Material Handling involves the movement of material, manually or mechanically in batches or one item at a time within the plant. The movement may be horizontal, vertical or combination of horizontal or vertical. Material Handling is the movement, storage, control and protection of materials, goods and products throughout the process of manufacturing, distribution, consumption and disposal. The focus is on the methods, mechanical equipment, systems and related controls used to achieve these functions. Briefly, Material Handling is the moving of materials from the raw stage through production to ultimate Customer with the least expenditure of time and effort so as to produce maximum Productive Efficiency at the lowest Material Handling cost. Material Handling is concerned with motion, time, quantity and space. Material Handling Institute describes this as follows: Material Handling is MOTION. Parts, material and finished products must be moved from store to location. Material Handling is concerned with moving Continue reading
Operations Management
Just-In-Time (JIT) Method – Eliminate Waste and Improve Productivity
Just-in-time or JIT means producing goods and services exactly when they are needed, like for example a new company opens that is producing steering shaft for automobiles. The company, under the JIT system, will set up the machines to produce the jobs in a row from those who collect the metals at one end, all of the way to those who ship the product at the other end of the factory.  The people at each station, as they receive the product, take the job order, perform their duties on the product, and then transfer the product out to the next station after their work is completed.  Along the way, the product is screened for infirmities, and if they exist, the line is stopped until the defect is repaired.  In the end, the shipping agent will receive the product and ship it to the customer.  All along Continue reading
Inventory Control: Benefits of Holding Inventories
Inventory management is primarily about specifying the shape and percentage of stocked goods. It is required at different locations within a facility or within many locations of a supply network to precede the regular and planned course of production and stock of materials. The intent of inventory management is to continuously hold optimal inventory levels. The benefits of holding inventories are; 1. Avoiding Lost Sales Losing business is the last part where you, as  a business owner wants. Without the necessary goods in hand, which are ready to be exploited, most businesses will surely lose its business and market share. There are some customer are willing to wait, especially when the product they want must be made to order or it is not sidely available from your competitors. Thus, your business must prepare itself to provide the goods or product demanded by your customers. For instance, Shelf Stock are Continue reading
Recent Trends and Developments in Purchase Management
Many companies are now confronted with diminishing growth opportunities, which results in a situation where an increase in turnover can only be realized at the expense of the competition and only with a great deal of effort. This leads to increased pressure on sales prices and consequently on cost prices and margins, which causes two developments. On the one hand it has resulted in shifts of power between purchasing and selling parties in many markets. Due to the fact that in many cases the market has changed from seller’s market to buyer’s market, the role of the buyer is now more dominant than a number of years ago. On the other hand the increasing pressure on sales prices and margins has resulted in an increased pressure on direct materials-related costs. Because the purchasing prices determine the sales prices in the industrial sector to a large extent, the company will be Continue reading
Vendor Managed Inventory (VMI)
Vendor Managed Inventory (VMI) is a supply chain practice where the inventory is monitored, planned and managed by the vendor on behalf of the consuming organization, based on the expected demand and on previously agreed minimum and maximum inventory levels. In its simplest form, Vendor Managed Inventory is the process where the vendor assumes the task of generating purchase orders to replenish a customer’s inventory. VMI is a term that is used to describe many types of supply chain initiatives. Traditionally, success in supply chain management derives from understanding and managing the trade off between inventory cost and the service level. The Vendor Managed Inventory Approach Vendor Managed Inventory reduces stock-outs and reduces inventory in the supply chain. Some features of VMI include:- Shortening of the supply chain Centralized forecasting Frequent communication of inventory, stock-outs, and planned promotions. Electronic Data Interchange (EDI) linkages facilitate this communication. No manufacturer promotions Trucks Continue reading
Concept of Vendor Management
Vendor Management is the management and control, by an entity, of those third parties that supply goods and/ or services to that entity. It is the discipline of establishing service, quality, cost, and satisfaction goals and selecting and managing third party companies to consistently meet these goals:- Establishing Goals– Just as employees need clearly established goals, operations need clearly defined performance parameters.  When selecting or managing vendors, vendor managers must optimize their opportunity to achieve these goals by using third parties companies. Selecting Vendors– The fine art of vendor management is essential to optimizing operational results.  Different vendors have different strengths and weaknesses, and it is the vendor manager’s responsibility to match the right company with the desired performance characteristics.  Failure to consider this comprehensively could lead to complete failure. Managing Vendors– On a daily basis, vendor managers must monitor performance, provide feedback, champion new projects,  define Continue reading