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Production and Inventory Management

Production and Inventory Management

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Published by amithakim

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Published by: amithakim on Dec 14, 2010
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11/09/2011

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Management by exception is hardly a new management technique.
However, it acquires special significance in a state-of-the-art system
environment. Since the information pyramid concept allows reporting at the
summary level from a large base of detailed information, for the first time
management can operate by specifying quantitative limits to operational data,

236 Chapter 9 – Measuring Performance – Closing All the Loops

then use computer-generated reporting mechanisms to signal out-of-tolerance
conditions.

If this concept of managing is to reach its full effectiveness, clearly
management must have a detailed understanding of how the system works,
the data that are maintained, and what different data mean when they are
reviewed by a program that generates an exception or out-of-tolerance
condition report. Since the amount of information that is really involved in
running a sizable manufacturing facility of any complexity is truly enormous,
there really is no other feasible means to ensure good management control.
The importance of this technique thus becomes truly central. The discussion
that follows in this chapter will detail how this process is performed and
include several examples.

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