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• Operations Management: An Integrated Approach
• Title
• Copyright
• Contents
• Contributors
• Preface
• Acknowledgements
• PART I: Operations within Organisations – Building Blocks
• 1 What is Operations Management and Why is it Important?
• Learning objectives
• Introduction
• What is operations management?
• Role of operations management in organisations
• Operations management as a standalone function
• Operations management as a ubiquitous function
• Operations management within supply chains and networks
• Operations management from a strategic perspective
• An operational perspective
• Integrated role of operations management
• Differences and similarities between goods and services
• Typical decision areas within operations management
• Trends encouraging focus on operations
• Develop a global focus
• Think beyond organisation boundaries
• Be more responsive to customers
• Establish distinctive capabilities
• Operations-led excellence
• Treat employees as partners
• Be an ethical operator
• Historical evolution of the field
• Craft production
• Batch production
• Mass production
• Lean operation
• Mass customisation
• Careers in operations management
• Summary
• DISCUSSION QUESTIONS
• Further readings and references
• Internet resources
• Notes
• 2 Operating System Models
• Learning objectives
• Introduction . . . and a brief look back in time
• Traditional and progressive operating systems
• Delivering on the proposition
• Work-in-progress and inventory issues
• Philosophy of lean systems
• What is value and what is waste?
• Making value flow along the value stream
• The components of lean practice
• Building a lean organisation
• Lean layouts and technology
• Lean operating systems for services
• Employee empowerment
• The challenges of JIT management
• Supply relationship management
• Summary
• DISCUSSION QUESTIONS
• References
• Further readings and bibliography
• Internet resources
• Notes
• 3 Key Decisions in OM
• Learning objectives
• Introduction
• Make-or-buy, outsource, or off-shore?
• The make-or-buy decision
• Retaining the core technologies of the business
• Strategic considerations
• Buy rather than make
• Service and product volumes
• Globalisation of world trade
• Outsourcing
• Off-shoring
• Alternatives to the make-or-buy decision
• Forecasting decisions
• Role of demand forecasting for products and services
• Which forecasting approach to use?
• Short-range forecasts
• Medium-range forecasts
• Long-range forecasts
• Performance of forecasting methods
• Location decisions
• Strategic importance of location
• Location decisions in supply chains
• Locating service operations
• Factors to consider when evaluating potential site locations
• Capacity decisions
• Issues in determining levels of capacity
• Demand-related issues
• Capacity-related issues
• Capacity measurement
• Impact of capacity planning and control
• Timing of capacity change and aggregate capacity strategies
• Balancing of capacity and safety capacity
• Capacity constraints
• Front office
• Back office
• Service specific capacity issues
• Summary
• DISCUSSION QUESTIONS
• References
• Internet resources
• 4 Planning and Controlling the Use of Operating Assets and Resources
• Learning objectives
• Introduction
• Inventory management
• Inventory costs
• Independent versus dependent demand
• Inventory systems
• Economic order quantity (EOQ) model
• Example
• Solution
• Aggregate planning
• What is aggregate planning?
• Planning options
• Aggregate planning strategies
• Techniques for aggregate planning
• Example
• Solution
• Master scheduling
• What is a master schedule?
• Master scheduling process
• Material requirements planning (MRP)
• Is ERP the same as MRP?
• Planning process and MRP module
• Example
• Managing change
• Other considerations
• Lot sizing
• Stability of the MRP system
• Successful MRP system
• Enterprise resource planning (ERP)
• How does ERP connect the functional areas?
• Summary
• DISCUSSION QUESTIONS
• Further readings and references
• Internet resources
• PART II: Approaches to Understanding OM
• 5 Strategic Approach to Operations Management
• Learning objectives
• Introduction
• Strategy: general organisational perspectives
• Defining strategy: reconciling multiple view points
• Strategy and the organisational hierarchy
• Strategy: content, process and context
• Competitive advantage and generic strategies
• Market-based view of competition
• Resource-based view of competition
• Market-driving vs market-driven organisations
• Generic competitive strategies
• The strategic approach to operations: key concepts
• Strategic operations decision areas
• Operations’ contribution to competitive advantage
• Competitive priorities
• The concept of trade-offs in operations
• Technology and the trade-offs concept
• The ‘sand cone’ model
• Defining operations strategy
• Operations strategy: content, process and context
• Operations strategy in practice
• Major improvement programs as operations strategy
• Specific organisational practices as operations strategy
• Entrepreneurial initiatives as operations strategy
• Operations strategy process in practice
• Summary
• DISCUSSION QUESTIONS
• Further readings and references
• Internet resources
• 6 Processes and Systems in Operations Management
• Learning objectives
• Introduction
• What does ‘process’ mean?
• Classification of processes into generic types
• Factors affecting choice of process type
• Project process type
• Job process type
• Batch process type
• Line or mass process type
• Continuous process type
• Process types in services
• Process layout
• Layout decision
• Fixed-position layout
• Process-focused layout
• Product-focused layout
• Cellular layout
• Layout in services sector organisations
• People and technology in processes
• The role of people in processes
• The role of technology in processes
• Process analysis and measurement
• Quality
• Productivity
• Utilisation
• Standard time
• Throughput time
• Delivery-in-full-on-time-in-specification (DIFOTIS)
• Flowchart or process mapping
• Service blueprinting
• Scheduling
• Scheduling in high volume systems
• Scheduling services
• Summary
• DISCUSSION QUESTIONS
• References
• Internet resources
• 7 Supply Chain or Network Approach to Operations Management
• Learning objectives
• Introduction
• What is a supply chain?
• Companies and situations
• Operating the supply chain
• Sourcing and strategic issues
• Designing success with SCOR®
• The Internet and IT
• Strategy and the Internet
• Internet and operations
• Bullwhip and the Internet
• Infrastructure and services
• Infrastructure
• Service providers
• Current challenges and success
• Summary
• DISCUSSION QUESTIONS
• References
• Internet resources
• PART III: Moving Forward with OM – Creating Competitive Advantage
• 8 Innovation, Technology and Knowledge Management
• Learning objectives
• Introduction
• The challenges and benefits of innovation success
• The customer value proposition challenge
• The channel to market challenge
• The scale up and supply challenge
• The key people challenge
• The sustainable development challenge
• The return on financial investment
• Meeting the six challenges
• Managing innovation
• Innovation and its impact on operations management
• Balancing operational effectiveness and innovation capacity
• Rates of innovation
• Radical innovation
• Incremental innovation
• Continuous innovation
• Discontinuous innovation
• Forms of innovation
• Product and service innovation
• Process innovation
• Market position innovation
• Paradigm innovation
• Managing technology
• Hard and soft technologies
• Measuring and managing the impact of technologies
• Harnessing information and communication technologies
• New forms of organisational structures
• Technology transfer
• Managing knowledge
• Absorptive capacity
• Resource reconfiguration
• Summary
• DISCUSSION QUESTIONS
• References
• Internet resources
• 9 Quality Management in Operations
• Learning objectives
• Introduction
• Quality management
• The meaning of quality
• Defining quality
• Transcendent quality
• Product-based quality
• Manufacturing-based quality
• Value-based quality
• User-based quality
• Quality as meeting or exceeding expectations
• Quality and grade
• Competing on quality
• Significant contributors
• W. Edwards Deming
• Appreciation of the system
• Theory of variation
• Theory of knowledge
• Psychology
• Profound knowledge and management
• Joseph Juran
• Internal failure costs
• External failure costs
• Appraisal costs
• Prevention costs
• Chronic and sporadic waste
• Standards-based approach to quality management
• ISO 9000 quality management system
• Current implementation and efficacy
• Process control and improvement
• Data: variable, attribute, subjective
• Accuracy, precision and stability
• Process control and inspection
• Statistical process control
• Process capability
• Quality improvement tools
• Implementation issues
• Teams
• Problems with implementation
• Learning versus performing
• The meaning of information
• Wholism versus segmentalism
• Summary
• DISCUSSION QUESTIONS
• References
• Internet resources
• Notes
• 10 Operations Excellence
• Learning objectives
• Introduction
• Operations excellence and its context
• Characteristics of high performing organisations
• A good fit with the operating environment
• Globalisation of markets
• Fragmentation of demand
• Rapid technological change
• Changes in the labour market
• All operations are viewed as a service
• Excellent operations deliver great customer value
• A mix of measures is used to judge performance
• Operations deliver value with other organisational functions
• There is a continuous search for ways to improve
• Models of excellence
• Development of the models
• The Australian Business Excellence Framework
• The Singapore business excellence awards
• The New Zealand criteria for performance excellence
• Summary of models of excellence
• Measures of performance
• Linking operations performance with financial performance
• Keeping score
• What to measure
• A systemic view of operations performance management
• Transformation tools
• Six-sigma method
• Just-in-time (JIT) methodology
• Business process re-engineering
• Other transformation tools
• Summary
• DISCUSSION QUESTIONS
• Further readings and references
• Internet resources
• PART IV: Challenges and Opportunities in Operations
• 11 Managing Risk in Operations
• Learning objectives
• Introduction
• Concepts and frameworks of risk management
• COSO enterprise risk management
• Risk Standard AS/NZ 4360
• M-o-R: Management of Risk Framework
• Risk in the key decision areas of operations
• Inventory management
• Holding safety stock
• Implementing lean manufacturing practices
• Lead time reduction
• Product design
• Information technology
• Process technology
• Operating planning and capacity management
• Maintenance and servicing
• Risk in service operations
• Occupational health and safety
• Environmental risk
• Operations and corporate risk: managerial implications
• Risk analysis process
• Summary
• DISCUSSION QUESTIONS
• References
• Internet resources
• 12 Sustainability in Operations Management
• Learning objectives
• Introduction: What is sustainability?
• How ideas of sustainability have developed
• Accepted definitions
• Sustainability: An organisational context
• What makes sustainability practices successful?
• What is a sustainability practice?
• Quality and excellence
• Strategic connection
• Business case for sustainability
• Building sustainability: the role of operations
• Role of culture, strategy and operations
• Operations management – a key role
• New capabilities in operations management to support sustainability
• New sensitivity
• New dialogue
• Innovation
• Putting it into practice
• Summary
• DISCUSSION QUESTIONS
• References
• Internet resources
• Notes
• 13 Operations Management in Different Settings
• Learning objectives
• Introduction
• Operations management and organisational type
• Role of operations managers in different industries
• Relevance and setting
• Five laws of operations management
• Law of variability
• Law of bottlenecks
• Law of scientific methods
• Law of quality
• Law of factory focus
• Summary
• DISCUSSION QUESTIONS
• References
• Internet resources
• PART V: Case Studies
• CS1 Innovation in the Biotechnology Sector: The Case of IDT Australia
• Introduction
• Manufacturing capabilities and core competencies of IDT
• Corporate structure and strategy of IDT
• Organisational climate
• Leadership style and vision of the CEO
• Commercial orientation and commercialisation of research
• Innovation intensity
• Major challenges to innovation management
• Accessing large markets through commercial orientation
• Overcoming the ‘not invented here’ syndrome
• Taxation system in Australia
• Distance from major markets
• Expanding the revenue base
• Enhancing innovation intensity and performance
• Quality standards and compliance
• Disciplined research practices
• Maintaining documentation and clear ‘audit trail’
• Staff recruitment and development
• Retention of valuable employees
• Project management and continuous improvement
• Innovation intensity and performance at IDT
• Core competencies of IDT’s staff
• Modern state-of-the-art laboratories, plant and facilities
• Quality standards and continuous improvement
• Access to the large markets in the United States and Europe
• Leadership and vision of the CEO
• DISCUSSION QUESTIONS
• References
• Note
• CS2 New Zealand King Salmon: Value-Chain Innovation
• Introduction
• Strategic focus
• Commitment to value-addition
• Research and development at NZKS
• Production research
• Development of new products
• Development of new processes
• ‘Pure R’ versus ‘D’
• Innovation and development processes at NZKS
• Sources of product and process ideas
• Criteria for screening product ideas
• Organisational structures and management systems
• The executive meeting
• DISCUSSION QUESTIONS
• Note
• CS3 Pilila Clothing Company Goes Lean
• DISCUSSION QUESTIONS
• CS4 From Singapore to theWorld: Port Management in Singapore
• Introduction
• History
• Operational excellence and capabilities
• Technology and systems
• PORTNET® system
• EZShip
• Global equipment management system (GEMS)
• Throughput analysis and vessel information system (TRAVIS)
• ALLIES
• CargoD2D10
• CITOS® System
• Flow-through gate system
• Moving forward
• Notes
• CS5 Striving for Operations Excellence within Queensland Rail Supply Division
• Queensland Rail (QR)
• Shared Services Group – Supply Division
• Leadership
• Strategy and planning
• Background
• Supply chain optimisation
• Virtual Supply Chain
• Information and knowledge
• People
• Customer and market focus
• Process management, improvement and innovation
• Success and sustainability
• Integration
• Alignment with corporate strategy
• DISCUSSION QUESTIONS
• CS6 Should I Stay or Should I Go? Shiraishi Garments Company
• Introduction
• Background: Shiraishi Garments Company
• Cutting costs
• China: allures and challenges
• Cheap labour
• Chinese suppliers
• Supplier 1
• Supplier 2
• Auditing
• Should I stay or should I go?
• DISCUSSION QUESTIONS
• CS7 Towards a Green Supply Chain: Toyota Australia
• Introduction
• Background
• Environmental performance management within Toyota Australia
• Environmental performance management by Toyota with its suppliers
• Toyota Purchasing’s role in green supply
• DISCUSSION QUESTIONS
• CS8 Process Analyses and Improvement at Bartter Enterprises
• Company and industry history
• The industry and market in 2006
• Bartter Enterprises in 2005/6
• Foundations for operations excellence strategy
• The Beresfield pilot
• DISCUSSION QUESTIONS
• Notes
• CS9 Operations Challenges at Firth Industries Limited,Wellington Division1
• Company background
• The market
• Local operations
• The productivity issue
• DISCUSSION QUESTIONS
• Note
• CS10 Ford Motor Company: Moving Forward in Australia
• Ford Motor Company – the beginning
• Ford Australia
• The purchasing function
• Challenges to purchasing at Ford Australia
• Transactional purchasing versus strategic purchasing
• Local tactics versus a regional view
• Local structure versus regional structure
• Market and volume challenges
• Raw material and commodity prices
• DISCUSSION QUESTIONS
• References
• Internet resources
• CS11 Technology Transfer at Hero Honda
• Technology history of the Hero Group
• What impressed Honda about the Hero Group?
• Technology management at HHML
• Levels of technology absorption
• Indigenisation: a significant challenge
• Expected performance outcomes
• DISCUSSION QUESTIONS
• CS12 Why Is the Patient Resident Time so Long?: The Case of St Martin’s and Charity Private Hospital
• Introduction
• Hospital background
• Day surgery unit at Charity campus
• Schedule of surgeries
• How does the hospital plan for its resources?
• Typical patient flow at Charity
• DISCUSSION QUESTIONS
• Index