Operations and Supply Chain Management, Sixteenth Edition
By Robert Jacobs and Richard B. Chase
Contents:
Section One
STRATEGY, PRODUCTS, AND CAPACITY
1 INTRODUCTION 2
Introduction—The Elements of OSCM 3
What Is Operations and Supply Chain Management? 3
Distinguishing Operations versus Supply Chain Processes 4
Categorizing Operations and Supply Chain Processes 6
Differences between Services and Goods 7
The Goods–Services Continuum 8
Product–Service Bundling 9
Careers in OSCM 9
The Major Concepts that Define the OSCM Field 10
Current Issues in Operations and Supply Chain Management 13
Efficiency, Effectiveness, and Value 13
Concept Connections 14
Discussion Questions 15
Objective Questions 16
Analytics Exercise: Comparing Companies Using Wall Street Efficiency Measures 16
Practice Exam 19
2 STRATEGY 20
What Is Operations and Supply Chain Strategy? 21
Competitive Dimensions 22
The Notion of Trade-Offs 24
Order Winners and Order Qualifiers: The Marketing–
Operations Link 24
Strategies Are Implemented Using Operations and
Supply Chain Activities—IKEA’S Strategy 25
Assessing the Risk Associated with Operations and Supply Chain Strategies 25
Risk Management Framework 27
Productivity Measurement 28
A Sustainable Operations and Supply Chain Strategy 30
Concept Connections 31
Solved Problem 33
Discussion Questions 33
Objective Questions 34
Case: The Tao of Timbuk2 36
Practice Exam 37
3 DESIGN OF PRODUCTS AND SERVICES 39
Product Design 40
Product Development Process 41
Product Design Criteria 46
Designing for the Customer 47
Value Analysis/Value Engineering 48
Designing Products for Manufacture and Assembly 49
Designing Service Products 53
Economic Analysis of Product Development Projects 54
Build a Base-Case Financial Model 55
Sensitivity Analysis to Understand Project Trade-Offs 57
Measuring Product Development Performance 58
Concept Connections 59
Solved Problem 60
Discussion Questions 63
Objective Questions 63
Case: IKEA: Design and Pricing 66
Case: Comparison of Competing Products 68
Practice Exam 70
4 PROJECTS 71
What Is Project Management? 72
Organizing the Project Team 73
Pure Project 73
Functional Project 73
Matrix Project 74
Organizing Project Tasks 75
Managing Projects 76
Earned Value Management (EVM) 78
Network-Planning Models 81
Critical Path Method (CPM) 82
CPM with Three Activity Time Estimates 86
Time–Cost Models and Project Crashing 88
Project Management Information Systems 92
Concept Connections 93
Solved Problems 95
Discussion Questions 99
Objective Questions 99
Analytics Exercise: Product Design Project 105
Practice Exam 107
5 STRATEGIC CAPACITY MANAGEMENT 108
Capacity Management in Operations and Supply Chain Management 109
Capacity Planning Concepts 110
Economies and Diseconomies of Scale 110
Capacity Focus 111
Capacity Flexibility 111
Capacity Planning 112
Considerations in Changing Capacity 112
Determining Capacity Requirements 113
Using Decision Trees to Evaluate Capacity Alternatives 115
Planning Service Capacity 118
Capacity Planning in Services versus Manufacturing 118
Capacity Utilization and Service Quality 119
Concept Connections 120
Solved Problem 121
Discussion Questions 123
Objective Questions 123
Case: Shouldice Hospital—A Cut Above 125
Practice Exam 127
5S INVESTMENT ANALYSIS 128
Financial Analysis 128
Concepts and Definitions 128
Activity-Based Costing 131
The Effects of Taxes 132
Choosing among Investment Proposals 133
Methods of Ranking Investments 139
Sample Problems: Investment Decisions 140
Concept Connections 143
7S MANUFACTURING TECHNOLOGY 182
Technologies in Manufacturing 182
Computer-Integrated Manufacturing 185
Concept Connections 187
Discussion Questions 188
8 FACILITY LAYOUT 189
Analyzing the Four Most Common Layout Formats 191
Workcenters (Job Shops) 191
Systematic Layout Planning 195
Assembly Lines 195
Assembly-Line Design 195
Splitting Tasks 199
Flexible and U-Shaped Line Layouts 200
Mixed-Model Line Balancing 200
Cells 202
Project Layouts 202
Retail Service Layout 204
Servicescapes 204
Signs, Symbols, and Artifacts 206
Office Layout 206
Concept Connections 207
Solved Problems 208
Discussion Questions 213
Objective Questions 213
Advanced Problems 219
Analytics Exercise: Designing a Manufacturing Process 220
Practice Exam 222
9 SERVICE PROCESSES 223
The Nature of Services 224
An Operational Classification of Services 225
Designing Service Organizations 225
Structuring the Service Encounter: The Service- System Design Matrix 227
Web Platform Businesses 228
Managing Customer-Introduced Variability 230
Applying Behavioral Science to Service Encounters 230
Service Blueprinting and Fail-Safing 233
Three Contrasting Service Designs 234
The Production-Line Approach 235
The Self-Service Approach 236
The Personal-Attention Approach 236
Seven Characteristics of a Well-Designed Service System 237
Concept Connections 239
Discussion Questions 240
Objective Questions 241
Case: South Beach Pizza: An Exercise in Translating
Customer Requirements into Process Design Requirements 241
Practice Exam 243
9S HEALTH CARE 244
The Nature of Health Care Operations 244
Classification of Hospitals 245
Hospital Layout and Care Chains 246
Capacity Planning 247
Workforce Scheduling 248
Quality Management and Process Improvement 248
Health Care Supply Chains 249
Inventory Management 251
Performance Measures 251
Performance Dashboards 252
Trends in Health Care 252
Concept Connections 254
Discussion Questions 254
Objective Questions 255
Case: Managing Patient Wait Times at a Family Clinic 255
Practice Exam 257
10 WAITING LINE ANALYSIS AND SIMULATION 258
The Waiting Line Problem 259
The Practical View of Waiting Lines 259
The Queuing System 260
Waiting Line Models 267
Approximating Customer Waiting Time 273
Simulating Waiting Lines 276
Example: A Two-Stage Assembly Line 276
Spreadsheet Simulation 279
Simulation Programs and Languages 282
Concept Connections 283
Solved Problems 285
Discussion Questions 288
Objective Questions 288
Case: Community Hospital Evening Operating Room 293
Analytics Exercise: Processing Customer Orders 293
Practice Exam 296
11 PROCESS DESIGN AND ANALYSIS 301
Process Analysis 302
Example—Analyzing a Las Vegas Slot Machine 302
Process Flowcharting 304
Understanding Processes 305
Buffering, Blocking, and Starving 305
Make-to-Stock vs. Make-to-Order 306
Measuring Process Performance 309
Production Process Mapping and Little’s Law 311
Job Design Decisions 313
Behavioral Considerations in Job Design 314
Work Measurement and Standards 314
Process Analysis Examples 315
A Bread-Making Operation 315
A Restaurant Operation 316
Planning a Transit Bus Operation 318
Process Flow Time Reduction 320
Concept Connections 322
Solved Problems 324
Discussion Questions 326
Objective Questions 327
Case: Runners Edge–Call Center Process Analysis 331
Practice Exam 333
11S OPERATIONS CONSULTING 334
What is Operations Consulting? 334
The Management Consulting Industry 334
Economics of Consulting Firms 335
When Operations Consulting is Needed 336
The Operations Consulting Process 337
Operations Consulting Tool Kit 338
Problem Definition Tools 338
Data Gathering 340
Data Analysis and Solution Development 341
Cost Impact and Payoff Analysis 341
Implementation 342
Concept Connections 342
Discussion Questions 343
Objective Questions 343
Practice Exam 343
12 SIX SIGMA QUALITY 344
Total Quality Management 345
Quality Specifications and Quality Costs 346
Developing Quality Specifications 346
Cost of Quality 347
Six Sigma Quality 349
Six Sigma Methodology 350
Analytical Tools for Six Sigma 351
Six Sigma Roles and Responsibilities 354
The Shingo System: Fail-Safe Design 355
ISO 9000 and ISO 14000 356
External Benchmarking for Quality Improvement 357
Concept Connections 358
Discussion Questions 359
Objective Questions 360
Case: Tesla’s Quality Challenge 361
Practice Exam 362
13 STATISTICAL QUALITY CONTROL 363
Statistical Quality Control 364
Understanding and Measuring Process Variation 365
Measuring Process Capability 367
Statistical Process Control Procedures 371
Process Control with Attribute Measurements: Using p-Charts 372
Process Control with Attribute Measurements: Using c-Charts 374
Process Control with Variable Measurements: Using X–- and R-Charts 375
How to Construct X–- and R-Charts 376
Acceptance Sampling 379
Design of a Single Sampling Plan for Attributes 379
Operating Characteristic Curves 380
Concept Connections 382
Solved Problems 383
Discussion Questions 386
Objective Questions 386
Analytics Exercise: Hot Shot Plastics Company 391
Analytics Exercise: Quality Management—Toyota 392
Practice Exam 393
Section Three
SUPPLY CHAIN PROCESSES
14 LEAN SUPPLY CHAINS 396
Lean Production 397
The Toyota Production System 398
Lean Supply Chains 399
Value Stream Mapping 401
Lean Supply Chain Design Principles 403
Lean Concepts 404
Lean Production Schedules 405
Lean Supply Chains 409
Lean Services 410
Concept Connections 412
Solved Problems 414
Discussion Questions 418
Objective Questions 418
Case: Quality Parts Company 419
Case: Value Stream Mapping 421
Case: Pro Fishing Boats—A Value Stream Mapping Exercise 422
Practice Exam 423
15 LOGISTICS, DISTRIBUTION, AND TRANSPORTATION 424
Logistics 425
Decisions Related to Logistics 426
Transportation Modes 426
Warehouse Design 427
Locating Logistics Facilities 427
Plant Location Methods 429
Centroid Method 433
Locating Service Facilities 434
Concept Connections 437
Solved Problems 438
Discussion Questions 442
Objective Questions 442
Analytics Exercise: Distribution Center Location 445
Practice Exam 447
16 GLOBAL SOURCING AND PROCUREMENT 448
Strategic Sourcing 449
The Bullwhip Effect 450
Supply Chain Uncertainty Framework 451
Outsourcing 454
Logistics Outsourcing 454
Framework for Supplier Relationships 455
Green Sourcing 457
Total Cost of Ownership 460
Measuring Sourcing Performance 462
Concept Connections 464
Discussion Questions 465
Objective Questions 466
Analytics Exercise: Global Sourcing Decisions—
Grainger: Reengineering the China/U.S. Supply Chain 468
Practice Exam 470
Section Four
SUPPLY AND DEMAND PLANNING AND CONTROL
17 THE INTERNET OF THINGS AND ERP 472
Intelligent Devices Connected through the Internet 473
What is ERP? 473
Consistent Numbers 474
Software Imperatives 474
Routine Decision-Making 475
How ERP Connects the Functional Units 475
Finance 476
Manufacturing and Logistics 476
Sales and Marketing 477
Human Resources 477
Customized Software 477
Data Integration 477
How Supply Chain Planning and Control Fits Within ERP 479
Simplified Example 479
SAP Supply Chain Management 479
SAP Supply Chain Execution 480
SAP Supply Chain Collaboration 480
SAP Supply Chain Coordination 481
Performance Metrics to Evaluate Integrated System Effectiveness 481
The “Functional Silo” Approach 482
Concept Connections 483
Discussion Questions 484
Objective Questions 484
Practice Exam 484
18 FORECASTING 485
Forecasting in Operations and Supply Chain Management 486
Quantitative Forecasting Models 487
Components of Demand 487
Time Series Analysis 488
Forecast Errors 501
Causal Relationship Forecasting 504
Qualitative Techniques in Forecasting 506
Market Research 507
Panel Consensus 507
Historical Analogy 507
Delphi Method 507
Web-Based Forecasting: Collaborative Planning, Forecasting, and Replenishment (CPFR) 508
Concept Connections 509
Solved Problems 511
Discussion Questions 515
Objective Questions 516
Analytics Exercise: Forecasting Supply Chain Demand— Starbucks Corporation (LO18-2) 524
Practice Exam 525
19 SALES AND OPERATIONS PLANNING 526
What Is Sales and Operations Planning? 527
An Overview of Sales and Operations Planning Activities 527
The Aggregate Operations Plan 529
Aggregate Planning Techniques 533
A Cut-and-Try Example: The JC Company 533
Aggregate Planning Applied to Services: Tucson Parks and Recreation Department 538
Yield Management 540
Operating Yield Management Systems 541
Concept Connections 542
Solved Problem 543
Discussion Questions 546
Objective Questions 546
Analytics Exercise: Developing an Aggregate Plan— Bradford Manufacturing 549
Practice Exam 550
19S LINEAR PROGRAMMING USING THE EXCEL SOLVER 552
The Linear Programming Model 553
Linear Programming Using Microsoft Excel 554
Concept Connections 557
Solved Problem 557
Objective Questions 564
20 INVENTORY MANAGEMENT 566
Understanding Inventory Management 567
Purposes of Inventory 569
Inventory Costs 570
Independent versus Dependent Demand 570
Inventory Control Systems 571
A Single-Period Inventory Model 572
Multiperiod Inventory Systems 573
Fixed–Order Quantity Models 576
Fixed–Time Period Models 582
Inventory Turn Calculation 584
Price-Break Model 585
Inventory Planning and Accuracy 588
ABC Classification 588
Inventory Accuracy and Cycle Counting 589
Concept Connections 591
Solved Problems 593
Discussion Questions 596
Objective Questions 596
Analytics Exercise: Inventory Management at Big10Sweaters.com 605
Practice Exam 607
21 MATERIAL REQUIREMENTS PLANNING 609
Understanding Material Requirements Planning 610
Where MRP Can Be Used 610
Master Production Scheduling 610
Material Requirements Planning System Structure 613
Demand for Products 613
Bill-of-Materials 614
Inventory Records 616
MRP Computer Program 617
An Example Using MRP 618
Forecasting Demand 618
Developing a Master Production Schedule 618
Bill-of-Materials (Product Structure) 619
Inventory Records 619
Performing the MRP Calculations 619
Lot Sizing in MRP Systems 622
Lot-for-Lot 623
Economic Order Quantity 623
Least Total Cost 624
Least Unit Cost 625
Choosing the Best Lot Size 625
Concept Connections 626
Solved Problems 628
Discussion Questions 633
Objective Questions 633
Analytics Exercise: An MRP Explosion—Brunswick Motors 637
Practice Exam 639
22 WORKCENTER SCHEDULING 640
Workcenter Scheduling 641
The Nature and Importance of Workcenters 641
Typical Scheduling and Control Functions 643
Objectives of Workcenter Scheduling 644
Job Sequencing 644
Priority Rules and Techniques 645
Scheduling n Jobs on One Machine 645
Scheduling n Jobs on Two Machines 648
Scheduling a Set Number of Jobs on the Same Number of Machines 649
Scheduling n Jobs on m Machines 651
Shop-Floor Control 651
Gantt Charts 651
Tools of Shop-Floor Control 652
Principles of Workcenter Scheduling 654
Personnel Scheduling in Services 655
Scheduling Daily Work Times 655
Scheduling Hourly Work Times 656
Concept Connections 657
Solved Problems 659
Discussion Questions 664
Objective Questions 664
Case: Keep Patients Waiting? Not in My Office 669
Practice Exam 671
22S THEORY OF CONSTRAINTS 672
Eli Goldratt’s Theory of Constraints 672
The Goal of the Firm 673
Performance Measurements 673
Unbalanced Capacity 675
Bottlenecks, Capacity-Constrained Resources, and Synchronous Manufacturing 676
Basic Manufacturing Building Blocks 677
Methods for Synchronous Control 677
Comparing Synchronous Manufacturing (Toc) to Traditional Approaches 686
MRP and JIT 686
Relationship with Other Functional Areas 687
Theory of Constraints—Problems About What to Produce 688
Concept Connections 695
Solved Problem 696
Discussion Questions 698
Objective Questions 698
Practice Exam 702
APPENDICES
A Interest Tables 703
B Negative Exponential Distribution: Values of E−X 707
C Areas of the Cumulative Standard Normal Distribution 708
D Uniformly Distributed Random Digits 709
E Answers to Selected Objective Questions 710
INDEX 712