ISTAMA BTECH Organisation and Management of Production

Organisation and management of production B-TECH ISTAMA
IN AFFILIATION WITH THE
Lecture notes on
MEA 314: ORGANIZATIONAL AND MANAGEMENT OF
PRODUCTION 3
CHAPTER 1: INTRODUCTION AND DEFINITION OF CONCEPTS
CHAPTER 2: METHOD OF PRODUCTION SCHEDULING
CHAPTER 3: MANAGEMENT OF STOCKS AND WAREHOUSE
CHAPTER 4: MANAGEMENT OF THE TECHNICAL DATA AND INFORMATION
Course facilitator
Engr. ESIBE Clifford N.
677172358/697232610
esibecliff@gmail.com
Course facilitator: ESIBE Clifford Page 1

CHAPTER 1: INTRODUCTION AND DEFINITION OF CONCEPTS

1.1. INTRODUCTION
The very essence of any business is to cater needs of customer by providing services and goods,
and in process create value for customers and solve their problems. Production and operations
management talks about applying business organization and management concepts in creation of
goods and services.
Production management is a process of planning, organizing, directing and controlling the
activities of the production function in an organization to achieve the goals of an organization.
Production management is the management of an organization‟s production systems, which
converts inputs into the desired product and services. A production system takes given inputs which
include raw material, people, machines, tools, building, technology, cash, information and other
resources whereas the outputs include the product and services. Production management is the study
(practices) of planning, designing, and production systems and subsystems to achieve the organization
goals.
Production management of the plant.

It brings together the 6M's i.e. men, money, machines, materials, methods and markets to
satisfy the wants of the people.
Production management also deals with decision-making regarding the quality, quantity, cost,
etc., of production. It applies management principles to production.
Production management is a part of business management. It is also called "Production
Function." Production management is slowly being replaced by operations management.
Elwood Spencer Buffa defines production management as, “Production management deals with
decision making related to production processes so that the resulting goods or services are produced
according to specifications, in the amount and by the schedule demanded and out of minimum cost.”
1.2. OBJECTIVES OF PRODUCTION MANAGEMENT:
The four objectives of the production management are „to produce goods services of right
quality and quantity at the right time and right manufacturing cost.‟
1. Right Quality: The quality of the product is established based on the customer needs in the market.
The right quality is not necessarily the best quality of the product. It is determined by the cost of the
product and the technical characteristics as suited to the specific requirements of the customers in the
market environment.
2. Right Quantity: The manufacturing organization should produce the products in the right number. If
they are produced more than demand the capital will block up in the form of inventory and if the
quantity is produced in short of demand, leads to a shortage of products.
3. Right Time: Timeliness of delivery of the product to the consumer or wholesaler is one of the critical
parameters to judge the effectiveness of the production department. So, the production department
has to make the optimal utilization of input resources to achieve its desired objectives.
4. Right Manufacturing Cost: Manufacturing costs are incurred before the product is manufactured and
released into the market. Hence, all attempts should be made to the duce the products at a pre-
established cost, to reduce the variation between the actual and the standard (pre-established) cost.
Some of the key features of production management are as follows.
1. Production management deals with processes. It is not possible for a single person to perform the
function of production management. Production management includes some staff such as
supervisors, materials managers and store managers or anyone who manages staff, equipment, or
materials.
2. The management term in broad interpretation includes the design of the system and performance of
all the activities mandatory to operate the system that encompasses the directions to staff and
acquiring material and equipment.
3. The term highlights the fact that to manage the production of the organization‟s final products; there
are many subsystems as parts of the production system. For example, the cost accounting department
in a manufacturing company is part of the production system.
4. The goal of production management is to minimize costs, for most of the organizations. It also helps
to improve the efficiency and productivity of the production system.
1.3. IMPORTANCE OF PRODUCTION MANAGEMENT
A. The importance of production management to the business firm:
1. Accomplishment of firm's objectives: Production management helps the business firm to achieve
all its objectives. It produces products, which satisfy the customers' needs and wants. So, the firm
will increase its sales. This will help it to achieve its objectives.
2. Reputation, Goodwill and Image: Production management helps the firm to satisfy its customers.
This increases the firm‟s reputation, goodwill and image. A good image helps the firm to expand
and grow.

3. Helps to introduce new products: Production management helps to introduce new products in the
market. It conducts Research and development (R&D). This helps the firm to develop newer and
better quality products. These products are successful in the market because they give full
satisfaction to the customers.
4. Supports other functional areas: Production management supports other functional areas in an
organization, such as marketing, finance, and personnel. The marketing department will find it
easier to sell good-quality products, and the finance department will get more funds due to increase
in sales. It will also get more loans and share capital for expansion and modernization. The
personnel department will be able to manage the human resources effectively due to the better
performance of the production department.
5. Helps to face competition: Production management helps the firm to face competition in the
market. This is because production management produces products of right quantity, right quality,
and right price and at the right time. These products are delivered to the customers as per their
requirements.
6. Optimum utilization of resources: Production management facilitates optimum utilization of
resources such as manpower, machines, etc. So, the firm can meet its capacity utilization objective.
This will bring higher returns to the organization.
7. Minimizes cost of production: Production management helps to minimize the cost of production.
It tries to maximize the output and minimize the inputs. This helps the firm to achieve its cost
reduction and efficiency objective.
8. Expansion of the firm: The Production management helps the firm to expand and grow. This is
because it tries to improve quality and reduce costs. This helps the firm to earn higher profits.
These profits help the firm to expand and grow.
B. The importance of production management to customers and society:

1. Higher standard of living: Production management conducts continuous research and
development (R&D). So they produce new and better varieties of products. People use these
products and enjoy a higher standard of living.
2. Generates employment: Production activities create many different job opportunities in the
country, either directly or indirectly. Direct employment is generated in the production area, and
indirect employment is generated in the supporting areas such as marketing, finance, customer
support, etc.
3. Improves quality and reduces cost: Production management improves the quality of the products
because of research and development. Because of large-scale production, there are economies of
large scale. This brings down the cost of production. So, consumer prices also reduce.
4. Spread effect: Because of production, other sectors also expand. Companies making spare parts
will expand. The service sector such as banking, transport, communication, insurance, BPO, etc.
also expand. This spread effect offers more job opportunities and boosts economy.
5. Creates utility: Production creates Form Utility. Consumers can get form utility in the shape, size
and designs of the product. Production also creates time utility, because goods are available
whenever consumers need it.
6. Boosts economy: Production management ensures optimum utilization of resources and effective
production of goods and services. This leads to speedy economic growth and well-being of the
nation.
1.4.TYPES OF PRODUCTION
There can be many methods of production. A production manager will have to choose an
appropriate method for his unit. The nature of product and the quantity to be produced should be
taken into account while selecting a particular method. Production methods may be broadly
classified as: Job Production, Batch Production and Flow Production.

1. Job Production:
Job production involves the procedure of manufacturing a product according to a specific
customer order. The products manufactured are generally non-standardized and heterogeneous in nature.
It usually refers to:-
i. The supply of components to a larger manufacturer;
ii. The provision of one particular area of production to a large one; or
iii. Making of special equipment or material.
i. Characteristics
The Job-shop production system is followed when there is:
i. High variety of products and low volume.
ii. Use of general purpose machines and facilities.
iii. Highly skilled operators who can take up each job as a challenge because of uniqueness.
iv. Large inventory of materials, tools, parts.
v. Detailed planning is essential for sequencing the requirements of each product, capacities
for each work centre and order priorities.
ii. Advantages include:

 Can provide emergency parts or services, such as quickly making a machine part that would
take a long time to acquire otherwise
 Can provide parts or services for machinery or systems that are otherwise not available, as
when the original supplier no longer supports the product or goes out of business (orphaned)
 Work is generally of a high quality
 A high level of customization is possible to meet the customer's exact requirements
 Significant flexibility is possible, especially when compared to mass production
 Workers can be easily motivated due to the skilled nature of the work they are performing
iii. Disadvantages include:
 Higher cost of production
 Re-engineering: sometimes engineering drawings or an engineering assessment, including
calculations or specifications, needs to be made before the work can be done.
 Requires the use of specialist labor (compared with the repetitive, low-skilled jobs in mass
production)
 Slow compared to other methods (batch production and mass production)
The manufacture of single product is considered as one operation. It consists of bringing together
of materials, parts, and components, in order to assemble and commission a single piece of equipment or
product. Ship building, dam construction, bridge building, book printing, are some of the examples of
job production.
2. Batch Production:
Batch production pertains to repetitive production. It refers to the production of goods, the
quantity of which is known in advance. Under batch system the work is divided into operations and one
operation is done at a time. After completing the work on one operation it is passed on to the next
operation and so on till the product is complete. Batch production may be explained with the help of an
example. A company wants to manufacture 50 electric motors. The work will be divided into different
operations. The first operation on all the motors will be completed in the first batch and then it will pass
on to the next operation.
The second group of operators will complete the second operation before passing to the next and
so on. Under job production the same operators will manufacture full machine and not one operation
only. Batch production can fetch the benefits of repetitive production to a considerable degree, provided
the batch is of a sufficient quantity. Thus batch production may be defined as the manufacture of a

product in small or large batches or lots by a series of operations, each operation being carried out on the
whole batch before any subsequent operation is operated.
a) Characteristics
Batch production system is used under the following circumstances:
i. When there is shorter production runs.
ii. When plant and machinery are flexible.
iii. When plant and machinery set up is used for the production of item in a batch and change of
set up is required for processing the next batch.
iv. When manufacturing lead time and cost are lower as compared to job order production.
b) Advantages
 The advantages of batch production are that it‟s cheaper to produce a whole batch instead of
single; machines can be used more effectively.
 It's lower cost, fewer workers because going to use machines.
 It would be more accurate and consistent as machines would replicate the exact same
product leaving less faulty products.
 The company that uses it has a variety of products rather than just one type so therefore it
gives customer a larger choice and hence a larger possibility of sales.
 Another advantage is that the company is reducing its risk on simply concentrating on one
product; it produces a variety of different ones of the same type.
c) Disadvantages
 The main disadvantage of batch production is that there's a period of time for which the
machinery is being changed and this causes the productivity to stop completely which could
cause the workers to sit idle; basically the work stops.
 High storage costs
 If the prototype has an error all the rest of the same products will have that fault as the
machine replicates exactly. This would waste valuable time and the loss of materials would
be costly.
3. Mass or Flow Production:

Flow production, also called on-line mass production and continuous production, refers to the
production on a large-scale to provide a continuous supply. Flow production is the manufacture of a
product by a series of operations, each article going on to a succeeding operation as soon as possible.
The manufacturing process is broken into separate operations. The product completed at one operation
is automatically passed on to the next till it is complete. There is no time gap between the work done at
one process and the starting at the next. The flow of production is continuous and progressive.
a) Characteristics
Mass production is used under the following circumstances:
i. Standardisation of product and process sequence.
ii. Dedicated special purpose machines having higher production capacities and output rates.
iii. Large volume of products.
iv. Shorter cycle time of production.
v. Lower in process inventory.
vi. Perfectly balanced production lines.
vii. Flow of materials, components and parts is continuous and without any back tracking.
viii. Production planning and control is easy.
ix. Material handling can be completely automatic.
b) Advantages
 It is usually 'automated' to the highest extent possible.

 Fewer labour costs

 Faster rate of production
 Capital and energy are increased while total expenditure per unit of product is decreased
 Faster rate of production
c) Disadvantages
 Machinery is very expensive to buy, so production lines are very expensive to set up.
 Workers are not very motivated, since their work is very repetitive.
 Not very flexible, as a production line is difficult to adapt.
 If one part of the line breaks, the whole production process will have to stop until it is
repaired.
1.5. SCOPE OF PRODUCTION MANAGEMENT
The scope of production management is indeed vast. Commencing with the selection of location,
production management covers such activities as acquisition of land, constructing building, procuring
and installing machinery, purchasing and storing raw materials and converting them into saleable
products. Added to the above are other related topics such as quality management, maintenance
management, production planning and control, methods improvement and work simplification and other
related areas.
1.6. FUNCTIONS OF PRODUCTION MANAGEMENT
The definitions discussed above clearly shows that the concept of production management is
related mainly to the organizations engaged in production of goods and services. Earlier these
organizations were mostly in the form of one man shops having insignificant problems of managing the
productions.
But with development and expansion of production organizations in the shape of factories more
complicated problems like location and lay out, inventory control, quality control, routing and
scheduling of the production process etc. came into existence which required more detailed analysis and
study of the whole phenomenon.
This resulted in the development of production management in the area of factory management. In
the beginning the main function of production management was to control labour costs which at that
time constituted the major proportion of costs associated with production.
But with development of factory system towards mechanization and automation the indirect
labour costs increased tremendously in comparison to direct labour costs, e.g., designing and packing of
the products, production and inventory control, plant layout and location, transportation of raw materials
and finished products etc. The planning and control of all these activities required more expertise and
special techniques.
In modern times production management has to perform a variety of functions, namely:
i. Design and development of production process.
ii. Production planning and control.
iii. Implementation of the plan and related activities to produce the desired output.
iv. Administration and co-ordination of the activities of various components and departments
responsible for producing the necessary goods and services.
However, the responsibility of determining the output characteristics and the distribution strategy
followed by an organization including pricing and selling policies are normally outside the scope of
Production Management.

CHAPTER 2: METHOD OF PRODUCTION SCHEDULING

2.1. INTRODUCTION
Scheduling (production processes) Scheduling is the process of arranging, controlling and
optimizing work and workloads in a production process or manufacturing process. Scheduling is used
to allocate plant and machinery resources, plan human resources, plan production processes and
purchase materials.
Production scheduling problems have been the subject of intense academic research for the last
three decades. Scheduling is a key factor for manufacturing productivity. Effective production
scheduling can improve on-line delivery, reduce inventory, cut lead time, and improve machine
utilization.
2.1.1. What is the Demand Schedule
In economics, the demand schedule is a table showing the quantity demanded of a good or
service at different price levels. The demand schedule can be graphed as a continuous demand curve
on a chart where the Y-axis represents price and the X-axis represents quantity.
2.1.2. BREAKING DOWN Demand Schedule
The demand schedule most commonly consists of two columns. The first column lists a price for
a product in ascending or descending order. The second column lists the quantity of the product that
is desired, or demanded, at that price, which is determined based on research of the market. When the
data in the demand schedule is graphed to create the demand curve, it provides a visual
demonstration of the relationship between price and demand, allowing an easy estimation of the
demand for a product or service at any point along the curve.
2.1.3. Demand and Supply Schedules
A demand schedule is typically used in conjunction with a supply schedule, which shows the
quantity of a good that would be supplied to the market by producers at given price levels. Graphing
both schedules on a chart with the axes described above, it is possible to obtain a graphical
representation of the supply and demand dynamics of a particular market. In a typical supply and
demand relationship, as the price of a good or service rises, the quantity demanded tends to fall. If all
other factors are equal, the market reaches equilibrium where the supply and demand schedules
intersect. At this point, the corresponding price is the equilibrium market price, and the
corresponding quantity is the equilibrium quantity exchanged in the market.
2.1.4. Additional Factors on Demand
Price is not the sole factor that determines demand for a particular product. Demand may also
be affected by the amount of disposable income available, shifts in the quality of the goods in
question, effective advertising and even weather patterns. Price changes of related goods or services
may also affect demand. If the price of one product rises, demand for a substitute of that product may
rise, while a fall in the price of a product may increase demand for its complements. For example, a
rise in the price of one brand of coffeemaker may increase the demand for a relatively cheaper
coffeemaker produced by a competitor. If the price of all coffeemakers falls, the demand for coffee, a
complement to the coffeemaker market, may rise, as consumers take advantage of the price decline in
coffeemakers.
2.2.PRODUCTION SCHEDULING
Production scheduling consists of the activities performed in a manufacturing company in order to
manage and control the execution of a production process.
2.2.1. SCHEDULLING
Scheduling is a decision-making process that plays a very important role in most manufacturing
and service industries. Scheduling function deals with the determination of time-sequence of jobs,
orders, tasks, and operations as well as the allocation of the required resources to accomplish the
related set of jobs, orders, operations, and tasks. A schedule is an assignment problem that describes
into details (in terms of minutes or seconds) which activities must be performed and how the
factory‟s resources should be utilized to satisfy the plan. Detailed scheduling is essentially the

problem of allocating machines to competing jobs over time, subject to the constraints. Each work
center can process one job at a time and each machine can handle at most one task at a time. A
scheduling problem, typically, assumes a fixed number of jobs and each one has its own parameters
(i.e., tasks, the necessary sequential constraints, the time estimates for each operation and the
required resources, no cancellations). All scheduling approaches require some estimate of how long it
takes to perform the work. All scheduling changes can be projected over time enabling the
identification and analysis of starting time, completion times, idle time of resources, lateness, etc.
Sequencing, timing, routing, reconfiguration, forecasting, labeling, grouping, aggregation, and
dis-aggregation are the main issues of scheduling function. Scheduling function can be performed
through five levels of scheduling. This classification is based mainly on time horizon and aggregation
process. The levels are long-range planning, middle range planning, short-range planning,
scheduling, and reactive scheduling control. The scheduling environment can be classified as
classical job shop, open job shop, batch shop, flow shop, batch/flow shop, manufacturing cell,
assembly shop, assembly line, transfer line, flexible transfer line, and flexible manufacturing systems
A right scheduling plan can drive the forecast to anticipate completion date for each released part and
to provide data for deciding what to work on next. Questions about “Can we do it?” and/or “How are
we doing?” presume the existence of approaches for optimization. The aim of a scheduling study is,
in general, to perform the tasks in order to comply with priority rules and to respond to strategy. An
optimal short-term production planning model aims at gaining time and saving opportunities.
It starts from the execution orders and it tries to allocate, in the best possible way, the
production of the different items to the facilities. A good schedule starts from planning and springs
from respecting resource conflicts, managing the release of jobs to a shop and optimizing completion
time of all jobs. It defines the starting time of each task and determines whatever and how delivery
promises can be met. The minimization of one or more objectives has to be accomplished (e.g., the
number of jobs that are shipped late, the minimization set up costs, the maximum completion time of
jobs, maximization of throughput, etc.). Criteria could be ranked from applying simple rules to
determine which job has to be processed next at which work-center.
2.3. TYPES OF SCHEDULING
Types of scheduling can be categorized as forward scheduling and backward scheduling.
a. Forward scheduling:
It is commonly used in job shops where customers place their orders on “needed as soon
as possible” basis. Forward scheduling determines start and finish times of next priority job by
assigning it the earliest available time slot and from that time, determines when the job will be
finished in that work center. Since the job and its components start as early as possible, they will
typically be completed before they are due at the subsequent work centers in the routing. The
forward method generates in the process inventory that are needed at subsequent work centers
and higher inventory cost. Forward scheduling is simple to use and it gets jobs done in shorter
lead times, compared to backward scheduling.
b. Backward scheduling:
It is often used in assembly type industries and commit in advance to specific delivery
dates. Backward scheduling determines the start and finish times for waiting jobs by assigning
them to the latest available time slot that will enable each job to be completed just when it is
due, but done before. By assigning jobs as late as possible, backward scheduling minimizes
inventories since a job is not completed until it must go directly to the next work center on its
routing. Forward and backward scheduling methods are shown
2.4.PROBLEM CONTEXT AND HYPOTHESES
In production and manufacturing systems, the objects to be scheduled are often individuals or
products. A product can be a single unit or batch units to be processed. In order to manufacture a
given product, a machine is required, and a set of operations and/or assembly operations must be
performed on one or several units to make the product. In production scheduling, it is prohibited to
interrupt the operation on a product and move the residual processing to a different time interval.
The problem is defined as:
 The finished product set to be produced and, eventually, either the dates by which they have
to be imperatively finished (deadlines) or the target dates at which they are supposed to be
completed with possible associated penalty cost for both earliness and lateness (due date).
 The date of the availability of the components used in the production process (release date).
 The set of „routes‟ which can be used to obtain each finished product with
i. The corresponding processing time,
ii. The corresponding machine used for each operation in each route
iii. The set of precedence constraints in each route.
 The time intervals when a given machine is available.
 The measure of quality of the completed schedule.
2.5. METHODS OF PRODUCTION SCHEDULING
The scheduling methodology depends upon the type of industry, organization, product, and level of
sophistication required. They are:
1. Charts and boards,
2. Priority decision rules
3. Mathematical programming methods.
1. Gantt Charts and Boards
Gantt charts and associated scheduling boards have been extensively used scheduling devices in
the past, although many of the charts are now drawn by computer. A Gantt chart is a type of
control chart especially designed to show graphically the relationship between planned
performance and actual performance. It was design for companies to quickly know whether
production was on schedule, ahead of schedule or behind schedule. Gantt charts are extremely
easy to understand and can quickly reveal the current or planned situation to all concerned. They
are used in several forms, namely,
a. Scheduling or progress charts, which depicts the sequential schedule;
b. Load charts, which show the work assigned to a group of workers or machines
c. Record a chart, which are used to record the actual operating times and delays of workers
and machines.
2. Priority Decision Rules
Priority decision rules are simplified guidelines for determining the sequence in which jobs will
be done. In some firms these rules take the place of priority planning systems such as MRP
systems. Following are some of the priority rules followed
3. Mathematical Programming Methods
Scheduling is a complex resource allocation problem. Firms process capacity, labor skills,
materials and they seek to allocate their use so as to maximize a profit or service objective, or
perhaps meet a demand while minimizing costs. The following are some of the models used in
scheduling and production control.
a. Linear programming model: Here all the constraints and objective functions are
formulated as a linear equation and then problem is solved for optimality. Simplex
method, transportation methods and assignment method are major methods used here.
b. PERT/CPM network model: PERT/CPM network is the network showing the sequence
of operations for a project and the precedence relation between the activities to be
completed.
Note: Scheduling is done in all the activities of an organization i.e., production, maintenance etc.
Therefore, all the methods and techniques of scheduling is used for maintenance management.

CHAPTER 3: MANAGEMENT OF STOCK AND WAREHOUSING

Objectives
After studying this chapter, you will able to:
 Explain the meaning of warehousing;
 Recognise the need for warehousing;
 Outline the reason for keeping stock
 Explain the characteristics of ideal warehouses;
 Describe the functions of warehouses; and
 Explain how to manage stock
B. WAREHOUSING
3.1. GENERAL INTRODUCTION
We eat a variety of food in our daily life. Some of us may take rice, while others may take chapati
or roti as our main food. But have you ever thought from where the paddy or wheat from which these
food items are prepared comes from. We know that these food grains are not produced throughout the
year. But we need to eat them every day. So how are the farmers able to supply these continuously to
us? You might be thinking that they store the food grains in a proper place and supply them at the time
of need. Yes, you are right. Since the production takes place during a particular season and in specific
areas, there is a need to store these grains systematically. In our home we may keep limited stock for our
own consumption. But there are certain places or stores, where these items are stored in huge quantities
in a proper and systematic way.
A warehouse is simply an area or a place where goods are stored until demand. All enterprises or
entrepreneurs will like to enjoy economies of sales that is advantages from large scale production with
this, there is need for warehouse where products are stored after mass production or after bulk buying.
The warehouse therefore helps to regulate supply. This means that the storage of goods is an
important part of the production process. According to Robert Hughe, warehousing is a set of activities
that are involved in receiving and storing of goods and is preparing them for reshipment. Keeping in
view the definition of warehousing, we discover that it is not only concern with storage facilities but
also concerns other activities like receiving, identifying, assembling and preparing products to meet
demand. Warehousing therefore is part by of Supply Chain Management (SCM).
SCM is the study of materials information and finance as they move in a process from supplier to
manufacturer to whole sellers to retailers and to the final consumer. It should be noted
Warehouse that for a supply chain to be well managed there must be suitable warehouses to support the
process.
3.2. MEANING OF WAREHOUSING
We need different types of goods in our day-to-day life. We may buy some of these items in
bulk and store them in our house. Similarly, businessmen also need a variety of goods for their use.
Some of them may not be available all the time. But, they need those items throughout the year
without any break. Take the example of a sugar factory. It needs sugarcane as raw material for
production of sugar. You know that sugarcane is produced during a particular period of the year.
Since sugar production takes place throughout the year, there is a need to supply sugarcane
continuously. But how is it possible? Here storage of sugarcane in sufficient quantity is required.
Again, after production of sugar it requires some time for sale or distribution. Thus, the need for
storage arises both for raw material as well as finished products. Storage involves proper
arrangement for preserving goods from the time of their production or purchase till the actual use.
When this storage is done on a large scale and in a specified manner it is called „warehousing‟. The
place where goods are kept is called „warehouse‟. The person in-charge of warehouse is called
„warehouse-keeper‟.
Warehousing refers to the activities involving storage of goods on a large-scale in a systematic
and orderly manner and making them available conveniently when needed. In other words,

warehousing means holding or preserving goods in huge quantities from the time of their purchase
or production till their actual use or sale.
Warehousing is one of the important auxiliaries to trade. It creates time utility by bridging the
time gap between production and consumption of goods.
3.3. NEED FOR WAREHOUSING
Warehousing is necessary due the following reasons.
1. Seasonal Production: You know that agricultural commodities are harvested during certain
seasons, but their consumption or use takes place throughout the year. Therefore, there is a need
for proper storage or warehousing for these commodities, from where they can be supplied as
and when required.
2. Seasonal Demand: There are certain goods, which are demanded seasonally, like wool garments
in winters or umbrellas in the rainy season. The production of these goods takes place throughout
the year to meet the seasonal demand. So there is a need to store these goods in a warehouse to
make them available at the time of need.
3. Large-scale Production: In case of manufactured goods, now-a-days production takes place to
meet the existing as well as future demand of the products. Manufacturers also produce goods in
huge quantity to enjoy the benefits of large-scale production, which is more economical. So the
finished products, which are produced on a large scale, need to be stored properly till they are
cleared by sales.
4. Quick/fast Supply: Both industrial as well as agricultural goods are produced at some specific
places but consumed throughout the country. Therefore, it is essential to stock these goods near
the place of consumption, so that without making any delay these goods are made available to
the consumers at the time of their need.
5. Continuous Production: Continuous production of goods in factories requires adequate supply
of raw materials. So there is a need to keep sufficient quantity of stock of raw material in the
warehouse to ensure continuous production.
6. Price Stabilization: To maintain a reasonable level of the price of the goods in the market there
is a need to keep sufficient stock in the warehouses. Scarcity in supply of goods may increase
their price in the market. Again, excess production and supply may also lead to fall in prices of
the product. By maintaining a balance of supply of goods, warehousing leads to price
stabilisation.
3.4. TYPES OF WAREHOUSES
Warehouses can broadly be classified under public and private. A Public warehouse is owned
by the government while the private warehouse is owned by private individuals or enterprises.
Some of which are;
1. Private Warehouses: The warehouses which are owned and managed by the manufacturers or
traders to store, exclusively, their own stock of goods are known as private warehouses.
Generally these warehouses are constructed by the farmers near their fields, by wholesalers and
retailers near their business centres and by manufacturers near their factories. The design and
the facilities provided therein are according to the nature of products to be stored.
2. Public Warehouses: The warehouses which are run to store goods of the general public are
known as public warehouses. Anyone can store his goods in these warehouses on payment of
rent. An individual, a partnership firm or a company may own these warehouses. To start such
warehouses a licence from the government is required. The government also regulates the
functions and operations of these warehouses. Mostly these warehouses are used by
manufacturers, wholesalers, exporters, importers, government agencies, etc.
3. Government Warehouses: These warehouses are owned, managed and controlled by central or
state governments or public corporations or local authorities. Both government and private
enterprises may use these warehouses to store their goods.

4. Bonded Warehouses: These warehouses are owned, managed and controlled by government as
well as private agencies. Private bonded warehouses have to obtain licence from the
government. Bonded warehouses are used to store imported goods for which import duty is yet
to be paid. In case of imported goods the importers are not allowed to take away the goods from
the ports till such duty is paid. These warehouses are generally owned by dock authorities and
found near the ports.
5. Co-operative Warehouses: These warehouses are owned, managed and controlled by co-
operative societies. They provide warehousing facilities at the most economical rates to the
members of their society
3.5. CHARACTERISTICS OF IDEAL WAREHOUSES
In the above section you have learnt about different types of warehouses. In each of these
warehouses adequate arrangements are made to keep the goods in proper conditions. However, any
warehouse is said be an ideal warehouse if it possesses certain characteristics, which are given
below:
1. Warehouse should be located at a convenient place near highways, railway stations, airports and
seaports where goods can be loaded and unloaded easily.
2. Mechanical appliances should be there to loading and unloading the goods. This reduces the
wastages in handling and also minimises handling costs.
3. Adequate space should be available inside the building to keep the goods in proper order.
4. Ware houses meant for preservation of perishable items like fruits, vegetables, eggs and butter
etc. should have cold storage facilities
5. Proper arrangement should be there to protect the goods from sunlight, rain, wind, dust,
moisture and pests.
6. Sufficient parking space should be there inside the premises to facilitate easy and quick loading
and unloading of goods.
7. Round the clock security arrangement should be there to avoid theft of goods
8. The building should be fitted with latest fire-fighting equipment to avoid loss of goods due to
fire.
3.6. FUNCTION OF WAREHOUSES
You have learnt that warehouses preserve goods on a large-scale in a systematic and orderly
manner. They provide protection to goods against heat, wind, storm, moisture, etc. and also cut
down losses due to spoilage, wastage etc. This is the basic function of every warehouse. In addition
to this, warehouses now a days also perform a variety of other functions. In this section let us learn
about the various functions of warehouses.
Warehouses perform the following functions
i. Storage of goods: The basic function of warehouses is to store large stock of goods. These
goods are stored from the time of their production or purchase till their consumption or use.
ii. Protection of goods: A warehouse provides protection to goods from loss or damage due to
heat, dust, wind and moisture, etc. It makes special arrangements for different products
according to their nature. It cuts down losses due to spoilage and wastage during storage.
iii. Risk bearing: Warehouses take over the risks incidental to storage of goods. Once goods are
handed over to the warehouse-keeper for storage, the responsibility of these goods passes on
to the warehouse-keeper. Thus, the risk of loss or damage to goods in storage is borne by the
warehouse keeper. Since it is bound to return the goods in good condition, the warehouse
becomes responsible for any loss, theft or damage, etc. Thus, it takes all precautions to
prevent any mishap.
iv. Financing: When goods are deposited in any warehouse, the depositor gets a receipt, which
acts as a proof about the deposit of goods. The warehouses can also issue a document in
favour of the owner of the goods, which is called warehouse-keeper‟s warrant. This warrant is
a document of title and can be transferred by simple endorsement and delivery. So while the

goods are in custody of the warehouse-keeper, the businessmen can obtain loans from banks
and other financial institutions keeping this warrant as security. In some cases, warehouses
also give advances of money to the depositors for a short period keeping their goods as
security.
v. Processing: Certain commodities are not consumed in the form they are produced. Processing
is required to make them consumable. For example, paddy is polished, timber is seasoned,
and fruits are ripened, etc. Sometimes warehouses also undertake these activities on behalf of
the owners.
vi. Grading and branding: On request warehouses also perform the functions of grading and
branding of goods on behalf of the manufacturer, wholesaler or the importer of goods. It also
provides facilities for mixing, blending and packaging of goods for the convenience of
handling and sale.
vii. Transportation: In some cases warehouses provide transport arrangement to the bulk
depositors. It collects goods from the place of production and also sends goods to the place of
delivery on request of the depositors.
3.7. ADVANTAGES OF WAREHOUSING
Warehousing offers many advantages to the business community. Whether it is industry or
trade, it provides a number of benefits which are listed below.
i. Protection and Preservation of goods: Warehouse provides necessary facilities to
the businessmen for storing their goods when they are not required for sale. It provides
protection to the stocks ensures their safety and prevents wastage. It minimises losses from
breakage, deterioration in quality, spoilage etc. Warehouses usually adopt latest technologies to
avoid losses, as far as possible.
ii. Regular flow of goods: Many commodities like rice, wheat etc. are produced during
a particular season but are consumed throughout the year. Warehousing ensures regular supply
of such seasonal commodities throughout the year.
iii. Continuity in production: Warehouse enables the manufacturers to carry on production
continuously without bothering about the storage of raw materials. It helps to provide seasonal
raw material without any break, for production of finished goods
iv. Convenient location: Warehouses are generally located at convenient places near road, rail or
waterways to facilitate movement of goods. Convenient location reduces the cost of
transportation.
v. Easy handling: Modern warehouses are generally fitted with mechanical appliances to handle
the goods. Heavy and bulky goods can be loaded and unloaded by using modern machines,
which reduces cost of handling such goods. Mechanical handling also minimizes wastage during
loading and unloading.
vi. Useful for small businessmen: Construction of own warehouse requires heavy
capital investment, which small businessmen cannot afford. In this situation, by paying a
nominal amount as rent, they can preserve their raw materials as well as finished products in
public warehouses.
vii.Creation of employment: Warehouses create employment opportunities both for skilled and
unskilled workers in every part of the country. It is a source of income for the people, to improve
their standards of living.
viii. Facilitates sale of goods: Various steps necessary for sale of goods such as inspection of goods
by the prospective buyers, grading, branding, packaging and labelling can be carried on by the
warehouses. Ownership of goods can be easily transferred to the buyer by transferring the
warehouse keeper‟s warrant.
ix. Availability of finance: Loans can be easily raised from banks and other financial institutions
against the security of the warehouse-keeper‟s warrant. In some cases warehouses also provide
advance to the depositors of goods on keeping the goods as security.

x. Reduces risk of loss: Goods in warehouses are well guarded and preserved. The warehouses can
economically employ security staff to avoid theft, use insecticides for preservation and provide
cold storage facility for perishable items. They can install fire-fighting equipment to avoid fire.
The goods stored can also be insured for compensation in case of loss.
3.8. HOW TO SELECT AND SET UP A WAREHOUSE
Setting a warehouse starts from analysing principally the position of the product in the supply
chain. Ie to say the warehouse may be to support production and will be located or set up near the
production unit. It may also be supported transportation, purchasing, selling etc.
Selecting a warehouse now takes into consideration of the following;
1. Types of product: The product must be scamined to see if it is perishable or not. The volume of
the product is also taken into consideration. This acts as guide lines to know the types of
warehouse needed.
2. Location: In the case of the manufacturing company, the source of raw material is seriously
taken into consideration. In case they are from abroad, there may be a need for a warehouse or
the firm factor located at the entering point into the country (sea, airport, border port). It may be
located near the market. This facilitates selling in bulk. The market position should be scamined
to represent a road junction for easy supply of products into the market. This strategic position
also permits the businessman to discover and penetrates new markets. Position of the warehouse
should also permit feedback information to the headquarters of the biz for management decision
making.
3. Transportation: A warehouse should be set up in area where it is easily accessible. This
facilitates the movement of the product to the market\company.
3.9.THE ROLE OF WAREHOUSING IN THE SUPPLY CHAIN
Warehousing helps in a number of stages in the supply chain.
It supports manufacturing, purchasing, inventory management, and transportation etc.
 In manufacturing
All manufacturing industries make good use of their raw materials. To enjoy economies of scale and
continuous supply, these raw materials are purchased in bulk. The warehouse helps to safeguard,
accommodate and protect these raw materials. Its strategic location makes the raw materials to easily get
to the factory for transportation. In a manufacturing plan, the warehouse accommodates raw materials,
semi-finished into finished product. It also helps the manufacturer to reduce cost and enjoy economies
of scale; this is as raw materials can be purchased in bulk.
 In transportation
Transportation per unit is reduced as a greater number of units are transported, this means that
warehousing encourages one-stop loading as a number of trucks can load in the same house whereby
reducing cost.
 In purchasing
Material planners‟ use the production schedule and the requirement plan to determine ordering of
materials or components required for production. This planner procurement personnel work together to
evaluate material needs, leads time for receiving material and pricing policies in buying. All this
components influence the need to store materials in a warehouse for future production. This enables the
next purchasing procedure to be carried on when materials are still available in the warehouse. This
prevents shortage in raw materials and requirement for production.
 In inventory management
Inventory management is mostly concerned with stock talking. The warehouse provides space for
physical counting of products. This inventory therefore supplies information to the procurement
personnel to take decision of replacing products running out of stock. It is thanks to the warehouse
counters are able to evaluate the stock or product to complete the cost of assets of an enterprise during
end of year work.

B. STOCK CONTROL
3.10. THE IMPORTANCE OF MANAGING STOCKS
Inventory control is also important to maintaining the right balance of stock in your warehouses. ...
When you have control over your inventory, you're able to provide better customer service. It will also
help you get a better, more real-time understanding of what's selling and what isn't.
3.11. TYPES OF STOCK
Raw Materials Work in Progress Finished Goods

 Raw Materials
 Substances in a natural state before they go through manufacturing or other processing
 Components that require assembly
 Purchased from outside suppliers
 Work in progress
 Items which, at a given time, are going through the production process
 Some products have a long production process – so the value of work in
progress is often substantial – e.g. construction projects
 Finished goods
 Goods that are complete.
 May be stocked awaiting delivery to customer.
 May be produced some time in advance ahead of seasonal increases in
demand.
3.12. WHY HOLD STOCKS
 To meet demand
 Acts as a “buffer” in times of high demand
 Protect against uncertain / unreliable delivery from suppliers
 Encourage customers to buy (crucial in businesses like retailers)
 To lower production costs
 Take advantage of quantity or “bulk” discounts by ordering more at a time
 Can buy stocks ahead of a shortage or a supplier price rise
 Reduce ordering costs
 Ensure continuity of production (avoid costs of production shortages)
3.13. STOCK CONTROL
Managing stock effectively is important for any business, because without enough stock,
production and sales will grind to a halt. Stock control involves careful planning to ensure that the
business has sufficient stock of the right quality available at the right time. Stock can mean different
things and depends on the industry the firm operates in. It includes:
 Raw materials and components from suppliers
 Work in progress or part finished goods made within the business
 Finished goods ready to dispatch to customers

 Consumables and materials used by service businesses

As stock comes in, and gets used, new stock replaces it. This may cause problems in valuing the stock if
they have different values. Who cares? This is important because stock value is one of the components
of profit.
There are three ways of valuing stock…
1. FIFO (First in first out). Stock is assumed to be used on the basis of the earliest stuff in was the
first used, so the stock left, and so the stock to be valued is the newest stuff in, and so the price
used to calculate it is the cost of the latest stock in.
2. LIFO (Last in first out). Stock is assumed to be used on the basis of the latest stuff in was the
first used, so the stock left, and so the stock to be valued, is the oldest stuff in. The value is
calculated depending upon the price for the oldest stock used.
3. Average cost. An average value is taken of the cost of all stock over the time period.
In order to meet customer orders, product has to be available from stock – although some firms are
able to arrange deliveries Just in Time, see below. If a business does not have the necessary stock to
meet orders, this can lead to a loss of sales and a damaged business reputation. This is sometimes called
a „stock-out‟.
It is important therefore that a business either holds sufficient stocks to meet actual and anticipated
orders, or can get stocks quickly enough to meet those orders. For a high street retailer, in practice this
means having product on the shelves.
However, there are many costs of holding stock, so a business does not wish to hold too much
stock either. The costs of holding stock include:
 The opportunity cost of working capital tied up in stock that could have been used for another
purpose
 Storage costs – the rent, heating, lighting and security costs of a warehouse or additional factory or
office space
 Bank interest , if the stock is financed by an overdraft or a loan
 Risk of damage to stock by fire, flood, theft etc; most businesses would insure against this, so there
is the cost of insurance
 Stock may become obsolete if buyer tastes change in favour of new or better products
 Stock may perish or deteriorate – especially with food products
3.13.1. Stock Control - application and evaluation
When a stock control situation is presented in an examination, it is likely to be in the context of a
business that is facing change – so it is rarely as simple as the diagram in the tutor2u stock control
revision note.
Candidates need to interpret and apply stock control principles to the particular situation, and
make practical suggestions to help address the question.
Examples might include:
 A business that is growing will need to review its re-order and buffer stock levels, and the
frequency and size of orders
 Look out for seasonality in a business; larger or more frequent orders may be needed in busy
times
 If the supplier is having trouble supplying goods on time, the firm might need to re-order at an
earlier point (or seek a new supplier!)
 Does the firm have a back-up supplier in case of delays?
 Could small additional orders be made with a supplier as a stop gap if the firm‟s stock runs out
suddenly?
Note - these orders would be more expensive because of extra transport costs and lower discount level
3.13.2. Stock shown graphically
A stock control chart is a graphical illustration of a simple approach to stock management over
time. This „saw tooth‟ shaped diagram is normally shown as if sales were steady throughout each month.

Whilst this oversimplifies the situation for many businesses, the principles can be adapted to most
situations.
The key features and terms are:
 Maximum stock level – this is the maximum amount of stock a business would wish to hold. This
could represent enough stock for a month or a week, it might be as much as the warehouse has
space for, or it might depend on the order size needed to qualify for a quantity discount – known as
the Economic Order Quantity (EOQ). On the diagram below, the maximum stock level is 600 units,
and the usual order quantity is 500 units
 Re-order level – this acts as a trigger point, so that when stocks fall to this level, the next order
should be placed. This helps take account of fluctuations in sales levels over time. When an order is
placed, there is a lead time that the supplier needs to meet that order. Ideally this new order will
arrive just before stocks fall below the minimum stock level. On the diagram below, 300 units
 Lead time – the amount of time between placing the order and receiving the stock On the diagram
below, just under two weeks
 Minimum stock level – this is the minimum amount of product the business would want to hold in
stock. Assuming the minimum stock level is more than zero, this is known as buffer stock – see
below. On the diagram below, 100 units
 Buffer stock – an amount of stock held as a contingency in case of unexpected orders so that such
orders can be met and in case of any delays from suppliers.
3.14. OTHER BITS AND PIECES ON STOCK
a. Stock-taking: A simple approach to checking the level of stock in a business is to count it on the
shelves – this is called stocktaking. For many businesses, such as a small shop, this is a thoroughly
practical approach. Most businesses conduct an „annual stock take‟ when stocks are checked in
considerable detail to find any discrepancies between what is physically and the stock records.
This is also a good time to check for any obsolete or out of date stock that needs to be disposed of.
b. Stock rotation: Most businesses try to use up older stock first to help avoid stock deterioration or
becoming obsolete – this is known as stock rotation. You have probably noticed that
supermarkets always load the freshest stock to the back of the shelves.
c. Computerized stock control: Large businesses such as the major retailers use computerised
systems to manage stocks of tens of thousands of items, some of which are replenished several
times a day. As stock arrives, and again as it is sold, scanning of bar codes keeps the levels up to
date.
d. Automatic re-ordering of stock: As bar codes on products are scanned at the checkout, the
system is taking those sales into account as part of a program to re-order stock. Rather than
manual stock-taking by counting product on the shelves or in the warehouse, the supermarket has
detailed real-time stock level information that the system uses to place reorders through EDI
(Electronic Data Interchange).
Information such as weather forecasts, public holidays and major sporting events can be used to
help determine the stock level of seasonal products – such as beer, ice cream and food for
barbecues. Huge amounts of data are available from sales around the country to help determine
what stock to have in place on different days of the week and even at different times of the day.
The major supermarkets such as Tesco have developed stock management as one of their core
competencies and derive competitive advantage from having the right stocks on the shelves when
customers want them.
e. Just-in-time (JIT) stock control: JIT stock control means that stock is only ordered to meet
specific orders, and little or no product is held in stock. This requires very responsive and reliable
suppliers who can meet stringent requirements to deliver exactly the right stock to a precise
location and within a narrow time frame. See the revision notes on Lean Production for more
details of JIT.

Critical example
CAMEROON
Cameroon‟s CMS was first granted semi-autonomous status by presidential decree in 1985 with
the creation of ONAPHARM. ONAPHARM‟s budget came almost entirely from government funds and
provided commodities for free until 1989. In 1990, ONAPHARM began operating more like a private,
for-profit company, selling commodities to facilities, which then charged patients a fee in an attempt to
recover the cost of the commodities, making medicines unaffordable to the country‟s poorest individuals
and families. In addition, ONAPHARM started to purchase expensive brand-name medicines from
preferred suppliers and sell them to facilities at marked-up prices rather than focus on procuring
essential generic pharmaceuticals using a competitive tendering process.
To address these failures, a second phase of reforms took place between 1995 and 1998 to create
an independent non-profit CMS known as CENAME. External technical advisors (including donors)
helped draft regulations for the tendering process, the types of commodities that could be procured and
selling prices. Financial incentives for efficiency, such as the ability to retain surpluses, were built in.
Donors also invested in infrastructure improvements, staff training, and initial procurements. An
independent board was created that was given authority to manage human resources, finances,
procurement, and logistics.
Cameroon has seen a number of improvements in operational performance and service quality
since CENAME was introduced:
 Increased financial accountability: CENAME uses a commercial accounting system, which sheds
light on costs that are often hard to see in public accounting systems, such as the cost of holding
excess inventory. In addition, by regulation, CENAME is required to share financial audits with
customers.
 Increased payment for service and reduction in debt: CENAME‟s average customer pays 50% of
costs upfront and pays the rest within three months. Those who do not pay on time cannot make
future purchases without settling debts. Public and religious facilities, however, are allowed to
purchase on credit, when needed. Prior to the introduction of CENAME, ONAPHARM owed over
a billion dollars to suppliers; by contrast, CENAME has very little debt.
 Improved distribution: CENAME‟s customers make new orders every three months. CENAME
makes deliveries every three months while outsourcing some deliveries. CENAME‟s timeliness is
generally considered acceptable by customers.
 Improved quality of service: Data from the pre-CENAME era were not available; however,
customers interviewed reported that orders would take months to arrive. After CENAME, orders

generally arrive between 1 and 28 days after order, with locations close to CENAME reporting the
shortest delivery times.
 Improved commodity quality: CENAME performs quality assurance on every type of medicine,
sampling 25% for testing in their quality control lab.
 Improved commodity access: After reform, CENAME increased the number of direct customers as
well as increased their distribution network to include more rural areas. Stock-outs also decreased;
a small study found that six out of eight of CENAME‟s sampled customers had less than a 5%
stock-out rate, although the remaining two (both general hospitals) had stock-out rates between
20% and 40%.

CHAPTER 4: MANAGEMENT OF THE TECHNICAL DATA AND

INFORMATION
Objectives
After studying this chapter, you will able to:
 Explain the meaning of warehousing;
 recognise the need for warehousing;
 identify different types of warehouses;
 Explain the characteristics of ideal warehouses;
 Describe the functions of warehouses; and
4.1.INTRODUCTION
Data management plays a significant role in an organization‟s ability to generate revenue,
control costs and mitigate risks. Successfully being able to share, store, protect and retrieve the ever-
increasing amount of data can be the competitive advantage needed to grow in today‟s business
environment. Management of data generally focuses on the defining of the data element, how it is
structured, stored and moved. Management of information is more concerned with the security,
accuracy, completeness and timeliness of multiple pieces of data. These are all concerns that
accountants are trained to assess and help manage for an organization. Lastly, but just as important, data
management plays a key role in helping an organization mitigate risks. For example, establishing a
formal data retention policy can help decrease storage costs and reduce litigation risks.
4.2.DEFINITION OF SOME KEY TERMS USED
a. Technical data management and information: The definition provided by the Data
Management Association (DAMA) is: Technical Data management and information is the
development, execution and supervision of plans, policies, programs and practices that control,
protect, deliver and enhance the value of data and information assets. Technical Data
Management (TDM) ensures people in engineering organizations enjoy fast, easy, access to
reliable information, so they can do their jobs efficiently.
b. Data: A collection of facts, concepts or instructions in a formalized manner suitable for
communication or processing by human beings or by computer.
c. Data Manager: The senior manager, reporting to the Data Management Champion, responsible
for Data Management in an organization.
d. Data Management Plan: A plan for the management of an individual dataset, compliant with
the local Data Policy.
e. Data Policy: A set of broad, high-level principles that form the guiding framework within which
Data Management can operate.
f. Metadata: Metadata is the term used to describe the summary information or characteristics of a
set of data. In the area of geographic information or information with a geographic reference this
normally means the What, Who, Where, When and How of the data.
g. Data Owners: Are the individuals or groups of individuals who are held accountable,
managerially and financially, for a dataset and who have legal ownership rights to a dataset even
though that dataset may have been collected/collated/disseminated by another party.
h. Dataset: A dataset is a collection of data that has been compiled to serve a specific business
purpose. It may have been collected for a specific purpose or it may be data previously collected
for another purpose that is being reused for a purpose not envisaged at the time of collection
4.3.USERS OF DATA INCLUDE
 Technicians, Assemblers, Schedulers, Purchasing Agents
 Those who reference and mark-up drawings and documents
 Data Controllers
 Responsible for overall data integrity
 Project Manager

 Responsible for approvals, releases and workflow

 Engineers, CAD Operators, Technical Writers
 Responsible for design, drafting and documentation
 Customers, Vendors
 Need access to information and files to do their jobs
4.4.IMPORTANCE AND BENEFITS OF MANAGING TECHNICAL DATA AND INFORMATION

Data management and information plays a significant role in an organization‟s ability to generate
revenue, control costs and mitigate risks. Successfully being able to share, store, protect and retrieve the
ever-increasing amount of data can be the competitive advantage needed to grow in today‟s business
environment. Below are benefit to; Data suppliers, brokers/intermediaries, and users and customers.
a. Benefits to data suppliers
 An increased confidence and trust that their data will be used according to their agreed
conditions of use, without risk to confidentiality, copyright or IPR, and in compliance with all
statutory and non-statutory obligations.
 Provides a clear understanding of the use of their data, formally documented in a Memorandum
of Agreement signed by both supplier and user.
 A fair return for the use of the data they have supplied.
b. Benefits to data brokers/intermediaries
 Better quality, harmonized and coherent data from the use of common definitions, including
geographic references, formats, validation processes and standard procedures.
 Better care of the data holdings through the use of effective data policies and best practice
guidance.
 Better control over the data by the clear definition and use of the procedures for the care of data.
 Improved knowledge and understanding of data holdings, their availability, interpretation and
use, with subsequent reduction of the risk of duplication or loss, through better cataloguing,
metadata and, in time, better access to data via an integrated data environment.
 Improved business processes, including better and more efficient use and re-use of data, and the
standardization of datasets that are frequently used by different parts of an organization.
 Increased confidence that the organization complies with statutory and non-statutory obligations,
by the regular use of centrally coordinated, frequently updated guidance, codes of practice and
training on legal, contractual and other obligations.
 An increasing confidence by the customer in the quality of the data managed and in the
reliability of outputs that are produced.
c. Benefits to users and customers
 Improved awareness and understanding of what data are available for current and future use,
resulting from better cataloguing and data archiving.
 Improved access to data, free from unnecessary obstacles, safeguarded from disclosure of
personal information or infringement of legal and contractual obligations.
 Better quality and more timely information i.e. access to the right information at the right
time, resulting from quicker identification of customer needs and the avoidance of wrong or
conflicting information, through the use of effective metadata.

 Better value for money, resulting from clear, fair and consistent data charges and conditions
of use, which recognize the need for free access by the appropriate customers.
 Better exploitation of data generally, enabled by easier data exchange and integration with
other harmonized data.
4.5.PRINCIPLES OF GOOD TECHNICAL DATA MANAGEMENT AND INFORMATION
Good Data Management is essential for the effective use of the information resources of public
bodies in all their forms. Some Key principles are; Avoid re-collecting data, Data lifecycle control, Data
policy, Data ownership, Metadata, Data quality, and these are further discussed below.
4.5.1. Avoid re-collecting data
The largest potential for waste in Data Management is reacquiring an existing dataset. This has
been done frequently by public and private sector organizations and must be avoided.
a) Data lifecycle control
Good Data Management requires that the whole life cycle of datasets be managed carefully.
This includes:
 Business justification, to ensure that thought has been given to why new data are
required rather than existing data amended or used in new ways, how data can be
specified for maximum use including the potential to meet other possible requirements,
and why the costs of handling, storing and maintaining these data are acceptable and
recoverable.
 Data specification and modelling, processing, database maintenance and security, to
ensure that data will be fit for purpose and held securely in their own databases.
 Ongoing data audit, to monitor the use and continued effectiveness of the data.
b) Data policy
The fundamental step for any organization wishing to implement good Data Management
procedures is to define a Data Policy. The document may have different names in different
public bodies but in each it should be a set of broad, high-level principles that form the
guiding framework within which Data Management can operate. This is the document that is
approved at senior levels in the public body, and the senior executive who owns the policy
(Data Management Champion) manages the resources for its implementation.
c) Data ownership
One key aspect of good Data Management is the clear identification of the owner of the data.
Normally this is the organization or group of organizations that originally commissioned the
data acquisition or compilation and retains managerial and financial control of the data. The
Data Owner has legal rights over the dataset, the IPR and the Copyright. Data ownership
implies the right to exploit the data, and if continued maintenance becomes unnecessary or
uneconomical, the right to destroy them, subject to the provisions of the Public Records and
Freedom of Information acts.
d) Metadata
All datasets must have appropriate metadata compiled for them. At the simplest level
metadata are “data about data”. Metadata provide a summary of the characteristics of a
dataset. A good metadata record enables the user of a dataset or other information resource to
understand the content of what they are reviewing, its potential value and its limitations.
e) Data quality
Good Data Management also ensures that datasets are capable of meeting current needs
successfully and are suitable for further exploitation. The ability to integrate data with other
datasets is likely to add value, encourage ongoing use of the data and recover the costs of
collecting the data. The creation, maintenance and development of quality data require a
clear and well-specified management regime.

ISTAMA BTECH Organisation and Management of Production

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ISTAMA BTECH Organisation and Management of Production

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Organisation and management of production B-TECH ISTAMA

IN AFFILIATION WITH THE

CHAPTER 1: INTRODUCTION AND DEFINITION OF CONCEPTS

CHAPTER 2: METHOD OF PRODUCTION SCHEDULING

CHAPTER 3: MANAGEMENT OF STOCKS AND WAREHOUSE

CHAPTER 4: MANAGEMENT OF THE TECHNICAL DATA AND INFORMATION

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CHAPTER 1: INTRODUCTION AND DEFINITION OF CONCEPTS

Production management of the plant.

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B. The importance of production management to customers and society:

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ii. Advantages include:

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3. Mass or Flow Production:

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 Fewer labour costs

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CHAPTER 2: METHOD OF PRODUCTION SCHEDULING

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CHAPTER 3: MANAGEMENT OF STOCK AND WAREHOUSING

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Raw Materials Work in Progress Finished Goods

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 Consumables and materials used by service businesses

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CHAPTER 4: MANAGEMENT OF THE TECHNICAL DATA AND

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 Responsible for approvals, releases and workflow

4.4.IMPORTANCE AND BENEFITS OF MANAGING TECHNICAL DATA AND INFORMATION

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