PB 602 OPERATION

MANAGEMENTSOURCE ACQUISITION AND OPERATION CONTROL

PN SITI MARIAM BINTI SAMAT

Raja Izzat Muqri Bin Raja Zahari 16DPM11F2033Muhamad Shaiful Nizam Bin Abd Rahman 16BPM12F2003Mohamad Ihsan Hakim Bin Rozali 16BPM12F2004

SOURCE ACQUISITION

▪Process to create the demand for raw materials , labor, capital rising and other factors of production are needed

OPERATION CONTROL

▪ Known as the control of production of goods and services that will be produce for the firm.

To ensure that available resources are used, efficiently and effectively by the firm to meet consumer demand

Purpose

Operation control

Operational Aspects

Transformation Of Operational Control

TWO IMPORTANT ASPECTS

OPERATIONAL ASPECTS

▪ Refer to aspects of management of firm Planning

Implementation

Monitoring

TRANSFORMATION OF OPERATIONAL CONTROL

Refer to control of exchange of raw materials or component to finished product installation for the goods or services produced to meet the specifications

Responsible for the firm to deal with matters relating to the purchase of raw material, factory equipment, spare parts, machinery and all the materials needed to produce product

PROCUREMENT DEPT.

PURPOSETo Identify the good and service required

To develop, evaluate, and identify the best supplier, price And delivery of goods and services

Importance of purchasing department

Cost of materials give a major impact to firm profitability

The use of automation in production

Introduction of JIT production

Increasing in global competition

FUNCTION OF PURCHASING DEPARTMENT

a. To store supplier current and new database

b. Choose the best suppliers

c. Deal a contract with suppliers

d. Acting as intermediary between the suppliers and the company

METHOD OF PURCHASING USED BY THE DEPARTMENT

Centralized/single supplier• Purchased from one supplier only

Decentralization/multiple supplier• Purchased from various suppliers

Advantages and disadvantages of one supplier

Advantages

▪ less work to qualify the source and probably less administrative effort in

dealing with only one supplier. This is a real advantage in a highly technical

product where significant engineering effort is required to qualify or use a

product.

▪ The supplier should feel a special obligation to help the buyer in terms of availability, etc. Again, in the process of awarding this business to the supplier,

the fact that the buyer’s company is relying on the supplier for material availability should be made clear.

Disadvantages

▪ It is more difficult for the buyer to be sure that he is keeping his company

competitive if there is only one source.

▪ There is a real risk if the single source has a catastrophic event, gets

bought by your competitor, has financial problems, etc.

▪ In periods of tight supply, the buyer may be at a disadvantage in being

able to ask other suppliers to accept orders.

Advantages and disadvantages of various suppliers

Advantages

▪ Choice and flexibility

Disadvantages

▪ suppliers from similar sectors may be wary of entering into contracts

that require close co-operation with competitors, for fear of making their

confidential information or intellectual property available to a

competitor.

RECEIVING DEPARTMENT

Responsibility for the receipt of goods, the delivery of supplies and equipment and the inventory control for all equipment.

Function of receiving department

▪ Unload and unpack incoming materials

▪ Checking quantities received against the shipper packing list

▪ Identify good received with description on purchased order

▪ Prepare a receiving report

▪ Notify the purchasing department of description discovered

INVENTORY DEPARTMENT FUNCTION

▪ Inventory department responsible in supervision of supply, storage and accessibility of items in order to ensure an adequate supply without excessive oversupply.It can also be referred as internal control - an accounting procedure or system designed to promote efficiency or assure the implementation of a policy or safeguard assets or avoid fraud and error etc.

Quality control department

▪ Quality control, is a process by which entities review the quality of all factors involved in production. This approach places an emphasis on three aspects

▪ Elements such as controls, job management, defined and well managed processes,[1][2] performance and integrity criteria, and identification of records

▪ Competence, such as knowledge, skills, experience, and qualifications

▪ Soft elements, such as personnel, integrity, confidence, organizational culture, motivation, team spirit, and quality relationships.

▪ Controls include product inspection, where every product is examined visually, and often using a stereo microscope for fine detail before the product is sold into the external market. Inspectors will be provided with lists and descriptions of unacceptable product defects such as cracks or surface blemishes for example.

LOGISTIC

process involving planning, managing and controlling the flow of goods and services, information, real-time data and human resources from the point of origin to the point of destination.

FUNCTION OF LOGISTIC DEPARTMENT

1. Ensuring all the requirements of the customers are met on time in an efficient and safe manner.

2. To coordinate with third party logistics (3PLs).

3. To ensure that there is a safe and timely dispatch of goods.

4. To draft plans, policies and procedures for successful implementation of logistics system.

5. To ensure that the business goals of the organization are in synchronization with logistics system

THE PROCESS TO OBTAIN INPUT

A process to obtain raw material and other equipment to use in manufacturing

operations.

This process involves four steps of :

Material specification

Involves a detailed description of materials to be purchases such as color,

size , number , version , model , and other information about the material.

Purchasing instructions

The department that use the material gives purchasing order includes

information on material to be purchased , quantity , delivery date , the

amount charged , where the delivery and approval of the manager who

approved the purchase.

Request for quotation

The request for quotation is prepared by the purchasing department . A form attach together

when making a delivery for quotation of unit prices, cash, discount, payment terms, delivery

date, and other.

Purchase order

The most important instrument of purchasing and the basis of authority to the supplier for

produce goods and services and the buyer must make payment.

COMPLETE OUTPUT CONTROLLING SYSTEM SHOULD HAVE THE FOLLOWING ELEMENT :

Information about the type , quantity , and date of completion of goods is determined.

Expenses for the production process has been allocated.

The production factors required already available for scheduling tasks purpose

The schedule of start and completion dates are provided for each types of activity.

Authorization and direction provided to staff who are involved in the production

process.

The process of production are determined and reported to top management.

Action will be taken if the current report does not go as planned.

Determine the other of work▪ This process is important to an organization because it can facilitate the parties involved

in a more systematic and orderly manner. It various department such as purchasing

department , marketing department to department until delivery.

▪ Provide orders

▪ What should be produced – it involves what items must be complete.

▪ How many should be produced – depending on the number of order and forecast

demand?

▪ To whom the the goods should be delivered – refers to end – users, agents or distribution

center

Preparation of progress reports

▪ Supervisor must responsible for the progress report who most convenient to workers.

▪ The report will be forwarded to the supervisor to monitor the performance work as

planned.

▪ If performance is not on the level then the manager may provide a new regulation,

change work procedures or increasing the number of employees so that the performance

can be improved.

The evaluation technique in development of control orders

Reduce the number of supplier

Sharing information

Involving supplier in the early stages of discussion

Communicate effectively and the efficiently

Monitoring and supporting

Purpose of productions factors

▪ To design production capacity of firms to be more

appropriate.

The elements of production factors are labor,land,capital

technology and entrepreneur

Scheduling system

▪ Include ( schedule for activities, resource utilization and distributing of the use of securities

Finite loading

Infinite loading

▪ Finite loading

Scheduled in detail using the setup and run time required for each order. The system determines exactly what will be done by each resource at every moment during working day.

▪ Infinite loading

Occurs when work is assigned to a work center simply based on is needed over time.

- Forward scheduling

- Backward scheduling

Forward scheduling▪ Starts the schedule as soon as the job requirements are known. Job is

performed to customer order and delivery .

Backward scheduling

▪ Begin with the due date,scheduling the final operation first.

steps in job are then scheduled , one at time, in reverse order. Backward scheduling is used in many manufacturing enviroments,as well as service enviroments such as catering ,a banquet or scheduling surgery

Schedulling and operation control

Provides for order made,tools and labor to work center

Determine the order of work according to priorities

Provide instruction to start work

Control the production activities consisted of reviewing the current work status accelerate the process of late orders or critical

and

Method used in work schedule

▪ First come first serve

▪ Shortest operating time

▪ Due dates

▪ Start dates

▪ Slack times

EXERCISE

1. Explains the meaning of operational controlOperational Control is Known as the control of production of goods and services that will be produce for the firm.

2. State the purpose of operational control implementedTo ensure that available resources are used, efficiently and effectively by the firm to meet consumer demand

3. Describe four main function of purchasing department

a) To store supplier current and new database

Record all the old and new information in a file for future use as reference

b) Choose the best suppliers

Helping the manufacturers in order not to be fooled by the tricks of supplier and seeks to foster cooperation between manufacturers and suppliers

c) Deal a contract with suppliers

Manufacturers made an agreement with the supplier. For example made an agreement with the supplier to distribute the goods at the end of the month and payment is made after that

d) Acting as intermediary between the suppliers and the company

Acting as intermediary between suppliers and companies linked to other firms by the supplier.

4) State two purchasing method by purchasing department

1.Centralized/one supplier

2.Decentralized/various supplier