NATURE & CHARACTERISTICS OF MANAGEMENT

91A. ANANDA KUMAR / INDUSTRIAL MANAGEMENT / UNIT-3

INDUSTRIAL MANAGEMENTUNIT 3DEFINITIONIn our introduction to production and operations management ("POM") we suggested that there are several different methods of handling the conversion or production process - Job, Batch, Flow and Group. This revision note explains these methods in more detail.INTRODUCTIONThe various methods of production are not associated with a particular volume of production. Similarly, several methods may be used at different stages of the overall production process.JOB METHODBy Job production, the complete task is handled by a single worker or a group of workers. Jobs can be small-scale/low technology as well as complex/high technology.Low technology jobs: here the organisation of production are extremely simple, with the required skills and equipment easily obtainable. This method enables customer's specific requirements to be included, often as the job progresses. Examples include: hairdressers; tailoringHigh technology jobs: high technology jobs involve much greater complexity - and therefore present greater management challenge. The important ingredient in high-technology job production is project management, or project control. The essential features of good project control for a job are:Clear definitions of objectives - how should the job progress (milestones, dates, stages)Decision-making process - how are decisions taking about the needs of each process in the job, labour and other resources

Examples of high technology / complex jobs: film production; large construction projects (e.g. the Millennium Dome)

BATCH METHODAs businesses grow and production volumes increase, it is not unusual to see the production process organised so that "Batch methods" can be used. Batch methods require that the work for any task is divided into parts or operations. Each operation is completed through the whole batch before the next operation is performed. By using the batch method, it is possible to achieve specialisation of labour. Capital expenditure can also be kept lower, although careful planning is required to ensure that production equipment is not idle. The main aims of the batch method are, therefore, to:Concentrate skills (specialisation)Achieve high equipment utilisation

This technique is probably the most commonly used methods for organizing manufacture. A good example is the production of electronic instruments.Batch methods are not without their problems. There is a high probability of poor work flow, particularly if the batches are not of the optimal size or if there is a significant difference in productivity by each operation in the process. Batch methods often result in the build up of significant "work in progress" or stocks (i.e. completed batches waiting for their turn to be worked on in the next operation).FLOW METHODSFlow methods are similar to batch methods - except that the problem of rest/idle production/batch queuing is eliminated.Flow has been defined as a "method of production organisation where the task is worked on continuously or where the processing of material is continuous and progressive,"The aims of flow methods are:Improved work & material flowReduced need for labour skillsAdded value / completed work faster

Flow methods mean that as work on a task at a particular stage is complete, it must be passed directly to the next stage for processing without waiting for the remaining tasks in the "batch". When it arrives at the next stage, work must start immediately on the next process. In order for the flow to be smooth, the times that each task requires on each stage must be equal length and there should be no movement of the production flow line. In theory, therefore, any fault or error at a particular stageIn order that flow method can work well, several requirements must be met:(1) There must be substantially constant demand: If demand is unpredictable or irregular, then the production flow line can lead to a substantial build up of stocks and possibility storage difficulties. Many businesses using flow methods get round this problem by "building for stock" - i.e. keeping the flow line working during quiet periods of demand so that output can be produced efficiently.(2) The product and/or production tasks must be standardized: Flow methods are inflexible - they cannot deal effectively with variations in the product (although some "variety" can be accomplished through applying different finishes, decorations etc. at the end of the production line).(3) Materials used in production must be to specification and delivered on time: Since the flow production line is working continuously, it is not a good idea to use materials that vary in style, form or quality. Similarly, if the required materials are not available, then the whole production line will come to a close - with potentially serious cost consequences.(4) Each operation in the production flow must be carefully defined - and recorded in detail(5) The output from each stage of the flow must conform to quality standards: Since the output from each stage moves forward continuously, there is no room for the sub-standard output to be "re-worked" (compare this with a job or batch production where it is possible to compensate for a lack of quality by doing some extra work on the job or the batch before it is completed).The achievement of a successful production flow line requires considerable planning, particularly in ensuring that the correct production materials are delivered on time and that operations in the flow are of equal duration.Common examples where flow methods are used are the manufacture of motor cars, chocolates and televisions.PROCESS PLANNINGProcess Planning in Manufacturing SystemsIntroductionManufacturing systems, students usually complete lab or shop projects for class requirements. The projects often involve significant amounts of manufacturing processes, and require the students to work very hard, sometimes extra hours at school or home to meet deadlines. When they do work at home, they often use their parents tools, and purchase materials with their money. During the period of, and after the, construction of the project, their parents yards and garages might be disorganized and some tools may be missing, damaged or misplaced.Although this technically-minded students often score highly on their projects, several lessons could be learned from the way they often undertake them:They have no idea how many resources (time, tools and materials) would be required to build the project until they got into building it.Their tasks are, for the most part, technically unorganized (out of sequence) and unplanned.They cannot estimate the dollar worth of their labor in the whole project.They hardly think that housekeeping is very important to their safety.They seldom think that manufacturers cant make any profits operating like this.

Every manufactured product has some planning associated with it. In manufacturing systems, this is technically referred to as process planning. One of the first tasks of the manufacturing personnel when they receive new drawings is to perform the process plan. This task, when completed, generally directs both the organization of needed resources and the actual production of the product.In many schools, shops and laboratories, however, the notion is that manufacturing begins when a designer produces and releases full-proof working drawings to the manufacturing personnel. Erroneously, most manufacturing students envision manufacturing as something a company just jumps in without adequate planning and preparation. This paper outlines the basics of process planning and provides examples for school shop and laboratory instructors who may need to teach their students the basic principles of process planning.STEPS TO PROCESS PLANNINGThe practice of process planning in manufacturing, provides precise and clear sequential directions about how the product is to be routed and fabricated in a manufacturing facility. In advanced manufacturing, this will influence how the facility will be designed and laid out in preparation for the new product. For school, shops and laboratories, this mostly helps to guide students from one process to the next logical one, thus simplifying their manufacturing project activities. This explanation will begin with the technical drawings.1. CAD or Manual Drawings: The first step in preparing a process plan is to secure a good drawing or drawings of the project. Because the drawings represent the initial ideas and plans for the product, The design of production processes starts with the product designer (Wright, 1990, p. 412). In many schools today, computer-aided drafting (CAD) is taught and can be used to create the students ideas into quality, dimensioned drawings with achievable specifications. Either manual or CAD drawings are suitable as long as students know how to read and interpret them. The dimensioned drawings should contain important information including the following: complete and clear graphics, material types, part name, drawing number, owner name, date, units, appropriate set of views showing all required dimensions, tolerances with reasonable values for each dimension, clear titles and labels, and should be easy to read.2. Study and Separate the Drawings into Parts: The drawings should be carefully studied the way one reads a manual, to understand all the details contained in them. It is important to separate the drawings into their parts at this juncture. Each part should have a clear label so that it can be identified. 3. Identify, List, and Sequence Required Operations for Each Part: The identified tasks or processes required to fabricate each part should be listed below it. This step requires a careful study of each part and determining the various manufacturing processes needed to fabricate it into the shape shown in the drawing. Successful completion of this step often requires a good knowledge of manufacturing processes and shop processing equipment, but students who are not familiar with shop processes and machines can consult their instructors at this stage. 4. Assign Time Data, Equipment, and Tooling to the Sequenced Processes: To complete the planning, it is necessary that the machines and tooling needed to process each part, as well as the time it takes to complete each process are assigned. The time unit should be in minutes and all machines and tools must be clearly identified. INVENTORY PLANNING - BASIC CONCEPTSEvery organization that is engaged in production, sale or trading of Products holds inventory in one or the other form. While production and manufacturing organizations hold raw material inventories, finished goods and spare parts inventories, trading companies might hold only finished goods inventories depending upon the business model.When in the case of raw material inventory management function is essentially dealing with two major functions. First function deals with inventory planning and the second being inventory tracking. As inventory planners, their main job consists in analyzing demand and deciding when to order and how much to order new inventories. Traditional inventory management approach consists of two models namely:EOQ - Economic Order Quantity Continuous Ordering Periodic Ordering

EOQ: Economic Order Quantity method determines the optimal order quantity that will minimize the total inventory cost. EOQ is a basic model and further models developed based on this model include production Quantity Model and Quantity Discount Model.

Continuous Order Model: works on fixed order quantity basis where a trigger for fixed quantity replenishment is released whenever the inventory level reaches predetermined safety level and triggers re ordering.

Periodic System Model: This model works on the basis of placing order after a fixed period of time.

EOQ MODEL

Example: Biotech.Co produces chemicals to sell to wholesalers. One of the raw material it buys is sodium nitrate, which is purchased at the rate of $22.50 per ton. Biotechs forecasts show a estimated requirement of 5,75,000 tons of sodium nitrate for the coming year. The annual total carrying cost of this material is 40% of the acquisition cost and the ordering cost is $595. What is the Most Economical Order Quantity?

D = Annual DemandC = Carrying CostS = Ordering CostD = 5,75,000 tonsC = 0.40(22.50) = $9.00/Ton/YearS = $595/Order

= 27,573.135 tons per Order.This model pre supposes certain assumptions as under:No safety Stocks available in inventory. No Shortages allowed in order delivery. Demand is at a uniform rate and does not fluctuate Lead Time for order delivery is constant One order = One delivery no shortages allowed. This model does not take into account other costs of inventory such as stock out cost, acquisition cost etc to calculate EOQ.

In this model, the demand increases for production the inventory gets depleted. When the inventory drops to a critical point the re order process gets triggered. New order is always place for fixed quantities. On receipt of the delivery against the order the inventory level goes up.Using this model, further data extrapolation is possible to determine other factors like how many orders are to be placed in a year and what is the time lapse between orders etc.EOQ FOR PRODUCTION LOT:This model is also used to determine the order size and the production lot for an item to be produced at one stage of production and stored as work in progress inventory to be supplied to the next state of production or to the customer.INVENTORY CONTROL - INVENTORY AUDITS AND CYCLE COUNTSAny inventory of Raw materials, finished goods as well as Intermediate in process inventory has an economic value and is considered an asset in the books of the company. Accordingly, any asset needs to be managed to ensure it is maintained properly and is stored in a secure environment to avoid pilferage, loss or thefts etc.Inventory control assumes significance on account of many factors.First of all inventory of raw materials as well as finished goods can run in the thousands of SKU varieties. Secondly, inventory can be in one location or spread over many locations. Thirdly inventory may be with the company or may be under the custody of a third party logistics provider. These factors necessitate inventory maintenance mechanisms to be devised to ensure inventory control.Inventory control is also required as an operational process requirement. Inventory is has two different dimensions to it. On one level, it is physical and involves physical transactions and movement of inventory. While on the other hand, inventory is recognizable by the book stock and the system stocks maintained. This necessitates inventory control mechanism to be implemented to ensure the book stocks and the physical stocks match at all times.Thirdly the inventory always moves through the supply chain and goes through various transactions at various places. The number of transactions and handling that it goes through from the point of origin to the point of destination is numerous. Therefore, it becomes essential to control inventory and have visibility through the pipeline including transit inventory.Inventory control is exercised through inventory audits and cycle counts. An inventory audit essentially comprises of auditing the books stocks and transactions and matching physical stocks with the book stock.CYCLE COUNTSCycle count refers to the process of counting inventory items available in physical locations. Depending upon the nature of inventory, number of transactions and the value of items, cycle count can be carried on periodically or perpetually.Daily Cycle Count: Normally where the number of SKUs is very high coupled with the high number of transactions and throughput, daily cycle count is initiated, where in a certain percentage of locations or SKUs are counted on daily basis and physical stock is compared with system stock. By the end of the month all of the stock would have been covered once in cycle count.

The inventory system throws up a count list based on an analysis of the movements of fast moving SKUs along with other attributes like value, etc. In some of the system, inventory controllers can set up the attributes for each cycle count.Quarterly & Half Yearly Cycle Counts: End of the sales quarter or end of half yearly sales, finished goods and spare parts are normally covered under inventory audit and a 100% cycle count is carried out.

Wall to Wall Cycle Count: End of financial year and closing of books entails doing wall to wall cycle count of all stocks lying in all locations and tallying with books of account. This is a mandatory audit requirement and until stock figures are reconciled, certified by auditors and published, New Year books of accounts cannot be started afresh.

PRODUCTIONProduction is the action of making or manufacturing from components or raw materials, or the process of being so manufactured. Theprocessesandmethodsused to transformtangibleinputs (raw materials, semi-finished goods, subassemblies) and intangible inputs (ideas, information, knowledge) intogoodsorservices.Resourcesare used in this process tocreateanoutputthat is suitable for use or has exchange value.Production function is that part of an organization, which is concerned with the transformation of a range of inputs into the required outputs (products) having the requisite quality level. Production is defined as the step-by-step conversion of one form of material into another form through chemical or mechanical process to create or enhance the utility of the product to the user. Thus production is a value addition process. At each stage of processing, there will be value addition.Edwood Buffa defines production as a process by which goods and services are created.Some examples of production are: manufacturing custom-made products like, boilers with a specific capacity, constructing flats, some structural fabrication works for selected customers, etc., and manufacturing standardized products like, car, bus, motor cycle, radio, television, etc.

Transformation Process:Product DesignProcess PlanningProduction ControlMaintenance

Outputs:ProductsServices

Inputs:MenMaterialsMachinesInformationCapital

Continuous:InvestmentQualityCost

OBJECTIVES OF PRODUCTION MANAGEMENTThe objective of the production management is to produce goods services of right quality and quantity at the right time and right manufacturing cost.1. Right QualityThe quality of product is established based upon the customers needs. The right quality is not necessarily best quality. It is determined by the cost of the product and the technical characteristics as suited to the specific requirements.2. Right QuantityThe manufacturing organization should produce the products in right number. If they are produced in excess of demand the capital will block up in the form of inventory and if the quantity is produced in short of demand, leads to shortage of products.3. Right TimeTimeliness of delivery is one of the important parameter to judge the effectiveness of production department. So, the production department has to make the optimal utilization of input resources to achieve its objective.4. Right Manufacturing CostManufacturing costs are established before the product is actually manufactured. Hence, all attempts should be made to produce the products at pre-established cost, so as to reduce the variation between actual and the standard (pre-established) cost.TYPES OF PRODUCTION SYSTEMThere are eight types of production which may be classified in three or four broad groups according to the quantities of production involved [Samuel Eilon]. They are shown in following figure in terms of product variety and production volumethe figure is self explanatory.1. Job Shop Production system which has the following features:(a) A small number of items produced only once,(b) A small number of items produced intermittently when the need is felt,(c) A small number of items produced periodically at known time interval.2. Batch Production which has the following characteristics :(a) A batch of items produced only once,(b) A batch of items produced at irregular intervals when a need is felt,(c) A batch of items produced periodically at known intervals to satisfy the continuous demand.3. Continuous Production which consists of(a) Mass production(b) Flow production

1. Job ProductionThis is the oldest method of production on a very small scale. It is also popularly known as job-shop or Unit production. With this method individual requirements of consumers can be met. Each job order stands alone and may not be repeated. Some of the examples include manufacturing of aircrafts, ships, space vehicle, bridge and dam construction, ship building, boilers, turbines, machine tools, things of artistic nature, die work, etc. Some of the features of this system are as follows:This system has a lot of flexibility of operation, and hence general purpose machines are required.Generally no automation is used in this system, but computer-aided-design (CAD) is used.It deals with low volume and large variety production. It can cater to specific customer order, or job of one kind at a time.It is known for rapid value addition.

AdvantagesLow risk of loss to the factory adopting this type of production. Due to flexibility, there is no chance of failure of factory due to reduction in demand. It can always get one or the other job orders to keep it going.Requires less money and is easy to start.Less or no management problem because of very small work force.

DisadvantagesFor handling different types of jobs, only workers with multiple skills are needed. This increases the labor cost.Low equipment utilization.As the raw materials are purchased in less quantity, the cost of material procurement is more.

2. Batch ProductionThe batch production system is generally adopted in medium size enterprises. Batch production is a stage in between mass production and job-shop production. As in this system, two or more than two types of products are manufactured in lots or batches at regular interval, which justifies its name the batch production system. It has the following features:A batch production then turns into flow production when the rest period vanishes. In flow production, the processing the materials is continuous and progressive.Batch production is bigger in scale than job production, but smaller than that of mass production.Material handling may be automated by robots as in case of CNC machining centers.A medium size lots (5 to 50) of same items is produced in this system. Lot may be produced once in a while or on regular interval generally to meet the continuous customer demands.Plant capacity generally is higher than demand.

AdvantagesIt is flexible in the sense that it can go from one job to another with almost zero cost. It needs general purpose machine having high production rate.If demand for one product decreases then production rate for another product may be increased, thus the risk of loss is very less.Most suitable for computer-aided-manufacturing (CAM).

DisadvantagesAs the raw materials to be purchased are in smaller quantity than in case of mass production, the benefits of discount due to large lot purchasing is not possible.It needs specially designed jigs and fixtures.

3. Continuous ProductionIn this, the production activity continues for 24 hours or on three shifts a day basis. A steel plant, for example, belongs to this type. It is impossible to stop the production process on a short notice without causing a great damage to its blast furnace and related equipment. Other examples include bottling plant, soft drink industry, fertilizer plant, power plant, etc). Mass production and Flow production 3. belong to continuous type only. They are explained below:

Mass production: In this type, a large number of identical items is produced, however, the equipment need not be designed to produce only this type of items. Both plant and equipment are flexible enough to deal with other products needing the same production processes. For example, a highly mechanized press shop that can be utilized to produce different types of components or products of steel metal without the need of major changes.Flow production: In this type, the plant, its equipment, and layout have been chiefly designed to produce a particular type of product. Flexibility is limited to minor modifications in layout or design of models. Some famous examples are automobiles, engines, house-hold machinery, chemical plants, etc. If the management decides to switch over to a different type of product, it will result in extensive change in tooling, layout, and equipment.CONCEPT OF OPERATIONSAn operation is defined in terms of the mission it serves for the organization, technology it employs and the human and managerial processes it involves. Operations in an organization can be categorized into manufacturing operations and service operations. Manufacturing operations is a conversion process that includes manufacturing yields a tangible output: a product, whereas, a conversion process that includes service yields an intangible output: a deed, a performance, an effort.SCOPE OF PRODUCTION AND OPERATIONS MANAGEMENTProduction and operations management concern with the conversion of inputs into outputs, using physical resources, so as to provide the desired utilities to the customer while meeting the other organizational objectives of effectiveness, efficiency and adoptability. It distinguishes itself from other functions such as personnel, marketing, finance, etc., by its primary concern for conversion by using physical resources. Following are the activities which are listed under production and operations management functions:1. Location of facilities2. Plant layouts and material handling3. Product design4. Process design5. Production and planning control6. Quality control7. Materials management8. Maintenance management.1. Location of FacilitiesLocation of facilities for operations is a long-term capacity decision which involves a long term commitment about the geographically static factors that affect a business organization. It is an important strategic level decision-making for an organization. It deals with the questions such as where our main operations should be based?The selection of location is a key-decision as large investment is made in building plant and machinery. An improper location of plant may lead to waste of all the investments made in plan and machinery equipments. Hence, location of plant should be based on the companys expansion plan and policy, diversification plan for the products, changing sources of raw materials and many other factors. The purpose of the location study is to find the optimal location that will results in the greatest advantage to the organization.2. Plant Layout and Material HandlingPlant layout refers to the physical arrangement of facilities. It is the configuration of departments, work centres and equipment in the conversion process. The overall objective of the plant layout is to design a physical arrangement that meets the required output quality and quantity most economically.According to James Moore, Plant layout is a plan of an optimum arrangement of facilities including personnel, operating equipment, storage space, material handling equipments and all other supporting services along with the design of best structure to contain all these facilities.Material Handling refers to the moving of materials from the store room to the machine and from one machine to the next during the process of manufacture. It is also defined as the art and science of moving, packing and storing of products in any form. It is a specialisedactivity for a modern manufacturing concern, with 50 to 75% of the cost of production. This costcan be reduced by proper section, operation and maintenance of material handling devices. Material handling devices increases the output, improves quality, speeds up the deliveries and decreases the cost of production. Hence, material handling is a prime consideration in the designing new plant and several existing plants.3. Product DesignProduct design deals with conversion of ideas into reality. Every business organization have to design, develop and introduce new products as a survival and growth strategy. Developing the new products and launching them in the market is the biggest challenge faced by the organizations.The entire process of need identification to physical manufactures of product involves three functions: marketing, product development, manufacturing. Product development translates the needs of customers given by marketing into technical specifications and designing the various features into the product to these specifications. Manufacturing has the responsibility of selecting the processes by which the product can be manufactured. Product design and development provides link between marketing, customer needs and expectations and the activities required to manufacture the product.4. Process DesignProcess design is a macroscopic decision-making of an overall process route for converting the raw material into finished goods. These decisions encompass the selection of a process, choice of technology, process flow analysis and layout of the facilities. Hence, the important decisions in process design are to analyse the workflow for converting raw material into finished product and to select the workstation for each included in the workflow.5. Production Planning And ControlProduction planning and control can be defined as the process of planning the production in advance, setting the exact route of each item, fixing the starting and finishing dates for each item, to give production orders to shops and to follow up the progress of products according to orders. 6. Quality ControlQuality Control (QC) may be defined as a system that is used to maintain a desired level of quality in a product or service. It is a systematic control of various factors that affect the quality of the product. Quality control aims at prevention of defects at the source, relies on effective feed back system and corrective action procedure.Quality control can also be defined as that industrial management technique by means of which product of uniform acceptable quality is manufactured. It is the entire collection of activities which ensures that the operation will produce the optimum quality products at minimum cost.The main objectives of quality control are:To improve the companies income by making the production more acceptable to the customers i.e., by providing long life, greater usefulness, maintainability, etc.To reduce companies cost through reduction of losses due to defects.To achieve interchangeability of manufacture in large scale production.To produce optimal quality at reduced price.To ensure satisfaction of customers with productions or services or high quality level, to build customer goodwill, confidence and reputation of manufacturer.To make inspection prompt to ensure quality control.To check the variation during manufacturing.

7. Materials ManagementMaterials management is that aspect of management function which is primarily concerned with the acquisition, control and use of materials needed and flow of goods and services connected with the production process having some predetermined objectives in view.The main objectives of materials management are:To minimise material cost.To purchase, receive, transport and store materials efficiently and to reduce the related cost.To cut down costs through simplification, standardisation, value analysis, import substitution, etc.To trace new sources of supply and to develop cordial relations with them in order toensure continuous supply at reasonable rates.To reduce investment tied in the inventories for use in other productive purposes and todevelop high inventory turnover ratios.

8. Maintenance ManagementIn modern industry, equipment and machinery are a very important part of the total productive effort. Therefore, their idleness or downtime becomes are very expensive. Hence, it is very important that the plant machinery should be properly maintained.The main objectives of maintenance management are:To achieve minimum breakdown and to keep the plant in good working condition at the lowest possible cost.To keep the machines and other facilities in such a condition that permits them to be used at their optimal capacity without interruption.To ensure the availability of the machines, buildings and services required by other sections of the factory for the performance of their functions at optimal return on investment.

INVENTORY MANAGEMENTInventory is the stock of any item or resource used in an organization. Inventory includes: raw materials, finished products, component parts, supplies, and work-in-process. An inventory system is the set of policies and controls that monitors levels of inventory and determines what levels should be maintained, when stock should be replenished, and how large orders should be. Importance of Inventory Management -- Good inventory management is essential to the successful operation for most organizations because of:The amount of money invested in inventory represents, andThe impact that inventories have on daily operations of an organizationDefinitions:Inventory a stock or store of goodsIndependent vs. Dependent demand itemsIndependent demand items are the finished goods or other end items that are sold to someoneDependent demand items are typically subassemblies or component parts that will be used in the production of a final or finished productThe purposes of inventories are:1. To maintain independence of operations2. To meet variation in product demand3. To allow flexibility in production scheduling4. To provide a safeguard for variation in raw material delivery time5. To take advantage of economic purchase order sizeFUNCTIONS OF INVENTORIESTo meet anticipated demandTo smooth production requirementsTo decouple components of the productionTo protect against stockoutsTo take advantage of order cyclesTo hedge against price increases, or to take advantage of quantity discountsTo permit operations (work in process)

OBJECTIVES OF INVENTORY CONTROLMaximize level of customer serviceMinimize costs (carrying costs and ordering costs)

MATERIAL MANAGEMENTAn approach for planning, organizing, and controlling all those active ities principally concerned with the flow of materials into an organization. The scope of materials management varies greatly from company to company and may include materials planning and control, production planning, purchasing, inventory control and stores, in-plant materials movement, and waste management. Objective of Materials ManagementContinuity of supplyCost reductionTo ensure consistency in quality.To reduce inventory investment.CSordial supplier relations

SCOPE OF MATERIALS MANAGEMENTMaterial Planning & ControlPurchasingStores & Inventory Control

FUNCTION OF MATERIALS MANAGEMENTMaterial Planning PurchasingReceiving & inspection WarehousingTransportation (inwards & outwards)Inventory controlMaterial HandlingDisposal of scrap,obsolete and surplusValue analysis

STOREStore is a place where excess material is kept which will be used as and when required. Loss of items, deterioration, obsolescence and inadequacy [of what is stored to what is needed] are treated as part of life. Modern scientific management has no place for such defects built into the system as part of life. As students of management we have to constantly look for Non Value Activities in the system and eliminate them totally or minimize them. Let us look at stores as a function of modern management.