All entries for March 2009

March 09, 2009

Resource Utilization —— some thought from Wining Margin game

Resource Utilization involves planning, coordination and control of industrial processes. To use the resource effectively we need to oversee the production process, predict the production schedule. Take an example in FACS module when we play the Winning Margin game, as a production manager I need Well coordination with purchasing and sales managers to make best use of resource in order to have better control of cash and generate more profit for the company.

In order to produce the right volume of product for the contracts signed from sales manager, I need to foreseen the production process to adjust the machine to produce appropriate products and thus make a suitable schedule. This would ensure there is no empty machine left, minimize wasting of resource. Purchasing manager needs to request right unit of raw material, he/she needs to coordinate with production manager to make sure minimal resource is unused and left in the inventory.

Bad coordination with sales manager may cause increase in unsold goods in inventory or insufficient product produced, which cannot generate maximal profit but also take occupation of cash. Bad coordination with purchasing manager may cause inefficient production or inefficient use of cash. If request more than production capability, unused material would be placed in the warehouse that means the resource is not used efficiently, in the contrast, less request may cause machines be left empty, ended up with paying the fixed cost without producing which is also a kind of waste.

In reality, Resource Utilization also needs to take care of time, quality, costs and customer satisfaction of products. As the rules in Winning Margin, we don't need to worry about these factors but if product is produced not in time or with bad quality, or the production cost is too high, it will directly impact on the sales. In large companies, if want to fully use the resource, they also need to deal with people, in order to maximize people's working potential.

March 05, 2009

Environmental Management

At first, I am a bit confused about the term of Environmental Management. As the lecture notes on website says "In this section (means Environmental management section) the focus will be on the Resource aspect, related to how buildings, equipment and material are managed."However, the whole topic later on is talking about an organisation to be environmental friendly. So in my opinion, the "Environmental" term here, is talking about natural environment, there is also another meaning we can understand from that is the environment around the organisation, to manage the environment in organisation is like what says above, to manage the assets and make best use of them. So this aspect of meaning can go to Facilities Management category.

Talking about natural environmental issues for an organisation, it has both sides effects. If organisation is using it well, it can generate a chain of benefits, bringing financial gains, product innovation and operational efficiency. But in most of time, implying Environmental Management is a long term investment, because at first it need large amount of capital including finance and human recourse to be invested in for new technology, new process, new production line and new management system etc. however those investment cannot be paid back in short term. Therefore, most of organisations lose interests in the first place as they can't see payback for the investment shortly. In addition, organisational and technology factors are still undercover, waiting to be studied and proven, maybe large investment end up with no coming results. So uncertainty of success is also a problem.

Nevertheless, to be environmental friendly is more and more important nowadays. The energy prices such as oil and gas are keeping increasing, environmental management can help organisation innovate new products and new processes to be cost efficient, e.g. using green energy instead of costly cure oil. On the other hand, the organisation who doing well for environmental management can win consumers' preference, it will have good public image among people, hence easier to get support and market share from public than those organisations who are causing negative effect to the environment. For example, GE once has been caught dumping production waste directly into the river on newspaper, which to some degree has destroyed its public image, hence people would less likely to buy its products. That's the reason Jeff Immelt, the current CEO, keep emphasize on investing in R&D for green tech to enhance its brand image.

To imply the environmental management, only the technology is not enough, it also need a process and good management system, like ISO14001 is a special tool for managing environmental issues for organisation. It needs a policy outlining the commitment to improving its environment performance, follow on the plans and programs. The plans need to be integrated in to day to day bases, not only on paper and also need to take measurement on the implication. It needs the whole organisation's effort through top to bottom, therefore training to make mutual understanding is essential. 

March 2009

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