PB602 : OPERATION MANAGEMENT

LECTURER : PUAN SITI MARIAM BINTI SAMAT

CHAPTER 6 : SOURCE ACQUISITION AND OPERATION CONTROL

MOHAMAD RADHZI BIN A RAHMAN 16BPM12F2002

MOHAMMAD IZUAR BIN MAZLAN 16BPM12F2005

AZRUL FAZLI BIN MAT SAID 16BPM12F2009

MUHAMMAD ADIEB AZRAI BIN ISLAKHUDDIN 16BPM12F2010

What is Source Acquisition ??

Acquisition source is a process to create the demand for raw materials, labor, capital rising and other factors of production are needed. This source of demand comes from sales and sales forecasts for previous year.

What is Operation Control

Operation Control is also know as the control of production of goods and services that will be produce for the firm.

Two Important Aspects :

(a) Operation Aspects

Refers to aspects of management of firms, such as planning, implementation,

and monitoring.

(b) Transformation of operation control

Refers to control of exchange of raw materials or components to finished installation for the goods or services produced to meet the specifications.

Function of department involved

Purchasing department

Responsible for the firm to deal with matters relating to the purchase of raw materials, factory equipment, share parts, machinery, and all the materials needed to produce products.

The purpose of purchasing:

(a) Identify the goods / services required

(b) To develop, evaluate, and identify the best supplier , price and delivery of goods and services.

Importance of Purchasing Departments

• Cost of materials give a major impact to firm profitabilityIf the cost of good is high, prices should be reasonable to put a profit and compete with competitors.

• The use of automation in productionA firm can use the advanced machinery and tools, a most recent or modern. This article seeks to add functionality and can be delivered to user who are looking for innovation of the goods with reasonable price and good quality.

• Introduction of JIT productionThis method can develop linkages between manufacturers and suppliers. Manufacturers produce goods or service at the time scheduled. It seeks to avoid deceived customers and have to wait too long to get the products.

• Increasing in global competitionIncreasing in global competition seeks to increasing competition with foreign markets. By advertise products to overseas markets.

The Function of Purchasing Department

1. To store suppliers current and new databaseRecord all the old and new information in a file for future use as

reference

2. Choose the best suppliersHelping the manufacturers in order not to be fooled by the tricks of

the supplier and seeks to foster cooperation between manufacturers and suppliers.

3. Deal a contract with suppliersManufacturers 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.

4. Acting as intermediary between suppliers and the companyLinked to other firms by the suplier

Purchasing method applied by Purchasing Department

There are 2 methods of purchasing made by the purchasing department :

1. Centralized/single supplier

The materials purchased from one supplier only. Materials purchased are on the same standard and there are advantages and disadvantages for organizations when dealing to one supplier only.

2. Decentralization/multiple supplier

Materials required purchased from various suppliers. Materials submitted will have some differences because supplied by different suppliers, but still at a level needed by the purchasing department. There are advantages and disadvantages for organization when dealing with various suppliers.

The Function of Receiving Department

Receiving Department has responsibility for the receipt of goods, the delivery of suppliers and equipment, and the inventory control of all equipment. Receiving Department activities include receiving, shipping, and inventory control functions.

The function of receiving department is to unload and unpack incoming materials, check quantities receive against the shippers packing list, identify goods received with descriptions on the purchase order, prepare a receiving report, notify the purchasing department of descriptions discovered, arrange for inspection when necessary, notify the traffic department of any damage in transit and rout accepted materials to the appropriate factory location

The Function of Inventory Department

Inventory is an idle stock of physical goods that contain economic value, and are held in various forms by an organization in its custody awaiting packing, processing, transformations, use or sale in a future point of time.

Inventory is often the largest item in the current assets category, and must be accurately counted and valued at the end of each accounting period to determine a company’s profit or loss.

THE PROCESS TO OBTAIN INPUT

Material specification• Detail description of materials to be purchase suac as

colour,size,number,version and model and other information.

Purchasing instructions • The department that use the materials gives purchasing order• Information on materials to be purchased ,quantity ,delivery

date and the amount charged and approval manger who approved the purchase.

Request for quatation• Tge request quatation prepared by purchasing

deparment.involves discount,payment terms ,delivery date.

Purchase order• Most important purchasing and the basic of authority to the

supplier for produce goods and services and the buyer must make payment

COMPLETE OUTPUT CONTROLLING SYSTEM

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

Expenses for the production process has been allocated

The production factors required already available for scheduling tasks purposes

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

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

The progress of production are determined and reported to top management

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

Availability of

production factors

Finite loading

• Approach actually scheduled in detail using the setup anf run time required for each order.

• Done by each resource at every moment during the working days

Infinite loadingINFINITE LOADING OCCURS WHEN WORK IS ASSUGNED TO A WORK CENTER SIMPLY BASED ON EHAT IS NEEDED OVER TIME .

FORWORD SCHEDULING : STARTS THE SCHEDULE AS SOON AS THE JOB REQUIREMENTS ARE KNOWN.

USED IN A VARIETY OF ORGANIZATION SUCH AS HOSPITALS ,CLINICS ,RESTAURANTS AND MACHINE TOOLS .

IN THESE FACILITIES ,JOB IS PERFORMED TO CUSTOMERS ORDER AND DELIVERY IS OFTEN REQUESTED AS SOON AS POSSIBLE.

BACKWARD SCHEDULING : BEGIN THE DUE DATE,SCHEDULING IS THE FINAL OPERATION FIRST.

USED IN MANY MANUFACTURING ENVIROMENTS.AS WELL SERVICES ENVIROMENTS.CATERING A BANQUET.

Scheduling and

operations control

Provides for order made ,tools and labor

to work center

Determine the order of work according to

priorities

Provide instructuion to start work

Control the production activites consisted of reviewing he current

work statuds

Method used in the works schedule

First come first

served

Shortest operating

time

Due dates

Start dates

Slack time

Provide order

What should be produced

How many

quantity should be produced

To whom the goods should be delivered

The evaluation technique in development of control orders

Reduce the number supplier

Sharing information

Involving supplier in the early stages of

discussion

Communicate effectively and

efficiently

Monitoring and supporting

Question 1

One of important aspect that emphasized in ensuring the process of a product or service can be carried out smoothly is operation control. As an operations officer. You are required to explain about operation control of management based on the following areas.

1. Explains the meaning of operations control Operation control is also known as the control of production of goods and services that will be produce for the firm.

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

3. Describe two important aspect of operational management

Operation aspect

Refer to aspects of management of firm such as planning, implementation and

monitoring. Instruction is important to ensure smooth operations and control.

Transformation of operational control

Refer to exchange of raw material or components to finished product installation for

the goods or services produce to meet the specification.