PRODUCTION AND OPERATIONS MANAGEMENT

Second Edition
KANISHKA BEDI
Assistant Professor Universitas 21 Global Bangalore

OXFORD
UNIVERSITY PRKSS

Contents
Preface to the Second Edition Preface to the First Edition Acknowledgements 1. Introduction to Production and Operations Management Products and Services 2 The Product/Process Continuum 7 The Transformation Process 8 Production and Operations Management 10 Product Design 13 Process Design 16 Automation 18 The Production Manager 21 POM in India: First 40 Years of the Republic 25 Summary 28 References 29 Keywords 29 Case Study IKishore Biyani and Big Bazaar 30 Case Study IIRover-Honda 32 Concept Review Questions 33 Project Assignments 34 2. Service Operations Management Services Scenario in India 36 Medical Tourism in India 37 Characteristics of Services 39 Classification of Services 42 Service Capacity 47 Yield Management 50 Designing Service Processes 53 Service Blueprinting 59 Service Quality 61 Measuring Service Quality using SERVQUAL iv vi ix 1

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Quality Ratings in the Hotel Industry 76 Summary 85 References 86 Key Terms 87 Case Study INaresh Goyal and Jet Airways 87 Case Study IINarayana Hrudayalaya 96 Concept Review Questions 99 Project Assignments 100 3. Outsourcing and Off shoring India as an Outsourcing and Offshoring Destination 102 Banking Industry and Outsourcing 104 Outsourcing, Offshoring, Near-shoring, and Farm-shoring 106 Summary 117 References 117 Key Terms 118 Case StudySunil Bharti Mittal and Bharti Airtel 118 Concept Review Questions 122 Project Assignment 123 101

4. Facility Location Planning Introduction 125 Operations Strategies for Multiple Facilities 127 Factors Affecting Facility Location Planning 129 ' Locating Foreign Operations Facilities 133 Factor and Location Ratings 135 Break-even Analysis for Facility Location Planning 137 Simple Median Model 150 The Centre of Gravity Method 152 ' Transportation* Model using MS Excel XP 153 Ardalan Heuristic for Location Planning of Service Facilities 161 Summary 163 References 163 Keywords 163 . . . . Case Study ITata's 'Dream Car' Plant Location 164 Case Study IIToyota in China 167 Concept Review Questions 169 Numerical Problems 169 Project Assignments 170 . 5. Facility Capacity and Layout Planning Capacity and Capacity Planning 172

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Decision Tree Analysis in Facility Capacity Planning 181 Facility Layout Planning 186 The Assignment Model in Layout Planning 203 Load-Distance Analysis in Process Layouts 206 Closeness Ratings 207 Summary 209 References 210 . Keywords 210 w Case Study I'Professor' Lalu scripts Indian Railways's Turnaround Case Study IIHonda's Mixed Model Assembly Lines 216 Concept Review Questions 217 Numerical Problems 217 Project Assignments 220 Project Management Introduction 222 Role of Project Management in Other Functional Areas of Management Network Diagrams 230 Critical Path Method 233 Programme Evaluation and Review Technique 252 Limitations of CPM and PERT 257 Crashing of a Project 257 Resource Levelling 273 Microsoft Project 2000 285 Summary 296 References 297 Keywords 297 Case Study IE. Sreedharan and the Delhi Metro Rail Project 299 Case Study IIDhabol Power Project 306 Concept Review Questions 309 Numerical Problems 309 ' Project Assignments 313 Inventory Management Introduction 317 Uses of Inventory 319 Role of Other Functional Departments 321 Types of Costs 322 Inventory Management Systems 327 Monte Carlo Simulation in Inventory Management Summary 369 References 369

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Keywords 370 Case Study IPantaloonRevolutionizing Inventory Management in Indian Retailing 370 Case Study IIOlivetti 374 Concept Review Questions 376 Numerical Problems 377 Project Assignments 380 8. Materials Requirement Planning, Just-in-Jlme, and Supply Chain Management Materials Requirement Planning (MRP) 382 Just-in-Time 400 Hybrid MRP-JIT Production System 410 Supply Chain Management 412 Summary 422 References 422 Keywords 423 Case Study IThe 'Indian' McDonald's 424 Case Study IIVolvo-Sunwind 429 Concept Review Questions 430 Numerical Problems 430 Project Assignments 434 9. Total Productive Maintenance Total Productive Maintenance (TPM) 436 Summary 450 References 451 , ' Keywords 451 Case Study IMaintenance Management at Jet Airways 451 Case Study IIHindustan Lever Limited 454 Concept Review Questions 457 Project Assignments 457 10. Aggregate Planning Aggregate Production Planning 459 Production Planning Strategies 464 Disaggregating the Aggregate Plan 472 Summary 479 Reference 480 Keywords 480 Case Study IJamsetji Tata and Tata Steelthe saga of great Indian pride 481 Case Study IIABB 486 Concept Review Questions 489 Numerical Problems 489 Project Assignments 490 381

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11. Work Design Work Design 492 Job Design 493 Work Measurement 498 Summary 577 Reference 517 Keywords 517 Case Study ITaj Hotels 518 Case Study IIVolvo Truck Corporation Concept Review Questions '523 Numerical Problems 524 Project Assignments 525 12. Operations Scheduling Operations Scheduling 527 Sequencing or Prioritization 531 Summary 551 Keywords 557 Case StudyIndoChem 552 Concept Review Questions 553 Numerical Problems 553 Project Assignments 556

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13. Quality Management . Quality 558 India Inc. riding high on the quality bandwagon 560 Quality ManagementA Conceptual Framework 564 Dimensions of Quality 565 Costs of Quality 567 Quality at Every Stage 570 Quality System Standards 610 Bureau of Indian Standards (BIS) 612 Agmark Grading and Standardization of Agricultural and Allied Commodities International Organization for Standardization 676 ISO 14000 627 COPC-2000 628 Summary 629 References 630 Keywords 630 Case Study I'Pure for Sure' with Bharat Petroleum 637 Case Study IIHarley-Davidson 640

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Concept Review Questions 642 Numerical Problems 642 __ Project Assignments 644 _ 14. Demand Forecasting Demand Forecasting 646 Qualitative Methods of Forecasting 649 Quantitative Methods of Forecasting 657 Measurement of Forecasting Errors 677 Siummary 685 Reference 685 Keywords 686 Case Study IAir Traffic Forecasting by Airbus 686 Case Study IIGE Aircraft Engines 692 Concept Review Questions 694 Numerical Problems 694 Project Assignments 698 15. Operations Strategies Introduction 700 Relationship Between Business Grand Strategy and the Operations Strategy 703 Dimensions of Operations for Competitive Advantage 709 Innovation Management 773 Allocating Resources to Strategic Alternatives 720 Summary 726 Reference 726 Keywords 727 Case Study.IVideoconThe True Indian Multinational 728 Case Study IIIndian 'Scorpio' Stings the World 732 Case Study IIIBMW Rolls-Royce 736 l Concept.Review Questions 737 Numerical Problems 737 Project Assignments 738 . Answers to Numerical Problems Appendix: Statistical Tables Index 645

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