30+mba-第52章

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empirical　observation　that　the　relationship　between　the　number　of　circuits　
and　the　number　of　telephone　customers　who　could　be　provided　with　an　
acceptable　level　of　service　was　not　as　obvious　as　it　at　first　seemed。　For　example；　
in　his　experiments　where　one　circuit　was　provided　on　a　network；　
adding　just　one　more　could　reduce　waiting　time　by　over　90　per　cent；　rather　
than　just　halving　it　as　simple　logic　might　suggest。　He　published　the　first　
paper　on　queuing　theory　in　1909　and　this　new　operation　scheduling　technique　
was　born。　
Queuing　theory　can　help　answer　operational　questions　such　as　these　
for　a　service　business　such　as　a　restaurant；　bank　or　call　centre：　Given　the　
present　resources：
240　The　Thirty…Day　MBA　
。　How　long　will　a　customer　have　to　wait　before　they　are　served？　
。　How　long　will　it　take　for　the　service　to　be　pleted？　
。　How　big　a　waiting　area　will　be　needed　for　the　queue？　
。　What　is　the　probability　of　a　customer　having　to　wait　longer　than　a　
given　time　interval　before　they　are　served　–　the　classic　service　standard　
problem　calling　for；　say；　‘all　telephone　calls　to　be　answered　within　10　
rings’？　
。　What　is　the　average　number　of　people　in　the　queue？　
。　What　is　the　probability　that　the　queue　will　exceed　a　certain　length？　This　
can　cause　congestion；　say　in　a　bank　or　supermarket。　
。　What　time　period　will　the　server　be　fully　occupied　for　and　how　much　
idle　time　are　they　likely　to　have；　bearing　in　mind　this　is　a　cost　to　be　
minimized？　
The　technique　can　be　used　for　any　operational　problem　where　efficiency　
is　determined　by　calculating　the　optimal　number　of　channels　required　
to　meet　a　level　of　demand。　J　E　Beasley；　formerly　of　the　Tanaka　Business　
School　（Imperial　College）　and　currently　Professor　of　Operational　Research　
at　Brunel　University；　provides　helpful　notes　on　the　subject　at　this　web　link　
（h。。p：//people。brunel。ac。uk/~mastjjb/jeb/or/queue。html）。　
INVENTORY　MANAGEMENT　
High　inventory　levels　are　popular　with　marketing　departments；　as　having　
them　makes　satisfying　customers　an　easier　task；　they　are　less　popular　with　
production　departments　who　have　to　carry　inventory　costs　in　their　budgets。　
Finance　departments　insist　on　having　the　lowest　possible　stock　levels；　as　
high　stock　pushes　working　capital　levels　up　and　return　on　investment　
down。　（Look　back　to　Financial　ratios　in　Chapter　1　on　accounting　to　see　how　
this　works。）　This　tussle　between　departments　is　a　strategic　issue　that　has　to　
be　resolved　by　top　management。　The　birth　of　Waterstone’s；　the　bookshop　
business　founded　by　Tim　Waterstone；　fortuitously　a　marketing　visionary；　
qualified　accountant　and　the　pany’s　managing　director；　provides　an　
interesting　illustration　of　the　dimension　of　the　stock　control　issue。　Until　the　
advent　of　Waterstone’s　the　convention　had　been　to　store　books　spine　out　on　
shelves；　in　alphabetical　order；　under　major　subject　headings　–　puting；　
Sport；　Travel。　This　had　the　added　advantage　of　making　it　easy　to　see　
what　books　needed　reordering　and　stock　counts　were　a　simple　process。　
Waterstone；　however；　knew　that　‘browsers’；　the　majority　（60　per　cent；　
according　to　his　research）　of　people　who　go　into　bookshops　to　look　around；　
had　no　idea　what　book　they　wanted；　so　didn’t　know　where　to　start　looking。　
His　differentiating　strategy　was　that　as　well　as　following　the　conventional　
model　of　having　books　on　shelves；　he　sca。。ered　the　books　in　piles　around　
Operations　Management　241　
the　store　using　a　variety　of　methods：　new　books　in　one　pile；　special　offers　
in　another。　Sales　and　profits　soared；　sufficient　to　more　than　pensate　for　
the　near　doubling　of　book　stock。　
Inventory　categories　
There　are　three　different　categories　of　inventory　that　a　business　needs　to　
have　and　keep　track　of：　
。　Finished　goods：　These　are　products　ready　to　ship　out　to　customers。　
For　Apple　these　would　be　puters；　iPods　and　so　forth；　for　General　
Motors　vehicles　and　for　a　baker　loaves　of　bread。　
。　Work　in　progress　（WIP）：　These　are　products　in　the　process　of　being　
pleted。　They　have　used　up　some　raw　materials　and　had　workers　
paid　to　start　the　manufacturing　process；　so　the　cost　will　reflect　those　
inputs。　For　General　Motors　WIP　would　include　vehicles　awaiting　paint　
or　a　pre…delivery　inspection。　
。　Raw　materials：　These　are　the　basic　materials　from　which　the　end　product　
is　made。　For　General　Motors　this　would　include　metal　and　paint；　but　
it　could　also　include　a　plete　bought…in　engine　for　the　vehicles　in　
which　they　use　third…party　power　units。　
Economic　order　quantity　（EOQ）　
Businesses　have　to　carry　a　certain　minimum　amount　of　stock　to　ensure　
that　the　production　pipeline　works　efficiently　and　likely　demand　is　met。　
So　the　costs　associated　with　ordering　large　quantities　infrequently　and　
so　reducing　the　order　cost　but　increasing　the　cost　of　holding　stock　has　to　
be　balanced　with　placing　frequent　orders；　so　pushing　the　costs　in　placing　
orders　up；　but　reducing　stock　holding　costs。　EOQ　is　basically　an　accounting　
formula　that　calculates　the　point　at　which　the　bination　of　order　costs　
and　inventory　carrying　costs　are　the　least　and　so　arriving　at　the　most　costeffective　
quantity　to　order。　
The　formula　for　EOQ　is：　
Economic　order　quantity　=　（√　（2×R×O））　
C　
Where：　R　=　Annual　demand　in　units；　O　=　Cost　of　placing　and　order；　C=　Cost　
of　carrying　a　unit　of　inventory　for　the　year。　
InventoryOps；　a　website　created　and　run　by　Dave　Piasecki　to　support　
his　book　Inventory　Accuracy：　People；　Processes；　&　Technology　（2003；　Ops　
Publishing）；　provides　a　useful　starting　point　in　your　quest　for　information　
242　The　Thirty…Day　MBA　
on　all　aspects　of　inventory　management　and　warehouse　operations。　At　this　
link　（inventoryops/economic_order_quantity。htm）；　you　will　find　
a　full　explanation　of　how　to　use　EOQ。　
QUALITY　
As　well　as　using　efficient　operation　and　control　procedures　an　organization　
has　to　deliver　a　quality　product　or　service。　Quality　in　operations　does　
not　carry　quite　the　same　meaning　as　it　does　in；　say；　marketing；　where　it　
signifies　something　of　a　high　standard。　In　operations；　quality　means　that　
something　meets　a　set　of　prescribed　standards　and　performs　as　expected。　
In　other　words；　promises　are　made　and　kept。　But　quality　is　also　part　of　
the　efficiency　equation　too。　Quality　below　standard　can　lead　to　high　waste；　
disrupted　schedules　and　lost　orders。　The　ideas；　concepts　and　techniques　
that　drive　thinking　on　quality　e　from　these　management　ideas。　
Inspection　
Frederick　W　Taylor　（see　above）　in　his　book　The　Principles　of　Scientific　Management　
stated　that　one　of　the　clearly　defined　tasks　of　management　was　
to　ensure　that　no　faulty　product　le。。　the　factory　or　workshop。　This　led　to　
a　focus　on　the　detection　of　problems　in　the　product；　testing　every　item　to　
ensure　that　it　plied　with　product　specifications。　The　task　was　carried　
out　at　the　end　of　the　production　process　using　specially　trained　inspectors。　
The　‘big　idea’　emerging　from　this　approach　was　defect　prevention　as　the　
means　to　ensure　quality　control。　Inspection　still　plays　a　part　in　modern　
quality　practices；　but　less　as　an　answer　and　more　as　one　tool　in　the　toolkit。　
Philosophy　
W　Edwards　Deming　（deming）；　an　American　statistician　and　
member　of　the　faculty　at　the　New　York　University　Graduate　School　of　
Business　and　Columbia　University；　where　he　taught　up　until　10　days　
before　his　death　in　1993；　is　considered　as　the　founder　of　modern　quality　
management。　He　took　the　inspection　aspect　of　quality　control　a　stage　
further　with　the　introduction　of　statistical　probability　techniques。　His　view　
was　that　quality　should　be　designed　into　products　and　processes　and　that　
mass　inspection　was　redundant　as　statistical　sampling　using　control　charts　
will　signal　when　a　process　is　out　of　control。　
Deming　is　remembered　most　for　his　14…point　‘System　of　Profound　
Knowledge’。　In　this　he　explains　that　being　a　quality…driven　organization　
requires　everyone；　starting　with　top　management；　‘to　fully　embrace　a　
new　way　of　thinking　that　involves　seeking　the　greater　good　for　everyone　
Operations　Management　243　
involved　and　implementing　continuous　improvement’。　He　wanted　slogans；　
targets　and　numerical　targets　removed　and　emphasized　to　all　employees　
in　the　pany　that　if　change　is　to　be　made　and　processes　are　to　be　continuously　
improved　then　it’s　down　to　them　to　achieve　it。　Deming’s　ideas　
were　adopted　enthusiastically　by　the　Japanese　whose　economy；　having　been　
crippled　by　the　war　（WW2）；　was　ready　to　embrace　radical　change。　It　was　
not　until　the　Japanese　motor　industry　was　cu。。ing　deep　into　its　home　market　
that　US　industry　woke　up　to　Deming’s　message　on　quality。　Total　Quality　
Management；　Quality　Circles　and　Six　Sigma　have　bee　buzzwords　for　
variations　and　extensions　of　Deming　and　other　pioneers’　work　on　quality。　
The　la。。er　term　was　in　use　in　the　1920s　where　mathematicians　used　it　as　the　
symbol　for　a　unit　of　measurement　in　product　quality　variation。　But　it　was　
not　until　the　mid…1980s　that　engineers　in　the　US　pany　Motorola　used　
‘Six　Sigma’　first　as　an　informal　name　–　later　as　a　brand　–　for　their　initiative　
aimed　at　reducing　defects　in　production　processes。　The　name　Six　Sigma　
was　chosen　because　mathematically　it　represents　3。4　parts　–　or　defects　–　per　
million；　an　extremely　high　level　of　quality。　
INFORMATION　TECHNOLOGY　
Information　technology　is　universally　seen　as　important　by　all　major　business　
schools；　but　taught　differently　and　with　a　different　level　of　emphasis　
by　all。　At　London　Business　School　the　course　is　relatively　short；　entitled　‘IT　
for　Business　Value’；　and　has　two　intended　outputs：　to　enhance　students’　
confidence　in　choosing　the　right　technology　for　meeting　business　needs；　
and　to　examine　issues　involved　in　managing　the　implementation　of　business　
systems。　At　Wharton　the　Management　Information　Systems　（MIS）　
course　on　the　MBA　programme　covers　‘the　practice　of　using　puter　
and　munication　systems　to　solve　problems　in　organizations　and　provide　
the　essential　skills　and　technology…based　insights　needed　in　order　to　
manage　effective　problem　solving　with　information　technologies　and　
systems　（IT&S）；　and　to　extract　the　most　value　from　an　actual　or　potential　
information　system’。　The　course　itself　is　organized　around　several　‘hands　
on’　cases　or　projects；　through　which　student　teams　bee　familiar　with　
important　information　technologies；　including　databases　and　the　internet。　
MBAs　will　be　expected　to　have　some　appreciation　of　these　key　issues；　
though　they　will　usually　expect　to　be　able　to　rely　on　professional　expertise　
either　from　within　the　organization　or　outside。　
Data　protection　
Holding　data　on　customers；　employees　and　indeed　on　any　living　person　
requires　an　organization　to　register　with　the　Information　missioner’s　
244　The　Thirty…Day　MBA　
Office　（ico。gov。uk　》　For　organizations　》　Data　protection　guide）　and　
to　ply　with　the　Data　Protection　Act’s　eight　principles；　which　make　sure　
that　personal　information　is：　
。　fairly　and　lawfully　processed；　
。　processed　for　limited　purposes；　
。　adequate；　relevant　and　not　excessive；　
。　accurate　and　up　to　date；　
。　not　kept　for　longer　than　is　necessary；　
。　processed　in　line　with　your　rights；　
。　secure；　
。　not　trans