MGMT WEEK 6

a field of management that specialises in the production of goods and services and uses special tools and techniques for solving manufacturing problems

• Design for manufacturability and assembly 
• 1. Producibility - degree to which a product or service can actually be produced within existing capacity
• 2. Cost - sum of materials, labour, design, transportation and overhead expense associated with product and service
• 3. Quality - excellence of product/service- the serviceability and value that customers gain by purchasing a product.
• 4. Reliability - degree to which customer can count product/service to fulfil intended purpose
• Also: Timing

• Cost - benefit analysis
• Benefits and costs are analysed and best option is selected with highest ratio

• Process Layout
• Product Layout
• Cellular Layout (both process and product)
• Fixed Position Layout

office layout, warehouse and storage layout and retail layout

• Equipment that performs a similar process are grouped together
• Suitable for LOW volume and HIGH variety products
• Drawback- a complex product may need several different processes performed on it

• Machines and tasks are arranged according to progressive steps in producing a single product
• Assumes high volume production and high demand 

• Machines dedicated to sequences of operations are grouped into cells
• Advantages:
• Provides efficiencies of both product and processes layout
• Workers can work in clusters that facilitate teamwork and joint problem solving
• Staffing flexibility- one person can operate all machines and walking distance is small

• Product remains in one location and tasks and equipment are brought to it
• Advantage: Used for large or special products e.g aircraft
• Disadvanatage
• Not suitable for high volume but necessary for large bulky products
• Limited space

managing the sequence of supplies and purchasers, covering all stages of processing from obtaining raw materials to distributing finished goods to final customers

Organisation spreads purchases among many suppliers encouraging them to compete to provide the best quality at the lower prices

Cultivating relationships with selected suppliers to meet unique needs.

• Efficient integration of material acquisition, movement and storage activities. 
• Some organisations use contract logistics firms such as Linfox. 
• Some companies share transportation information and resources with other companies so they share truckspace and avoid waste of resources to save money

• Many Suppliers
• Few Suppliers
• Vertical integration
• Kiretsu
• Partnering
• Arm's length approach

• Interest or opportunity cost: Firms may borrow or not undertake another investment in order to purchase inventory
• Storage and handling cost: Inventory takes up space and must be moved in and out of storage 
• Insurance: Higher levels of stock incur higher insurance costs
• Reduction in value: Obsolescence and deterioration may reduce value of stock and theft could occur.

• Raw materials
• Work in progress
• Maintenance
• Finished Goods

• 1. Customer service: speedy delivery avoid stock outs
• 2. Administration costs: reduced paper work, negotiation time
• 3. Labour and equipment utilisation: 'economies of scale,' stabilises output when demand is seasonal
• 4. Transportation costs: Handling and mileage 
• 5. Payments to suppliers: Incentives, preferential treatment

• Ability to produce goods/services previously purchased or actually buying supplier or distributor
• Can forward or backward integrate
• can yield cost reduction and timely delivery 

• Sales gains: 
• Improved response 
• Higher prices
• Improved reputation
• Reduced Costs:
• Increased productivity
• Lower rework and scrap
• Lower warranty costs

• 1. Conformance to specifications
• 2. Value 
• 3. Fitness for use
• 4. Support
• 5. Psychosocial impressions

• 1. Good personnel selection and training
• 2. Tight control of incoming shipments
• 3. Effective control of all goods leaving facility