Chapter 1

Notes

Introduction

- Manufacturing companies are in the business of converting raw materials to a form that is of far more value and use to the consumer than the original raw materials. Logs are converter into tables and chairs, iron ore into steel, and steel into cars and refrigerators.

Operating environment :-

1) Government

- Regulation of business by the various level of government is extensive. Regulation applies to such areas as the environment, safety, product liability, and taxation.

2) Economy

- Materials and labor shortages or surpluses influences the decision management makes.

3) Competition

- Manufacturing companies face competition from throughout the world. They find foreign competitors selling in their markets even though they may not be selling in foreign markets.

4) Customers

- Both consumers and industrial customers have become much more demanding and suppliers have responded by improving the range of characteristics they offer.

5) Quality

- Since competition is international and aggressive, successful companies provide quality that not only meets customer high expectation but exceed them.

What is the current supply chain concept?

- Companies adopting the supply chain concept view the entire set of activities from raw materials production to final customer purchase to final disposal as a linked chain of activities.

What is materials management?

- The concept of having one department responsible for the flow of materials from suppliers through production to consumer, is relatively new.

Manufacturing planning and control.

1) Production planning

- Production must be able to meet the demand of the market place.

2) Inplementation and control

- These are responsible for putting into action and achieving the plans made by production planning.

3) Inventory management

- Inventories are materials and supplies carried on hand either for sale or to provide materials or supplies to the production process.

Inputs to the manufacturing planning and control system

1) Product description

- It shows how the product will appear at some stage of production.

2) Process specification

- It describes the steps necessary to make the end product.

3) Time needed to perform operations

- It usually expressed in standard time which is the time taken by an average operator, working at a normal pace to perform a task.

4) Available facilities

- Manufacturing planning and control must know what plant, equipment and labor will be available to process work.

5) Quantities required

- This information will come from forecasts, customers orders, orders to replace finished-goods inventory and the materials requirements plan.

Physical supply/Distribution

- It includes all activities involved in moving goods, from supplier to the beginning of the production process and from the end of the production process to the consumer.

Activities

Excercise For Chapter 1

1.      Which of following are NOT included in operating environment that affected operations management?

A.    Government

B.     Customers

C.     Competition

D.    Quantity

2.      Which of the following strategies has the shortest delivery lead tome and the least customer input:-

A.    Engineer-to-order

B.     Make to order

C.     Assemble to order

D.    Make to order

3.      What is a supply chain? Describe five important factors in supply chains.

4.      What is purpose of materials management?

5.      What is wealth and has it is created?

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