AESOS PRELIMS - Reviewer

PPT 1: Introduction to Materials and Processes

Manufacturing Overview

• Definition: application of physical & chemical processes to alter geometry, properties, or appearance of a material and/or assemble parts into products.

• Manufacturing vs. Production: Manufacturing focuses on making tangible goods; production is broader, covering all economic outputs.

Industrial Categories

• Primary: exploit natural resources (agriculture, mining, forestry).

• Secondary: convert primary outputs into consumer & capital goods (automotive, electronics, chemicals).

• Tertiary: service sector (health, banking, retail, education).

Manufactured Products

• Consumer Goods: satisfy direct wants; classified into durable & non-durable.

• Capital Goods: purchased by firms to produce other goods/services; subject to wear & replacement (machinery, tools).

Manufacturing Processes

• Processing Operations: modify material’s geometry/properties/appearance.

• Assembly Operations: join two + components to create new entity.

Importance of Manufacturing

• Technological: enables availability of most modern products.

• Economic: significant GDP contributor (e.g., 12\% U.S. GDP), large employment source.

• Historical: “making things” fundamental to human progress.

Manufacturing Capabilities

1. Technological Processing Capability: set of available manufacturing processes & expertise.

2. Physical Product Capability: size & weight limits of items a plant can produce.

3. Production Capacity: max output rate (equipment + labor time available).

• Manufacturing process: transformation of materials into items of greater value by means of one or more processing and/or assembly operations.

Engineering Materials

• Four classes: Metals, Ceramics, Polymers, Composites.

1. Metals

• Usually alloys.

  • Ferrous: iron-based; steels (≤2.11\% C), cast irons (2.12–4\% C). ~75\% of world metal tonnage.

  • Non-ferrous: Al, Cu, Ni, Ti, etc.

2. Ceramics

• Compounds of metallic/semi-metallic + non-metallic elements.

  • Crystalline ceramics: clay, \text{Al}2\text{O}3.

  • Glasses: silica-based (\text{SiO}_2).

3. Polymers

• Long-chain molecules from repeating mers.

  • Thermoplastics: reheatable (PE, PVC, Nylon).

  • Thermosets: permanently cross-linked (epoxies, phenolics).

  • Elastomers: high elasticity (natural rubber, neoprene).

4. Composites

• Two + phases processed separately, then bonded (fibers/particles in matrix) ⇒ superior combined properties.

Environmentally Conscious Manufacturing

• Goal: efficient resource use & minimal environmental impact.

• Approaches: design eco-friendly products & processes; termed green/clean/sustainable manufacturing.

PPT 2: Basics Of Supply Chain Management for AESOS

Supply Chain Concepts

• Supply

  • Quantity of goods available

  • Actual or planned replenishment

  • Created in response to or anticipation of demand

• Supply Chain

  • Network used to deliver products/services from raw materials to customers

  • Involves flow of information, physical distribution, cash

• Supply Chain Management (SCM)

  • Design, planning, execution, control, monitoring of supply chain activities

  • 

  • Objectives:

    • Create net value

    • Build competitive infrastructure

    • Leverage world-wide logistics

    • Synchronize supply with demand

    • Measure performance

  • 

Planning Horizon

• Long-Term – Q4 to Yxxxx

• Mid-Range/Strategic – Week 5 to Q3

• Short-Term/Tactical – Day 1 to Week 4

4 Basic SCM Questions

1. What are we going to make?

2. What does it take to make it?

3. What do we already have?

4. What must we get and when?

STOP / GO Concepts

Positioning:

• STOP – Storage

• GO – movement

5 Primary Logistics Activities

• Transportation

• Inventory

• Warehousing

• Production/Operations

• Information Technology

3 Concepts of Logistics & SCM Relationship

• Re-labelling Concept

• Unionist Concept

• Intersectionist Concept

Logistics Trends

• Globalization

• Technological Innovation

• Corporate Social Responsibility

• Collaborations

• Human Resources

FORECASTING

• Where SCM starts? → DEMAND

• Factors Influencing Demand

  • General business/economic conditions

  • Competitive factors

  • Market trends

  • Firm’s own plans

• Sources of Demand

  • Customers

  • Spare parts

  • Promotions

  • Intracompany

  • Others

• Demand Patterns

  • Stable vs. Dynamic

    • Stable: retains same general shape over time

    • Dynamic: tends to be erratic

  • Dependent vs. Independent

    • Dependent: directly related to or derived from the bill of material structure for other items or end products

    • Independent: unrelated to the demand of other items

• What Should Be Forecasted?

  • Long-range plan: Market direction

  • Strategic: Product lines/families

  • Tactical: End items and options

Forecasting Principles

• Rarely 100% accurate

• Include error estimate

• More accurate for families and shorter timeframes

Forecasting Techniques

• Qualitative – Intuition, opinion-based

• Quantitative – Based on historical data

• Extrinsic – External indicators

• Intrinsic – Internal factors

Quantitative Forecasting Methods

• Moving Average = (M1 + M2 + M3) / 3

• Weighted Moving Average – Importance-based weights

• Exponential Smoothing – Geometrically discounts old data

• Regression Techniques

PRODUCTION PLANNING

• Definition: Set manufacturing output to meet demand while aligning with business goals

  • concerned with:

    1. Planning for each product family

    2. Meeting desired inventory level

    3. Determining resources needed

• Basic Strategies:

  • Demand Matching (Chase)

    • +: Stable inventory

    • −: Hiring/firing costs, morale issues

  • Level Production

    • +: Smooth operations

    • −: Inventory buildup

  • Hybrid – Mix of above two

Key Ingredients Of Production Planning

1. CAPACITY MANAGEMENT

• Capacity: Output a system can produce per time period

• Capacity Planning:

  • Determine capacity required

  • Match demand

  • Choose methods to make it available

• Controlling:

  • Monitor output, compare with plan, take corrective action

• Capacity Planning Process:

  1. Determine capacity available

  2. Translate demand

  3. Sum up required capacity

  4. Resolve mismatches

2. MATERIALS MANAGEMENT

• Inventory Planning = Materials Planning

• Inventory Types:

  • Raw materials

  • Work in process (WIP)

  • Finished goods

• Functions of Inventory:

  • Anticipation

  • Fluctuation

  • Lot-size

• Inventory Objectives:

  • Best customer service

  • Low-cost operations

  • Min. inventory investment

Inventory Costs

• Item Cost:

  • Includes product, transportation, customs, insurance, etc.

• Carrying Cost:

  • Capital, storage, obsolescence

• Ordering Costs:

• Stockout Cost:

  • Backorders, lost sales/customers

• Capacity-Related Cost:

  • Hiring, layoffs, training

Methods of deciding how much to order at one time:

• Lot-for-Lot:

  • Only what is needed

  • Best for dependent demand

• Fixed Order Quantity:

  • Same amount each order

  • Simple to implement

• Economic Order Quantity (EOQ):

  • Constant demand

  • Balances ordering & carrying costs

When to Order

• Order Point System:

  • Order when stock hits OP

  • OP = Demand × Lead Time + Safety Stock

  • Order quantities are usually fixed

  • Equals demand during lead time plus safety stock

• Periodic Review System:

  • Fixed interval checks, varying quantity

• Material Requirements Planning (MRP):

  • Uses BOM, inventory data, schedule

  • Tools: SAP, Oracle

PURCHASING

• Definition: Procuring materials, supplies, services

• Objectives:

  • Quality and quantity

  • Right cost

  • Best service

  • Maintain supplier relations

• Purchasing Cycle:

  1. Select suppliers

  2. Receive request

  3. Issue PO

  4. Follow up

  5. Receive goods

  6. Authorize payment

  7. Resolve issues

SUMMARY & ESSENTIALS

• SCM = Nervous system of manufacturing

• Planning = Backbone of SCM

• Goal:

  • Match demand with supply

  • Support plan must benefit customer, company, suppliers

• Key Support Process:

  • Demand comes in

  • Capacity Support

  • Materials Support

  • Respond with final support

• 4 Questions:

  1. What are we going to make?

  2. What does it take to make it?

  3. What do we already have?

  4. What must we get and when?

• Challenges in SCM

  • Quick Turn Around

  • Automation

  • Globalization