The Blackwell Encyclopedia of Management, Operations Management (Blackwell Encyclopaedia of Management) (Volume 10) PDF
Preview The Blackwell Encyclopedia of Management, Operations Management (Blackwell Encyclopaedia of Management) (Volume 10)
THE BLACKWELL ENCYCLOPEDIC DICTIONARY OPERATIONS MANAGEMENT THE BLACKWELL ENCYCLOPEDIA OF MANAGEMENT SECOND EDITION EncyclopediaEditor:CaryL.Cooper AdvisoryEditors:ChrisArgyrisandWilliamH.Starbuck VolumeI:Accounting EditedbyColinClubb(andA.RashadAbdel Khalik) VolumeII:BusinessEthics EditedbyPatriciaH.WerhaneandR.EdwardFreeman VolumeIII:Entrepreneurship EditedbyMichaelA.HittandR.DuaneIreland VolumeIV:Finance EditedbyIanGarrett(andDeanPaxsonandDouglasWood) VolumeV:HumanResourceManagement EditedbySusanCartwright(andLawrenceH.Peters,CharlesR.Greer,andStuartA. Youngblood) VolumeVI:InternationalManagement EditedbyJeanneMcNett,HenryW.Lane,MarthaL.Maznevski,MarkE.Mendenhall,and JohnO’Connell VolumeVII:ManagementInformationSystems EditedbyGordonB.Davis VolumeVIII:ManagerialEconomics EditedbyRobertE.McAuliffe VolumeIX:Marketing EditedbyDaleLittler VolumeX:OperationsManagement EditedbyNigelSlackandMichaelLewis VolumeXI:OrganizationalBehavior EditedbyNigelNicholson,PinoG.Audia,andMadanM.Pillutla VolumeXII:StrategicManagement EditedbyJohnMcGee(andDerekF.Channon) VolumeXIII:Index T H E B L A C K W E L L E N C Y C L O P E D I A O F M A N A G E M E N T S E C O N D E D I T I O N OPERATIONS MANAGEMENT Edited by Nigel Slack and Michael Lewis University of Warwick and University of Bath #2005byBlackwellPublishingLtd exceptforeditorialmaterialandorganization#2005byNigelSlackandMichaelLewis BLACKWELLPUBLISHING 350MainStreet,Malden,MA02148-5020,USA 108CowleyRoad,OxfordOX41JF,UK 550SwanstonStreet,Carlton,Victoria3053,Australia TherightofNigelSlackandMichaelLewistobeidentifiedastheAuthoroftheEditorialMaterialin thisWorkhasbeenassertedinaccordancewiththeUKCopyright,Designs,andPatentsAct1988. Allrightsreserved.Nopartofthispublicationmaybereproduced,storedinaretrievalsystem,or transmitted,inanyformorbyanymeans,electronic,mechanical,photocopying,recordingor otherwise,exceptaspermittedbytheUKCopyright,Designs,andPatentsAct1988,withouttheprior permissionofthepublisher. Firstpublished2005byBlackwellPublishingLtd LibraryofCongressCataloginginPublicationData TheBlackwellencyclopediaofmanagement.Operationsmanagement/editedbyNigelSlackandMichaelLewis. p.cm. (TheBlackwellencyclopediaofmanagement;v.10) Rev.ed.of:TheBlackwellencyclopedicdictionaryofoperationsmanagement/editedbyNigelSlack.1999. Includesbibliographicalreferencesandindex. ISBN1-4051-1096-1(hardcover:alk.paper) 1.Productionmanagement Dictionaries.2.Management Dictionaries.I.Slack,Nigel.II.Lewis,Michael. III.BlackwellPublishingLtd.IV.Blackwellencyclopedicdictionaryofoperationsmanagement. V.Title:Operationsmanagement.VI.Series. HD30.15.B4552005vol.10 [TS155] 658’.003s dc22 [658.5’003] 2004007695 ISBNofthe12-volumeset0-631-23317-2 AcataloguerecordforthistitleisavailablefromtheBritishLibrary. Setin9.5on11ptEhrhardt byKolamInformationServicesPvt.Ltd,Pondicherry,India PrintedandboundintheUnitedKingdom byTJInternational,Padstow,Cornwall Thepublisher’spolicyistousepermanentpaperfrommillsthatoperateasustainableforestrypolicy, andwhichhasbeenmanufacturedfrompulpprocessedusingacid-freeandelementarychlorine-free practices.Furthermore,thepublisherensuresthatthetextpaperandcoverboardusedhavemet acceptableenvironmentalaccreditationstandards. Forfurtherinformationon BlackwellPublishing,visitourwebsite: www.blackwellpublishing.com Contents Preface vi AbouttheEditors ix ListofContributors x DictionaryEntriesA–Z 1 Index 353 Preface Operationsmanagement(OM)isthesetofactivitiesinanyorganizationthatareconcernedwiththe resourcesdevotedtotheproductionanddeliveryofproductsandservices.Everyorganizationhasan operations function because every organization produces some type of products and/or services, although they call the operations function by this name. This definition encompasses service and manufacturing aswellasfor profit andnot for profit organizations. OMisalsoubiquitous.Every thingwewear,eat,siton,use,read,orknockaboutonthesportsfieldhasbeenproduced.Sohasevery bookweborrowfromthelibrary,everytreatmentwereceiveatthehospital,everyserviceweexpect, and every lecture weattend. Moreover items were produced before they were sold inan organized manner, or before their cost was precisely calculated. OM is arguably the oldest of management disciplines. Itisalsoadisciplineprofoundlyinfluencedbypractice.Unlikesomemanagementfunctions,the OMtaskisprincipallydefinedbythepragmaticchallengesofimmediacy.Inotherwords,theday to dayproductionofgoodsordeliveryofservicesrequirespractitionerstocontinuallymakedecisionsand implement changes. Academic OM also tends to focus on ‘‘real’’ managerial preoccupations and regularly re dedicates itself to the needs of practitioners. Unfortunately, whilst this concern with relevanceisentirelylaudable,itmayhaverenderedthedisciplinesomewhatblindedtoitsrichand extendedheritage.Moreover,thetheoreticalunderpinningsoftheOMfieldaresomewhatdifferent fromotheracademicmanagementsubjectslikestrategy,marketing,orfinance.Whereasthesefieldsof studyaremore or lessdirectlyconnectedtobasetheoreticaldisciplinessuchaseconomics,sociology, psychology,andmathematics,OM’sunderpinningsaremorefragmented. The specific genealogy of ‘‘modern’’ OM is a curious amalgam of very different academic and practicaldisciplines(e.g.economicsandengineering)andasaresultthetitleOperationsManagement hasemerged only after several changes. Ifthis encyclopedia hadbeen compiled at another point in time, then the title might have been Production and Operations Management or Manufacturing Management,orevenIndustrialEngineering.Inpart,thisisaconsequenceofbearinga‘‘functional’’ name; because organizational labels inevitably evolve over time (e.g. personnel becoming human resources).However,italsoreflectssomeoftheprofoundshiftsthathavetakenplaceintheunderlying pre occupationsofthediscipline. Understandingthenatureof‘‘modern’’OMmeanstracingitsinfluencesfromtheseminaldescrip tionofpin makingandarticulationoftheconceptofthedivisionoflabourinSmith’sWealthofNations in1776.LikewiseBabbagein1832builtuponSmith’swork,andisoftencitedasakeyinfluenceon OM.However,itwasnotuntilFrederickWinslowTaylor(1856–1915)soughttoestablisha‘‘science’’ of operational management based upon the ‘‘scientific’’ selection of workers and their scientific education and development, that OM theory had any impact upon practice. Until him no one generatedthesustainedinterestandsystematicframeworkthatwasnecessarytoproclaimmanagement asadiscipline.Taylorwasalwaysanextremelycontroversialfigure,evenduringhisownlifetime,and hisphilosophywas(andstillis)widelycaricatured.HoweveranobjectiveappraisalofTaylor’score conceptsdemonstrateshowmanyoftheprinciplesheespousedarenowwidelyaccepted. TheearliestOMideasemergedintheUKbuttheirfurtherdevelopmentandwidespreadaccept ancehappenedinNorthAmerica.Thisisnocoincidence.TheUK’sindustrialrevolutionbeganinthe Preface vii textile industry during the eighteenth century, stimulated by coincidental geo political (a rapidly growing empire, centred around India) and technological events. By the mid nineteenth century, however, an alternative system of manufacturing was emerging in the United States. During this periodtheUSsawthefirstwidespreadintroductionofinterchangeablepartsthatallowedmanufac turerstobreakmorefundamentallywiththecraftmodelofproductionandfullyexploitthedivisionof labor,mostnotablyinthepracticesimplementedbyHenryFord(1863–1947).Fordcarefullydetailed hisapproachtomanufacturingintwobooksandalthoughhebuilthisfactoriesuponbasicAmerican manufacturing principles, he was the first to produce very complex products. In addition to his extraordinary attention to the detailed design and control of various production processes, he also understoodthemorestrategicfinancialandoperationalsignificanceofcycletimeandthroughputin manufacturing. Like Taylor (of whom he apparently knew nothing!), Ford’s ideas were viewed as extremely important and proved highly influential in the development of the Japanese production conceptsthatwouldbesoinfluentialmorethanhalfacenturylater. At about the same time that Taylor was working and writing, a marketplace was emerging (particularlyinNorthAmerica)forformalmanagementeducation,andscientificmanagementformed a key component of many curricula. Similarly, engineering education was broadening to include industrialengineeringcourses,alsostronglyinfluencedbyscientificmanagementprinciples.Bythe 1950s,thescopeofacademicOMasadescriptivefieldhadbecomeverybroad(includingpersonnel management,accounts,generalmanagementetc.).Thisledtocurriculabeingdismantledintoseparate functionalfields,whichleftthe‘‘parent’’OMdisciplinewithrelativelyfewnaturalissuestodevelop. Inresponse,OMbegantoincorporatethequantitativemodellingtechniquesdevelopedbyOperations Research/ManagementScience(ORMS)practitionersandacademics.OM’srelationshipwithORMS remainsextremelyclosewhileatthesametimedealingwiththebroadermanagerialimplicationsof operationsdecisions. OMhaddevelopeduptothispointwithanalmostexclusivemanufacturingfocus.Thegrowthof the‘‘serviceimperative’’hasbeguntochangethis,undertheinfluenceoftwokeyfactors.Thefirstof these is recognition that the service level of how goods are delivered to the customer and how the customer is treated can provide many manufacturing organizations with a competitive edge. The secondreasonisthatmanufacturingaccountsforasmallerandsmallerproportionofGDPinmost Western economies. There are clear limits to the direct applicability of manufacturing concepts to service however, and in particular, traditional OM lacked any conceptualization of transactions directlyinvolvingthecustomer. MeanwhileJapaneseindustrialdevelopment(especiallyintheautomotiveindustry)wasfollowinga very different trajectory. The embodiment of this was the Toyota Production System that can be summarizedasanadherencetotwokeyprinciples.Thefirstoftheseisanemphasisonplanningand controldrivenbycustomerpullratherthanorganizationpush.SuchsystemsseektoprioritizeWIP reductionovercapacityutilization(comparethiswithaclassiclinebalanceapproach)andareenabled by(and/ornecessitate)productionsmoothing,quickset uptimesandstagescloselyinter connected bykanbans.Thesecondkeyprincipleisacommitmenttocontinuousimprovementenabledbypeople development.Thepracticalimplementationofthisapparentlystraightforwardprincipleismuchmore challenging.Fromacriticalperspective,itseffectsupontheworkforce(itoftenrequiresde unioniza tionorsingleunionagreements)havebeenattackedand,moremanagerially,thedemandsplacedupon workersbyleansystemshavebeenhighlightedasaproblemwithrespecttoongoingstaffrecruitment. TheseJapanese‘‘LeanProduction’’practicesarousedintenseinterest.Theenhancedproductivitythat resultedfromitsadoptionhasuniversalappeal.IndeedLeanProduction’soriginators,byformulating theoperatingproblemasanunceasingbattleagainstwastewereabletomakeitseemalmostaxiomatic that lean implied better. Although the Lean Production concept was initially viewed as a counter intuitive alternative to traditional manufacturing models, today it is arguably the paradigm for manufacturingoperations. It was the impact of lean production ideas, together with other developments such as total qualitymanagement(TQM)andbusinessprocessredesign(BPR)thatsawthebeginningofanOM viii Preface renaissanceintheearly1980s.Bythemid 1990sthedisciplinewasonceagainfirmlylocatedinboth theacademicandpractitionermainstreams.Thereareanumberofexplanationsforthisthataddtothe cumulativeeffectofsuccessfuloperationspractices. . Nootherfunctionalareahassuchadirectimpactonbothrevenueandcost.Thepopularizationof ideassuchasTQMandleanproductionestablishedinbothpractitionerandresearcharenasthe idea that operations practice must pursue the twin objectives (even if to different extents) of improvingaspectsofservicesuchasquality,variety,responsivenessetc.,whileatthesametime reducing costs. Given the business maxim that ‘‘profit is a very small number made up of the differencebetweentwoverybignumbers,’’anysubjectthatclaimstoincreaserevenueandreduce costsmustdemandtheattentionofcompaniesthatcanappreciateitspotentiallydisproportionate effectonprofitability. . All types of services (including ‘‘internal’’ services such as HR) have become more concerned about their levels of productivity, quality, responsiveness, etc. As a result, the audiences for processmanagementandreengineeringcourses,books,andconsultancy,arenolongerlimitedto functionaloperationsmanagers.Increasingly,allsortsofadministrativepersonnelandmanagers see themselves as managing processes and therefore have something to learn from operations managementideas. . InterestinOMhasparalleledthegrowthofinterestinresource basedorcapability basedmodels of competitive strategy. The overlaps between operations management/strategy and resource baseddrivenviewsofgeneralstrategyareoftenexplicit.PrahaladandHamel(‘‘Thecorecompe tenceofthecorporation’’,HarvardBusinessReview,May–June,1990),forexample,definedtheir core competencies as ‘‘collective learning...especially how to co ordinate diverse production skillsandintegratemultiplestreamsoftechnologies.’’ OverthelasttwocenturiesOMhasemergedapowerfullensthroughwhichitispossibletounderstand andimprovetheoperationalandstrategicactivitiesofnearlyallorganizations.Itislikelythatitwill continue to develop along a trajectory defined by its blend of theoretical influences and practical insight.Predictingthefutureofanydisciplineisofcoursearisky(andoftenfutile)exercise.However, sometrendsmaybealreadydiscernible.Thedominantforces,thathaveshapeditsdevelopmentover the last century, may continue to shape its future. There will be some who emphasize conceptual rigourandthedevelopmentofscientificinsight,whereasotherswillexpressconcernsoveradriftaway frompracticalrelevance,andacalltore establishthedisciplineusingpractitionerneedsasaguide.In the short/medium term, it seems likely that more integrative and strategic themes will continue to growinsignificance.Thiscreatesthedangerthatthiswillbefollowedbyanotherperiodofhollowing outofthecorefield.Indeedtheremaybeevidenceofthishappeningwithrespecttoissuessuchas supply chainmanagement,productdevelopment,ande business.IfOMcontinuestoexploremore intangible service operations and address broader strategic issues, a trend accentuated by market demands for more strategic and service exemplars (and less quantitative studies), many of its traditionalmethodologiesandtheoreticalantecedentscouldappearincreasinglyinappropriate. NigelSlackandMichaelLewis About the Editors EditorinChief CaryL.CooperisbasedatLancasterUniversityasProfessorofOrganizationalPsychology.Heisthe author of over 80 books, is past editor of the Journal of Organizational Behavior and Founding PresidentoftheBritishAcademyofManagement. AdvisoryEditors Chris Argyris is James Bryant Conant Professor of Education and Organizational Behavior at HarvardBusinessSchool. WilliamHaynesStarbuckisProfessorofManagementandOrganizationalBehaviorattheStern SchoolofBusiness,NewYorkUniversity. VolumeEditors NigelSlackistheRoyalAcademyofEngineeringProfessorofServiceandSupportManagementat CambridgeUniversityandProfessorofOperationsStrategyatWarwickBusinessSchool.Heisthe authorofmanypublicationsintheOperationsManagementarea,includingthemarketleadingtext, OperationsManagement(FourthEdition,2004)withStuartChambersandRobertJohnston,whichhas beentranslatedintoseverallanguages. Michael Lewis is Professor of Operations and Supply Management at Bath University. He has publishedwidelyintheOperationsManagementandStrategyareas,includingthefour volumeseries ofeditedpapersOperationsManagement:Criticalperspectives(2003).
The list of books you might like
