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Welcome to

OPERATIONS MANAGEMENT

Operations Management is important, exciting, challenging, and everywhere your


look!
Important, because it’s concerned with creating all of the products and services upon
which we depend. Exciting, because it’s at the centre of so many of the changes affecting
the world of business. Challenging, because the solutions that we find need to work
globally and responsibly within society and the environment. And everywhere, because
every service and product that you use – the cereal you eat at breakfast, the chair you sit
on, and the radio station you listen to while you eat – is the result of an operation or
process.
Our aim in writing Operations Management is to give you a comprehensive understanding
of the issues and techniques of operations management, and to help you get a great final
result in your course. Here’s how you might make the most of the text:
● Get ahead with the latest developments – from the up-to-the-minute Operations in
practice features in every chapter to the focus on corporate social responsibility in the
final chapter – these put you at the cutting edge.
● Use the Worked examples and Problems and applications to improve your use of key
quantitative and qualitative techniques, and work your way to better grades in your
assignments and exams.
● Follow up on the recommended readings at the end of each chapter. They’re specially
selected to enhance your learning and give you an edge in your course work.
And in particular, look out for the references to
MyOMLab in the text, and log on to
www.myomlab.com* where you can
● check and reinforce your understanding of key concepts using self-assessment
questions, audio summaries, animations video clips and more;
● practice your problem-solving with feedback, guided solutions and a limitless supply of
questions!
We want Operations Management to give you what you need: a comprehensive view of the
subject, an ambition to put that into practice, and – of course – success in your
studies. So, read on and good luck!
Nigel Slack
Stuart Chambers
Robert Johnston

* P.S. In order to log in to MyOMLab, you’ll need to register with the access code included with all
new copies of the book.
Further reading in Operations Management

Take your study and interest in operations management further with these leading
textbooks written by the same team of expert authors.
OPERATIONS MANAGEMENT
Sixth Edition

Nigel Slack
Stuart Chambers
Robert Johnston
Pearson Education Limited
Edinburgh Gate
Harlow
Essex CM20 2JE
England
and Associated Companies throughout the world

Visit us on the World Wide Web at:


www.pearsoned.co.uk

First published under the Pitman Publishing imprint 1995


Second edition (Pitman Publishing) 1998
Third edition 2001
Fourth edition 2004
Fifth edition 2007
Sixth edition 2010

© Nigel Slack, Stuart Chambers, Christine Harland, Alan Harrison, Robert Johnston 1995, 1998
© Nigel Slack, Stuart Chambers, and Robert Johnston 2001, 2004, 2007, 2010

The rights of Nigel Slack, Stuart Chambers, and Robert Johnston to be identified as authors
of this work have been asserted by them in accordance with the Copyright, Designs and
Patents Act 1988.

All rights reserved. No part of this publication may be reproduced, stored in a retrieval
system, or transmitted in any form or by any means, electronic, mechanical, photocopying,
recording or otherwise, without either the prior written permission of the publisher or a
licence permitting restricted copying in the United Kingdom issued by the Copyright
Licensing Agency Ltd, Saffron House, 6–10 Kirby Street, London EC1N 8TS.

All trademarks used herein are the property of their respective owners. The use of any
trademark in this text does not vest in the author or publisher any trademark ownership
rights in such trademarks, nor does the use of such trademarks imply any affiliation with
or endorsement of this book by such owners.

ISBN: 978-0-273-73046-0

British Library Cataloguing-in-Publication Data


A catalogue record for this book is available from the British Library

Library of Congress Cataloging-in-Publication Data


Slack, Nigel.
Operations management / Nigel Slack, Stuart Chambers, Robert Johnston. – 6th ed.
p. cm.
ISBN 978-0-273-73046-0 (pbk.)
1. Production management. I. Chambers, Stuart. II. Johnston, Robert, 1953– III. Title.
TS155.S562 2010
658.5–dc22

10 9 8 7 6 5 4 3 2 1
14 13 12 11 10

Typeset in 10/12pt Minion by 35


Printed and bound by Rotolito Lombarda, Italy

The publisher’s policy is to use paper manufactured from sustainable forests.


Brief contents

Guide to ‘operations in practice’, Part Three


examples, short cases and PLANNING AND CONTROL 267
case studies xi
10 The nature of planning and control 268
Making the most of this book 11 Capacity planning and control 297
and MyOMLab xiv
Supplement to Chapter 11 – Analytical
Preface xviii queuing models 333
To the Instructor xx 12 Inventory planning and control 340
To the Student xxi 13 Supply chain planning and control 373
Ten steps to getting a better grade in 14 Enterprise resource planning (ERP) 406
operations management xxii Supplement to Chapter 14 – Materials
About the authors xxiii requirements planning (MRP) 422
15 Lean synchronization 429
Acknowledgements xxiv
16 Project planning and control 457
17 Quality management 495
Part One
INTRODUCTION 1 Supplement to Chapter 17 – Statistical
process control (SPC) 520
1 Operations management 2
2 Operations performance 32 Part Four
IMPROVEMENT 539
3 Operations strategy 60
18 Operations improvement 540
Part Two 19 Risk management 571
DESIGN 85 20 Organizing for improvement 601

4 Process design 86 Part Five


5 The design of products and services 112 CORPORATE SOCIAL
6 Supply network design 138 RESPONSIBILITY 631
Supplement to Chapter 6 – Forecasting 168 21 Operations and corporate social
responsibility (CSR) 632
7 Layout and flow 177
8 Process technology 206 Notes on chapters 652
9 People, jobs and organization 233 Glossary 658
Supplement to Chapter 9 – Work study 259 Index 670
Contents

Guide to ‘operations in practice’, examples, Problems and applications 58


short cases and case studies xi Selected further reading 59
Making the most of this book and MyOMLab xiv Useful web sites 59
Preface xviii
To the Instructor xx Chapter 3
To the Student xxi Operations strategy 60
Ten steps to getting a better grade in
Introduction 60
operations management xxii
What is strategy and what is operations strategy? 62
About the authors xxiii
The ‘top-down’ and ‘bottom-up’ perspectives 65
Acknowledgements xxiv
The market requirements and operations
resources perspectives 68
The process of operations strategy 75
Part One Summary answers to key questions 79
INTRODUCTION 1 Case study: Long Ridge Gliding Club 80
Problems and applications 81
Chapter 1 Selected further reading 82
Operations management 2 Useful web sites 82
Introduction 2
What is operations management? 4
Operations management is important in Part Two
all types of organization 6 DESIGN 85
The input–transformation–output process 11
The process hierarchy 15 Chapter 4
Operations processes have different Process design 86
characteristics 19 Introduction 86
The activities of operations management 23 What is process design? 87
Summary answers to key questions 25 What effects should process design have? 88
Case study: Design house partnerships at Process types – the volume–variety effect on
Concept Design Services 27 process design 91
Problems and applications 30 Detailed process design 96
Selected further reading 30 Summary answers to key questions 108
Useful web sites 31 Case study: The Central Evaluation Unit 109
Problems and applications 110
Chapter 2 Selected further reading 111
Operations performance 32 Useful web sites 111
Introduction 32
Operations performance is vital for any Chapter 5
organization 34 The design of products and services 112
The quality objective 40 Introduction 112
The speed objective 42 Why is good design so important? 114
The dependability objective 44 The benefits of interactive design 129
The flexibility objective 46 Summary answers to key questions 134
The cost objective 48 Case study: Chatsworth – the adventure
Trade-offs between performance objectives 54 playground decision 135
Summary answers to key questions 56 Problems and applications 136
Case study: Operations objectives at Selected further reading 137
the Penang Mutiara 57 Useful web sites 137
viii Contents

Chapter 6 Organization design 238


Supply network design 138 Job design 241
Introduction 138 Summary answers to key questions 255
The supply network perspective 140 Case study: Service Adhesives tries again 256
Configuring the supply network 142 Problems and applications 257
The location of capacity 146 Selected further reading 258
Long-term capacity management 155 Useful web sites 258
Summary answers to key questions 161 Supplement to Chapter 9
Case study: Disneyland Resort Paris (abridged) 162 Work study 259
Problems and applications 166
Selected further reading 167 Introduction 259
Useful web sites 167 Method study in job design 259
Work measurement in job design 262
Supplement to Chapter 6
Forecasting 168
Introduction 168 Part Three
Forecasting – knowing the options 168 PLANNING AND CONTROL 267
In essence forecasting is simple 169
Approaches to forecasting 170 Chapter 10
Selected further reading 176 The nature of planning and control 268
Introduction 268
Chapter 7 What is planning and control? 270
Layout and flow 177
Supply and demand affect planning and control 272
Introduction 177 Planning and control activities 277
What is layout? 179 Summary answers to key questions 293
The basic layout types 180 Case study: Air traffic control – a world-class
What type of layout should an operation juggling act 294
choose? 187 Problems and applications 295
Detailed design of the layout 189 Selected further reading 296
Summary answers to key questions 202 Useful web sites 296
Case study: Weldon Hand Tools 203
Problems and applications 204 Chapter 11
Selected further reading 205 Capacity planning and control 297
Useful web sites 205
Introduction 297
What is capacity management? 299
Chapter 8
Measuring demand and capacity 301
Process technology 206
The alternative capacity plans 309
Introduction 206 Choosing a capacity planning and control
What is process technology? 208 approach 317
Understanding process technologies 209 Capacity planning as a queuing problem 322
Evaluating process technologies 221 Summary answers to key questions 327
Implementing process technologies 227 Case study: Holly Farm 328
Summary answers to key questions 229 Problems and applications 331
Case study: Rochem Ltd 230 Selected further reading 332
Problems and applications 232 Useful web sites 332
Selected further reading 232
Useful web sites 232 Supplement to Chapter 11
Analytical queuing models 333
Chapter 9 Introduction 333
People, jobs and organization 233 Notation 333
Introduction 233 Variability 334
People in operations 235 Incorporating Little’s law 335
Human resource strategy 236 Types of queuing system 336
Contents ix

Chapter 12 Chapter 15
Inventory planning and control 340 Lean synchronization 429

Introduction 340 Introduction 429


What is inventory? 342 What is lean synchronization? 431
Why is inventory necessary? 342 Eliminate waste 435
Some disadvantages of holding inventory 345 Lean synchronization applied throughout
The volume decision – how much to order 346 the supply network 447
The timing decision – when to place an order 357 Lean synchronization and other approaches 449
Inventory analysis and control systems 362 Summary answers to key questions 452
Summary answers to key questions 368 Case study: Boys and Boden (B&B) 453
Case study: Trans-European Plastics 369 Problems and applications 455
Problems and applications 371 Selected further reading 456
Selected further reading 371 Useful web sites 456
Useful web sites 372
Chapter 16
Project planning and control 457
Chapter 13
Supply chain planning and control 373 Introduction 457
What is a project? 459
Introduction 373 Successful project management 461
What is supply chain management? 375 The project planning and control process 462
The activities of supply chain management 377 Network planning 475
Types of relationships in supply chains 386 Summary answers to key questions 487
Supply chain behaviour 391 Case study: United Photonics Malaysia Sdn Bhd 488
Supply chain improvement 394 Problems and applications 493
Summary answers to key questions 400 Selected further reading 494
Case study: Supplying fast fashion 401 Useful web sites 494
Problems and applications 404
Selected further reading 405 Chapter 17
Useful web sites 405 Quality management 495
Introduction 495
Chapter 14 What is quality and why is it so important? 497
Enterprise resource planning (ERP) 406 Diagnosing quality problems 501
Conformance to specification 502
Introduction 406
Total quality management (TQM) 508
What is ERP? 408
Summary answers to key questions 515
How did ERP develop? 408
Case study: Turnround at the Preston plant 516
Implementation of ERP systems 415
Problems and applications 518
Summary answers to key questions 417
Selected further reading 519
Case study: Psycho Sports Ltd 418
Useful web sites 519
Problems and applications 420
Selected further reading 421 Supplement to Chapter 17
Useful web sites 421 Statistical process control (SPC) 520
Introduction 520
Supplement to Chapter 14
Control charts 520
Materials requirements planning
Variation in process quality 521
(MRP) 422
Control charts for attributes 527
Introduction 422 Control chart for variables 528
Master production schedule 422 Process control, learning and knowledge 532
The bill of materials (BOM) 424 Acceptance sampling 533
Inventory records 425 Sampling plans 533
The MRP netting process 425 Summary 535
MRP capacity checks 428 Selected further reading 536
Summary 428 Useful web sites 536
x Contents

Chapter 20
Part Four
Organizing for improvement 601
IMPROVEMENT 539
Introduction 601
Why the improvement effort needs organizing 603
Chapter 18 Linking improvements to strategy 603
Operations improvement 540
Information for improvement 606
Introduction 540 Improvement priorities – what to start on? 612
Why improvement is so important 542 Improvement culture 617
Elements of improvement 542 Implementing improvement 620
Approaches to improvement 549 Summary answers to key questions 624
Improvement techniques 558 Case study: Re-inventing Singapore’s libraries 626
Summary answers to key questions 564 Problems and applications 628
Case study: Geneva Construction Selected further reading 628
and Risk 565 Useful web sites 629
Problems and applications 569
Selected further reading 570
Useful web sites 570 Part Five
CORPORATE SOCIAL RESPONSIBILITY 631
Chapter 19
Risk management 571 Chapter 21
Introduction 571 Operations and corporate social
What is risk management? 573 responsibility (CSR) 632
Assess the potential causes of and risks
Introduction 632
from failure 573
What is corporate social responsibility? 633
Preventing failure occurring 586
How does the wider view of corporate social
Mitigating the effects of failure 592
responsibility influence operations
Recovering from the effects of failure 593
management? 637
Summary answers to key questions 596
How can operations managers analyse CSR
Case study: The Chernobyl failure 597
issues? 646
Problems and applications 599
Summary answers to key questions 648
Selected further reading 600
Case study: CSR as it is presented 649
Useful web sites 600
Problems and applications 650
Selected further reading 651
Useful web sites 651

Notes on chapters 652


Glossary 658
Index 670
Guide to ‘operations in practice’, examples,
short cases and case studies

Chapter Location Company/example Region Sector/activity Company size


Chapter 1 p. 3 IKEA Global Retail Large
Operations p. 8 Acme Whistles UK Manufacturing Small
management p. 9 Oxfam Global Charity Large
p. 14 Prêt A Manger Europe/USA Retail Medium
p. 21 Formule 1 Europe Hospitality Large
p. 21 Mwagusi Safari Lodge Tanzania Hospitality Small
p. 27 Concept Design Services UK Design/manufacturing/ Medium
distribution
Chapter 2 p. 33 A tale of two terminals Dubai and UK Transport Large
Operations p. 41 Lower Hurst Farm UK Agricultural Small
performance p. 43 Accident recovery General Healthcare Medium
p. 44 Dabbawalas hit 99.9999% India General service Large
dependability
p. 47 BBC Global Media Large
p. 49 Aldi Europe Retail Large
p. 51 Hon Hai Precision Industry Taiwan/China Manufacturing Large
p. 57 Mutiara Beach Resort, Penang Malaysia Hospitality Medium
Chapter 3 p. 61 Two operations strategies: Global/Europe Manufacturing service/ Large
Operations Flextronics and Ryanair transport
strategy p. 68 Giordano Asia Retail Large
p. 74 Amazon what exactly is your Global Retail/business Large
core competence? services
p. 77 Sometimes any plan is better Europe Military Large
than no plan
p. 80 Long Ridge Gliding Club UK Sport Small
Chapter 4 p. 87 McDonalds USA Quick service Large
Process design p. 90 Daimler-Chrysler, Smart car France Auto manufacturing Large
p. 107 Heathrow UK Transport Large
p. 109 The Central Evaluation Unit Belgium Non-governmental Large
(European Union Directorate) organization
Chapter 5 p. 113 Airbus A380 Europe Aerospace Large
The design of p. 116 Dyson Global Design/manufacturing Large
products and p. 120 Square water melons Japan Retail/Agriculture Various
services p. 122 Daniel Hersheson UK Hairdressing Small
p. 125 Art Attack! UK Media Small
p. 135 Chatsworth House UK Tourism Medium
Chapter 6 p. 139 Dell Global Computer Large
Supply network manufacturing
design p. 145 Hon Hai, Quanta and Compal Taiwan Computer Large
manufacturing
p. 147 Tata Nano India Manufacturing Large
p. 149 Tesco Thailand Retail Large
p. 151 High-tech subcontracting India/China Research and Medium/large
development
p. 162 Disneyland Paris France Entertainment Large
xii Guide to ‘operations in practice’, examples, short cases and case studies

Chapter Location Company/example Region Sector/activity Company size


Chapter 7 p. 178 Tesco Global Retail Large
Layout and flow p. 180 Surgery UK Healthcare Medium
p. 185 Yamaha Japan Piano manufacturing Large
p. 186 Cadbury UK Entertainment and Large
manufacturing
p. 203 Weldon Hand Tools UK Manufacturing Large
Chapter 8 p. 207 Airlines All Airlines Large
Process p. 210 Robots All Security Various
technology p. 211 Yo! Sushi UK Restaurants Medium
p. 213 IBM USA Disaster recovery Large
p. 218 Farming Netherlands Agriculture Medium
p. 220 QB House Asia Hairdressing Medium
p. 224 SVT (Sveriges Television) Sweden Media Large
p. 230 Rochem Ltd UK Food processing Medium
Chapter 9 p. 234 W.L. Gore and Associates Global Manufacturing and Large
People, jobs research
and p. 237 Google Global e-services Large
organization p. 247 McDonalds UK Restaurants Large
p. 250 Lloyds TSB Europe Banking Large
p. 256 Service Adhesives Europe Manufacturing Large
Chapter 10 p. 269 BMW dealership UK Service and repair Medium
The nature of p. 273 Air France Global Airline Large
planning and p. 281 Accident and Emergency All Healthcare Large
control p. 286 Chicken salad sandwich All Food processing Large
(Part 1)
p. 292 Robert Wiseman Dairies UK Milk distribution Large
p. 294 Air traffic control All Air travel Medium
Chapter 11 p. 298 Britvic Europe Distribution Large
Capacity p. 304 Seasonal products and services All Various Various
planning p. 309 British Airways London Eye UK Tourism Medium
and control p. 310 Lettuce growing Europe Agriculture Large
p. 315 Seasonal products and services UK/Global Food processing/media Large
p. 317 Greetings cards All Design Large
p. 326 Madame Tussauds, Amsterdam Netherlands Tourism Medium
p. 328 Holly Farm UK Agriculture/ Small
entertainment
Chapter 12 p. 341 UK National Blood Service UK Healthcare Large
Inventory p. 348 Croft Port Europe Beverages Large
planning and p. 356 The Howard Smith Paper Group UK Distribution service Large
control p. 369 Trans-European Plastic France Manufacturing Large
Chapter 13 p. 374 Siemens Europe Service and Large
Supply chain manufacturing
planning and p. 379 Ford Motor Company Global Auto manufacturing Large
control p. 384 Levi Straus & Co Global Garment design/ Large
retailing
p. 385 TDG Europe Logistics services Large
p. 397 Northern Foods Europe Food services Large
p. 398 Seven-Eleven Japan Japan Retail Large
p. 401 H&M, Benetton and Zara Global Design/manufacturing/ Large
distribution/retail
Guide to ‘operations in practice’, examples, short cases and case studies xiii

Chapter Location Company/example Region Sector/activity Company size


Chapter 14 p. 407 Rolls Royce Global Aerospace Large
Enterprise p. 410 SAP Global IT services Large
Resource p. 411 Chicken salad sandwich All Food processing Small
Planning (Part 2)
p. 414 SAP Global IT services Large
p. 417 What a waste US Waste management Large
p. 418 Psycho Sports Ltd All Manufacturing Small
Chapter 15 p. 430 Toyota Motor Company Global Auto manufacturing Large
Lean p. 440 Hospitals UK Healthcare Medium/large
synchronization
Chapter 16 p. 458 The Millau Bridge France Construction Large
Project p. 465 The National Trust UK Heritage Various
planning p. 47 Access HK Hong Kong Charity Small
and control p. 488 United Photonics Malaysia Malaysia Research and Medium
Sdn Bhd development
Chapter 17 p. 496 Four Seasons Hotel Global/UK Hospitality Large
Quality p. 499 Tea and Sympathy USA Hospitality Small
management p. 500 Magic Moments UK Photography services Small
p. 505 Vitacress Europe Agriculture Large
p. 507 Surgical Statistics US Healthcare Various
p. 512 IBM Canada IT services Large
p. 516 Rendall Graphics Canada Manufacturing Medium
Chapter 18 p. 541 Heineken International (Part I) Netherlands Brewery Large
Improvement p. 548 Erdington UK Beverage Large
p. 556 Xchanging Europe Process outsourcing Large
p. 565 Geneva Construction and Europe Insurance Large
Risk (GCR)
Chapter 19 p. 572 Cadburys Salmonella outbreak Global Confectionary Large
Risk p. 575 Not what you want to hear USA Airline Large
management p. 577 Viruses, threats and 30 years Global Internet Various
of spam
p. 592 Otis Elevators Global Facilities services Large
p. 597 Chernobyl Ukraine Power generation Large
Chapter 20 p. 602 Taxing Quality Denmark Public service Large
Organizing for p. 620 Heineken International (Part II) Netherlands Brewery Large
improvement p. 622 Work-Out at GE Global Various ?Large
p. 626 Singapore Libraries Singapore ? ?
Chapter 21 p. 635 Ecological footprints All All All
Corporate p. 638 HP Recycling Program Global Manufacturing Large
social p. 642 The Gap between perception, Global Retail Large
responsibility reality and intention
(CSR) p. 649 CSR as it is presented Various Various Various
Making the most of this book and MyOMLab

Check your understanding


Each chapter opens with a set of Key questions to identify major topics. Summary answers conclude
the chapter. You can check your understanding of each chapter by taking the Sample tests of
self-assessment questions on MyOMLab at www.myomlab.com.

56 Part One Introduction

Chapter 2 Summary answers to key questions

Check and improve your understanding of this chapter using self assessment questions
Operations performance and a personalised study plan, audio and video downloads, and an eBook – all at
www.myomlab.com.

➤ Why is operations performance important in any organization?

■ Operations management can either ‘make or break’ any business. It is large and, in most busi-
Key questions Introduction nesses, represents the bulk of its assets, but also because the operations function gives the
➤ Why is operations performance Operations are judged by the way they perform. There are ability to compete by providing the ability to respond to customers and by developing the
important in any organization? capabilities that will keep it ahead of its competitors in the future.
many individuals and groups doing the judging and there
➤ How does the operations function are many different aspects of performance on which the
incorporate all stakeholders’
assessment is being made. The people doing the judging are
objectives? ➤ How does the operations function incorporate all stakeholders objectives?
called ‘stakeholders’ and the aspects of performance they
➤ What does top management expect
from the operations function? are using are called ‘performance objectives’. And if we want ■ At a strategic level, performance objectives relate to the interests of the operation’s stake-
to understand the strategic contribution of the operations
➤ What are the performance holders. They relate to the company’s responsibility to customers, suppliers, shareholders,
objectives of operations and function, it is important to understand how we can measure employees, and society in general.
what are the internal and external its performance. So this chapter starts by illustrating how
benefits which derive from excelling operations performance can impact on the success of the
in each of them? whole organization. Second, we look at various perspectives ➤ What does top management expect from the operations function?
➤ How do operations performance on, and aspects of performance. Finally, we examine how
objectives trade off against each performance objectives trade off against each other. On our ■ Operations can contribute to the organization as a whole by:
other? – reducing the costs
general model of operations management the topics covered in
– achieving customer satisfaction
this chapter are represented by the area marked on Figure 2.1.
– reducing the risk of operational failure
– reducing the amount of investment
– providing the basis for future innovation.

➤ What are the performance objectives of operations and what are the internal
and external benefits which derive from excelling in each of them?

■ By ‘doing things right’, operations seek to influence the quality of the company’s goods and
services. Externally, quality is an important aspect of customer satisfaction or dissatisfaction.
Internally, quality operations both reduce costs and increase dependability.
■ By ‘doing things fast’, operations seek to influence the speed with which goods and services
are delivered. Externally, speed is an important aspect of customer service. Internally, speed
both reduces inventories by decreasing internal throughput time and reduces risks by delaying
the commitment of resources.
■ By ‘doing things on time’, operations seek to influence the dependability of the delivery of goods
and services. Externally, dependability is an important aspect of customer service. Internally,
dependability within operations increases operational reliability, thus saving the time and money
Figure 2.1 This chapter examines operations performance
that would otherwise be taken up in solving reliability problems and also giving stability to the
operation.
■ By ‘changing what they do’, operations seek to influence the flexibility with which the company
produces goods and services. Externally, flexibility can:
– produce new products and services (product/service flexibility);
Check and improve your understanding of this chapter using self assessment
– produce a wide range or mix of products and services (mix flexibility);
questions and a personalised study plan, audio and video downloads, and an
eBook – all at www.myomlab.com. – produce different quantities or volumes of products and services (volume flexibility);
– produce products and services at different times (delivery flexibility).
Making the most of this book and MyOMLab xv

Practice makes perfect


Worked examples show how quantitative and qualitative techniques can be used in operations
management. Problems and applications at the end of the chapter allow you to apply these techniques,
and you can get more practice as well as guided solutions from the Study plan on MyOMLab at
www.myomlab.com.

306 Part Three Planning and control Chapter 11 Capacity planning and control 331

run continuously at its maximum rate. Different products will have different coating require-
ments, so the line will need to be stopped while it is changed over. Maintenance will need to Problems and applications
be performed on the line, which will take out further productive time. Technical scheduling
difficulties might mean further lost time. Not all of these losses are the operations manager’s
These problems and applications will help to improve your analysis of operations. You
fault; they have occurred because of the market and technical demands on the operation.
can find more practice problems as well as worked examples and guided solutions on
Effective capacity The actual capacity which remains, after such losses are accounted for, is called the effective
MyOMLab at www.myomlab.com.
capacity of operation. These causes of reduction in capacity will not be the only losses in
the operation. Such factors as quality problems, machine breakdowns, absenteeism and A local government office issues hunting licences. Demand for these licences is relatively slow in the first part
other avoidable problems will all take their toll. This means that the actual output of the line 1
of the year but then increases after the middle of the year before slowing down again towards the end of
will be even lower than the effective capacity. The ratio of the output actually achieved by the year. The department works a 220-day year on a 5-days-a-week basis. Between working days 0 and 100,
an operation to its design capacity, and the ratio of output to effective capacity are called, demand is 25 per cent of demand during the peak period which lasts between day 100 and day 150. After
Utilization respectively, the utilization and the efficiency of the plant: 150 demand reduces to about 12 per cent of the demand during the peak period. In total, the department
Efficiency processes 10,000 applications per year. The department has 2 permanent members of staff who are
actual output
Utilization = capable of processing 15 licence applications per day. If an untrained temporary member of staff can only
design capacity process 10 licences per day, how many temporary staff should the department recruit between days 100
actual output and 150?
Efficiency =
effective capacity
In the example above, if a new computer system is installed that allows experienced staff to increase their
2
work rate to 20 applications per day, and untrained staff to 15 applications per day, (a) does the department
still need 2 permanent staff, and (b) how many temporary members of staff will be needed between days 100
and 150?
Worked example
A field service organization repairs and maintains printing equipment for a large number of customers.
Suppose the photographic paper manufacturer has a coating line with a design capacity of 3
It offers one level of service to all its customers and employs 30 staff. The operation’s marketing vice-president
200 square metres per minute, and the line is operated on a 24-hour day, 7 days per week has decided that in future the company will offer 3 standards of service, platinum, gold and silver. It is
(168 hours per week) basis. estimated that platinum-service customers will require 50 per cent more time from the company’s field
Design capacity is 200 × 60 × 24 × 7 = 2.016 million square metres per week. The service engineers than the current service. The current service is to be called ‘the gold service’. The silver
records for a week’s production show the following lost production time: service is likely to require about 80 per cent of the time of the gold service. If future demand is estimated
to be 20 per cent platinum, 70 per cent gold and 10 per cent silver service, how many staff will be needed
1 Product changeovers (set-ups) 20 hrs to fulfil demand?
2 Regular preventative maintenance 16 hrs
3 No work scheduled 8 hrs Look again at the principles which govern customers’ perceptions of the queuing experience. For the following
4 Quality sampling checks 8 hrs 4
operations, apply the principles to minimize the perceived negative effects of queuing.
5 Shift change times 7 hrs
6 Maintenance breakdown 18 hrs (a) A cinema
7 Quality failure investigation 20 hrs (b) A doctor’s surgery
8 Coating material stockouts 8 hrs (c) Waiting to board an aircraft.
9 Labour shortages 6 hrs
10 Waiting for paper rolls 6 hrs
Consider how airlines cope with balancing capacity and demand. In particular, consider the role of yield
5
management. Do this by visiting the web site of a low-cost airline, and for a number of flights price the fare
During this week the actual output was only 582,000 square metres. that is being charged by the airline from tomorrow onwards. In other words, how much would it cost if you
The first five categories of lost production occur as a consequence of reasonably unavoid- needed to fly tomorrow, how much if you needed to fly next week, how much if you needed to fly in 2 weeks,
able, planned occurrences and amount to a total of 59 hours. The last five categories are etc. Plot the results for different flights and debate the findings.
unplanned, and avoidable, losses and amount to 58 hours.
Measured in hours of production. Calculate the overall equipment efficiency (OEE) of the following facilities by investigating their use.
6
Design capacity = 168 hours per week (a) A lecture theatre
(b) A cinema
Effective capacity = 168 − 59 = 109 hrs (c) A coffee machine
Actual output = 168 − 59 − 58 = 51 hrs Discuss whether it is worth trying to increase the OEE of these facilities and, if it is, how you would go
about it.
actual output 51 hrs
Utilization = = = 0.304(30%)
design capacity 168 hrs
actual output 51 hrs
Efficiency = = = 0.468(47%)
effective capacity 109 hrs
Making the most of this book and MyOMLab (continued)

Analyse operations in action


The Operations in practice and Case study features in each chapter illustrate and encourage you to
analyse operations management in action. You can see and hear more about how theory is applied in
practice in the animations and video clips in the Multimedia library in MyOMLab at www.myomlab.com.

298 Part Three Planning and control Chapter 1 Operations management 27

Operations in practice Britvic – delivering drinks to demand 1


Case study
Design house partnerships at Concept Design Services6
Britvic is amongst Europe’s leading soft-drink
manufacturers, a major player in a market consuming ‘I can’t believe how much we have changed in a relatively The move into ‘Concept’ products
nearly ten billion litres a year. Annually, Britvic bottles, short time. From being an inward-looking manufacturer, The move into higher-margin homeware had been master-
distributes and sells over 1 billion litres of ready-to-drink we became a customer-focused “design and make” minded by Linda Fleet, CDS’s Marketing Director, who
soft drinks in around 400 different flavours, shapes and operation. Now we are an integrated service provider. Most had previously worked for a large retail chain of paint
sizes, including brands such as Pepsi, Tango, Robinsons, of our new business comes from the partnerships and wallpaper retailers. ‘Experience in the decorative pro-
Aqua Libra, Purdey’s and J2O. Every year, Britvic we have formed with design houses. In effect, we design ducts industry had taught me the importance of fashion
produce enough cans of soft drinks to stretch three products jointly with specialist design houses that have and product development, even in mundane products such
times around the world, so it has to be a high-volume a well-known brand, and offer them a complete service as paint. Premium-priced colours and new textures would
and high-speed business. Its six UK factories contain of manufacturing and distribution. In many ways we are become popular for one or two years, supported by appro-
factory lines producing up to 1,500 cans a minute, with now a “business-to-business” company rather than a priate promotion and features in lifestyle magazines. The
distribution organized on a giant scale. At the centre of “business-to-consumer” company.’ (Jim Thompson, CEO, manufacturers and retailers who created and supported
Source: Wincanton

its distribution network is a National Distribution Centre Concept Design Services (CDS)) these products were dramatically more profitable than those
(NDC) located at Lutterworth, UK. It is designed to CDS had become one of Europe’s most profitable home- who simply provided standard ranges. Instinctively, I felt
operate 24 hours a day throughout the year, handling ware businesses. Originally founded in the 1960s, the com- that this must also apply to homeware. We decided to
up to 620 truckloads of soft drinks daily and, together pany had moved from making industrial mouldings, mainly develop a whole coordinated range of such items, and to
with a national network of 12 depots, it has to ensure in the aerospace sector, and some cheap ‘homeware’ items open up a new distribution network for them to serve up-
that 250,000 outlets in the UK receive their orders on customers (supermarkets). Given the lack of space such as buckets and dustpans, sold under the ‘Focus’ market stores, kitchen equipment and speciality retailers.
time. Designed and built in collaboration with Wincanton, in the High Bay, it is not possible to simply stock up brand name, to making very high-quality (expensive) stylish Within a year of launching our first new range of kitchen
a specialist supply chain solutions company, which for the busy periods, so flexibility and efficiency are homewares with a high ‘design value’. homeware under the “Concept” brand name, we had over
now manages Britvic’s NDC, it is capable of holding the keys to success. 3000 retail outlets signed up, provided with point-of-sale
up to 140 million cans in its 50,000-pallet ‘High Bay’ The NDC uses a number of methods to cope with display facilities. Press coverage generated an enormous
warehouse. All information, from initial order to final demand fluctuation. Most importantly is the use and interest which was reinforced by the product placement on
delivery, is held electronically. Loads are scanned at development of technology both within the NDC and out several TV cookery and “lifestyle” programmes. We soon
Britvic factories and fed into the ‘Business Planning in Britvic’s supply chain. High levels of throughput and developed an entirely new market and within two years
and Control System’ that creates a schedule of the ability to respond quickly to demand fluctuations “Concept” products were providing over 75 per cent of our
receipts. This information is then fed to the Warehouse depend on the use of integrated information technology revenue and 90 per cent of our profits. The price realiza-
Management System and when hauliers arrive at the linked to automated ‘High Bay’ handling technology. tion of Concept products is many times higher than for the
NDC, data are passed over to the Movement Control ‘Without the automation this plant simply couldn’t Focus range. To keep ahead we launched new ranges at
System that controls the retrieval of pallets from the function. You realize how much you need this system regular intervals.’
High Bay. when it breaks down! The other day, multiple errors
Over the year Britvic distribute over 100 million in the system meant that in the space of 6 hours The move to the design house partnerships
cases. However, the demand pattern for soft drinks is we went from being ahead to having 50 loads waiting to ‘Over the last four years, we have been designing, manu-
seasonal, with short-term changes caused by both be processed. That equates to 1,350 pallets or nearly facturing and distributing products for some of the more
weather and marketing campaigns. Furthermore, 4 million cans.’ prestigious design houses. This sort of business is likely
Britvic’s service policy of responding whenever Human resource management is also key in managing to grow, especially in Europe where the design houses
customers want them to deliver has a dramatic impact capacity. Every morning the shift manager receives appreciate our ability to offer a full service. We can design
on the NDC and its capacity planning. ‘Our busiest orders for the day, although further orders can be placed products in conjunction with their own design staff and
periods are during the summer and in the run-up to at any time during the day. The order information allows offer them a level of manufacturing expertise they can’t
Christmas, where we expect over 200 trailers in and the multi-skilled workforce to be allocated effectively. get elsewhere. More significantly, we can offer a distribu-
out each day – that equates to about 3 million cases The daily meetings also allow any problems to be tion service which is tailored to their needs. From the
per week. In the quiet periods, especially after addressed and dealt with before they become critical. customer’s point of view the distribution arrangements
Christmas, we have less than a million cases per week’ Finally, by outsourcing the NDC management to appear to belong to the design house itself. In fact they are
(Distribution Manager). Wincanton, the site is able to second employees from based exclusively on our own call centre, warehouse and
Not only is demand on the NDC seasonal in a other Wincanton-owned sites when demand is high. distribution resources.’
Source: Alamy/Adrian Sherratt

general sense, it can vary from 2,000 pallets one day, ‘Our other sites around the country have different peaks The most successful collaboration was with Villessi, the
to 6,000 the next, as a result of short-term weather and troughs throughout the year which helps us utilize Italian designers. Generally it was CDS’s design expertise
patterns and variable order patterns from large employee numbers.’ which was attractive to ‘design house’ partners. Not only
did CDS employ professionally respected designers, they
had also acquired a reputation for being able to translate
difficult technical designs into manufacturable and saleable ➔
Making the most of this book and MyOMLab xvii

Take a different view


Critical commentaries, together with Further reading and Useful websites at the end of each chapter,
show a diversity of viewpoint and encourage you to think critically about operations management.
You can find the Useful websites in the Multimedia library of MyOMLab at www.myomlab.com.

Chapter 10 The nature of planning and control 291 Chapter 6 Supply network design 167

A private health-care clinic has been offered a leasing deal where it could lease a CAT scanner at a fixed
4
charge of A2,000 per month and a charge per patient of A6 per patient scanned. The clinic currently charges
A10 per patient for taking a scan. (a) At what level of demand (in number of patients per week) will the clinic
break even on the cost of leasing the CAT scan? (b) Would a revised lease that stipulated a fixed cost of
A3,000 per week and a variable cost of A0.2 per patient be a better deal?

Visit sites on the Internet that offer (legal) downloadable music using MP3 or other compression formats.
5
Consider the music business supply chain, (a) for the recordings of a well-known popular music artist, and
(b) for a less well-known (or even largely unknown) artist struggling to gain recognition. How might the
transmission of music over the Internet affect each of these artists’ sales? What implications does electronic
Figure 10.16 The drum, buffer, rope concept music transmission have for record shops?

Visit the web sites of companies that are in the paper manufacturing/pulp production/packaging industries.
Therefore, some form of communication between the bottleneck and the input to the process 6
Assess the extent to which the companies you have investigated are vertically integrated in the paper supply
is needed to make sure that activities before the bottleneck do not overproduce. This is called chain that stretches from foresting through to the production of packaging materials.
the rope (see Figure 10.16).

Critical commentary Selected further reading


Most of the perspectives on control taken in this chapter are simplifications of a far more
messy reality. They are based on models used to understand mechanical systems such as Carmel, E. and Tjia, P. (2005) Offshoring Information London. Michael Dell explains how his supply network
car engines. But anyone who has worked in real organizations knows that organizations Technology: Sourcing and Outsourcing to a Global Workforce, strategy (and other decisions) had such an impact on the
are not machines. They are social systems, full of complex and ambiguous interactions. Cambridge University Press, Cambridge. An academic book industry. Interesting and readable, but not a critical analysis!
Simple models such as these assume that operations objectives are always clear and on outsourcing. Schniederjans, M.J. (1998) International Facility Location
agreed, yet organizations are political entities where different and often conflicting objectives
Chopra, S. and Meindl, P. (2001) Supply Chain Management: and Acquisition Analysis, Quorum Books, New York. Very
Strategy, Planning and Operations, Prentice Hall, Upper much one for the technically minded.
compete. Local government operations, for example, are overtly political. Furthermore,
Saddle River, NJ. A good textbook that covers both strategic Vashistha, A. and Vashistha, A. (2006) The Offshore Nation:
the outputs from operations are not always easily measured. A university may be able to
and operations issues. Strategies for Success in Global Outsourcing and Offshoring,
measure the number and qualifications of its students, for example, but it cannot measure
Dell, M. (with Catherine Fredman) (1999) Direct from Dell: McGraw-Hill Higher Education. Another topical book on
the full impact of its education on their future happiness. Also, even if it is possible to
Strategies that Revolutionized an Industry, Harper Business outsourcing.
work out an appropriate intervention to bring an operation back into ‘control’, most
operations cannot perfectly predict what effect the intervention will have. Even the largest
of burger bar chains does not know exactly how a new shift allocation system will affect
performance. Also, some operations never do the same thing more than once anyway. Useful web sites
Most of the work done by construction operations is one-offs. If every output is different,
how can ‘controllers’ ever know what is supposed to happen? Their plans themselves are www.locationstrategies.com Exactly what the title implies. www.opsman.org Lots of useful stuff.
mere speculation. Good industry discussion. www.outsourcing.com Site of the Institute of Outsourcing.
www.cpmway.com American location selection site. You can Some good case studies and some interesting reports, news
get a flavour of how location decisions are made. items, etc.
www.transparency.org A leading site for international busi- www.bath.ac.uk/crisps A centre for research in strategic pur-
The degree of difficulty in controlling operations ness (including location) that fights corruption. chasing and supply with some interesting papers.
The simple monitoring control model in Figure 10.15 helps us to understand the basic func- www.intel.com More details on Intel’s ‘Copy Exactly’ strategy
tions of the monitoring and control activity. But, as the critical commentary box says, it is and other capacity strategy issues.
a simplification. Some simple technology-dominated processes may approximate to it, but
many other operations do not. In fact, the specific criticisms cited in the critical commentary Now that you have finished reading this chapter, why not visit MyOMLab at
box provide a useful set of questions which can be used to assess the degree of difficulty www.myomlab.com where you’ll find more learning resources to help you
associated with control of any operation:9 make the most of your studies and get a better grade?
● Is there consensus over what the operation’s objectives should be?
● How well can the output from the operation be measured?
● Are the effects of interventions into the operation predictable?
● Are the operation’s activities largely repetitive?
Figure 10.17 illustrates how these four questions can form dimensions of ‘controllability’.
It shows three different operations. The food processing operation is relatively straightforward
to control, while the child care service is particularly difficult. The tax advice service is some-
where in between.
Preface

Introduction ● Strategic in its perspective. It is unambiguous in


treating the operations function as being central to
Operations management is important. It is concerned competitiveness.
with creating the services and products upon which we ● Conceptual in the way it explains the reasons why
all depend. And all organizations produce some mixture operations managers need to take decisions.
of services and products, whether that organization is ● Comprehensive in its coverage of the significant ideas
large or small, manufacturing or service, for profit or and issues which are relevant to most types of
not for profit, public or private. Thankfully, most com- operation.
panies have now come to understand the importance ● Practical in that the issues and challenges of making
of operations. This is because they have realized that operations management decisions in practice are
effective operations management gives the potential to discussed. The ‘Operations in practice’ feature, which
improve both efficiency and customer service simulta- starts every chapter, the short cases that appear
neously. But more than this, operations management is through the chapters, and the case studies at the end
everywhere, it is not confined to the operations function. of each chapter, all explore the approaches taken
All managers, whether they are called Operations or by operations managers in practice.
Marketing or Human Resources or Finance, or what- ● International in the examples which are used. There
ever, manage processes and serve customers (internal are over 120 descriptions of operations practice from
or external). This makes, at least part of their activities all over the world.
‘operations’. ● Balanced in its treatment. This means we reflect the
Operations management is also exciting. It is at the balance of economic activity between service and
centre of so many of the changes affecting the business manufacturing operations. Around seventy-five per
world – changes in customer preference, changes in cent of examples are from service organizations and
supply networks brought about by internet-based twenty-five percent from manufacturing.
technologies, changes in what we want to do at work,
how we want to work, where we want to work, and
so on. There has rarely been a time when operations Who should use this book?
management was more topical or more at the heart of Anyone who is interested in how services and products
business and cultural shifts. are created.
Operations management is also challenging. Promot-
ing the creativity which will allow organizations to ● Undergraduates on business studies, technical or
respond to so many changes is becoming the prime joint degrees should find it sufficiently structured to
task of operations managers. It is they who must find provide an understandable route through the subject
the solutions to technological and environmental (no prior knowledge of the area is assumed).
challenges, the pressures to be socially responsible, the ● MBA students should find that its practical discus-
increasing globalization of markets and the difficult-to- sions of operations management activities enhance
define areas of knowledge management. their own experience.
● Postgraduate students on other specialist masters
degrees should find that it provides them with a well-
The aim of this book grounded and, at times, critical approach to the subject.
This book provides a clear, authoritative, well structured
and interesting treatment of operations management as Distinctive features
it applies to a variety of businesses and organizations.
The text provides both a logical path through the activ- Clear structure
ities of operations management and an understanding The structure of the book uses a model of operations
of their strategic context. management which distinguishes between design, plan-
More specifically, this text is: ning and control, and improvement.
Preface xix

Illustrations-based Case studies


Operations management is a practical subject and cannot Every chapter includes a case study suitable for class
be taught satisfactorily in a purely theoretical manner. discussion. The cases are usually short enough to serve
Because of this we have used examples and ‘boxed’ short as illustrations, but have sufficient content also to serve
cases which explain some issues faced by real operations. as the basis of case sessions.

Worked examples Problems and applications


Operations management is a subject that blends qualit- Every chapter includes a set of problem type exercises.
ative and quantitative perspectives; ‘worked examples’ These can be used to check out your understanding
are used to demonstrate how both types of technique of the concepts illustrated in the worked examples.
can be used. There are also activities that support the learning
objectives of the chapter that can be done individually
Critical commentaries or in groups.
Not everyone agrees about what is the best approach
to the various topics and issues with operations man- Selected further reading
agement. This is why we have included ‘critical com- Every chapter ends with a short list of further reading
mentaries’ that pose alternative views to the one being which takes the topics covered in the chapter further, or
expressed in the main flow of the text. treats some important related issues. The nature of each
further reading is also explained.
Summary answers to key questions
Each chapter is summarized in the form of a list of bullet Useful websites
points. These extract the essential points which answer A short list of web addresses is included in each chapter
the key question posed at the beginning of each chapter. for those who wish to take their studies further.
To the Instructor …
Teaching and learning resources for the 6th edition
New for the sixth edition ● The ‘Problems’ and ‘Study activities’ sections have
been merged. This makes each chapter more
We have a regular opportunity to listen to the views of
compact.
users of the book and are always keen to receive feedback.
● The book has been visually redesigned to aid
Our research for the 6th edition resulted in maintaining
learning.
the successful structure of previous editions and incorp-
orating the following key changes:
Instructor’s resources
● An even greater emphasis has been placed on the idea
of ‘process management’, making the subject more A completely new instructor’s manual is available to
relevant to every functional areas of the organization. lecturers adopting this textbook, together with
● A whole new chapter on Corporate Social Respons- PowerPoint presentations for each chapter and a
ibility (CSR) has been added, and reflects a greater Testbank of assessment questions. Visit www.
emphasis on this issue throughout the book. pearsoned.co.uk/slack to access these.
● The ‘Operations in Practice’ sections that are used to In addition a new Operations in Practice DVD is
introduce the topic at the beginning of each chapter now available. Please contact your local Pearson
have been refreshed. Education Sales Consultant (www.pearsoned.co.uk/
● The Worked examples have been extended to provide replocator) for further details and to request a copy.
a better balance between qualitative and quantitative- Finally, and most importantly, a new set of online
based techniques. resources to enable students to check their understand-
● Many of the cases at the end of the chapter and short ing, practice key techniques and improve their problem-
cases are new (but the old ones are still available on solving skills now accompanies the book. Please see
the web site), and provide an up-to-date selection of below for details of MyOMLab.
operations issues.

The key to greater understanding and better grades in Operations Management!


MyOMLab for instructors
MyOMLab is designed to save you time in preparing and delivering assignments and assessments for your
course, and to enable your students to study independently and at their own pace. Using MyOMLab, you
can take advantage of:
● A wide range of engaging resources, including video, powerpoint slides and animated models with audio
commentary.
● Hundreds of self-assessment questions, including algorithmically-generated quantitative values which
make for a different problem every time.
● A Homework feature, allowing you to assign work for your students to prepare for your next class or
seminar.
● A Gradebook which tracks students' performance on sample tests as well as assessments of your own
design.
If you'd like to learn more or find out how MyOMLab could help you, please contact your local Pearson
sales consultant at www.pearsoned.co.uk/replocator or visit www.myomlab.com.
To the Student . . .
Making the most of this book
All academic textbooks in business management are, to ations management decisions and activities in newspapers
some extent, simplifications of the messy reality which and magazines. There are also examples which you can
is actual organizational life. Any book has to separate observe every day. Whenever you use a shop, eat a meal
topics, in order to study them, which in reality are in a restaurant, borrow a book from the library or ride
closely related. For example, technology choice impacts on public transport, consider the operations management
on job design which in turn impacts on quality control; issues of all the operations for which you are a customer.
yet we have treated these topics individually. The first The case exercises and study activities are there to
hint therefore in using this book effectively is to look out provide an opportunity for you to think further about
for all the links between the individual topics. Similarly the ideas discussed in the chapters. Study activities can
with the sequence of topics, although the chapters be used to test out your understanding of the specific
follow a logical structure, they need not be studied in points and issues discussed in the chapter and discuss
this order. Every chapter is, more or less, self-contained. them as a group, if you choose. If you cannot answer
Therefore study the chapters in whatever sequence is these you should revisit the relevant parts of the chapter.
appropriate to your course or your individual interests. The case exercises at the end of each chapter will require
But because each part has an introductory chapter, some more thought. Use the questions at the end of each
those students who wish to start with a brief ‘overview’ case exercise to guide you through the logic of analysing
of the subject may wish first to study Chapters 1, 4, 10 the issue treated in the case. When you have done this
and 18 and the chapter summaries of selected chapters. individually try to discuss your analysis with other course
The same applies to revision – study the introductory members. Most important of all, every time you analyse
chapters and summary answers to key questions. one of the case exercises (or any other case or example
The book makes full use of the many practical exam- in operations management) start off your analysis with
ples and illustrations which can be found in all opera- the two fundamental questions:
tions. Many of these were provided by our contacts in
companies, but many also come from journals, mag- ● How is this organization trying to compete (or satisfy
azines and newspapers. So if you want to understand its strategic objectives if a not-for-profit organization)?,
the importance of operations management in everyday ● What can the operation do to help the organization
business life look for examples and illustrations of oper- compete more effectively?

The key to greater understanding and better grades in Operations Management!


MyOMLab for students
MyOMLab has been developed to help students make the most of their studies in operations management.
Visit the MyOMLab at www.myomlab.com to find valuable teaching and learning material including:
● Self-assessment questions and a personalized Study Plan to diagnose areas of strength and weakness,
direct students’ learning, and improve results.
● Unlimited practice on quantitative techniques and solving problems.
● Audio downloads, animated models and electronic flashcards to aid exam revision.
● Video clips and short cases to illustrate operations management in action.
Ten steps to getting a better grade in
operations management
I could say that the best rule for getting a better grade is Use the videos on MyOMLab to look further at
to be good. I mean really, really good! But, there are operations in practice.
plenty of us who, while fairly good, don’t get as good a
grade as we really deserve. So, if you are studying oper- Step 7 Always answer the question. Think ‘What is
ations management, and you want a really good grade, really being asked here? What topic or topics does this
try following these simple steps: question cover?’ Find the relevant chapter or chapters,
and search the Key questions at the beginning of each
Step 1 Practice, practice, practice. Use the Key questions chapter and the Summary at the end of each chapter to
and the Problems and applications to check your under- get you started.
standing. Use the Study plan feature in MyOMLab and
practice to master the topics which you find difficult. Step 8 Take account of the three tiers of accumulating
marks for your answers.
Step 2 Remember a few key models, and apply them
(a) First, demonstrate your knowledge and under-
wherever you can. Use the diagrams and models to
standing. Make full use of the text and MyOMLab
describe some of the examples that are contained within
to find out where you need to improve.
the chapter. You can also use the revision pod casts on
(b) Second, show that you know how to illustrate and
MyOMLab.
apply the topic. The Short cases, Case studies and
‘Operations in practice’ sections, combined with
Step 3 Remember to use both quantitative and qualitative
those on MyOMLab, give you hundreds of different
analysis. You’ll get more credit for appropriately mix-
examples.
ing your methods: use a quantitative model to answer a
(c) Third, show that you can discuss and analyse the
quantitative question and vice versa, but qualify this
issues critically. Use the Critical commentaries
with a few well chosen sentences. Both the chapters of
within the text to understand some of the alterna-
the book, and the exercises on MyOMLab, incorporate
tive viewpoints.
qualitative and quantitative material.
Generally, if you can do (a) you will pass; if you can do
Step 4 There’s always a strategic objective behind any (a) and (b) you will pass well, and if you can do all
operational issue. Ask yourself, ‘Would a similar oper- three, you will pass with flying colours!
ation with a different strategy do things differently?’
Look at the Short cases, Case studies, and Operations in Step 9 Remember not only what the issue is about, but
practice pieces in the book. also understand why! Read the text and apply your
knowledge on MyOMLab until you really understand
Step 5 Research widely around the topic. Use websites why the concepts and techniques of operations man-
that you trust – we’ve listed some good websites at the agement are important, and what they contribute to an
end of each chapter and on MyOMLab. You’ll get more organisation’s success. Your new-found knowledge will
credit for using references that come from genuine stick in your memory, allow you to develop ideas, and
academic sources. enable you to get better grades.

Step 6 Use your own experience. Every day, you’re Step 10 Start now! Don’t wait until two weeks before an
experiencing an opportunity to apply the principles assignment is due. Log on (www.myomlab.com), read
of operations management. Why is the queue at the on, and GOOD LUCK!
airport check-in desk so long? What goes on behind
the ‘hole in the wall’ of your bank’s ATM machines? Nigel Slack
About the authors

Nigel Slack is the Professor of Operations Management Rolls Royce Aerospace, graduating in mechanical engi-
and Strategy at Warwick University. Previously he has neering, and then worked in production and general
been Professor of Service Engineering at Cambridge management with companies including Tube Invest-
University, Professor of Manufacturing Strategy at Brunel ments and the Marley Tile Company. In his mid-thirties
University, a University Lecturer in Management Studies and seeking a career change, he studied for an MBA, and
at Oxford University and Fellow in Operations Manage- then took up a three-year contract as a researcher in
ment at Templeton College, Oxford. manufacturing strategy. This work enabled him to help
He worked initially as an industrial apprentice in the executives develop the analyses, concepts and practical
hand-tool industry and then as a production engineer solutions required for them to develop manufacturing
and production manager in light engineering. He holds strategies. Several of the case studies prepared from this
a Bachelor’s degree in Engineering and Master’s and work have been published in an American textbook
Doctor’s degrees in Management, and is a chartered on manufacturing strategy. In addition to lecturing on
engineer. He is the author of many books and papers in a range of operations courses at the Business School
the operations management area, including The Manu- and in industry, he undertakes consultancy in a diverse
facturing Advantage, published by Mercury Business range of industries and is co-author of several operations
Books, 1991, and Making Management Decisions (with management books.
Steve Cooke), 1991, published by Prentice Hall, Service
Superiority (with Robert Johnston), published in 1993 Robert Johnston is Professor of Operations Manage-
by EUROMA and Cases in Operations Management (with ment at Warwick Business School and its Deputy Dean.
Robert Johnston, Alan Harrison, Stuart Chambers and He is the founding editor of the International Journal
Christine Harland) third edition published by Financial of Service Industry Management and he also serves on
Times Prentice Hall in 2003, The Blackwell Encyclopedic the editorial board of the Journal of Operations Man-
Dictionary of Operations Management (with Michael agement and the International Journal of Tourism and
Lewis) published by Blackwell in 2005, Operations Hospitality Research. He is the author of the market
Strategy together with Michael Lewis, the second edition leading text, Service Operations Management (with
published by Financial Times Prentice Hall in 2008 and Graham Clark), now in its 3rd edition (2008), published
Perspectives in Operations Management (Volumes I to by Financial Times Prentice Hall. Before moving to
IV) also with Michael Lewis, published by Routledge academia Dr Johnston held several line management
in 2003. He has authored numerous academic papers and senior management posts in a number of service
and chapters in books. He also acts as a consultant to organizations in both the public and private sectors.
many international companies around the world in many He continues to maintain close and active links with
sectors, especially financial services, transport, leisure many large and small organizations through his research,
and manufacturing. His research is in the operations and management training and consultancy activities. As a
manufacturing flexibility and operations strategy areas. specialist in service operations, his research interests
include service design, service recovery, performance
Stuart Chambers is a Principle Teaching Fellow at measurement and service quality. He is the author or
Warwick Business School, where he has been since 1988. co-author of many books, as well as chapters in other
He began his career as an undergraduate apprentice at texts, numerous papers and case studies.
Acknowledgements

During the preparation of the fifth edition of this book, Sohal of Monash University, Alex Skedd of Northumbria
the authors conducted a number of ‘faculty workshops’ Business School, Martin Spring of Lancaster University,
and the many useful comments from these sessions have Dr Ebrahim Soltani of the University of Kent, R. Stratton
influenced this and the other books for the ‘Warwick of Nottingham Trent University, Dr Nelson Tang of the
group’. Our thanks go to everyone who attended these University of Leicester, David Twigg of Sussex Univer-
sessions and other colleagues. We thank Pär Åhlström of sity, Helen Valentine of the University of the West of
Stockholm School of Economics and Alistair Brandon- England, Professor Roland van Dierdonck of the Univer-
Jones of Bath University for assistance well beyond the sity of Ghent, Dirk Pieter van Donk of the University of
call of duty, Alan Betts of ht2.org for case writing help Groningen and Peter Worthington.
and support, and Shirley Johnston for case writing help Our academic colleagues in the Operations Manage-
and support. Also, Professor Sven Åke Hörte of Lulea ment Group at Warwick Business School also helped,
University of Technology, Eamonn Ambrose of Univer- both by contributing ideas and by creating a lively and
sity College, Dublin, Colin Armistead of Bournemouth stimulating work environment. Our thanks go to Jannis
University, Ran Bhamra, Loughbrough University, Ruth Angelis, Nicola Burgess, Dan Chicksand, Michaelis
Boaden of Manchester Business School, Peter Burcher of Giannakis, Zoe Radnor, Michael Shulver, Rhian
Aston University, John K Christiansen of Copenhagen Silvestro, Nick Wake, Dick Wheeler, Helen Walker,
Business School, Philippa Collins of Heriot-Watt Univer- and Paul Walley. We are also grateful to many friends,
sity, Henrique Correa of Rollins College, Florida, Paul colleagues and company contacts. In particular thanks
Coughlan, Trinity College Dublin, Simon Croom, Univer- for help with this edition goes to Philip Godfrey and
sity of San Diego, Stephen Disney, Cardiff University, Cormac Campbell and their expert colleagues at OEE,
Doug Davies of University of Technology, Sydney, Tony David Garman and Carol Burnett of The Oakwood
Dromgoole of the Irish Management Institute, Dr J.A.C. Partnership, Clive Buesnel of Xchanging, Hans Mayer
de Haan of Tilburg University, Carsten Dittrich, Univer- and Tyko Persson of Nestlé, Peter Norris and Mark Fisher
sity of Southern Denmark, David Evans of Middlesex of the Royal Bank of Scotland, John Tyley of Lloyds
University, Paul Forrester of Keele University, Keith TSB, Joanne Chung of Synter BMW, Michael Purtill of
Goffin, Cranfield University, Ian Graham of Edinburgh Four Seasons Hotel Group, Catherine Pyke and Nick
University, Alan Harle of Sunderland University, Fudge of Lower Hurst Farm, Johan Linden of SVT,
Norma Harrison of Macquarie University, Catherine John Matthew of HSPG, Dan McHugh of Credit Swiss
Hart of Loughborough Business School, Chris Hillam First Boston, David Nichol of Morgan Stanley, Leigh
of Sunderland University, Ian Holden of Bristol Busi- Rix of The National Trust, and Simon Topman of Acme
ness School, Matthias Holweg, Cambridge University, Whistles. Mary Walton is coordinator to our group
Mickey Howard, Bath University, Brian Jefferies of West at Warwick Business School. Her continued efforts at
Herts College, Tom Kegan of Bell College of Techno- keeping us organized (or as organized as we are capable
logy, Hamilton, Denis Kehoe, Liverpool University, Mike of being) are always appreciated, but never more so
Lewis, Bath University, Peter Long of Sheffield Hallam than when we were engaged on ‘the book’.
University, John Maguire of the University of Sunder- We were lucky to receive continuing professional and
land, Charles Marais of the University of Pretoria, Roger friendly assistance from a great publishing team. Especial
Maull, Exeter University, Bart McCarthy, Nottingham thanks to Matthew Walker, Elizabeth Wright and Colin
University, Harvey Maylor of Cranfield University, John Reed.
Meredith Smith of EAP, Oxford, Michael Milgate of Finally, all six editions were organized, and largely
Macquarie University, Keith Moreton of Staffordshire word processed by Angela Slack. It was, yet again, an
University, Chris Morgan, Cranfield University, Adrian heroic effort. To Angela – our thanks.
Morris of Sunderland University, Steve New, Oxford
University, John Pal of Manchester Metropolitan Univer- Nigel Slack
sity, Peter Race of Henley College, Reading University, Stuart Chambers
Ian Sadler of Victoria University, Richard Small, Supply Robert Johnston
Network Solutions, Andi Smart, Exeter University, Amrik
Acknowledgements xxv

Publisher’s acknowledgements
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