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 

Become a smooth operator A critical competency for any business, operations management is an increasingly popular field for business students and professionals who want to have an immediate impact on a company’s bottom line. And in Operations Management For Dummies, you’ll discover how firms actually get their products and services out the door. From forecasting demand to ensuring quality control, managing inventory, and sourcing supplies, this book walks you through how to keep a business humming and what to do when something goes wrong. Inside… Design the perfect processForecast demandPlan capacity and inventoryRely on Lean principlesConquer quality controlUnderstand the supply chainManage Agile projectsLearn digital operations technologies