AboutLeo Lingham Expertise In Managing a business, I can cover all aspects of running
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Experience 18 years of working management experience covering such areas
as business planning, business development, strategic planning,
marketing, management services, personnel administration.
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24 years of management consulting which includes business planning, strategic planning, marketing, product management, training, business coaching etc.
Question Can you pls provide me some information on the below Am urgently in need of these say about 4 days time since i have to give my exams
1. What are the different measures of Cost Control in automobile industry
2. Aggregate production plan in service industry
3. Changes in the way company operates that require less inventory
4. IMPACT OF NEW TECHNOLOGY ON OPRN MGR
Pls also email me @
Answer DEEPAREKHA,
HERE IS SOME USEFUL MATERIAL.
REGARDS
LEO LINGHAM
====================================
1. What are the different measures of Cost Control in automobile industry
Control Activities
Control activities are the policies and procedures that help ensure management directives are carried out. They help ensure that necessary actions are taken to address risks to achievement of the entity's objectives. Control activities occur throughout the organization, at all levels, and in all functions. They include a range of activities as diverse as approvals, authorizations, verifications, reconciliations, reviews of operating performance, security of assets and segregation of duties.
Control activities usually involve two elements: a policy establishing what should be done and procedures to effect the policy. All policies must be implemented thoughtfully, conscientiously and consistently.
Information and Communication
Pertinent information must be identified, captured and communicated in a form and time frame that enables people to carry out their responsibilities. Effective communication must occur in a broad sense, flowing down, across and up the organization. All personnel must receive a clear message from top management that control responsibilities must be taken seriously. They must understand their own role in the internal control system, as well as how individual activities relate to the work of others. They must have a means of communicating significant information upstream.
Monitoring
Control systems need to be monitored - a process that assesses the quality of the system's performance over time. Ongoing monitoring occurs in the ordinary course of operations, and includes regular management and supervisory activities, and other actions personnel take in performing their duties that assess the quality of internal control system performance.
The scope and frequency of separate evaluations depend primarily on an assessment of risks and the effectiveness of ongoing monitoring procedures. Internal control deficiencies should be reported upstream, with serious matters reported immediately to top administration and governing boards.
Control systems change over time. The way controls are applied may evolve. Once effective procedures can become less effective due to the arrival of new personnel, varying effectiveness of training and supervision, time and resources constraints, or additional pressures. Furthermore, circumstances for which the internal control system was originally designed also may change. Because of changing conditions, management needs to determine whether the internal control system continues to be relevant and able to address new risks.
Components of the Control Activity
1.Internal controls rely on the principle of checks and balances in the workplace. The following components focus on the control activity:
2.Personnel need to be competent and trustworthy, with clearly established lines of authority and responsibility documented in written job descriptions and procedures manuals. Organizational charts provide a visual presentation of lines of authority and periodic updates of job descriptions ensures that employees are aware of the duties they are expected to perform.
3.Authorization Procedures need to include a thorough review of supporting information to verify the propriety and validity of transactions. Approval authority is to be commensurate with the nature and significance of the transactions and in compliance with COMPANY policy.
4.Segregation of Duties reduce the likelihood of errors and irregularities. An individual is not to have responsibility for more than one of the three transaction components: authorization, custody, and record keeping. When the work of one employee is checked by another, and when the responsibility for custody for assets is separate from the responsibility for maintaining the records relating to those assets, there is appropriate segregation of duties. This helps detect errors in a timely manner and deter improper activities; and at the same time, it should be devised to prompt operational efficiency and allow for effective communications.
5.Physical Restrictions are the most important type of protective measures for safeguarding COMPANY assets, processes and data.
6.Documentation and Record Retention is to provide reasonable assurance that all information and transactions of value are accurately recorded and retained. Records are to be maintained and controlled in accordance with the established retention period and properly disposed of in accordance with established procedures.
7.Monitoring Operations is essential to verify that controls are operating properly. Reconciliations, confirmations, and exception reports can provide this type of information.
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RESOURCES are the input for the development of business
and hence the sales / profit.
-materials are the input resources, from which products are
made / sold and profit made.
-finance is the input resources, which helps to engineer
the business.
-human resources are the input, helping to run the business.
==============================================
MANAGEMENT COST CONTROLS AT ALL LEVELS
*BUDGETORY CONTROLS, THROUGH THE FINANCIAL CONTROLLER
-all departmental expenses.
-all capital expenditures.
-all travel expenses.
etc
----------------------------------------------
*AUTHORIZATIONS CONTROLS
-managers are listed, who have the authority to sign off
expenses.
---------------------------------------------------
*INVENTORY CONTROLS--RAW MATERIALS
-raw material levels control.
etc
--------------------------------------------------------
*INVENTORY CONTROLS --FINISHED PRODUCTS
-finished goods control levels.
-stockholding cost levels.
etc
---------------------------------------------------------
*QUALITY CONTROLS
-wastage limit controls.
-rejection limit controls.
etc
-----------------------------------------------------------
*PROCUREMENT CONTROLS
-purchase rejection limits controls.
-purchase price variation limits controls
-purchase budget controls.
etc
--------------------------------------------------------------
*DEBT CONTROLS
-finance debt level controls.
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*SALES
-sales expenses budget controls
etc
----------------------------------------------------------
*MARKETING CONTROL
-marketing expenses budget control
etc
--------------------------------------------------
*PERSONNEL CONTROL
-HR expenses budget control.
-recruitment/ selection expenses control.
-wages / salary expenses budget control.
-training/ development expenses budget control.
etc.
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*R&D CONTROL.
-r&d expenses budget control.
etc
------------------------------------------------------
THESE CONTROLS ARE MANAGED THROUGH
-MONTHLY PERFORMANCE REVIEW AGAINST BUDGET
-HALF YEARLY BUSINESS AUDITING
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2. Aggregate production plan in service industry
Aggregate planning is an operational activity which does an aggregate plan for the production process, in advance of 2 to 18 months, to give an idea to management as to what quantity of materials and other resources are to be procured and when, so that the total cost of operations of the organization is kept to the minimum over that period.
The quantity of outsourcing, subcontracting of items, overtime of labor, numbers to be hired and fired in each period and the amount of inventory to be held in stock and to be backlogged for each period are decided. All of these activities are done within the framework of the company ethics, policies, and long term commitment to the society, community and the country of operation.
Aggregate planning has certain prerequired inputs which are inevitable. They include:
Information about the resources and the facilities available.
Demand forecast for the period for which the planning has to be done.
· Cost of various alternatives and resources. This includes cost of holding inventory, ordering cost, cost of production through various production alternatives like subcontracting, backordering and overtime.
· Organizational policies regarding the usage of above alternatives.
"Aggregate Planning is concerned with matching supply and demand of output over the medium time range, up to approximately 12 months into the future. Term aggregate implies that the planning is done for a single overall measure of output or, at the most, a few aggregated product categories. The aim of aggregate planning is to set overall output levels in the near to medium future in the face of fluctuating or uncertain demands. Aggregate planning might seek to influence demand as well as supply."
Attempts to match the supply of and demand for a product or service by determining the appropriate quantities and timing of inputs, transformation, and outputs. Decisions made on SERVICE production, staffing, inventory and backorder levels.
Characteristics of aggregate planning:
Considers a "planning horizon" from about 3 to 18 months, with periodic updating
Looks at aggregate product SERVICE demand, stated in common terms
Looks at aggregate resource quantities, stated in common terms
Possible to influence both supply and demand by adjusting production rates, workforce levels, inventory levels, etc., but facilities cannot be expanded.
SERVICE REQUIREMENT [aggregate plan):
A managerial statement of the period-by-period (time-phased) rates, work-force levels, and EQUIPMENT investment, given customer requirements and capacity limitations.
Staffing Plan (service aggregate plan):
A managerial statement of the period-by-period staff sizes and labour-related capacities, given customer requirements and capacity limitations.
Objectives of Aggregate Planning
Objective of aggregate planning frequently is to minimize total cost over the planning horizon.
Other objectives should be considered:
maximize customer service
minimize EQUIPMENT investment
minimize changes in workforce levels
minimize changes in SERVICE REQUIREMENT rates
maximize utilization of RESOURCES
Aggregate Planning Strategies
Active strategy:
Attempts to handle fluctuations in demand by focusing on demand management
Use pricing strategies and/or advertising and promotion
Develop counter-cyclical products
Request customers to backorder or advance-order
Do not meet demand
Passive strategy (reactive strategy):
Attempts to handle fluctuations in demand by focusing on supply and capacity management
Vary size work force size by hiring or layoffs
Vary utilization of labour and equipment through overtime or idle time
Build or draw from inventory
Subcontract production
Negotiate cooperative arrangements with other firms
Allow backlogs, back orders, and/or stockouts
Mixed strategy:
Combines elements of both an active strategy and a passive (reactive) strategy
Firms will usually use some combination of the two
Passive (reactive) Strategies in Aggregate Planning: Basic Approaches
Chase approach
capacities (workforce levels, production schedules, output rates, etc.) are adjusted to match demand requirements over the planning horizon.
Advantages:
anticipation inventory is not required, and investment in inventory is low
labour utilization is kept high
Disadvantages:
expense of adjusting output rates and/or workforce levels
alienation of workforce
Level Approach
Capacities (workforce levels, SERVICE REQQUIREMENT schedules, output rates, etc.) are kept constant over the planning horizon.
Advantages:
stable output rates and workforce levels
Disadvantages:
greater inventory investment is required
increased overtime and idle time
resource utilizations vary over time
Aggregate Planning Methods: Intuitive Methods
Intuitive methods use management intuition, experience, and rules-of-thumb, frequently accompanied by graphical and/or spreadsheet analysis.
Advantage:
easy to use and explain
Disadvantage:
many solutions are possible, most of which are not optimal
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3. Changes in the way company operates that require less inventory
=========================================
INVENTORY MANAGEMENT / ECONOMIC ORDER QUANTITY
Inventory is held to avoid the nuisance, the time and the cost etc. of constant replenishment. However, to replenish inventory only infrequently would necessitate the holding of very large inventories. It is therefore apparent that some balance or trade-off or compromise is needed in deciding how much inventory to hold, and therefore how much inventory to order. There are costs of holding inventory and there are costs of re-ordering inventory and these two costs need to be balanced. The purpose of the EOQ model is to minimise the total costs of inventory.
The important costs are the ordering cost, the cost of placing an order, and the cost of carrying or holding a unit of inventory in stock. All other costs such as, for example, the purchase cost of the inventory itself, are constant and therefore not relevant to the model.
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COMPONENTS OF INVENTORY COST
Annual Usage/Demand: Expressed in units this is generally the easiest part of the equation. You simply input your forecasted annual usage.
Order Cost: Also known as purchase cost or set up cost, this is the sum of the fixed costs that are incurred each time an item is ordered. These costs are not associated with the quantity ordered but primarily with physical activities required to process the order.
For purchased items these would include the cost to enter the Purchase Order and/or Requisition, any approval steps, the cost to process the receipt, incoming inspection, invoice processing and vendor payment, and in some cases a portion of the inbound freight may also be included in order cost. It is important to understand that these are costs associated with the frequency of the orders and not the quantities ordered. For example in your receiving department the time spent checking in the receipt, entering the receipt and doing any other related paperwork would be included while the time spent repacking materials, unloading trucks, and delivery to other departments would likely not be included. If you have inbound quality inspection where you inspect a percentage of the quantity received you would include the time to get the specs and process the paperwork and not include time spent actually inspecting, however if you inspect a fixed quantity per receipt you would then include the entire time including inspecting, repacking, etc. In the purchasing department you would include all time associated with creating the purchase order, approval steps, contacting the vendor, expediting, and reviewing order reports, you would not include time spent reviewing forecasts, sourcing, getting quotes (unless you get quotes each time you order), and setting up new items. All time spent dealing with vendor invoices would be included in order cost.
Associating actual costs to the activities associated with order cost is where many an EOQ formula runs afoul. Do not make a list of all of the activities and then ask the people performing the activities "how long does it take you to do this?" The results of this type of measurement are rarely even close to accurate. I have found it to be more accurate to determine what percentage of time within the department is consumed performing the specific activities and multiplying this by the total labor costs for a certain time period (usually a month) and then dividing by the line items processed during that same period.
It is extremely difficult to associate inbound freight costs with order costs in an automated EOQ program and I suggest it only if the inbound freight cost has a significant effect on unit cost and its effect on unit cost varies significantly based upon the order quantity.
In manufacturing the Order cost would include the time to initiate the work order, time associated with picking and issuing components excluding time associated with counting and handling specific quantities, all production scheduling time, machine set up time, and inspection time. Production scrap directly associated with the machine setup should also be included in order cost as would be any tooling that is discarded after each production run. There may be times when you want to artificially inflate or deflate set up costs. If you lack the capacity to meet the production schedule using the EOQ you may want to artificially increase set up costs to increase lot sizes and reduce overall set up time. If you have excess capacity you may want to artificially decrease set up costs, this will increase overall set up time and reduce inventory investment. The idea being that if you are paying for the labor and machine overhead anyway it would make sense to take advantage of the savings in reduced inventories.
For the most part Order cost is primarily the labor associated with processing the order however you can include the other costs such as the costs of phone calls, faxes, postage, envelopes, etc.
Carrying cost (Inventory Holding Costs): Also called Holding cost, carrying cost is the cost associated with having inventory on hand. It is primarily made up of the costs associated with the inventory investment and storage cost. For the purpose of the EOQ calculation, if the cost does not change based upon the quantity of inventory on hand it should not be included in carrying cost. In the EOQ formula, carrying cost is represented as the annual cost per average on hand inventory unit. Below are the primary components of carrying cost.
Interest. If you had to borrow money to pay for your inventory, the interest rate would be part of the carrying cost. If you did not borrow on the inventory however have loans on other capital items, you can use the interest rate on those loans since a reduction in inventory would free up money that could be used to pay these loans. If by some miracle you are debt free you would need to determine how much you could make if the money was invested.
Insurance. Since insurance costs are directly related to the total value of the inventory, you would include this as part of carrying cost.
Taxes. If you are required to pay any taxes on the value of your inventory they would also be included.
Storage Costs. Mistakes in calculating storage costs are common in EOQ implementations. Generally companies take all costs associated with the warehouse and divide it by the average inventory to determine a storage cost percentage for the EOQ calculation. This tends to include costs that are not directly affected by the inventory levels and does not compensate for storage characteristics. Carrying costs for the purpose of the EOQ calculation should only include costs that are variable based upon inventory levels.
If you are running a pick/pack operation where you have fixed picking locations assigned to each item where the locations are sized for picking efficiency and are not designed to hold the entire inventory, this portion of the warehouse should not be included in carrying cost since changes to inventory levels do not effect costs here. Your overflow storage areas would be included in carrying cost. Operations that use purely random storage for their product would include the entire storage area in the calculation. Areas such as shipping/receiving and staging areas are usually not included in the storage calculations, however if you have to add an additional warehouse just for overflow inventory then you would include all areas of the second warehouse as well as freight and labor costs associated with moving the material between the warehouses.
Since storage costs are generally applied as a percentage of the inventory value you may need to classify your inventory based upon a ratio of storage space requirements to value in order to assess storage costs accurately. For example let's say you have just opened a new E-business called "BobsWeSellEverything.com". You calculated that overall your annual storage costs were 5% of your average inventory value, and applied this to your entire inventory in the EOQ calculation. Your average inventory on a particular piece of software and on 80 lb. bags of concrete mix both came to $10,000. The EOQ formula applied a $500 storage cost to the average quantity of each of these items even though the software actually took up only 1 pallet position while the concrete mix consumed 75 pallet positions. Categorizing these items would place the software in a category with minimal storage costs (1% or less) and the concrete in a category with extreme storage costs (50%) that would then allow the EOQ formula to work correctly.
There are situations where you may not want to include any storage costs in your EOQ calculation. If your operation has excess storage space of which it has no other uses you may decide not to include storage costs since reducing your inventory does not provide any actual savings in storage costs. As your operation grows near a point at which you would need to expand your physical operations you may then start including storage in the calculation.
A portion of the time spent on cycle counting should also be included in carrying cost, remember to apply costs which change based upon changes to the average inventory level. So in cycle counting you would include the time spent physically counting and not the time spent filling out paperwork, data entry, and travel time between locations.
Other costs that can be included in carrying cost are risk factors associated with obsolescence, damage, and theft. Do not factor in these costs unless they are a direct result of the inventory levels and are significant enough to change the results of the EOQ equation.
ECONOMIC ORDER QUANTITY MODEL [ EOQ]
Demand is known and is deterministic, ie. constant.
The lead time, ie. the time between the placement of the order and the receipt of the order is known .
The receipt of inventory is instantaneous. In other words the inventory from an order arrives in one batch at one point in time.
Quantity discounts are not possible, in other words it does not make any difference how much we order, the price of the product will still be the same. (for the Basic EOQ-Model)
That the only costs pertinent to the inventory model are the cost of placing an order and the cost of holding or storing inventory over time
Important Note: When calculating the Economic Order Quantity, be aware of the assumptions mentioned above!
HOW ''EOQ'' WORKS
Basic EOQ:
The objective is to determine the quantity to order which minimizes the total annual inventory management cost.
Thus: Minimize! Total cost per period = inventory holding costs per period + order costs per period
where Order Cost = The Number of Orders Placed in the period x Order Costs
and Carrying Cost = Average Inventory Level x the Carrying Costs of 1 unit of Stock for one period
with:
Q = order quantity
A = demand per time period (e.g. Annual Demand)
S = Carrying / Holding Cost of 1 unit of Stock for one period
P = Order Cost
and the derivation set to zero we get the following formula:
So we can see that the two cost elements at the economic order quantity are equal, one to the other; (compare with the graphical solution!)
If we now isolate the Q, we get the following Basic EOQ-Formula:
EOQ = sqrt ( 2 * A * P / (S*(1-A/R))
Since the cost associated with stock we need to deal with that stock in an Effective, Efficient and Economic manner (the 3E's )
The question then arises: how much stock should we have? It is this simple question that inventory control theory attempts to answer.
There are two extreme answers to this question:
a lot
this ensures that we never run out
is an easy way of managing stock
is expensive in stock costs, cheap in management costs
none/very little
this is known (effectively) as JIT [ just in time ]
is a difficult way of managing stock
is cheap in stock costs, expensive in management costs
We shall consider the problem of ordering raw material stock but the same basic theory can be applied to the problem of:
deciding the finished goods stock; and
deciding the size of a batch in a batch production process.
The costs that we need to consider so that we can decide the amount of stock to have can be divided into stock holding costs and stock ordering (and receiving) costs as below. Note here that, conventionally, management costs are ignored here.
Holding costs - associated with keeping stock over time
storage costs
rent/depreciation
labour
overheads (e.g. heating, lighting, security)
money tied up (loss of interest, opportunity cost)
obsolescence costs (if left with stock at end of product life)
stock deterioration (lose money if product deteriorates whilst held)
theft/insurance
Ordering costs - associated with ordering and receiving an order
clerical/labour costs of processing orders
inspection and return of poor quality products
transport costs
handling costs
Note here that a stockout occurs when we have insufficient stock to supply customers. Usually stockouts occur in the order lead time, the time between placing an order and the arrival of that order.
Given a stockout the order may be lost completely or the customer may choose to backorder, i.e. to be prepared to wait until we have sufficient stock to supply their order.
Note here that whilst conceptually we can see that these cost elements are relevant it can often be difficult to arrive at an appropriate numeric figure (e.g. if the stock is stored in a building used for many other purposes, how then shall we decide an appropriate allocation of heating/lighting/security costs).
To see how we can decide the stock level to adopt consider the very simple model below.
Basic model
In this basic model we have the situation where:
our company orders from an outside supplier;
that outside supplier delivers to us precisely the quantity we ask for; and
we pass that stock onto our customers (either external customers, or an internal customer within the same company (e.g. if ordering raw materials for use in the production process)).
Assume:
Stock used up at a constant rate (R units per year)
Fixed set-up cost co for each order - often called the order cost
No lead time between placing an order and arrival of the order
Variable stock holding cost ch per unit per year
Then we need to decide Q, the amount to order each time, often called the batch (or lot) size.
FROM THE ANALYSIS OF THE ABOVE VARIABLES,
THAT IS FIXED/VARIABLE/HOLDING COSTS
WHERE
EOQ = sqrt ( 2 * A * P / (S*(1-A/R))
Q = order quantity
A = demand per time period (e.g. Annual Demand)
S = Carrying / Holding Cost of 1 unit of Stock for one period
P = Order Cost
WE FIND MOST OF THE FACTORS LIKE
-cost of unit items [ already negotiated to the best]
-labor cost is fixed
etc etc.
ALSO THE CONSTRAINTS LIKE
-item is a slow moving [ nature of demand]
-unit cost is high
WE ARE LEFT WITH NO CHOICE, BUT
TO PULL THE LEAD TIME TOWARDS ''ZERO''
TO MAKE SOME REDUCTION IN THE TOTAL COST.
SO THAT WE CAN SAVE ON
-interest payment.
-reduction in holding cost.
=========================
WHAT IS THE MODERN ORGANIZATION SEEKING
- Access wider geographic markets by complying with a recognised standard.
- New customers who require ISO 9000 compliance.
- Reduce customer rejection of products/services because of poor quality.
- Improve customer loyalty.
- Reduce or eliminate repetition of work.
- Reduce warranty and customer support costs.
- Reduce management time spent on “putting out fires”.
- Improve productivity by “doing it right the first time”.
===========================================
TO THIS END, THE MANAGEMENT INTRODUCES VARIOUS
SYSTEMS / TECHNIQUES TO ACHIEVE ITS OBJECTIVES.
TQM = TOTAL QUALITY MANAGEMENT
JIT = JUST IN TIME.
------------------------------------------------
WHAT DOES TQM / JIT paradigm OFFER :
-Developing a corporate quality policy.
-Designing and implementing a quality system.
-Developing measures for capturing quality costs and benefits from improved quality.
-Encouragement of teamwork and participation of the management and the workforce.
-Continuous education and training to foster employee attitudes, management beliefs and value system.
-Usage of problem solving tools and techniques.
-Benchmarking of business results and processes.
-Improvement of managerial and technical processes.
-Integrating the customers’ and suppliers’ expectations.
-Carrying out quality audits and reviews on a continuous basis.
=====================================================
WHAT ARE THE BENEFITS OF TQM/JIT TO AN ORGANIZATION.
TQM / JIT leads to a synergy of benefits to the firm.
1.A philosophy that improves business from top to bottom
[everybody in the organization is involved towards the same objective]
2.A focused, systematic and structured approach to enhancing customer's satisfaction
[helps to increase sales / profit of the organization ]
3.Process improvement methods that reduce or eliminate problems i.e. non conformance costs
[improves the efficiency of the process and better results]
4.Tools and techniques for improvement - quality operating system
[improved working methods for improves results ]
5.Delivering what the customer want's in terms of service, product and the whole experience
[helps to tailor the product/service to match customer requirements and the
customer satisfaction]
6.Intrinsic motivation and improved attitudes throughout the workforce
[improved work conditions means employees are motivated to perform better]
7.Workforce is proactive - prevention orientated
[it helps to prevent accidents / quality rejects etc ]
8.Enhanced communication
[it encourages discussion among employees/ between managers and employees]
9.Reduction in waste and rework
[continual discussion /continual improvements / proactive attitude
helps to prevent waste / rework/ reduces rejects.]
10.Increase in process ownership- employee involvement and empowerment
[setting of quality circles/ problem solving teams improves
the employee involvement and empowers employee to make decisions]
11.Everyone from top to bottom educated.
[TQM involves continual training at all levels which
helps the development of the individuals ]
12.Improved customer/supplier relationships (internally & externall)
[TQM takes the system across all working units
including all departments internally and external stakeholders integration]
13.Market competitiveness
[TQM helps to improve the customer servicing and helps
the competitive positioning of the company in the market]
14.TQM / JIT Through education, management and staff are given the tools to achieve all the above. Education provides for guided innovation from all levels. Training, which is a cost, shows a commitment by management .
15. TQM / JIT HELPS Individual staff self improvement, which is a motivator.
IN SUMMARY,
Staff will collectively provide continual improvement of company systems. By working together, communication/departmental barriers will be broken down. The standard of service can be set, maintained and then improved. Suppliers will be working with rather than working for the company . The standard of staff and management will improve through education. The adoption of a new attitude to work, by everyone embracing the ideas of TQM / JIT.
Direct benefits of TQM / JIT are as follows:
- Increased pride of workmanship among individual workers
- Increased readiness
- Improved sustainability caused by extended time between equipment failures
- Greater mission survivability
- Better justification for budgets because of more efficient operations
- Streamlined maintenance and production processes.
The bottom line of TQM/ JIT is “more bang for the buck.”
The concept behind TQM / JIT revolves around a change from management by results to management by process (quality) improvement. Managers are tasked with con- tinuously improving each and every process in their organization. That means combining quantitative methods and human resource management techniques to improve customer-supplier .
==================================================
When a committed organisation applies TQM/JIT proven approach, the benefits can be profound
A philosophy that improves business from top to bottom
- A focused, systematic and structured approach to enhancing customer's satisfaction
- Process improvement methods that reduce or eliminate problems i.e. non conformance costs
-Tools and techniques for improvement - quality operating system
- Delivering what the customer want's in terms of service, product and the whole experience
- Intrinsic motivation and improved attitudes throughout the workforce
- Workforce is proactive - prevention orientated
- Enhanced communication
-Reduction in waste and rework
-Increase in process ownership- employee involvement and empowerment
-Everyone from top to bottom educated
- Improved customer/supplier relationships (internally & externally)
- Market competitiveness
=============================================
ALL THESE LEADS TO REDUCTION IN INVENTORY, WASTAGE
AND IMPROVEMENT IN PRODUCTIVITY/ PERFORMANCE.
#################################################################
4. IMPACT OF NEW TECHNOLOGY ON OPRN MGR
OPERATIONS MANAGEMENT [MANUFACTURING ], as a function ,normally includes the
following
*PRODUCT DESIGN
-new ''cad'' system which helps to speed up the product designing.
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*PRODUCT DEVELOPMENT
-new software which helps to refine the development of the products.
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*PRODUCTION
-new / modern technology to improve the production processes
and hence the performance / productivity.
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*PRODUCTION PLANNING
-new / modern technology to improve the production planning
and which means more effective / efficient production.
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*TOTAL QUALITY MANAGEMENT
-tqm technology/ process helps to reduce wastages and
hence the quality of the products.
-----------------------------------------------------------------------------------
*CONTINOUS IMPROVEMENTS
-modern sytems helps to maintain the process improvements
on a continuous basis.
-------------------------------------------------------------------------------------
*JUST IN TIME INVENTORY MANAGEMENT
-jit systems enables to manage the most cost effective
inventory system.
---------------------------------------------------------------
*STRATEGIC CAPACITY PLANNING
-modern sytems helps to maintain the capacity development
on a continuous basis.
--------------------------------------------------------------------------------
-FACILITY LAYOUT
-modern sytems helps to maintain the facility improvements
on a continuous basis.
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*PROJECT PLANNING AND CONTROL
-modern softwares helps to maintain the process improvements
on a continuous basis.
--------------------------------------------------------------------------------------
*AGGREGATE PLANNING
-modern softwares helps to conduct the aggregate planning
on a continuous basis.
----------------------------------------------------------------------------------
*MATERIAL REQUIREMENT PLANNING [ MRP]
*MATERIAL MANAGEMENT
*PROCUREMENT
-modern MRP / ERP softwares helps to maintain the process improvements
on a continuous basis.
==================================================
*BUSINESS PROCESS ENGINEERING
-modern softwares helps to maintain the process improvements
on a continuous basis.
==================================
ETC ETC ETC
IN THESE WAYS, THE CURRENT OPERATION MANAGERS
CAN LIFT THEIR GAME--IMPROVEMENTS IN PERFORMANCE
AND PRODUCTIVITY ON A CONTINUAL BASIS.
###############################################################
