Cover image for Back to basics : your guide to manufacturing excellence
Back to basics : your guide to manufacturing excellence
Melnyk, Steven A.
Personal Author:
Publication Information:
Boca Raton, Fla. : St. Lucie Press ; Alexandria, VA APICS, [2000]

Physical Description:
xxv, 197 pages ; 24 cm.
Added Author:
Format :


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Material Type
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TS155 .M438 2000 Adult Non-Fiction Non-Fiction Area

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As organizations move into the future, the operations environment needs to expand into Collaborative Planning and Forecast Replenishment (CPFR), Vendor Managed Inventory (VMI), and an Enterprise Resource Planning (ERP) operating system to become and remain competitive. These innovative and complex methods require an unprecedented degree of accuracy and knowledge of the basics in operations management. Back to Basics: Your Guide to Manufacturing Excellence details the key concepts necessary to expertly apply new approaches such as ERP, CPFR, VMI, and much more.

Based on the popular "Back to Basics" columns that appear in the magazine APICS: The Performance Advantage, the structure of the book allows for sufficient development of each topic and is short enough to be quickly read. Topics include: capacity, inventory, inventory accuracy, part numbering, processes, problem solving, and general managerial guidelines. Each chapter has everything you need to understand the issues and their implications.
Many careers in operations management begin with production and inventory control. When entering this field, you need to know the basics - in a hurry. Developing excellence takes time and usually comes through the "school of hard knocks". Whether new on the job, or brushing up to implement the latest technology, Back to Basics: Your Guide to Manufacturing Excellence gives you the information you need to become an expert - quickly.

Author Notes

R. T. "Chris" Christensen is the Director of Operations Management programs at the University of Wisconsin-Madison, School of Business, Executive Education.

Table of Contents

Chapter 1. Why the Basics?p. 1
Understanding the Basicsp. 1
Oh, No! Not Another Book on Manufacturing!p. 2
How Can Things Be So Wrong, When Everything Seems To Be So Right?p. 2
Why Teach Basics When the Answers Are Out There?p. 4
Basics Are Hard, But Basics Work!p. 5
Mapping Manufacturing Excellence: The Case of the MRPII System That Wasn'tp. 7
Overviewp. 7
The Case of the MRPII Implementation That Wasn'tp. 8
Mapping the Basics of Manufacturing Excellencep. 10
Mapping Manufacturing Excellence: The Four Operations Pillars of Excellencep. 12
Overviewp. 12
The Four Operations Pillars of Excellencep. 12
Lead Time: One of the Basic Concepts of Manufacturingp. 13
Overviewp. 13
Defining the Concept of Lead Timep. 13
Types of Lead Timesp. 14
Major Lessons Learnedp. 15
Understanding the Components of Manufacturing Lead Timep. 16
Overviewp. 16
Defining the Concept of Manufacturing Lead Timesp. 16
Factors Affecting Manufacturing Lead Timep. 17
Importance of Monitoring the Elements of Manufacturing Lead Timep. 18
Major Lessons Learnedp. 19
Manufacturing Is Really Just a Balancing Actp. 19
Overviewp. 19
The Balancep. 20
Major Lessons Learnedp. 23
Chapter 2. Understanding Management: The Basics of Problem-Solvingp. 25
Why Problem-Solving?p. 25
Understanding the Concept of Manufacturing's Most Fragile Asset: Informationp. 26
Overviewp. 26
Defining Informationp. 26
Critical Traits of Informationp. 27
Major Lessons Learnedp. 28
Managing Informationp. 28
Overviewp. 28
Information Managementp. 29
The Fragile Nature of Informationp. 31
Major Lessons Learnedp. 31
When Is a Problem Not a Problem?p. 31
Overviewp. 31
Problem vs. Symptomp. 32
Symptomsp. 32
Urgency, Structure, and Orientation of Problemsp. 33
Causesp. 34
Major Lessons Learnedp. 35
Understanding the Problem-Solving Processp. 35
Step 1 Size-Up/Descriptionp. 35
Step 2 Problem-Statement/Diagnosticsp. 37
Step 3 Analysisp. 38
Major Lessons Learnedp. 38
Step 4 Prescription/Alternativesp. 39
Step 5 Implementationp. 40
General Observations About the Problem-Solving Processp. 42
Responding to a Problem: Solve, Resolve, or Dissolvep. 43
Overviewp. 43
Identifying the Three Forms of a Solutionp. 43
To Go Forward, Sometimes We Have To Go Backwardsp. 45
Overviewp. 45
The Importance of Going Backp. 45
How To Go Backwardsp. 47
Major Lessons Learnedp. 47
Chapter 3. What Type of Company Are We?p. 49
Why Should We Care What Type of Company We Are?p. 49
What Type of Company Are We? The Major Dimensionsp. 50
Overviewp. 50
Manufacturing Settings: Major Dimensionsp. 50
Manufacturing Settings Examinedp. 51
Job Shopp. 51
Batchp. 52
Repetitivep. 52
Processp. 53
Major Lessons Learnedp. 53
What Type of Company Are We? Understanding the Industrial and Manufacturing Contextsp. 54
Overviewp. 54
Understanding the Industrial Contextp. 54
Understanding the Impact of the Industrial Contextp. 55
How Does This Information Help with Software Selection?p. 56
Major Lessons Learnedp. 56
Chapter 4. Understanding the Importance of Metricsp. 57
Why Metrics?p. 57
The Importance of Metrics (Part 1)p. 58
Overviewp. 58
The Total Quality Management Experience at One Companyp. 58
What Are Metrics?p. 59
Why Metrics?p. 60
Major Lessons Learnedp. 61
The Importance of Metrics (Part 2)p. 61
Overviewp. 61
Understanding the Differences Between Metricsp. 61
Major Lessons Learnedp. 63
The Importance of Metrics (Part 3)p. 64
Overviewp. 64
Metrics and Corporate Strategyp. 64
Gaps as Indicators of Strategic Problemsp. 65
Gaps as Indicators of Tactical Problemsp. 66
Major Lessons Learnedp. 67
Chapter 5. Process Thinking: Key to the Basicsp. 69
Process Thinking: Understanding the Importance of Processesp. 69
Processes: The Basic Building Blocks of the Operations Management Systemp. 70
Overviewp. 70
What Is a Process?p. 71
Strategic Management Processp. 72
Innovation Processp. 72
Customer Service Processp. 72
Resource Management Processp. 72
Supply-Chain Management Processp. 73
Logistics Management Processp. 73
Performance Measurementp. 73
Other Processesp. 73
Major Lessons Learnedp. 74
Identifying the Building Blocks of the Processp. 74
Overviewp. 74
Categorization of Activities within the Processp. 75
Operationp. 75
Transportationp. 76
Inspectionp. 76
Delayp. 76
Storagep. 77
Major Lessons Learnedp. 78
Structure of Processesp. 78
The Ordering of Activitiesp. 78
Positioning of Activitiesp. 78
Linking of Activitiesp. 80
Major Lessons Learnedp. 80
Improving Processes: The First Stepp. 80
Overviewp. 80
Four Types of Processes Found in Every Firmp. 81
The Process as Formally Documentedp. 81
The Process as People Think It Existsp. 82
The Process as It Actually Existsp. 82
The Process as It Should Existp. 82
Major Lessons Learnedp. 83
Incorporating Value into Process Analysisp. 83
Overviewp. 83
Identify the Critical Customer/Product Traitsp. 84
Determine What Constitutes Value for the Critical Customersp. 85
Identify Metrics Consistent with These Specific Traits of Valuep. 85
Identify the Critical Processes (Including Bounding and Setting Base Conditions)p. 85
Document (and Validate) the Process as It Currently Existsp. 85
Assess the Performance of the Current System in Light of the Customer-Based Metricsp. 85
Modify the Process Appropriatelyp. 86
Major Lessons Learnedp. 86
Process Analysis: Closing the Value Gapp. 87
Overviewp. 87
Disposition Tacticsp. 87
Position Tacticsp. 88
A Caution Regarding Process Changep. 88
Major Lessons Learnedp. 89
Poka-Yoking Our Activitiesp. 90
Overviewp. 90
The Importance of Knowing the Desired Outcomesp. 91
Major Lessons Learnedp. 92
Chapter 6. Capacity: You Can't Build It if You Don't Have the Capacityp. 93
Capacity: The Resource at the Heart of Manufacturing Excellencep. 93
Capacity: Understanding the Basicsp. 93
Major Lessons Learnedp. 96
Measuring Capacityp. 96
Safety Capacityp. 97
Making the Transition from Volume to Outputp. 98
Major Lessons Learnedp. 99
Making the Transition from Capacity in Isolation to Capacity within the Processesp. 100
Overviewp. 100
Capacity in Isolation to Capacity of the Systemp. 100
Measuring Capacity at the Activityp. 101
Calculating Capacity of the Overall Processp. 102
Major Lessons Learnedp. 102
Production Scheduling Is No Substitute for Capacity Planningp. 103
Overviewp. 103
Production Scheduling: Defining the Conceptp. 104
The Problem of Production Scheduling: Solving the Wrong Problems and Hiding Othersp. 105
Prerequisites for Effective Production Schedulingp. 106
Major Lessons Learnedp. 107
Don't Schedule the Shop; Schedule the Bottleneckp. 107
Overviewp. 107
Bottlenecks: The Key to Simplified, Effective Schedulingp. 108
Major Lessons Learnedp. 110
Chapter 7. Understanding the Nature of Setupsp. 113
Why Be Concerned with Setup?p. 113
Understanding the Nature of Setups: The Basicsp. 114
What Is Setup?p. 114
Internal Activity, External Activity, and Capacity Usagep. 116
Why Worry About Setups?p. 116
General Guidelines for Managing Setupsp. 116
Understanding the Nature of Setups: Setups and Lot Sizingp. 117
Lot Sizing: A Reviewp. 117
Setup Costsp. 118
Setup Costs: An Examplep. 118
Major Lessons Learnedp. 120
Chapter 8. Inventory: The Most Misunderstood Corporate Assetp. 121
Inventory Accuracy: What's So Important About the Status of Our Inventory, Anyway?p. 121
Overviewp. 121
Why Inventory Accuracyp. 121
The Need for Record Accuracyp. 122
Major Lessons Learnedp. 123
If Inventory Is a Waste, Then Why Study It?p. 124
The Fallacy of Inventory Management through FIATp. 124
Understanding the Nature of Inventory: Functionsp. 125
Overviewp. 125
What Is Inventory?p. 125
Functions of Inventoryp. 126
Transitp. 126
Decouplingp. 127
Lot Sizingp. 127
Anticipatoryp. 127
Seasonalp. 127
Bufferp. 128
Applying the Functions Approachp. 128
Major Lessons Learnedp. 128
Understanding the Nature of Inventory: Forms and Positionsp. 129
Overviewp. 129
Forms of Inventoryp. 129
Position of the Inventory in the Supply Chainp. 130
Putting Things Togetherp. 130
Major Lessons Learnedp. 130
Understanding the Nature of Inventory: ABC Analysisp. 131
Part 1

p. 131

Overviewp. 131
Develop Categories of Inventoriesp. 131
The Nature of ABC Analysisp. 132
ABC and Inventory Controlp. 132
ABC and Inventory Reductionp. 133
Doing ABC Analysisp. 133
Major Lessons Learnedp. 134
Part 2

p. 135

A Reviewp. 135
Doing ABC Analysis: The Answerp. 135
Introducing Costsp. 136
Major Lessons Learnedp. 136
Managing the Slow Movers Using ABC Analysisp. 137
Overviewp. 137
The Problem of the "Slow Movers"p. 137
Managing the Bottom 5%p. 138
Strategies for Managing Slow Moversp. 138
Major Lessons Learnedp. 139
From Inventory Accuracy by Accident to Inventory Accuracy by Design: Key Conceptsp. 140
Overviewp. 140
Defining Inventory Accuracyp. 142
Major Lessons Learnedp. 144
From Inventory Accuracy by Accident to Inventory Accuracy by Design: Developing the Systemp. 144
Overviewp. 144
The Structure for Inventory Accuracyp. 144
An Effective Cycle-Counting Program: The Key to High Inventory Accuracyp. 146
Major Lessons Learnedp. 149
Chapter 9. Odds and Ends of Manufacturing Basicsp. 151
Manufacturing Excellence Draws on Multiple Sourcesp. 151
Part Numbering: An Introductionp. 151
Overviewp. 151
Defining the Concept of Part Numberingp. 153
Assigning Part Numbers: To Be Significant or Not To Be Significantp. 154
Major Lessons Learnedp. 155
Understanding Part Numbering: Significant Numbering (Yes or No)?p. 155
Overviewp. 155
Reasons for Using Significant Part Numbersp. 155
Part Numbering: What To Dop. 158
Overviewp. 158
Part Numbering vs. Storage and Retrieval of Informationp. 158
Comments from Column Readersp. 160
Part Numbering: When To Change the Numberp. 160
How To Handle Prototypesp. 161
How To Handle Design Revisionsp. 162
Part Numbering Revisitedp. 163
Overviewp. 163
Another Look at Part Numbering: One Reader's Perspectivep. 163
Major Lessons Learnedp. 165
Bills of Materials: An Introductionp. 166
The Problemp. 166
Defining the Bill of Materialsp. 167
Bills of Materials: Understanding the Usesp. 168
Overviewp. 168
Uses of the Bill of Materialsp. 168
Product Definitionp. 168
Engineering Change Controlp. 169
Service Part Supportp. 169
Warranty Analysis/Controlp. 170
Planning and Schedulingp. 170
Costingp. 171
Shortage Assessmentp. 171
Backflushingp. 171
Terms and Definitionsp. 171
Revisiting Bills of Materialp. 172
Major Lessons Learnedp. 174
Chapter 10. Getting Things Done, and Done Right, the First Time: The Basics of Implementationp. 175
Implementing the Savings: The Dumb Way of Achieving Managerial Excellencep. 175
Overviewp. 175
What Are the Savings?p. 176
Major Lessons Learnedp. 179
The Power of WIIFM (What's in It for Me?)p. 179
Overviewp. 179
The Power of WIIFMp. 180
Major Lessons Learnedp. 181
When a Cost Savings Is a Real Cost Savingsp. 182
Overviewp. 182
You Don't Understand Costsp. 182
True Cost Savingsp. 183
Opportunity Cost Savingsp. 184
Incremental Cost Savingsp. 184
Myopic Cost Savingsp. 184
Major Lessons Learnedp. 185
Focus, Urgency, and Time Compression: Understanding the Keys to Success in Implementationp. 185
Introductionp. 185
The Scenariop. 186
The Problemp. 186
Hey, Vendor, There's a Paradigm in my Software!p. 188
Overviewp. 188
The Manufacturing Software Decisionp. 188
So What?p. 190
Postscript: Finding a Beginning in the Endp. 191
Indexp. 195