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2014 | Book

Industrial Management- Control and Profit

A Technical Approach


About this book

This volume presents controlling tools for management in order to be in a position to communicate with control engineers concerning technological decisions.

The main objective of manufacturing management is to make profit. However, in traditional manufacturing systems none of the separate stages in the process support this objective. Management is not expert in any of these stages and therefore is dependent on specific experts at each stage and must follow their decisions. Each stage has its own first priority which is not profit and cost. This means that management does not have real control over these functional stages, nor over the process as a whole.

This book presents controlling tools for management in order to allow them to communicate better with the experts of the particular manufacturing stages to reach better results and higher profits. It is shown that most enterprises can improve their efficiency rate by between 25 and 60% by using the tools developed here.

Table of Contents

1. Introduction
The manufacturing process is a chain of activities aimed at meeting management objectives. These objectives are mainly carried out through the engineering profession.
Each stage in the engineering cycle has its own objectives and criteria of optimization according to its function. Not even a single stage considers management’s primary criterion of optimization as its primary objective.
Most decisions are made by engineers who are not qualified to make economic decisions. Thus, there is vagueness as to who should make certain decisions, a situation with the potential to upset enterprise efficiency and profit. This chapter attempts to clarify the dilemma surrounding such decisions so as to improve efficiency.
Gideon Halevi

Management Control Engineering

2. Product Design
Product specification is a task in which most management disciplines, as well as engineering, take part. It is an innovative task and depends on the creativity of both management and the product designer.
The product designer’s task is to develop a design to meet product specifications. It is up to engineering alone to make design decisions. However, during the design process, several decisions will arise that will affect the cost of the product. Such decisions should be made with the approval of management.
Several such decisions are presented in this chapter.
Gideon Halevi
3. Process Planning
Process planning plays a major role in determining the cost of components and affects all factory activities; disappointingly, it is an art rather than a science. Process planning activities are predominantly labour intensive, depending on the experience, skill and intuition of the planner. Thus, it robs the manufacturing system of its natural flexibility.
This chapter advises two methods for managing this important task:
First, run seminars on how to improve process planning in which experience is transferred from one planner to the others. Include an understanding of the detail parameters of deciding upon a process plan. Use textbook data.
Second, redefine the process planner’s task. A process planner should build a roadmap of alternatives, and let each user generate the suitable routing at the time of need.
Gideon Halevi
4. Production Lot Size & Maximum Profit
This chapter deals with two topics that are traditionally outside the scope of engineering. By introducing flexibility to production planning integration, such disciplines can be improved.
Lot size; The term economic lot size comes from the theory of inventory control. The approach assumes gradual usage of items, which does not always hold true in manufacturing.
The flexibility of manufacturing may regard economic order lot size in terms of production. This chapter presents a lot size definition as a parameter of routing.
The maximum profit section proves that neither the minimum processing cost nor the maximum production criteria nor the higher selling price will result in maximum profit. A proposed method for arriving at the optimum selling price and selection of the appropriate routing is presented.
Gideon Halevi
5. Traditional Production Planning
The task of traditional production planning and control is to plan and produce the products according to management’s orders and policy. It includes the following stages: master production schedule, material requirement planning, capacity planning, shop floor control, and inventory management and control. The market has put forward software to perform these tasks. Management may decide to prepare internal software or to purchase the software which is as close as possible to that which meets its managing policy.
This chapter describes the techniques of each individual stage and indicates the decisions that should be made by management that affect company performance. The “management control section” notes may be used in choosing vendor software.
Gideon Halevi
6. Flexible Production Planning
Production planning is, by nature, a very simple task. However, traditional production planning systems and notions have made the system very complex and unproductive, as decisions are made too early in the manufacturing process.
This chapter presents a different approach, one that introduces flexibility to manufacturing in which routine is a variable and treats each order as a unit. Therefore, bottlenecks cannot be created and disruptions are solved automatically; thus, processing time and productivity increases.
Gideon Halevi
7. Quality Control: SQC & SPC
Quality control is a process through which management seeks to ensure that product quality is maintained or improved and manufacturing errors are reduced or eliminated. This is done through product inspections.
This chapter presents two statistically popular methods; statistical quality control (SQC) and statistical process control (SPC).
SQC is a technique for error detection and removal of reject items in order to meet quality specifications as specified.
SPC is a technique for error prevention rather than error detection.
Gideon Halevi

Engineering Support Management

8. Inventory Management and Control
Inventory is an integral part of the manufacturing system. Inventory control is divided into two main parts: inventory management and inventory accounting. Inventory items may be divided into dependent items and independent items, and each needs to be treated differently, as described in this section.
Special attention is devoted to methods of inventory accuracy and size reduction and extra-order quantities.
This section discusses the possibility of extending the inventory system to serve as a management control system as well. Using the “two-way concept” can increase the reliability of the inventory system and serve as a control tool.
Manufacturing control can be by item level inventory, or by operation level production planning.
Many companies find it adequate to work at the item level, leaving the detailed scheduling to production planning and control.
Gideon Halevi
9. Resource Planning
Resource planning is a management decision, not an engineering decision. Management relies on economic models and techniques in making its decisions. Different concerns will adapt different economic models. However, regardless of the economic model employed, the decisions are restricted to the engineering data fed into it.
This chapter presents the roadmap method, the purpose of which is to supply sound engineering data to the decision-makers. The roadmap concept allows management to work with a computer that will supply engineering data in any desired form, eliminating the need to call the engineer each time information or data is needed.
The second part of this paper reviews several resource manufacturing methods.
Gideon Halevi
10. Master Production Planning
The master production schedule is a management tool which coordinates functions between manufacturing, marketing, finance, and management. Furthermore, it is a management tool with a “look ahead” feature—a feature that is needed in order to plan the future of a company, prepare the budget, plan cash flow, manpower, and resource requirements, and forecast company profits.
Engineering can provide a set of profiles that may assist management in organizing a reasonable master production plan.
This chapter presents two methods of creating profiles: one with conventional tools and one with flexible tools.
Gideon Halevi
11. Determining Delivery Date and Cost
Management makes decisions that set orders, cost and delivery dates.
Production planners do not question how the delivery date was determined, but regard them as a constraint. Due date is one of the determining factors in establishing the quality of the shop’s performance. Impractical due dates can result in severe losses for a company, such as loss of reputation and extra cost in meeting the promised dates by working overtime, extra shifts, or on weekends and holidays.
Engineering, through its flexible methods, may supply management with accurate data on the cost-delivery date relationship.
This chapter presents a method of establishing a realistic due date, based on shop floor load. Furthermore, it correlates the due date and processing cost, and prepares, in a few seconds, table of several process planning alternatives, listing the due date and processing cost for each one.
Gideon Halevi
12. Company’s Level of Performance
The overall rating of a company’s performance does not reveal the reasons for the rating. To be able to evaluate the contribution of each chain of the manufacturing process, the rating must consider the individual elements.
This chapter presents a performance measurement ratio method that is based on setting reference values, which are the “best” performance for each stage. It sets a ratio of actual performance value with relationship to the reference value, such as the effect of the suitability of resources to the product mix and the effect of the production planning method selected. Furthermore, improvements to the computed performance value are presented.
Gideon Halevi
Industrial Management- Control and Profit
Gideon Halevi
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