Mission Industrial Engineering Management E-Book

1. Industrial Engineering Management Systems Approach to the Enterprise Vision
L | C | LOGISTICS
ENTERPRISE SUPPLY CHAIN MANUFACTURING & COMMERCIAL LOGISTICS OPERATIONS ….
_____ _ PROCESS INNOVATION-OPTIMIZATION & ENGINEERING PROJECTS MANAGEMENT….
Industrial Engineering Management E-Book
INDUSTRIAL ENGINEERING MANAGEMENT FUNDAMENTALS AND HOW IT WORKS
January 2015
Expertise in Process Engineering Optimization Solutions & Industrial Engineering Projects Management
Supply Chain Manufacturing & DC Facilities Logistics Operations Planning Management
Chapter I MISSION

2. Systems Approach to the Enterprise Vision
Chapter I
MISSION summary abstract
To sustain the continuous materials replenishment from vendor’s to
manufacturers and their Finished Goods for distribution across the
entire trade channels to the end consumer with maximum inventory
turns throughout time with the highest net margin contributions from
innovating competitiveness and minimal operational waste

3. Systems Approach to the Enterprise Vision
Chapter I
Goal. The Enterprise highest goal is to sustain their ability to keep their
manufacturing-distribution supply chain available resources in total
utilization. In order to continuously lunch and re-lunch finished goods into
consumer markets and, to replenish their inventories at the most efficient-
effective cost, with continuous economic growth
Objectives from the Enterprise are normally measured in economic &
financial growth; such as market share, nationwide-distribution channels
coverage, net margins, facilities and market-industry value

4. Systems Approach to the Enterprise Vision
Chapter I
Strategies vary, from doing all by the Enterprise itself, to sub contracting
major operational functions and focus their own concentrated efforts on
their major core business activities
Strategies includes, from using the lowest management and staff cost across
the Enterprise, to a more moderated human resources higher cost value
added used in each function, reflecting higher quality and professional
performance, with sustained growth
The most dangerous-risk strategy is the decision to give the highest positions
to family members or closed friends, when both or either one of them, lack
professionalism, ethics and totally abuse their political power for self-
satisfaction. Soon you will find out that the Enterprise looses competitive
edge, eventually looses the business

5. Systems Approach to the Enterprise Vision
Chapter I
Tactics refers to the way the Enterprise chooses to take specific
actions and implement their strategies, it requires skills and vision
Programs are the result of selective aggregated functions to carry on
specific task to accomplish a major strategic overall impact
Projects are individual actions taken to bust up the performance of an
operational function
Operations are many in each function, but the completion of their cycle
closes a business task. Their critical points are their level of performance as
per their associated design specification as well as cost, waste and
inefficiency levels

6. Systems Approach to the Enterprise Vision
Chapter I
To understand operations better; let’s look at the following concepts:
Operations: The starting point is to have a professional Demand Plan analyst
who understands each Finished Goods sku item’s statistical behavior, armed
with statistical process control data models and charts to be able to workout
demand behaviors, trends, and seasonality analysis forecasts, with maximum
and minimum Finished Goods stocks levels over short weekly rolling periods
of one, two, three, four, five, six months sales-marketing demand rolling
forecasts, and its different variables’ scenarios simulations

7. Systems Approach to the Enterprise Vision
Chapter I
Most organizations leave this demand plan function and analysis to brand
managers, marketing managers or even sales managers. This is their major
mistake, as these people are not full time dedicated to understand and
analyze paths, trends, seasonal ties and other sku’s market related moves, as
well as to simulate its different scenarios
Their failure to accurately forecasts demand is always explained by many
other reasons related to their buyer’s actions, shortages and sudden changes
within their competitor’s activities or about the economy trend, which by the
way is never at its best time in history

8. Systems Approach to the Enterprise Vision
Chapter I
Their way out of it, is by requesting from the Enterprise to carry inventory
levels high enough to overcome unexpected sales order fluctuations. Often
described as minimum and maximum holding stocks level and they can go
from days, weeks or months’ sales of holding stocks, with high usage of
precious financial resources
Unfortunately, although this concept of holding minimum and maximum
stocks goes against the Enterprise mission, it always find room in the mind
of top management, eating margins from high financial, facilities and
operational costs. Demand planning cost is by far more economical that the
unnecessary aggregated stocks

9. Systems Approach to the Enterprise Vision
Chapter I
However, demand Forecast is the most important piece of information to
be produced, analyzed and discussed with all marketing and sales managers
before any data is made official and used in production planning,
procurement and manpower needs
Another way to look at Demand Plan is to think as an OEM and have
within your organization a function such as program management, linking
and coordinating information flow between your customer procurement-
production planner, your own procurement-production planner and your
supplier’s procurement-production planner

10. Systems Approach to the Enterprise Vision
Chapter I
Working together as one team; making use of the latest computer
communication technologies available, such as the internet web site
network systems, connecting your MRP-I with your customers and
suppliers MRP-I systems, talking over the net, and resolving together as a
unified team all related planning issues on materials, finished goods,
capacity available, production delivery dates, and priorities
Simulating integrated Production and transportation costs, inventories
levels flow, consumption rates, shortages and over supply of materials
and finished goods, affecting all parties, yourself, your customers and your
suppliers as one cost unit

11. Systems Approach to the Enterprise Vision
Chapter I
There are three major cost components; production and transportation,
storage operations including inventories financial costs, marketing
advertisement and promotional events costs
That is why the major cost savings comes from maximum inventory turns,
optimal storage operations, packaging and raw materials; use of credit terms
almost as materials on consignments, and transport
Urban delivery routes and nation wide deliveries transport planning
contribute to optimal delivery service cost saving, reducing stocks
Advertisement and promotional material costs are sales components cost, not
savings, but if they are effectively directed to targeted customers and achieve
its measurable objectives, sales will increase

12. Systems Approach to the Enterprise Vision
Chapter I
Demand plan data is the backbone to these major cost or saving components
within the Enterprise financial blood flow stream
Optimizing materials inventory turns by means of managing stocks on hand,
procurement costs and vendors delivery lead times
Achieving higher incoming materials yields by materials quality assurance
inspection as per Bill of Materials specifications
With efficient QC receiving and warehousing operational process cycles
without compromising savings due to higher cost from a “vendor-client” joint
partnership efforts to improve their own joint supply chain communication
systems
Critical mass or break-even point is always necessary to balance the point
where investments are placed to have a “vendor-client” joint partnership
effort to improve their logistics operations, especially if ERP systems are used
at both ends

13. Systems Approach to the Enterprise Vision
Chapter I
Eliminate causes for unnecessary operational waste due to materials flows
delayed, waiting or moved faster than their operational pace. Manage excess
Finished Good’s inventories, apply 5’S techniques to all operations, and avoid
incorrect warehouse data processing
Find out delayed, inaccurate or unavailable customer’s information as well as
wrong sku’s inventory deployment costing structure
Analyze and improve low performance delivery routes, forwarding
transportation constraints, Finished Goods production defects, and damages
from storage materials handling operations

14. Systems Approach to the Enterprise Vision
Chapter I
Design and implement the most cost efficient Urban areas delivery routes and
transport specification requirements, re-engineer for all distribution channels
customer receiving time schedules, such as hyper-markets, super-markets,
catering; modern trade convenient stores and petrol stations mini-marts, for
both frozen, chilled, dry foods and others every one every day consumer
goods all the way back to delivery trucks loadings, and production real time
schedules
Determine the most efficient IT-Warehouse Management System software,
warehouse operational layout to service receiving Finished Goods, cross-
docking, put away, picking, staging, loading and dispatch, manpower
requirements per shift, materials handling equipment, mezzanine shelving,
storage pallet racking system

15. Systems Approach to the Enterprise Vision
Chapter I
Identify the most cost efficient depots and cross-docks locations network
across the country. Plan their facilities operational and delivery services
logistics, plan their in-land transportation cost and schedules, and trucks
requirements’ specifications, tonnage, volume
Set standard Finished Goods sku’s production lines rates per hour, and
man-hours usage rates required to incorporate them into the production
plans and production processes schedules, in order to plan for the
loadings of raw and packaging materials into production lines, as well as
to balance all production lines as per required line manpower allocation
plan

16. Systems Approach to the Enterprise Vision
Chapter I
Check and coordinate your sanitation and maintenance engineering schedules
with production and procurement planning, as well as manpower deployment
plans
Balance the weekly-monthly production capacity available and maximum
production possible, under all available resources and constraints, due to
production lines breakdowns, and other un-expected manpower staffing
problems, and materials out of stock

17. Systems Approach to the Enterprise Vision
Chapter I
All products in the production line or at the warehouse-cold rooms have
design specifications, named standard product specifications, which cover all
aspects from materials dimensions, design layouts, specific material
characteristics (physics/chemistry), production process instructions, machine
setting parameters, packaging, shipping marks, shipping documents, storage,
handling, and shelve life among others related to specific Industries or trade
regarding safety, health and contamination risks from bacteria or hazardous
pollution and leakages

18. Systems Approach to the Enterprise Vision
Chapter I
Full Accounting systems have standard operational procedures regarding
sales order processing, invoicing, delivery notes, credit and debit notes,
procurement purchase orders, receiving reports, warehousing movements,
physical stock counts and adjustments, inventory assemblies and stock items
movements and controls
Production machines have also operational parameters setting standards, and
acceptable ranges for performance conformance
And so are standards related to the supply of energy regarding steam heat,
hot oil, cooling and refrigeration temperatures, electric power, water supply
quality processing, waste water processing, compressed air, vacuum

19. Systems Approach to the Enterprise Vision
Chapter I
The environment protection standards are set in accordance with Industry or
Trade regulations, regarding the handling of hazardous materials, fire fighting
equipment, chemicals, water, drainage for contaminated water, rain water,
and other polluted water from the production or facilities plant operations
There are also standards in regards to the workers and technician dressing
code in production areas, laboratories and other assigned special locations,
including their related hygiene norms
For every operation along the process there are also standard report forms,
to record operational data, this documents form the bulk of the standard
documents control system, used in many ways to perform traceability of
production or logistics operations, or any other activity related to the full
accounting system in place

20. Systems Approach to the Enterprise Vision
Chapter I
Quality Control is the application of securing the production of all related
activities, within acceptable standard specification parameters as per design
and as per document description
Quality Assurance is making sure that there is full use of all standard documents
by both Quality Control and Production operations, with extension to Suppliers
Quality Assurance, Incoming Quality Assurance and Outbound Quality
Assurance; it also makes sure all standards are clearly recorded, registered,
documented, distributed and with formal document control management

21. Systems Approach to the Enterprise Vision
Chapter I
The question in Quality Control is to monitor the process parameters
variations, to make sure they are within the standard acceptable process
performance range (Upper limit and Lower limit) and to set the alarm and if
required, stop the process to get the required people to re-set and correct all
deviations in the process before there are collateral damages, Work In
Process waste, scraps and spoils, or even risk of contamination due to
changes in the physical and environment conditions

22. Systems Approach to the Enterprise Vision
Chapter I
What is important is to keep the production yield as high as possible with a
target of 100%, though there could be additional gains due to process
synergies, but also losses due to the physics/chemistry and the environment
Standards are the basics to measure the yield of a finished product, once this
is understood, then it is important to map the complete process flow of all
operational activities, and measure the flow rates of all materials, Work In
Process, collateral losses due to waste, scraps, missing, damages, spoils, and
other process losses or gains
Quality control is not about registering a data based on a sample, making a
chart and producing a report to file to management, and certainly it is not
the duty of Quality Assurance to try to correct the incidences, that probably
will be the duty of all the people involved in the production or logistics
operation, including Engineering, Sanitation and almost everybody in their
own operational capacity

23. Systems Approach to the Enterprise Vision
Chapter I
Based on the full accounting system, map the complete logistics
operation cycle including;
Sales orders, Inventories on Hand, credit control, invoicing, delivery
notes, credit-debit notes, bills collection, urban and nation-wide
deliveries, in-land transportation, freight forwarding, procurement,
delivery-receiving materials, inspection reports, inventories control,
warehousing storage operations, picking, staging, packing and loading
for delivery to customers, physical stocks counts, stocks adjustment,
suppliers bills payment,

24. Systems Approach to the Enterprise Vision
Chapter I
Map the integrated operation of procurement and production planning, in
coordination with production, process engineering maintenance,
production process sanitation, facilities engineering maintenance,
environment, industrial safety and hygiene
Map the organization structure based on operations functionality, match
function profile specifications versus the people involved in the related
function operation and activities, identify skills, strength and weakness,
gaps and training opportunities, finally map that QC and QA really cover
their function as per operations requirement

25. Industrial Engineering Management Systems Approach to the Enterprise Vision
L | C | LOGISTICS
ENTERPRISE SUPPLY CHAIN MANUFACTURING & COMMERCIAL LOGISTICS OPERATIONS ….
_____ _ PROCESS INNOVATION-OPTIMIZATION & ENGINEERING PROJECTS MANAGEMENT….
Industrial Engineering Management E-Book
INDUSTRIAL ENGINEERING MANAGEMENT FUNDAMENTALS AND HOW IT WORKS
January 2015
Expertise in Process Engineering Optimization Solutions & Industrial Engineering Projects Management
Supply Chain Manufacturing & DC Facilities Logistics Operations Planning Management
THANK YOU
Chapter I MISSION