Professional Documents
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Introduction:
In the construction industry, the term 'material handling' refers to the delivery, movement,
storage and control of materials and other products.
Types of plant used for material handling on site include; hydraulic excavators, telescopic
handlers, cranes, forklift trucks, lifting devices, conveyor systems and so on.
From receipt and inspection of materials, through to storage, assembly and use, the material
handling system should be well-coordinated and organised so that everyone on site is aware
of how it works.
Pre-start inspections are critical, load limits should not be exceeded, method
statements should be followed, and it may be necessary for a banksman to direct material
movements around the site.
The proposed system of material handling should be defined in terms of needs, objectives
and functional specification.
Working conditions and methods should have worker safety as the primary objective.
Storage areas should be kept organised and clean, maximising density as much as possible
and eliminating damage to materials.
Any twisting, bending, stretching or other awkward position may exacerbate problems.
Follow all established procedures and perform job duties as you have been trained.
Think about what could go wrong paying close attention to what you are doing while you
work and where your body position is in order to prevent being caught between, in or under
materials.
Always use the required personal protective equipment (PPE) and inspect it carefully
before each use to make sure it is safe to use.
Replace worn out or damaged PPE because it will not provide you adequate protection.
Make sure all containers are properly labeled and that the material is contained in an
appropriate container.
Report any damaged containers or illegible labels to your supervisor right away.
When working with chemicals, read labels and the safety data sheet before use.
If you do not understand or do not have means for precautions, STOP and ask for
assistance.
Do not use solvents to clean your hands, or gasoline to wipe down equipment.
Never eat or drink while handling any materials, and if your hands are contaminated, do
not handle contact lenses.
Read the labels to identify properties and the hazards of products and materials.
Store all materials properly, separate incompatibles, and store in ventilated, dry, cool
areas.
movement,
protection,
storage, and
i) Cranes
hoists
iv)Gantry Crane
v)Electrical hoist
vi)Elevators
viii) Winches
ix)Monorail
ropeways
cableways
A spare part, spare, service part, repair part, or replacement part, is an interchangeable
part that is kept in an inventory and used for the repair or replacement of failed units. Spare
parts are an important feature of logistics engineering and supply chain management, often
comprising dedicated spare parts management systems.
Capital spares are spare parts which, although acknowledged to have a long life or a small
chance of failure, would cause a long shutdown of equipment because it would take a long
time to get a replacement for them.
Classification
spare parts can be broadly classified into two groups, repairables and consumables.
Economically, there is a tradeoff between the cost of ordering a replacement part and the
cost of repairing a failed part.
When the cost of repair becomes a significant percentage of the cost of replacement, it
becomes economically favorable to simply order a replacement part.
In such cases, the part is said to be "beyond economic repair" (BER), and the percentage
associated with this threshold is known as the BER rate.
Analysis of economic tradeoffs is formally evaluated using Level of Repair Analysis (LORA).
Repairable
Repairable parts are parts that are deemed worthy of repair, usually by virtue of economic
consideration of their repair cost.
Rather than bear the cost of completely replacing a finished product, repairables typically
are designed to enable more affordable maintenance by being more modular.
This allows components to be more easily removed, repaired, and replaced, enabling
cheaper replacement.
Spare parts that are needed to support condemnation of repairable parts are known
as replenishment spares .
A rotable pool is a pool of repairable spare parts inventory set aside to allow for multiple
repairs to be accomplished simultaneously.
Consumable
Consumable parts are usually scrapped, or "condemned", when they are found to have
failed.
Since no attempt at repair is made, for a fixed mean time between failures (MTBF),
replacement rates for consumption of consumables are higher than an equivalent item
treated as a repairable part.
Because consumables are lower cost and higher volume, economies of scale can be found by
ordering in large lot sizes, a so-called Economic order quantity.
In order to keep machines in good repair requires timely replacement of defective or worn
out parts.
Older factors which calls for scientific spare parts management are:
Spare parts inventory management shares many traits with standard inventory
management, but requires an extra layer of cost consideration.
These five steps collect the information you need for executing effective spare parts
inventory management.
Step #4: Work with vendors for cost-reduction and in-stock improvement
V. Manufacturers recommendations
Most companies are reluctant to maintain a comprehensive spare part inventory because
they fear that stocking assets like spares is counterintuitive when trying to effectively control
operating costs.
They expect plant managers to identify ways to reduce cost while maintaining
the performance and efficiency of plant operations.
Practical spare part management is the foundation for reliable plant operation and is crucial
to a plant managers success.
As plant manager, you need to know how to determine which spare parts are needed to
make up an effective and comprehensive inventory system.
Rather than using perception to determine what’s needed, it’s best to establish a strategic
method that will adequately manage the movement and storage of your inventory.
Operating strategy, inventory control and lead times are a few of the factors you should
consider when developing or reviewing your part management system.
Taking these factors into account can help minimize performance disruption, promote
efficiency, and reduce carrying cost.
Introduction
A supply chain is actually a complex and dynamic supply and demand network.
Supply chain activities involve the transformation of natural resources, raw materials, and
components into a finished product that is delivered to the end customer.
In sophisticated supply chain systems, used products may re-enter the supply chain at any
point where residual value is recyclable.
3. Machine -Machine are the basic tools to produce goods or to generate services.
5. Method-Every thing has a right way to do and this right way is known as a Method
inmanagement .
6. Management
Internal Communications
Satisfied employees work harder and invest more in your company, but how can business
owners encourage employee satisfaction? Promoting internal communication is a helpful
first step.
Peer to peer communication can enhance workplace morale and improve project outcomes,
regardless of your industry.
Mobile Accessibility
Whether you’re in the technology industry and rely on mobile devices to achieve sales
targets, or you’re in the hospitality business and need client portals to reach your target
market, mobile accessibility is vital to the future of operations management.
Automatization
Automating processes throughout your business can save money and increase efficiency
when it comes to all areas of operations management.
Performance Measurement
Detailed analytics give companies a baseline for implementing changes in areas from
development and production to customer service.
With metrics solutions that deliver comprehensive measurements, business owners can
make informed decisions regarding business practices moving forward.
Not only are companies able to track website performance and on-site sales, they can also
zero in on employee productivity and communication.
Mobile collaboration apps allow organizations to see which employees are actively
engaged in collaboration, and which may require encouragement or assistance.
Employee Analytics
Beyond sales figures-based analytics, employee feedback and surveys can also contribute to
better business overall.
On the face of it, operations management may appear to span only materials and
products, but people are an essential component of any business structure.
Outsourcing
When it comes to reducing costs, outsourcing is often on the top of companies’ lists.
Contracting with outside agencies or individuals can help companies save money and
ensure each task receives the appropriate attention.
In cases where outsourcing is cheaper than hiring additional staff, or when no staff is
available to tackle extra projects, companies should have no qualms about accepting outside
assistance.
X. Cycle of operations in business
The operating cycle is the average period of time required for a business to make an initial
outlay of cash to produce goods, sell the goods, and receive cash from customers in
exchange for the goods.
This is useful for estimating the amount of working capital that a company will need in order
to maintain or grow its business.
A company with an extremely short operating cycle requires less cash to maintain its
operations, and so can still grow while selling at relatively small margins.
Conversely, a business may have fat margins and yet still require additional financing to
grow at even a modest pace, if its operating cycle is unusually long.
If a company is a reseller, then the operating cycle does not include any time for production
- it is simply the date from the initial cash outlay to the date of cash receipt from the
customer.
The following are all factors that influence the duration of the operating cycle:
Longer payment terms shorten the operating cycle, since the company can delay paying out
cash.
The order fulfillment policy, since a higher assumed initial fulfillment rate increases the
amount of inventory on hand, which increases the operating cycle.
The credit policy and related payment terms, since looser credit equates to a longer interval
before customers pay, which extends the operating cycle.
Thus, several management decisions (or negotiated issues with business partners) can
impact the operating cycle of a business.
Ideally, the cycle should be kept as short as possible, so that the cash requirements of the
business are reduced.
Examining the operating cycle of a potential acquiree can be particularly useful, since
doing so can reveal ways in which the acquirer can alter the operating cycle to reduce cash
requirements, which may offset some or all of the cash outlay needed to buy the acquiree.
Similar Terms
The operating cycle is also known as the cash-to-cash cycle, the net operating cycle, and
the cash conversion cycle.
Supply chain management is the management of the flow of goods and services and
includes all processes that transform raw materials into final products.
Typically, SCM attempts to centrally control or link the production, shipment, and
distribution of a product.
By managing the supply chain, companies are able to cut excess costs and deliver products
to the consumer faster.
SCM is based on the idea that nearly every product that comes to market results from the
efforts of various organizations that make up a supply chain.
Although supply chains have existed for ages, most companies have only recently paid
attention to them as a value-add to their operations.
1. ABC Analysis
2.BID
3. Bill of materials
4. Buffer stock
5.Carrying cost
6. Buyer’s market
7. Cycle time
8. Distributed inventory
13.Inventory
14.Inventory Management
15.Inbound Logistics
16.Integrated logistics
17.Just in Time (JIT)
19.Lead Time
21.Min-max
23.Obsolete Inventory
24.Order cost
25.Procurement
26.Proprietary
27.Public purchasing
28.Purchase Manual
29.Purchase order
32.Quality
33.Quantity
34.Quantity Discount
i. Quantity
v. Quantity allocated
35.Requisition
i)Safety stock
36.Single source
39.Value Analysis
40.Vendors List
Ii) Work-in-progress
1. ABC Analysis
"B items" with less tightly controlled and good records, and
"C items" with the simplest controls possible and minimal records.
The ABC analysis provides a mechanism for identifying items that will have a significant
impact on overall inventory cost,while also providing a mechanism for identifying different
categories of stock that will require different management and controls.
The ABC analysis suggests that inventories of an organization are not of equal value.
Thus, the inventory is grouped into three categories (A, B, and C) in order of their estimated
importance.
Because of the high value of these 'A' items, frequent value analysis is required.
'B' items are important, but of course less important than 'A' items and more important
than 'C' items.
2.BID
Bid price, a price offered for a good by a potential buyer or a price offered by a potential
vendor to perform a specific job
3. Bill of materials
In a nutshell, it is the complete list of all the items that are required to build a product.
4. Buffer stock
5.Carrying cost
This includes warehousing costs such as rent, utilities and salaries, financial costs such
as opportunity cost, and inventory costs related to perishability, shrinkage (leakage) and
insurance.
Holding cost also includes the opportunity cost of reduced responsiveness to customers'
changing requirements, slowed introduction of improved items, and the inventory's value
and direct expenses, since that money could be used for other purposes.
6. Buyer’s market
The term "buyer's market" is commonly used to describe real estate markets, but it applies
to any type of market in which there is more product available than there are people who
want to buy it.
The opposite of a buyer's market is a seller's market, a situation in which demand exceeds
supply and owners have an advantage over buyers in price negotiations.
7. Cycle time
The inventory period of your business is the amount of time it takes to turn over its average
inventory, and sometimes it is referred to as "cycle time."
Calculating inventory period requires dividing the number of days in a period by the
inventory turnover ratio for the period.
If your business turned over its inventory 10 times this past year, then its inventory period
is 365 divided by 10, or 36.5 days.
In general, businesses with short inventory periods operate more efficiently than those with
long inventory periods.
8. Distributed inventory
Distributed inventory enables the products or goods to reach out to every party of the
region where the products have to be sold.
In inventory management, economic order quantity (EOQ) is the order quantity that
minimizes the total holding costs and ordering costs.
The quoted factory lead time, or time required between placement of order until product is
received, plus any other variables which may impact receiving inventory on time, such as
order placement frequency.
ERP provides an integrated and continuously updated view of core business processes using
common databases maintained by a database management system.
ERP systems track business resources—cash, raw materials, production capacity—and the
status of business commitments: orders, purchase orders, and payroll.
FIFO and LIFO accounting are methods used in managing inventory and financial matters
involving the amount of money a company has to have tied up within inventory of produced
goods, raw materials, parts, components, or feed stocks.
They are used to manage assumptions of cost sheet related to inventory, stock
repurchases (if purchased at different prices), and various other accounting purposes.
13.Inventory
In the context of a construction system, inventory refers to all work that has occurred – raw
materials, partially finished products, finished products prior to sale and departure from
the system.
In the context of services, inventory refers to all work done prior to sale, including partially
process information.
14.Inventory Management
Inventory management refers to the process of ordering, storing and using a company's
inventory:
raw materials,
components and
finished products.
15.Inbound Logistics
transport,
storage and
16.Integrated logistics
Its origin and development was in Japan, largely in the 1960s and 1970s and particularly at
Toyota.
18.Just in Time II (JITII)
JIT II places more responsibility with the suppliers for functions such as:
forecasting usage;
reduce inventories,
get cost-saving tips from having suppliers familiar with their business.
19.Lead Time
A lead time is the latency between the initiation and execution of a process.
For example, the lead time between the placement of an order and delivery of a new car
from a manufacturer may be anywhere from 2 weeks to 6 months.
20.Master production schedule (MPS)
It is usually linked to manufacturing where the plan indicates when and how much of each
product will be demanded.
This plan quantifies significant processes, parts, and other resources in order to optimize
production, to identify bottlenecks, and to anticipate needs and completed goods.
Since an MPS drives much factory activity, its accuracy and viability dramatically affect
profitability.
21.Min-max
You simply draw two lines, which represent a maximum amount of inventory and a
minimum amount.
When your stock of a certain product reaches the minimum line, it’s time to reorder.
The simplistic approach of this method can be both a good thing and a bad thing.
It’s easy to use, but it could leave you with shortages or overstocks, if you’re not careful.
22.MRP/MRPII, Manufacturing resource planning
Manufacturing resource planning (MRP II) is defined as a method for the effective planning
of all resources of a manufacturing company.
Ideally, it addresses operational planning in units, financial planning, and has a simulation
capability to answer "what-if" questions and extension of closed-loop MRP.
This is not exclusively a software function, but the management of people skills, requiring a
dedication to database accuracy, and sufficient computer resources.
It is a total company management concept for using human and company resources more
productively.
23.Obsolete Inventory
Obsolete inventory is a term that refers to inventory that is at the end of its product life
cycle.
This inventory has not been sold or used for a long period of time and is not expected to be
sold in the future.
This type of inventory has to be written down and can cause large losses for a company.
24.Order cost
Ordering costs are the expenses incurred to create and process an order to a supplier.
These costs are included in the determination of the economic order quantity for an
inventory item.
Cost of the labor required to inspect goods when they are received
25.Procurement
Procurement is the process of finding, agreeing terms and acquiring goods, services or
works from an external source, often via a tendering or competitive bidding process.
The process is used to ensure the buyer receives goods, services or works at the best
possible price, when aspects such as quality, quantity, time, and location are compared.
Corporations and public bodies often define processes intended to promote fair and open
competition for their business while minimizing risk, such as exposure to fraud and collusion.
Almost all purchasing decisions include factors such as delivery and handling, marginal
benefit, and price fluctuations.
If good data is available, it is good practice to make use of economic analysis methods such
as cost-benefit analysis or cost-utility analysis.
26.Proprietary
Proprietary specifications are those that require the use of a single approved product type
for any particular installation.
Proprietary specifications are often used in cases where there is existing equipment or
installations already on site.
In these cases the owner may want to maintain consistency of materials or possibly simply
prefers a specific type of product.
Also, in highly complex installations where there is only one specific piece of equipment
that will accomplish a specified task, a proprietary specification is required.
27.Public purchasing
28.Purchase Manual
A document that stipulates rules and prescribes prodedures for purchasing with suppliers
and other departments.
29.Purchase order
A purchase order (PO) is a commercial document and first official offer issued by a buyer to
a seller, indicating types, quantities, and agreed prices for products or services.
It is used to control the purchasing of products and services from external suppliers.
If no prior contract exists, then it is the acceptance of the order by the seller that forms
a contract between the buyer and seller.
30.Qualified vendor/Responsible Vendor
competence,
reputation,
31.Qualified Products List (QPL)
A list of products that, because of the length of time required for test and evaluation, are
tested in advance of procurement to determine which suppliers comply with the
specification requirements.
32.Quality
ISO 8402-1986 standard defines quality as "the totality of features and characteristics of a
product or service that bears its ability to satisfy stated or implied needs."
33.Quantity
Quantity is among the basic classes of things along with quality, substance, change, and
relation.
Some quantities are such by their inner nature (as number), while others are functioning
as states (properties, dimensions, attributes) of things such as heavy and light, long and
short, broad and narrow, small and great, or much and little.
34.Quantity Discount
A quantity discount is an incentive offered to a buyer that results in a decreased cost per
unit of goods or materials when purchased in greater numbers.
The seller is able to move more goods or materials, and the buyer receives a more favorable
price for the goods.
At the consumer level, a quantity discount can appear as a BOGO (buy one, get one
discount) or other incentives such as buy two, get one free.
Quantities can be compared in terms of "more", "less", or "equal", or by assigning a numerical value
in terms of a unit of measurement.
Quantity is among the basic classes of things along with quality, substance, change, and relation.
Some quantities are such by their inner nature (as number), while others are functioning as states
(properties, dimensions, attributes) of things such as heavy and light, long and short, broad and
narrow, small and great, or much and little.
ii.Quantity on hand
"On-hand quantity" The total number of stock-keeping units (SKUs) that are physically located in
the warehouse location at the current time.
This includes items that are already allocated to fulfilling production needs or sales orders.
iii.Quantity on order
The total number of stock-keeping units (SKUs) that have been ordered from a supplier.
These units are not counted as part of the quantity on hand until they actually arrive.
However, knowing the quantity on order is important for avoiding duplicate orders of the same
items.
iv.Quantity in transit
The total number of stock-keeping units (SKUs) that are currently being shipped from one location
to another.
The quantity in transit data for a given load may be input in the inventory management software
application once a bill of lading is created for an outbound shipment or once the shipment actually
leaves the dock depending on how the system is set up.
v.Quantity allocated
The total number of stock-keeping units (SKUs) currently on the premises that are already
committed to fulfilling a given order (e.g., for production or sales).
The quantities allocated are still counted as part of the quantity on hand.
If a situation arises in which the allocated items are needed for other purposes, they may be
reallocated based on priority.
vi.Quantity available
The total number of stock-keeping units (SKUs) that are currently available for use in filling a
new order internally or externally for purposes such as production or distribution.
This quantity does not include items already allocated to other orders or items that are in
transit from a supplier.
vii.Reorder point
The reorder point (ROP) is the level of inventory which triggers an action to replenish that
particular inventory stock.
It is a minimum amount of an item which a firm holds in stock, such that, when stock falls
to this amount, the item must be reordered.
It is normally calculated as the forecast usage during the replenishment lead time plus safety
stock. In the EOQ (Economic Order Quantity) model, it was assumed that there is no time lag
between ordering and procuring of materials.
Therefore the reorder point for replenishing the stocks occurs at that level when the
inventory level drops to zero and because instant delivery by suppliers, the stock level
bounce back
35.Requisition
Written order or a formal demand by the user(s) of a good or service (which is not made
available without a specific request) to the organization's purchase (or stores) department.
It generally includes the brand and model name or number, description, quantity, and the
required delivery date.
Safety stock is an additional quantity of an item held in inventory in order to reduce the risk
that the item will be out of stock.
Safety stock acts as a buffer in case the sales of an item are greater than planned and/or the
supplier is unable to deliver additional units at the expected time.
However, the holding costs could be less than the cost of losing a customer if the customer's
order cannot be filled
36.Single source
A pharse generally applied to the rules under which all bids must be submitted to be
reasonably available for the required product, service or construction item.
Often, these services go beyond logistics and include value-added services related to the
production or procurement of goods, i.e., services that integrate parts of the supply chain.
When this integration occurs, the provider is then called a third-party supply chain
management provider (3PSCM) or supply chain management service provider (SCMSP).
In simpler terms, it's a logistics platform that enables users to manage and optimize the
daily operations of their transportation fleets.
38.Unsuccessful Vendor
price,
quantity,
39.Value Analysis
Value Analysis is one of the major techniques of cost reduction and control.
It is a disciplined approach which ensures the necessary functions for the minimum cost
without diminishing quality, reliability, performance and appearance.
It is a creative approach to eliminate the unnecessary costs which add neither to quality nor
to the appearance of the product.
40.Vendors List
A list of names and addresses of suppliers from whom bids, proposals and quatations might
be expected.
The list, maintained by all the purchasing office, should include all suppliers who have
expressed interest in doing business with the government.
is a family of business models in which the buyer of a product provides certain information
to a supplier (vendor) of that product and the supplier takes full responsibility for
maintaining an agreed inventory of the material, usually at the buyer's consumption
location (usually a store).
A third-party logistics provider can also be involved to make sure that the buyer has the
required level of inventory by adjusting the demand and supply gaps.[1]
Ii) Work-in-progress
goods in process,or in-process inventory are a company's partially finished goods waiting
for completion and eventual sale or the value of these items.
These items are either just being fabricated or waiting for further processing in a queue or
a buffer storage.