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

Task 7 : Bill Of Materials

 Bill Of Materials

EXAMPLE 1 : BILL OF MATERIALS

      

•          A Bill of Materials (BOM) describes a product in terms of its assemblies, sub-assemblies, and basic parts.

•          Basically consisting of a list of parts, a BOM is an essential part of the design and manufacture of any product. 

•          It is also known as recipe, formula or ingredient list.

EXAMPLE 2 : BILL OF MATERIALS

        

What information must exist in a BOM?

      1.    Item no

2.       Description

3.       Quantity

4.       UOM

5.       Supplier

6.       Brand

                                                               

                                        Item no: BRDWHT0250

                                        Description: Loaf White Bread 250g

                                        Version: A                                                           Revision: 1         

                                        Effective date: 25/12/2006

                                            EXAMPLE  LOAF WHITE BREAD

                 

Task 6: Inventory

WHAT IS INVENTORY?

v  Any quantifiable item that you can handle, buy, sell, store, consume, produce, or track can be considered inventory.

v  This covers everything from office and maintenance supplies, to raw material used for manufacturing, to semi-finished and finished goods, to fuel used to power equipment used in the business.

WHAT IS INVENTORY?

1.       Goods for resale

2.       Consumables

3.       Packing material

4.       Stock items

•          Raw materials

•          Work In Progress (WIP)

•          Semi finished Goods (SFG)

•          Finished Goods (FG)

EXAMPLE OF  INVENTORY?

1.       Goods for resale – paper, wood, boxes, TV

2.       Consumables – paper, fuel, glue

3.       Packing material – wood, boxes, plastic

4.       Stock items –

•          Raw - screws, wood, resistor, fabric

•          WIP - Screws, wood, resistor, fabric

•          SFG- Table top, drawer, motherboard

•          FG – Table, TV

    

MEANING OF TYPES BY STOCK ITEMS.

RAW MATERIALS-

•          materials and components scheduled for use in making a product

WORK IN PROGRESS(WIP) –

•          materials and components that have begun their transformation to finished good

SEMI FINISHED GOODS

FINISHED GOODS

·         goods ready for sale to customers.

HOW DO WE IDENTIFY INVENTORY?

ü  DESCRIPTION

–        Specific

–        Measurements

               Example:-

1.       Flour     –             corn, wheat, tapioca

2.       Screw    –             M6X16 Pan Head M/C Screw-R/P                            

3.       Cable    –             32W X 0.5MM(SQ)

                                                              32W X 0.4MM

ü  ITEM NUMBERING

–        Unique

–        Have meaning

               Example:-  Books                         

                                        

                                                                     

                                                                       

               Example : resistor colour code

                              

RESISTOR COLOUR CODE

–        1 KΩ, 1/4 W, 5%, leaded resistor

                        

                  

                                                          

HOW DO WE IDENTIFY INVENTORY?

Other examples of item numbering

•          880804-81-5002

•          670001

•          DB-02-J9                                               

•          8645 TISP218

•          46ND012-P

•          F26-71763-36

•          YY-1605-TTMA

·         AMP 0-102241-2


      EXAMPLE :  

SCANNING ITEM CODE

    

ü  UNIT OF MEASURE

–        Quantity of the material

–        Standard packing

WHAT OTHER INFORMATION IS NEEDED FOR AN ITEM?

•       Brand

•        Supplier

•        Purchase price

•        Selling price

•         Product Group

•       Component

•       FG

•       Service

•       Stockable/non-stockable

PRODUCT CODE

·         Finished goods and Semi Finished goods must also have item numbers or product codes.

               

·         Besides having a product code, a Bill of Material (BOM) must also exist.