Operations Management Concepts

Seven Management and Planning Tools

Competition level within every industry is constantly growing and businesses try to find any possible ways to improve quality of products and services. However, quality is quite a complex concept that can be viewed as a measure of perfection. Quality improvement leads to a perfect product that is meant to satisfy the customer. In the early 1980s, the seven management and planning tools were designed as major tools for effective planning and management of processes, which are above the quality operation.

They are as follows:

1. Affinity Diagrams

The first of the tools in the list is Affinity diagrams. The affinity diagram is a visual brainstorming instrument that can be used to categorize various facts and data, ideas and opinions by a proximity factor.… Read the rest

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Lean Supply Chain Management

Even though Toyota – the Japanese company – was the one who made the lean concept widely well-known with the Toyota production system (TPS), there is a fact shows that lean did not just emerging but it was partially used in the United States. For example in 1908, “Scientific management” made by Frederick W. Taylor was the concept of using scientific method such as standardization to apply with the working process. This scientific idea was criticized to be the initial stage of developing the lean concept, since it helped workers to work in system and ignored the unnecessary jobs. However, Henry Ford is considered to be the first person, who used the lean principles.… Read the rest

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Types of Inventory System (Q and P Models)

The term inventory derives from the French word inventaire and the Latin word inventariom which simply means a list of things which are found. The term inventory includes materials which are in raw form, or are in process, in the finished packaging, spares and the others which are stocked in order to meet all the unexpected demands or distribution in the future. This term usually refers to the stock at hand at a particular period of time of all those materials which are in raw form, those goods which are in progress of manufacture, all the finished products, merchandise purchased products for resale of those products, tangible products which can be seen, touched, measured or are countable.… Read the rest

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Collaborative Planning, Forecasting and Replenishment (CPFR)

Collaborative Planning, Forecasting and Replenishment (CPFR) is defined as a business practice that combines the brainpower of two or more trading partners in planning the ways to fulfill the customer demand. They also explained the relationship that CPFR links best practices of sales and marketing, such as category management, to the implementation of supply chain planning and completion process, to increase availability while reducing inventory, transportation and logistics costs. Basically CPFR is an approach that deals with the requirements for good demand management. The most involved industries with CPFR are consumer products and food and beverage.

The main objective of Collaborative Planning, Forecasting and Replenishment (CPFR) is to “optimize” the supply chain process by:

  • Improving accuracy of forecasting demand,
  • Delivering the right product at the right time to the right location,
  • Reducing inventory,
  • Avoiding stock outs, and
  • Improving customer service.
… Read the rest
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Concept of Agile Manufacturing

The Agile Manufacturing was presented in the first time at the publication in the USA of a report entitled 21st Century Manufacturing Enterprise Strategy. So, it has been introduced as a method of increasing competitive advantage in response to increasingly competitive global markets. Agile concept focuses on the fast response to changeable of customer demand. The key component in agile manufacturing is flexibility. The agile manufacturing methods can be adjusted and consolidated into companies of any size to ensure the growth and success. The changeable of customer and technological requirements that make the manufacturers develop agile supply chain capabilities in order to be competitive.… Read the rest

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Difference Between Cost Control and Cost Reduction

A cost reduction program is a type of method which is to improve profitability of the organization or by expected to get a good result that flow to the bottom line of the financial statement and exempted from any serious damage to the organization itself. As this program is much more about reducing cost or reducing expenses of the organization, so a good cost reduction program is all about how to control the damage of an organization. Furthermore, a cost reduction program is said can be improved the profitability of an organization because by reducing expenses, profits are increased without making others changes.… Read the rest

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