PRODUCTION AND QUALITY MANAGEMENT

1.1 INTROIt is important to ensure that a business is able to produce the right quantity of products or services according to the specifications at the right time in order to achieve its business goalsProduction activities involve three main features which are input, system and output.

1.2 PRODUCTION SYSTEM

1.3 MATERIALS REQUIREMENT AND INVENTORY CONTROLStock Inventories

For example, the estimated average monthly sale for readymade clothing is RM49, 500. If the price per unit is RM110, so the total demand for readymade clothing is 450 units (RM49, 500/RM110).Estimated end stock = 2% from demand

Total clothing produced = (450 unit + (2/100 x 450) = 459 unit

Estimated cost of material for a unit of readymade clothing = RM 55.00

Cost of material for 459 units = RM55 x 459 = RM 25, 245

Estimated end stock = 5% from materials needed

Total materials to purchase = RM 25,245 + (5/100 x RM 25,245) = RM 26,507.25

1.4 PRODUCTION CAPACITY PLANNINGTo determine the number of labors needed, an entrepreneur needs to get the following information:

Planned operational rateStandard time for 1 unit productWorkers productive hours

The formula as shown below:

Number of workers = Standard time for produced x Planned Operational 1 unit product Rate Workers productive hours

Example: Mrs Siti decides to produce 200 pieces of clothing daily. The standard time taken to produce a piece of clothing is 32 minutes. Workers productive hour is 6 hours per day. How many workers are needed to produce 200 pieces of clothing daily?Number of workers = 32 minutes/per clothing x 200 unit/day 6 hours/day x 60 minutes

= 6 400/360 = 17.7

In the above example, Mrs Siti needs 18 workers provided that the business is running in only one shift.

The purchase of machines and equipment needs to be made carefully because it is a long term investment for a business. Other factors that need to be taken into consideration are:

PriceQualitySpare part resourcesFrequent MaintenanceTechnology Efficiency and operation resourcesSupplier reputationAfter sales service

To calculate the number of machines needed for an operation, the following information is required:

Planned operational rateStandard time for 1 unit productMachines productive hours

A laundry business has an average estimated sales of RM26,500. The manager decides to purchase a few machines. The specification given by the supplier is that the machine is able to wash 6kg of clothes per wash and takes about 30 minutes to complete. If the price of 1kg of wash is RM3.50 and the business operates from 9.00 a.m. to 9.00 p.m., how many machines are needed by the manager?

Calculate operation rate:Monthly operational rate = Average monthly sales 1 unit production price

= RM26,000/month RM3.50/unit

= 7,572 kg/month

If the average working hour per month is 25 days, so the production rate per day is:

Daily operational rate = 7572kg/month 25 days/month

= 303 kg/dayIf the machine to operate for 10 hours without interruption from 9.00 am to 9.00 pm, the hour production rate is:Daily production rate (hour) = 303kg/12hours

Determine the production time per unit of goods

Production time per cycle = 30 min/kg

Determine productive time machine.Productive time machine = Real time machine Daily operating time = 12 hours 12 hours = 1 hour

Number of machines needed =

Production time per cycle X Planned production rate Productive time machine

= 30 min/6kg x 303 kg/10 hours x 1/60minutes 1

= 2.5 ~ 3 machines

1.5 QUALITY MANAGEMENT

1.6 LOGISTIC AND WAREHOUSINGLogistics is defined as the management of the flow of goods, energy, information and labor of a businessThere are four sub-functions of logistics which are sales, manufacturing, materials and purchasing management.

Warehousing intends to store finished products while distribution is moving finished products from factories to consumers.

1.7 PRODUCT LABELING AND PACKAGING Labeling strategy is one of the strategies done by companies in order to distinguish their products from other products in the marketFeatures of labeling:

Easily expressed by consumers (Eg: Gardenia, Nestle, Anakku and Dutch Lady)Easily remembered by consumers (Eg: M symbol for McDonalds)Trademark, which is part of the label that patented to protect the producers right Copyright, which is the legal right to be the only person or company that can produce a book, or perform a play, song etc.

Packaging is a way to store products to ensure that they are long- lasting, unspoiled and easily recognized by consumers. Products can be packed in cans, bottles, boxes, plastic bags, paper, etc.