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MANAGING PROJECTS

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Projects represent nonroutine business activities that often have long-term strategic ramifications for a firm. In this chapter, we examined how projects differ from routine business activities and discussed the major phases of projects. We noted how environmental changes have resulted in increased attention being paid to projects and project management over the past decade. In the second half of the chapter, we introduced some basic tools that businesses can use when planning for and controlling projects. Both Gantt charts and network diagrams give managers a visual picture of how a project is going. Network diagrams have the added advantage of showing the precedence between activities, as well as the critical path(s). We wrapped up the chapter by showing how these concepts are embedded in inexpensive yet powerful software packages such as Microsoft Project. If you want to learn more about project management, we encourage you to take a look at the Web site for the Proj...
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MANAGING PRODUCTION ACROSS THE SUPPLY CHAIN

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This chapter has provided a comprehensive overview of the various tools companies use to manage production, starting with master scheduling, then MRP and job sequencing, and ending with DRP. Planning and control systems aid manufacturers and service firms alike by helping them to determine the quantities and timing of their activities. Put another way, production management should be of interest not only to manufacturing firms but to virtually all firms involved in the flow of physical products. Today, advances in information technology are radically changing planning and control systems in two fundamental ways. First, faster computers and extensive communications networks are expanding the depth and breadth of planning and control activities. Firms can replan and share new information with their supply chain partners almost instantaneously. Second, planning and control software tools are becoming more sophisticated. Some firms even have advanced decision support tools th...
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FORECASTING

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Forecasting is a critical business process for nearly every organization. Whether the organization is forecasting demand, supply, prices, or some other variable, forecasting is often the first step an organization must take in planning future business activities. In this chapter, we described the different types of forecasts companies use and the four laws of forecasting. We also talked about when to use qualitative and quantitative forecasting techniques and explained several approaches to developing time series and causal forecasting models. Of course, forecasting is not just about the “numbers.” As the discussion and CPFR examples illustrate, organizations can collaborate with one another to improve the accuracy of their forecasting efforts or even reduce the need for forecasts.
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Sales and operations Planning (Aggregate Planning)

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S&OP fills the gap between long-term strategic planning and shortterm planning and control. Through S&OP, firms can not only plan and coordinate efforts in their own functional areas—operations, marketing, finance, human resources, and so on—but also effectively communicate to other members of the supply chain what they expect to accomplish over the intermediate time horizon. In this chapter, we described several approaches to S&OP and demonstrated the power of thetechnique. We discussed when and where top-down versus bottom-up planning can be used and showed three basic approaches to S&OP: level, chase, and mixed production. We also touched on some of the qualitative issues surrounding S&OP: How do we select a plan? How can we use S&OP to foster agreement and cooperation among the various parties? How can we organize for S&OP? We also argued for increased sharing of S&OP information across the supply chain. As information technologies be...
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LOGISTICS

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As critical as logistics is today it will continue to grow in importance. In fact, several trends will keep logistics at the forefront of many firms’ strategic efforts: ·          Growth in the level of both domestic and international logistics; ·          Outsourcing opportunities; and ·          Increased emphasis on sustainability at the company level. The last two points deserve special mention. As logistics becomes more globalized and information intensive, more firms are outsourcing the logistics function to specialists, most notably third-party logistics providers (3PLs). This trend is expected to continue. However, firms must carefully analyze the strategic benefits and risks of outsourcing. Firms must remember that outsourcing is part of a logistics strategy, not a substitute for one. Second, logistics covers a wide range of business activiti...
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SUPPLY MANAGEMENT

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In this chapter, we introduced you to some of the specific activities and challenges associated with supply management. We began by highlighting the importance of supply management, most notably the profit leverage effect. We then described in detail the strategic sourcing process (Figure 7.1) and demonstrated how spend analysis, total cost analysis, portfolio analysis, and weighted-point evaluation models can be used to support strategic sourcing efforts. We followed with a discussion of the procure-to-pay cycle, as well as some of the major challenges affecting supply management today. We end this chapter with a brief discussion on the future of the purchasing profession. Every year, purchasing professionals perform fewer procure-to-pay activities and spend more time on strategic sourcing activities such as spend analysis, supplier evaluation and selection, and make-or-buy decisions. These activities require individuals with a solid mix of quantitative and interpersonal ...
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MANAGING CAPACITY

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Capacity decisions are among the most important strategic decisions operations and supply chain managers make. As the opening case study on manufacturing flu vaccines suggests, such decisions can have far-reaching effects for a business, its customers, and even society. Even though capacity decisions are inherently risky, this chapter showed how managers can think about and analyze these decisions in a logical manner. Specifically, we talked about three common capacity strategies and also demonstrated various methods for evaluating the financial pros and cons of capacity alternatives. We devoted the last section of the chapter to analyzing process  capacity using the Theory of Constraints (TOC), waiting line theory, and Little’s Law. These advanced perspectives help us understand how capacity behaves across a supply chain, how higher resource levels drive down waiting times, and the relationship between inventory, throughput times, and throughput rates.
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