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Definition of- Manag~ment
(80 Industrial Management I • To manage is to forecast andplan , to' organize, to
command , to coordinate and- control- Henry
Management Science Fayol( 19/6).
• Management is. concerned with the systematic
organization of economic resources and its 'task
is to make these resources productive- Peter F
Introduction to Management Drucker (1955).
UI • Management is a social, process- consisting of
GDP planning ' control, coordination , and motivation-
EFL Brech( 1957)
4.lt ensures economy and efficiency. 7. Depleting financial and non, fin resources.
8. Disruptive and changing technology.
5.1tfocuses Of} group' activities.
9. Infrastructure bottlenecks.
6. It is the key to economic growth. 10. Environmental and pollution problems.
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2
(}
14 Principle's of Henri Fayol 14 Principle's of Henri FayoJ
~1. Division of work- As per skills and- talents 8.Centnlisation of authority-declsion making and
Authorlty- Right to give orders. authority t be centralized .
~2.
9.scalar chain- Flow of authority
J. Discipline.- Respect rules
IO.Order-right man at the right place
4. Unity: of command- Instructions from one boss. I I.EQuity-de.lings to be fair with·.H employees.
S. Unit)( of direction- One action plan 12.SGlbility of·tenure of personnel- "",oiding frequent
6. Subordination of individual interest to group transfers
interest- personal goals are not important I J.lnitiative -Employees should show initiative within the
limits of discipline.
7. Remu~er~tion- wages should be fair to achieve 14.Espirit de corps- Team work . unity in Strength .
Organisational goals
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Benefits of SM Criticism of SM
• Increases productivity and working methods. • It ignore the functional areas of Management
• It helped develop rational approach to • Individual creativity is ignored.
measure tasks.
• Worker is reduced to a cog in the machine.
• Wage system was introduced.
• It made the work more mechanical.
• Working conditions improved
• Mobility of worker gets restricted due to
• Laid foundation for work study and other
techniques. narrow specialization.
• It formed the basis of McGregor's Theory X • Workers were not part of pla.nning,.t~os, ; ..
some of the jobs w~re repetitivi;'and bOring:::' . .: ..
• Japanese companies used SM to improve
production system - Theory Z- W Ouchi's
4
1I?Ri?01 S
o x
s~~::-~·
.\ . x .'
;:"'\., -:
o
c
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Levels of Management -
Management Pyramid
5
1/2~/Lui5
Douglas McGregor -Theory 'X' and 'Y' Douglas McGregor -Theory 'X' and 'Y'
Two sets of assumptions are made by Theory Y: assumes that employees 'are
managers regarding employees '- Consider work as natural as play or rest.
1. They can direct and control performance on their
Theory X: assumes that employees are
own
r. Inherently lazy.
J. Committed to the organizations objective.
L require constant guidance and support.
-4_ Rewards make them more committed.
3. sometimes require coercion and control,
5. Given an opportunity they not only accept
•. Given the opportunity would like to avoid responsibility but also look for opportunities to
responsibility. outperform others.
5. They do not have ambitions and always seek security. 6. Most of them are highly imaginative.creative. and
display ingenuity in handling organizational issues.
6
Fredrick Herzberg- Victor H Vroom-
Two Factor Theory of Motivation Expectancy theory of motivation
Hygiene factors (Dissatisfier's]. and, Motivators. This disapproves the need based-theory of
I. Hygiene factors: basic requirements such as motivation proposed by Maslow and focuses on
policies and procedures. salary. security. the relationship between efforts and rewards.
working conditions. social and personal life. It suggests that individuals are motivated to act in a
These provide happiness but do not motivate .If certain way because they strongly expect that a
absent there would be dissatisfaction. particular action will lead to a desirable result.
2. Motivators: recognition on the job. awards and Force = Valence x Expectancy.
'rewards. challenging assignments. Force = the strength of a persons motivation.
Built around the job. Any few may give satisfaction Valence = It is the strength of arrindividuals desire
but absence of them does.not give for a particular outcome.
dissatisfaction. Expectancy= Probability that a particular action will
lead to a desired-result . ' . .'~
<:"~1:~~
Chester Barnard
• He stressed the cooperation within the
organization depends on three factors -
Physical,environmental and social.
• He suggested that formal organization
structure can supplemented by an
informal organization for the vitality.
• Stressed the importance of upward
communication.
Leadership
Hani\ger
7
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Departmentalization
• It is a traditional principle of organizing
people based on expertise or the skills they
have.
Management Science • This is also known as division of labour.
Designing Organizational Structures
• It is the process of grouping together people
Unit II and jobs into work units.
• These groups or departments are linked
together in a coordinated way.
• Out of this attempt in departmentalization,
organizational structures are born.
~-- ..
~- .. --.- ..
~~- ..---
-----------..:.: '-~--
-.
_.- • Merits
l. It clearly sets the
lines of authority
and responsibility.
• Demerits
• Une manger could
be over burdened
• No scope for
I z.lt is simple to specialisation
[d::..J [~.J [~
understand • More scope for
3. Easy to control favoritism and
4.Flexible nepotism
s.Facilitates. quick • May lead to low
decision and actions morale
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(Ad~=~}- (,--_':er_nts )
8G
,.---Jc==::~::::r:::::::-;::=-----------
Draughtman 2
(Plans)
)
.
0raghtsman3
(Specificallons) (~J((=)J
.:
pbnning.nd control than one boss.
:l.fxiliCltH large s.c:illie
• Very Costly structure, to it.
production through
surmrdiSOltion • Requires more • It intends to use the skills ,knowledge and
•.."1l'tediK~convoisillr~ coordination . experience of all .he concerned parties.
_W""fined. • less suitable when • It is supposed to gain cooperation ,coordinate
•. SuiUd when • single p«><I••cr products are many. :--
ee seresce is il1YO~ and utilize the resources of all members.
• No dear line of
6. Offers de~ career path for authority. • The commitee is supportive in nature and is
em~.
formed to obtain a consensus outcome,
~ ....
":;;:.=t~~ct.¥.?i?.&~~~M~~~~~~5 ..S~?Z::~'::..~""!=~",,~_'?.Y"~S!%";"~~~~.:z,.#~~~~~~~~~~t?&:~~:':.:.::;~~~~~;jj:).:§-:'?:"':~ j
~---~~~----------~-----~~-=~------~
..
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Committee
OrganizatiOf')(University)
Committee Form
* • Merits > Demerits.
1. It pooIsskiUs. 1. ResponsibilityfoFa
knowledge and decision cannot be
experience of members. ftxed on a particular
2. All interest groups are person.
represented. 2. It calls for high degree .
3. Yields results as it is ofcoordtnanon,
aded •.••Ch 3. It invoNes high"cost in
he uy airman 't~~ 'bf"tlme and
4. It.motivatesall tile .._" . - .~n:aoney. _. ,.-" •
members' to pankip;ile..
Product/Marketing-Management
Matrix Organization Matrix System
2.1tis combination of vertical • horizontal and .~'.~¥ W-,."Fi'lli\-.-,.lI l:trtSt-; ••;:; rr1H.f'.t.
(~:JI"
--'-"---
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--- --...-.- .. ~ - --
..-.-.. ..
llme1
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• Upside-Down Pyramid
Upside-down Pyramid
• It offers an alternative and suggestive way of viewing
organizations and the role played by managers.
within them.
r,The operating workers are at the top of the Upside-
down pyramid.
2. They are supported in their work by managers who
mobilize and deliver support required to serve
customers,
l. Eachmember of this UDpyramid is a value added
worker.
4. Instead of managers 'directing' and 'order -giving' ,it
looks at 'helping' and 'supporting'the workers.
r--..:It ~ms at worker involvement and empowerment ..
I ~==::.::
~-.-
.. ~
-- .-....- ----
~:
• Here employees are more involved and • Each cell is self-managed and organised to
empowered because of reduced barriers.
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End
Unit II
t----~_---_--
6
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, "
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--~-~
.--- - -- - -
Pfinciples of Plant Layout Factors affecting-Plant Layout
Integration of production centers in a logical and Closeness to raw material
balanced manner. Nearness to Markets
Availability of Fuel and Power
Minimum movement of men and material to
Availability of transport facilities
reduce costs
Availability of Labour
Smooth and continuous flow of material Agglomeration of economies - subsidies
Cubic space utilization-Using the vertical space Naturaland Climatic factors
efficiently. Government influence-Incentives for balanced
regional growth
Safe and improved environment to improve worker
Political interference- Ministers constituency.
efficiency and satisfaction levels.
Other Considerations- Pollution , Environmental
Flexibility to meet the changing demand( as in auto Effluents
sector. )
.--.--
Factors affecting Plant Layout Fatfors affecting Plant Layout ....
Closeness to raw material- Arou~d 35-70 % of the 5. Availability of Labour- Skilled and qualified labour
cost of a product is due to RM cost . Cost of makes it easy. Hyderabadl Bengalurul Pune are good
procurement, Transportation , Imported items , for software professionals . Pune/ Gurgaon/Chennail
financial strength of the buyer are other factors.
are best for automobile sector. Currently mobility helps
Nearness to Markets- Less transportation cost , in starting a company keeping other factors in mind.
understanding demographics easily and providing the
right product becomes easy.
6.Agglomeration of economies-Industrial areas can
Availability of Fuel and Pcq,ver- Depending on the fuel
provide some benefits due to concentration of firms
the factory is located(water , coal ). Cost of power,
providing economies.
subsidies are other considerations.
Availability of transport facilities- Road water,
pipeline ,air and rail are the modes. Cost of reducing 7.Natural and Climatic factors-Ports for EXlM ( Mumbai ,
transportation is the objective. Use the best mode. Kolkatta, Chennai) , Wine ( Nasik) Apples U&K), Ores
(Orissa), Pharma( Himachal Pradesh)
1
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Process Layout
Product Layout
Milling WddinS
~on ~on
Raw
Ma tttial
Stores
Product A Product 8
----
Production - Job Type Production
Production Vs Productivity In this type products are manufactured to meet
Production is also called as 'manufacturing' . Now a specific order - Ganesh Idols, Ferrari, Yacht
days 'Operations' is also used in place of them.
Every job is different from others in terms of cost,
Production refers to the actual amount of goods and type , specs, volumes and machinery used
services produced.
The quantity involved is small, costliest and time
Productivity- It is defined as the rate at which goods consuming. Economies of scale cannot be realised.
and services are produced . The job is produced only once, at irregular intervals or
It is the ratio of amount produced against resources periodically at regular intervals.
used
If the volume of the order is considerably large and
have large customers, the job production system
slowly transforms into Batch Production systems.
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-..---.~-
production - Batch Type Production Production -C~~-tjn'uous Production
It is associated with production of large quantities with
In this layout, a number of identical items in terms of
high rate of demand. The system is classified as :
cost, specs, volumes etc are manufactured to meet a
specific order.- Pharma .fashion garments/ items etc; Mass Production: Same type of product is produced to
meet the demand of a market. The machinery , with
A batch is produced only once ,at irregular intervals,
slight alterations could be used for manufacturing other
periodically at known intervals.
products.
As the frequency of regular orders goes on increasing,
Flow Production : The plant is designed for a specific
the hatch production system becomes mass production
product unlike in mass production and has to be
Automation can be used effect:ively scrapped if product fails in the market- Cement, Oils etc
Cost per unit would be less . Quality control and special handling systems can be
Process Layout can be used advantageously. employed.
Economies of scale can be realized as quantity is more . Advantages : Mechanization and division of labor.
»->;
.
Job Production Shop: Tailor shops, cycle repair shops , p
etc r
,,,.,,.,,
.
u
m
output I Product variety
Work Study
Work Study The principal aim of work study is to hring efficiency
and economy by making improvements in the method
Definition: According to British Standard (BSJl38), of doing the job.
~, .
It is concerned with manual work( TIme Study)-Its
design and execution.
It strives to establish better standards of performance
by identifying the essential movements while doing
the job and determining the standard time for agiven
job.
It has two parts - Method Study( Motion Study) and
Work Measurement CJ
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Work Study-Benefits
It deals with techniques of analyzing the job to do a given job
Work Study better. Tbe benefits are :
It leads to standardization of the job process
:::::. ;1 Determines the cost of the work done.
<l
Minimizes and saves time by eliminating unnecessary
movements.
Enhances the productivity of workers and machines.
Helps to evaluate performance of an employee or department
War!<.Study is the systematic examination of against targets.
the methods of carrying on activities so as
Enables worker to earn incentive.
to improve the effective use of resources
and to set up standards of performance for Contributes to cost savings.
the activities being carried out. Enhances employee morale.
Facilitates the organization to plan and achieve work targets.
.s>:
Mf"'.
Banks - Withdrawal of It helps in arranging a less costly way of designing and
IDoneyor obtaining a
draft. tl.~d1.~£. improving productivity.
tlt.~.
manufucturing a
They devised a symbol called • Therblig' to represent a
component or assembly
of a product like Toy. specific body movement.
Therblig is reverse of Gilbreth .
.--
17 Therbligs 17 Therbligs (continued)
Transport empty (TE) - reach for an object Pre-position (PP) - position object for next operation
Grasp (G) - grasp an object Position (P) - position object in defined location
Transport loaded (TL) - move an object with Assemble (A) - join two parts
band and arm
Disassemble (DA) - separate multiple parts that were
Hold (H) - hold an object previously joined
Release load (RL) - release control of an Search (Sh) - attempt to find an object using eyes or
object hand
5
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--- or Workplace-Arrangement--
Method Study Examples Normal and maximum working areas in the workplace .
.' ,.
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•
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J_~
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Illustration Illustration
.-
Two workplace layouts. (b) Good arrangement or parts and tools in workplace
(a) Poor arrangement of parts and tools in workplace Numbers indicate sequence of work elements in relation to
locations of hand tools and parts bins.
1I,,, ••f.,,.,,-,,b
\V.'r •••.
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r""lIInn
6
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(s\ ~
kkd the tilde: to be dudied
R \
B.cm.r:d. ~~ted~ilboutCUJ:ft.Dt orpropoiRdm.ethods.
E \
D:
oJ
~the &.cumtka.Dyc:onDMriDs
~
thtPWPOR.
tJ.c be:g po5Ab~-.thod
p~ _d ~IM)W'CH
-
Install 1M new method
\~/ Maintain the in5hlIcd _thod
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b:r.~~ Co" aadPmdu.crlritytJuoup
I I
~A
'll~u!o~=th~~~~..ed~=;=dem.
Method Study
~----
•.. '- __ .-_--' thejob to be studied
Transport
r---;;:-:':----,new methods drawilg on contributkwls
'---r----' of
those ooocemed
A StOIr<lgC
Delay
L- __ .-_--'resutts of different alternative solutions D
Insp«tion
~tioncum
cum Inspection
Transportation
'----r----'applying ft 8
,---",==_--,and establish control procedures
-'
- Record- Charts and Diagrams (.-h~" r h.--I! •.••_~. "'"Yr'''''
u~"'aitil\al
I •••..• 'Vn •.••'11.::0.0
dicL:.:J.La •..••••
.-'
C.h,u r ~,..,,-/~: "'·Y('>'$I P'HIJ I""U.er ,,-'
~ • .::.>.>t •• tray.
OuttineProcessChart-Mainevents- Operationsand Inspection
.II ,.~'"
:~ ~~~ Chart(Worker,Material.Equipment)-Scale drawingof (Typi!<t)
Two-Handed Process Chart- Simurtaneousactivities of both the t ";'-,;. T<" ••ut •.•• ;>.-·,.. ornc~
hands ('\) -r~, k •• <1.<.'tL~tiou
< ~ To o ••••
·n orn ••
:::~
~~nesActi~~~=~~~n'=le .c;
(-i:) )',el"''''I'"':: [rpl"li- ••
..::1
~~~~rlI',g~~~~~~~~l
~~.\'I~~~atta",=t=/i,a.i'v~"::'n~~ry
Du.·,n.~ "--heckin~, •• nd ",owning
movement
g~~~~ This is a photographic record for capturing short
T •• c- •••••n
'l"ypc cn ••.
othc:e
cl.,p~
7
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Record- Example
Outline Chart
Record-
Example of
Multiple
activity
Char!
_ .....•.
swttch Rotor
Record- Exa.,!!Y"e
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String Diagram Work Measurement
Work measurement:
(
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-_.
Process and Statistical Controls
--
SQC-Causes for Variation
Chance Causes: They cannot be identified.
Process control is a technique of ensuring the quality Manufacturing output will have variations in
of products during manufacturing. measurements. To accommodate such causes we
Process control is achieved through control charts . create tolerance s. Instead of 2" dia . We may have
If a process consistently produces items within a get 1.96" or 2.04". The spec's will be 2±0.04"
tolerance range of specs, it is said to be statistically Assignable causes: These may affect the quality of
under control. the production process. These could be identified
Statistical control charts provide graphic data to and specified. They exceed the control limits and
analyze output of a machine and to identify the help in identifying the causes.
process variation due to random /chance or assignable
causes.
12/8/2014
-
.. ..- ....
Control chart
"Normal" bell shaoed curve
tl(l l(..K-n
. .
i
Add up about 30 of most tnngs
and you start to be 'normal'
Nannal distributions
-.......--....
are divide up
into 3 standard deviations on _
~ io C \ i \
f,0' '0 each side of the mean
5 lCL= ~,2~
what is going on
I.
Sample:
10
12/8/2014
.s->
UCL=x+~From
LCL =x-S;R -- Tables
LCL
~-
D~_
D,R
From Tables
7
8
«sn
0.04B3
0·-419
o·m
0·076
o.q6
1.U4
1._
L'»4
L8<4
0·337 OJB4 db6
0.308 0-»] '·m
..-""
In thefollowing table tne length of 10 samples of5 rods
are shown. Construct X bar and R bar charts
Construct X and R charts from the info given. X has
4- 5
been computed based on 5 samples drawn every half 6., 6.8 7-> 6.0 3>-0 6-4 L4
5.8
an hour from production. Is the process in control? 5-8 6.0 H 6.8 6.6 p.6 6·5 L6
4-8 5·' 5.8 6.. 6.8 29.0 5-8
6.6 6.8 6-4 6., 6.0 3>-0 6.• 0.8
X 20344539 26:191] 34"T1:l3
6.6 6., 7-> H 7·' 34-6 6·9
R 2339145 r] 40 6.8 6.6 4-Z 4-8 4-0 ,6--4 53 1.8
8.8 7-> 7.8 ].8 5-6 3P 6.6 5-0
4-6 4-8 6.6 6.8 6.0 z8.8 5-7
6.8 7-> 6.6 6.4- 6.0 33-0 6-4
UCl.2 x+A,a1t = 3O.0.56X20 • .cL6 ..La. X-Aa/tz30-D.SU2O=lllA 6.6 4-. 6., 6.6 9.0 5-8
P 2
oa» o,Ji z2...1JJQOa-4J..2 u:J..%'D"R=OX2D-O
309.6 >0.4
11
12/8/2014
76/10=
UCL =1C+A2 R bar = 6.2 +0.S8X2.04=7-4 (approx) 7-5 7.6
Rbar=
LCL = X -A2 [bar'= 6.2-0.58 x 2.04= s.o(approx) 8 26/10=
2.6
UCL= D4 R bar =2.11 x 2.04= 4- Jl( approx) UCl=
9·5 8.658
LCL= D3 R bar = ox 2.04= 0 lCl=6.0
( From the chart A2= 0.58 , D3= 0 , D4 = 2.11 ) 92
u·5
Rbar
(From the problem n=s) 4 UCL=
5.486
H
lCl=O
4
1:76 D6
• C= 100/20 =5
6
9 1)
,.••.,
7
UCL = 5+3,Js =11.69
5 8 '5
6 9
7 4 LCL = 5-3,Js =0
3 13
9 '9
•
ToQI Number of defects _ 100
12
12/8/2014
Cbar e 37110 = 3.7 Data collection costs and efforts are relatively less
LCL= 3.7 - 3 -.I3.7= -2.972=0
UCL=3.7+3-.1 3.7 = 9.472
Useful when the sample size is larger.
..----
.p€hart ContrOl"limits
Problems- p Chart
For each of the 14 days , a number of magnets used in
electric relays are inspected and the number of
UCL, = P+3~P(l; p)
defects are recorded. The total number of magnets
tested is 14000. The detail s are :
LCL, =P_3~P(l;P)
'§Ntlll.8m.uz 'M'·fia§#f&
u.o
'00
50 60
3 140
P(Average defective)=Totai number gf defectives found
Total number of pieces Inspected •
5 '50
50
70
6 50 '3 40
80 14 '40
---- '---~ -.
Problems- p Chart
The average sample size = 14000/'4= 1000 Problem p Chart
Avg Defects Found = P= T. No of Defects found - MQQ.=o.i
1: No of pieces inspected '4000
UCL, =0.1+3 0.1(1-0.1) =0.4
1000
10011סס0-0.10 J.4O/1ClOO=O.J.4
6 50/tOOCFO·OS
'3 40/lQIOO=«).04
13
=
12/8/2014
Lot size(N) is not the criteria What do you understand from Scientific management?
What are Henri Fayol's Principles of management?
What are the different Types of Organizations?
What do you understand from :
A 200 7 8
Virtual, Boundry less , Cellular and Organizations
B 33 1 2 Departmentalization , Decentralization and Inverted
Pyramid Structure
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---.
.~.
.i->:
--'
..
Acceptable Quality Level (AQL) , Consumer's Risk (a) & Producer's Risk ([3)
Lot Tolerance Percentage Defective( LTPD)
Consumer's Risk (a) is the
chance of accepting a lot that
=.~.
,••_\...,.." •••_.,
contains a greater number of : "'-'" iP'OJ.a:-'<: ••••••
O~2010
15
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»>:
16
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END
13. Institute a vigorous programme of
education and retraining.
14. Create a structure in top management
UNIT 3
that will push everyday on the above 13 '-More the Knowledge
points. Le"., the Ego.
Lesser the Knowledge
More the Ego ... •
17
12/8/2014
MATERIALS MANAGEMENT -
OBJECTIVES
@Materials: They are the inputs for production .
They could be raw materials (RM) , Work-in-
Progress(WIP) , finished goods , spare parts and
components. MRO's like lubricating oil, cleaning
material and others required for maintenance
and repairs are also considered as materials.
MATERIALS @Materials Management : It is the process of
lanning, organizing and controlling materials in
MANAGEMENT a given organization . It is now called Supply
Chain Management (SCM)
Unit IV/l
1
> •
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2
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STORE RECORDS
ADVANTAGES OF CLASSIFICATION @ They facilitate maintenance of accounts of each
item of inventory.
1. Long description of the item can be avoided
@ The following are some of the documents used in
ABC ANALYSIS
STORE RECORDS @ It is a technique used to control inventory. It
5. Goods Received Note - This document provides the is based on Pareto's Law, after Vilfredo
info on the supplier , the items supplied, Pareto, the Italian mathematician. Under
requisition , PO number and the purpose for which this, all the inventory is segregated into A, B
it is received.
, and C category in order of value. It is
6.Goods Returned Note-Sometimes a part or whole of
sometimes called 80/20 rule.
the consignment is returned for which a debit
note is raised because the suppliers account has to
Category Value " Volume " Degree of
be debited by the same amount (Rs in lakhs) (Quantity) Control
7.Stores Ledger Account - It provides the details of the
quantity ,price , receipts ,issues and balance A 70 10 Strict
available. 8 20 20 Moderate
8.Bin Card- Slip or Tag attached to the bin providing
C 10 70 low
details of the iteml quantity for tallying
.'fl 1OO~/o
@Given the annual requirement EOQ helps in lowering toe
acquisition and carrying costs
§ 80
{j!
.....
~
@ Inventory Costs consist of Inventory Ordering costs and
Inventory Carrying Costs
'" 3G 60
Q
ADVANTAGE~AND DISADVANTAGES
Method Advantages Disadvantages
PERPETUAL INVENTORY CONTROL
Simple Easy to calculate Considers only price
Average and not the quantity. @This is also called 'Continuous Stock taking'.
Neutralizes price When large
@The stock verification is done every day.
differences fluctuations occur,
the average price Is @The ledger figure are in line with the
mtsleading physical stocks.
Weighte Price differential Is Difficult to calculate
d neutralized.
e The stores records are updated after every
Average receipt and issue.
Realistic as quantities The valued prices
are considered are cttfferent from
actual prices
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-~-~
! I
5
t
, ! 3. It reduces the cost of carrying material
The requirements are:
+-~,- ~~'! I ~~n
1. Reliable vendors are required
Levet
2. The set up time of machines has to be
minimum
safety stock 3. No disruption in production.
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Information
Product
•
Funds
I Customer I
• ••
Supply Chain
MARKETING
@Marketing is a societal process by which
individuals and groups obtain what they need
MARKETING and want through creating " offering and
freely exchanging products and services of
MANAGEMENT value with others - Philip Kotler
Unit IVIZ @Marketing creates and delivers the standard of
living to the society- Malcolm Mc Nair
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MARKETING FUNCTIONS -
MARKETING FUNCTIONS - JF PYLE CONVERSE, HUGEY AND MITCHELL
Concentrating Functions Disperstng Functions TIme and Place Possesston Utility Form Uttlity
BlI)'1ng Seiling Acttvlttes
Concentrating Functions= Focus on bringing the Order Assembly Equallsatfon Risk· Takfng
goods to the market centers
Dispersing Functions - Focus on selling the goods,
IThis concept is based on utilities. Marketing basically I
constitute utilities
providing after sales service
8
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MARKETING FUNCTIONS -
ESSENTIAL STAGES IN PRODUCT LIFE CYCLE
Functions of Functions of Facilitating @ PLC describes the growth pattern of a
Exchange Physical Functions product. It provides insights into the future
Exchange sales and helps strategies actions.
Selling Transportation Financing @ The different stages are
( Demand
L Imroduction
Creation)
Assembling Storage and Risk-taking 2. Early growth
(Buying) Warehousing 3. Rapid Growth
Standardization 4. Maturity
Marketing s. Saturation
I Risks; Social , P<Iitical , Physical, I Research and 6. Decline
conomical,Trans portation ) Information
""'-"~I
profits increase , Competitors enter , Market size
increases
4. Maturity - Sales slow down , Over capacity in
'"
industry, Price offers, low profits, Competition ~rl~~
s. Saturation-No Market Growth, replacement sales ,
New customers replace old , New features to
extend PLC
Inoill Diffusion
curve
6. Decline - New products enter market, sales decline
,profitability is low, Either divest or harvest.
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4. Spend more on promotion instead of price 4. Reduce or eliminate less effective distributors .
reduction 5. Reduce promotion to minimal leveL
10
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THE4PS&4CS
GDP
END
Customer
Solution
Customer Communication
Cost
11