Purchasing is a function of procuring goods and services from sources external to the organization. In the words of Alford and Beaty,”Purchasing is the procuring of materials, supplies, machine tools and services required for the equipment, maintenance, and operation of a manufacturing plant.” According to yet another authority,” Purchasing is the procuring of materials, tools, stores and services required for the manufacture of a product, maintenance of the machines, and un-interrupted running of the manufacturing plant in a manner that guarantees the marketing of the company’s products in the quantities desired, at the time promised and at the competitive price consistent with quality desired.” Purchasing in essence is the task of buying goods of right quality, in the right quantities, at the right time and at a right price. Since raw materials, components and services account for a significant as much as 50 to 70% proportion of the company’s total Continue reading
Production Management
Analyzing Toyota’s Recipe for Success – The Toyota Way
The fundamental reason for Toyota’s success in the global marketplace lies in the so called “Toyota way”. The Toyota Way is not only about technology and efficiency, it is about doing the right thing for the company, its employees, the customer and the society as a whole. In other words, the incredible success of the Toyota way is a direct result of operational excellence. Toyota has turned operational excellence into a strategic weapon. This operational excellence is only in part based on tools and quality improvement methods made famous by Toyota in the manufacturing world, such as JIT, Kaizen, and one-piece-flow. Although such techniques helped spawn the “lean manufacturing” revolution, tools and techniques are no secret weapon for transforming a business. Toyota’s continued success at implementing this tools stems from a deeper business philosophy based on its understanding of people and human motivation. Its success is ultimately based on its Continue reading
Kaizen and Kanban in Lean Manufacturing
Kaizen Kaizen is broadly interpreted as the Japanese term for continuous improvement, although it is perhaps more accurately translated as a form of control. It applies to all aspects of organisational output, and can thus be linked to both Toyota Production System (TPS) and types of waste, as well as the means of introducing and managing basic employee working conditions. One of the most popular tools of Kaizen is a Kanban, which of itself translates to differing types of organisational process control, which collectively lead to greater organisational production efficiency. The overarching principle of Kaizen, and Kanban within that, is to create a ‘pull through’ organisational process, as opposed to push through. Historically, for many manufacturing organisations, understandably, they would place the manufacturing process itself at the heart of operations, and would strive to make this element as efficient as possible working towards metrics such as overall equipment Continue reading
The Toyota Production System (TPS) – Meaning and Methods
A key success factor that enabled Toyota to become the world’s most successful automobile company is its famous manufacturing method, the so called Toyota Production System (TPS). The evolution of the Toyota production system approach can be traced to the period immediately following the second world war when the economic outlook was uncertain and human, natural and capital resources were in limited supply. Against this background, the most important objective of the Toyota System has been to increase production efficiency by consistently and thoroughly eliminating waste. This concept developed between 1948 and 1975 by Toyota’s former president Toyoda Kiichiro and later by Ohno Taiichi and Eiji Toyoda represents a highly efficient production system that is similar to that of Henry Ford several decades earlier, although Toyota’s approach to both product development and distribution proved to be much more consumer-friendly and market-driven. The main objective of TPS is to produce goods Continue reading
Efficiency of Material Handling Systems
The efficiency of material handling could be judged by the following principles: 1. “Equipment built for motion should be kept in motion; idle Equipment should be kept inexpensive”. 2.”Continuous material movement is most economical” This principle states that materials handling efficiency is Greatest when it approaches a steady flow of materials, in as straight as possible, with minimum interpretations and minimum backtracking and where movements approach continues rather than intermittent flow. It is not; always possible, in practice, to completely achieve the objective of this rule. However, it is the target towards which we Aim our thinking. Conveyors systems, both overhead and floor types, are excellent examples of the application of this idea. 3. “Materials’ handling economy is generally directly proportional to the size of load handled” We all recognize, however, that as the load size increases There is a point reached beyond which it becomes more costly, and less Continue reading
How Logistics Productivity Improvement Affects the Economy as a Whole as well as the Position of Individual Consumer?
Generally logistics refers to the inbound and outbound flow and storage of goods , services, and information within and between organisations. The Council of Supply Chain Management Professionals (CSCMP), which is the pre-eminent professional organisation for academics and practitioners in the logistics field, formed in 1963, defined logistics management as ” that part of supply chain management that plans, implements and controls the efficient, effective forward and reverse flow and storage of goods ,services, and related information between the point of origin and the the point of consumption in order to meet customers requirements “. Logistics Productivity Improvement and the Economy Logistics has become an enormously important component of the gross domestic product (GDP) of industrialized nations and thus affects the rate of inflation, interest rates, productivity, energy costs and its availability and other aspects of the economy as well. Ever changing business environment due to globalization, lead time reductions, Continue reading