Introduction 1
About This Book 1
Conventions Used in This Book 3
Foolish Assumptions 3
Icons Used In This Book 4
Beyond the Book 4
Where to Go from Here 4
Part 1: Getting Started with Operations Management 7
Chapter 1: Discovering the Fundamentals of Operations Management 9
Defining Operations Management 10
Getting beyond the smokestack 10
Seeing the relevance of operations management 11
Understanding the Process of Operations 12
Driving the business model 12
Recognizing the diversity of processes 13
Managing processes 15
Handling special situations 17
Meeting the Challenges 18
Firefighting 18
Technology 18
Complacency 19
Metrics 19
Perspective 19
Outsourcing 20
Chapter 2: Defining and Evaluating Processes 21
Mapping Processes 22
Distinguishing between operations and delays 24
Identifying waste 24
Developing a process map 26
Evaluating the Elements of a System 28
Checking productivity 28
Considering capacity 28
Clocking cycle time 29
Getting a handle on constraints 29
Talking thruput and takt time 30
Going with the flow time 31
Monitoring utilization 32
Accounting for variability 35
Chapter 3: Designing Processes to Meet Goals 37
Getting Started with Process Improvement 38
Planning Operations 38
Considering a serial process 39
Placing operations in parallel 39
Improving Processes According to a Goal 42
Reducing customer flow time 43
Increasing system capacity 44
Balancing the line 46
Utilizing flexible resources 48
Improving a process that has excess capacity 49
Managing Bottlenecks 50
Getting tripped up by overproduction 50
Increasing process capacity 52
Chapter 4: Dealing with Shared Resources, Batches, and Rework 55
Sharing Resources 56
Assigning a resource to more than one operation 56
Allocating resources to more than one process 57
Batching Parts and Setting Up Operations 58
Working with batches 59
Maximizing operation batch size 60
Optimizing transfer batch size 62
Optimizing batch size with operation setups 65
Handling Poor Quality 68
Putting rework back in the process that created it 69
Pulling rework out of the main process 71
Chapter 5: Designing Your Process to Match Your Product or Service 73
Considering Costs, Standardization, Volume, and Flexibility 74
Balancing operating costs 75
Blurring the lines: Making standardized stuff customizable 79
Improving Face-to-Face and Back-Office Operations 80
Strengthening the customer interface 81
Improving efficiencies behind the scenes 83
Fulfilling Customer Demand: Making to Stock or Making to Order 84
Making to stock 84
Making to order 85
A tale of two companies: Making either method work 86
Getting It to Your Customer 87
Ordering Online and Pickup in Store or Curbside 87
Ordering Online with Delivery 88
Designing for X: Designing Products with Operations in Mind 89
Part 2: Managing Variability and Risk 91
Chapter 6: Forecasting Demand 93
Getting Savvy about Forecasts 94
Building a Forecast to Predict Demand 95
Recognizing demand variation 95
Looking to the past to predict the future 96
Lacking data: No problem 101
Acknowledging the Error of Your Ways 103
Hunting down the source of your error 103
Measuring how inaccurate you are 105
Chapter 7: Planning Capacity 107
Considering Capacity 108
Matching supply and demand 109
Timing adjustments just right 110
Balancing Capacity and Inventory 111
Producing to match demand 113
Producing at capacity 113
Increasing capacity 115
Addressing Wait Time for Services 116
Getting the why of waiting 116
Estimating waiting time with queuing theory 119
Altering customer perceptions 126
Chapter 8: Managing Inventory 129
Dealing with the Business of Inventory 130
Recognizing inventory’s purposes 131
Measuring the true cost of inventory 132
Managing Inventory 133
Continuous review 135
Periodic review 137
Single period review 138
Comparing the options 139
Getting Baseline Data on Performance 139
Assessing the inventory management? system 140
Evaluating the quality of customer service 141
Reducing Inventory without Sacrificing Customer Service 141
Multitasking inventory: The commonality approach 142
Holding on: The postponement strategy 143
Managing Inventory across the Supply Chain 145
Keeping track of the pipeline inventory 145
Setting service levels with multiple suppliers 147
Chapter 9: Planning for Successful Operations 149
Planning from the Top Down 150
Determining corporate strategy 150
Preparing for success 151
Executing the plan 153
Exploring the Components of an Aggregate Plan 153
Putting together a plan 154
Creating the master schedule 154
Considering Materials 156
Gathering information for the system 156
Getting system results 157
Planning for Services 159
Seeing the difference in services 159
Establishing the service plan 160
Applying Information to the Entire Organization 161
Part 3: Improving Operations 163
Chapter 10: Becoming Lean 165
Evolving to Lean 165
Mastering the craft 166
Producing in mass 167
Trimming the Fat 170
Eliminating the waste 170
Involving everyone 171
Leveling production 171
Embracing your supplier 174
Focusing on quality 175
Implementing continuous improvement 176
Producing Just in Time 176
Knowing when to work 177
Differentiating the customer interface 178
Implementing pull 178
Knowing when to JIT 180
Seeking the Silver Bullet 181
Chapter 11: Proofing against Disruption 183
Understanding Disruptions 184
Planning for Disruption 187
Knowing your supply chain and operations 187
Using new technology 187
Planning for scenarios collaboratively 188
Investing in Relationships 188
Fattening the Supply Chain 189
Stockpiling inventory 189
Maintaining stand-by capacity 190
Exploiting flexible capacity 190
Redesigning Your Product and Process 191
Designing for multiple parts 191
Designing for multiple processes 191
Replacing labor with autonomy 191
Protecting against Cyberhacking 192
Mixing and Matching Strategies 192
Chapter 12: Managing Quality 193
Deciding What Matters 193
Recognizing the Value of Quality 196
Assessing the cost of failure 196
Detecting defects 197
Getting the perks of high quality 198
Preventing defects in the first place 199
Addressing Quality 199
Considering the customer 200
Getting all hands on deck 200
Sticking to the improvement effort 201
Designing for Quality 202
Starting with the end in mind 202
Cascading to production 205
Measuring Quality 205
Understanding variation 206
Measuring “goodness” of a process 207
Controlling processes 210
Chapter 13: Creating a Quality Organization 215
Reaching Beyond Traditional Improvement Programs 216
Multiplying failures 216
Raising the bar 218
Varying skill levels 218
Adding to the Tool Box 219
Defining the problem 220
Measuring the process 221
Analyzing the problem 221
Implementing a solution 227
Maintaining the gain 229
Overcoming Obstacles 230
Failing to focus 230
Prioritizing into paralysis 231
Avoiding the lure of magical solutions 231
Lacking employee involvement 232
Knowing what to do 232
Learning from the experience 232
Calling it a program 233
Giving up 233
Part 4: Managing the Supply Chain 235
Chapter 14: Understanding Supply Chain Basics 237
Seeing the Structure of Supply Chains 238
Getting through the tiers 239
Linking in support services 239
Aligning the Supply Chain with Business Strategy 240
Defining product demand 241
Choosing the right supply chain strategy 241
Exploring the Bullwhip Effect 243
Finding the bullwhip triggers 244
Dodging the bullwhip 247
Improving Supply Chain Management 249
Communicating better 249
Outsourcing inventory management 249
Simplifying the chain by consolidating shipments 250
Chapter 15: Sourcing Strategically 253
Seeing the Upsides and Downsides of Outsourcing 253
Benefiting from the pros 254
Avoiding the cons 255
Getting Down to the Basics 257
Figuring out what to outsource 258
Choosing the right partner 259
Developing a lasting relationship 262
Integrating the product 264
Chapter 16: Digitalizing the Supply Chain 267
Navigating the Digital World 268
Defining the difference between digitizing and digitalizing 268
Realizing the benefits 268
Mapping a Digital Strategy 269
Undergoing a digital transformation 270
Selecting the best solution 271
Chapter 17: Scaling throughout the Product Life Cycle 273
Managing Operations Age-Appropriately 273
Swooning over the Baby 275
Keeping capacity flexible to minimize inventory during unpredictable demand 275
Designing a supply chain for a new product 277
Defining a market with no competitors 278
Avoiding failure in incubation 278
Surviving the Awkward Stage of Quick Growth 279
Balancing Capacity and inventory for growing demand 279
Growing your supply chain 281
Distinguishing your product from competitors’ products 281
Getting Comfortable with Market Maturity 282
Exploiting capacity and optimizing inventory for steady demand 282
Balancing a mature supply chain 283
Preparing for the End 283
Emerging Anew 284
Repositioning 284
Making improvements 285
Changing the product portfolio 285
Managing Start-up Operations 286
Operating on a shoestring 287
Transitioning to growth 287
Part 5: Managing Projects 289
Chapter 18: Leading Successful Projects 291
Defining Success 292
Prioritizing criteria 292
Seeing the interaction of factors 293
Figuring Out Why Projects Fail 295
Laying Out the Project Management Life Cycle 296
Detailing the phases of the cycle 296
Deciding to go or not to go 298
Documenting the project 300
Leading a Project 300
Developing a project proposal with a team 301
Communicating with stakeholders 302
Keeping stakeholders in the loop 303
Managing the team 303
Chapter 19: Estimating and Scheduling Projects 307
Estimating Time and Cost 308
Compiling a list of tasks 308
Adding up the project costs 312
Timing: The critical path 314
Assigning tasks 319
Presenting the schedule 320
Working with Uncertainty 321
Estimating with ranges 321
Using historical data 321
Relying on expert knowledge 326
Putting It All Together 328
Avoiding the estimation dance 328
Accelerating the project 329
Chapter 20: Becoming Agile 331
Escaping the Waterfall 332
Deciding on Agile 333
Gearing Up for Agile 334
Sprinting through the Project 335
Planning the sprint 336
Standing up with scrum meetings 339
Rinsing, washing, and repeating 340
Avoiding Common Agile Mistakes 342
Starting without planning 343
Ignoring Waterfall skills 343
Combining Agile and Waterfall 344
Chapter 21: Responding to Risks That Threaten Your Project 345
Tracking Project Progress 346
Assessing earned value 346
Earning value over time 349
Monitoring the metrics: Who’s responsible? 351
Realizing your project’s in trouble 351
Planning Ahead with Risk Registers 354
Knowing what can go wrong 355
Prioritizing risks 356
Developing a contingency plan 358
Responding Productively to Risk 361
Staying productive: Parkinson’s Law 361
Recovering from delays: Brook’s Law and Homer’s Law 362
Delay the project 364
Sacrificing functionality 364
Part 6: The Part of Tens 365
Chapter 22: Ten Pivotal Operations Management Developments 367
Logistics 367
Division of Labor 368
Interchangeable Parts 368
Scientific Management and Mass Production 369
Statistical Quality Control 369
Lean Manufacturing 370
Scientific Project Planning 370
Supply Chain Management 371
Computerized Supply Chain Coordination 371
Electronic Commerce 372
Chapter 23: Ten Mistakes That New Operations Managers Make 373
Beginning an Improvement Journey without Knowing your Process 373
Creating Overly Complex Processes 374
Missing the Real Bottleneck 375
Managing Based on Utilization 375
Not Standardizing 375
Automating Bad Processes 376
Misdefining Quality 376
Improving Process through “Big Bangs” rather than Continuous Improvement 377
Not Doing Enough Project Planning Upfront 377
Not Focusing on the Customer 378
Chapter 24: Ten Traits of World-Class Operations 379
Knowing Thyself 379
Possessing Profound Knowledge of the Customer 380
Focusing Intensely on Quality 380
Adapting to Change 381
Getting Better All the Time 381
Appreciating Employees 381
Paying Constant Attention to Product Offerings 382
Using Relevant Process Metrics 382
Balancing Respect and Expectations for the Supply Chain 382
Avoiding Unnecessary Complexity 383
Index 385
