Definitions of Operation Management

The book manufacturing industry is another example of a Job shop if the production runs are mall as is the case for a textbook. The automotive, appliance, towel, petroleum refining, and computer industries are examples of repetitive manufacturing. See also repetitive manufacturing. Several industries have characteristics of both repetitive manufacturing and Job shops in their operations. Even in Job shops, standardized materials, machines, and tooling and fixtures are desirable. Standard sizes, capacities, and performance are characteristic of the construction industry.

Also, either industry may incur high tooling costs. Even in the construction industry, appetitive manufacturing is gaining as modular assemblies are replacing coachwork in many of the subassembly. LINE BALANCING: In a production or process operation line with several processes, machines, or operations in sequence, the discipline of balancing the throughput of each operation in the sequence such that production of any one unit in the sequence is equivalent or “balanced” with each of the other units in the sequence. MR.: Material requirements planning.

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MR. systems are used in almost all plants. They coordinate the bill of materials, forecasted demand, long lead-time parts, and he inventory in the plant. The reasons MR. systems are generally required relate to the fact that all parts cannot be supplied KIT and that schedules are not predictable. I nerve are SST II suppliers Tanat give price Lockouts Tort larger orders. Hurter, material receipt, inventory tracking, and engineering changes introduce complexity in plants unless the bills of material are few and simple.

A plant that uses KIT exclusively is very rare. Forecasted demand is common for many supplied parts. Further, parts get lost, stolen, and damaged. Parts that do not meet quality standards must be reworked or respelled. For all these reasons and more, an MR. system is required. MR. systems are quite complex and computer-based. The software incorporating MR. systems can be expensive and difficult to install because it requires and evaluation and possible change of all business practices.

MR. II: Material Resource Planning–an advanced version of MR. that integrates the whole value chain in planning material orders, production, scheduling, and shipments.. PURCHASING: That function that defines the conditions that govern purchases within company as well as the actual purchase of the goods and services. PULL SYSTEM FOR MATERIAL CONTROL: Equivalent to KIT but most often internal to operations. The pull system means that the “release” for moving material within the plant or from suppliers is signaled by the next process in line that needs the material.

The material is moved by the demand from the succeeding process in the production chain or routings not by a central schedule or general release. See also Kanata and push system. The idea is to produce what the customer requires. The main challenge in implementing this system comes in when looking at the supply side of raw materials as well as the efficiency of the plants. A company that produces KIT, need to have suppliers that can supply raw materials in a short notice and are therefore located close by in order to receive raw materials in a timely fashion for production.

At the same time, manufacturing KIT requires more than Just good plants. See the seven zeros. The implementation of this system took Toyota over 30 years to be perfected. However the trend seems to be going towards this system in the United States. The suggest advantage of this system is the reduction in cost of the goods as well as the flexibility in production that help companies be more dynamic and competitive in the industry.

The push system denotes a system whereby material is released for production and movement by a central or local scheduling algorithm and based on forecasted or anticipated needs for that material. See also pull system. Traditionally, the Push system had been used in plants for production scheduling. The push system is simply when the demand for a product is forecasted ND a production schedule is made up according to the forecast of demand through a centralize system.

However, ten mall problem Walt tens system Is ten variations between the forecasted and the actual demand that may cause excess inventory of finished goods or a backorder in production. In order to avoid problems that are caused due to forecasting errors, companies that use a push system may either: I. Keep finished goods on inventory (safety stock) I’. Have an excess lead-time on delivery to give enough time to produce enough The main disadvantage of the system comes in when the plants have to keep excess inventory or have long lead times for the customers.

Inventory costs money and long lead times cause dissatisfied customers. At the same time, companies have spent millions of dollars in the past Just to get good MR. software that would be able to help planners plan the production effectively. FORECAST: Usually the prediction of customer sales and the subsequent manufacturing schedule. Inventory Deft. 1 : The raw materials, work-in-process goods and completely finished goods that are considered to be the portion of a business’s assets that are ready or will be ready for sale.

Inventory represents one of the most important assets that most businesses possess, because the turnover of inventory represents one of the primary sources of revenue generation and subsequent earnings for the company’s shareholders/owners. Deft. 2: Goods and products held by a company in the product value stream that are eventually intended for sale to customers on their own or as part of a product system. Inventory includes the material cost of the goods and the value added by the operation to reach its state of manufacture.

Raw materials, work in process, and knishes goods are three categories of inventory. ‘Inventory’ Possessing a high amount of inventory for long periods of time is not usually good for a business because of inventory storage, obsolescence and spoilage costs. However, possessing too little inventory isn’t good either, because the business runs the risk of losing out on potential sales and potential market share as well. Inventory management forecasts and strategies, such as a Just-in-time inventory system, can help minimize inventory costs because goods are created or received as inventory only when needed.