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Important Notes to the EM PLOYEE:

1. This Training Module is of Basic Level and explores different basic aspects of Operations Management. 2. Please consult books like “The Six Sigma Way:How to Maximise the Impact of Your change and Improvement Effort”, Operations Management Theory and Practice by B Mahadevan, Traction:Get a grip on your business by Gino Wickman, Theory and Applications of Operations Research Paperback by Dilip kumar, Operations Management by William J Stevenson. 3. Regarding any doubt or query please consult the instructor and various other online resources (marked in below each article) 4. Please take the tests provided at the end of each module to have an elaborate understanding as to where you stand in understanding these

concepts

5. All the concepts and references provided in this manual is only for guidance and providing an employee with a deeper view on various nuances of the subject so as to optimize efficiency of the employee and at the same time through collated improvement provide tangible improvement in the Organisational Performance.

6. Which concept to use at which point of time in perusal of work requires proper understanding and experience . Hence , All readers are requested to read the manual in depth and re read the same after a gap of 3 months or more to remember them and interpret them again and again after on job trials too.

Content and Visual Description:

The text in light yellow is notes to the Employee. Please read notes at each instance. The notes to graphics and tech are instructions for the graphics and technical teams. They will not appear on screen. This text gives the description about the treatment used for a screen and the images and animations to be used. They will be in gray. Post Test Evaluation : No Learning can be said to be Complete without proper evaluation of the same through both practical and Theoretical Tests. Theoretical Tests provide a peek into the cognitive efficiency of the learner but may not provide an accurate picture of future implementation of the same which can lead to organisational and work efficiency improvement but it does provide a reflection of the hardwork , concentration and interest put in by the employee to learn the given module and it also provides a progress report to the trainer and the employee himself about their efforts and learnability respectively.

How to interpret Results:

Overall % of Questions Correct Level of Proficiency exhibited by Employee Notes to the Trainer

>90% High

>60% & <90% Medium Some Concepts might not be clear to the employee . Need to re teach the areas in which employee has got wrong answers..

<60% Low Need to re teach the entire Unit

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Title Supply Chain And Operations Management :Introduction

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Page Title Introduction (Word limit: 10)

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Content An operation is the process by which a company or organization converts raw materials, labor and capital into a final product or service. In an automobile company, for example, materials and labor are transformed by manufacturing operations into cars. In a hospital, nurses and doctors use medicines, care and equipment to help sick patients become healthy. In a bank, staff members use computers and systems to manage the flow of money among accounts and provide customers with statements and other banking services. Whatever the operation, decisions have to be made to establish work schedules for employees, forecast demand for products and services, improve and maintain quality, ensure adequate inventory, transport and store products and materials, and order materials and parts. These all require operational decisions that can be made using the managerial techniques and computing technologies. Broadly , Operations Management can be further sub divided into following major topics : 1.Supply chain management .2.Planning and Control 3.Logistics 4.Quality Management 5.Scheduling 6,Computer Modeling and Decision Making 7,Quality and Process Improvement Methods 8.Service Operations Management 9.Enterprise Planning and Control Systems 10 Qualitative Methods used for Forcasting and statistical Inferential technique Supply chain management (SCM) is the management of the flow of goods and services.[2] It includes the movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption. Interconnected or interlinked networks, channels and node businesses are involved in the provision of products and services required by end customers in a supply chain. Major developments in SCM can be classified under 6 stages : 1.Creation Era(The term "supply chain management" was first coined by Keith Oliver in 1982., The characteristics of this era of supply chain management include the need for large-scale changes, re-engineering, downsizing driven by cost reduction programs, and widespread attention to Japanese management practices.) 2.Integration Era (This era of supply chain management studies was highlighted with the development of electronic data interchange (EDI) systems in the 1960s, and developed through the 1990s by the introduction of enterprise resource

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planning (ERP) systems. This era has continued to develop into the 21st century with the expansion of Internet-based collaborative systems. This era of supply chain evolution is characterized by both increasing value added and cost reductions through integration)

3,Globalization(The third movement of supply chain management development, the globalization era, can be

characterized by the attention given to global systems of supplier relationships and the expansion of supply chains beyond national boundaries and into other continents)

4.Specialisation Era I (In the 1990s, companies began to focus on "core competencies" and specialization. They abandoned vertical integration, sold off non-core operations, and outsourced those functions to other companies. This changed management requirements, by extending the supply chain beyond the company walls and distributing management across specialized supply chain partnerships.This transition also refocused the fundamental perspectives of each organization. Original equipment manufacturers (OEMs) became brand owners that required visibility deep into their supply base. They had to control the entire supply chain from above, instead of from within. Contract manufacturers had to manage bills of material with different part-numbering schemes from multiple OEMs and support customer requests for work-in-process visibility and vendor-managed inventory (VMI).)

5.Specialisation Era II (Debuted in late 1990s ,Outsourced technology hosting for supply chain solutions has taken new root primarily in transportation and collaboration categories. This has progressed from the application service provider (ASP) model from roughly 1998 through 2003, to the on-demand model from approximately 2003 through 2006, to the software as a service (SaaS) model currently in focus today. Supply chain specialization enables companies to improve their overall competencies in the same way that outsourced manufacturing and distribution has done; it allows them to focus on their core competencies and assemble networks of specific, best-in-class partners to contribute to the overall value chain itself, thereby increasing overall performance and efficiency.)

6.Supply Chain Management 2.0(Building on globalization and specialization, the term "SCM 2.0" has been coined to describe both changes within supply chains themselves as well as the evolution of processes, methods, and tools to manage them in this new "era" ushered in by Globalisation. The growing popularity of collaborative platforms is highlighted by the rise of TradeCard’s supply chain collaboration platform, which connects multiple buyers and suppliers with financial institutions, enabling them to conduct automated supply-chain finance transactions. During this phase, speed of the supply chain increased due to global competition; rapid price fluctuations; changing oil prices; short product life cycles; expanded specialization; near-, far-, and off-shoring; and talent scarcity. )

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Note to Employee Elaborate examples of the above sub classifications is included in the Wikipedia and Operations Management by William J Stevenson.

Note to Graphics There should be a colourful next button to move between screens from the user perspective

Note to Tech The content should be displayed in 2-3 separate screens

Title Supply Chain And Operations Management :Strategy ,Planning and Control

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Page Title Operations Strategy ,Planning and Control (Word limit: 10)

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Content While Organisational Strategies are plans for achieveing organisational Goals .Long term implications are most relevant in it . However, From tactical and operational perspective, the time frames are much shorter. Mostly Operational Strategy allies with Organisational Strategy,Mission , Mission Statement, Tactics and Goals. Lets take the following example: Mission: Live a good life Goals: Successful career, good income Strategy: Obtain a college education Tactics: Select a college and a major; decide how to finance college. Operations :Register, buy books ,take courses and study In broader context most Operations Strategies try align itself with the one of the 3 organisational strategies which are possible .

Organisational Strategy Operations Strategy

Low cost Outsource operations to third world countries that have low labour cost

Scale based Profit Use capital intensive methods to achieve high output volume and low unit cost

Specialization Focus on narrow product lines or limited service to achieve higher quality

Strategic operations management decisions can be further broken down into the following :

Decision Area What the decisions affect

Product and Service Design Costs,quality,liability and environmental issues

Capacity Cost structure, flexibility

Process Selection and Layout Costs, flexibility ,skill level needed , capacity

Work design Quality of work life, employee safety, productivity

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Location Costs ,visibility

Quality Ability to Meet or exceed customer expectations

Inventory Costs, shortages

Maintenance Costs, Equipment reliability, Productivity

Scheduling Flexibility , efficiency

Supply Chains Costs,quality agility, shortages, vendor relations

Projects Costs,new products, services, or operating systems

Strategies in operations can be further classified into :

1. Quality based strategies (Focus on maintaining or improving the quality of an organizations products or services.) 2. Time based strategies (Focus on reduction of time needed to accomplish tasks)

Time based strategies usually focus on reduction in time of :

1. Planning Time (The time needed to react to competitive threat ,to develop strategies and select tactics, to approve proposed changes to facilities to adopt new technologies and so on)

2. Product/Service design time (The time required to develop and market new or redesigned products or services) 3. Processing time (The time needed to produce goods or provide services. This includes time of scheduling ,

repairing equipment , methods used ,inventories, quality , training and the like ) 4. Changeover time (The time needed to change from one type of product or service to another. It includes new

equipment settings and attachments , different methods , equipment , schedules or materials) 5. Delivery time (Time needed to fill orders) 6. Response time for complaints (Time needed to handle all kinds of complaints)

If we look at operations as a whole from point of view of planning and control then the following picture finds significance: Feedback Feedback Feedback

Inputs Land Labour Capital Information

Transformation Conversion Process

Output Goods and Services

Control

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Material requirement planning (MRP) :A computer based information system that translates master schedule requirement s for end items into time phased requirements for subassemblies components and raw materials. Inputs for MRP are:

1. Bill of Materials( tells the composition of final product) 2. Master schedule (tells how much finished product is desired) 3. Inventory Records(tells how much inventory is on hand and on order)

Outputs from MRP are:

1. Planned order schedule 2. Order Release 3. Performance control reports 4. Exception reports

Master Schedule : One of three primary inputs in MRP and states which end items are to be produced and when these are needed and in what quantitites. Master schedule for end item X whose 100 units are to be needed at the start of week 4 and another 150 units will be needed at the start of week 8, looks like :

Item :X 1 2 3 4 5 6 7 8

Quantity 100 150

Bill of Materials contains listing of all the assemblies ,subassemblies, parts and raw materials that are needed to produce one unit of a finished product. The listings are all hierarchical where the end item is shown at the top. BOMs can be :

1. Modular BOM(hierarchical in nature with top level denoting final product) 2. Configurable BOM(used where there are lot of options and products are highly configureable) 3. Multilevel BOM (displays all items in parent child relationship. It is like a tree with several levels)

Some of the pictorial depiction of BOM are:

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Inventory Records refer to stored information on the status of each item by time period called time buckets . This include gross requirement , scheduled receipts , expected amount on hand. It also include other details for each item such as supplier , lead time , lot size policy.

Week Number

0 1 2 3 4 5 6 7 8

Item X Gross requirement

Scheduled Receipts

Projected

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on Hand Net requirement

Planned order receipt

Planned order releases

Overall the process flow end to end looks like:

Note to Employee Elaborate examples of the above sub classifications is included in the Wikipedia and Operations Management by Wiliam sStevenson

Note to Graphics There should be a colourful next button to move between screens from the user perspective

Note to Tech Please display the content in 6-7 screens

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Title Supply Chain And Operations Management :Introduction

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Page Title Scheduling (Word limit: 10)

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Content Scheduling is establishing the timing of the use of equipment , facilities and human activities in an organisation. There are two types of scheduling in production processes:

1)Forward scheduling is planning the tasks from the date resources become available to determine the shipping date or the due date.

2)Backward scheduling is planning the tasks from the due date or required-by date to determine the start date and/or any changes in capacity required.

The benefits of production scheduling include:

Process change-over reduction

Inventory reduction, leveling

Reduced scheduling effort

Increased production efficiency

Labor load leveling

Accurate delivery date quotes

Real time information

Production scheduling can take a significant amount of computing power if there are a large number of tasks. Therefore a range of short-cut algorithms (heuristics) (a.k.a. dispatching rules) are used:

Stochastic Algorithms

Heuristic Algorithms

Basic concept behind stochastic Algorithm is as follows :

A single machine is available which can make all the products, but not in a perfectly interchangeable way. Instead the machine needs to be set up to produce one product, incurring a setup cost and/or setup time, after which it will produce

this product at a known rate . When it is desired to produce a different product, the machine is stopped and another

costly setup is required to begin producing the next product. Let be the setup cost when switching from product i to

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product j and inventory cost is charged based on average inventory level of each item. N is the number of runs made, U the use rate, L the lot size and T the planning period.

To give a very concrete example, the machine might be a bottling machine and the products could be cases of bottled apple juice, orange juice and milk. The setup corresponds to the process of stopping the machine, cleaning it out and loading the tank of the machine with the desired fluid. This product switching must not be done too often or the setup costs will be large, but equally too long a production run of apple juice would be undesirable because it would lead to a large inventory investment and carrying cost for unsold cases of apple juice and perhaps stock-outs in orange juice and milk. The ELSP seeks the optimal trade off between these two extremes

One of the famous Stochastic Algorithm are Rogers algorithm : Steps of rogers algorithm are as follows:

= use period

cL= , the unit cost for a lot of size L

the total cost for N lots. To obtain the optimum we impose:

Which yields as the optimum lot size. Now let:

be the total cost for NL±alots of size L±a

be the incremental cost of changing from size L to L+a

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be the incremental cost of changing from size L to L-a

2.

Total quantity of an item required = UT Total production time for an item = UT/P Check that productive capacity is satisfied:

3.Compute:

as a whole number If for a certain item, θ0 is not an even number, calculate:

And change L0 to L in the direction which incurs the least cost increase between +Δ and -Δ

4.Compute tp=L/P for each item and list items in order of increasing θ=L/U

5.For each pair of items ij check:

To forms pairs take the i

th with the i+1th, i+2th, etc. If any of these inequalities is violated, calculate +Δ and -Δ for

lot size increments of 2U and in order of size of cost change make step-by-step lot size changes. Repeat this step until both inequalities are satisfied.

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6.

1. Form all possible pairs as in Step 5 2. For each pair, select θi < θj 3. Determine whether tpi > tpj, tpi < tpj or tpi = tpj 4. Select a value for eij(eij=0,1,2,3,...,θi - tpi - tpj) and calculate tpi+e and tpj+e

5. Calculate Miθi-Mjθj by setting Mi=k and Mj=1,2,3,...,T/θj; ∀k∈(1,2,...,T/θi). Then check if one of the following boundary conditions is satisfied:

for or

for If none of the boundary conditions is satisfied then eij is non-interfering: if i=1 in eij, pick the next larger e in sub-step 4, if i≠1 go back to sub-step 2. If some boundary condition is satisfied go to sub-step 4. If, for any pair, no non-interfering e appears, go back to Step 5.

7.Enter items in schedule and check it's feasibility

One example of Heuristic Algorithm is as below : function mdd(processed, task)

return max(processed + task.processTime, task.dueDate)

function mddSort(tasks)

unsortedTasks = copy(tasks)

sortedTasks = list

processed = 0

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while unsortedTasks isn't empty

bestTask = unsortedTasks.getFirst()

bestMdd = mdd(processed, bestTask)

for task in unsortedTasks

mdd = mdd(processed, task)

if mdd < bestMdd then

bestMdd = mdd

bestTask = task

sortedTasks.pushBack(bestTask)

unsortedTasks.remove(bestTask)

processed += bestTask.processTime

return sortedTasks

Practical example of the heuristic algorithm is as follows :

Lets take example of scheduling flight departures

Each flight is characterized by:

a due date: The time after which the plane is expected to have taken off

a processing time: The amount of time the plane takes to take off

a weight: An arbitrary value to specify the priority of the flight.

We need to find an order for the flight to take off that will result in the smallest total weighted tardiness.

For this example we will use the following values:

Flight scheduling

N° Due date Processing time Weight

1 12 8 2

2 18 9 5

3 10 5 2

4 14 6 8

In the default order, the total weighted tardiness is 136. The first step is to compute the modified due date for

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each flight. Since the current time is 0 and, in our example, we don’t have any flight whose due date is smaller

than its processing time, the mdd of each flight is equal to its due date:

N° Modified due date

1 12

2 18

3 10

4 14

The flight with the smallest MDD (Flight n° 3) is then processed, and the new modified due date is computed.

The current time is now 5.

N° Due date Processing time Modified due date

3 10 5 N/A

1 12 8 13

2 18 9 18

4 14 6 14

The operation is repeated until no more flights are left unscheduled.

We obtain the following results:

Flight scheduling

N° Due date Processing time

3 10 5

1 12 8

4 14 6

2 18 9

In this order, the total weighted tardiness is 92

This example can be generalized to schedule any list of job characterized by a due date and a processing time.

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Note to Employee Elaborate examples of the above sub classifications is included in the Wikipedia and Operation Managment by William Stevenson

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Note to Tech The content should distributed properly in 6-7 screens

Title Supply Chain And Operations Management :Introduction

Page # 18

Page Title Operational Research and Transportation Problem(Word limit: 10)

Template Introduction/Static Screen

Content The Transportation and Assignment problems deal with assigning sources and jobs to destinations and

machines. We will discuss the transportation problem first.

There is a type of linear programming problem that may be solved using a simplified version of the simplex

technique called transportation method. Because of its major application in solving problems involving several

product sources and several destinations of products, this type of problem is frequently called the transportation

problem. It gets its name from its application to problems involving transporting products from several sources

to several destinations. Although the formation can be used to represent more general assignment and

scheduling problems as well as transportation and distribution problems. The two common objectives of such

problems are either (1) minimize the cost of shipping m units to n destinations or (2) maximize the profit of

shipping m units to n destinations.

Let us assume there are m sources supplying n destinations. Source capacities, destinations requirements and

costs of material shipping from each source to each destination are given constantly. The transportation

problem can be described using following linear programming mathematical model and usually it appears in a

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transportation tableau.

There are three general steps in solving transportation problems.

We will now discuss each one in the context of a simple example. Suppose one company has four factories

supplying four warehouses and its management wants to determine the minimum-cost shipping schedule for its

weekly output of chests. Factory supply, warehouse demands, and shipping costs per one chest (unit) are shown

in Table below

Table ”Data for Transportation Problem”

At first, it is necessary to prepare an initial feasible solution, which may be done in several different ways; the

only requirement is that the destination needs be met within the constraints of source supply.

The Transportation Matrix

The transportation matrix for this example appears in Table 7.2, where supply availability at each factory is

shown in the far right column and the warehouse demands are shown in the bottom row. The unit shipping

costs are shown in the small boxes within the cells (see transportation tableau – at the initiation of solving all

cells are empty). It is important at this step to make sure that the total supply availabilities and total demand

requirements are equal. Often there is an excess supply or demand. In such situations, for the transportation

method to work, a dummy warehouse or factory must be added. Procedurally, this involves inserting an extra

row (for an additional factory) or an extra column (for an ad warehouse). The amount of supply or demand

required by the ”dummy” equals the difference between the row and column totals.

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In this case there is:

Total factory supply … 51

Total warehouse requirements … 52

This involves inserting an extra row - an additional factory. The amount of supply by the dummy equals the

difference between the row and column totals. In this case there is 52 – 51 = 1. The cost figures in each cell of

the dummy row would be set at zero so any units sent there would not incur a transportation cost. Theoretically,

this adjustment is equivalent to the simplex procedure of inserting a slack variable in a constraint inequality to

convert it to an equation, and, as in the simplex, the cost of the dummy would be zero in the objective function.

Table 7.2 "Transportation Matrix for Chests Problem With an Additional Factory (Dummy)"

Initial Feasible Solution

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Initial allocation entails assigning numbers to cells to satisfy supply and demand constraints. Next we will

discuss several methods for doing this: the Northwest-Corner method, Least-Cost method, and Vogel's

approximation method (VAM).

Table 7.3 shows a northwest-corner assignment. (Cell A-E was assigned first, A-F second, B-F third, and so

forth.) Total cost : 10*10 + 30*4 + 15*10 + 30*1 + 20*12 + 20*2 + 45*12 + 0*1 = 1220($).

Inspection of Table 7.3 indicates some high-cost cells were assigned and some low-cost cells bypassed by using

the northwest-comer method. Indeed, this is to be expected since this method ignores costs in favor of

following an easily programmable allocation algorithm.

Table 7.4 shows a least-cost assignment. (Cell Dummy-E was assigned first, C-E second, B-H third, A-H

fourth, and so on.) Total cost : 30*3 + 25*6 + 15*5 +10*10 + 10*9 + 20*6 + 40*12 + 0*1= 1105 ($).

Table 7.5 shows the VAM assignments. (Cell Dummy-G was assigned first, B-F second, C-E third, A-H fourth,

and so on.) Note that this starting solution is very close to the optimal solution obtained after making all

possible improvements (see next chapter) to the starting solution obtained using the northwest-comer method.

(See Table 7.3.) Total cost: 15*14 + 15*10 + 10*10 + 20*4 + 20*1 + 40*5 + 35*7 + 0*1 = 1005 ($).

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Table 7.3 ”Northwest – Corner Assignment”

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Table 7.4"Least - Cost Assignment"

Table 7.5 "VAM Assignment"

Develop Optimal Solution

To develop an optimal solution in a transportation problem involves evaluating each unused cell to determine

whether a shift into it is advantageous from a total-cost stand point. If it is, the shift is made, and the process is

repeated. When all cells have been evaluated and appropriate shifts made, the problem is solved. One approach

to making this evaluation is the Stepping stone method.

The term stepping stone appeared in early descriptions of the method, in which unused cells were referred to as

"water" and used cells as "stones"— from the analogy of walking on a path of stones half-submerged in water.

The stepping stone method was applied to the VAM initial solution, as shown in Table 7.5

Table 7.6 shows the optimal solutions reached by the Stepping stone method. Such solution is very close to the

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solution found using VAM method.

Table 7.6 "Optimal Matrix, With Minimum Transportation Cost of $1,000."

Alternate Optimal Solutions

When the evaluation of any empty cell yields the same cost as the existing allocation, an alternate optimal

solution exists (see Stepping Stone Method – alternate solutions). Assume that all other cells are optimally

assigned. In such cases, management has additional flexibility and can invoke nontransportation cost factors in

deciding on a final shipping schedule.

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Table 7.7 "Alternate Optimal Matrix for the Chest Transportation Problem, With Minimum Transportation

Cost of $1,000.

Degeneracy

Degeneracy exists in a transportation problem when the number of filled cells is less than the number of rows

plus the number of columns minus one (m + n - 1). Degeneracy may be observed either during the initial

allocation when the first entry in a row or column satisfies both the row and column requirements or during the

Stepping stone method application, when the added and subtracted values are equal. Degeneracy requires some

adjustment in the matrix to evaluate the solution achieved. The form of this adjustment involves inserting some

value in an empty cell so a closed path can be developed to evaluate other empty cells. This value may be

thought of as an infinitely small amount, having no direct bearing on the cost of the solution.

Procedurally, the value (often denoted by the Greek letter epsilon, - ) is used in exactly the same manner as a

real number except that it may initially be placed in any empty cell, even though row and column requirements

have been met by real numbers. A degenerate transportation problem showing a Northwest Corner initial

allocation is presented in Table 7.8, where we can see that if were not assigned to the matrix, it would be

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impossible to evaluate several cells.

Once a has been inserted into the solution, it remains there until it is removed by subtraction or until a final

solution is reached.

While the choice of where to put an is arbitrary, it saves time if it is placed where it may be used to evaluate

as many cells as possible without being shifted.

Table "Degenerate Transportation Problem With Added. Number of filled cells = 4”

Note to Employee Elaborate examples of the above sub classifications is included in the Wikipedia and Operations Management by William

J Stevenson.

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Note to Tech The content should be divided in 9-10 screens

Title Supply Chain And Operations Management :Introduction

Page # 28

Page Title TQM and Quality Control (Word limit: 10)

Template Introduction/Static Screen

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Content Quality of a firms goods or services can adversely affect a firm in various ways . Some ways in which a firm can be affected are: 1.Loss of business share (In competitive world , quality loss effectively means business loss as competitor companies would soon emerge as more viable alternative) 2. Loss of reputation ( Quality defect , delay can spread as a word very rapidly among customers ) 3.Loss of customers (Loss of confidence is inevitable owing to poor quality of product or delay in re-correcting the products ) 4. Reduction in Productivity (Actual number of defect free products produced will be less) 5.Liability (Damages or injuries resulting from faulty design and damages to be paid for incorrect product delivery ) Responsibility of providing quality products is of :

1. Top management (As they develop strategy for quality and provide guidance) 2. Design Team (Design features of the product or services .) 3. Procurement Team (Raw material to be used and required specified machinery quality both are its

responsibility) 4. Production/Operations Team (Are responsible that processes yield products as per design specifications) 5. Quality Assurance Team (Perform checking and analyse data on pr oblems) 6. Packaging and Shipping team (Ensures goods are not damaged on transit, packages clearly labelled) 7. Marketing and Sales Team (Clearly communicates customer needs ) 8. Customer Service (Works on remedy of the quality defect)

Costs of Quality are:

1. Appraisal Cost ( relate to inspection , testing and other intended activities performed to uncover defective products or services)

2. Prevention Costs ( costs related to reducing the potential for quality problems) 3. Internal Failure Costs ( Costs related to defective products or services before they are delivered to customers) 4. External Failure Costs ( Costs related to delivering substandard products or services to customers)

Return on Quality is an approach that evaluates the financial return of investment in quality

Quality Certification Reason for certification

ISO 9000 Quality management , Quality assurance

ISO 14000 Assessing Companys environmental Performance

ISO 9000 includes following categories :

1. System requirements

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2. Management Requirement 3. Resource Requirement 4. Realization of Requirements 5. Remedial Requirements Eight quality management principles form the basis of latest version of ISO 9000: 1. A customer focus 2. Leadership 3. Involvement of people 4. A process approach 5. A system approach to management 6. Continual Improvement 7. Use of a factual approach to decision making 8. Mutually beneficial supplier relationship

The Standards for ISO 14000 certification bear upon three major areas:

1. Management systems – systems development and integration of environmental responsibilities into business planning

2. Operations – consumption of natural resources and energy 3. Environmental systems – measuring ,assessing and managing emissions ,effluents and other waste systems.

Some certifications and programs are available to monitor implementation of TQM( Total Quality Management) .TQM implementation usually involves:

1. Continuous improvement ( Through a series of Kaizens (change for betterment)) 2. Competitive Benchmarking (Eg Xerox used Mail order company L.L. Beans to benchmark order filling ) 3. Employee empowerment (Giving decision making in the hands of those who are closest to the job) 4. Team Approach (Use of teams for problem solving) 5. Decisions based on facts rather than opinions (data based decision making) 6. Knowledge of tools (Employees are trained on quality tools) 7. Supplier quality (Suppliers to be included in quality assurance and quality improvement efforts) 8. Champion (Promote TQM within the organisation) 9. Quality at the source (Each worker responsible for quality of his or her work)

Six Sigma is a business process for improving quality ,reducing costs and increasing customer satisfaction. It works on 1.improving process performance 2.reducing variations 3.utilizing statistical methods 4.designing a structured improvement strategy 5.involves definition, measurement , analysis , improvement and control.

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For success of six sigma buy in from top management is of utmost importance .Other key players are :

Player Name Function

Program champion Identify and rank potential projects , help select and evaluate candidates , manage program resources and serve as advocates for the program

Master black belts Provide Extensive training in statistics and use of quality tools

Black belts Project team leaders responsible for implementing process management projects.

Green Belts Members of project teams

Six sigma projects has one or more objectives such as reducing defects , reducing costs , reducing project and or process variability, reducing delivery time , increasing productivity or improve and control (DMAIC.) Obstruction towards Implementing TQM are:

1. Lack of company wide definition of Quality 2. Lack of strategic plan for change 3. Lack of customer focus 4. Poor intra organizational communication 5. Lack of employee empowerment 6. View of quality 7. Emphasis on short term results 8. In ordinate presence of internal politics 9. Lack of strong motivation 10. Lack of time to devote to quality initiatives 11. Lack of leadership

For monitoring process control mostly Control charts are used :

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The control chart is a graph used to study how a process changes over time. Data are plotted in time order. A control chart always has a central line for the average, an upper line for the upper control limit and a lower line for the lower

control limit. These lines are determined from historical data.

In the words of statistics ,Control charts,or process-behavior charts, in statistical process control are tools used to determine if a manufacturing or business process is in a state of statistical control

Features of Control charts are :

Points representing a statistic (e.g., a mean, range, proportion) of measurements of a quality characteristic in samples taken from the process at different times (i.e., the data)

The mean of this statistic using all the samples is calculated (e.g., the mean of the means, mean of the ranges, mean of the proportions)

A centre line is drawn at the value of the mean of the statistic

The standard error (e.g., standard deviation/sqrt(sample size) for the mean) of the statistic is also calculated using all the samples

Upper and lower control limits (sometimes called "natural process limits") that indicate the threshold at which the process output is considered statistically 'unlikely' and are drawn typically at 3 standard errors from the centre

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line

The chart may have other optional features, including:

Upper and lower warning or control limits, drawn as separate lines, typically two standard errors above and below the centre line

Division into zones, with the addition of rules governing frequencies of observations in each zone

Annotation with events of interest, as determined by the Quality Engineer in charge of the process's quality

When to Use a Control Chart

When controlling ongoing processes by finding and correcting problems as they occur.

When predicting the expected range of outcomes from a process.

When determining whether a process is stable (in statistical control).

When analyzing patterns of process variation from special causes (non-routine events) or common causes (built into the process).

When determining whether your quality improvement project should aim to prevent specific problems or to make fundamental c

ACTION AREAS on BASIS OF CONTROL CHART:

there are several rule sets for detection of signal, this is just one set. The rule set should be clearly stated as below :

1. Any point outside of the control limits – Analyse the point

2. A Run of 7 Points all above or All below the central line - Stop the production

When a point falls outside of the limits established for a given control chart, those responsible for the underlying process are expected to determine whether a special cause has occurred. If one has, it is appropriate to determine if the results with the special cause are better than or worse than results from common causes alone. If worse, then that cause should be eliminated if possible. If better, it may be appropriate to intentionally retain the special cause within the system producing the results

It is known that even when a process is in control (that is, no special causes are present in the system), there is approximately a 0.27% probability of a point exceeding 3-sigma control limits. So, even an in control process plotted on a properly constructed control chart will eventually signal the possible presence of a special cause, even though one may

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not have actually occurred

Types of control charts are :

Chart Process observation Process observations relationships

Process observations

type

Size of shift to detect

and R chart Quality characteristic measurement within one subgroup

Independent Variables Large (≥ 1.5σ)

and s chart Quality characteristic measurement within one subgroup

Independent Variables Large (≥ 1.5σ)

Shewhart individuals control chart (ImR chart or XmR chart)

Quality characteristic measurement for one observation

Independent Variables† Large (≥

1.5σ)

Three-way chart Quality characteristic measurement within one subgroup

Independent Variables Large (≥ 1.5σ)

p-chart Fraction nonconforming within one subgroup

Independent Attributes† Large (≥

1.5σ) np-chart Number nonconforming within one

subgroup Independent Attributes

† Large (≥ 1.5σ)

c-chart Number of nonconformances within one subgroup

Independent Attributes† Large (≥

1.5σ) u-chart Nonconformances per unit within one

subgroup Independent Attributes

† Large (≥ 1.5σ)

EWMA chart Exponentially weighted moving average of quality characteristic measurement within one subgroup

Indep

X bar and R chart is one of the mostly commonly used Control chart .

In statistical quality control, the and R chart is a type of control chart used to monitor variables data when samples are collected at regular intervals from a business or industrial process

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The chart is advantageous in the following situations

1. The sample size is relatively small (say, n ≤ 10— and s charts are typically used for larger sample sizes) 2. The sample size is constant 3. Humans must perform the calculations for the chart

The "chart" actually consists of a pair of charts: One to monitor the process standard deviation (as approximated by the sample moving range) and another to monitor the process mean, as is done with the and s and individuals control

charts. The and R chart plots the mean value for the quality characteristic across all units in the sample, , plus the range of the quality characteristic across all units in the sample as follows:

R = xmax - xmin.

The normal distribution is the basis for the charts and requires the following assumptions:

The quality characteristic to be monitored is adequately modeled by a normally distributed random variable

The parameters μ and σ for the random variable are the same for each unit and each unit is independent of its predecessors or successors

The inspection procedure is same for each sample and is carried out consistently from sample to sample

The control limits for this chart type are:[3]

(lower) and (upper) for monitoring the process variability

for monitoring the process mean

where and are the estimates of the long-term process mean and range established during control-chart setup and A2, D3, and D4 are sample size-specific anti-biasing constants. The anti-biasing constants are typically found in the appendices of textbooks on statistical process control.

Note to Employee Elaborate examples of the above sub classifications is included in the Wikipedia and

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Note to Tech Content to be filled in 8-9 static screens

Title Supply Chain And Operations Management :Introduction

Page # 37

Page Title Process Improvements and Quality Tools (Word limit: 10)

Template Introduction/Static Screen

Content Process improvement is a systematic approach to improving a process. It involves following steps: Step 1 : Define the problem and establish an improvement goal Step 2: Develop performance measures and collect data Step 3: Analyze the problem Step 4: Generate potential solutions Step 5:Choose a solution Step 6:Implement the solution Step 7: Monitor the solution to see if it accomplishes the goal Usually control chart methods leads to an accurate understanding of the presence of a problem . Once the problem is known analysis of the problem can be done through 7 qc tools. 7 QC tools that are widely used are :

1. Cause-and-effect diagram (also called Ishikawa or fishbone chart): Identifies many possible causes for an effect or problem and sorts ideas into useful categories.

2. Check sheet: A structured, prepared form for collecting and analyzing data; a generic tool that can be adapted for a wide variety of purposes.

3. Control charts: Graphs used to study how a process changes over time. 4. Histogram: The most commonly used graph for showing frequency distributions, or how often each different value

in a set of data occurs. 5. Pareto chart: Shows on a bar graph which factors are more significant. 6. Scatter diagram: Graphs pairs of numerical data, one variable on each axis, to look for a relationship. 7. Stratification: A technique that separates data gathered from a variety of sources so that patterns can be seen

(some lists replace “stratification” with “flowchart” or “run chart”).

Generating Potential Solutions can now be done in the following ways :

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1.Brain storming ( For generating a free flow of ideas in a group of people) 2. Affinity Diagram(tool for organising data into logical categories) 3.Quality Circles(Groups of workers who meet to discuss ways of improving products or processes) 4. Interviewing ( Identifying problems and collecting information) 5.Benchmarking (process of measuring performance against the same or another industry) 6.5w2h approach( What why where when who how and how much questions are asked about a process) Eg of affinity diagram is as follows :

Note to Employee Elaborate examples of the above sub classifications is included in the Wikipedia and Operations Management by William

J Stevenson.

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Note to Tech The content in this case should be distributed in 2-3 screens.

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Title Supply Chain And Operations Management :Introduction

Page # 40

Page Title Enterprise Planning and Control System (Word limit: 10)

Template Introduction/Static Screen

Content Enterprise resource planning (ERP) is a category of business-management software—typically a suite of integrated applications—that an organization can use to collect, store, manage and interpret data from many business activities, including:

product planning, purchase

manufacturing or service delivery

marketing and sales

inventory management

shipping and payment

ERP provides an integrated view of core business processes, often in real-time, using common databases maintained by a database management system. ERP systems track business resources—cash, raw materials, production capacity—and the status of business commitments: orders, purchase orders, and payroll. The applications that make up the system share data across various departments (manufacturing, purchasing, sales, accounting, etc.) that provide the data. ERP facilitates information flow between all business functions, and manages connections to outside stakeholders.

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ERP (Enterprise Resource Planning) systems typically include the following characteristics:

An integrated system that operates in (or near) real time without relying on periodic updates

A common database that supports all applications

A consistent look and feel across modules

Installation of the system with elaborate application/data integration by the Information Technology (IT) department, provided the implementation is not done in small steps

ERP systems connect to real–time data and transaction data in a variety of ways. These systems are typically configured

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by systems integrators, who bring unique knowledge on process, equipment, and vendor solutions.

Connectivity to plant floor information is provided in the following ways :

Direct integration—ERP systems have connectivity (communications to plant floor equipment) as part of their product offering. This requires that the vendors offer specific support for the plant floor equipment their customers operate. ERP vendors must be experts in their own products and connectivity to other vendor products, including those of their competitors.

Database integration—ERP systems connect to plant floor data sources through staging tables in a database. Plant floor systems deposit the necessary information into the database. The ERP system reads the information in the table. The benefit of staging is that ERP vendors do not need to master the complexities of equipment integration. Connectivity becomes the responsibility of the systems integrator.

Enterprise appliance transaction modules (EATM)—These devices communicate directly with plant floor equipment and with the ERP system via methods supported by the ERP system. EATM can employ a staging table, web services, or system–specific program interfaces (APIs). An EATM offers the benefit of being an off–the–shelf solution.

Custom–integration solutions—Many system integrators offer custom solutions. These systems tend to have the highest level of initial integration cost, and can have a higher long term maintenance and reliability costs. Long term costs can be minimized through careful system testing and thorough documentation. Custom–integrated solutions typically run on workstation or server-class computers

Advantages of ERP are :

The fundamental advantage of ERP is that integrated myriad business processes saves time and expense. Management can make decisions faster and with fewer errors. Data becomes visible across the organization. Tasks that benefit from this integration include:

Sales forecasting, which allows inventory optimization.

Chronological history of every transaction through relevant data compilation in every area of operation.

Order tracking, from acceptance through fulfillment

Revenue tracking, from invoice through cash receipt

Matching purchase orders (what was ordered), inventory receipts (what arrived), and costing (what the vendor invoiced)

ERP systems centralize business data, which:

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Eliminates the need to synchronize changes between multiple systems—consolidation of finance, marketing, sales, human resource, and manufacturing applications

Brings legitimacy and transparency to each bit of statistical data

Facilitates standard product naming/coding

Provides a comprehensive enterprise view (no "islands of information"), making real–time information available to management anywhere, any time to make proper decisions

Protects sensitive data by consolidating multiple security systems into a single structure

Disadvantages of ERP :

Customization can be problematic. Compared to the best-of-breed approach, ERP can be seen as meeting an organization’s lowest common denominator needs, forcing the organization to find workarounds to meet unique demands

Re-engineering business processes to fit the ERP system may damage competitiveness or divert focus from other critical activities.

ERP can cost more than less integrated or less comprehensive solutions.

High ERP switching costs can increase the ERP vendor's negotiating power, which can increase support, maintenance, and upgrade expenses.

Overcoming resistance to sharing sensitive information between departments can divert management attention.

Integration of truly independent businesses can create unnecessary dependencies.

Extensive training requirements take resources from daily operations.

Harmonization of ERP systems can be a mammoth task (especially for big companies) and requires a lot of time, planning, and money.

Various Open source ERP softwares are:

Name Platform technology

Software license Description Countries of origin

Last stable release

date

Adaxa Suite Java GPL Integrated ERP built on Adempiere/iDempiere

Australia

Adempiere Java GPL Began as a fork of Compiere Worldwide 2015 (3.8 LTS)

Apache OFBiz Java Apache License 2.0

Business Solutions and Applications Framework from the Apache Software

Worldwide 2014 (12.04.04)

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Foundation

Compiere Java GPL/Commercial Acquired by Consona Corporation in June 2010

USA 2010 (3.3.0)

Dolibarr JavaScript, PHP, MySQL or PostgreSQL

GPLv3 Web application (LAMP based system) to manage small and medium companies, foundations or freelancers

Worldwide 2016 (3.8.3)

Epesi PHP, MySQL MIT license A framework for building ERP/CRM applications. Business Information Manager.

Poland, USA

2016 (1.7.2)

ERP5 Python, JavaScript, Zope, or MySQL

GPL Based on unified model for mid to large size organizations

Worldwide 2014 (5.5)

ERPNEXT Python, JavaScript, MariaDB

GPL ERP for small and medium-size businesses

India 7 April 2016 (6.27.8)

FrontAccounting PHP, MySQL GPLv3 Web application ? 2014 (2.3.21)

GNU Enterprise Python GPLv3 Tools to develop interactive database applications

? 2010

HeliumV Java AGPL ERP for small and medium-size businesses (initial focus has been electronic manufacturing)

Austria, Germany

?

iDempiere Java GPLv2 OSGI + Adempiere Worldwide 2015 (3.1)

ino erp PHP, JavaScript, MySQL

MPL First Dynamic Pull Based ERP System;Designed to provide better Inventory Turn

Singapore 2015 (0.3.1)

JFire Java, Eclipse LGPL ERP and CRM system Germany 2011 (1.2.0)

Kuali ERP for higher education institutions

USA

LedgerSMB Perl, PostgreSQL

GPL Double entry accounting and ERP system (fork of SQL-Ledger)

Worldwide 2014 (1.4.7)

Odoo Python, Javascript, PostgreSQL

AGPLv3 Renamed from OpenERP to reflect that is more than just ERP

Worldwide 2015 (9.0)

Openbravo Java, OBPL1 ERP and Point of Sale (POS) Spain 2013 (3.0)

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PostgreSQL, Oracle

software

Phreedom PHP, Javascript, MySQL

GPLv3 Expanded from Phreebooks accounting engine

USA 2012 (3.4)

Postbooks C++, JavaScript, PostgreSQL

CPAL Accounting, CRM and ERP USA 2014 (4.5.0)

SQL-Ledger Perl, PostgreSQL

GPL Double entry accounting and ERP system

Canada 2014 (3.0.6)

Tryton Python, GTK+ GPLv3 Originally forked from TinyERP, cleaned-up code base with continuous update/migration path

? 2015 (3.8)

WebERP PHP, MySQL GPLv2 LAMP-based system ? 2015 (4.12.2

Note to Employee Elaborate examples of the above sub classifications is included in the Wikipedia and Operations Management by William J Stevenson.

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Title Supply Chain And Operations Management :Introduction

Page # 49

Page Title Logistics (Word limit: 10)

Template Introduction/Static Screen

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Content Logistics is generally the detailed organization and implementation of a complex operation. In a general business sense, logistics is the management of the flow of things between the point of origin and the point of consumption in order to meet requirements of customers or corporations. The resources managed in logistics can include physical items such as food, materials, animals, equipment, and liquids; as well as abstract items, such as time and information. The logistics of physical items usually involves the integration of information flow, material handling, production, packaging, inventory,

transportation, warehousing, and often security.

A basic distinction in the nature of logistics activities is between inbound and outbound logistics.

Inbound logistics is one of the primary processes of logistics, concentrating on purchasing and arranging the inbound movement of materials, parts, and/or finished inventory from suppliers to manufacturing or assembly plants, warehouses, or retail stores.

Outbound logistics is the process related to the storage and movement of the final product and the related information flows from the end of the production line to the end user.

Given the services performed by logisticians, the main fields of logistics can be broken down as follows:

1. Procurement logistics 2. Distribution logistics 3. After-sales logistics 4. Disposal logistics 5. Reverse logistics 6. Green logistics 7. Global logistics 8. Domestics logistics 9. Concierge Service 10. RAM logistics 11. Asset Control Logistics 12. POS Material Logistics 13. Emergency Logistics 14. Production Logistics

Procurement logistics consists of activities such as market research, requirements planning, make-or-buy decisions, supplier management, ordering, and order controlling. The targets in procurement logistics might be contradictory: maximizing efficiency by concentrating on core competences, outsourcing while maintaining the autonomy of the

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company, or minimizing procurement costs while maximizing security within the supply process.

Distribution logistics has, as main tasks, the delivery of the finished products to the customer. It consists of order processing, warehousing, and transportation. Distribution logistics is necessary because the time, place, and quantity of production differs with the time, place, and quantity of consumption.

Disposal logistics has as its main function to reduce logistics cost(s) and enhance service(s) related to the disposal of waste produced during the operation of a business.

Reverse logistics denotes all those operations related to the reuse of products and materials. The reverse logistics process includes the management and the sale of surpluses, as well as products being returned to vendors from buyers. Reverse logistics stands for all operations related to the reuse of products and materials. It is "the process of planning, implementing, and controlling the efficient, cost effective flow of raw materials, in-process inventory, finished goods and related information from the point of consumption to the point of origin for the purpose of recapturing value or proper disposal. More precisely, reverse logistics is the process of moving goods from their typical final destination for the purpose of capturing value, or proper disposal. The opposite of reverse logistics is forward logistics.

Green Logistics describes all attempts to measure and minimize the ecological impact of logistics activities. This includes all activities of the forward and reverse flows. This can be achieved through intermodal freight transport, path optimization, vehicle saturation and city logistics.

RAM Logistics combines both business logistics and military logistics since it is concerned with highly complicated technological systems for which Reliability, Availability and Maintainability are essential, ex: weapon systems and military supercomputers.

Asset Control Logistics: companies in the retail channels, both organized retailers and suppliers, often deploy assets required for the display, preservation, promotion of their products. Some examples are refrigerators, stands[disambiguation needed], display monitors, seasonal equipment, poster stands & frames.

Emergency logistics (or Humanitarian Logistics) is a term used by the logistics, supply chain, and manufacturing industries to denote specific time-critical modes of transport used to move goods or objects rapidly in the event of an emergency. The reason for enlisting emergency logistics services could be a production delay or anticipated production delay, or an urgent need for specialized equipment to prevent events such as aircraft being grounded (also known as "aircraft on ground"—AOG), ships being delayed, or telecommunications failure. Humanitarian logistics involves governments, the military, aid agencies, donors, non-governmental organizations and emergency logistics services are typically sourced from a specialist provider.

.production logistics describes logistic processes within a value adding system (ex: factory or a mine). Production

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logistics aims to ensure that each machine and workstation receives the right product in the right quantity and quality at the right time. The concern is with production, testing, transportation, storage and supply. Production logistics can operate in existing as well as new plants: since manufacturing in an existing plant is a constantly changing process, machines are exchanged and new ones added, which gives the opportunity to improve the production logistics system accordingly. Production logistics provides the means to achieve customer response and capital efficiency. Production logistics becomes more important with decreasing batch sizes. In many industries (e.g. mobile phones), the short-term goal is a batch size of one, allowing even a single customer's demand to be fulfilled efficiently. Track and tracing, which is an essential part of production logistics due to product safety and reliability issues, is also gaining importance, especially

in the automotive and medical industries.

Note to Employee Elaborate examples of the above sub classifications is included in the Wikipedia and Operations Management by William

J Stevenson.

Note to Graphics There should be a colourful next button to move between screens from the user perspective

Note to Tech At max 3 screens should be used for this content.