Factors that affect location
decision:
Based on:
- Political View
- Economical Factor
- Cultural
- Labor
- Flexibility
Region/community decisions:
- Corporate desires
- Attractiveness of region
- Labor availability of region
- Cost of utilities
- Land cost
Site decisions:
- Site size and cost
- Transportation system
- Zoning restriction
What is Bottleneck?
A point of congestion in a
system that occurs when workloads arrive at a given point more quickly than
that point can handle them. The inefficiencies brought about by the bottleneck
often create a queue and a longer overall cycle time.
For example, a company whose
product is in high demand may see its shipping department receive purchase
orders more quickly than the products can be shipped
out, thus causing a bottleneck.
What is inventory?
Defining Inventory
Inventory is an idle stock of
physical goods that contain economic value, and are held in various forms by an
organization in its custody awaiting packing, processing, transformation, use
or sale in a future point of time.
Any organization which is into
production, trading, sale and service of a product will necessarily hold stock
of various physical resources to aid in future consumption and sale. While
inventory is a necessary evil of any such business, it may be noted that the
organizations hold inventories for various reasons, which include speculative
purposes, functional purposes, physical necessities etc.
From the above definition the
following points stand out with reference to inventory:
- All organizations engaged in production or sale of products hold inventory in one form or other.
- Inventory can be in complete state or incomplete state.
- Inventory is held to facilitate future consumption, sale or further processing/value addition.
- All inventoried resources have economic value and can be considered as assets of the organization.
Different
Types of Inventory
Inventory of materials occurs at
various stages and departments of an organization. A manufacturing organization
holds inventory of raw materials and consumables required for production. It
also holds inventory of semi-finished goods at various stages in the plant with
various departments. Finished goods inventory is held at plant, Finished Goods Stores,
distribution centers etc. Further both raw materials and finished goods those
that are in transit at various locations also form a part of inventory
depending upon who owns the inventory at the particular juncture. Finished
goods inventory is held by the organization at various stocking points or with
dealers and stockiest until it reaches the market and end customers.
Besides Raw materials and finished
goods, organizations also hold inventories of spare parts to service the
products. Defective products, defective parts and scrap also forms a part of
inventory as long as these items are inventoried in the books of the company
and have economic value.
Types
of Inventory by Function
|
INPUT
|
PROCESS
|
OUTPUT
|
|
Raw Materials
|
Work In Process
|
Finished Goods
|
|
Consumables required for
processing. Eg : Fuel, Stationary, Bolts & Nuts etc. required in
manufacturing
|
Semi Finished Production in
various stages, lying with various departments like Production, WIP Stores,
QC, Final Assembly, Paint Shop, Packing, Outbound Store etc.
|
Finished Goods at Distribution
Centers through out Supply Chain
|
|
Maintenance Items/Consumables
|
Production Waste and Scrap
|
Finished Goods in transit
|
|
Packing Materials
|
Rejections and Defectives
|
Finished Goods with Stockiest and
Dealers
|
|
Local purchased Items required for
production
|
|
Spare Parts Stocks & Bought
Out items
|
|
|
|
Defectives, Rejects and Sales
Returns
|
|
|
|
Repaired Stock and Parts
|
|
|
|
Sales Promotion & Sample
Stocks
|
