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., 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.

12%

1. Metals

Usually alloys.

Ferrous: iron-based; steels (≤ C), cast irons ( – C). ~ of world metal

tonnage.

Non-ferrous: Al, Cu, Ni, Ti, etc.

2. Ceramics

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

Crystalline ceramics: clay, .

Glasses: silica-based ( ).

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

2.11% 2.12 4% 75%

Al2O3

SiO2

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