How material flow information helps in work centre decision

How material flow information helps in work centre decision.

Before we venture into understanding how material flow information helps in work centre decision, let us first understand what a work centre actually is.

A work centre is a facility for production or a centre for providing a service which comprises of one more machines / equipment and one or more person deployed there to look after the work concerning that location, basically to evaluate its capacity and see if the operations are running as per the requirement. Work centre is also called a cost centre. It is a station where some material enters and then leaves either in as such condition or processed further or as different product or may be the same product packed differently.

For example in a mango juice shop the small work centre comprises of a shelf to keep the mangoes, a juice making machine, glasses to supply mango juice to the customers and a wash station for the used glasses. The mangoes come as input; the juice taken out is the processing part, filling glasses of mango juice for customers are the output part.

Let us consider another example of a shopping centre to illustrate how material flow information helps in the work centre decision.

All activities at the work centre are conducted on the basis of flow of information. The route sheet contains information about the material, quantities, inspection procedures, packing procedures and procedure for supplying to the next unit (may be customer directly). Material flow information in a shopping centre would basically be the following;

A)   Input of the items to the shopping centre (from whole-sale dealers or directly from manufacturers).

B)   Output of the items from the shopping centre i.e. sale to the customers.

Input & output or "From" & "To" are important aspects of material flow information at every work centre.

Now it is important to consider from where the incoming items are coming. The important aspects about it are regarding the importance of the closeness of the location from where the incoming items are coming from. The basic information necessary is about how much close the incoming items should be? Should they be;

i)             Absolutely necessary to be close, or

ii)            Essential to be close, or

iii)           Important to be close;

iv)           Can have just ordinary closeness, or

v)            Are they not important to be close , or

vi)           Is it not desirable at all that they may be close?

The pertinent answers to the above questions helps a great deal in taking decisions related to work centre. For example if shopping centre has a shop for supplying ice cold water to the customers then it needs to realize that the source of ice (ice factory) should be close to the location of his/her work centre (ice cold water shop). It is absolutely necessary that it is very close otherwise lot of ice would melt in transportation.

Take another example of a fast food shop at the shopping centre. The flow of information required here is which are the dishes which the customers are ordering more on a day then what materials are required for it? Are those materials (say raw vegetable) available instantly, what is the stock of those vegetable left at any point of time.

We see that there is a connection between the "To" aspect (output) and the "From" aspect (input) and the flow of information as to how much has gone and how much needs to be replenished immediately becomes a necessary information. This is basically the information about the flow of the material. How much material has gone at any given time and so how much would be required. Here the importance of the 'closeness" aspect comes into picture. Is the vegetable market near so that potatoes can be procured immediately if the order for sandwiches is more. If the cook at the fast food shop provides the information swiftly then action can be taken in time. This means that if the information flows fast from the waiter serving the order to the cook making the sandwiches and he informing the manager that potatoes are falling short as order for sandwiches have exceeded the stock of potatoes then this material flow information helps a lot at that fast food shop (work centre or cost centre) to make the business good.

2. Project Failure analysis. 

Before understanding the reason of the failure of a project let us first understand what project really is. Project is a collaborative work about an objective which is required to be done after careful planning in some sort of a logical sequence and which leads to completion of the mission and ultimately acquires the shape of a structure or an object or a scheme. It may require some kind of a design, some new concepts woven judicially with already known facets about the objective; it may require use of some special systems and use of methods all of which lead ahead for fulfilling the said objective by their own routes but collectively and in context with each other.

The term 'failure of project' means that either the mission targeted is not accomplished or the final shape achieved after the project differs a lot from the actual objective or the result of the activities performed for achieving the activities did not conform to the required objective. A project would be even termed as a failure when the object it gets shaped into fails to give the planned result after the completion of the project. For example years back Enron implemented on the project of generating and supplying electric power at quite a low price but it could never do so and therefore Enron project in Maharashtra India was termed as a failure. 

The reasons of failure of a project are many. Broadly speaking the reasons may be categorized in to the following categories;

1.    General reasons

2.    Management related reasons

3.    Technical reasons

When we study the general reasons for project failures we find that it could be out of the following;

i)             The financial resources are not utilized properly and this could lead to shortage of funds at the specific time it is needed. If a project fails due to this reason then most often than not it remains a fact that the project began on a lavish scale with importance showered on the pomp & show and in the advertisement of the cause. Excessive expenditure also comes in the same category. This generally drains out the funds faster, quite early and the worst damage it does is to make such huge expenditures a way of life for the project team. And when the funds are required for the specific important jobs it falls short which induces project people to make compromises on quality aspects. This sets the ball rolling for the failure of the project.

ii)            The objective of the project is not quite clear and there remain some ambiguity about the final shape. For example there are many products which can be made from alternative starting raw materials and the same set of machines but has different production cost associated. If it is not clear that only a specific raw material would be used then one cannot make a correct project costing and when this is not done the project eventually never succeeds.

iii)           Project team no up to the mark is in term of its abilities to deliver is another prime general reason which makes project fail. Project team members and the project manager have to be competent in context to the activities of the project undertaken so that they can guide the project to success safely and in time. Incompetence of any one person or a group of person delays the activities of the others and the net result takes away the overall project away from its planed path. The project team needs to be dedicated to the purpose.

iv)           Project objective not in line with the business activities also causes project failure.

The management reasons for project failures are mainly the following;

i)             Lack of management judgment: When the management and particularly the project management are not able to judge an aspect properly & correctly it tends to decides incorrectly and that changes the path on which the project moved. It often alters the direction of the project and leads it to failure.

ii)            Inability to chose or adapt to new resources or change with time. This is the inability of management when it fails to understand that some of the concepts it decided while the project was planned have completely changed and have become obsolete and that if those are not changed the required result from the project could never be extracted.

iii)           Inappropriate rules & regulations:  Some kind of flexibility is needed when a team is working on a project. For example if the management becomes extremely strict on 9.00 am to 5.00 pm attendance then it could be that creative people who have the ability to deliver much more than generally required, would not be able to do justice to their work as their focus would be to wind up at 5.00 pm everyday though they could have worked much longer and yielded better results and that would have been better then they coming later than 9.00 am the next day.

iv)           Insufficient training: When people are not trained they do more faults and that ultimately spoils the project in the long run.

v)            Manpower recruitment issues: Manpower is the backbone of projects. If there is shortage of manpower and the recruitment is delayed it would delay all the activities in the link. For example of a mason leaves the project team and there is no alterative person available or the recruitment is delayed then the construction work would be held up and that might delay all other activities in the sequence. If the recruitment procedure of the organization is time taking and follows the whole lot of steps then obviously it will delay the project, which might be one of the reasons for its failure because completion of project in time is the most important step in project management.

Project also fails due to technical reasons. Some of the important technical reasons are:

i)             Lack of technical information. This is lack of technical information on the machineries to be installed, or lack of information on the storage conditions mandatory for some of the materials used in the project. For example there may be substance like enzymes which are needed to be stored at temperature below 20 degree Celsius and if this information is not available and the enzymes are kept under ambient conditions then the entire lot of enzymes can go bad and useless by the time they are put into use.

ii)            Lack of analytical systems to analyze or test materials.

iii)           Absence of technical knowledge about the changed aspects or changes in laws or changes in business aspects. Suppose the starting raw material Keto Gluconic acid is planned to be imported from China for a Vitamin-C manufacturing project and if the import duty is changed on this raw material it would greatly impact the project.

iv)           Lack of system to collect data appropriately. Until the data are tabulated and analyzed the picture will not be clear. Even the ongoing expenditure would not be clear category-wise and it may be too late before the project team realizes that their expenditure was higher than normal on one aspect and so the other facets would then suffer.

v)            Use of incorrect specifications. This can lead to all sorts of confusions as the procurement team would then tend to procure items which were not actually useful technically speaking.

3. Understanding project management life cycle 

Reply: By project we mean a particular set of activities required for setting up physical systems which enables a business house to yields products or services. Management of a project is extremely important for the project to complete timely & efficiently as well as to make the newly set up system easy to run / operate thereafter. Managers must understand the change process in a project to bring about the changes; a perfect planning is required for its execution. 

The different phases of project management life cycle are as follows;

i)             Understanding the scope of the project

ii)            Establishing objectives of the project

iii)           Formulating and planning various activities

iv)           Project execution

v)            Monitor and control the project resources.

Any project has to be first studied and evaluated alongwith the various alternatives available for it.  The actual requirement should be known in totality. This being the 1st phase of the project management cycle, it assumes a greater role as it fabricates the foundation of the project. Any error at this stage will get gradually multiplied as the project proceeds.

Before the project work is commissioned at the earmarked site, the entire strategies to be adopted for the marketing of the product for which the project is being set up, should be studied thoroughly from the point of view of the objectives of the project. This project management life cycle phase is the design phase where-in a through study of the inputs and outputs is done. The design phase can also be called the planning phase.

The project then needs to be formally planned. The best method for this is to break up the project into small -small activities and prepare a bar chart for the same which indicates how long that activity would continue and which all other activities can be run simultaneous to each other and from which point of time.

The project then needs to be executed strictly according to the plan and each step should be re-evaluated from time to time to under its repercussions if any on the previous or subsequent project activity.

Suppose a chemical plant is being erected. Then the size of the equipment such as heat exchangers need to be planned before planning the size of the building otherwise it might not be feasible later to take a longer heat exchanges inside the building for erection there.

Execution phase requires that the planned activities are followed keeping an eye on the schedule of activities. Safety is a big feature in the execution of projects. Many large scale projects such refineries or power stations required some additional safety features which usually do not become a part of the project later. For example some additional structures need to be fabricated and installed to safely facilitate the supplies of the construction material at different elevations. Such structures are removed later when the project work is completed.

The project activities need to be properly & correctly implemented under the guidance of the project manager. The project manager should keep the bar chart in front of him and evaluate the time factor and the stages of the on-going work regularly. Inspection of the jobs being done or completed is very important and this should continue during the phase of execution of the project.

The sources need to be monitored and kept under control. For example if a building is being constructed for a project then the time availability of cement should be always kept monitored along with the availability of torr steel. If at the location of the project there is load shedding for specific hours then the same has to be taken under consideration and jobs that do not require electric power should be planned during that period of the day. This has to e planned and later executed accordingly.

As the project reaches the completion stage, the evaluation of the activities which have been completed becomes more & more necessary. It becomes a learning exercise if the activities, timing, trouble shooting exercises etc are all documented. Analysis after completion of project is therefore an important phase of the project management life cycle.

Each & every phase discussed above has its own importance in project management. Some phases need to be studies simultaneous to the other phase and in context to the other phases. 

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