Task 12 : PROCUREMENT PROCESS BUY ( Under purchase order )

 Flow of procurement process

1.       RFG to supplier

2.       Calculate quanity to purchase

3.       Issues purchase requisition

4.       Generate Purchase Order

5.       Send to supplier

Purchase requisition

  

Once raw materials are not available, Purchase Requisition (PR) to approved suppliers/vendors is generated based on the quantity required and quotation given by supplier.

Purchase order

-Evaluation on who should supply raw material must also consider:-

ü  Company policy

ü  Supplier track record

-          Delivery

-          Quality

-The Material controller (MC) must control the amount of excess (extra) bought due to MOQ or standard packing.

-Purchase Order for other than Stock item must refer to the related budget.

ü  Consumables

ü  Office Equipment

ü  Maintenance

ü  Fixed Asset

Task 11 : ChECk InVENtory

There must be some form of control where inventory is kept in order with high level of accuracy. 

Businesses could keep:

                1. Forecasted quantity of products (MTS)

                2. Made to order (MTO)

Among the advantages & disadvantages between the two methods of keeping stocks:

1.       Made to Stock

ü  Advantage:  Product available when customers order.

ü  Disadvantage: High value stocks.   Product may not be sold due to obsolesce.

2.   Made to Order

ü  Advantage : Minimum value stocks

ü  Disadvantage: Product not available during customer order.  Long lead time

Where do we find the quantity of inventory required by customer?

ü   Files

ü   Excel

ü  System

ü  Store

ü  Bin card

Check raw material Inventory

       Once it is determined that the product customer ordered is not in stock, then the person in charge needs to check if raw materials are available to manufacture the product.

Just In Time

ü  is an inventory strategy implemented to improve the  return on investment of a business by reducing in-process inventory and its associated costs

ü  The process is driven by a series of signals, or Kanban.

ü  Kanban also tell production processes when to make the next part.

ü  Advantages:

·         New stock is ordered when stock drops to the re-order level. This saves warehouse space and costs.

ü  Disadvantage:

·         One drawback of the JIT system is that the re-order level is determined by historical demand.

Task 10: Production Control Plan

Control Of Production and service provision :

Plan and  carry out production and services under controlled conditions which shall include the:

- Availability of information that describes the product characteristics.

- Availability of work instructions

- use of suitable equipment

- Availability and use of monitoring and measure devices

-Implementation of monitoring and measurement

- Implementation of release, delivery and post-delivery activities.

Develop Control Plan for :

- for systems, subsystem, component or materials level for the product supplied.

- pre-launch and production taking into account design and manufacturing FMEA outputs.

Control Plan include :

 - control for manufacturing processes

- customer required information

- methods to monitor over special characteristics

- the reaction plan

- review and  update control plan

Task 9: Work INstrucTion

Work INstrucTion ( wi )

The Benefits:

• Effective communication- if the boss is away, staff simply refer to the WI or SOP for instruction
• Provides clear and easy to understand instructions.
• Useful when training new or temporary staff
• Reduces the possibility of mistakes being made
• Information in writing is less likely to be forgotten or misunderstood.

Procedures or Work Instructions

What is a Procedure?

• A procedure is a written instruction that describes what has to be done, by whom, when, how and where. 
• Standard work instructions are used to maintain and improve productivity, quality and safety.
• Used as part of lean and kaizen initiatives  

Why Use Procedures?

There are usually four ways that a job can be performed:

• What people think is being done;
• What is actually being done “most of the time”
• The short cut; or
• What should be done.

Writing Work Instructions

• Writing procedures require people to think about what they do, how they do it, why they do it and to what standard.
•  People often find this an interesting exercise, and come to realise that the so-called “straight forward jobs”.

Steps to follow

1. Write down in simple steps, what actions you take when carrying out the job or activity.
2. Review the steps you have recorded and check that all the important steps are need.
3. Number each step in order in which it occurs (eg. 1, 2, 3…..)

Task 8: Customer Order

Quotation to customer

•         A quotation is given to customer prior to the order

·         The quotation is given based on the costing of the product sold.

•         Material cost

•         Labour

•         Overhead

•         Transportation – Delivery terms

•         Sales Tax

•         Mark-up

•         Delivery items

v  Incoterms or international commercial terms are a series of international sales terms that are widely used throughout the world.

v   They are used to divide transaction costs and responsibilities between buyer and seller and reflect state-of-the-art transportation practices.

v  Incoterms deal with the questions related to the delivery of the products from the seller to the buyer.

§  the carriage of products

§  export and import clearance responsibilities

§  who pays for what

§  who has risk for the condition of the products at different locations within the transport process

·         Types of delivery items

  v   Ex Works (named place): the seller makes the goods available at his premises.

  v  Free On Board (named loading port): the classic maritime trade term, Free On Board:   

            seller must load the goods on board the ship nominated by the buyer, cost and risk being  

            divided at ship's rail. The seller must clear the goods for export. Maritime transport  

            only.

  v  CIF. Cost, Insurance and Freight (named destination port): seller must pay the costs  

            and freight to bring the goods to the port of destination,procure and pay for insurance for 

            the buyer. Maritime transport only.

  v  DPP- Delivery Duty Paid

  v  DPU – Delivery Duty Unpaid

DELIVERY ITEMS

CUSTOMER SALES AND ORDER

·         Types of customer order

ü  Trading is the exchange of goods, services or both.

–        Complete Built Unit (CBU)

ü  Manufacturing is the application of tools and a processing medium to the transformation of raw materials into finished goods for sale.

–        Complete Knock Down (CKD) 

          CUSTOMER ORDER

•          In general, a customer would place an order for Finished Goods.

–        In Electronic components trading a resistor would be considered as FG but in Electronic appliance Factory the same resistor could be raw material

–        Orders should have specific description, quantity, unit of measure, required delivery date, price, delivery term, payment term.

EXAMPLE CUSTOMER ORDER

  EXAMPLE PURCHASE ORDER

EXAMPLE QUATATION

                

       

Task 4 : Project Risk Management

What is risk?

       Any factors that may adversely affect the successful completion of a project in terms of  

       achievement delivery of output:

v  resource

v  time

v  cost

v  quality

Risk Management

v  There are always risks associated with a project

v  The purpose of risk management is to ensure levels of risk and uncertainty are properly   managed so that the project is successfully completed

v  It enables those involved to identify possible risks, the manner it can be contained and the likely cost of the mitigation strategies.

Risk Management processes

EXAMPLE OF RISK MANAGEMENT PROCESS

      

Strategies to manage risk

v  Accepted

v  Avoided

v  Mitigated

v  Transferred


      Risk Register
          

Risk       Description	P	I	Factor             (PxI)	Strategies	Contigency       Actions
Due to high competition,       net profit is             minimum.		3	3       9	Accepted              risk	Sell in high       volume.
		2     3	6	Mitigated	Find cheaper       materials or       labour.
High levels of  stocks	1		3        3	Avoided                   risk	Purchase only       when there is       confirmed       customer order.
Software   installation takes long time.              Software price is high.		3 3     3	3       9                      9	Transferred	Give installation CD to users. Users install software themselves.       Sell without software.

    

Risk Description	P	I	Factor (PXI)	Strategie	s     Contingency        Actions
There is no market demand       for the product therefore       high investment in facility       and longer ROI		1	3	3    Accepted risk	To find other projects the require       the same equipment.
CEEDTec could       find another       vendor that could do the job		3	3         9	Avoided   risk	Teaming Agreement drawn up between all parties.       For this WiWi module, MIMOS (owner of product)        has selected only PAN to manufacture it.       CEEDTEC has no option to select other vendors
Our existing   equipment       cannot produce the module		2	3	6     Mitigated	The SMT machine is serviced and running well.  Whichever equipment which is not available in the existing line is sourced for purchased, loaned or rental