PROCESS MANAGEMENT. Principles and Practice for Strategic impact

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1 k PROCESS MANAGEMENT Principles and Practice for Strategic impact Third Edition Nigel Slack Alistair Brandon-Jones Robert Johnston Alan Betts PEARSON Harlow, England London New York Boston San Francisco Toronto Sydney Auckland * Singapore Hong Kong Tokyo Seoul Taipei New Delhi Cape Town Sao Pauto Mexico City Madrid Amsterdam Munich Paris Milan

2 Contents Guide to case studies Preface Guided tour of the book Guided tour of the Pearson etext About the authors Acknowledgements XV xvii xx xxiii xxiv xxv 1 Operations and processes Executive summary What is operations and process management? Does the business take a process perspective? Does operations and process management have a strategic impact? Should all processes be managed in the same way? Critical commentary Summary checklist Case study: Design house partnerships at Concept Design Services Applying the principles Notes on chapter Taking it further Useful websites Operations strategy 33 Executive summary 34 What is operations strategy? 36 Does the operation have a strategy? 38 Does operations strategy make sense from the top and the bottom of the business? 47 Does operations strategy align market requirements with operations resources? 50 Does operations strategy set an improvement path? 55 Critical commentary 59 Summary checklist 60 Case study: McDonald's: half a century of growth 61 Applying the principles 65 Notes on chapter 66 Taking it further 66 Useful websites 67

3 viii Contents 3 Supply network design 69 Executive summary 70 What is supply network design? 72 How should the supply network be configured? 76 Where should operations be located? 81 How much capacity should each operation in the supply network have? 84 Critical commentary 90 Summary checklist 91 Case study: Disneyland Resort Paris (abridged) ~ 92 Applying the principles 97 Notes on chapter 98 Taking it further 98 Useful websites 98 Supplement: Forecasting Process design 1 - positioning 109 Executive summary 110 What is process design positioning? 112 Do processes match volume-variety requirements? 115 Are process layouts appropriate? 120 Is process technology appropriate? 124 Are job designs appropriate? 127 Critical commentary 130 Summary checklist 131 Case study: McPherson Charles Solicitors 132 Applying the principles 134 Notes on chapter 135 Taking it further 135 Useful websites Process design 2 - analysis 137 Executive summary ~ 138 What is process design analysis? 140 Are process performance objectives understood? 142 How are processes currently designed? 145 Are process tasks and capacity configured appropriately? 149 Is process variability recognised? 158 Critical commentary 163 Summary checklist 164 Case study: The Action Response Applications Processing Unit (ARAPU) 165 Applying the principles 167 Notes on chapter 169

4 Contents ix Taking it further 169 Useful websites 170 Supplement: Queuing analysis Designing the innovation process 179 Executive summary 180 What is innovation and why does it matter? 182 Are the innovation process objectives specified? 184 Is the innovation process defined? 188 Are the resources for developing innovations adequate? 194 Is the design of the offering and of the process simultaneous? 198 Critical commentary 203 Summary checklist 204 Case study: Developing 'Savory Rosti' crisps at Dreddo Dan's 205 Applying the principles 207 Notes on chapter 208 Taking it further 208 Useful websites Supply chain management 211 Executive summary 212 What is supply chain management? 214 Are supply chain objectives clear? 218 How should supply chain relationships be managed? 225 How should the supply side be managed? 227 How should the demand side be managed? 232 Are supply chain dynamics under control? 235 Critical commentary 238 Summary checklist 240 Case study: Supplying fast fashion 241 Applying the principles 243 Notes on chapter 244 Taking it further 244 Useful websites Capacity management 247 Executive summary 248 What is capacity management? 250 What is the operation's current capacity? 253 How well are demand-capacity mismatches understood? 257 What should be the operation's base capacity? 260 How can demand-capacity mismatches be managed? 262

5 x Contents How should capacity be controlled? 269 Critical commentary 271 Summary checklist 272 Case study: Blackberry Hill Farm 273 Applying the principles 278 Notes on chapter 279 Taking it further 279 Useful websites Inventory management 281 Executive summary 282 What is inventory management? 284 Why should there be any inventory? 288 Is the right quantity being ordered? 291 Are inventory orders being placed at the right time? 299 Is inventory being controlled effectively? 303 Critical commentary 306 Summary checklist 307 Case study: supplies4medics.com 308 Applying the principles 310 Notes on chapter 310 Taking it further 311 Useful websites Resource planning and control 313 Executive summary 314 What is resource planning and control? 316 Does resource planning and control have all the right elements? 318 Is resource planning and control information integrated? 323 Are core planning and control activities effective? 326 Critical commentary 334 Summary checklist ^ 336 Case study: subtext Studios, Singapore 337 Applying the principles 340" Notes on chapter 341 Taking it further 342 Useful websites 342 Supplement: Materials requirements planning (MRP) Lean synchronisation 351 Executive summary 352 What is lean synchronisation? 354

6 Contents XI What are the barriers to lean synchronisation? 359 Is flow streamlined? 363 Does supply exactly match demand? 365 Are processes flexible? 366 Is variability minimised? 368 Is lean synchronisation applied throughout the supply network? 371 Critical commentary 376 Summary checklist 379 Case study: Implementing lean at CWHT 380 Applying the principles 382 Notes on chapter 383 Taking it further 384 Useful websites Quality management 385 Executive summary 386 What is quality management? 388 Is the idea of quality management universally understood and applied? 390 Is 'quality' adequately defined? 392 Is 'quality' adequately measured? 396 Is 'quality' adequately controlled? 399 Does quality management always lead to improvement? 403 Critical commentary 406 Summary checklist 407 Case study: Turnaround at the Preston plant 408 Applying the principles 410 Notes on chapter 411 Taking it further 411 Useful websites 412 Supplement: Statistical process control (SPC) Improvement 425 Executive summary 426 What is improvement? 428 What is the gap between current and required performance? 431 What is the most appropriate improvement path? 440 What techniques should be used to facilitate improvement? 448 How can improvement be made to stick? 452 Critical commentary 455 Summary checklist 457 Case study: Geneva Construction and risk 458 Applying the principles 461

7 XII Contents Notes on chapter 462 Taking it further Useful websites \ \ Risk and resilience \ 465 Executive summarv 466 What are risk and resilience? 468 Have potential failure points been assessed? 471 Have failure prevention measures been implemented? 479 Have failure mitigation measures been implemented? 483 Have failure recovery measures been implemented? 487 Critical commentary 489 Summary checklist 490 Case study: Slagelse Industrial Services (SIS) 491 Applying the principles 492 Notes on chapter Taking it further ' 494 Useful websites Project management 495 Executive summary 496 What is project management? 498 Is the project environment understood? 501 Is the project well defined? 505 Is project management adequate? 506 Has the project been adequately planned? 508 Is the project adequately controlled? 515 Critical commentary 519 Summary checklist 520 Case study: United Photonics Malaysia Sdn Bhd 521 Applying the principles 526 Notes on chapter 527 Taking it further 527 Useful websites - 528" Index 529

OPERATIONS AND PROCESS MANAGEMENT Principles and practice for strategic impact

OPERATIONS AND PROCESS MANAGEMENT Principles and practice for strategic impact Second Edition Nigel Slack Stuart Chambers Robert Johnston Alan Betts FT Prentice Hall FINANCIAL TIMES An imprint of Pearson