Operations Management: Theory and Practice

634 Pages·2015·28.307 MB·English

by  B. Mahadevan

third edition
Operations Management
THEORY AND PRACTICE
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third edition
Operations Management
THEORY AND PRACTICE
B. Mahadevan
Indian Institute of Management Bangalore
Delhi • Chennai
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Copyright © 2015 Pearson India Education Services Pvt. Ltd
Published by Pearson India Education Services Pvt. Ltd, CIN: U72200TN2005PTC057128, formerly known as Tutor-
Vista Global Pvt. Ltd, licensee of Pearson Education in South Asia.
No part of this eBook may be used or reproduced in any manner whatsoever without the publisher’s prior written consent.
This eBook may or may not include all assets that were part of the print version. The publisher reserves the right to
remove any material in this eBook at any time.
ISBN 978-93-325-4752-0
eISBN 978-93-325-4171-9
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Operations Management_Copyright_Page.indd 1 1/30/2015 9:49:25 AM
To
my parents, Balu and Saroja,
my wife Sujatha and
my daughter Dhrithi
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About the Author
B. Mahadevan is a professor of operations management at the Indian
Institute of Management Bangalore, where he has been teaching since
1992. He was also the Dean (Administration) of the institute and a
member of the Governing Board of IIM Bangalore for four years. He has
more than 23 years of wide-ranging experience in teaching, research,
consulting and academic administration at IIM Bangalore and other
reputed institutions such as IIT Delhi and XLRI, Jamshedpur. Earlier,
he was the Chief Editor of IIMB Management Review, the premier Indian
journal for management educators, consultants and practitioners.
He was also the EADS–SMI Chair Professor for sourcing and supply
management at IIM Bangalore.
Professor Mahadevan received his M.Tech. and Ph.D. from the
Industrial Engineering and Management Division of IIT Madras. He
holds a bachelor’s degree in engineering (production engineering) from
the College of Engineering, Guindy, Chennai.
He was a visiting scholar at the Amos Tuck School of Business
Administration, Dartmouth College, New Hampshire, during 1999–
2000. He was also a retainer consultant to Deloitte Consulting LLP, USA, in 2001–2002. He is
also on the board of trustees of some NGOs providing valuable community and social services.
Professor Mahadevan is a member of the editorial board of the Production and Operations
Management Journal and the International Journal of Business Excellence. He served in the editorial
board of Six Sigma and Competitive Advantage. Besides being on the advisory boards of several
business schools and management journals in India, he has published several of his research
findings in leading international journals such as California Management Review, European Journal
of Operational Research, Interfaces, Production and Operations Management Journal, International Journal
of Production Research, International Journal of Technology Management, Asian Journal of Operations
Management, International Journal of Yoga, Vikalpa, South Asian Journal of Management and IIMB
Management Review. He is a lifetime member of the Society of Operations Management and a
member of the Production and Operations Management Society.
Professor Mahadevan has been recognized for his excellence in teaching both at IIM
Bangalore and outside. He has been consistently rated among the top five professors in IIM
Bangalore’s Teaching and Executive Education Programmes. He was also conferred the ICFAI
Best Teacher Award by the Association of Indian Management Schools in 2005. He was one
among the 40 nominees, who were nominated globally, for the Economic Intelligence Unit’s
(EIU) Business Professor of the Year Award, 2012.
Apart from Operations Management: Theory and Practice, Professor Mahadevan is also the
author of The New Manufacturing Architecture and has developed software that addresses issues in
restructuring manufacturing systems for competitive advantage. His research interests include
supply chain management issues in e-markets and e-auction.
Professor Mahadevan’s other interests include researching the possibility of using ancient
Indian wisdom to address contemporary concerns. He is active in inculcating these ideas
among his students and the youth through various forums and public lectures. He was also a
member of the Central Sanskrit Board, an advisory body to the Ministry of HRD, Department
of Education on all Sanskrit policy issues in the country.
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brIeF CoNteNtS
Preface xix
PArt I CoNCePtuAlIzINg SuStAINAble oPerAtIoNS 2
1 operations Management: trends and Issues 2
2 operations Strategy 22
3 Sustainability in operations 46
4 Project Management 64
PArt II oPerAtIoNS ANd the VAlue ChAIN 100
5 Supply Chain Management 100
6 Facilities location 126
7 Sourcing and Supply Management 154
PArt III deSIgNINg oPerAtIoNS 180
8 Process and Capacity Analysis 180
9 design of Manufacturing Processes 218
10 design of Service Systems 260
11 Product development Process 302
12 total Quality Management 328
13 lean Management 358
PArt IV PlANNINg ANd CoNtrol oF oPerAtIoNS 392
14 demand Forecasting 392
15 operations Planning 426
16 resources Planning 474
17 Inventory Planning and Control 510
18 operations Scheduling 542
19 Six-Sigma Quality Control 572
Subject Index 603
Company Index 609
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Preface xix 1.8 Current Priorities for Operations
Management 18
PArt I IDEAS AT WORK 1.3: INDIA – AN EMERGING
GLOBAL MANUFACTURING BASE 19
CONCEPTUALIZING SUSTAINABLE
Summary 19
OPERATIONS 2
Review Questions 20
1 Operations Management: Trends and Net-Wise Exercises 20
Issues 2 Notes 21
IDEAS AT WORK 1.1: NARAYANA HEALTH (NH): A Suggested Readings 21
JOURNEY THAT BEGAN WITH WINING THE HEART OF
INDIA 3 2 Operations Strategy 22
1.1 Introduction to Operations IDEAS AT WORK 2.1: CAFÉ COFFEE DAY: A
Management 4 STRATEGY FOR AFFORDABLE LUXURY 23
1.2 Manufacturing and Service Sector Trends 2.1 The Relevance of Operations
in India 5 Strategy 24
1.3 Services as a Part of Operations 2.2 The Strategy-Formulation Process 25
Management 6 Step 1: understand the Competitive Market
Intangibility 7 dynamics 26
heterogeneity 7 Step 2: Identify order-qualifying and order-
winning Attributes 26
Simultaneous Production and Consumption 8
Step 3: Identify Strategic options for Sustaining
VIDEO INSIGHTS 1.1 8
Competitive Advantage 27
Perishability 8
Step 4: devise the overall Corporate
IDEAS AT WORK 1.2: OPERATIONS MANAGEMENT
Strategy 27
IN SERVICE SYSTEMS 8
Step 5: Arrive at the operations Strategy 27
1.4 Operations as a Key Functional Area 10
2.3 Measures for Operational Excellence 28
1.5 Operations Management: A Systems
VIDEO INSIGHTS 2.1 28
Perspective 12
IDEAS AT WORK 2.2: MEASURES FOR
VIDEO INSIGHTS 1.2 13 OPERATIONAL EXCELLENCE: THE CASE
OF INDIGO AIRLINES 28
1.6 Operations Management Functions 14
2.4 Options for Strategic Decisions in
design Versus operational Control Issues 14
Operations 30
long-term Versus Short-term Issues 15
Product Portfolio 30
1.7 Challenges in Operations
Management 15 Process design 31
Competitive Pressure due to economic Supply Chain 32
reforms 16 technology 33
growing Customer expectations 16 VIDEO INSIGHTS 2.2 33
technological developments 17 Capacity 34
environmental Issues 17
2.5 Break-Even Analysis 34
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