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
Operations Management Techniques
Features of an Ideal Plant Layout
Plant layout and design is an important component of a businesses overall operations, both in terms of maximizing the effectiveness of the production process and meeting the needs of employees. Plant layout refers to the arrangement of physical facilities such as machinery, equipment, furniture etc. within the factory building in such a manner so as to have quickest flow of material at the lowest cost and with the least amount of handling in processing the product from the receipt of material to the shipment of the finished product. It may be defined as a technique of locating machines, processes and plant services within the factory so as to achieve the right quantity and quality of output at the lowest possible cost of manufacturing. It involves a judicious arrangement of production facilities so that workflow is direct. The basic objective of layout is to ensure a smooth flow of work, material, Continue reading
Ultimate Guide to Cause & Effect Diagram
The cause & effect diagram is the brainchild of Kaoru Ishikawa, who pioneered quality management processes in the Kawasaki shipyards, and in the process became one of the founding fathers of modern management. The cause and effect diagram is used to explore all the potential or real causes (or inputs) that result in a single effect (or output). Causes are arranged according to their level of importance or detail, resulting in a depiction of relationships and hierarchy of events. This can help you search for root causes, identify areas where there may be problems, and compare the relative importance of different causes. Causes in a cause & effect diagram are frequently arranged into four major categories. While these categories can be anything, you will often see: manpower, methods, materials, and machinery (recommended for manufacturing) equipment, policies, procedures, and people (recommended for administration and service). These guidelines can be helpful but Continue reading
9 Important Elements of a Quality Culture
Indeed, quality culture starts with top management. There need to be top management leadership to drive this culture of quality across the organization. For this to happen, business leaders and managers must have the commitment in setting up quality control programmes, strategic planning for quality and provide resources for quality. In addition, top management leadership role is also a distinguishing element of a quality culture. Adopting a democratic leadership style where workers are not punished for errors and failures and that continuous learning is what prevails in the organization. Management attitudes should be towards treating employees as members and remove barriers of superiors or subordinates. This suggests to everyone that the work of all members of the company is important and adds value to the final outputs. Members of the organization should focus on the purpose for which they are all here to get better and better at creating that Continue reading
Location Strategy in Operations Management
The location of a plant or facility is the geographical positioning of an operation relative to the input resources and other operations or customers with which it interacts. Three main reasons are identified why a location strategy is required. The first reason is that a new company has been created and needs a facility to manufacture products or deliver a service to its customers. The second reason is that there is a decision to relocate an existing business due to a number of factors such as the need for larger premises or to be closer to a particular customer base. The third reason is relocate into new premises in order to expand operations. Decisions with regards to where an organisation can locate its plant or facility are not taken often, however they still tend to be very important for the firm’s profitability and long-term survival. An organisation which chooses an Continue reading
Supplier Relationship Management (SRM) – Meaning and Importance
Supplier Relationship Management (SRM) is a concept in the Supply Chain Management, which considered in the aspect of establishing and sustaining the business relationship along the supply chain. Supplier Relationship Management (SRM) concerns the practical processes to integrate the communication and coordination between organizations and their suppliers. Supplier chain relationship was considered to be one of the important factors in most business, since it can influence the potential of supply chain concept. Now, the modern business seems to be more complex with high competition. Due to the information has more valuable in the supply chain management, firms then need to re-design the ways of managing and sharing information among each others. Organizations cannot independently run the business by themselves. Not only good relationship can help companies to have more competitive advantage to survive in the market, but it can also help companies expands the market too. Supplier Relationship Management (SRM) Continue reading