Production Management,
Inventory Control & Supply
Chain Management
By
Prof. J. Hayavadana
University Head, Department of
Technology
Osmania University
Hyderabad-7
Production Management
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Is it Operations Management ?
How it is defined
Production Vs Service function
Production function- determinants
Production Decisions : Strategic, Operating ,
Control
• Production & productivity
• How Production Management is related to
Industrial Engineering
• Why Production Management is required
( timely production & Lead time fulfulment )
Areas of Productivity
• Improving volume of production
• Apply Control Charts – reduce rework, rejections
, waste or scrap
• Maintain LT
• Control Idle time , WIP– update with norms –
time study
• Use MIS & Quality systems
• Good House keeping ., Material Handling
• Check absenteeism. Theft., pilferage
• Ensure Safety – Safe-t-Score test
• Efficient Training & Team Building
( Identify for Re-Training , Training costs)
Work out correct Inventory – EOQ
Use Cause & effect Diagram
Use Deming Cycle
Use Six Sigma concept
Use Lean Management concept
Use Acceptance Sampling
Use Normal Distributions
Choose the right method of sampling
Components of Production Management
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1. Process Design
2. Product design
3.Product Life cycle
4.Plant Utilities or industrial Climatology
i. Plant Lighting ii. Plant Ventilation
iii. Plant Air-conditioning iv.Sanitation
v. Noise control and Acoustics vi.Need for
Automation and types of Automation
vi. Type of Building vii. Type of Floor
viii. Type of Roof
• 5. Plant location : Types , Selection , Tools,
recent trends
• 6. Plant Layout : Types, Selection , Tools,
Role of Computers
• 7.Material Handling : types , Selection,
Safety , Maintainance
• 8.Maintainance Management : Types ,
selection , Audit , Link to quality production
• 9.Ergonomics : Need, Meaning , Approach
• 10.Job Design :
Job rotation, Enlargement , Enrichment ,
Vestibule training , Job description ,
Specification
• 11. Work Study :
Method Study & Time Study – Need , Role
Significance , Fixation of Wage , Incentive
Method Study :phases: S , R , E, D, Dev.,M I
How this is useful in a production set
up ?
Time Study: Phases: S , R , D , Dev.., I
Tools : Clock, elements, allowances, Normal
time ,Observed time , Rating of a worker,
Standard time , S M V or S A V – link to
production
Time Study for set up
1. Motion & Time analysis
2. Ergonomics
3. Elements – Time measurement
4. Apply Allowances
5. Establish the Standard time
6. Identify the idle time
7. Determine the number of rounds of
observation
Overview of Inventory Control
• What is Inventory & Inventory Control ?
• What is W I P ?
• How Inventory is Created ?
• What are P & Q systems ?
• Saw Tooth Curve
• Inventory Decisions ( Credit & Discount )
Supply Chain Management
• Introduction
• Need
• Production Equation
• Supply Chain for a Manfg. Unit
• Supply Chain for a Service Unit
Overview of SCM
• Inventory Control
• Materials Management
• Components of Material Management or LM
1. Purchasing & Procurement
2.Principles
3.Purchasing methods
4. Purchasing Cycle
5.Purchasing Interfaces
6. Value Analysis
7. Outsourcing ( 3 PL & 4 PL)
Vendor Dynamics
Choosing a Supplier – determinants,
Certification
Vendor Rating
Vendor Analysis
Vendor Development
Supplier types : i. Partnership
ii. Adversary
Evaluation of Logistics: Incoming & Outgoing
shipment
Innovations in Logistics
• 1. Warehousing : types – i. Bonded
ii. UnBonded
2.Warehousing design , Construction
3. Developments in Warehousing
i. Barcoding ii. Electronic data interchange
iii. Distribution requirement Planning
iv. JIT or Kanban
Supply Chain Strategies
• Strategy 1 : Multiple Suppliers
( Short term)
• Strategy 2. Few Suppliers
( Long term)
• Strategy 3. Vertical Integration
• i. Backward Integration
• ii. Forward Integration
• Strategy 4. : Keiretsu Network
• Strategy 5.: Virtual Company – R M G
Managing Supply Chain
• 1. Postponement or Curtailment if a part
can be available locally
• 2.Channel Assembly – Distributor as Manfg.
• Drop Shipping and Special packaging
• Blanket Order
• Invoice less Purchasing
• Electronic Ordering and Fund transfer
• Stockless Purchasing- Direct to purchaser
without store
• Standardization : Reduce no. of materials and
components to aid Cost reduction
Benchmarking in SCM
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Comparison of Supply Chain
Performance
For different factors like
i. Number of suppliers per purchasing
agent
ii. Purchasing cost & lead time
iii. % of late deliveries
iv. % of rejections
v. Number of shortages per year
Tools for SCM
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1. Make or Buy decision
2.Supplier scheduling
3. Value Analysis
4.Supplier evaluation
5. Linear Programming
7. Assignment techniques
8. Transportation Techniques
9. Network Techniques
10. Sequencing