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    Operations Management

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    anon_482261011

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    Operations Management PROCESSES AND SUPPLY CHAINS Thirteenth Edition Global Edition LEE J. KRAJEWSKI Professor Emeritus at The Ohio State University ‘and the University of Notre Dame MANOJ K. MALHOTRA Case Westom Reserve University ® Pearson io a on Ra Ri Pci Tmt oy Tal» Sp Hg Eg "Seoul «Tapa!» Now Dell + Cape Tow » ao Paula» Maio iy» Madd» Arran » Mun Brief Contents 1 USING OPERATIONS TO CREATE VALUE a SUPPLEMENTA. DECISION MAKING 55 Pant’ Managing Processes ag 2 PROCESS STRATEGY AND ANALYSIS 7 8 QUALITY AND PERFORMANCE 123 © LEANSYSTEMS: 163 5 CAPACITY PLANNING 17 SUPPLEMENTS WAITING LINES 2a © CONSTRAINT MANAGEMENT 29 17 PROJECT MANAGEMENT mm wT2 Managing Customer Demand ats 8 FORECASTING 218 8. INVENTORY MANAGEMENT 357 SUPPLEMENT SPECIAL INVENTORY MODELS a1 10 OPERATIONS PLANNING AND SCHEDULING. as SUPPLEMENT D LINEAR PROGRAMMING 451 1 RESOURCE PLANNING 479 Pants Managing Supply Chains os 529 ‘SUPPLY CHAIN DESIGN 529 13 SUPPLY CHAIN Lo«isnics NETWORKS. 857 1 SUPPLY CHAIN INTEGRATION 589 18 SUPPLY CHAIN SUSTAINABILITY 29 Appendix NORMAL DISTRIBUTION 653 Selecad References 054 Glossary 601 Name aden on Subject nde 675 ONLINE SUPPLEMENTS SUPPLEMENT E SIMULATION 1 SUPPLEMENT FINANCIAL ANALYSIS Bt SUPPLEMENT.G ACCEPTANCE SAMPLING PLANS. oa SUPPLEMENT H MEASURING OUTPUT RATES: 4 SUPPLEMENT! LEARNING CURVE ANALYSIS H SSUPPLEMENT.J OPERATIONS SCHEDULING a SUPPLEMENT K LAYOUT ka Contents Preface 11 BB usine operations TO CREATEVALUE 21 ‘Apple ine. 21 Rolo of Operations in an Organization 23 [AProcess View 24 Nested Processes 25 Service and Manufacturing Processas 25, ‘A Supply Chain View 27 (Core Processes 27 Support Processes 27 ‘Supply Chain Processes 28, Operations Strategy 22 ‘Corporat Srateay 29 Marist Anais 31 Competitive Portas and Capabilities 22 ‘Managerial Practice 1 » Zara Order Winere ancl Qualifiers 24 ‘Using Compettive Pio: An Airing Exarsple 25, ‘donttying Cope Bewween Compettive Prories ang Copaiiies 35, ‘Tends and Challenges in Operations Management 37 Productivity improvement 37 Globe! Competion 38 Ethel Worlforce Divers, and Environmental Fourth ndustal Revolution (industry 40) 41 “The Intent of Things 2 Baulive Menutecturing 44 Developing Skills for Your Carer 46 “Rling Valve wth Procoas Innovation 47 Leaning Oinctresn Review 48 Key Eunos 49 Kaytems 49. Sava Prelome 43 acisionQstons 60 (Caso = Chots rosie Concepts 52 ‘Video Case » Using pertonts Cente Vue t Coyala 54 SUPPLEMENT A. Decision Making 55 BrealcEvan Analysis 55 Evaluting Sevens or rods 66 Proference Matix 69 Decision Theory 60 Decision Making Under Corainty 61 Decision Making Under Uncartlnty 61 Decision Making Under Risk 63 Decision hoes 62 amin Oeetins info 65 Koy Emstons 68 Koya 68 SahedPreens 65, Meblons 6S PART 1 Managing Processes 73 PROCESS STRATEGY AND ANALYSIS 72 CVS Pharmacy 73 “Gustomar- Contact Matix 77 Service Process Suturing 78 Process Structure In Manufscturing 78 Product Process Matrix 78 Manufacturing Procas Structuring 79 Production ad inventory Strtegies 60 Layout Bt Process Strategy Decisions €1 “Customer Involvement 3 Resource Flexibility 82 Capa tency 8 ‘Strategie Fit 04 Decision Pators for Servis Procostoe 85 Decision Patterns for Manufacturing, Procaases 85 Gaining Foeus 85 ‘Managerial Practice 2.1 = Parts hin Plat tod ‘Camear ‘Stratoges for Chango 67 Provess Reengineering #8 Process Improveront 88 val Challenge» Msiog 68 Defining, Measuring, and Analyzing the Process 90 Flowchart St ‘ork Measurement Techniques 92 Process Charts 95 Data Analyte Tools 96 Redesigning and Maneging Process Improvements 101 “Questioning and Brainstorming 101 Benchmarking 102 Implementing 102 ming Objactns in Reviw 104 Koy Terms 18 SovedProtlome 105. iesesen Oberon 108 Problms 108 Ace Modal srcle 16 cate Custom Mose. 177 Vidoo case = Process Sraapyand Anais veld ine 20 BD ovaurty ano PERFORMANCE ‘za Lego 2a Costs of ualty 126 ‘Aporaleal Costs 126 Internal aire Cost 126. Extema allure Cost 126 Ethie! Failure Costa 126 ‘Total Quality Management and Six Sigma 127 Total Quay Management 127 Managerial Practice. Inco Cult Tregh Egy laeent Sta rr Gar Crany 129 sxigina 150, ‘Acceptance Sampling 121 ‘Managetl Challenge ® Accounting 132 Statiatial Process Control 122 ‘Vataion of Outputs 132 Contra Chats 138 {Conta Chart for Variables 138 Conta Chat for Atbutes 140 Procoss Capability 148 Defining Process Copaiy 143 {Using Continaaus improvement to Determine the ‘Copal of Procaes 145 Intemational Quality Documentation Standards and Dovarde M8 “The 180 90012015 Documentation standards 148 Matcoim Baldrige ertormance Exclenea Progra 14 ‘Systems Approach to Total Quality Menagement 147 esting Oboctne Review 147 Koy Eqns 148 Kyteas 149" Sobed rns 449 Ducts Qesione 162 Protons 182 Aetve Mode Ero 160 Exprintal Luring 3.1» Stic! recess Conta ith ‘ain Gap 160 ‘ideo Case» Oslin 162 LEAN SYSTEMS 12 ‘ike, ne 160, Continuous improvement Using a Lean Systoms ‘Approach 165 ‘Manager! Challenge * Face 108 Strstogie Characteristics of Lean Systoms 108 ‘Supply Chain Coneiderstions in san Systm 168, Process Considerations in Lan Seam 163 [MonegeralPracten 41 = Alea 171 ‘Toyota Producion System 174 Dosigning Lean System Layouts 175 ‘One Worker Mulple Macings 178 Group Technology 176 ‘The Kanban System 177 ‘Genorl Operting Rulos 178 Detarmining the Number af Continers 178 Other Kanban Signals 180 Value Stream Mapping 180 (Coren Sate Map Tao Fore State Map 136 Operational Benefts and Implementation Isues 106 ‘Organizational Considerations 108. Provese Cneidortons 106 Inventory ana Schedling 187 Leasing ObjectvenRoviow 17 Kay Eaton 108 Keys tat Sled Prone 169 DeunsonQesons 91 Prolene 191 Caco » Copper Katie Catarng 194 Video Case" tnon Syma t stl 195 CAPACITY PLANNING 187 aM 87 Planning Long-Term Capacity 199 Wesson Capt ad tron 200 romeo Se 0 Deceraioe of Sexo 201 Capac Ting an Shing Statagee 201 Sing Capes Cushion 201 “Tray and Sting Erprson 202 Ling Copa on Ge esone 209 Managerial chonge = Upsne 208 ‘A Systematic Approach to Long-Term Capacity Deetsions 204 pacity Requirements 208 Stop2:lsomty Cope 208 Stop 3: Develop Aorstives 206 Stop 4:Eveluste the Atarneuves 207 “Tools for Capacity Planning 206 ‘Managedal Prat 5.1 CapzcyPaming a Pacicap 208 Watting Une Madals 200 ‘Simulation 209, Decision Trees 210 usm Dinter in Reviw 210 Kay quan 214 KoyToms 21 Sled Prtams 21 Dieseononsone 23 (ase Faness Pus, Pat 219 ‘Video Caso” Gt Tisai t Suathwest Aas 219, SUPPLEMENT B Waiting Lines 221 Stractre of Waiting Line Problems 222 Customer Population 222 ‘The Service Systom 223, Prony Rule 224 Probability Distibutions 225 ‘rival Dseibution 225 Service Time Distibuton 225 Using Waiting Line Models to Analyze Operations 226 ‘Single Sever Model 227 Multiple Server Model 229 Uno’ Law 230, Finite Source Model 291 Wilting Lines and Simulation 252 ‘Sieh 232 Decision Areas for Management 223 Leasing Oicvera view 294 Key Equations 704 Keyes 795" Scved Plan 255. Problons 236 CONSTRAINT MANAGEMENT 29 Microsolt Comporation 238 Managerial Challenge © Marsiog 241 ‘ThoTheory of Constraints 242 Key Principle ofthe TOC 248 Managing Botlenceks in Service Processes 248 Managing Boones in Manufacturing Processes 205, Identtving Botlonecks 246, Relieving Botlonocs 267 Managerial Procice 64» Ther of Canis (TC) ad Drum fer ope OBA et Selena 288, -Appiving the Theory of Constraints to Product Mix Decisions 240 Managing Constraints in Line Processes 251 Line Beencing 25% Rebalancing tho Assembly Line 255, Manager Cnsiceratons 258 Leang Ojctvs a Review 258 Kay Equations 257 Keylnne 257" Solel Prone 267 "OseusonOrio 250 Prolene 268, Experientia! Leaning 61 Minto Gamer anpany 268: Video Case = Manoir Consens or Coopers ana Patons ‘Gevalia COMO. 270 PROJECT MANAGEMENT 27s Buri Khalifa 273 Defining and Organizing Projects 276 Dating the Scope and Objocvas ofa Project 276, Selecting the Project Manager end Team 277 Recognizing Organizational Swuctr 277 Managerial Challenge » nati 278 ‘Constructing Project Networks 278 Defining the Wore Breakdown Stucure 278, Diagramming the Network 220 Managoril Practice 71 = Clvlnd Cle 282 veloping the Projet Schedule 269 Cea Path 25 Project Schedule 283 ‘atv Slack 286 ‘Analyzing Cost-Time' Cost Crash 287 Minimizing Costs 257 ‘Assessing and Analyzing Risks 290 RskManagement Plans 290, Statistical Analyst 291 Analyzing Probebilties 202 NearCrtel Pathe 288 ik Caused by Changing Requirements Scrum 204 Monitoring and Gontoing Projects 295 Monitoring Projet Status 295 Monitoring Project Resources 295 Containg Projects 256 ‘fe 286 Lanna Ojctinsinnoew 298 Kay Eusons 297 Keyes 298" Sthed rene 298 Diesen Gertone 202 Probleme 302 Ace tndlesren 310 (Caco = The Pet Muttng 310 Video Case Project Monogenet st hice at pant2 Managing Customer Demand 313 FORECASTING 212 miele Managing Demand 315 epoca Daan ane ae ont Xe Deion on Moning Frere 318 ‘near Vato omc 18 Choc shoe ot rein Techlgo 318 Mangal Galenge = rane non) 318 reset a a Camu am of Fors ors 38 Sienna rsa Ee 50 aerate Pacer St Computer Suppo 322 Judgment Made 32 usa Method Lner Regression 323 Time Soe Methods 5 {exit Poco: cetmaing the Average 228 ‘Tondo Ug tapon ob Eien! Paine Cees Fiore 29 tora rStecing TS Mtoe 32 la Dataend the Foreastng Recess 33 Ba bt 20 EL eer racing 3 Ar tee Lesring Obata Ravin 298 Key Equations 329 KeyTwme 340" Saved rons 240 "Dass Ovens 944 Pree 368 xparontial Leaming 1 « Foreasnga Vil Er Sette 353 case # Yankee Foran Ho Company 254 ‘Video Care = Forcaig ed Sapo Chats Mana Dect Duda Copuraton 388 ie} INVENTORY MANAGEMENT as7 Ford's Smart Inventory Management Systom (SIMS) 357 Inventory Tade-Ofs 359 ‘Pressures for Smal Inventories 360, Presses for Large invontorss 260 ‘Manogerl Challenge = Fnonce 351 Types of inventory 262 “Accounting inventories 362 ‘Operational Inventories 363 Inventory Reduction Tectics 365, ‘te rventory 368 Safety Stock Ivortry 385, ‘Ailption inventory 365 Pipeline Inventory 3 ABC Analysis 365, Economic Order Quantity 257 ‘eleulting the EO 368 ‘Moragerl Insight from the £00. 370 Continuous Review System 371 ‘Selecting the Reorder Point When Demand and Lead “Tne Are Constant 371 Selecting the Reorder Point When Demand "Varible and ood Timo ls Constant 572 Selecting the Reorder Point When Both Demand and sad Time Are Variable 376 systems Based on the QSystom 377 Calectating Total Systm Costs 377 ‘Advantages ofthe @ System 578 Periodic Review System 378 ‘Selecting the Time Betwosn Reviews 379 Selecting the Target Inventory Lavel When Demend ie Varaba and Load Times Constant 990 Selecting the Target ventory Lave! Whan Dorand ‘and Lend Time Are Variable 381 Calculating Total PSystom Costs 281 ‘avantages of tho PSystor 381 ‘Syetame Based on the PSytom 382 ‘Manages! Paco 9.1» inary Mangement st WEA 382 Lontina Given Reviow 362 Key uations 388 Ke Tom 365 "Sle roms 296 "Deca Gvsone 30 Froleme 381 Aco Moolesrie 396 Experiential Leaming 94 » Swit ectonle Supp he. 357 Cee = Parts Enporion 398 ‘doo Case = entry Management aol 400 SUPPLEMENT C Special inventory Models 401 Noninstantensous Replenishment 401 ‘Quantity Discounts 404 (One-Petiod Decisions 408 Learn Obectvosin Rein 408. Key Eqatons 400 Key Tarn 408 Sed Probl 410. Problems 412 OPERATIONS PLANNING AND SCHEDULING «16 Coops Tire and Rubber Company 418 Levels in Operations Planning and Scheduling 418 evel Sales end Operations Panning #18 Uva 2: Resource Panning 420 Ure: Scheduling 420, ‘SBOP Supply Options 421 ‘Manage Challenge » Hunan Resuress 422 SOP Strategies 422 ‘Chase Statogy 422 Love Strategy 422 Constants and Costs 423 Sales and Operations Planning a a Process 423 Spreadsheets for Sales and Operations Planning 425 ‘Spraadehestsfor# Manafocuror 425 Sprondsheets fora Serves Provider 426 Workforce and Workstation Scheduling 22 Wiorkfors Scheduling 423 Managed! Practice 10.1» Seheduing Mor Lean Bssrbt Umpes 430 Job and Feity Seheduing 433 ‘Sequencing Jobe ate Workstation 434 Software Support 436 Lenting OjsnesnRoviow 427 Kay Toons 437 SeivedPalene 438. UscussenQsoions 4 Probame 441" Ate Mael xr 448 Coe = Meni Hosp! 480 ‘Video Cave = Sit und Operaon Pain et Sanwond 450, SUPPLEMENT D Linear Programming 451 ‘Characteristics of Linear Programming Models 451 Formulating a Linear Programming Model 452 Graphic Analysis 458 Plot the Constraints 458 Identity the Feoibie Region 456 Plot the Gbjetive Function Line 457 Find the Vial Solution 458 Find the Algebraic Soltion 459 Slack and Supls Variables 460 Senet Analysis 460 Computer Output 481 ‘The Transporation Method 464 “Transportation Method for Sales and Operations Planning 404 Leaning ObjoctvesinRevew 458 Kay Terms 408 Salva Pabens 468. OscussenGuetooe 471 Protons 471 RESOURCE PLANNING «7» Philips 478 Material Requirements Planing 481 ‘Dependent Demand 481 ‘Manogedalhallonge * Opwaons 463 Master Production Scheduling 483 Dovsoping a Master Production Schedule 494 ‘oalabieto Promise Qvontes 438, Froesing he MPS 487 Recoeling the MPS with el ne 467 [MnP Explosion 487 Bil of Materiel 487 Inventory Record 489 PranningFetors 481 Surputs trom MRP 494 andthe Environment 497 MRP, Core Processes, and Supply Chain Linkages 488 pd Operations Entorprise Resource Planing 459 Now ERP Syatoms Are Designed 499 Manage Practice 7.1 = Et implemen ste cl Fondtan 600 Resource Planning for Service Providers 501 ‘Dependent omar fr Servoss 501 Bilt Resources 202 arigObjoctvesn Review 605 Koy Terns 508 Saved Plans 606 Oscissn Qoeions 61 Pretome S12 Ace Mn Erin 823 (caso = Wein, ne. 524 ‘Video Case» Reaice Pring at Colne 527 pants Managing Supply Chains s20 ‘SUPPLY CHAIN DESIGN sz ‘Amazon.com 529 ‘roating an Effective Supply Chain 531 ‘Managerial Challenge = Oporeons 538 ‘Measuring Supply Chaln Performance 534 Inventory Measures 534 Financial Measures 525 Strategie Options for Supply Chain Design 537 Efelent Supply Cha Responsive Supply Chains 528 Deelgne for Elen and Responsive Supply ‘caine 528 ‘Mass Customization 541 Compattive Advantages 642 Supply Chan Deslgn for Mase Customization 642 Outsourcing Processes 543 ‘Manager! Practice 121 " Otsourcng ih aed Dabo Busnes 4 ‘Outsourcing and Glbalizeson sa Verte inepratin 545 Make-or Buy Docslons sas Leaning ject Row B47 Key Eqs 547 Kay Toms 642 Sled Pron 648, "OscustonCesons $49 Prolene 649 Experiential Leming 12.1 SoisDsibuors 852 (Case = runneth, e553 Video Case = Soy Chan Desn at raya 855 SUPPLY CHAIN LOGISTICS NETWORKS ss7 ‘Airbus SAS 987 Factors Aecting Location Decisions 540 Dominant Faetorsn Manufacturing £60 Dominant Feterein Servic 582, ‘Managoril Challenge = Hunan Fasowees 569, Load-Distance Mathod 563 ‘Distance Reasuroe 564 Celetating » Lond Distance Score 564 Contr of Gravity 568 BrealcEven Analysis 567 Transportation Method $69 ‘Seting Up thei! Tabloay 669 Dummy Plants or Warehouses 569 Finding Solution 570 Geographical information Systems 571 Using Gis 571 ‘Managoral Practee 181 = Fatood Ste Seeton ‘aig os 572 ‘Tha GIS Method for Locating Multiple Foaios 672 Warehouse Strategy in Logistics Networks 573 Inventory Placomont $73 ‘Autonomous Warehouse Opartions 574 {A Systomatic Location Selection Process 575 Losming Onactes Ravin 678_ Key Eqns 57 KyTems 877 ‘Sobed Preis 877 Osos Dieta 580 Probes 580. te Mel rien 686 (Caco = RU. Rod for aston 585 ‘ido Caso = Coto The! Pursuing 8 Waring Part SUPPLY CHAIN INTEGRATION seo Onl ofthe Seo ‘Supply Chain Dieruptons 692 ‘Causes of Supply Chain Disruptions 582 ‘Supply Chain Dynamics 533 Inoprated Supply Chaina 8 [Managoral Challenge © rman Techoiogy 59 ‘Supply Chain Risk Management 698 ‘Gporationel Risks 695 Managerial Practice 14.1 = Coronas se Sup hain Whee stele Papar £57 Financial Risks 897 Securty ists 598 Cloud Computing and Blockchoine 600 Cloud Computing 600 Blocehaine 601 Now Service or Produet Development Process 604 Design 608 ‘alas 605 Development 65 Fall Laure 026 ‘Supplier Relationship Process 606 ‘Sourcing 606, Design Cllzboration 608 "Negotation 608 Buying 611 Vendor Managed inortves 611 Key Performance Meaeures forthe Suppler elationehip Procase 612 ‘Order Futiment Process 612 Cstomer Demand Panning 612 Supply Planning 612, Production 612 Logistics 63 Koy Performance Measures for the Order Customer Relationship Process 615, Order Placement 616 Key Performance Measures for the Customer Relationship Process 617 LonmogObjetvesin Review 617 Xoy Eston 618 Kerorms 618. Solel rahons 618 Darien Overton 620 Prone 620 Case Wot Moors 625 Video Case» Inapaig te Sip Cain teed Cnc 62 SUPPLY CHAIN SUSTAINABILITY eo coce-Cola 629, ‘The Three Elements of Supply Chan Sustainability 621 Reverso Logistics 638 ‘hain Delgn for Reverse Logisee 623 ell Challenge = Orton nd Logis 635 Energy Efficiency 635 “Transportation Distance 695, Freight Danaty 38 Transporation Mode 640, Disaster Relief Supply Chains 64 ‘Organizing for Disaster le! 621 Managing Disester Ralf Opertone 42 ‘Managerial Practice 18.1 Un Dons sate, alt 6 ‘Supply Chain Ethics 644 Folty Location 645 Inventory Management 885 ca Managing Sustainable Supply Chains 646 vg OjctvesinRovon 647_ Kay faurbon 647 KeyToms 647 ‘Soved Mobis 648 Dacian Ouesons 6&8 Prone 649 Video Case pony 851 Supply hain Sustaady ctr 8 Appendix NORMAL DISTRIBUTION 653 cted References 654 Glossary 661 Name index 671 Subject Index 675 Online Supplements Supplement E SIMULATION E-1 Supplement F FINANCIAL ANALYSIS FE Supplement G ACCEPTANCE SAMPLING PLANS Gx ‘Supplement H MEASURING OUTPUT RATES HA Supplement | LEARNING CURVE ANALYSIS It Supplement J OPERATIONS SCHEDULING Jt Supplement K LAYOUT Kt Preface 1.dogs not tk a genius to now that the word, in prticlar the busines worl, changing Although the Twelfth Elton was succssil at Winging erent pratcn in opraions nage ‘monn anes to-adertand format. to = broad bush of tunes sede t bce cleat That much ba happened sins I wus published. We Unga the Thiseonth Elton by obtaining Iiadack rom ncrctors, reviewer practicing manga stants and diligently wa thst Inputs ato tho fase of ech copter. Howovar,belere we could actly sat the zvision, the (COVID-10 coronavirus pander track the work. Whe tought scanner to hands ‘of millions of people warldwido, and dath to many aeons the lobe, forded an extrarinary ‘portunity demonstrat how busines operations can eespand whan an tnexpocted diate proses lf Inthe Tltasah Elian yu wil pe many exxmples of telat ths cena ‘ius on business operation and how they wer andled. Wa oleae Salon Wyo ae a ‘busines or aking operations managements roll cues ou ae no an operons nor we have made a special flat to show you bow le rinciplas af operations manage ‘alta 0 ys rgurdlas of your eoaen career path, New to This Edition Video Casae—Cevoland tine In aon tothe existing telection of real world video cares ought tha txt omens {his edition frtare the workdsenowmned Cevelaod Clie ‘Ob Cleveland Clini ding U:S-asod hosp gioup wove expertie {sin specialized modical ear, In atin tots Tos-ace 3F downtown Cleveland, it has 11 regional hogptals throughout Northeast Oho: 5 hosp in Ford: a hel Ab Da UAE nda an Vpn Selemmstbatdenerazeatin ceeding orl of operators ‘ Clveland Cline and how the cronaviue pds hat ‘feted them. Yo wil fit esa oe Cleve lie has {aldessod procis-dasign challange a Chapter 2, "Pris ‘Stsgy and Anas" to st the sag, Th, subeequeat haplts,you willow mans esponss to operations iss rtd to maaglag constants a ‘Chap 6, “Constant Managemen.” planing fr esours n Cpa 1, essere Planning” snd he cordnaton of supply cain aetvtos and information Nos troughou th aan In'hapa 14, "Supply Chai Intalio." I's se ret ine we have wen sng oration ‘acs ina th text. Aor ending the casas and watching the vidos, we hope you wl agro hat sich an exphass provides the oppertnty to ely appreciate how nod the rsh of options "mangpnont eats in supporting th suocos of worlds enanatons. ‘Chapter Opening Vignettes ach chapor opens with» renl-voraloxanple ‘ta campeny aressing the opi of that chap. In this ein, we have Inyoduced seven sow vigutes highlighting the operations at Appl, Lago, ‘Nika, SM, Starbuck, Oasis af th Sas, and CachCol, ne Now Technologies In the Thistouth Edition, we have taken care to fnclude the ates technologies being weed to improve business operations Hove af somo of thas achnoogis you ca lok farward Fourth nus Revolution ndasty 4.0), Chop, “Using peations te Create Valo, deerins Industry 4.0, which isthe ening atomation ‘tual auf and industrial practice wing dors smart | memantine Tochnolay. Thediacasion eters the induay ao erhnologioeinta | Nlssingenowsrws ons fear gap: Sar Nenaaig Sa Prous, Sat Sapp, ent | SS es = Autonomous Supply Chan. Chops 12, “Supply Chain Dasgn* dis Gusssthe concept of stones supe chan which liga ensformatin in which {ho ats in dig) tecology isos felts and autora decison making pad lve the supply eh an tery tans the way supply cis pest, 4s Warehow jams. Chapt 13, “Aion Chain Legis Not sronke adrenan the ore of tomted guided vices, owated abe robs, and rel drooes in warehouse Blockchatos. Chapter 14, Supply Chain Intpetion,” efnes te concept of bloke chain, differen fom ‘lod computing, nd shows ‘in oxample of mn op py chal. Managerial Challenges We belive that the principles af operations managetent we se Filto manages of ll disciplines To demon strate, we have added Managerial Challange twa chapter, stating with Chapter 2, "Pro oss Stat and Analysis.” The challenges te realistic soonarlos, based on extensive esearch, that deseibe meaningful apers tions decision problems in which menagars tt varios diseplines find themselves aking lnading role The fetured discipines incite ‘cemuntng, nance, huh resource, ifoyation systems, logistics, marketing, and pas tons, and over both manufetaring and service companies. ‘understanding of operations managment to Drove many examples af erent pracics. In this edition, we have added four new Managerial Practica, anging oom tha {ventory system at IKEA to the shortage of tulle paper defo the coronavinas pendant Detailed Chapter-by-Chapter Changes \Wehsve meticlouly vised the tx toonhanen i slit and update al he ofrences and ‘sins eaples. Hare ae the major eng neal chap: Chapter: Using Operatonto Greate Valve Wonddnd nee oping vgn foturing Appothat ‘plains how ts superior operations and supply chain capabilities are teresa for is ues ‘Tie A0 decison areas of operations management that Apple ses lo waxunlze ts operational Alleney and build rte capabilites provide ance ens othe Tsander of ho text. Wo ‘Wed nw section ted “Pout lndutial Rowton (ndsty 40)" whieh deiner the four tlaint eatgore of moder ochnorgix Smart Manfacturing Sat Product, Stat Supply, fh Hare Technologie, We also put the Intent of Things (oT) and eddies samaactaring Under the umbrella to make stcin, bat comprehensive, overievt of node technologies Fovimproved operations, Ano lenin objective wos added io cover tis important materia PARTI: Manegiag Processes The int pat ath text as th foundation or why procs view ‘Serta! forullizing operations management ara stategle wespon by showing hove ds ‘td anange th internal proceso na em, regard he Feo aren Chapt: Process Statgy and Analysis Io dion to updating the opening vignoto on CVS tndhe Managerial Praca on Ford Camnear, we added a Managerial Challenge focusing on the vce president of marketing and sale for Tomplatn's Packaging Products Division, wh ‘st ig ont why machine fepae request coming Sato hor deactinnt fom estomars are ‘xporieacing lengthy delays Fly now wideocasfstring the Coven Cine shoves howe ‘nanaguneat ued Ye Six Sigma lnrovenont Model orev a woklow proles vavig silo nd ese sta Chapt: sli nd Pestarmance Welded enw opening vignt desing the poise gual {yada of Ung, which produc ilion plastics yer wh roves hi proces ‘nly 1 dls per ilios Lh Wo loaded sage Challenge invabing the experte nll tres, wh ast yoo inetd aor overall pay end eutoner ling proces rl ow aso dts kticantmpmveretewee race, We patel the anal Paton op Santa Cruz Glter Company and changed Figany 3.2 tbe wore consistant {eth th 60 002015 ermine Choptr& Loan Sysoms Wo msved thi chaplr, which was Chaplain the Twelfth tion, tonoxtin ne because the conont ad techniques song suppor: hy ralhods we describe ‘Chapter 2 Quality ara Pevtoaunce* We add snow opening vignette on Nike, In tht ell ‘the engngng sary af how Nik, In, appli the principles af an estos tn faces and ‘poly chain ta bcore ler i tha fnduty. Wo upted the Manag Prclon on Alcon {in copay revamped the Mustraton ofthe Kana system, sling nw Figur ih ‘uliple spars eliminating tho twoseard sytem and smpliying the dicwson, ine ‘ildod «Managerial Challe a which the Vf france fr Oak ove Hell Systrs was ives Thodselgamont oftgurngout how to combs hosing cost of patent aad doing oven, Uhapter 5: Capacity Planag t= keeping with tho curacy of the taps in the Tito Ealon, th new opening vigutte on 3b shows howe» tpencich coropany cn cope wih sexpiced capacity erie troughton byt cornavis parent, Wo also aes Manag (Galenga in wih ho lity manag for Tse Medical Cantar st datrsine ho cope ith dramatically inreased visits to tho wneeguncy doprtinent und surg In sugary requ, “Tha Manger Praction om PaiiCrp as aso pte, Chapter 6 Constraint Management. Wo costa a now Managerial Practice wn Sooo Limited illustrates thy spplestion ofthe teary of constants andthe drum-bleopo sytem, ‘A Manage Challange sls dd ht fetus the marking port Sich Inde ‘sha fondo that hie sales proces ws a tsack othe ele the company iach po inl, we added « Video Ca on constr sssagenent tthe Crean Cline hn hows how management analyzed sd selves» persnalprnttveaquspent (SPE atenck de {he COVIDH viru pandone (Chapter 7 Project Management Clcvoland Cin, « ain atbacion af the Titonth ation, Xe fatrvel ina car Managerial Practica that discusses» projec o uid naw hospital Tondan, Hog. Also added to ths chapters a Managral Challenge ha nvalves the head ofthe mankting dopntnnt fora lamp Rnancial services iw asked with oveselng projet within Bor depart oesigh and implement pew prea a del ih aqui for {eative ads, innovative communications, printed brochure, new web content, and continu ‘lee support om unital ver he sompny isl, wo ado a secton addressing projet "lak cated changing niltement Idesribos an approach called sr which is go ‘toot mangement frmework that focuser on llwring tons to spond rp, fice, Id octvaly to change. PART2 Managing Customer Demand To socond partofthoextshaws how stint caster ‘lmands and satisfy thos demands trough inventory management, operations planing ad ‘cheung and resource planning {hapter & Fetecestng Wo top this chapter with» new opening vignstte describing how Starbucks uss big data or managing demands Wo als added» Manager Challenge turing "rent information sytem grads who wae arid th tank of tvlwing the frwessting ‘stom and software at Kramer Hells Cn boas staffing loves of ential employs have ‘ben oo low dv to excessive front eons Chapter Inventory Management Ths opening wipnsttson F's Smart ventory Management Systm as rviod to icude CaStory, which see prdiclie nna to delorsne baw lang, ‘nod vols wil main on th lt We aed snow Meera Practice dasa how IKEA, anges ie ag inventory at ata ets. Pally,» Manan Challange presenta scenario In vehich the chief fncial ofr (CFO) of Medco manufacturer of meen wholes, I cused about declining stirs on ests (ROA) and nnn isnt analy she corp. Tate ofc th tak of eparing te him how invontary vesbont canbe reuod Without acting the customers of eden a Chapt 10 Operations Planning and Schoduling_ We updated the opening vignette on Cooper ‘Theand revised the Manager! Paci on unpre scbeling to inlade te 2019 World Serie Woaddod« Manager Challeng n which the dieser of huss sources foe Redwoo! Hotel [food with staffing pablms, mst Kad afng plan that moot the hota’ even args CGheptr 1: Resource Plunge updated th opening ignete on Philip nd de Manager ‘rain on Vall Ll Foundation Hl fo som events Weslo nad Maagaal Changs ‘nwhich the VP of nutctring nd st Ronin Indste, Inn gna quinn ‘tunica (OFM) of tomo pats, wa takod with rocomeponding, anges to tha eran Inter potion scheduling prc and resolving pram delivery performance. Fly, Thee i nee Video Cos that revels hw Cleveland lai annus ht the ried sro te ‘alae othe lrg nae of compliotd mperie ond oon pecarnod dally PART Managing Supply Chai Tho this prt ofthe txt bald pn he ols for manaping po fesse tad er daman a Us evel ofthe fin nd provides he ol and perspectives to na ‘pth low of mates, formation and nds batween suppl tb fie, nd its casters. Chapter 12 Supply Chain Design We aed » Manages Challeng in which tho supply hain ‘manager of Adorn, leding Manufacturer of oxen’ apparel, ust analyze the supply chain {ane how Adorn can get prod orate fro. We ipl tho dscussion of whal 2 "ppl chan by removing the distinction between servic supply chan and manofacturing Inpply chanson insond cong on host of supply ebsin with tr of suppor {id ston channels Foal, we added a neve sin ttled “Autonomous Supply Chins, whlch desis the trend tsar setomating lames of supply chins and the vantages it ‘Chapter 12 Supply Chan Logistics Networks Wo ado! » Managerial Challango involving the diner of human eeouree for BiaoTren AG, producer of vansmlscans, storing and le ‘tans, and driver assistance festres othe aomobl rusty, this decor wa esigned {Toommte analyzing the lation fora now plant and nds that se ust argue for he ie ‘hn of ky fotrsasecated wih labor climate and quality fife athe potential ste. We eso (slid «major scion ied “Wars Satay in Lites Netweck," in which we dsrase {nventaryplacamentandavtonomoe wareoves operons, ch ar oomstod puted ve titonomoue mate abot nd eral drone. Chaptr 1 Supply Cain negation This choptr undoreat a major oision to dive oma the Importance eftpply cata ilegton The new opening vignete dasrbes the Oasis ofthe Sas tthe ed for an integrated spy chat, sepals when aod with expect srptions heh asthe comeviae pandemic, We added» Managerial Challenge in which the diet of Inforation technology for Creview Food, Ie. thane stones were expvoncing severe sock tule, het devise plan fo facia information sxchnges up aod down the supply cha, ‘Wemovad the can on ve manfictring to Chapter, "Using Opoaionsto Crate Value ‘ni'moved the setion “Sppy Chain sk Managarent 1 just after the section “Supply Chain Dionptons torino th cic sed cape with duptans in supply ehaas. We add a ‘nw Magi Prctos onthe coronaire andl let onthe supply of tlt pape. We alsa Incaporte major eto illad“Clond Gomputingand Wloka” ei provides thorough Aiscussion of tw technologies for integrating pply chains. The concopt of blocks ina Sapp hain explained wah exsrpln td tw neve gues, We dncuae how # work, ts bons, nit uss, Wot added a dicuesion question cloud computing and bockcains. Fil, Theis «now Video Cave a Cleveland Cle tal shows the avant af having a nto ‘Supply chai tsupport the goal fa patent Hirt enepris ia ight of he COVID-19 pandemic Chapter 1 Sapp Chain Sustainability A now opening vgnte doses how Caa-Cola bas ‘reed it deettatng water opin am indy tht uss 09 paroot of tho word's rah ‘euler supply. Weslo added a Manag Challeng at gl Trucking Company a transportation Company serving te ol id gs ath care, an food dase, which Hb CEO hs asked Hive presidents to devia plan to rsducs to company’s eaben ftp. We expanded the tection a imnapotaton moda acide adissson of lets tuck Solving Teaching and Learning Challenges ‘Many students eho ake heaton to operations manages cours have difcalty sing, tholevan a proces view fa business rte enacts of competitive pints trough {int sustninaiiy to tei ves and ther carvers, Teaching can bee sallenge whan students ‘reso motivo and gt ite genfnenment n hat thay have leteved. We Dave found that ‘adeats pot motivated when thoy sy concaps, eehniquas, and methods hat as acualy ‘used in practice and they got snfocement when they can apply what thay ave lard Aa for ‘motivation, the Titwenth Baton ha four ilar Four Pillars of Mtvationa Lear + Prwctica ‘This tex is ten fom «managerial perspective. The Manag Chsloges ‘how how students of any bsines major can fn wsfuaes nthe tole of ths tne ura, dar an many amples of problems typically expen’ in bates sod the ocison tools used to analyze them. The explanations a nue nd pode s Uae ‘uudent to wpply tha concepts tnd technique tn prton * Grant The chapter opening vignettes, Manapral Practice, vidos and pts connet ‘he tpies covered i the text te psbant day pratense, = Somprobensie, ‘The Titomth aloncoversll ofthe now und tains pics manag {3s nie onow tome thir process compttvo weapons int dyn evened Regardless ofthe fnctional ares, praecesat tho mans ogo wor foes, 1 Understendable, The Threnth Baton ha numero dingeams cory sing he cn hls ortachnigun bing discussed. We ook cr tout uneasy gens Key te dei inthe sage tho pargrph where thoy iru wed and hy cons eae ‘hos af th chap, Purher, ach langebectve far acheter sepa thea ot the chapar with guelins for evo. All Tua etc ren testa Ebi hance laity an mak the tes ch more aoa tants fall aj As for reiaforcarent by applying what ty have leaned, the ThiteoothBaiion provides ample epparunty fr tions ngage with be conta ‘Learning by Example Many students srg with ‘quate probloasling, ‘To holp students nto hare italy athe Thien alton ‘each tochinigque fr tater ealalation ae fn astociated. example fo inthe chapter ‘whore dissed nd Sahed proba ehowing he tie teciiqn forse problem att ed tn each ase the pba and ll he ‘ops toward solution ate lanl domonetated. Tnstructors can use the thought proveking discus sion questions i cats to ‘perk ialg of ios nous Sd managerial situation, ‘The problems ae prop “undo eaming ejetvs to take ies for isto ‘ang problems hat cower Mlebietie ping Staten Apply ‘Tir Sills Students can tet their ‘ndorstanding of the con Tent using cases in to ‘ways: Fest, tho Thirteenth Tedon bas 14 video cases, ‘Fa which ap eet te ‘edition. Each video case hag feo pts: & writen fase describing « proba ‘paren by ara com pany, alongwith sever showing the actual sting forthe caseand discnrons ‘with manager rogaine robe. es feat pr Mie aich environment Inbleh to disease the top tft chapter Th second ‘vay instore cam eo ‘dats sto we ay of the 4 ert can nthe tat ‘ie weet ches pls ‘se that stents ea ‘ith tei in the txt to analyze and roolvo an tee 7 Working in Teams and Gaining Valuable Decision Making Experience Perhaps the most engag: Ing and fn seve ts {he Thiteenth Eton are the experiantial learning tied sctve model eeceos Minto Garment Company [Active Model Exercise © chance ee ‘problem scenarios. These ‘models ar pfoct fra lag what questions and learning from the results. “The Active Moos assign: tents are supported by fecteat esaietar reel, ‘hlet il stodens All told the Thienth Eton bas the elements to support student motivation snd exe ‘ment and long witha hot of strc Resourons, waves tae the teaching an Faring Challenges involved in the intaducton fo operatians management coun, Developing Employability Skills ordain ine mpl agg act tsa develop vi ofall We fave ein ven els it ties len racemose vee eae ‘Trem shon er mr nt fh Thiet i mp in enon el plobity Sis in te 1 “oat amen save dl Bree pr Opn Meets ‘easiness porn eaing Mra Expl ‘Ot xtra and PO Tor Pato stato z “Flos a Z z a Sat aio | 7 v Additional Resources leet a tae ot ‘ww parol “toro Feats of he fesauce tn Suporte Sumit Sar Eras Kp sits anc ih ai tar nn is ah ar Se, Pana As, cee ‘Samp Aut Opt, ari sve rs Cpls Sehr, _ po iE i pi oe al of cl oa rs Ws ad Tosser cig tx me ban 0 aa en thet Ti es pei oa camper eg ai, + sate oon gern pus utos ten arte - ten Thee eo prion ad hrow BEM. Pol foros bn er pagar a a 25 carmen OM ‘Aci Wess Tee 29 eases oie sans to erdue erst aon tee ems The ale Oat ees. ‘nk fa Bel opal a ras bald subi rd cd po erg ess a, manda cles ae ete Sick wey lero is sig aS. ‘eaten Dhan dg, tts xpton crs ren mn wih at D's cyan re. ale aa ems a sys. ‘etal information and udltlona reouscs ao avallbe at ww. pearsonglbaleditons.com. Acknowledgments ‘No book sat the work of th thor. We relly appreciate the asta and alle cate ‘lions by several people who made this ton poe, Thatks to very Ate of peated rotons for her afr Inning and producing the ew vdeo segments for thi edition ‘Special hanks aed fo toward Weis of Temple Lnivonity whose experts in uprang ho Safar fo ths bok is roy appreciated, "We wuld ks to than tho people et Pearson inciding Lynn Heddon, Manager of Content ‘State Kosta Masttolana, Prout Manager an Yani Hom, Conon rot We ar aso {adbtedto Kathy Sth, Projet Manager, end eanne Boehm, enpseditr a SPL lob. Witt tale hard wk, dodo, and guldane, iz beak would not he boon pow We want giv epecil thank you to aucllg Lary Ria, who has conor of thst for ease Mac ofthe content philosophy and wim yo thie eon, ‘due tir ard work We xn aly ope hat he an fur edition th ext wiley se tho logy tha he provided wih i ears. In aiton, many cllepuse aster aoe ‘nl universities povided valuable comments tad sugges ar hin previous eons: patcular, we grate acknowl PreasorGullabe Marodiat ln MooteSeol of sino {the Univertyof South Crone and Profesor XI. Shakar al the Weatherhead Schon of Managoment rts vlusie insights uncon t the Thirteenth aon, We also tank the rovlewes who provided valuable suggestions and fastback tha nflenee the town Elion: Keio Metco Beane, University af North Carolin t Chariot Pip Friedman, (Coneada Univer Slat Paul; Navneet Ja, Maine Nari Academy Vicky Lao, Univeraty ‘of Hard; Jin Mill, Jacksonville Uiverity Anil Ostekin, Univesity of Masses Lowel: Tammy Prt, Alabaon State University: Math Reladonp Drexel Unive Kev Sadoghzadals, University af Maarachusste Dartmouth; Rea Sajal, University of Texas at Dalle: Len Sasso Nichols Colao; gh Set, University of Nath Cuong and Thre ‘A. Wills, Univorty of Wisconsin-Fau Cat, Finally wo thank ou fails fr supporting us during hi projet, whickinvleed maple mals fleonferenc call ed long periods of action amidt he coronaviwe pandemic Out ‘iva, Judie and Mays, have provided th love stability. snd encouragement tat sustained ‘sha wo trast tho we Balin at the Pint, oe J Krajwstt Mane) K: Metra Global Edition Acknowledgments Peaeon woul ks otha the felling exports for thee werk on the Clabal Baion Contributor LakshntNerasimban Vodanthachar, Mido Univerty Landon Reviewers (Ghristan Von Delt HBC Paks Xin Ma, Monash Unversity ‘Alka Nand, Manash University About the Authors jpy_ lee J. Keajewsk i: mens Bont Tn Ohio Ste Unrey su Profesor Boi at he Univer of Nore Dane Wil af The ‘ho Sute Unive, hesweivd the Unies Ani Dstingtsbed ‘Teaching Aword and tho Calloge of Bustnoss Outstanding Faculty esr Av He nite the Cntr for Excllnce in Manta Management end seed et direor fr fur yous, Las also sere tr Acting Ditcor ofthe Exseutlve MBA Program, Chaipeson of the ‘putea of Management Scenes, and Academie Director ofthe id gum a The Ohio State University. AL he Univerty of Nore Dame, bel the Wiliam and Cras Daley Calin Managemen. bn Bie be ove the Neto Presionts Aver nd the National SRward of Mor ofthe American Produetion abd Inventory Conta Society (APICS), te arvod ax proident ofthe Decision Setences Ioatitate and was alec Fellow of the DecistonSeienot Inset 1986, 1 eeivod the biltogusod Sees Avard in 200 La as conduc einer and consulted frm such 8 any Corporation, Westinghouse Coxpasion, Frain Choral, nl Basco. Soe aie hs PAD rom te alors of Wisconsin. Over th yess bs designed nd tnught courses a bth gedane and undp Tools on tpi such a operations sate ‘eiBtluciontaperations managment operation design, project management, and mma ig planning ad conte stom. Me aed asthe eller of Dizon Sfonce, was the founding itor ofthe Journal of operations Manegemen an his rave on veal alter bonds, Widely plished hms Perereuatel natasous stile such jnrals as Doeston Siento, Joel of Opa Toa rae Management Scene, Prodi and Operaons Management, Inman Faroal ae eto Match, Pad Besies vs an xeon st afew 1a Cort er on ihe Bea Thaetalimpiial Pape: swords a hoe national Decision Scions Letina aria ie Sly. Ava or bat ekg and come eysons, suply chao maagimect an as product scheduling Manoj K, Malhotra isthe Dean and Albert. Weatherhead I Profesor of Managhnent tthe Woahethend School of Managemen ‘Gane Wester Resse Unversity and a nmbor ofthe Lendrsbip {loveland cass of 2019. Previously, hosorved ashe Senor Associate Dean of Crauato Prop, ef Bute Profesor. andl Chatman of the Management Science Deprient atthe Darla Moore School of Business, University of Sauth Caroline (USC), Colombia, He slo ferved from 2008 ta 2017 athe founding director ofthe Center er cel Supply Chin sod Process Management (GSCPNO) at the ‘Moor choo! He sna an engineering undergraduate degos fo the Indian nate of Technolgy (7, Kanput India in 1985, and {PAD im oporations managment fom Tho Ohio State University tn 1000, Ha sa Fellow ofthe Decision Scaucts inte (DST, Praduction and Operations Manageamot Soetty (POMS), and the American Production and Inventory Management Soci (APIS) Manoj hat conduct snare and conse with is uc a Avaye, BMS, eek Cammtas turbo Technologies, Dstt Air Line, Deere Matso Pape, Pats Fath, Sono, Verizon, Walmart, aad Woringhouse-Toshba, among oe Ar foe ching operations anagem suppl chin management, aloe] busines sexsalt UG, Man) hos also taaght af the Terry School of tsines, Univesity of Goon ‘Wictulvtamivereit Won tn Aus andthe Grate Sehool of Management at Maorware ESE austen Hs ecach as thematealy eased on the doploynent of escble esas aang and seven finns on operations sd soppy bain tray, and on th too Aaa pctone remeron tnd tbo unions) mens Of sins. ie wrk on these and a cba has toon pbs Inthe leading refereed journals ofthe field, sche Devon rea pa orl of Cpertiona eso, nye, Jounal of Operations Menage. aoe ith and Operon: Sdanagment. Mato) bae boo cg fo his pedal ard ‘hole comuta tone texgh severe tnehig and dsplinswide exacts was ho septa ofthe Mlcnel | Mange Outstanding Craduate Tealng Avorn 200, th Crain Fetus Pioksnur Awan in 201 sath Droehugh Lodershipn Rosas Awad i 2018 on, ‘Be Uanaty of Suh Carolina He hasbeen he pega aor ateratonl confront ‘eet Steneslostite (DS sd Potion nd Operon Managment Society (FONE). “Aesth peident of POMS in 047 un ctns to sore nor otra jour USING OPERATIONS TO CREATE VALUE LEARNING OBJECTIVES Ater reading this chapter, you shouldbe able to 411 Describe terol of operation nan organization snd ts 1.6 Ment the itoial von overtime 112 bescrbe te praca aw af operations in teas of inputs, processes, outous,nfrmation Rows, suppliers, andes 13 oaseribe te supply chan vow of operations intorns ofinkages between oar and supp processes, 114 efine an operations eratoqy ands kage arporate satay and sat onli 15 ideny nine compettv pioies sod i operations strategy, and expan how e consistent patarn of dacisons can cavelo organizational copa, Ithas over 197000 employses and 510 retail store inapertons managemon 3 ean adress the changes 1 suppl chain managersin, nd understa facing operation ‘fim. 17 Define he fourth industrial rveition {indus 401 and understand how ts embedded techralages and ‘itomaton ara transforming the practice of operations ‘nd supply chai management, 1.8 Understand haw ta deel she or your ever sig ‘histeatbook 25 counties. \ ple Incorporated isthe world’s largest multinational technology company: Robust sales of consumer electronics, computer software, and online 22 CHAPTER USING OPERATIONS TO CAEATE VALUE ‘services have madi it the most valued company in the word, with = market ‘capitalization of $1953 tillon as of August 12, 2020. Apple's brand loyalty is legendary, with a cultike folowing of customers who often stand in fong lines 10 buy new products when they are launched, Even though its stellar reputation hs been built on innovative designs and trendsetting new products like the iPhone, few realize that Apple's distinctiveness and competitive supevionty eis just a ‘strongly if not more so, from its eutstanding manufacturing, operations, and supply chain managamnent practices, ‘The 10 decision areas of operations management that Apple measures 10 maximize its operational efficiency and build strategic capabilities are i design fof goods and services, (i) quality management, i process and capacity design. {iv location stratagy for stores, (layout design and strategy, (vi jab design and human resources, (ul suppl chain management, (vil inventory management, (od scheduling, and tl maintenance. A dedicated team of senior managers establish and implement a well-calicated set of matris that establish diferent ‘standards, benchmarks, and eitaria for productivity in ifferent decision areas, So, what drives Apple's operational excellence? Itis not any single decision ‘area mentioned above that stands out in particular, but how well operations ‘and supply chain decisions ara interwined into every other decision that the company makos in its faitly welLcontalled ecosystem, ranging from product design to component sourcing, manufacturing, distribution, and rete store dosign and location. By fecusing on a narrow product line, Anple can make each product in lager volumes aad get quantity discounts from suppliers. By investing in advanead component material and manufacturing process technologies, coupled with a supetior understanding of the markets, Apple can anticipate customer needs ahead of ime and give customers what they want through innovative products that compatitors cannot easily copy of reproduce ‘Apple's longterm investments in ts processes, supply chins, and human resource practices also make it very resent in managing its complex mattinationsl supply cheins, Even in the midst of the coronavirus pandemic, Foxconn, Apple's contact manufacture, wes running night shifts a its Phone factory in Zhengzhou, Henan Province, China, While it wal not escape completely unscathed, Apple has built contingency plans and managed disruptions in its supply chains better than. many ofits competitors, ts lunch of potential naw products tke iPhone 12, Apple 1, and an Apple Watch will at occur win the usual ime frame of Septernbor 12020, but are on track to show up a few weoks later Despite store closures and inventory shortages, Apple reported on Jy 30, 2020, tha its revenue was the highest that the company has ever reported in ts third quarter, up T! pereent yea ‘verve. And so the juggemaut continues, powered by its vaunted workdcass, kis and capabiltis in operations and supply chain management.) | | | | ‘Sammars Rowan “App ne. Operations Management 10 Desa Panoune Tinta (aeany 22" 209), ip pesnsecaaepleieopertione magramD-ieone ara ruc (aug 9 200); my run" Opontians Tams tt Be Sig to Pu Ts Epes Caran 2 2 romper 9007 ple ‘Sirs sling alsin ea (gt Hh 2020, KF Laing, “Ag ut wont "SHRFharc wet op 15 Spe Camara sapien ay 20,2020, pw aca 07a eign gut, 200 Mart Late “Opens ps eeSRuar the Options on (vomit 2) Mes!oemtennon rascontz0 1/0 SRothint pesca ang 20) bepson peda a Ap CAnpt 0220, Operations management reesto the systematic design, decion, and contol of ro ads that uansfor inp ino sores and prodacts for bth taral and exter customers [Sr exemplitd by Ape. it an baa sou competitive ndvastage for es In ath Sree SM mfactring econ. This tbook dats with managing thos fandamental activities andl proces hat anganiations ‘uefa pou goa and serve that pople use wery day A podem x ny ttvy or rou Stctve tht takes ane or more inputs trmsforms tha ad provides one or ore outpus {orltecusiomere Por onnzationlpurpobs, proses tend tobe clstare together nto ops tons, Am eperation ist group of resources performing al or pelt of one of more procs. Procrssar can be inka age ofan supply cha, eich he intro sere f pro ‘tes tin firm an eos flare fs hal produce a suvieear poet oto satsfocon ‘teuntomers® A finn ean bave mulple supply chins, which vary by the pratt service provided: Supply chain management i Unc ychronizaton of «Ben's procnss With thos of [Re wuppliery tnd caster to ssi the flow of materia services and nlroation with eu a ann wil or ho hs ok il tm have ren ad tps ‘Cains, Sound operalinal planning and design 9 thes proces olong with tral and xt al eourdiation within ss supply chaln, eon costa wealth and valve fora firn’s diverse ‘Saksheldar Role of Operations in an Organization Broulyspsking, oportions and supply chain management underlie all dapartnets and Fhnetions it business, Whether yo aspire fo manag’ department ora particular procs ‘nthin or you jst want to understand how the protes you are past of Hts the overall Titre of te busdous, you nowd to understand the paces of operations and supply chain management pti ea nec cte path owe anaes in many np nizations The reason peratians managos a reponsible fo ay decsons that alec he ‘cer ofthe orpnation ta anuctrg fas the head of operations usualy hostile "hit pertins efi (000) or vio president of manalsctsing (oof roduion ar oper) “Tho caresponding Sie na sree oganzation might bs COO a vice present a ica) at ‘pentions Reporting the hat of operations ar the manger departs ck camer ‘vie production td inventory ctrl and quality arstanes "iguo.tshowsopaations a ono a tho ky functions within an argusization, To iene solos tat are shoes highlight the porte of th coordination among the sre ra Tine feline of any busines! (2) operation, 2) mating, ad (3) finance. Each fmesion ‘unique un hss wn knowiedge ad al ros, primary responalbitis process, nd des ‘Stn damine Frcs an eterna perspctv, Hane gonatesresorers. capa, ad funds om [nvesto and slo goods tn solos in the rrksplacs Based on Wsnase strategy th ‘Sanne aed apeaion uations ten did how to inva tae eure snd convert that physiol evel and materiel iapuls, Operations subsoquettytnssforme thew mata and ser eran management “sans om seo, ‘ano yas reason poser al ml yay gon cis ates rer ren, ‘era. ees temnaiposie cares. weratin Agapat resus primi ‘asm eo repasese sty cin name sos pes ‘Mem semen ohe ‘ty cha wananonet Tegel ee sas hoa ip plan castes at, Ihe eas sevens, teat thse ‘enor ‘y rauRE. nega Been Oe ‘ie np nto rodt and sevice outputs These caput aust es ‘match fw charters tht ex be sll inthe selacted maskals mee tbymarktng Marketing responsible pradcing ls revensc exits ft the output, whch bac ets estore el epi for veer ‘ppotting opéstion. Funetons such se cemntng torsion ws ‘pom, tinan our ongnenngma be rm comple - ‘pring seal fat, sie, and ahr manag Tee eatlonsipe provide drction fr the snes wolesdualigne secre meget riparia dani creed ate edie eon ies How wll he face wick apa dere te SEeciveo ote oct Fenton al be nog Should pene ammo seg, Susee depends ne ‘rl hy al to do soo pa of ie ecb dad {rnin witout o efeaienes and regu of ot Gepurterts end functon axa ndetualymatagas toy aro Stes lnted together through procs Tha» fm compets Sitonyy olen servss nd profct ceatve masa Sos inane ao trout nique competencies Spestions nd sound manngamnt fc process es ppl no and ae chav satis wl chang 24 onAPTER "he Fr a Caney, 1821 ow Historical Evolution and Perspectives ‘The history of maderm operations an supply chain Iiagement ts sch and over 200 years old, owes Though ts precio as been around in one form Cretatr for conuries, james Wat invented the ‘foam engine in 1783, The subsequent establish ‘Moat of attends fuiltated eflont movement of ‘loth throughout Europe, and svestually evan In Sst colt soca nn, Wi th vention Sf cotton gn in 1784, HH WhitDoytouced the concept of intorchangeblo parts, revolution i thet of chine baed mansfocturing and coupled ith te invention of tho steam engine od tothe grat nd rvotin In England ad the toot of Europe. The tone industry was ne oft ‘arg induste obo mockalod, The inti evolation gradually apresd to tho Uaited Stats ‘Sn the res o the wor a to 100 century ad tous tecompaniod by sue rst iaovtions asthe i [Sita combustion agin, ra powered ship, ToT, pede ut olin Mev ctallrgy of ten making, grea production of ‘dhemica ad Invention of machine tools ong |} Shes The foundations of moder manufacture Sha technological bresoughs ware alo inspied by th creation of mechanical computer by Charles Babbage nth cry part ofthe 10h Tis ponecred te concep af division af labor, which lad the fundation for scone aA operatons and copy chain management tat was forthe Improved upon by Fredrick Taylor 1811 He or atimerkevets rom he 20th century define the history of operations and stp ply dir anagnts Fist she vention of he sory oe tho Mod T cat by Haury Roan ote nation as br whit amp pres The tne eee. scarel in nye uierso aflodal prltstheush repttve anak ‘Seba ious in be 10s teu he don of stato planning fo oeiving prot section and very, with teeny funded Genera Motors Capron otting emf Perea purpove.s Fay wth th pulicaton ofthe Taye Prodcton Syst book $655 ts ova Talch Ohno ia the groundwork for rmoving wastfl sve fom 0 aaa cea tha wo enor fre in Uns book while euning about aan stm rset tery of operation and spy chains over th post tos decades bas bea sieopetieecinaqiea funn Te 1986 wer charecarza by wie svaliiity ofcomputer- SORTASE CAD), computorarded mnnofactring (CANO, and automation, tnformation cae elton sted playing a ncresnghy important ole nthe 1990 and started Set i iene mpi rh ir Rv Ne es aan ey ohaogy bent for spc elton. Sevceoguzatans ike Amazon, Fane all Fecal Servin (PS, and Walnut alsa became sophia users of Fare eer ulogy in pertion, ogi, and managoment of supply cals The nee aoe esate attention of end, nang whan eens eon dea mat aa iby nate savronment. Wo cover al thse eas an topical ‘Sun grein deta throng hs book AProcess View Yu might wonder why we begin by lankng a proceso nor than at departinents rove he TeTHRM ota tats pocese view ft frm providos a much more evant pictur ofthe arn tig wrk Departents pally hve el own nto jective aston Taam is toseave nae objectives, and managers and employees esponible fo pero a ore rc aging maybe wo specie hat Uy aconsinod wholly within ‘Tenge deporte, uch a aecoutng erat yroaee,ngever cab mic broader A process ca ba is bw st of jot ttle a er tates acon dngartnntl bout equ resources eee eee ante You wil a sample throughout this txt of companies that cco ee ue tee procter o gain a compottiva advantage. You wil noice that tho ky 0 Fee a a Risatons iss toon waderetuading of how fbr procases work sinor a aa yates flectve ots pci, Thea, operations rangement eeren a et rgerlon of aj, because ll parents have procees hat ‘at uanagod fetvely Co gua comptitive advasigs How Processes Work ‘a etmaen Figure showbow ros wakin anata. ay eee s Inputs and output Inpate ean incu 2 com {hon of human roars (weskers end mamagors) xptal {mt an iis, pase tial nd ah [Shand onary. The naberd cles reprosent operations though whieh serve, produc or caters Ps ad tis prfonnnd. Th azows rprsent ows fb or entomer can hav rent ‘epireents (and tha ferent Mow pater han the bet Inor eusomee "roroses provide outputs to customers. Those output ‘nay often be servis tat ean take the form of nforation) tr tangible products Every proces and every person in an Urgulzstion has customer. Some are external customers, (who may te ond wer riattvedire emanates nance netutons or rales) buying tho fs fash ‘eves or rode, Ors ar internal xstomers, whe ‘SSumployeo i the fm whowe prac inp are cally the outpace procesns man Seed ti the Gather way process ust be mage with tho exstomar tn mind ee simile ahion very processed every person an oranieton raison spl “sternal suppor mayb ater businesn or individuals who provi he resources, vies, Drove a mutes forthe firm's short tent and long-term noes, Proceacs also have Titernal suppers, who say be employees or pocasee tht supply inpartant infomation or material Tuts and outpts ary dapanding onthe service oe product provided, For example, inputs saa ty nae icae aehondlos ie sre buling pcs evel nd nas tutus to fatal customers ae eae a 01d merchandise. Inpat o efactory manasa Inge ous ince im relia, he Pant, werkors, menage, nd sree provided by tsi consultants tpt arloting and suppatngsrveas. The fundamental sof np, rocesue, and esoma tps holds te for pocosaes at ll nizations Fig zen pont role en, eprtnet al g ofewe sl ‘dual! ch ce bas Input ad was proasa ot varios opertons to provide ep. The Ala ies voprosont to spoil ies of inp: palpation by customers and formation ‘performance fon both infor! snd external souress Partepation by ewtomers cts not ‘nly wen hey sce outputs bt lz wen thy ake an alive parti he precast, su ‘then stents periptetna case dscuein.lforsation os performance nelle intel {ports on eustamer serve! or ventory levels and extereal information fom matt rssh, {Government opt or leone alls om suppor: Manager eed all ype of iforaation to Ianageprocnses oa eflactvel) Nested Processes Proceses can be broken down oto sulprocases, which in tun can bo broken down fs lito still more sapeocesses, We refer to thi coneapt of process within a process as nested proces ay be helpful fo soporte one pant of a process om ent for soveral Ito Ons pram depart ny be nil tae para epoca {front port of tho psoces nay require diferent skills. Som pars oft proces may be \lesigod for routine work whereas eter put ray be peae fread work, Th cane ‘Mast procsss aus in geo dtl tn Chapter2, "Prose Strategy and Analysis Srsre wer rainforest vd ta wnderstand and improwativitis within a business and each roca inputs and outputs. ‘Service and Manufacturing Processes “Two msjortyps of processes a (2) service and (2) manufacturing orvceproceses pervale the business ld dad havea prominent pce fm our season of oporations management -Mnfactring press ae aso iupertant without hem the products we enjoy spat {ally ves wou no exist nado, manufacturing ges isto setvic opportunities Dillrancas Why do we dsngulsh betwen service and manufacturing procasts? The answer Iovate east design ofempativeproeeser Wile Figur 13 shows vera dsintions tntwoun sien and mencturing process slong «cosine, Ube two kay iferencs that tte dass dla are (the ua of thet tpt and (2) the dg of usta coma n onera manteturng process so have lange respons ines, ey ae more capital inten, {nd heir qulty canbe menred mor asl than thso of sevice proces, acnigune 12 Press an Opes (eg, mato ais in ee by ‘tes rh ees pres Ore rm oreo roms aon rus ton sioepier pee oat saps Teta or tan ‘wo pes be we, Sorc, ods, eae fees tert lptomnors, to po Th ops ross at ‘sty pitino ‘a at's pas. rose process Te cwaptta poss wn th Manufacturing procssiae convert materials into goods tat havea ial or we call rvs. For ‘compl an assembly Tin pradusrs 4370 Z sport ca, Merete ‘ oat it oe the af 4 7 ‘asene ‘clothing stare. The transformation processes change the Ft ato Sader leet (ate a FIGURE 13 ‘i sym ind {WAseve ocr sng ah char ere es ere ang al rs aes ‘ee Sp 4. Physical proprtos + wong yet 1 Radian, Siz og long, bom, and eight of w rect Shean anor inter bora) total 4 Barace fiish SHEParey mere 5, fining parts and mts “The outputs from anuftring process canbe prodveed, stored and tsnepored in anticipation of Fito dnd tt procs dos ot chang the propetis of materials on atleast one ofthese ve dine. sonst feconisert serves or nonnunlcring) proces, rece procesn end to rode eel porte outputs, For example the utpet eon tho ata Tan process of» bank sees Ear fom,e a oputo theo fllvent oct ofthe U.S: Postal Service Is Meters af your leer. The outputs service protseeypicaly cannot betel in afnished vs Sentry to ingle the paca fem etal custome demands "Avoca Ly diferenc between serie procaccs and manfiuring prosese is dear of castrarcaneet Service prossate and to hve a higher dope ofcastomt cota, Customers ‘Say take a ative ran the paces elf, ho case of shopping in» spanner, or They may be in close comiact with tho service provider to noe spelic ands sn the case o maa lise ‘Manactringproastes en o hae las stots conc. For example woshing machines ae ultately produced to foot stall forecast Tha proces eure ite information Rom the ulate conruners (yond 10), excopt indrecty thocdstinettn ein servic and mvnaleting ross on theta of estomer cont! ent part the portant pnt {sthat managers nut copie the dogs of vastomercostct requir when designing proses. ‘Shoterkies At the level ofthe fn, serton provers do not fener services and manufactures ntfs ater ro Ais Pans stump good serra ood fo Souter purchasing» su eater expe «ond Scie motu pacbo o ‘nell sien ure oven hnughsreice press do othe fhe sient hy dooney thar pas Fer caple hype bey vento fea su Fs nol na rd oy oper Some fata process nc, tater) De Ships cae rye oc Soe would ie cae ‘tthtgesene Custom pfs (og tallred ut) {prec wi shor sel og dal newspaper Whon you look what reg done wh pret leo sch sata Yow the proces ro “lng u sree or manulaciag s rods. Hower Ths cy tow! when th whnecompny slid ther ¢ enter rm mri provider Hreute {Rotten pars bot ype of proces For xl, the procs of coking fambutper st Donal Autactring proces becuse chang tho mate's geal propertis (mension 1), af the prog of ‘ema tha hamlet che bu imnsion Tieqorer toa fbr proses ible tvsbie ces ehnry versa wooaon neva fy | toMeDonal's customers ae service procs. You can ‘iba whet to cal th hae MeDonal guna on srven provider ore manulctrer,eherws ls ‘Sato at the procs vl rel Toss amiguots. A Supply Chain View eee es oR gh mei of cat bons Bch Re eee ee Rl ects taemeog waitin cage el my et ie Oa eee rtat cleteacehepeains em pee ee eee eae eac bia iacerndel cavcnsabuoin Borie aSeettschtepeecree Piomiety cesege ng tryna Apteaais etet ‘lsh ue rata tight he ply ch Ee cont upp cane ee cere a asateg aay eet eae sapien rene Ped tie UE Rieeset etapa taceenities inte ec: st cwreet Cee Se aN eoeray anc mit ticompecemnsattnappen eee ‘rome tce tne Hearst Taoersssints tea hotoceel saver pacarainalccuads aaron Mendon mai. En STmicsoai ie eps aes ‘Gore Processes: ‘he service/ product ‘sew proce bast of cv th le valet xem] cntomers Manag cttoms Sapo ross frosted bopper inhnet with ema cnr ead dont with, STM Poem tlavelop naw services and produets, interact with external suppliers, and produce the sareice or OHS Hw cogs a frotey kth eral eltomer pee ns tafe easton naling enw ext VHB qciafor an eo manufcter or Wate purcieing ran oniserwalorike Atnzonsom. erin ese an Clete acta ince ieee oo ts meae rai ‘eat ects Taisen we aco ur cre rene Siontieraat nest 1. Seppe Relationship Proves Hpoyeos i the supplier reatonship proces lect the {wih ost eke ‘afetesofsavics notre; end infomation snd adie they and efit we Fle mato We sn Working oloatey ih spp con sl ion val att aes Sheen oan im free mince lngom ‘tess logic sa spowan vate evan Somes, 2. Naw Service/Product Development Process. Employoos in the nave servcelproduct sqrai monn Scropmmt ps dog a develo nw ecu pls Tin sarvcor ots ‘mrylsolood ioe euderespecticonscr concave im nputsrenied fom eaten rant pest Gnnaarin oe Ao lie st. 3. One oft cee T ord tnen procn cies the actives uel oan produs ond dlver asia or produ oh eral atone Ganaaneres ck 4 Csoner ltinsin Prose omnes refrod tos cstomerreetonhp management. wb erty Enon nae tcstomeraloatipprecen Knit end ald ten. oxi oot Uae ibecivertnal aceeerantncletheficsmert of rds tycoon Tiina ba cx meu {Enclon suc ar suranga sie my ba pr of hi procen ‘nano

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