ERP: The Dynamics of Supply Chain and Process Management is a complete
updating and expansion of Avraham Shtub’s award-winning 1999 text Enterprise Resource
Planning (ERP): The Dynamics of Operations Management.
New chapters, written together with his co-author Reuven Karni, cover
enterprise process modeling; design of business processes; a complete revision of the
original chapter on the integrated order-fulfillment process using ERP; business process
management; business process improvement; and a new appendix on simulating process life
cycles: using serious games as teaching aids, along with a complete description of and
instructions for using the CD containing MERPTM – a Dynamic Case Study Simulator (DCSS)
from MBE Simulations Ltd.
MERPTM is designed to facilitate the teaching of integrated operations of a
business organization with a focus on corporate performance management. It reflects a
fully live environment and allows students to participate in a virtual organization made
real and dynamic as minute-by-minute business events and conditions unfold.
This book is ideal for use in academic and executive programs aimed at teaching
students how integrated systems work. It is suitable as a textbook for the basic MBA
Operations Management course or as a text for courses on ERP systems and the development
of business processes. In an industrial engineering program it could serve to give
students their first, and perhaps only, introduction to business issues like market demand
and supplier relationships.
"I used Avy Shtub’s award-winning 1999 book on ERP and the accompanying
Operations Trainer software inseveral leading MBA programs in the United States and
Europe. Most of the courses were delivered in traditional classroom settings but some of
them were offered fully online. The current revision and second edition of the book,
co-written with Reuven Karni, adds new materials with an emphasis on services and business
processes, provides excellent, detailed examples, and revises old ones of the previous
edition. The book is nicely complemented and enhanced by the addition of a unique,
dynamic, online simulation package MERP™ that represents a major upgrade to the old,
PC-based Operations Trainer. In my reading, the book’s first main theme, Integrated
Production and Order Management (IPOM), is a different, and perhaps more valid, take on
the many issues associated with Supply Chain Management. The authors touch on all facets
and issues of Operations and Supply Chain Management and provide a theory-based and sound,
practice-proven approach to the problems present in any organization. The second main
theme covers the design and improvement of enterprise and business processes, touching on
facets and issues relating to process-based enterprise management. I would highly
recommend the book and the accompanying software to any instructor teaching
Operations/Supply Chain Management, Business Process Management or Industrial
Engineering."
-- Gyula Vastag (Corvinus University of Budapest, Hungary)
Table of Contents
Preface xi
Authors' Acknowledgements xiii
1 Introduction 1
1.1 The Theme of this Book 1
1.2 Operations Management Defined 1
1.3 The Need for Integrated Production and Order Management 3
1.4 Summary: Viewpoints of Enterprise Operation 5
1.5 Operations Management Frameworks 6
1.6 Modeling in Operations Management 7
1.7 Modeling in Process Management 9
1.8 The Dynamic Aspect: Simulation and Systems Dynamics 10
1.9 Overview of the Book 12
Problems 17
2 Organizations and Organizational Structures 19
2.1 Functional and Project Organizations, Typical Goals and Performance Measures 19
2.2 The Job Shop, Flow Shop, and Group Technology 25
2.3 Operations Management and Its Interface with Other Functional Areas: Restructuring
the Order-Fulfillment Process 28
Problems 29
3 Enterprise Process Modeling 31
3.1 The Reference Model Approach to Enterprise Process Modeling 31
3.2 Basic Concepts in Enterprise Process Modeling 31
3.3 An Example of a Business Process 35
3.4 Enterprise Modeling Principles 35
3.5 Enterprise Functionalities 36
3.6 A Procedure for the Design of an Enterprise-Specific Process Model 44
3.7 A Case Study: "Hotel Front Desk" 53
Problems 56
4 Information and Its Use 59
4.1 From Data Collection to Decisionmaking 59
4.2 Information Systems: The Data Base and the Model Base 61
4.3 The Accounting Information System 63
4.4 Quality of Information 65
4.5 Forecasting 66
Problems 71
5 Marketing Considerations 73
5.1 Manufacturing Policies: Make to Stock, Make to Order, Assemble to Order, Engineer
to Order 73
5.2 The Master Production Schedule 76
5.3 Lead Time and Time-Based Competition 78
5.4Quality and Its Management: Quality-Based Competition 81
5.5 Cost Considerations and Cost-Based Competition 82
Problems 85
6 Purchasing, Outsourcing and Inventory Management 87
6.1 The Need for Purchasing and Outsourcing 87
6.2 Purchasing and Outsourcing-Make or Buy Decisions 88
6.3 Supplier Management 90
6.4 Inventory Management-Benefit and Cost Considerations 93
6.5 Inventory Management-Models and their Assumptions 97
6.6 The Dynamics of the Order-Fulfillment Process-Early Studies 101
Problems 102
7 Scheduling 105
7.1 The Job Shop: Implementing Priority Rules 105
7.2 Scheduling the Flow Shop 111
7.3 The Just-in-Time Approach 113
7.4 The Dynamic Shop: Expediting and Changing Priorities 116
7.5 The Drum Buffer Rope Approach 117
Problems 121
8 Design of Business Processes 123
8.1 Process Design and Process Modeling 123
8.2 Process Perspectives (Process Viewpoints) 123
8.3 Business Process Design Procedure 125
8.4 Business Process Design Example 134
8.5 New Process Design 135
8.6 Comparison of the Current and New Processes 144
8.7 Context-Dependent Processes 145
Problems 147
9 The Integrated Order-Fulfillment Process Using MRP 151
9.1 Operations Management Frameworks 151
9.2 Evolution of Computer-based Operations Management Strategies 152
9.3 The Material Requirements Planning Concept 153
9.4 The Product (Engineering) Data: The Bill of Material 154
9.5 Logistic (Order) Data: The Master Production Schedule and Inventory Data 157
9.6 Gross to Net and Time-phasing-MRP Logic 159
9.7 Capacity Considerations 162
Problems 167
10 The integrated Order-Fulfillment Process Using ERP 169
10.1 Cross-Enterprise Processes in the Integrated Order-Fulfillment Process 169
10.2 The Role of Management in the Integrated Order-Fulfillment Process 169
10.3 The Hierarchy of Goals and the Road Map to the Goal 173
10.4 Establishing Control: Identifying Problems 175
10.5 Taking Actions: Solving Problems 177
Problems 179
11 Teaching and Training Integrated Production and Order Management 181
11.1 Individual Learning and Organizational Learning 181
11.2 The Individual Learning Curve 182
11.3 Team Building and the Team Performance Curve 184
11.4 Organizational Learning in the IPOM Environment 187
Problems 189
12 Business Process Management 191
12.1 Motivation 191
12.2 Enterprise Process Master Planning 192
12.3 Process Action Analysis 205
12.4 Example: Hotel Front Desk 208
12.5 Process Action Analysis: Summary 213
Problems 235
13 Business Process Improvement 217
13.1 Motivation 217
13.2 Definitions 218
13.3 Redesign: Dimensions of BPI 219
13.4 Redesign: Business Process Improvement Procedures 222
13.5 Redesign Example: Improving the Telesales Process 227
13.6 A Note on Engineering Creativity 227
13.7 Redesign: Incorporating an Improvement into the Process Flowchart and PAT 231
13.8 Performer Capability: Path to Improvement 232
13.9 A Discourse on Business Process Training 240
13.10 Performer Capability and Training - Telesales Example 241
13.11 Designer Capability: The Path to Improvement 243
13.12 Designer Capability: An Example of Design Focus Maturation 245
13.13 Summary 249
Problems 251
Appendix: Simulating Process Life Cycles: Serious Games as Teaching Aids 255
A.1 The Use of Simulators for Training 255
A.2 The Order Life Cycle 255
A.3 MERP?Background 256
A.4 Functional Views 257
A.5 DCSS?Scenarios 260
A.6 How MERP?Provides Value 262
A.7 Benefits to Students 263
A.8 Tools Available to Students and Professors 264
A.9 How to Get to Know the MERP?Tool and the Various Scenarios 264
A.10 The Registration Process 265
A.11 General Notes 267
References 269
Index 277
311 pages, Hardcover