Production & Operation Management

1. CHAPTER 24: Other Aspects of Materials Management
Responses to Questions
1. Codification helps identify an item uniquely in a rational manner. This
reasoning while codifying could also result in rationalizing the inventory.
For instance, when numbering (codifying) two similar shades of paint, one
may be inclined to ask whether these two varieties are required. In an
indirect manner, codification could result in standardization.
2. Such decimal code is useful for classification and sub-classification of
items. Each decimal reveals additional information (uniqueness) of an
item.
3. Standardization and variety reduction are very similar as far as the
inventory is concerned but standardization goes further down and as a
policy measure where the product design, the manufacturing process, the
vendor / procurement process, packaging etc could be standardized.
4. Basically, codification names an item uniquely. Thereby it avoids
confusion. Confusion has been the cause of duplication and excess
inventory of unwanted parts/items. Codification, by its very purpose of
instilling clarity, helps in standardization. Codification, if it includes supplier
information, can quickly point to the location where action is needed.
Codification helps in simplification of receiving, storing, procuring,
warehousing, etc. Thus, it causes better efficiencies across the production
and related functions in the organization.
5. A thorough understanding of the process and logistics is the first step. It
would help to know as to why it is used, from where it is procured, where it
is used and how. Thus, a new codification system is accompanied by or
rather preceded by a rationalization of inventory – at least an enquiry into
the existence of inventories of items. Without such rationalization or
enquiry, there is no point in identifying suppliers on the item code or
identifying shades of colours on the code and thus perpetuating
unnecessary variety.
The difficulties encountered would basically be a (i) resistance to change
and (ii) resistance from vested interests. People may also think that you
are overstepping your job and straying into others’ territory.
Hence, a solid support from the top management is essential. One must
obtain this mandate from the top management. A new codification should
be accompanied, ideally, by a rationalization / standardization exercise.

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6. In this case, the material storage system should be improved before
deciding upon the material handling system. Once a storage place and
system is decided, a suitable handling device can be chosen.
However, availability of handling devices (for the items in storage) also
limits the choices for the storage system. But, always a bigger
disorganization is to be corrected first.
7. Two names mean two different items. Each will be stocked – safety stock
and all. Codification and standardization can club it into one single item
(which it is) and thus reduce the stocks.
8. Lack of preservation means spoilage and lack of the item at crucial times.
It means unnecessary blockage of storage space; it gives rise to
complacency – a false sense of security that the item is there.
Packaging helps preservation, handling and shipping.
Appropriate marking improves the ease of locating an item. This is
necessary to cut down the time to search an item while issuing for the
process, while dispatching and while transporting.
9. The question to ask, at first, may be: Where is it originating from and why /
how? The source of the problem could be attacked. The problem could be
nipped in the bud.
As far as the current scrap goes, one may ask: Are all items unnecessary?
Perhaps, the concerned departments may be informed and consulted
once before disposing it off. Could some of these be reworked and re-
used? This would be the next query.
Once the items are found to be of no active use within the firm, these
‘scrap’ items could be sold outside:
(a) as reusable items for other organizations, or
(b) as metal (by weight).
Items that cannot be used as either (a) or (b) above, have to be dumped in
an environmentally friendly manner with the help of the civic authorities.
10.Stores receipts, issues, values of stocks are important for the
management of materials. Accountability and information on availability of
items are important reasons behind the stores documentation.

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CHAPTER 24: Other Aspects of Materials Management
Objective Questions
1. In a watch assembly line, in order to transport a subassembly from one
workstation to another, the firm would use:
a. Overhead crane
b. Pneumatic lift
√c. Conveyor belt
d. Fort lift
2. Fort lift requires the use of:
a. Chutes
b. Conveyor belts
c. Overhead cranes
√d. Standard pallets
3. Mnemonic coding uses
a. alphabets alone
b. figures (numbers) alone
√c. figures and alphabets
d. none of the above
4. Hybrid system of coding is:
a. same as Mnemonic coding
b. numerals and alphabets while coding
√c. group classification and mnemonic coding
d. decimal system of coding
5. ISO stands for:
√a. International Organization for Standardization
b. Indian Standards Organization
c. Indian Systems Organization
d. International Systems for Operation.
6. Stock-taking could be:
a. Continuous
b. Periodic
√c. Continuous or periodic
d. Sporadic
7. Choice of materials handling equipment depends upon:
a. Layout of the work areas
b. Characteristics of the item to be handled
√c. a & b

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d. none of the above
8. In Group Technology environment, the classification of items could be
based on:
a. Similar configuration
√b. Sameness of required production operations
c. Same supplier
d. Same material handling equipment
9. Classification for coding has similarities in:
a. ABC classification
b. VED classification
c. FSN classification
√d. none of the above