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目 录

1.Introduction to Operations Management 2.Operations Strategy

3.StrategicDecisionCategoriesinOperationManagement

4.Operation Planning and Control

5.Operations Management Revisited

6.Tutorials

.......

SECTION ONE INTRODUCTION TO OPERATIONS MANAGEMENT

CHAPTER 1 Manufacturing Operations,

CHAPTER 2 Service Operations,

SECTION TWO OPERATIONS STRATEGY

CHAPTER 3 Operations Strategy,

SECTION THREE STRATEGIC DECISION CATEGORIES IN OPERATIONS MANAGEMENT

CHAPTER 4 Forecasting Demand for Products and Services,

CHAPTER 5 Product Planning and Process Design,

CHAPTER 6 Long-Range Capacity Planning and Facllity Location,

CHAPTER 7 Managing Quality,

CHAPTER 8 Technological Developments in Operations Management,

CHAPTER 9 Organization and Human Resources,

SECTION FOUR OPERATION PLANNING AND CONTROL

CHAPTER 10 Global Supply Chain Management,

CHAPTER 11 Aggregate Production Planning,

CHAPTER 12 Independent Demand Inventory Management,

CHAPTER 13 Dependent Demand Inventory Management: Material Requirements Planning,

CHAPTER 14 Medium- and Short-Range Capacity Planning,

CHAPTER15 Shop-Floor Control,

CHAPTER 16 Just-in-Time Production,

CHAPTER 17 Design and Scheduling ofService Systems,

CHAPTER18 Project Management,

CHAPTER 19 Quality Analysis, Measurement, and Improvement,

SECTION FIVE OPERATIONS STRATEGY REVISITED

CHAPTER 20 Building Competitive Advantage through World-Class

Manufacturing: Allen-Bradley's World Contactor Facility,

SECTION SIX TUTORIALS

TUTORIAL 1 The Transportation Problem,

TUTORIAL 2 Decision Analysis,

TUTORIAL 3 Linear Programming,

TUTORIAI4 Simulation,

TUTORIAL 5 Waitlng Line Models,

Appendix: Tables,

Glossary,

Index,

Acknowledgments,

Preface, xvi

SECTIONONE

Introduction to Operations Management

INTRODUCTION

A Preview of Operations

Management, 1

Strategic Operations Management, 3

Frederick Winslow Taylor,

Henry Ford,

Alfred P. Sloan, Jr,

The Field of Operations Management,

Recent Trends in Operations Management,

Just-in-Time Production,

Total Quality Management,

Computers and Computer-Related Operations

Technologies,

Time-Based Competition,

Business Process Reengineeimg,

The Service Factory,

Operations Management m Practice 1.3:

Reengineering at Ford Motor Co.,

Case Study:

Northem Telecom,

CHAPTER 1

Manufacturing Operations, 6

Introduction,

The Transformation Process, 7

Productivity and the Transformation Process,

Managing the Transformation Process: The

Operations Manager,

Operations Management in Practice 1.1:

Portrait of a Quality Manager at an Award-Wnning

Manufacturing, Company,

Ecologically Sound Manufacturing,

Operations Management in Practice 1.2:

Creen Manufacturing at ATQ'T,

Types of Manufacturing Operations,

Project Manufacturing,

The Job Shop,

Line-Flow Production,

Batch Production,

Hybrid Processes,

The Product-Process Matrix,

Company Activities and Strategic Advantage:

The Value Chain,

The History of Operations Management,

Eli Whitney,

CHAPTER 2

Service Operations,

Introduction,

Defining Services,

Comparing Service and Manufacturing

Operations,

Classifying Service and Manufacturing

Operations,

Characteristics of Service Uperations,

High Consumer Contact,

Consumer Participation in the Service Process,

Perishability of Services,

Site Selection Dictated by Consumer's

Location,

Labor Intensiveness,

Variable, Nonstandard Output,

Intangibility of the Service Output,

Difficulty of Measuring Service Productivity,

Operations Management in Practice 2.1:

Hotel Automation: Technology versus Personal

Service,

Difficulty of Measuring Service Quality,

Strategic Approaches to Service Operation

Management,

The Service-Process Matrix,

The Strategic Service Vision,

Service-Sector Trends,

Operations Management in Practice 2.2:

ServiceMaster-Stressing Dignity to Its Workers,

Increased International Competition in

Serv'ices,

Improving Productivity and Competitivenes in

Services,

Global Operations Management 2.3:

Clobal Consulting- Becoming More Competitive

in the World Economy,

Technology and Automation in Services,

Operations Management in Practice 2.4

On-Line Banking-Will It Finally Become

Reality?,

Adequacy of Service Jobs,

Operations Management in Practice 2.5:

J.C. Penney Riding the Third Wave of Information

Technology,

Greater Quality Emphasi in Services,

Case Study:

Wal-Mart versus Kmart: Diverging Paths,

SECTlON TWO

Operations Strategy

CHAPTER 3

Operations Strategy,

Introduction,

Business-Level Strategic Planning,

Functional Area Involvement in Business-Level

Strategic Planning,

The Generic Business Strategies,

Operations Management in Practice 3.1:

Strategic Positioning at Haskell of Pittsburgh,

Operations Strategic Planning,

Operations as a Competitive Weapon,

Operations Competitive Priorities,

Strategic Operations Choices,

Global Operations Management 3.2:

Comfietitive Priorities at Meiji Seika Kaisha

Ltd.,

Categories of Strategic Operations Decisions,

Product or Service Planning,

Process Design and Technology

Management,

Long-Range Capacity Planning and Facility

Location,

Quality Management,

Manufacturing or Service Organization,

Human Resource Management,

Operations Planning and Control,

Vertical Linkages: The Value Chain Revisited,

Vertical Integration and Outsourcing,

Supply Chain Management,

Assembler-Supplier Relationships in Japan,

Global Integration of Operations,

Clobal Operations Management 3.3:

Clobal Integrtion of Operations at Xerox,

Case Study:

Allen-Bradley,

SECTlON THREE

Strategic Decision Categories in Operations

Management

CHAPTER 4

Forecasting Demand for

Products and Services,

Introduction,

Characteristics of Demand,

Factors Influencing Demand,

Demand Components,

The Forecasting Process,

Establish Objectives for the Forecast,

Determine What to Forecast,

Specify the Time Period for the Forecast,

Gather and Analyze Data,

Select a Forecasting Method,

Make the Forecast,

Present the Forecast KesuIts,

Monitor and Control the Forecast,

Approaches to Forecasting-A Preview,

Qualitative Forecasting Methods,

Naive Extrapolation,

Sales Force Composite,

Jury of Executive Opinion,

The Delphi Method,

Clobal Operations Management 4.1:

ADelphi Study of Consumer Attitudes toward

Travel in Eastem European Countries,

Market Research Surveys,

Quantitative Forecasting Methods-Time Series

Analysis Models,

Operations Management in Practice 4.2:

Hewlett-Packard: Sales Forecasting in the Fast

Lane,

Time Series Smoothing,

Operations Management m Practice 4.3:

Improving Call Center Forecasting at L.L. Bean,

Inc.,

Time Series Decomposition,

Quantitative Forecasting Methods-Associative

Models,

Regression Models,

Operations Management in Practice 4.4:

Vsing Regression Analysis to Predict the Sales Price

ofan Apdartment Property,

Econometric Models,

Measuring Forecasting Error,

Absolute Measures of Forecasting Error,

Relative Measures of Forecasting Error,

Monitoring and Controlling Forecasts,

Using Computers in Forecasting,

Customer Satisfaction, 176

Selecting Features for Products and Services,

Customer-Driven New Product Ideas,

Quality Function Deployment,

From the House of Quality to Operation

Requirements,

Application of QFD to New Product Design,

Improving Designs through Simplification and

Value Analysis,

Design for Manufacturability,

Concurrent Engineering,

Implementing Cross-Functional leams in DFM,

Process Design and Layout for Manufacturing and

Service Systems,

Projects: Processes That Don't Flow,

Intermittent Flow Configurations,

Line-Flow Configurations,

CHAPTER S

Product Planning and Process

Design,

Introduction,

Assessing Customers' Needs and Wants,

Technology-Driven New Product Ideas,

New Product Ideas from Market Research,

Operations Management in Practice 5.1:

Where You Really 5Need to Hear Customers,

The Voice of the Customer,

Clobal Operations Management 5.2:

Opel Eisenach GMBH-Creating a

High-Productivity Workplace,

Cellular Manufacturing,

Production Line Approach to Service, .

Strategic Issues in Process Design,

Product and Process Innovation,

The Product-Process Matrix,

Designing for the Environment,

Operations Management in Practice 5.3:

Merck Fights to Keep Up the Production Pace,

Operations Management in Practice 5.4:

ISO 14000 Standards: Ready for Lamchmg,

Case Study:

Cellular Manufacturing at Electronic Hardware

Corporation,

CHAPTER 6

Long-Range Capacity Planning

and Facility Location,

Introduction,

An Overview of Capacity Planning,

The Importance of Capacity Planning,

Defining and Measuring Capacity,

Measuring System Effectiveness,

Focused Facilities,

Operations Management in Practice 6.1:

The Focused Factory-Another Concept for

Continuous Improvements in Manufacturing,

Capacity Strategies,

Capacity Cushions,

Strategic Timing of Capacity Changes,

Sizing Capacity Changes,

Operations Management in Practice 6.2:

High Volume Production-The Key to Success,

Making Capacity Planning Decisions,

Steps in the Capacity Planning Process,

Using Decision Trees in Capacity Planning,

Operatwns Management in Practice 6.3:

A Plant Conversion Solves a Plant Capacity

Problem,

An Overview of Location Decisions,

Why Location Decisions Are Important,

Location Options,

A General Approach to Making Location

Decisions,

Factors Affecting Location Decisions,

Regional, Community, and Site

Considerations,

Dominant Facility Location Factors in

Manufacturing,

Dominant Facility Location Factors in Services,

Operations Management m Practice 6.4:

The Charlotte Panthers Choose a Preseason

Training Facility,

Making the Single-Facility Locatioi

Decision,

Detailed Cost Analysis,

Factor Rating Systems,

Center of Gravity Method,

Locational Cost-Volume-Profit Analysis,

Making Multiple-Facility Location Decisions,

Plant Charters Approach,

Transportation Method,

Heuristics,

Simulation,

Optimization Methods,

Strategic Trends in Location Decisions,

Business Park Proliferation,

Operations Management in Practice 6.5:

Analyzing Altemative Locations and Service Areas

for the American Red Cross,

Factories: Research and Development

Linkages,

Globalization of Production,

The Sun Belt Phenomenon,

Global Operations Management 6.6;

NAFTA Opens a New World ofMarket

Opportunities,

Global Operations Management 6.7:

Why BMW Cmised into Spartanburg,

Case Study:

Georgia-Pacific Corp.,

Case Study:

Pohang Iron and Steel Co., Ltd.,

CHAPTER 7

Managing Quality,

Introduction,

Quality in Historical Perspective,

Quality Management as a Strategic Issue,

ISO9000 International Standards,

Operations Management in Practice 7.1:

The Ritz-Carlton Hotel Co.,

Role of Quality in Manufacturing Strategy,

Global Operations Management 7.2:

A Global Comparison ofQuality Ccpcbilities,

Malcolm Baldrige National Quality Award,

Operations Management in Practice 7.3:

1996 Baldrige Award Winners,

Quality Management Leadership,

W. Edwards Deming,

Joseph M. Juran,

Philip B. Crosby,

Definitions of Quality,

Quality as Excellence,

Quality as Conformance to Specifications,

Quality as Fitness for Use,

Quality as Value for the Price,

Quality-Related Product Characteristics,

Quality-Related Service Characteristics,

Costs of Quality,

Classifying the Costs of Quality,

Interaction of Quality Costs,

Total Quality Management,

TQM Requirements,

TQM Implementation Process,

Barriers to Implementing TQM,

Business Process Reengineering,

Operations Management in Practice 7.4;

Reengineering Taco Bell,

Case Study:

Laying the Groundwork for Total Quality,

CHAPTER 8

Technological Developments in

Operations Management,

Introduction,

Role of Technology in Today's Busines

Environment,

Technology and the Environment,

Technology-Focused Strategic Alliances,

Operations Management in Practice 8.1:

DuPont Generates Energy from Garbage,

Global Operatwns Management 8.2:

Japan Bids for Clobal Leadership m Clean

Industry,

Transferring New Technology from Concept to

Reality,

Implementing New Technology,

Fixed, Programmable, and Flexible Automation,

Computer-Integrated Manufacturing,

Computer-Aided Design,

Computer-Aided Manufacturing,

Technological Improvements for Support,

Artificial Intelligence: Adaptive Technology

for the '90s,

Virtual Reality,

Technological Improvements in

Communications,

Operations Management in Practice 8.3:

The Marvels of "Virtual Reality",

Global Operations Management 8.4:

Motorola Plans New Satellite Ventures,

Case Study:

Pavilion Technologies,

CHAPTER 9

Organization and Human

Resources,

Introduction,

Strategic Human Resources Planning,

Sociotechnical Organizations,

Adaptive Organizational Structures,

Keys to Worker Productivity,

Human Resources Issues ofthe 1990s

and Beyond,

Government Regulations,

Work Force Diversity,

Manager as Leader,

Participative Management,

Team Activities,

Operations Management in Practice 9.1:

Multidisciplinary Teams at Dettmers

Industries,

Fear in the Workplace,

Training and Development,

Benefits, Compensation, Recognition

and Reward,

Global Operations Management 9.2:

Preparing U.S. Managers for Work Abroad, 361

Operations Management in Practice 9.3:

Linking Customer Loyalty to Compensation

at Pizza Hut,

The Inevitability of Change, .

. /ork Measurement,

Time Studies,

Elemental Standard Times,

Predetermined Standard Times,

Learning Effects on Time Standard

Estimation,

The Learning Curve,

Uses of Learning Curve Concept,

SECTIONFOUR

Operation Planning and Control

CHAPTER 10

Global Supply Chain

Management,

Introduction,

Supply Chain Management for Strategic Advantage,

Traditional Logistics Management, '

Logistics System Components,

Logistics Component Integration

Logistical Elements,

Logistics Issues,

Purchasing,

Global Operations Management 10.1:

Ford Looks for a Few Cood Global Supphers,

Transportation,

Warehousing,

Customer Service,

Bridging the Gap to Supply Chain Management,

Operations Management in Practice 10.2:

At CAT, They're Driving Supplier Integration into

the Design Process,

Variability Along the Supply Chain,

Operations Management in Practice 10.3:

Enemies Make Creat Logistics Allies,

Role of Information Technology in SCM,

Third-Party Logistics Services,

Environmental Sensitivity Along the Supply

Chain,

Operations Management in Practice 10.4:

National Semiconductor Improws Supply

Chain,

Just-in-Time Logistics,

Summary ofAggregate Production-Planning

Methods,

Operations Management in Practice 11.2:

Meeting the Semiconductor Wafer Fabrication

Challenge Using Simulatwn,

Global Operatwns Management 11.3:

Integrated Production Planning for Poultry

Processing at Sadia Concordia SA,

Aggregate Planning in Service Companies,

Global Operations Management 11.4:

Aircraft Maintenance Personnel Plannmg at KLM

Royal Dutch Airlines,

Implementing Aggregate Production

Plans-Managerial Issues,

Hierarchical Production Planning,

Operations Management m Practice 11.5:

Improved Hierarchical Production Planning at

Owens-Coming Fiberglas,

CHAPTER 11

Aggregate Production

Planning,

Introduction,

The Concept ot Aggregation,

Products,

Labor,

Time,

An Overview of Production-Planning Activities,

Long-Range Planning,

Medium-Range Planning,

Short-Range Planning,

Framework for Aggregate Production Planning,

Operations Management in Practice 11.1:

New Software Systems Speed Up Production

Plannmg,

The Production-Planning Environment,

Strategies for Aggregate Production Planning,

Techniques for Aggregate Production Planning,

Trial-and-Error Method,

Mathematical Techniques,

CHAPTER 12

Independent Demand Inventory

Management,

Introduction,

Independent and Dependent Demand,

Basic Inventory Concepts,

Types of Inventories,

How to Measure Inventory,

Operations Management in Practice 12.1:

Increasing Profits by Squeezing Work-in-Process

Inventory,

Reasons for Holding Inventories,

Inventory Costs,

Operations Management m Practice 12.2:

Inventory Control-An Important Ingredient m

Wal-Mart's Recipe for Success,

Classifying Inventory Items,

Inventory Records,

Objectives of Inventory Oontrol,

Global Operations Management 12.3:

Beamscope Canada, Inc. Moves to the On-Line Age

in Inventory Control and Distribution,

How Much to Order: Economi Orde Quantity

Models,

Economic Order Quantity: Constant Demand,

No Shortages,

Economic Order Quantity: Constant Demand

Shortages Allowed,

Economic Order Quantity: Uniform

Replenishment Rate, Constant Demand

No Shortages,

Economic Order Quantitv: Quantity

Discounts,

Sensitivity Analysis for the EOQ Model,

When to Order: The Continuous Review

Svstem.

Determining the Reorder Point,

Operations Management in Practice 12.4:

Delivering the Hits at Musicland,

Service Levels, Safety Stock, and Shortagcs,

When to Order: The Periodic Review Svstem,

Comparing the Continuous Review and Periodic

Review Systcms,

Operations Management in Practlce 12.5:

Reducing Inventory and Improving Productivity at

Von Duprin, Inc.,

CHAPTER 13

Oependent Demand Inventory

Management: Material

Requirements Planning,

Introduction,

The Development of Material Requirements Planning

(MRP),

MRP Prerequisites,

Operations Management in Practice 13.1-

MRP at Steelcase,

The Master Production Schedule,

Bills of Material,

Inventory Records,

The MRP Process,

MRP Records,

Timing Conventions,

MRP Record Calculations,

An MRP Example,

Low-Level Coding,

Gross-to-Net Requirements Explosion,

Important Observations,

Loss of Visibility for Low-Level Components,

Minirnum Length for the Planning Horizon,

LIRP System Nervousness,

Freezing the Master Production Schedule,

Lumpiness of Demand,

Lot Sizing,

Lot-for-Lot,

Fixed Order Quantity,

Period Order Quantity

Lot Sizing and MRP System Nervousness,

The Importance of Lot Sizing,

Use of MRP Systems,

Some Practical Considerations in Using MRP,

Uncertainty,

Modular Bills of Material,

Closed Loop MRP,

MRP II-Manufacturing ResourcePlanning,

Implementation of MRP,

Existing Systems and the Informal System,

Information Requirements,

Inventory Control,

Operations Management in Practice 13.2:

MRP and the Real Cost of Inventory Losse

at Cendex,

Keys to Successful Implementation,

An MRP Implementation Plan,

Clobal Operations Management 13.3:

Implementing MRP II at the Raymond

Corporation,

Distribution Requirements Planning (DRP),

CHAPTER 14

Medium- and Short-Range

Capacity Planning,

Introduction,

The Need for Capacity Planning,

Strategic Implications of Capacity Planning,

Capacity Planning and the Production Planning

and Scheduling Framework,

Capacity Planning as a Trial-and-Error Piocess,

Operations Management in Practice 14.1-

Capacity Planning Makes the Shop Floor

Manageable at Minnesota Wire (5 Cable Co.,

A Capacity Planning Examplt

Rough-Cut Capacity Planning Methods,

Capacity Planning Using Overall Faclors

(CPOF),

Capacity Planning Using Capacity Bills (CB),

Capacity Planning Using Resource Profiles (RP),

Comparison of Rough-Cut Methods Results,

Detailed Capacity Planning,

Capacity Requirements Planning (CRP),

Using CRP,

Operations Management in Practice 14.2:

Capacity Planning in a Make-to-Order Environment

at Borsig Valve Co

Capacity Planning and Service Operations,

CHAPTER 15

Shop-Floor Control,

Introduction,

The Task of the Shop-Floor Control Manager,

Shop-Floor Control in Continuous and Repetitive

Operations,

Continuous Process Shop-Floor Control,

Repetitive Operation Shop-Floor Control,

Mixed-Model Assembly in Repetitive

Manufacturing,

Shop-Floor Control in Intermittent, Job Shop

Operations,

Terminology,

Performance Measures in Job Shop-Floo

Control,

Scheduling Intermittent Job Shop Processes,

Input-Output Control,

Order Review and Release,

Scheduling and Sequencing,

Gantt Chart Construction,

Johnson's Rule for Fixed Sequence, Two-Machine

Problems,

Data Collection and Order Disposition,

Operatwns Management in Practice 15.1:

Streamline Manufcacturing: Sun

Microsystems, Inc.,

Innovative Control: Theory of Constraints,

Operations Management in Practice 15.2:

Dixie Reengineers Scheduhng and Increases Profit

300 Percent,

CHAPTER 16

Just-in-Time Production,

Introduction,

Operations Management in Practice 16.1:

Labor Unrest and the JIT Production

Environment,

Strategic Effects of Just-in-Time Production,

Origins of JIT Philosophy,

Total Business Cycle Management,

Managing Material Flows,

Setup Reduction and the EOQ Lot Size,

Inventory Reduction Caution,

Just-in-Time System Requirements,

Production Flexibility Along the Supply Chain,

Schedule Stability and Discipline,

Clobal Operations Management 16.2:

Canadian Supplier Speeds Parts Delivery Across

the Border,

Comprehensive Quality Assurance,

Creating Teams of Competent, Empowerea

Employees,

JIT Systems and Signals,

Logistics Systems to Support JIT Delivery,

Implementation of Just-in-Time,

Operations Management in Practice 16.3:

Purchasing Leads the Charge Toward

Just-in-Time,

Coordinating JIT and Material Requirements

Planning,

Case Study:

Satum Corporation, Then and Now,

CHAPTER17

Design and Scheduling of Service

Systems,

Introduction,

The Evolution of the Service System,

Service Strategy,

The Service Package,

Strategic Approaches to Service System Design,

Production-Line Approach,

Operations Management in Practice 17.1;

SABRE-The Evolution ofanAirline Demand

Management System,

Global Operations Management 17,2:

McDonald's Invades the World,

Isolating the Technical Core Approach,

Consumer Participation Approach,

Strategies for Managing Service Demand,

Price Incentives,

Promoting Off-Peak Demand,

Partitioning Demand,

Inventorying Demand-Reservation Systems,

Inventorying Demand-Queueing Systems,

Developing Complementary Services,

Strategies for Controlling Service Supply,

Operations Management in Practice 17.3:

On-Line Grocery Shopping: Consumers Begin

to Take a Bite,

Daily Worlt Shift Scheduling,

Weekly Work Shift Scheduling,

Part-Time Staffing,

Cross-Training Employees,

Customer Self-Service,

Adjusting or Sharing Capacity,

Operations Management in Practice J17.4:

Restaurant Drive-Throughs Improve

Services,

Vehicle Routing,

The Clarke-Wright Savings Heuristic,

Case Study:

National Technological University,

CHAPTER18

Project Management,

Introduction,

Work Breakdown Structures (WBS),

Gantt Charts,

PERT and CPM,

Construction of a Project Network,

Calculating the Completion Time for a

Project,

Operations Management in Practice 18.1:

Project Management for Product Launch at

Oldsmobile,

Managing Project Resources,

Developing Project Budgets,

Monitoring and Controlling Project Costs,

Resource Limitations,

Time/Cost Trade-Offs in Project

Management,

PERT Networks and Uncertain Time

Estimates,

Operations Management in Practice 18.2:

Using Project Management Tools in Building

Construction at Michigan Stdte

University,

Guidelines for Managing Projects,

Operations Management m Practice 18.3:

Platform Teams in the U.S. Auto Industry,

Case Study:

The Hershey Foods Leaf Integration

Project,

CHAPTER 19

Quality Analysis, Measurement,

and Improvement,

Introduction,

Total Quality Management Implementation

Process,

Process Analysis for Continuous Improvement,

Process Improvement Model,

Benchmarking,

Data Collection, Analysis, and Presentation,

Operations Mangement in Practice 19.1:

Aerospace and Defense Contractors Use Strategic

Benchmarrking for Improvement,

Statistical Tools for Process Improvement,

Statistical Sampling and Control,

Sampling and the Central Limit Theorem,

Using Statistics to Test Inferences about Quality

Control,

Process Control Charts,

Control Limits Versus Specification Limits,

Acceptance Sampling,

SECTION FIVE

Operations Management Revisited

CHAPTER 20

Building Competitive Advantage

through World-Class

Manufacturing: Allen-Bradley's

WoHd Contactor Facility,

Introduction,

Allen-Bradley's World Contactors,

The World Contactor Facility,

Identifying Strategic Threats and Opportunities,

The Competitive Challenge,

Defining Competitive Advantage,

The Foundation for Success,

Building Competitive Advantage: Toward World-Clas

Manufacturing,

Cost,

Quality,

Flexibility and Lead 'I'imes,

Manufacturing Approaches, Methods and

Technologies,

Concurrent Engineering and the Team

Approach,

Computer-Integrated Manufacturing and the

Productivity Pyramid,

Bar Coding,

Total Quality Management,

Just-in-Time Manufacturing,

Human Resource Management,

World-Class Manufacturing at Allen-Bradley:

Outcomes and Benefits,

World-Class Manufacturing: A Synopsis,

SECTION SIX

Tutorials

TUTORIAL 1

The Transportation

Problem,

Introduction,

Mathematical Structure of the Transportation

Problem,

Solving the Transportation problem,

Finding an Initial Basic Feasible

Solution,

Example Tl.l,

Example T12,

Moving to an Optimal Solution: The

Stepping-Stone Method,

Example T1.3

Example Tl.4,

Special Situations,

Alternative Optirnal Solutions,

Unacceptable Transportation Routes,

Degeneracy,

Example Tl.5,

The Unbalanced Transportation Problem,

Example T1.6,

Changes in Transportation Costs,

Example Tl.7,

Example Tl.8,

Profit Maximization Transportation

Problems,

TUTORIAL 2

Decision Analysis,

Introduction,

Example T2.1,

Donninated Alternatives,

Decision Making under Uncertainty,

Optimistic (Maximax) Criterion,

Pessimistic (Maximin) Criterion,

Coefficient of Optimism (Hurwicz)

Criterion,

Equally Likely Criterion,

Minimax Regret Criterion,

Decision Making under Risk,

Expected Value Criterion,

Decision Trees,

Decision Making with Additional

Information,

Expected Value of Perfect Information,

Accuracy ofAdditional Information,

Bayes' Theorem,

Evaluating and Using Additional

Information,

TUTORIAL 3

Linear Programming,

Introduction,

Formulating a Linear Programming Model,

Exarnple T3.1,

Assumptions Used in Linear Programming,

Mathematical Structure of the Linear Programming

Model,

Graphical Solutions to Linear Programming

Problems,

Example T3.2,

Solving Linear Programming Problems Using the

Simplex Method,

Example T3.3,

Technical Steps in the Simplex Method,

Summary of the Steps in the Simplex Method:

Maximization Problems,

Shadow Prices,

Other Issues in Linear Programming,

Other Types of Constraints (_> and =),

Sensitivity Analysis,

TUTORIAL 4

Simulation,

lntroduction,

An Overview of Simulation,

Steps in a Simulation Stndy,

Simulating Exogenous Inputs,

Example T4.1,

Simulating the System,

Simulation Languages,

TUTORIAL 5

Waiting Line Models,

Introduction,

Structure ofWaiting Line Problems,

The Input Process,

The VVaiting Line (Queue),

The Service Facility,

Operating Characteristic of Waiting Line Models,

Notation Used for Waiting Line Models,

Data Collection and Model Validation,

Decision Variables in the Analysis of Waiting Lines,

The Single-Channel, Single-Phase Waiting Line

Model,

Application ot tne Single-Channel, Single-Phase

Waiting Line Model,

The Multiple-Channel, Single-Phase Waiting Line

Model,

Application ot the Multiple-Channel, Single-Phase

Waiting Line Model,

Other Waiting Line Models,

APPENDIX

Tables,

CLOSSARY,

INDEX,

ACKNOWLEDGMENTS,

Outputs of manufacturing operations are primarily physical goods but may

include such auxiliary services as rapid delivery, product installation, and repairs.

Outputs of service operations are primarily intangible but often include physical

goods that are prepared but not produced by the system, such as legal docu-

ments, tax returns, and restaurant food. Figure l.l illustrates the transformation

process.

Productivity and the Transformation Process

Productivity is the total value of the outputs (goods and/or services) produced

by the transformation process and divided by the total cost of the inputs (labor,

materials, equipment). The basic productivity equation is

Productivity = [Total Outputs] / [Total inputs]

Productivity can be increased in three ways:

By using the same amounts of inputs to produce more output

By using smaller amounts of inputs to produce the same amount of output

By using smaller amounts of inputs to produce more output

Fui example, by streamlining operations a company can increase its output us-

ing smaller amounts of inputs. The nation's railroads cut back from nearly

27,000 locomotives and 440,000 workers in [982 to 18,000 locomotives and

260,000 workers in 1992 and hauled almost 50 percent more freight. Or, by us-

ing better process technology, a company can generate more output using

the same levels of inputs. At the huge U.S. Steel works in Gary, Indiana, a re-

built strip mill rolls 6,000 tons of hot steel in an eight-hour shift; before mod-

ernization and a change in work practices, it produced only 4,000 tons in the

same time period.'

Productivity studies often focus on the productivity of the manufacturing sec-

tor. A recent study of cross-national productivity levels concluded that in most

Japan or Germany. The study showed U.S. workers to be more productive than

German workers in all industries investigated and more productive than the

Japanese in all but the machinery and equipment sector. In manufacturing gen-

erally, German and Japanese workers were found to produce at a rate 82 percent

of that of U.S. workers

A more common measure of cross-national trends in manufacturing produc-

tivity is the growth rate of productivity (the percentage of change in productivity

from one period to the next). This measure is related to the long-term prosperity

and wealth ofnations. Figure 1.2 depicts average annual changes in manufactur-

ing productivity for the United States, Japan, Germany, France, the United

Kingdom, and Italy for the period 1987-1991. The data suggest that since the

late 1980s U.S. manufacturing productivity has been growing roughly at the

same rate as that of the European countries although still more slowly than in

Japan. However, more recent data point to continued increases in the productiv-

ity of U.S. manufacturing3

In 1989 the Massachusetts Institute ofTechnology (MIT) Commission on

Industrial Productivity analyzed the competitiveness of U.S. companies in eight

industries. The commission observed that the United States had surrendered to

overseas competitors most, ifnot all, production ofcertain product groups (tele-

visions) and a large percentage of entire industries (consumer electronics and

machine tools) and that American industry showed worrisome signs of weakness.

Much of the evidence gathered by the MIT commission pointed to the manu-

facturing sector as the area in which the American advantage in cost and quality

had been most severely eroded.'4

2Bart van Ark and Dirk Pilat, "Cross Country Productivity Levels: Differences and

Causes" (paper presented at the Brookings Papers on Economic Activity-Microeconomics

[BPEA-MICRO] meeting, Brookings Institution, Washington, D.C., June 1993).

3Christopher Heye, "Five Years After: A Preliminary Assessment of U.S. Industrial

Performance Since Made In America," working paper No.93-009WP, Industrial

Performance Center, Massachusetts Institute of Technology, Boston (September 1993):

10-11.