Professional Documents
Culture Documents
Definitions
Logistics can be simply defined as the management of the flow of goods and the services between the point of origin and the point of consumption in order to meet the requirements of customers American council of logistics management:
The process of planning, implementing & controlling the efficient, cost effective flow & storage of raw materials, in-process inventory, finished goods & related information from point of origin to point of consumption for the purpose of conforming to customers requirement
Example
Transport from Hyderabad to Vishakapatnam
Garibrath 500 Sleeper Class 350 Pvt Travels 800 Car 2000 RTC 550 Flight 3500
Objectives
The main purpose of logistics is to provide materials for smooth operation where & when needed at lowest possible cost Reduction in inventory Economy of freight Reliability and consistency in delivery performance Minimum damage to products Quicker and faster response Example DELL laptops
Elements of logistics
Test & support equipment Supply support (spares & repair parts) Personnel & training Technical data Facilities Transportation & handling Maintenance planning
Standardization
Standards are the base of all mass production Standards convey the sense that there are only certain sizes made and sold They are specifications of products from minimum variety of materials, parts, tools, & processes By standardization the quality, quantity, value, performance etc can be measured & compared
Classification
Aims at systematically grouping items together by their common features & subdividing them by their special features Helps in
Identify and locate identical items Identify substitutes Improves part location in store
Classification procedure
Define all the terms Classify according to basic characteristics Identify each item by code number
A code consists of letters & numbers Example: coding of computers
The computer in sujatha degree college can be coded as Suj\Sys\101\119 DL 01 C 1111, DL delhi, C category of vehicle, 01 district, 1111 vehicle number
Advantages of standardization
Easy availability of spare parts Fewer drawings & specifications Better resource utilization Lesser design mistakes & design alterations Better inspection & quality control Efficient tool design Fewer tool changes & process setups Supervision of process is easy while manufacturing Reduction in wastages Ultimately total cost is reduced
Disadvantages
Reduced variety Loss of business opportunities Cannot meet customer requirements Becomes less flexible to manufacture a new product
Applications
Finished products cars, tvs, mobiles, computers etc Subassemblies & components, e.g. automobile gearbox, keyboards, remotes etc Material standardization Production equipment standardization, e.g. machine tools, presses, welding equipments etc
Simplification
The process of reducing variety of products manufactured Is reduction product range, assemblies, parts, materials & design Simplification makes a product less complicated
Advantages
Reduced parts, varieties & changes in products, this reduces manufacturing operations Provides quick delivery & better after sales service Helps in better inventory control Reduction in price of a product Example: Phillips bulbs Sense and Simplicity Chairs
Qualitative factors
Product quality Patents Skills & materials Long term planning
Lead time
Lead time is the period between a customer's order and delivery of the final product This is the time elapsed between the receipt of a requisition & receipt of goods required Time to obtain quotations + time to place orders + vendor manufacture time + transportation time = lead time
Lead time
Internal lead time Within control of organisation External lead time Within control of vendor
Value analysis
Developed in USA in 1947 by Lorry D Miles @ GE Concept is to make cheaper & to sell cheaper products with same utility Value is cost proportionate to function or utility of product
Value = Function or Utility Cost
The value of the product can be increased by increasing utility of the product at same cost or reducing the cost of the product with same utility
Function of product
Value approach
Value analysis Examines design, function & cost of each & every component in order to produce it economically without decreasing its utility, functionality or reliability Value engineering Is an application of value analysis at design or pre-manufacture stage
Packaging
Packaging is the use of containers & components to contain, protect, preserve, promote, identify & facilitate distribution of products in factory fresh condition from manufacturer stage to ultimate consumer stage E.g. packaging of electronic appliances
Packaging cost
Packaging material cost Storage & handling cost Packaging operation cost Loss & damage cost Effect of packaging on sales
Import substitution
Inadequacy of natural resources Rapid industrial growth Criteria for import substitution
Source development Standardization of equipment National technology policy
Wastage control
Prevention of wastage of materials Waste of materials = loss of money Concentrates on why wastage occurs and how to prevent or minimize it
Stages of wastages
Planning & design stage Purchasing stage Transportation & handling stage During storage During production
Breakages & damages in handling Corrosion during storage Losses due to climate changes Remedies
Usage of good storage area Proper planning & storage
Material handling
It is a process of handling a good or a product from its initial stage to final finished good stage It involves movements of materials manually or mechanically within the plant
Principles of MHE
Minimize movements in production operations Aiming at moving optimum number of pieces in one batch Minimizing distance moved Employing technology instead of manpower for movement of materials Utilize gravity assisting material where ever possible MHE must be maintained properly
Selection of MHE
Material to be moved Plant buildings & layouts Type of production machines Type of material floe pattern Type of production Cost of MHE Handling costs Life of equipment
Maintenance of MHE
Preventive maintenance
Failure is prevented
Steps involved
Inspection Repair Overhaul
Types of MHE
Industrial trucks Cranes Hoists Monorails Conveyors Lifts Tractors etc.
Budgeting requirements
He process of making budget is budgeting Requirements
Proper organization of budget It must mark responsibilities of each section It must be error proof in estimation It must be flexible
Budgetary control
Makes use of budgets for planning & controlling all aspects of producing or selling products or services Shows the plans in financial terms Planning of business expenditure to control business
Objectives
Should specify units to be produced & cost of production It must facilitate planning within the company It should harmonize departmental programme It serves as medium of propagating policies through business enterprise It must be flexible It must help in smooth production & sales programme
Advantages
Helps in incorporating a system Over expenditures are controlled Optimum utilization of resources Targets & goals are defined It provides management as support tool Helps in smooth running of production It facilitates financial control
Limitations
Prediction of budget may or may not be correct Budget doesnt work until desire to make it work is established in workers
Types of budget
Social auditing
Detection of fraud Detection or errors Finally remove them
Types of audit
Financial audit Operation audit Compliance audit Cost audit Management audit Social audit
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