Inventory management could as be defined as managing inventory with the primary objective been determining and controlling stock levels within the facility to balance the need for product availability against the need for minimizing stock holding and handling costs. A management system is an information system that is used by a business to ensure they can manage and fulfill their tasks through a framework of procedures and processes. Typical management systems are used to maintain data within an organization as well as ensuring data is shared accurately, or for the management of services or products offered. A management system could also be defined as the integration of traditional management methods with a computer system to create a tool for strategic and automated information management. An inventory management system is usually used to automate a sales order fulfillment process. These types of system are designed containing a structure whereby it contains Continue reading
Operations Management Concepts
Purchasing Policy – Principles and Implementation
Purchasing Policy Principles The major principles on which purchasing policies should be based are a sound orientation, reflect a cross —functional approach and be directed at improving the company’s bottom line. i. Business Orientation Developing a purchasing and supply strategy requires a thorough understanding of the company’s business policies. The following questions are important to determine how purchasing and supply strategies will need to support the company in meeting its goals and objectives:- What end-user market is the company targeting and what are the major developments going on in those markets? What competition is the company suffering from and what leeway does the company has in setting its own pricing policies? To what extent can material’s price increases can be passed onto the last customer or is it impossible? What changes are happening in the company’s product, production and information technologies? What investments will be made by the company in Continue reading
5 Why Analysis – A Root Cause Analysis Tool
5 Why Analysis is a simple approach for exploring root causes and instilling a “Fix the root cause, not the symptom,” culture at all levels of a company. The 5 Why Analysis was originally developed by Toyota founder Sakichi Toyoda and was later used within Toyota Motor Corp. during the development of the Toyota Product System (TPS). At Toyota, 5 Whys is still a critical component of problem-solving training, and the method is still widely applied within the company when problems occur. “Toyota Business Practices dictates using the ‘Five Whys’ to get to the root cause of a problem, not the ‘Five Whos’ to find a fire the guilty party.” – Jeff Liker, The Toyota Way It can be used whenever the real cause of a problem or situation is not clear. Using the 5 Whys is a simple way to try solving a stated problem without a large detailed Continue reading
Basic Principles of Total Quality Management (TQM)
Total Quality Management ensures maximum effectiveness and efficiency within a business and secures commercial leadership by putting in place process and systems which will promote excellence and prevent errors. It ensures that every aspect of the business is aligned to the customer needs and the advancement of business goals without duplication or waste of efforts. Different companies have different approaches to implement Total Quality Management (TQM). The following principles (which are common to all companies) must be adhered for the successful Total Quality Management (TQM) implementation: Continuous improvement. TQM is a long-term process that entails achieving improvements in the company’s operations. This means that management should establish targets for improvement and measure progress by using reliable criteria. The quest for quality and better service to the customer should be a continual, never-ending one. Competitors will seek to provide better service and customers will come to expect it. Hence, to cease Continue reading
Case Study: How Total Quality Management Help Xerox Back on Track
Xerox Corporation is an American company founded in 1906 as Haloid Company. The company began as a manufacturer of photographic paper and equipment. Joseph Wilson inherited the business from his father who was the founder of the company and propelled it to new heights. Wilson signed an agreement with Chester Carlson to develop Carlson’s idea of printing using the toner commercially. The technology was named Xerography. The company changed its name to Haloid Xerox in the year 1958 and subsequently in 1961 to Xerox Corporation. Xerox has a presence in over 180 countries worldwide, and it employs over 140,000 people. The company deals in document management, business process solutions and software services. Xerox Company provides a multitude of products and services to its clients worldwide. They include business services, office equipment, and production equipment. The company’s dynamic nature has enabled it to survive technological changes in the industry. Xerox has made several Continue reading
Types of Inventory System (Q and P Models)
The term inventory derives from the French word inventaire and the Latin word inventariom which simply means a list of things which are found. The term inventory includes materials which are in raw form, or are in process, in the finished packaging, spares and the others which are stocked in order to meet all the unexpected demands or distribution in the future. This term usually refers to the stock at hand at a particular period of time of all those materials which are in raw form, those goods which are in progress of manufacture, all the finished products, merchandise purchased products for resale of those products, tangible products which can be seen, touched, measured or are countable. In a connection with the financial statements and records of accounting, the reference may be to the amount assigned to the stock or the pile of goods owned by an enterprise at a Continue reading