Operations management is an exciting and vital field in today’s complex business world. Therefore, students in both MBA and undergraduate courses have an urgent need to understand operations—an essential function in every business.

This textbook on operations management addresses the impact of operations decisions on the firm and emphasizes cross-functional decision making. The text provides materials of interest to general business students and operations management majors. By stressing cross-functional decision making, the text provides a unique and current business perspective for all students. This is the first text to incorporate cross-functional decision making in every chapter.

A unified decision framework organizes the material by grouping decisions into four major categories: process, quality, capacity, and inventory. This framework is intended to make it easy for students to understand the decision role and responsibilities of operations in relation to other functions such as marketing and finance. The text also provides a balanced treatment of both service and manufacturing firms.

The latest content is incorporated, including global operations, supply chain management, e-operations, service blueprinting, competency-based strategy, Six Sigma, lean systems, and mass customization. Complete coverage is also provided on traditional topics, including process design, service systems, quality management, ERP, and inventory control and scheduling.

While covering the concepts of operations management in 16 chapters, the book also provides 20 case studies. The cases are intended to strengthen problem formulation skills and illustrate the concepts presented in the text. Long and short case studies are included. The cases are not just large problems or examples; rather, they are substantial management case studies, including some from the Harvard Business School and Darden School case collections.

This softcover edition with fewer pages than most introductory books is economical for students. It covers all the essentials students need to know about operations, leaving out only superfluous and tangential topics. By limiting the size of the book, I have condensed the material to the basics.

This book is ideal for regular operations management courses and also case courses and modular courses. It is particularly useful for those who desire a cross-functional and decision-making perspective. Instructors can easily supplement the text with their own cases, readings, or course materials as desired.

The website for the text contains 21 Excel templates designed to assist in solving problems at the end of chapters and the case studies. The website also contains additional technical notes on linear programming, simulation, transportation method, financial analysis, and queuing, which can be assigned by the instructor, if desired. The website contains PowerPoint slides, video clips, and Web links to companies cited in the Student Internet Exercises in the text. The instructors website is password protected and contains the instructor’s manual with solutions for discussion questions, problems, cases and technical chapters. The website for this textbook (http://www.mhhe.com/schroeder4e) is also linked to the McGraw-Hill operations website (http://www.mhhe.com/pom/).

A number of pedagogical features are contained in this book.

• Operations Leader boxes are included in each chapter to illustrate the latest practices being implemented by leading firms.
  
• Each chapter contains at least three Student Internet Exercises. These exercises generally allow for extended learning about concepts that have already been discussed in the text.
  
• Points of cross-functional emphasis are noted in each chapter by a special symbol. This highlights the cross-functional nature of this book.
  
• Solved problems are included at the end of quantitative chapters to provide additional examples for students.
  
• Excel spreadsheets are keyed to specific problems at the end of chapters. One of these spreadsheets is illustrated in the text for each chapter that contains Excel problems.
  
• The student textbook website can be used to extend students’ learning of the basic ideas covered in the text. It includes technical chapters, video clips, Excel templates, PowerPoint slides, chapter quizes and Web links.

Appropriate video clips are noted in the text margin by a special symbol and identification label.

KEY CHANGES TO THE FOURTH EDITION

1. The chapter on JIT has been completely revised to cover lean systems and moved to the process section of the text. This location serves to address lean much earlier in the textbook and places lean in the context of process improvement rather than inventory.
   

2. The chapter on service process design has been completely rewritten to incorporate current material such as the service matrix and a revised customercontact model.
   

3. The supply chain management chapter has been extensively revised to include the supply chain operations reference (SCOR) model and more material on logistics and purchasing, offshoring, outsourcing, and the Internet.
   

4. The following changes have been made in various chapters:

   • Revised the purpose of operations to: adding value for the customer at low cost.
   • Emphasized that all work in any function is accomplished by a process.
   • The influence of the value proposition on new product design is included.
   • Manufacturing processes were expanded from three to five.
   • The customization point (or order penetration point) was added.
   • Kaizen and takt time were added to the chapter on lean systems.
   • Material on the Baldrige Award was updated.
   • A section was added on lean and Six Sigma.
   • The discussion of CPFR and S&OP was extended.

5. Half of the problems have been revised and new Operations Leader boxes were added.
   

6. About 60 student Internet assignments, with new and updated exercises, have been added to the fourth edition.
   

7. Twenty case studies have been included. They have been updated and three new cases added:

Early Supplier Integration in the Design of the John Deere Skid-Steer
Loader
Quality at Gillette Argentina
e-bags: Managing Growth

Two existing cases have been revised to add current information:

Six Sigma at 3M, Inc.
Customer Driven Learning at Radisson Hotels Worldwide

Summary of Chapter-by-Chapter Revisions

Chapter 1: The Operations Function

Adds a section on “why study operations management.”
Revises the purpose of operations to adding value for the customer at low cost.
Changes the definition of operations to incorporate customer value added.
Emphasizes that all work in any function is accomplished by a process.

Chapter 2: Operations and Supply Chain Strategy

Adds the definition of the value proposition.
Links operations objectives to competitive priorities.
Adds material on supply chain strategy.

Chapter 3: Product Design

Links operations strategy and the value proposition to new-product design.

Chapter 4: Process Selection

Adds detail on continuous flow and job shop processes.
Adds the customization point (or order-penetration point).
Expands the product-process matrix to include five processes.

Chapter 5: Service Process Design

Extensively rewritten to include the following revisions:
New Operations Leader box is added for Park Place Lexus.
Revises the differences between manufacturing and services.
Adds the Service Matrix, by Collier and Meyer.
Expands the customer contact model to include sales opportunities.
Revises the section on services recovery and service guarantee.
Deletes the cycle of service and moment of truth.
Revises the section on technology in services.

Chapter 6: Lean Systems

The previous Chapter 6 is deleted and replaced with lean systems; the following is emphasized:
Describes JIT as an earlier and more limited version of lean systems.
Presents three main principles of lean systems.
Discusses six elements of lean systems.
Includes implementation of lean.
Describes application of lean thinking to administrative and service processes.
Discusses Kaizen events and takt time.

Chapter 7: Process Flow Analysis

Explains that all work in any part of the organization can be viewed as a process.
Links process analysis to lean value stream mapping in the previous chapter.

Chapter 8: Managing Quality

Updates material on the Baldrige Award.

Chapter 9: Quality Control and Improvement

Revises the definitions of quality control and continuous improvement.
Adds a new section on lean and Six Sigma.
Revises half of the problems.

Chapter 10: Supply Chain Management

This chapter has been extensively rewritten to include:
New Operations Leader boxes on Apple ipod and Boeing 787 Dreamliner.
A new definition of supply chain management.
Added material on logistics and purchasing.
The SCOR model.
Rewritten section on measuring supply chain performance.
Added material on outsourcing and offshoring.
Added section on the Internet, e-business, and supply chains.

Chapter 11: Forecasting

Replaces Figure 11.1 with a clearer illustration.
Expands the section on CPFR.
Revises half of the problems.

Chapter 12: Facilities and Aggregate Planning

Adds a definition of capacity utilization.
Adds an Operations Leader box on S&OP.
Revises half the problems.

Chapter 13: Scheduling Operations

Adds more examples of batch scheduling for service operations.
Changes half the problems.

Chapter 14: Project Planning and Scheduling

Explains calculations for crashing time and cost in CPM networks.
Revises half the problems.

Chapter 15: Independent-Demand Inventory

Revises half the problems.

Chapter 16: Materials Requirement Planning and ERP

Adds a new section on ERP.
Expands the discussion of push and pull systems.
Revises half the problems.

BOOK SUPPLEMENTS

Book supplements available to instructors include the Instructor’s Resource with instructor’s manual, PowerPoint slides, Web links, Excel templates, additional video clips, technical notes, and a test bank.

McGraw-Hill/Irwin video series is available to book adopters. These videos include 13 volumes containing over 39 segments varying in length from 9 to 25 minutes. The videos provide actual plant and service tours, and students can hear from real operations managers. The topics include concepts such as lean production, quality, manufacturing processes, CIM, inventory management, services, supply chain management, improving operations methods, layout improvements, supplier development, reengineering, value-driven production, scheduling, product and process design, JIT, and international logistics.

McGraw-Hill/Irwin has the following products available for purchase or shrinkwrapped with the text at a discounted price:

• Interactive Cases for Operations Management and Supply Chain Management, by Byron Finch: This collection of 24 dynamic cases features scenarios utilizing interactive Java applets, included on a CD-ROM with the casebook. These innovative case studies require students to utilize the Java-based applets to solve operations and supply chain management problems with an interactive graphical tool, on topics such as production line simulation, variance analysis, overbooking, x-bar and r-charts, waiting lines, forecasting, bullwhip effect, inventory, Kanban, aggregate planning, constraint management, facility layout, and learning curves.
  

• HOM Operations Management Software for Windows, by Moses, Seshadri, and Yakir, offers powerful Windows-based programs for solving real-world operating problems such as forecasting, process analysis, waiting line design and analysis, project management, MRP and inventory management, and capacity planning. HOM imports and exports files to and from Excel, and each module has a detailed, step-by-step “how to solve” dialog box.
  

• Mike’s Bikes Business Simulation on CD provides an opportunity to run Mike’s Bikes, a bicycle manufacturing company. Through this simulation students apply their knowledge of the functional areas of business, such as marketing, operations, finance, and accounting, to a real business.

ACKNOWLEDGMENTS

The author would like to acknowledge the many individuals who have assisted with this book. Special thanks go to the reviewers for this edition:

Bahran Alidaee, University of Mississippi
Steven Dickstein, Ohio State University
Gene Fliedner, Outland University
Michael Godfrey, University of Wisconsin, Oshkosh
Mark E. Goudreau, Johnson & Wales University
Chuck Nener, Metro State University
Hugo Vandersypen, University of Michigan , Dearborn

The author would also like to thank the staff at McGraw-Hill/Irwin who had a direct hand in the editing and production of the text. Scott Isenberg, executive editor, provided unwavering editorial support for many of the key features and concepts incorporated into the text. My thanks go to Katie Jones, developmental editor, who ensured that the book faithfully adhered to its concept and coordinated the editing and review process Bruce Gin, project manager, was diligent in getting the book through the production process.

I would also like to thank my colleagues at the University of Minnesota who listened to my ideas and provided suggestions for book improvement. In particular my thanks go to Susan Meyer Goldstein and M. Johnny Rungtusanatham, who each revised a chapter in the book and made major contributions. Special thanks go to James Pope, University of Toledo, who authored the PowerPoint slides; and Michael Godfrey, University of Wisconsin, Oshkosh, who wrote practice quizzes for the text website and updated the Test Bank. I would also like to thank Gene Fliedner, Oakland University, who updated the Instructor’s Manual. And additional thanks go to thank Doug Chard, who diligently and carefully prepared the index. Finally, I thank my family for their patience and perseverance during the many months of writing and editing. Without their support and encouragement this textbook would not have been possible.

 Roger G. Schroeder