Nowadays with globalization, global supply chain management is becoming a very important issue for most of businesses. The main reasons of this trend are procurement cost reduction, purchasing risks control, revenues increasing and etc. For instance, companies may set up overseas factories to benefit from tariff and trade concessions, lower labor cost, capital subsidies, and reduced logistics costs in foreign markets. Moreover, easy access to abroad markets and close proximity to customers result better organizational learning. On the other hand, improved reliability can be obtained as a consequence of closer relationship with suppliers. There are some issues that should be considered in managing a global supply chain. First of all, the company should decide about its general outsourcing plan. For whatever reason, businesses may prefer to keep some aspects of supply chain nearer to home. The second issue that must be incorporated into a global supply chain management strategy is Continue reading
Operations Management
Roland Gareis Project Maturity Model
For managing the projects, project portfolios and programs, companies with project orientation have particular strategies, organizational structures, and certain cultures. The management of the programs and project provides competitive improvement for the social systems. Therefore, the organizations including nations, regions, industries are becoming more project oriented. There is an interrelationship between the outcomes of the project oriented systems in the project and their maturity state. These maturities of the project or an organization can be evaluated by different maturity models. In this article, the maturity model developed by the ROLAND GAREIS Project and Programme Management ® has been discussed. Dr. Roland Gareis who is a university professor at the Vienna University of Economics and Business Administration, Austria. Project Maturity models have different dimensions which relate to each other. ROLAND GAREIS model contains eight dimensions. These dimensions are discussed bellow. Project Management: A project is a defined as a provisional organization for the efficiency of Continue reading
Locational Decisions and Factors Governing Plant Locations
Plant location may be understood as the function of determining where the plant should be located for maximum operating economy and effectiveness. The selection of location for a plant is one of the problems, perhaps the most important, which is faced by an entrepreneur while launching a new enterprise. A selection on pure economic considerations will ensure an easy and regular supply of raw materials, labour force, efficient plant layout, proper utilization of production capacity and reduced cost of production. An ideal location may not, by itself, guarantee success; but it certainly contributes to the smooth and efficient working of an organization. A bad location, on the other hand, is a severe handicap for any enterprise and it finally bankrupts it. Locational decisions generally arise when: A new manufacturing (or servicing) unit is to be set up. Existing plant operations are difficult to expand due to poor selection of site Continue reading
Purchase Systems and Importance of Source
In an organization all activities are carried out according to systems and procedures for reducing variations and errors arising out of individuality. This makes performing the function simple and less prone to errors. Purchase organization also consists of such systems established for smooth running of purchasing function. These systems are pre purchase system, ordering system, post purchase system. Pre Purchase System: This system lays down how purchase activity is initiated. Various activities controlled by this system are requisitioning, selection of suppliers and obtaining & evaluating quotations. Requisitions: Requisition for an item may be made by anyone in the organization. Pre purchase system prescribes separate requisition form for capital equipment as this purchase activity is controlled by a separate system. Requisition for an item shall be made in a standard format. This format ensures that indenting person furnishes all relevant information like quantity, specifications, etc. and gets the purchase authorized by Continue reading
Warehouse Management System
Warehouse management systems (WMS) is described as the advanced technology and operating processes which optimize all warehousing functionalities. These functions begin from receipts from suppliers and ending with shipments to the customers, also including all inventory movements as well as information flows in between. Warehouse management systems are mainly associated with large and complex distribution operations. However even smaller and middle size companies are identifying the importance of WMS in today’s scenario of integrated logistics, just-in-time delivery and e- commerce fulfillment. In practical situation, Warehouse Management System is used mainly in integrating computer hardware, software and peripheral equipment along with good operating practices so as to manage inventory, space, labour, and capital equipment in ware houses and distribution centres. Implementing of WMS serves the company by increasing its competitive advantage in matters of labour cost, improval of customer service, increasing inventory accuracy, and improving of flexibility and responsiveness. A WMS Continue reading
Recent Trends and Developments in Purchase Management
Many companies are now confronted with diminishing growth opportunities, which results in a situation where an increase in turnover can only be realized at the expense of the competition and only with a great deal of effort. This leads to increased pressure on sales prices and consequently on cost prices and margins, which causes two developments. On the one hand it has resulted in shifts of power between purchasing and selling parties in many markets. Due to the fact that in many cases the market has changed from seller’s market to buyer’s market, the role of the buyer is now more dominant than a number of years ago. On the other hand the increasing pressure on sales prices and margins has resulted in an increased pressure on direct materials-related costs. Because the purchasing prices determine the sales prices in the industrial sector to a large extent, the company will be Continue reading