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week2DQs.docxMar 21, 2020Mar 21 at 5:08am
Benton (2014) states the purpose of materials management is to support the transformation of raw materials and component parts into shipped or finished goods (p. 69). This transformation process is much more involved that just buying raw goods and producing a product. I learned valuable lessons during my capstone class on the cost of improper material requirements planning. Capacity planning must take into consideration in both the perspective of the buyer as well as the seller. The buyer must know the capacity that can be produced, how much raw goods are needed to achieve that capacity. Inventory management is important to know the limitations of the organization. Ideally, a manufacturing plant would want on hand just enough raw materials on hand to satisfy peak demand of their product. Anything over cost money to store and anything less will cost because the equipment and manpower is not being used to produce product. Material requirement planning, capacity planning, and inventory management are all tied together to determine the correct amount of raw goods needed to satisfy the capacity of the manufacturing facility. Making a bad decision in any area of the production cycle will cause the company to lose money and by maintaining appropriate levels of inventory, manufacturers can better align their production with rising and falling demand (Kenton, 2019).
Reference
Benton, W.C. Jr. (2014). Purchasing and supply chain management (3rd ed.). Retrieved from https://www.redshelf.com
Kenton, W. (2019, September 27). Material Requirements Planning (MRP). Investopedia. Retrieved from https://www.investopedia.com/terms/m/mrp.asp
WednesdayMar 25 at 2:13pm
The relationship between material requirements planning, capacity planning and inventory management.
Materials management is a part of the procurement process and entails of purchasing the materials and transforming them into the finished product. The material requirements, capacity planning and inventory management all combined and handled appropriately will produce a quality product for the customers while managing the ebb and flow of the materials to production.
Material requirements planning is a system that calculates the materials needed for the product and uses three steps; taking inventory of materials on hand, identifying which ones are needed and scheduling them into production (Rouse, 2020). Knowing the materials required helps establishes at what capacity the company will need to have in order to produce the products. An example of capacity planning is if a manufacturing plant is designed to produce 1,000 units a day is it logical to run the plant with very low units or if the run the plant over capacity of 1,000 units are these beneficial ways to produce products (Benton, 2014). Knowing what the material requirements are and what the capacity is can balance the production of the materials to the final product and customers. “Inventory management is stored capacity” (Benton, 2014, pg.70). Having inventory on hand at the right time needs to coincide with the market for the products because it costs money to store inventory. To achieve that balance a method that can be used is just-in-time management where the manufacturer keeps only the inventory to produce and sell products (Hayes, 2019). As I understand the process with the reading and research, my profession has immediate use of services with technology so I don’t deal with a lot of inventory but I can understand the concept.
3.Rebecca Sperry
A concept that was born out of Japanese success in innovated manufacturing, the just-in-time (JIT) system is used “to manage the flow of materials, components, tools, and associated information (Benton, 2014, p. 118). JIT is based on the premise of eliminating waste and the pursuit of continuous improvement (Benton, 2014). As global markets continue to grow, JIT has found success in popular manufactures such as Harley-Davidson and Hewlett-Packard (Benton, 2014). When using JIT principles in purchasing, benefits such as reduced inventory levels, decreased cost, and higher customer satisfaction can be realized (Benton, 2104).
Understanding JIT and why it is important to organizations today should be important to a project manager because sound purchasing strategy can significantly contribute to the overall strategy of the success of the business (Benton,2014). Our text provides the example of how Southwest Airlines used JIT to efficiently turn-around their flights by making certain that they use the correct size aircraft and orchestrate a smooth team effort (Benton, 2014). More flights equal more customers, which equals more money to the bottom line of the business.
Resource:
Benton, W.C. Jr. (2014). Purchasing and supply chain management (3rd ed.). Retrieved from https://www.redshelf.com
ThursdayMar 26 at 8:58am
Manufacturing operations has shifted to the JIT process in order to optimize their resources and get product to shelf as profitable as possible. As Benton (2014) mentions, the process is about enhancing improvements and getting rid of any unnecessary costs.
A benefit of JIT is reduced order quantities from a purchasing perspective. A project manager would benefit from having knowledge of JIT for this benefit as they can work on simpler product designs and leaner production (Benton, 2014). This is an area that project manager could introduce cost saving projects as part of the production process.
Reduce lead times is another example of the benefits of JIT. As Benton (2014) mentions, this allows a manufacture to keep inventory of materials low and allow for shorter replenishment times. This is another area in which a project manager can play a role in implement cost saving projects. Having projects around time studies and purchasing demand can help a company optimize lead times and become more profitable.
It is important that project manager have JIT knowledge as it allows them to lean out processes and come up with ways to save companies money.
References
Benton, W.C. Jr. (2014). Purchasing and supply chain management (3rd ed.). Retrieved from https://www.redshelf.com
