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William J. Stevenson, Operations Management (Ninth Edition). Tata McGraw-Hill Publishing Company Limited (7 West Patel Nagar, New Delhi), 2009, xvi + 908. (Price not given) paperback. This book is intended as an introduction to the filed of operations management. The topics covered include both strategic issues and practical applications. Among the topics are forecasting, product and service design, capacity planning, management is quality and quantity control, inventory management, scheduling, supply chain management, and project management. The book deals with concepts, tools and applications of the field of operations management. The book places emphasis on problem solving by including a number of case examples and solve problems illustrating solutions. Chapter 1 entitled 'Introduction to Operations Management' introduces field of operations management. It describes the nature and scope of operations management and how operations management relates to other parts of the organization. Among the important topics it covers are a comparison of manufacturing and service operations, a brief history of operations management, and a list of trends business that relates to operations. Chapters 2 entitled 'Competitiveness Strategy and Productivity' discusses operations management in a border context and presents the issues of competitions, strategy, and productivity. This chapter describes time-based strategies, which many organizations are now adopting as they seek to become more competitive and serve their customers more efficiently. Chapter 3 entitled 'Forecasting' provides important insights on business forecasting as well as information on how to develop and monitor forecasts. In fact, forecasts are basic inputs for many kinds of decisions in business organizations. Consequently, it is important for all managers to be able to understand and use forecasts. It also identifies major factors to consider when choosing a forecasting technique. Chapter 4 entitled 'Product and Service Design' explains the strategic importance and identifies main objectives of product and service design. It discusses the importance of standardization; reviews importance of legal, ethical, and environmental issues, and lists characteristics of well-designed service systems.
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Chapter 5 entitled 'Strategic Capacity Planning for Products and Services' explains the importance of capacity planning, discusses ways of defining and measuring capacity, describes determinants of effective capacity, discusses major considerations related to developing capacity alternatives, and briefly describes approaches that are useful for evaluating capacity alternatives. Chapter 6 entitled 'Process Selection and Facility Layout' explains the strategic importance and the influence that process selection has on organization. It also includes types of basic processing and reviews automated approaches to processing. It also describes advantages and disadvantages of product and process layouts. Supplement to Chapter 6 entitled 'Linear Programming' describes types of problem that are amenable for solution using linear programming. Linear programming is a powerful quantitative tool used by operations mangers and other managers to obtain optimal solutions to problems that involve restrictions or limitations, such as budgets and available material, labour, and machine time. These problems are referred to as constrained optimization problem. Chapter 7 entitled 'Design of Work Systems' explains importance of work design involving job design, work measurement and the establishment of time standards, and worker motivation and compensation. Various topics described in this chapter all have an impact on productivity. It also reviews advantages and disadvantages of specialization and knowledge based pay. The chapter covers a very comprehensive discussion on work study involving both method study and work measurement. Ergonomics is an important part of job design, which relates to incorporation of human factors in workplace design. Ergonomics helps minimize common workplace ailments that result in result in lower productivity, lost workdays, and increase in health premiums. Supplement to Chapter 7 entitled 'Learning Curves' deals with concepts of learning curves highlighting relationship between illustrate the basic relationship between increasing repetitions and decreasing time per repetition. This relationship is also referred to as an experience curve, a progress function, or an improvement function. Learning curve projections help managers to plan costs and labor, purchasing and inventory needs. As productivity increases higher efficiency levels enable usage of raw materials and purchase parts keep pace with output. Failure to account for learning effect may result in over estimate of labour needs an underestimates of the
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rate of the material usage. Chapter 8 entitled 'Location Planning and Analysis' deals with main reasons and explains why location decisions are important. Location decisions represent a key part of the strategic planning process of virtually every organization. This chapter examines locations analysis. It begins with a brief overview of the reason firms must make location decisions, the nature of these decisions, and a general procedure for developing and evaluating location alternatives. Location decisions are closely tied to an organization's strategies. For example, a strategy of being a low-cost procedure might result in location where labour or materials costs are low, or locating near market share raw materials to reduce transportation costs. A strategy of increasing profile by increasing market share might result in locating in high-traffic areas, and a strategy that emphasizes convenience for the customer might result in having many locations where customers can transact their business or make purchases (e.g., branch banks, ATMs, service stations, fast-food outlets). Location criteria can depend on where a business is in the supply chain. For instance at the retail end of a chain, site selection tends to focus more on accessibility, consumer demographics (population density, age distribution, average buyer income), traffic pattern, and local custom. Businesses at the beginning of a supply chain, if they are involved in supplying raw materials, are often located near their markets, depending on a variety of circumstances. For example, business involved in storing and distributing goods often choose a central location to minimize distribution costs. Web-based retail business are much less dependent on location decisions; they can exist just about anywhere. Supplement to Chapter 8 entitled 'The Transportation Model' provides detailed account of the transportation method. The transportation problems involve finding the lowest-cost plan for distributing stocks of goods or supplies from multiple origins to multiple destinations that demand the goods. The transportation model can be used to determine how to allocate the supplies available from the various factories to the warehouses that stock or demand those goods, in such a way that total shipping cost is minimized (i.e., the optimal shipping plan). The transportation model can be used to compare location alternative in terms of their impact on the total distribution costs for a system. The procedure involves working through a separate problem for each location being considered and then comparing the resulting total costs.
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Chapter 9 entitled 'Management of Quality' covers evolution of quality management, the dimensions of product and service quality, philosophies of several quality "gurus", quality awards and quality certification, total quality management, and quality tools. Successful management of quality requires that managers have insights on various aspects of quality. These include defining quality in operational terms, understanding the costs and benefits of quality, recognizing the consequences of poor quality, and recognizing the need for ethical behaviour. The chapter includes a description of the key contributors to quality management, and its outline the ISO 9000 and ISO 14000 international standards. One way to describe to quality is the degree to which performance of a product or service meets or exceeds customer expectations. Quality of design refers to the intention of designers to include or exclude certain feature in a product or service. 'Quality of the conformance' refers to the degree to which goods and services conform to (i.e., achieve) the intent of the designers. Failure to devote adequate attention to quality can damage a profit-oriented organization's reputation and lead a decreased share of the markets, or it can lead to increased criticism and/or controls for a government agency or nonprofit organization. Poor designs or defective or service can result on loss if business. It is important for management to recognize the different ways in which the quality of a firm's products or services can affect organization and to take these into account in developing and maintaining a quality assurance programme. Total quality management is a never-ending pursuit of quality that involves everyone in an organization. The driving force is customer satisfaction; a key philosophy is continuous improvement. Training of managers and workers in quality concepts, tools, and procedures is an important aspects of the approach. Teams are an integral part of TQM. Two major aspects of the TQM approach are problem solving and process improvement. Six-sigma programme are a form of TQM. They emphasize the use of statistical and management science tools on selected projects to achieve business results. Chapter 10 entitled 'Quality Control' explains the elements of the control process, and how control charts can be used to monitor processes in order that they are performing in an acceptable manner. Quality control is a process that measures output relative to a standard and takes corrective action when output does not meet standard. Inspection can be used as part of an effort to improve process yield. One measure of process yield is the ratio of output of good product to the total output.
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Inspection at key points can help guide process improvement efforts to reduce the scrap rate and improve the overall process yield, and reduce or eliminate the need of inspection. In the service sector, inspection points are incoming purchased materials and supplies, personal, service, interfaces (e.g., service counter), and outgoing completed work. Sampling and corrective action are part of the control process. In a nutshell, control achieved by checking a portion of the goods or services, comparing the result to a predetermined standard, evaluating departures from the standard, taking corrective action when necessary, and following up to ensure that problems have been corrected. Capability analysis is the determination of whether the variability inherent in the output of the process is within the acceptable range of variability allowed by the designed specification for the process output. Organization should continually seek to increase the capability of the processes they use, so that they can move from a position of using of using inspection or extensive use of control charts to achieve desired levels of quality to one where quality is built into products and processes, so that little or no efforts are needed to assure quality. In supplement Chapter 10 entitled 'Acceptance Sampling' the author reviews the purpose acceptance sampling and contrasts it with process control. The chapter also compares and contrasts single and multiple sampling plans and discusses the concept of average outgoing quality level. A key element of acceptance sampling is the sampling plan. In the single plan, one random sample is drawn from each lot, and every item in the sample is examined and classified as either "good" or "defective". A double-sampling plan allows for the opportunity to take a second sample if the result of the initial sample are inconclusive. A multiple-sampling plan is similar to a doublesampling plan except that more than two samples may be required. Chapter 11 entitled 'Supply Chain Management' deals with all important aspects of the subject including need and elements of supply chain management, bullwhip effect, global supply chain, role of outsourcing, logistics and reverse logistics, purchasing and SCM, infrastructure and SCM, etc. The elements of supply chain management include customers, forecasting, product and service design, processing, inventory management, purchasing, supplier management, location decisions, and logistics. Logistics involves the movement of goods and materials in a supply chain. This includes incoming materials, movement within a facility, and outgoing goods. It also includes overseeing the two-way flow of information across the supply chain. Purchasing the link between an organization and its suppliers. Purchasing
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involves selecting suppliers, negotiating contracts, forging alliances, and serving as a link between the organization and its suppliers. Chapter 12 entitled 'Inventory Management and Scheduling' relates to the management and control of inventories, and scheduling, often key factors of operation management to achieve profit and/or cost objectives while satisfying customers. The basic issues are how to best manage resources to effectively match supply and demand. Inventory management is a core management activity, which has interface with marketing and finance functions. This is because when inventory management is carried out inefficiently it not only affects operations out also lowers customers satisfaction and enhances operating cost. The material presented in the chapter focuses primarily on management of internal inventories. However, successful inventory management also must include management of external inventories (i.e., inventory in the supply chain). Sharing demand data throughout the supply chain can alleviate the unnecessary buildup of safety stock in the supply chain that occurs when information isn't shared. Manufacturers and suppliers can judge the timing of orders from customers, and customers can use information about supplier inventories to set reasonable lead time. Chapter 13 entitled 'Aggregate Planning' deals with intermediate-range capacity planning that typically covers a tine horizon of 2 to 12 months, although in some companies it may extend to as much as 18 months. It is particularly useful for organizations that experience seasonal or other fluctuations in demand or capacity. The goal of aggregate planning is to achieve a production plan that will effectively utilize the organization's resources to satisfy expected demand. After the aggregate plan has been developed it is disaggregated or broken down into specific products requirements. This leads to a master schedule, which indicates the planned quantities and timing of specific outputs. Inputs to the master schedule are on-hand inventory amounts, forecasts of demand, and customer orders. The outputs are projected production and inventory requirements, and the projected uncommitted inventory, which is referred to as available-to-promise (ATP) inventory. Chapter 14 entitled 'MRP and ERP' describes material requirements planning (MRP), manufacturing resources planning (MRP II) and enterprise resource planning (ERP). MRP is planning and scheduling technique used
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for batch production of assembled items. Primary inputs of MRP are a bill of materials, which indicates the composition of the finished product; a master schedule which indicates how much finished products is desired and when; and an inventory records file, which indicates how much inventory is on hand or an order. ERP represents an expanded effort to integrate standardized record keeping that will permit information sharing among different areas of the organization in order to manage the system more effectively. ERP is the third generation of manufacturing software that encompasses all business functions, including order entry and an option for financial management integrated with the manufacturing functions available in MRP II. Chapter 15 entitled ' JIT and Lean Operations' deal with operation system in which materials are moved through the system and services are delivered with precise timing so that they are delivered at each step of the process just as they are needed - hence the name just-in-time. Over the years the scope of JIT broadened and the term became synonym of lean operations. Lean operation depends on having high-quality processes in place. Quality is an integral part of lean operation; without high process quality, lean operation cannot exist. A central theme of a true just-in-time approach is to work towards continual improvement of the system - reducing inventories, reducing setup cost and time, improving quality, increasing the output rate, and generally cutting waste and inefficiency. Supplement to chapter 15 covers maintenance aspects in operations management. Maintaining the productivity capability of an organization is an important function. Maintenance includes all of the activities related to keeping facilities and equipment in good operating order and maintaining the appearance of building and grounds. The goal of maintenance is to minimize the total cost of keeping the facilities and equipments in good working order. Maintenance decision typically reflects a trade-off between preventive maintenance, which seeks to reduce the incidence of breakdown and failure, and breakdown maintenance, which seeks to reduce the impact of breakdown when they occur. Scheduling (Chapter 16) is important for every organization regardless of the nature of activities. Business farms need to develop schedules for workers, equipment, procurement, maintenance, etc. Hospitals need to schedule admissions, surgery, nursing assignment, and support services such as meal preparation, security, maintenance, and cleaning. Lawyers, doctors, dentists, hairdressers, and auto repair shops need to schedule appointments
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for their clients, patients and customers. In hospitals scheduling can save lives and improve patient care. In educational institutions scheduling can reduce the need for expansion of facilities. In business effective scheduling can lead to competitive advantage in terms of customer service (shorter wait time for their orders). Chapter 17 entitled 'Project Management' deals with some behavioural and implementation aspects besides introducing the basic concepts of project management. Projects typically bring together people with diverse knowledge and skills, most of whom remain associated with the project for less than its full life. The project manager is overall in-charge for project implementation, who needs ability to adapt to changing circumstances that may involve changes to project goals, technical requirements, and project team composition. PERT and CPM are two commonly used technique for developing and monitoring projects. Chapter 18 entitled 'Management of Waiting Lines' deals with waiting lines which commonly occur in all service systems. Management of queues is governed by a theory what has come to be known as 'queuing theory'. Queuing theory is directly applicable to a wide range of service operations, including call centers, banks, post offices, restaurants, theme parks, telecommunications systems, and traffic management. In a queuing system customers enter a waiting line of service facility, receive service when their turn comes, and then leave the system. The number of customers in the system (awaiting service or being served) will vary randomly over time. The goal of waiting-line management is essentially to minimize total costs comprising cost of waiting and cost of providing additional service. Supplement to Chapter 18 deals with simulation in which a model of a process is developed and then experiments are conducted on the model to evaluate its behaviour under various conditions. Simulation enables decision makers to test their models that reasonably duplicates a real process. Simulation models unable decision makers to experiments with alternative choices using policy experimentation by answering 'what if' type of questions. Simulations have very wide range of application for instance, space engineers simulate space flights in laboratories to permit future astronauts to become accustomed to working in a weightless environment. Similarly, airline pilots often undergo extensive training with simulated landing and takeoffs before being allowed to try the real thing. Many video games are simulations, and universities use management games as a means of simulating business
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environments. Tire designers evaluate alternative tread designs using machine that simulate conditions that produce tire wear handling problems. The book is indeed highly reader friendly, which appropriately introduces the entire filed of operations management. The topics covered include both strategic issues and practical applications. The author provides a very comprehensive coverage of topics in easy-to-learn manner. The author has done a good balancing act by including information from plethora of new developments, while facing the prazctical limits on the length of the book. The author has placed considerable significance on problem solving. The book covers all important topics on strategic issues and practical applications - productivity, forecasting, product/service design, capacity planning, quality management and control, etc. The book provides clearly written explanations of concepts as well as methods. It includes large number of solved problems, examples, questions, practice problems, and cases to facilitate 'learning by doing'. The text features recent concepts and applications and in the rapidly going field of operations management. Inclusion of a number of chapter as supplement to existing chapters shows that authors has always accorded priority for its updation though it is very uphill task as developments in this field are really enormous. The book has all merit to be used as text book for courses on operations management in business schools both at under-graduate and post-graduate levels. The book is 'must' for libraries of all business schools wherever they are. S.S Yadav, Professor of Operations Management, IILM Institute for Higher Education. A.C. Fernando, Business Ethics: An Indian Perspective. New Delhi: Pearson Education (482, F.I.E., Patparganj, Delhi 110092), 2009, xviii + 514 (Price not given) paperback. Ethics differentiates between right and wrong behaviour, i.e., when the actions are moral and when they are immoral. The word 'ethics' is derived from the Greek word ethikos meaning custom or character. Business ethics on the other hand are applications of ethical concepts to business behaviour. Society expects only ethical business behaviour, which is conducive for social good and prevents it from indulging in unscrupulous conduct. Business ethics is applied ethics that studies moral standard and shows how these apply to the system and organization involved in business. Business ethics studies moral norms and values, and aims to apply the conclusions gleaned
Management & Change, Volume 13, Number 1 (2009)