profit organizations 9–10 process technology and 209 relevance to all parts of businesses 17–18 smaller organizations 8–9 operations network management 551 OPT see optimized production technology optimistic estimates 469, 481–3 optimized production technology (OPT) 290, 449–50, 664 optimum capacity level 155–6 Oracle 408 679 Z03_SLAC0460_06_SE_IDX.QXD 680 10/20/09 10:00 Page 680 Index Orange 649–50 orders fulfilment 385, 664 generating 366–7 placing costs 347, 349–51 quantity decisions 345, 346–57 timing decisions 357–62 winning competitive factors 69–71, 613, 664 organic farming 41–2 organisms, organizations as 239 organizational abilities 617–18 organizational ethics 644 organizational failures 576 organizational learning 227 organizations design 238–41 operations in 4–6, 17–18 perspectives on 239 structures definition 238 forms of 239–41 project-based 132–3 organizing for improvement see improvement original equipment manufacturers (OEM) 392–3, 410 Otis Company 592 outline process maps 98, 664 output capacity measure 304 output costs 643–4 outputs 11, 7–8, 13–15, 19 outsourcing 142, 143–6, 389, 467, 556, 664 over-booking capacity, airlines 316 over-production, waste from 430, 435 overall equipment effectiveness (OEE) 307–9, 664 overall strategic objectives 607 overtime 313–14 Oxfam 9–10 P:D ratios 276 –7, 451, 665 P2P (peer-to-peer) relationships 386 packages see products/services panel approach to forecasting 171 paper industry 184, 356–7 parallel processors 323–4 parallel relationships 470 Parasuraman, A 500 Pareto analyses 562 Pareto diagrams 561–2 Pareto law 363–5, 664 Paris Miki 47 part-time staff 314 participation 78 partnership supply chain relationship 389 – 90, 664 parts commonality see commonality parts family coding 665 passive interaction technology 219, 665 paths, critical 470, 475–81, 660 PDA (personal digital assistants) 215 PDCA cycle 544–5, 665 peer-to-peer networks 212 peer-to-peer (P2P) relationships 386 Penang Mutiara 57–8 people human failures 575 queues of 432 total involvement 435 see also customers; human resources; staff perfection 547–8 performance 32–4 benchmarking 394, 395, 611 competitors and 612–13 defined levels of 254 ethical 646–7 financial 646–7 of forecasting models 175–6 improvement 24, 394–400, 605 key performance indicators (KPI) 395, 607 management 610–11 measurement 554, 606–9, 610–11, 665 metrics 395 objectives 101, 665 basic 39–40 competitive factors 68–9 cost see costs customer influence 68–9 dependability see dependability flexibility see flexibility market influence 68–9 outsourcing and 144 polar representation 53–4 process design 89 product/service life cycle influence 72 project management 466–7 quality see quality speed see speed of top management 39 trade-offs between 54–5 processes 547 projects, assessing 474 standard 254, 668 standards 665 target setting 609–11 vital nature of 34–40 periodic reviews, inventories 355, 360–2, 665 perpetual inventory principle 367, 665 personal digital assistants (PDA) 215 personnel see staff PERT (programme evaluation and review technique) 452, 481–3, 666 pessimistic estimates 469, 481–3 PFA (production flow analysis) 194–6, 665 pharmaceuticals 115 photography 500–1 photonics industry 488–92 physical constraints, sequencing 280 physical distribution management 377, 384–5, 665 physical injuries 243 physical properties 12 physiological state 12 pianos 185 Pig Stand restaurant 87 pipeline inventory 344, 665 pipelines, supply chains 375 plan–do–check–act (PDCA) cycle 544–5, 665 planning business continuity 595–6 ERP 416 failure recovery 573, 594 –5 implementation 396 meaning 270, 665 see also enterprise resource planning; materials requirements planning planning and control 24, 267–9 activities 277–92 decisions 75 differences between 270–1 environmental issues 639 meaning and nature 270–2 social issues 642 supply and demand 272–7 volume-variety effect 272 waste effects 639 see also capacity: planning and control; control; inventories: planning and control; planning; projects: planning and control; quality: management; supply chains: management plant-within-a-plant 665 plastic household items 369–71 Platts, Ken 78 PM (preventive maintenance) 588–9, 665 PMTS (predetermined motion–time systems) 254, 665 point of entry 78 poka-yoke 587, 665 polar diagrams 53–4, 606, 665 polar representation 53–4 police call grading system 280–1 political systems, organizations as 239 pollution 639 POQ (production order quantity) see economic batch quantity positioning 54, 55 possession of information 12 post-failure analyses 578 potential failure 573, 574–8 power–interest grid 464–5 practice benchmarking 611 Z03_SLAC0460_06_SE_IDX.QXD 10/20/09 10:00 Page 681 Index precedence diagrams 197–9, 481 precedence networks 480–1 predetermined motion–time systems (PMTS) 254, 665 preliminary design 117, 123–5, 665 pressures, business 10–11 Preston Plant of Rendall Graphics 516 –19 Prêt a Manger 13–15 prevention costs 511, 512–13, 665 ethical practice breaches 648 of failures 573, 586–92 preventive maintenance (PM) 588–9, 665 prices discounting 317, 347, 349 global sourcing and 383 principles of motion economy 261, 665 priorities, improvement 612–17 priority sequencing 281 prison labour 384 probabilistic estimates 469–70, 481–3 problems solving evidence-based 545–6 joint 390 quality gap 501 process flow charting 551 process variation 553–4 processes 665 analysis see mapping below batch see batch processes blueprinting see mapping below business 18–19 capability 522– 6, 532–3, 555, 665 characteristics 19–23 continuous see continuous processes control 526, 532–3, 555 defining, to create package 125 delays 449 design 24, 86 –111, 115, 116 –17, 555, 576, 665 distance 227 end-to-end 545–6 exposure 20–2 flexibility 443 hierarchy of 15–19, 514 implementation 78 improvement 99–101, 545 inputs to 12–13 jobbing see jobbing processes knowledge 533 layouts 665 see also layouts: functional management 17–18 in manufacturing 91–4, 96 mapping 92, 97–101, 125, 437, 559 – 60, 665 mapping symbols 97–9, 665 mass see mass processes mass services see mass services in non-operations functions 18 of operations strategy 75–8 outputs 13–15, 665 performance 547 product–process matrix 95–6, 666 professional services see professional services project see project processes quality variation 521–6 resourcing failures 576 in service operations see service operations service shops see service shops of strategy 62, 75–8, 665 technology 206–7 automation 221–2 customer-processing technology 218–21 decisions 75 dimensions of 221–3 environmental issues 639 evaluation of 221–6 implementation 227–8 indirect 208, 662 information-processing technology 211–17 integrating technologies 208–3 materials-processing technology 209–11 meaning 208–9, 665 operations management and 209 scale of 222–3 small-scale 439 social issues 642 volume-variety reflected by 221–3 types 91–6, 180, 665 utilization 105–7 variability 105–7 variation reduction 547 yield 554 processing 12, 20 costs 643 times (VUT formula) 337 waste 430, 435 procurement see e-procurement; purchasing product–process matrix 95–6, 666 production e-business applications 214 production flow analysis (PFA) 194–6, 665 production of waste 643 production order quantity (POQ) see economic batch quantity productivity 49–51, 608, 665 products defects, waste from 430, 435 layouts see layouts prototypes 128–9 recalls 572, 576 structure 123, 424–5, 666 substitution of services in place of 643 –4 technology 666 products/services alternative 315 core 116 decline stage 72 design 24, 88, 112–14 acceptability 120–1, 128, 660 complexity reduction 124–5 concept 115, 660 concept generation 118–20 concurrent approach 131 creativity 122 criteria 120–1 decisions 75 environmental issues 639 evaluation 117, 122, 125–8 expert systems applications 216 failures 576 feasibility 120–1, 128, 660 final 117, 128–9 funnel 121–2, 660 importance of good design 114–29 improvement 117, 125–8 interactive 129–33, 662 open-sourcing 119 preliminary 117, 123–5, 665 process 115, 116–17 prototyping 117, 128–9, 666 screening 117, 120–3, 660 sequential approach 131 simultaneous development 131 social issues 642 stages 117–29 vulnerability 120–1, 128, 660 development functions 5–6 flexibility 46, 666 growth stage 72 introduction stage 72 life cycles 72, 91, 666 maturity stage 72 merging 14–15 new, design see design above outputs of 11–12 packages of 115–16, 123, 125 quality sampling 507, 533–5 supporting 116 see also products; services professional services 94, 96, 180, 666 profiles, inventory 348–9, 352 profitability 34–7, 114, 124, 130, 390, 396, 399 profits 34–7 programme evaluation and review technique (PERT) 452, 481–3, 666 programmes 459, 666 project-based organization structures 132–3 project champions, ERP 416 project processes 91–2, 96, 180, 666 681 Z03_SLAC0460_06_SE_IDX.QXD 682 10/20/09 10:00 Page 682 Index projects definition 462, 466–7, 666 common elements 459 design organization 132–3 environments, understanding 463–6 intervening to change 474–5 management computer-assisted 486–7 ERP 416 implementation 78 stages 462–3 stakeholders 463–6 successful 461–2 managers 461–2 meaning 459, 666 monitoring 474 objectives 459, 466–7 performance assessment 474 planning and control 457–8 control 473–5 environmental issues 639 network planning 475–87 social issues 642 scope 467 stakeholders 463–6 strategy 467 typology 459–61 proportion defective 554 prototyping 117, 128–9, 666 Psycho Sports Ltd 418–20 psychological state 12 pull control 289 –90, 441, 448, 451, 666 see also just-in-time purchase prices, global sourcing and 383 purchasing 214, 378–9, 608, 666 pure functional forms 133 pure project forms 133 purpose 78, 128 push control 289–90, 451, 666 see also materials requirements planning QA (quality assurance) 508 QB House 220 QFD (quality function deployment) 125 –7, 666 QLF (quality loss function) 525–6, 666 QSR (quick service restaurants) 87 qualified workers 254, 666 qualifying competitive factors 69–71, 613, 666 qualitative forecasting 170–1 quality 495–7 acceptance sampling 507, 658 assurance (QA) 508 attributes 504, 527–8, 658 awards 622–4 capacity planning and control 300 characteristics 502–4, 666 control (QC) 505–7, 508 costs 40, 52, 511–13, 666 customers’ view 498–501 definitions 498, 666 environmental issues 639 gaps, perceived 498–500, 501 in-house supply 144 importance 497–501 inventories and 342, 432 management acceptance sampling 507, 533–5, 658 conformance to specification 498, 502–8 customer-focus 514 expert systems applications 216 improvement-driven 514 statistical process control see statistical process control see also total quality management market requirements and 68–9 measurement 503–4 objectives 40–2, 52, 53, 57–8, 69, 89, 101, 300 operation’s view 498–501 outsourced supply 144 overall equipment effectiveness 307–9 performance measurement 514, 521–2, 607–8 problems 501 procedures 513–14 process technology 223 project objectives 446–7 sampling 507, 533–5, 666 sandcone theory 616–17 Six Sigma approach see Six Sigma social issues 642 at source 548 standards 504–7 supply chains 376 systems 513–14, 546 target-oriented 525–6 variables 504, 528–32, 666 quality function deployment (QFD) 125–7, 666 quality loss function (QLF) 525–6, 666 quality of working life (QWL) 434 Quanta 145 quantifying actions 606 quantitative evidence 555 quantitative forecasting 170, 171–4 queuing analyses 106 analytical models notation 333 types of system 336–9 balancing capacity and demand 324–5 customer perceptions 326 discipline 324 information, queues of 432, 448 management 323–4, 326 material, queues of 432 people, queues of 432 systems 333, 336–9 theory 317, 322, 336, 666 variability in demand/supply 325 quick service restaurants (QSR) 87 QWL (quality of working life) 434 R&D (research and development) 119, 667 Radio Frequency Identification (RFID) 216–17, 219, 627 rail transport 95 ratings, work measurement 262, 666 raw materials inventories 345 RBV (resource-based view) 73, 667 RCCP (rough-cut capacity plans) 428 RCM (reliability-centred maintenance) 591, 667 reach, e-business 214 received variety 20, 666 record charts, flow 190–1, 662 recovery from ethical practice breaches effects 648 from failures see failures recycling 638, 639, 643 Red Queen effect 543 reduction of waste 639–40 redundancy 586–7, 666 regulators’ performance objectives 38 rejecting, queuing theory 324 relationship matrices 125–7 relationships charts 666 projects 470 in supply chains 386–91 relative uncertainty 302 reliability 502, 504, 578, 581, 666–7 reliability-centred maintenance (RCM) 591, 667 remainder cells 196, 667 remote mice 123, 128 Rendall Graphics 516–19 reneging, queueing theory 324 re-order levels (ROL) 358, 360, 667 re-order points (ROP) 357–8, 362, 667 repeatability 19, 22, 667 repetition 221 repetitive strain injury (RSI) 243, 644, 667 replacement offices 596 repositioning 54 reputational risks 643, 645, 646 research and development (R&D) 119, 667 resilience 39, 607 resource-based view 73, 667 resource requirements plans (RRP) 428 resource-to-order planning and control 275, 667 Z03_SLAC0460_06_SE_IDX.QXD 10/20/09 10:00 Page 683 Index resources 7–8 business continuity 596 capabilities 65, 73–5 characteristics 240 constraints 73, 470, 483–4 distance 227 effective use 39 grouping 240 intangible 73, 667 processes, failures 576 profiles 483–4 projects 461, 469–70 see also transformed resources; transforming resources respect-for-humans system 434 responses, flexibility and 48 responsibilities of operations management 23–4 responsive supply chains 391 responsiveness to clients, projects 461 restaurants 87, 185, 211, 448 retail industry 140–1, 216–17, 397–8, 401– 4, 650 see also supermarkets revenues 300 reverse engineering 118, 667 RFID (Radio Frequency Identification) 216 –17, 219, 627 richness, e-business 214 risks of acceptance sampling 533, 534–5 assessments business continuity 596 ethical practice breaches 647 failures 573–85 deterioration 364 ethical practice breaches 647–8 global sourcing 383 identification 596 management 571–2 corporate social responsibility as 646 – meaning 573 principles 574 see also failures mitigation 573, 592–3 obsolescence 349, 364 operational failure 39 reduction, speed and 43 reputational 643, 645, 646 sources 573 supply chains 400, 668 vulnerability of design option 120–1 river and rocks analogy 432–3 roadmap, SCOR 396 Robert Wiseman Dairies 292 robots 209 –10, 211, 218, 667 robustness 202, 243 Rochem Ltd 230–1 Rocket Chemical Company 119 Roddick, Anita 646 ROL (re-order levels) 358, 360, 667 Rolls-Royce 407, 644 ROP (re-order points) 357–8, 362, 667 rostering 288, 667 rotation, jobs 246, 663 Rotterdam Educational Group (REG) 192–3 rough-cut capacity plans (RCCP) 428 routine services 71 Royal-Dutch Shell 583 RRP (resource requirements plans) 428 RSI (repetitive strain injury) 243, 644, 667 run-to-breakdown (RTB) maintenance 588–9, 667 Ryanair 61 safety inventories see inventories: buffer layouts 179 at work 251, 384 salads 310–11 sales e-business applications 214 functions 4–6, 18 Salisbury District Hospital 440 sampling plans 533–5 quality 507, 533–5 sandcone theory 616–17 sandwiches 97–9, 100–1, 286–8, 411–13 SAP 394, 407, 408, 410, 414–15, 417, 667 satisfaction, customers see customers Satyam Computer Services Ltd 414 scale of capacity 156 scale of process technology 222–3 scatter diagrams 558–9 SCC (Supply Chain Council) 394 scenario planning 171 schedule constraints 470–1 scheduling 284–9, 667 expert systems applications 216 levelled 430, 444–6, 663 schematic layouts 193 scientific management 97, 243–4, 259, 542, 551, 553, 667 SCOR (Supply Chain Operations Reference) model 374, 394–6 screening 117, 120–3, 660 seasonality 302, 304, 310–11, 315, 317 second-tier customers 140–1, 377, 667 second-tier suppliers see suppliers secondary functions 128 security, computers and Internet 577–8 self-assessment 623 sequencing 279–84, 324, 667 sequential approach to design 131 series relationships 470 serpentine flows 438 servers client–server networks 212 queuing theory 324 Service Adhesives 256–7 service-level agreements (SLA) 509–10, 548, 667 service operations 94–5, 96, 550 service prototypes 128–9 service shops 94–5, 96, 180, 667 services fail-safeing 587 failure recovery 594 flexibility 449 lean synchronization 448–9 legal 71 merging 14–15 operations producing 13–14 providers 14 substitution in place of products 643 –4 varying types 317 waste in 448 see also products/services set-up times reduction 443, 667 Seven-Eleven Japan 398 shared success, partnership relationships 389 shared vision, risk management 574 shareholders’ performance objectives 38 sharing, jobs 247, 250 Shell 381, 394 shop-within-a-shop 183–4, 665 shops see retail industry; service shops; supermarkets short cycle time manufacturing see just-in-time short fat layout 200 –2, 667 short-term capacity management 169 short-term capacity planning and control 299–300 short-term planning and control 270–1 short-term transactional relationship 388 short waiting tolerance 20 shortest operation time (SOT) sequencing 282, 283 Siemens 374, 394 Silicon Valley 151 simplicity 124–5 simulation 107, 117, 667 simultaneous development 131, 667 simultaneous engineering 131, 667 single-card kanbans 441–2 single factor productivity 50 single-loop learning 619 single-minute exchange of dies (SMED) 443, 667 single-sourcing 380, 667 sites 151 Six Sigma 542, 544, 545, 553–8, 565–8, 667 skills 13, 20, 57–8, 151, 249, 548 Skinner, Wickham 54 SKU (stock-keeping units) 355, 365 683 Z03_SLAC0460_06_SE_IDX.QXD 684 10/20/09 10:00 Page 684 Index Skunkworks 129 SLA (service-level agreements) 509–10, 548, 667 Slap.com 52–3 small-scale technology 439 smaller organisations 8–9 Smart car 90 smart products 217 smart tags 216 SMED (single-minute exchange of dies) 443, 667 Smith, Adam 242 smoothing exponential 172, 173–4 with inventory 158–9 SNCF 95 social dimension of corporate social responsibility 634, 636, 641–3 social responsibilities 24, 383–4, 667 see also corporate social responsibility societal pressures 646 society’s performance objectives 38 soft drinks industry 298 solution providers 410 Sony 51, 145 SOT (shortest operation time) 282, 283 Southwest Airlines 61 space inventories 432 use of 179 spacecraft 586 spam 577 Spangler 116 spatial containment of failures 593 spatially variable costs 148, 667 SPC see statistical process control specialist services 71 specifications 117–18 conformance to 498, 501, 502–8 range 522 specified jobs 254 speculation, degree of 276–7 speed 667 capacity planning and control 300 flexibility and 48 in-house supply 144 inventory roles 342 objectives 40, 42–3, 52, 53, 57– 8, 69, 89, 101, 282 outsourced supply 144 overall equipment effectiveness 307–9 performance measures 607–8 process technology 223 sandcone theory 616–17 supply chains 376 spending, e-procurement and 382 sports equipment 418–20 SQA (supplier quality assurance) 668 SQL Slammer 577 square watermelons 120 Staats, Bradley 448 stability, dependability and 46 staff 13 conditions 179 continuity, projects 461 contributions 510 costs 48, 50, 147, 149, 223 development 434 health ideas from 118 involvement 433 organizational ethics, exposure to 644 performance objectives 38 productivity 608 representative bodies’ performance objectives 38 rostering 288 utilization 20, 55 well-being 643 see also human resources stagegates 467 stakeholder dimension of corporate social responsibility 634, 637, 644 stakeholders 37–9, 463–6, 668 standard performance 254, 668 standard time 263–4, 668 standardization 20, 96, 124, 129, 668 standards ethical 646 ISO 9000 513–14, 583, 641, 663 ISO 14000 640–1, 663 quality 504–7 Starbuck’s 87, 650 statistical process control (SPC) 444, 507, 520–36, 668 stock see inventories stock cover 365–6 stock holders 141 stock-keeping units (SKU) 355, 365 stock-outs see inventories stock turn 365–6 stockless production see just-in-time; lean storage 12, 347, 349 strategic decisions 62, 74–5, 145, 668 strategic objectives 23, 607 strategic partners 236 strategic targets 610 strategies corporate 65–6, 660 development 23 emergent 67, 661 functional 66, 662 meaning 62 human resources 236–8 linking improvement to 603–5 operations 24–5, 60–81, 664 projects 467 see also business strategies streamlined flows 436–40 stress 238, 295 structural decisions 74–5, 668 structural improvement cycles 555 structures 74–5 organizations see organizations products 123, 424–5, 666 work breakdown (WBS) 468, 669 subcontracting 314, 321, 668 subjective estimates of failures 583 substitution 593, 643–4 success 39 critical success factors (CSF) 415–16 project management 461–2 Sun Microsystems 151 supermarkets 40–1, 42, 44, 46, 49, 149, 178, 390, 448 supplier quality assurance (SQA) 668 suppliers corporate social responsibility 643 development decisions 75 e-business applications 214 ethics and 644 first-tier 140 –1, 345, 377, 392–3, 662 internal 15, 509, 548, 663 performance objectives 38 second-tier 140–1, 345, 377, 393, 667 selection 379–81 supply changes in 147 and demand 272–7, 440–2 failures 574–5 performance 383 risks 383 seasonality 302 uncertainty in 273–4, 364 variability in 325 Supply Chain Council (SCC) 394 Supply Chain Operations Reference (SCOR) model 374, 394–6 supply chains agility 47, 377, 398, 400 behaviour 391–4 dynamics 392–4, 399, 668 efficient policies 391 flexibility 377 improvement 394–400 lean synchronization 447–9 management 217, 373–4 activities of 377–85 corporate social responsibility 383 –4 effects of e-business 397 environmental issues 639 Extranets 213 global sourcing 382–4 logistics 377–8, 384, 385 materials management 377, 378 meaning 375–7 objectives 375 physical distribution management 377, 384–5 purchasing and 378–9, 381–2 social issues 642 supplier selection 379–81 Z03_SLAC0460_06_SE_IDX.QXD 10/20/09 10:00 Page 685 Index supply chains (continued) meaning 375, 668 miscommunication in 393–4 objectives 375–7 pipelines 375 relationships 386–91 responsive policies 391 risks 400, 668 time compression 399 vulnerability 400 supply networks 15, 17, 375, 668 changing shape 142 configuring 142–6 design 75, 138–40 decisions 141–2 forecasting 168–76 location of capacity 146–54 long-term capacity management 142, 155 – 60 immediate 140, 662 lean synchronization 447–9 long-term issues 141 perspective 140–2 total 140–1, 668 supply side 140–1, 148, 668 support functions 5–6, 668 supporting products/services 116 supporting strategy 63 surgery 181, 507 sustainability (environmental) dimension of corporate social responsibility 634–5, 638–41 sustainable alignment 604–5 SVT (Sveriges Television) 224 synchronization 431 see also lean: synchronization synchronized flows 431–2, 547, 550 synthesis from elemental data 254, 668 systematization 19, 668 Taguchi, Genichi 128, 525 Taguchi loss function 525–6 Taguchi methods 128, 668 tangibility 13, 668 target-oriented quality 525–6 targets absolute 547 performance 609–11 strategic 610 see also goals; objectives tariffs, cross-border 383 task allocation 242–3 task forces 133 task-time variation 197 Tata 147–8 tax collecting 602 taxis 20 Taylorism see scientific management TDG 385 Tea and Sympathy 499 team value management (TVM) 379 teams ERP implementation 416 projects 461 teamwork 248, 574 technical execution, projects 462 technical functions 5–6 technical knowledge 17 technology costs 48 coupling/connectivity 222, 223 degree of automation 221–2 disruptive 660 failures 576 scale/scalability of 222–3 see also information technology; processes: technology telephones, mobile see mobile phones television programmes 125, 224 teleworking 249, 668 temperatures at work 251 temporal containment of failures 593 temporary nature of projects 459 Tesco 120, 149, 178 Texas Instruments 151 theme parks 162–6 theory of constraints (TOC) 290, 449–51, 668 third-party logistics (TPL) 377–8, 385 third-tier suppliers 393 Third World countries 641 three-bin inventory system 362 throughput efficiency 103–4 throughput rates 89 throughput time 89, 100–4, 325, 335, 436–8, 451, 665 timber merchants 443–5 time basic 262, 658 compression 399 constraints 471 dependability and 45 estimates 481–3 flexibility 48, 249 intervals between orders 361 lags 20 lead see lead time overall equipment effectiveness 307–9 projects 446–7, 469–70 set-up reduction 443, 667 standard 263–4, 668 throughput see throughput time valuable operating time 278, 669 waiting 55, 106–7 time series analysis 171–22 time study 262, 668 time to market (TTM) 130, 132, 669 time value of money 224 timing of capacity change 157–9 decisions, inventories 345, 357–62 TOC (theory of constraints) 290, 668 top-down 65–6, 668 top management commitment 514 performance objectives 38, 39 support 416, 461, 620–1 Top Shop 122–3 total customer satisfaction 553 total factor productivity 50 total people involvement 435 total productive maintenance (TPM) 446, 557, 590, 668 total quality management (TQM) coverage 509–10 customer needs and expectations 508–9 environmental issues 639 as extension of previous practice 508, 509 as improvement approach 549, 557–8, 565–6 ISO 9000 approach 513–14 meaning 508, 668 quality costs 511–13 quality systems and procedures 513–14 social issues 642 staff contributions 510 total supply networks 140–1, 668 total work content 197, 199 Towill, D.R 399 Toyota 126, 420, 435, 441, 442, 550 TPL (third-party logistics) 377–8, 385 TPM see total productive maintenance TQM see total quality management traceability, failures 578 trade-offs 54–5, 127, 644, 646–7, 668 trade unions’ performance objectives 38 trading blocs 382 traditional market supply relationships 388–9 training 220–1, 555 Trans-European Plastics 369–71 transaction costs 214 transaction files 425 transformation costs 643 transformation process model 11–15, 117, 668 transformed resources 122, 117, 187, 208, 342, 668 transforming resources 13, 117, 180, 669 transparency information 390, 415 layouts 439 transport costs 150, 153, 155, 383, 645 infrastructure 383 waste from 430, 435 troubleshooting ERP 416 mechanisms, projects 461 trust 390 TTM (time to market) 130, 132, 669 Tussaud’s 326 685 Z03_SLAC0460_06_SE_IDX.QXD 686 10/20/09 10:00 Page 686 Index TVM (team value management) 379 two-bin inventory system 362 two-handed process chart 669 type I and type II errors 506–7, 524–5, 533–5 tyre replacement service 274–5 U-form organizations 240–1 U-shaped flows 438 UAV (unmanned aerial vehicles) 207 UCL (upper control limits) 525, 527–32 Ulrich, Dave 236 unassignable variation 172–4 uncertainty 47, 121, 302, 459–61 in supply and demand 273–4, 364 under-utilization 300, 312 unethical behaviour 646 uniqueness, projects 459 unit costs see costs unitary form organizations 240–1 United Airlines 575 United Phototonics Malaysia 488–92 Universal Product Code 215 unmanned aerial vehicles (UAV) 207 upper control limits (UCL) 525, 527–32 upstream 141, 143, 391, 669 Upton, David 448 urgent-action zones 614 usage value 363–5, 669 utilization 89, 105 –7, 300, 306, 312, 325, 338 –9, 432, 669 vacuum cleaners 116–17 valuable operating time 278, 669 value-added throughput efficiency 104 value-adding activities 20, 299, 436–8, 545 value analyses 127 value engineering (VE) 127–8, 669 value stream mapping 436–7 Van Valen, Leigh 542 variability 105 –7, 325, 334 –5, 338, 443 – 6, 526 variable costs 148, 189 variables, quality see quality variation 547, 669 in demand 19, 20, 22 process 553–4 in process quality 521–6 variety 669 of output 19, 20, 22 reduction 124 see also volume–variety vendor-managed inventory (VMI) 398 vertical integration 142, 143–6, 389, 669 Vijay Dairy & Farm Products 414–15 violations 575, 597–9 Virgin Trains 95 virtual offices 249 virtual operations 389, 669 virtual prototype 129, 669 viruses 577 visibility 19, 20–2, 439, 669 vision, shared, risk management 574 visioning, ERP 416 visual control 430 Vitacress 505 VMI (vendor-managed inventory) 398 volume 669 decisions, inventories 345, 346–57 flexibility 46, 202, 223, 669 of outputs 19, 22 volume resellers 410 volume–variety effect on planning and control 272 flows 187 positions 91, 96 process technology reflects 221–3 voluntary dimension of corporate social responsibility 634, 637, 644–5 Volvo 248 Voss, C.A 452 vulnerability of design option 120–1, 128, 660 supply chains 400 VUT formula 337 wages, global sourcing and 384 waiting lines see queuing waiting times 55, 106–7, 430, 435 waiting tolerance 20 Wal-Mart 390 walking the talk 618 Walley, P 221 WAN (wide area networks) 212, 669 warehouses 356–7 warehousing 214 warm standby 587 waste 51, 90 corporate social responsibility 639 elimination 430, 433, 436–46, 550 identification 548 minimization 639–40 planning and control effects 639 production of 643 recycling 639, 643 reduction 639–40 in services 448 seven types of 435–6 Waste Management, Inc 417 watercress 505 watermelons 120 WBS (work breakdown structure) 468, 669 WD-40 119 weather forecasting 304 web-integrated enterprise resource planning 409, 414, 669 wedding photography 500–1 weekly demand fluctuations 302–4 weighted score method of location 152–3, 669 Weldon Hand Tools 203–4 welfare of customers 644 well-being, staff 643 whats 126–7 Wheelwright, S.C 63–4, 95–6 whisky industry 548–9 why–why analyses 5633 Wi-Fi 212 Wichita Mutual insurance 565–7 wide area networks (WAN) 212, 669 Wikipedia 119 Wincanton 298 WIP see work-in-progress wired networks 212 wireless LANs (WLAN) 212 wireless networks 212 W.L Gore & Associates Inc 234–5 work breakdown structure (WBS) 468, 669 work content 100, 103–4, 197, 199, 669 work-in-progress (WIP) 89, 101–3, 333–9, 344, 345, 669 work–life balance 643 work measurement 243, 253–4, 262–5, 669 work organization see jobs: design work packages 468 work patterns, scheduling 288–9 work-related stress 238, 295 work study 243, 259–65, 669 work times allocation 197, 252–4 workflow 104, 396 workforce size 314 Workhouse project, National Trust 465 –6 working capital 300, 347, 349, 391 working environment, job design 251–2 working hours, global sourcing and 384 working practices 434 World Bank 634 world wide web 212–13, 214, 669 worms 577 Xchanging 556 Yamaha 185 yield management 316–17, 669 Yo! Sushi 211 Zara 401–4 zero defects 511, 554, 669 ... costs ((D/Q) × Co ) 20 × 20 = 400 10 × 20 = 20 0 6.7 × 20 = 134 × 20 = 100 × 20 = 80 3.3 × 20 = 66 2. 9 × 20 = 58 2. 5 × 20 = 50 = Total costs 425 25 0 20 9 20 0* 20 5 21 6 23 3 25 0 *Minimum total cost... Planning and control Table 12. 2 Matrix of lead-time and demand-rate probabilities Lead-time probabilities 0.1 0 .2 0.4 0 .2 0.1 110 0 .2 110 (0. 02) 22 0 (0.04) 330 (0.08) 440 (0.04) 550 (0. 02) 120 0.3 120 ... D/535 C/541 A /26 0 B/141 D/ 021 Total Usage (items/year) 700 450 1,000 95 520 73 520 170 25 0 25 0 400 80 23 0 400 500 50 70 50 50 20 Cost (£/item) 20 .00 2. 75 0.90 8.50 0.54 2. 30 0 .22 0.65 0.34 0.30