Arthur V. Hill - The Encyclopedia of Operations Management: A Field Manual and Glossary of Operations Management Terms and Concepts

A Field Manual and Glossary of Operations Management Terms and Concepts

Arthur V. Hill

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2012 by Arthur V. Hill
Published by Pearson Education, Inc.
Publishing as FT Press
Upper Saddle River, New Jersey 07458

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All rights reserved. No part of this book may be reproduced, in any form or by any means, without permission in writing from the publisher.

Printed in the United States of America

First Printing July 2011

ISBN-10: 0-13-288370-8
ISBN-13: 978-0-13-288370-2

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To the author of all truth.

Purpose The Encyclopedia of Operations Management (EOM) is an ideal field manual for students, instructors, and practicing managers. For students, the EOM is a useful guide for developing an integrated mental map for the entire field of supply chain and operations management. It has also proven useful as a reference for students preparing for case discussions, exams, and job interviews. It is particularly helpful for students new to supply chain and operations management and for international students who need precise definitions of specialized terms. For instructors, the EOM is an invaluable desk reference and teaching aid that goes far beyond the typical dictionaries. Many instructors and doctoral students find the numerous figures, graphs, equations, Excel formulas, VBA code, and references helpful for their lectures and research. For practicing managers, the EOM is a valuable tool for black belt and green belt training programs and a powerful tool for helping organizations build a precise standard language.

This encyclopedia has proven to be a useful text for core undergraduate and graduate courses in both business and engineering schools. It is also useful for second-level courses in supply chain management, quality management, lean manufacturing, project management, service management, operations strategy, manufacturing management, industrial engineering, and manufacturing engineering.

Coverage The EOM covers a wide range of operations and supply chain management disciplines, including:

Accounting

Customer service

Distribution

e-business

Economics/finance

Forecasting

Healthcare management

Human resources management

Industrial engineering

Industrial relations

Inventory management

Lean sigma (six sigma)

Lean thinking

Logistics

Maintenance/reliability engineering

Management information systems

Manufacturing management

Marketing/sales

New product development

Operations research

Operations strategy

Organizational behavior/management

Personal time management

Production planning and control

Purchasing/supply management

Quality management

Reliability engineering

Service management

Simulation

Sourcing

Statistics

Supply chain management

Systems engineering

Theory of Constraints

Transportation

Warehousing

Format This book is designed to be an easily carried field manual. Each entry begins with a short formal definition followed by a longer description and ends with references to additional resources and cross-references (links) to related terms. The links (cross-references between terms) help the reader develop a complete mental map of the field. Essential terms are marked with a star () at the end of the short definition.

History As a faculty member at IMD International in Lausanne, Switzerland, I gave my MBA students a one-page list of about 50 essential operations management terms. Several students requested help defining those terms. This encyclopedia grew out of my response to those requests. As shown in the table below, the EOM has grown in size over the years. This 2012 edition has 540 new entries and nearly twice the number of links. More importantly, the EOM has grown in clarity and precision. About 30% of the entries were completely rewritten and many photos, figures, graphs, tables, examples, references, and footnotes were added and improved. We compressed the 2012 edition by about 50 pages so it is still a handy field manual. We did this by removing white space, shrinking figures, shortening longer entries, and combining entries to reduce redundancies. Comments, additions, and edits are welcomed and should be sent to the author at . Substantive contributions will be acknowledged in the next edition.

Arthur V. Hill, Associate Dean for MBA Programs, John & Nancy Lindahl Professor, Operations & Management Science Department, Curtis L. Carlson School of Management, University of Minnesota

Most students, instructors, and managers struggle to build a simple framework for the supply chain and operations management discipline. Although most standard texts offer some type of framework, none of these frameworks has been widely accepted. The SCOR framework has gained wide acceptance for supply chain management, but less so for operations management. (See the SCOR entry.) This author helped create an award-winning framework published in Hays, Bouzdine-Chameeva, Meyer Goldstein, Hill, and Scavarda (2007). (See the operations management entry.) More recently, this author developed the much simpler Better-Faster-Cheaper-Stronger framework that is based on the following four fundamental premises:

Premise 1: All work is a process.
Premise 2: All processes can be improved.
Premise 3: Processes are improved by making them better, faster, cheaper, and stronger.
Premise 4: Improved processes add more value to customers, shareholders, employees, and society.

Better processes create products and services that more reliably meet customer requirements for both tangible and intangible product attributes. Faster processes require less time and provide more customization. Cheaper processes reduce cost by achieving a better balance between supply and demand and by improving the product and service design. Stronger processes are better aligned with higher-level strategies, are more sustainable, and better mitigate risks. This framework has a logical order. We start with customer requirements for performance and reliability (