Production and Operations. Management Systems

Transcription

1 Production and Operations Management Systems Sushil Gupta and Martin Starr CRC Press Taylor & Francis Croup Boca Raton London New York CRC Press is an imprint of the Taylor & Francis Group, an informa business

2 Contents Preface Epilogue Acknowledgments Authors xix xxvii xxix xxxi 1 Introduction to Production and Operations Management The Systems Viewpoint Strategie Thinking Explaining P/OM Use of Models by P/OM The Systems Approach Using the Systematic-Constructive Approach Why Is the Systems Approach Required? Defming the System Structure of the Systems Approach Examples of the Systems Approach Designing the Product Line Using the Systems Approach Information Systems for Manufacturing and Services Defining Operations Manufacturing Operations Service Operations Similarities and Differences between Services and Manufacturing Working Defi nitions of Production and Operations Contrasting Production Management and Operations Management P/OM The Hub of the Business Model Transformation Process Costs and Revenues Associated with Input-Output (I/O) Models Inputs Associated with Variable (or Direct) Costs 23 vii

3 viii Contents Transformations Associated with Fixed (or Indirect) Costs Outputs Associated with Revenues and Profits P/OM Input-Output Profit Model Productivity A Major P/OM Issue The Stages of P/OM Development Organizational Positions and Career Opportunities in P/OM Career Success and Types of Processes Operations Management Career Paths Global Aspects of Career Paths Manager of Production or Operations: Manufacturing or Services Inventory Manager, Materials Manager, or Purchasing Agent (and Supply Chain Manager) Director of Quality Project Manager/Consultant (Internal or External) 37 Summary 37 Review Questions 38 Problems 39 P/OM History Archive 40 Archival Articles 40 Readings and References 41 Source of Video Clips on Manufacturing 42 Alliance for Innovative Manufacturing (AIM): How Everyday Things Are Made 42 2 Strategy, Productivity, and History The Systems Viewpoint Strategie Thinking Measurement of Productivity Labor Productivity Capital Productivity Multifactor Productivity Trends in Multifactor (MFP) Productivity Operational Measures of the Organization's Productivity System-Wide Issues Impacting Productivity Global Issues Bureaucracy, Flexibility, and Productivity Size of Firms and Flexibility Price-Demand Elasticity and Productivity Elasticity of Quality and Productivity Economies of Scale and the Division of Labor 62

4 Contents ix 2.5 History of Improvements of P/OM Transformations Artisans, Apprentices, and Trainees The Beginning Interchangeable Parts (IP) P/OM's First Step Scientific Management (SM) P/OM's Second Step Sequenced Assembly (SA) P/OM's Third Step Statistical Quality Control P/OM's Fourth Step Lean Production Systems P/OM's Fifth Step Mass Customization with CAD, CAM, and Flexible Production System P/OM's Sixth Step Global Competition: Year 2010 Plus P/OM's Seventh Step 72 Summary 73 Review Questions 74 Problems 75 Readings and References 76 3 Workload Assessment (Forecasting) Introduction Time Series and Extrapolation Forecasting Methods for Time-Series Analysis Moving Average Weighted Moving Average Exponential Smoothing Forecasting with a Seasonal Cycle Trend Analysis Regression Analysis Coefficients of Correlation and Determination Forecasting Errors The Delphi Method Pooling Information and Multiple Forecasts Product Life-Cycle Stages and Forecasting Introduction and Growth of the New Product (Goods and Services) Maturation and Decline of the New Product (Goods and Services) Demand Prediction in Life-Cycle Stages Protection of Established (Mature) Products (Goods and Services) 106 Summary 107 Review Questions 108 Problems 108 Readings and References 114

5 Contents Capacity Management and Aggregate Production Flanning Definitions of Capacity Introduction to Aggregate Production Flanning Example 1: Aggregate Production Flanning Production Plans Production Capacity Example 2: Aggregate Manufacturer's Production Flanning Costs in AP Production Capacity Production Plans Level Plan Chase Plan Mixed or Hybrid Plan Overtime in a Chase Plan with Level Production and Overtime Selection of a Production Plan Beginning Conditions Example 3: Aggregate Production Flanning in a Service Industry Costs in AP for the Blood-Testing Laboratory Production Capacity Production Plans Level Plan 150 Summary 153 Review Questions 154 Problems 155 Readings and References 159 Inventory Management I ntroduction Types of Inventory Situations Static versus Dynamic Type of Demand Distribution Certainty, Risk, and Uncertainty Stability of Demand Distribution Fixed or Varying Demand Continuity Smoothly Continuous or Lumpy Lead-Time Distributions Fixed or Varying Dependent or Independent Demand Inventory-Related Costs Costs of Ordering Costs of Setups and Changeovers Costs of Carrying Inventory 172

6 Contents xi Costs of Discounts Out-of-Stock Costs Costs of Running the Inventory System Additional Inventory Policy Costs EOQ Model Annual Ordering Cost Annual Inventory Holding Cost Annual Item Cost Annual Total Cost Annual Total Variable Cost Example for Cost Calculations EOQFormula EPQ Model ABC Classification Material Criticality Annual Dollar Volume of Materials Quantity Discount Model Lead Times Order Point Policies Perpetual (Fixed Quantity) Inventory Systems Reorder Point and Safety (Buffer) Stock Operating the Perpetual Inventory System Two-Bin Perpetual (Fixed Quantity) Inventory Control System Periodic Review (Fixed Time) Inventory Systems Safety (Buffer) Stock in Periodic (Fixed Time) Inventory Systems 197 Summary 198 Review Questions 198 Problems 200 Readings and References Scheduling Introduction Loading Sequencing Operations Scheduling Example Classification of Scheduling Problems Sequence of Machines r Number of Machines Processing Times Job Arrival Times Objective Functions 215

7 xii Contents 6.3 Two Machines Flow-Shop Problem Johnsons Rule Finding Make-Span Multiple Sequences Breaking Ties Single-Machine Scheduling Objective Functions Scheduling Rules Example FCFS Rule Calculation of Objective Functions SPT Rule EDD Rule More on FCFS or First-In, First-Out Sequence Rule Dynamic Scheduling Problems Example Objective Functions for Dynamic Problems 231 Summary 232 Review Questions 232 Problems 233 Readings and References Project Management Introduction Managing Projects Good Project Managers Are Leaders Basic Rules for Managing Projects Project Management Origins Project Network Project Network Example Critical Path and Project Duration Early Start and Early Finish Times Late Start and Late Finish Times SlackTime Reducing Project Duration Crashing Activities Cost Analysis Example Cost of Crashing an Activity Reducing Project Duration Fixed Costs Crashing Multiple Paths 260

8 Contents xiii 7.14 Probabilistic Projects Probabilistic Projects Example Resource Management 264 Summary 265 Review Questions 266 Problems 267 Readings and References Quality Management Introduction How Much Quality Dimension; of Quality Models of Quality Failure Critical to Quality Evaluation Warranty Policies The Service Function Repairability Functional Human Factors Nonfunctional Quality Factors Aesthetics and Timing The Variety Dimension The Costs of Quality The Cost of Prevention The Cost of Appraisal (Inspection) The Cost of Failure The Total Cost of Quality QC Methodology Data Check Sheets (DCSs) Bar Charts Histograms Pareto Analysis Cause and Effect Charts (Ishikawa aka the Fishbone) Example: A Good Cup of Coffee Control Charts for Statistical Process Control Inspection by Variables versus Attributes Causes of Process Variation Chance Causes Assignable Causes What Are QC Charts? Analysis of Statistical Runs Example: Control Charts for a Manufacturing Process Stable Process Selecting a Manufacturing Process 302

9 xiv Contents 8.7 Control Charts for Variables: x-bar Charts Example: Control Charts for a Manufacturing Process Discussion of UCL and LCL for BCTF Control Charts for Variables: i?-charts Control Charts for Attributes: /»-Charts Control Charts for Attributes: c-charts Acceptance Sampling Single Sampling Plans Operating Characteristic Curves Multiple-Sampling Plans International Quality Standards Industrial Recognition of Quality The Malcolm Baldrige National Quality Award 321 Summary 321 Review Questions 322 Problems 323 Readings and References Supply Chain Management Introduction Acquisition Chain Management The Purchasing Function Purchasing Agents The Ethics of Purchasing Receiving, Inspection, and Storage Requiring Bids before Purchase Certification of Suppliers Global Sourcing Distribution Chain Management e-business e-business System Design Competition, Conflict, Collaboration, and Coordination (C 4 ) Radio Frequency Identification Business Value of RFID Adoption and Implementation ofrfid Logistics Transportation Cost Forecasting and Inventory Decisions in Supply Chain Contingency Flanning for Supply Chain Capacity Crises 358

10 Contents xv A Supply Chain System The Better Beer Company Game 9.12 Bullwhip Effect Summary Review Questions Problems Reading and References 10 Long-Term Flanning (Facilities, Location, and Layout) 10.1 Facilities Flanning 10.2 Who Does Facilities Flanning? 10.3 Models for Facility Decisions 10.4 Location Decisions Qualitative Factors Location to Enhance Service Contact Just-in-Time Orientation Location Factors 10.5 Structure and Site Selection 10.6 Rent, Buy, or Build Cost Determinants 10.7 Facility Selection Using Scoring Models 10.8 Location Decisions Using the Transportation Model Shipping (Transportation or Distribution) Costs Rukna Auto Parts Manufacturing Company 10.9 Location Decisions Using Breakeven Models Variable (Direct) Costs Fixed (Indirect) Costs Revenue Example Musuk Spices Company Facilities Layout Opportunity Costs for Layout Improvement Layout Types Layout Models Layout Criteria Floor Plan Models Load-Distance Models Heuristics to Improve Layout Finding the Load Matrix Summary Review Questions Problems Readings and References

11 xvi Contents 11 Innovation by P/OM for New Product Development (NPD) and Sustainability Introduction to NPD and Innovation Organizations Must Be Adaptable Innovation Is Necessary for Humanitarian Operations and Crisis Management (HO&CM) Innovation Is Essential for Sustainability Competition for New Ideas, Resources, and Customers Patent Protection of Innovations Continuous Innovation (Step 1) Continuous Innovation (Step 2) Coordinated Teamwork Is Essential Product Innovation Failures Can Be Avoided Failure Might Turn Out to Be an Unexpected Opportunity Failure Caused by Inadvertent Process Change Unintended Consequences of Product and Process Changes Continuous Project Management Is a Successful Innovation New Service Development Applications Lifetime Value of a Loyal Customer Innovations to Restore Loyalty New Growth Platforms for Innovation Innovative W. L. Gore & Associates, Inc Continuous Innovation Using Product Platform Flanning (Step 3) Continuous Innovation Using Product Modularity Platform Differentiation for Different Demographics Mass Customization Product Life Cycles: Rollovers The Dynamics of Brand Share Product Renewal Innovation Brand Switching Matrix Equilibrium Analysis How Quickly Does Equilibrium Occur? Blue versus Red Ocean Strategies and Closed-Loop Supply Chains Innovators and Imitators Teaching and Learning Innovations Competitors Are Working on the Same Areas of Innovation Innovators' Production Strategies 449

12 Contents xvii Lean Production Methods Are a Form of Process Innovation 449 Summary 450 Review Questions 451 Problems 452 Readings and References 455 Appendix A: Quantitative Models 457 A.l Breakeven Models 457 A. 1.1 Linear Breakeven Equations 458 A. 1.2 Breakeven Charts 459 A.l.3 Interfunctional Breakeven Capacity Flanning 463 A.2 Transportation Model of Linear Programming 464 Reference 470 Appendix B: The z-table Index 475