A management guide to logistics engineering by K. Beal

By K. Beal

This consultant will turn out an excellent aid to companies in delivering the pratical recommendation that would permit them to grasp the paintings of logistics so it may be used to their most sensible company virtue

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37 a) Discrete order quantities, which correspond to net requirements for each period, result in the lowest possible inventory for a given lead time. Orders are planned in the exact quantities and timing indicated on the net requirements schedule. They are generally used for high value items, for large assemblies, or for items manufactured on a continuous basis. b) Economic order quantities minimise the combined costs of acquiring and carrying inventory. If the stock on hand at the review is at or below the reorder level, then an economic order quantity is placed.

An area of the warehouse floor, or a 'cell' in a racking or shelving system is allocated to a particular product. Each 'bin' is usually only partly filled. The warehouse usually operates this section of storage on a random location principle, with the section being zoned into areas devoted to fast moving and slow moving stock. The level of stock is easily checked, and parts are re-ordered when the quantity of goods fall below a pre-determined level. This procedure is the basis of two-bin and three-bin stock control systems.

This is used to derive a figure of merit for the logistics processes - the manufacturing cycle efficiency. Value Added Time MCE = ( Manufacturing Lead Time ' x 100% Eliminating or minimising the inter-operation activities improves the manufacturing cycle efficiency. ) Similar figures of merit can be established to cover the purchasing and distribution lead times. CHECKLIST - LEAD TIME REDUCTION Reduce the administration time: - Feed information directly from the source to the point of application.

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