Introduction to Materials Management

468 Pages·2016·47.69 MB·English

by  Steve Chapman

Introduction to
Materials
Management

Introduction
to Materials
Management
EIGHTH EDITION
GLOBAL EDITION
Stephen N. Chapman, Ph.D., CFPIM,
North Carolina State University
J. R. Tony Arnold, CFPIM, CIRM
Ann K. Gatewood, CFPIM, CIRM, CSCP
Gatewood Associates, LLC
Lloyd M. Clive, CFPIM
PEARSON
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Authorized adaptation from the United States edition, entitled Introduction to Materials Management, 8th edition,
ISBN 978-0-13-415632-3, by Stephen N. Chapman, J. R. Tony Arnold, Ann K. Gatewood, and Lloyd M. Clive,
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ISBN 10: 1-29-216235-X
ISBN 13: 978-1-292-16235-5
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library.
10 9 8 7 6 5 4 3 2 1
19 18 17 16
Typeset in 10/12 Times LT Pro Roman by Integra.
Printed and bound in Vivar, Malaysia.
CONTENTS
Preface 9
1 Introduction to Materials Management 13
Introduction 13 / Operating Environment 13 / The Supply Chain Concept 16 / What is Materials
Management? 21 / Summary 25 / Key Terms 26 / Questions 26 / Problems 27 / Case
Study 1.1: Priya’s Cakes 27
2 Production Planning System 30
Introduction 30 / Manufacturing Planning and Control System 31 / Sales and Operations Planning 35 /
Manufacturing Resource Planning 37 / Enterprise Resource Planning 39 / Making the Production
Plan 39 / Summary 48 / Key Terms 49 / Questions 49 / Problems 50 / Case Study 2.1:
Meridian Water Pumps 54 / Case Study 2.2: Williams 3D Printers 55
3 Master Scheduling 57
Introduction 57 / Relationship to Production Plan 58 / Developing a Master Production
Schedule 60 / Production Planning, Master Scheduling, and Sales 65 / Summary 71 /
Key Terms 71 / Questions 71 / Problems 72 / Case Study 3.1: Acme Water Pumps 78 / Case
Study 3.2: The MasterChip Electronics Company 79 / Case Study 3.3: Macarry’s Bicycle Company 81
4 Material Requirements Planning 84
Introduction 84 / Bills of Material 86 / Material Requirements Planning Process 93 / Using the
Material Requirements Plan 104 / Summary 108 / Key Terms 108 / Questions 108 / Problems
109 / Case Study 4.1: Apix Polybob Company 120 / Case Study 4.2: Benzie Products Company 122
5 Capacity Management 124
Introduction 124 / Definition of Capacity 124 / Capacity Planning 125 / Capacity Requirements
Planning 126 / Capacity Available 128 / Capacity Required (Load) 131 / Scheduling
Orders 134 / Making the Plan 135 / Summary 137 / Key Terms 137 / Questions 138 /
Problems 139 / Case Study 5.1: Wescott Products 142
6 Production Activity Control 145
Introduction 145 / Data Requirements 148 / Order Preparation 149 / Scheduling 150 /
Load Leveling 155 / Scheduling in a Nonmanufacturing Setting 156 / Scheduling Bottlenecks 156 /
Theory of Constraints and Drum-Buffer-Rope 158 / Implementation 161 / Control 162/
Production Reporting 167 / Product Tracking 168 / Measurement Systems 168 / Summary 168 /
Key Terms 169 / Questions 169 / Problems 170 / Case Study 6.1: Johnston Products 174 /
Case Study 6.2: Crofts Printing Company 176/ Case Study 6.3: Melrose Products 177
5
6
7 Purchasing 180
Introduction 180 / Establishing Specifications 183 / Functional Specification Description 185 /
Selecting Suppliers 187 / Price Determination 190 / Impact of Material Requirements Planning on
Purchasing 192 / Environmentally Responsible Purchasing 194 / Expansion of Purchasing into Supply
Chain Management 195 / Some Organizational Implications of Supply Chain Management 197 /
Summary 198 / Key Terms 198 / Questions 198 / Problems 199 / Case Study 7.1: Let’s
Party! 199 / Case Study 7.2: The Connery Company 200
8 Forecasting and Demand Management 202
Introduction 202 / Demand Management 202 / Demand Forecasting 204 / Characteristics of
Demand 204 / Principles of Forecasting 206 / Collection and Preparation of Data 207 / Forecasting
Techniques 207 / Some Important Intrinsic Techniques 209 / Seasonality 212 / Tracking the
Forecast 215 / Summary 222 / Key Terms 222 / Questions 222 / Problems 223 / Case
Study 8.1: Northcutt Bikes: The Forecasting Problem 229 / Case Study 8.2: Hatcher Gear Company 231
9 Inventory Fundamentals 233
Introduction 233 / Aggregate Inventory Management 233 / Item Inventory Management 233 /
Inventory and the Flow of Material 234 / Supply and Demand Patterns 235 / Functions of
Inventories 235 / Objectives of Inventory Management 237 / Inventory Costs 239 / Financial
Statements and Inventory 241 / ABC Inventory Control 246 / Summary 249 / Key Terms 249 /
Questions 250 / Problems 251 / Case Study 9.1: Randy Smith, Inventory Control Manager 254
10 Order Quantities 257
Introduction 257 / Economic Order Quantity 258 / Variations of the EOQ Model 262 / Quantity
Discounts 263 / Order Quantities for Families of Product When Costs are Not Known 264 / Period
Order Quantity 265 / Summary 268 / Key Terms 268 / Questions 268 / Problems 269
11 Independent Demand Ordering Systems 273
Introduction 273 / Order Point System 273 / Determining Safety Stock 275 / Determining Service
Levels 281 / Different Forecast And Lead-Time Intervals 283 / Determining When The Order Point Is
Reached 283 / Periodic Review System 285 / Distribution Inventory 287 / Summary 290 /
Key Terms 290 / Questions 291 / Problems 292 / Case Study 11.1: Carl’s Computers 298
12 Physical Inventory and Warehouse Management 301
Introduction 301 / Warehousing Management 301 / Physical Control and Security 307 / Inventory
Record Accuracy 307 / Consignment Inventory and Vendor-Managed Inventory (VMI) 313 /
Technology Applications 314 / Summary 315 / Key Terms 315 / Questions 316 /
Problems 316 / Case Study 12.1: CostMart Warehouse 320
13 Physical Distribution 323
Introduction 323 / Physical Distribution 326 / Physical Distribution Interfaces 329 /
Transportation 330 / Legal Types of Carriage 332 / Transportation Cost Elements 333 /
Warehousing 338 / Packaging 343 / Material Handling 345 / Multi-Warehouse Systems 345 /
Summary 348 / Key Terms 348 / Questions 349 / Problems 350 / Case Study 13.1: ABC
Footwear Limited 351
7
14 Products and Processes 353
Introduction 353 / Need for New Products 353 / Product Development Principles 354 / Product
Specification and Design 356 / Process Design 358 / Factors Influencing Process Design 359 /
Processing Equipment 361 / Process Systems 361 / Process Costing 363 / Selecting the
Process 364 / Continuous Process Improvement 366 / Summary 376 / Key Terms 377 /
Questions 377 / Problems 379 / Case Study 14.1: Rory Thomas, Production Manager 382
15 Lean Production 384
Introduction 384 / Lean Production 384 / Waste 386 / The Lean Production Environment 388 /
Manufacturing Planning and Control in a Lean Production Environment 395 / Comparing ERP, Kanban,
and Theory of Constraints 407 / Summary 409 / Key Terms 410 / Questions 410 /
Problems 411 / Case Study 15.1: Murphy Manufacturing 413
16 Total Quality Management 416
Introduction 416 / What Is Quality? 416 / Total Quality Management 418 / Quality Cost
Concepts 422 / Variation as a Way of Life 423 / Process Capability 425 / Process Control 429 /
Sample Inspection 432 / ISO 9000:2015 434 / ISO 26000:2010 435 / ISO 14001:2015 436 /
Benchmarking 436 / Six Sigma 437 / Quality Function Deployment 438 / The Relationship of
Lean Production, TQM, and ERP 440 / Summary 441 / Key Terms 441 / Questions 442 /
Problems 443 / Case Study 16.1: Accent Oak Furniture Company 444
Readings 449
Index 453