VALUE ANALYSIS Value Analysis is an effective tool for cost reduction and the results accomplished are far

greater. It improves the effectiveness of work that has been conventionally performed as it questions and probes into the very purpose, design, method of manufacture, etc., of the product with a view to pinpointing unnecessary costs, obvious and hidden which can be eliminated without adversely affecting quality, efficiency, safety and other customer feature
OBJECTIVES OF VA The VA / VE objectives is to find and improve on value mismatches in products, processes and capital projects. Find important functions define necessary versus un - necessary functions Find and improve on low performing functions. Define and segregate the necessary functions from the unnecessary functions and thereby creatively develop alternative means of accomplishing the necessary functions at lower total (life cycle) cost.

VALUE ANALYSIS JOB PLAN Several versions of the VA Job Plan can be found in different literature. Some give file, others six and yet many other seven phases. It is the systematic approach which is more important to achieve the desired objectives. The phases of VA Job Plan are as follows: 1) SELECTION & ORIENTATION - to select those problems areas where a potential for net higher Savings is expected - use the common paretos ABC analysis - General scope, restrictions and aims of the study is defined 2) ANALYSIS - to examine the data at a co- ordinated syndicate meeting - to appoint a secretary to record the minutes - to apply the Tests for Value - to propose further actions 3) RECORDING IDEAS - the secretary writes clearly the minutes of the analysis meeting and circulates them to syndicate members - it includes the agenda for the next meeting

4) SPECULATION - to hold additional syndicate 64 meetings in order to discuss the ideas analysed and any new information obtained. - to speculate upon practical measures for reducing costs and increasing value. 5) INVESTIGATION - to investigate suggestions for reducing costs and to make them practical and acceptable - to obtain definite prices and costs in order to estimate savings accurately. 6) RECOMMENDATION - recommended practical savings to management for implementing - to present the recommendations as a comprehensive report - to appoint a member to act as an implementation consultant. 7) IMPLEMENTATION - to decide on future plans for the company for which the authority of the management is needed - to implement the recommendations acceptable to the management.

VALUE ENGINEERING Value engineering is the term applied to value analysis done the design and prototype stage of a product. The potentials of saving are a more in case value analysis is done at design stage. Other advantage is that any changes at this stage are less costly than to effect the same at a latter stage, when the production is in full swing. There are a few limitations however on value engineering work. At the design and proto-type stage, the time is rather short since a company wants to put a new product in the market before any of its competitors can set in and value engineering will have a very short time to apply their techniques. Evaluation of the value at this stage becomes difficult in absence of any customer reaction and opinion.

Inventory management
Inventory management is primarily about specifying the size and placement of stocked goods. Inventory management is required at different locations within a facility or within multiple locations of a supply network to protect the regular and planned course of production against the random disturbance of running out of materials or goods. The scope of inventory management also concerns the fine lines between replenishment lead time, carrying costs of inventory, asset management, inventory forecasting,

inventory valuation, inventory visibility, future inventory price forecasting, physical inventory, available physical space for inventory, quality management, replenishment, returns and defective goods and demand forecasting. Or can be defined as the left out stock of any item used in an organization

Effective inventory management is all about knowing what is on hand, where it is in use, and how much finished product results. Inventory management is the process of efficiently overseeing the constant flow of units into and out of an existing inventory. This process usually involves controlling the transfer in of units in order to prevent the inventory from becoming too high, or dwindling to levels that could put the operation of the company into jeopardy. Competent inventory management also seeks to control the costs associated with the inventory, both from the perspective of the total value of the goods included and the tax burden generated by the cumulative value of the inventory. Balancing the various tasks of inventory management means paying attention to three key aspects of any inventory. The first aspect has to do with time. In terms of materials acquired for inclusion in the total inventory, this means understanding how long it takes for a supplier to process an order and execute a delivery. Inventory management also demands that a solid understanding of how long it will take for those materials to transfer out of the inventory be established. Knowing these two important lead times makes it possible to know when to place an order and how many units must be ordered to keep production running smoothly. Calculating what is known as buffer stock is also key to effective inventory management. Essentially, buffer stock is additional units above and beyond the minimum number required to maintain production levels. For example, the manager may determine that it would be a good idea to keep one or two extra units of a given machine part on hand, just in case an emergency situation arises or one of the units proves to be defective once installed. Creating this cushion or buffer helps to minimize the chance for production to be interrupted due to a lack of essential parts in the operation supply inventory. Inventory management is not limited to documenting the delivery of raw materials and the movement of those materials into operational process. The movement of those materials as they go through the various stages of the operation is also important. Typically known as a goods or work in progress inventory, tracking materials as they are used to create finished goods also helps to identify the need to adjust ordering amounts before the raw materials inventory gets dangerously low or is inflated to an unfavorable level. Finally, inventory management has to do with keeping accurate records of finished goods that are ready for shipment. This often means posting the production of newly completed goods to the inventory totals as well as subtracting the most recent shipments of finished goods to buyers. When the company has a return policy in place, there is usually a sub-category contained in the finished goods inventory to account for any returned goods that are reclassified as refurbished or second grade quality. Accurately maintaining figures on the finished goods inventory makes it possible to quickly convey information to sales personnel as to what is available and ready for shipment at any given time. In addition to maintaining control of the volume and movement of various inventories, inventory management also makes it possible to prepare accurate records that are used for accessing any taxes due on each inventory type. Without precise data regarding unit volumes within each phase of the overall operation, the company cannot accurately calculate the tax amounts. This could lead to underpaying the taxes due and possibly incurring stiff penalties in the event of an independent audit.

Different Types of Inventory

Inventory of materials occurs at various stages and departments of an organization. A manufacturing organization holds inventory of raw materials and consumables required for production. It also holds inventory of semi-finished goods at various stages in the plant with various departments. Finished goods inventory is held at plant, FG Stores, distribution centers etc. Further both raw materials and finished goods those that are in transit at various locations also form a part of inventory depending upon who owns the inventory at the particular juncture. Finished goods inventory is held by the organization at various stocking points or with dealers and stockiest until it reaches the market and end customers. Besides Raw materials and finished goods, organizations also hold inventories of spare parts to service the products. Defective products, defective parts and scrap also forms a part of inventory as long as these items are inventoried in the books of the company and have economic value.

Material handling
Material Handling is the movement, storage, control and protection of materials, goods and products throughout the process of manufacturing, distribution, consumption and disposal. The focus is on the methods, mechanical equipment, systems and related controls used to achieve these functions. The material handling industry manufactures and distributes the equipment and services required to implement material handling systems. Material handling systems range from simple pallet rack and shelving projects, to complex conveyor belt and Automated Storage and Retrieval Systems(AS/RS). Material handling can also consist of sorting and picking, as well as automatic guided vehicles.

Material Handling Systems

Materials handling systems provide transportation and storage of materials, components and assemblies. Material handling activities start with unloading of goods from delivery transportation, the goods then pass into storage, onto machining, assembly, testing, storage, packaging, storage, and finally loading onto transport. Each of these stages of the production process requires a slightly different design of handling equipment, and some processes require integration of multiple items of handling equipment. Design or selection of the right material handling system is one of the most important decisions that a manager can make, because of the effects on the rest of the manufacturing plant. It affects the material flow and the factory layout. Apart from the initial capital cost for a new system, the consequences of any misjudgment in material handling will have considerable and long-term effects on operations. In recent years computer based simulation tools have

been developed to simulate material handling systems and their effect on the manufacturing process. Loading equipment is aimed at providing the capability to load and unload vehicles; it is also referred to as loading bay equipment. The category can be divided into products that provide access from the loading bay to the vehicle and equipment that moves the product from the loading bay to the vehicle and vice versa. Equipment that falls into the access category are scissor lifts, goods lifts, dock levelers, loading ramps, doors, dock seals and vehicle restraints, and equipment that falls into the movement category are pallet trucks, conveyors and fork lift trucks.

Material Handling Equipment

Lifting and Transport Equipment

Lifting and transport equipment is used to move product around the production facility, from loading bay to storage, from storage to production, around production, from production to storage, and from storage to loading bay. Equipment that falls into this category are fork lift trucks, order picking trucks, overhead cranes, tower cranes and belt, chain and overhead conveyors. Storage Equipment Storage equipment, as the name suggests is used to store materials, components and assemblies. The level of complexity of this type of equipment is wide ranging, from a welded cantilever steel rack to hold lengths of stock materials to a powered vertical carousel system. Also within this category are pallet racks, mobile shelf units, and plastic, wood and steel containers. Automated Handling Equipment Manufacturers of automated handling equipment produce automated guide vehicles, storage and retrieval equipment, conveying systems and product sortation equipment. The level of automation varies depending on the handling requirements. Fully automated handling systems ensure that the materials/components/assemblies are delivered to the production line when required without significant manual intervention. Semi-automatic handling systems provide less advanced solutions that deliver materials/components/assemblies to the production line with some manual intervention.

 Automated Guided Vehicles (AGVs) An AGV is a material handling device that is used to move parts between machines or work centres. They are small, independently powered vehicles that are usually guided by cables that are buried in the floor or they use an optical guidance system. They are controlled by receiving instructions either from a central computer or from their own on-board computer. In some applications they can be used as mobile workstations to replace the more traditional conveyor system. Robotics Robotics was first introduced 30 years ago. Since then their applications and versatility have increased dramatically. The basic robotics technology is similar to CNC technology but most robots have more degrees of freedom. In manufacturing applications, robots can be used for assembly work, process such as painting, welding, etc. and for material handling. More recently robots are equipped with sensory feedback through vision and tactile sense. The main advantage of robots is that they can be used for repetitive, monotonous, mundane tasks that need precision. They can also be used in hazardous environments that are not suitable for human operators.

New generation material handling system

The new-generation material handling system are highly automated system based on latest technologies, provided with flexibility capable of changing its own structure or function in response to changes from manufacturing systems, and autonomous functions to enhance system reliability. Such system is defined as MMHS - Metamorphic Material Handling System. MMHS Project was the fifth international R&D project in IMS program, and its was to contribute to industries, optimize life cycle of equipment, produce a system most suited to the global environment, and respect humanity through research and development activities. MMHS project perform research and development activities focusing on the following four Points. Life cycle optimization Environmentally conscious manufacturing User-friendliness Contribution to global industry productivity Subjects and objectives of MMHS project conceived from this viewpoint were as follows.

 Responsive: Responsive to changes that may take place in manufacturing technology and environment, type of product or material to be handled, work schedule and load. Flexible: Capable of transforming itself and altering its function to meet any change in handling requirements. Autonomous: Able to make decisions on its own (to enhance system availability). Highly automatic: Incorporated with next-generation automation technology Multi-functional: Having such functions as assembling, packaging and disassembling, besides transporting.

Logistics management
What is Logistics?

Logistics The planning, execution, and control of the movement / placement of goods and / or people, and the related supporting activities, all within a system designed to achieve specific objectives. Logistics Management "Logistics management is that part of supply chain management that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customers' requirements."

Production logistics
The term production logistics describes logistic processes within an industry. Production logistics aims to ensure that each machine and workstation receives the right product in the right quantity and quality at the right time. The concern is not the transportation itself, but to streamline and control the flow through value-adding processes and to eliminate nonvalue-adding processes. Production logistics can operate in existing as well as new plants. Manufacturing in an existing plant is a constantly changing process. Machines are exchanged and new ones added, which gives the opportunity to improve the production logistics system accordingly. Production logistics provides the means to achieve customer response and capital efficiency. Production logistics becomes more important with decreasing batch sizes. In many industries (e.g., mobile phones), the short-term goal is a batch size of one, allowing even a single customer's demand to be fulfilled efficiently. Track and tracing, which is an essential part of production logistics due to product safety and reliability issues, is also gaining importance, especially in the automotive and medical industries.

Business logistics
One definition of business logistics speaks of "having the right item in the right quantity at the right time at [4] the right place for the right price in the right condition to the right customer". As the science of process business logistics incorporates all industry sectors. Logistics work aims to manage the fruition of project life cycles, supply chains, and resultant efficiencies. In business, logistics may have either an internal focus or an external focus (covering the flow and storage of materials from point of origin to point of consumption. The main functions of a qualified logistician include inventory management, purchasing, transportation, warehousing, consultation, and the organizing and planning of these activities. Logisticians combine a professional knowledge of each of these functions to coordinate resources in an organization.

Supply chain management

Supply chain management (SCM) is the management of a network of interconnected businesses involved in the provision of product and service packages required by the end customers in a supply chain.[2] Supply chain management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption. Another definition is provided by the APICS Dictionary when it defines SCM as the "design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand and measuring performance globally."

Problems addressed
Supply chain management must address the following problems: Distribution Network Configuration: number, location and network missions of suppliers, production facilities, distribution centers, warehouses, cross-docks and customers. Distribution Strategy: questions of operating control (centralized, decentralized or shared); delivery scheme, e.g., direct shipment, pool point shipping, cross docking, direct store delivery (DSD), closed loop shipping; mode of transportation, e.g., motor carrier, including truckload, Less than truckload (LTL), parcel; railroad; intermodal transport, including trailer on flatcar (TOFC) and container on flatcar (COFC); ocean freight; airfreight; replenishment strategy (e.g., pull, push or hybrid); and transportation control (e.g., owner-operated, private carrier, common carrier, contract carrier, or thirdparty logistics (3PL)). Trade-Offs in Logistical Activities: The above activities must be well coordinated in order to achieve the lowest total logistics cost. Trade-offs may increase the total cost if only one of the

activities is optimized. For example, full truckload (FTL) rates are more economical on a cost per pallet basis than LTL shipments. If, however, a full truckload of a product is ordered to reduce transportation costs, there will be an increase in inventory holding costs which may increase total logistics costs. It is therefore imperative to take a systems approach when planning logistical activities. These trade-offs are key to developing the most efficient and effective Logistics and SCM strategy. Information: Integration of processes through the supply chain to share valuable information, including demand signals, forecasts, inventory, transportation, potential collaboration, etc. Inventory Management: Quantity and location of inventory, including raw materials, work-in-process (WIP) and finished goods. Cash-Flow: Arranging the payment terms and methodologies for exchanging funds across entities within the supply chain.

Supply chain execution means managing and coordinating the movement of materials, information and funds across the supply chain. The flow is bi-directional. SCM applications provide real-time analytical systems that manage the flow of product and information throughout the enterprise supply chain network.

Activities/functions
Supply chain management is a cross-function approach including in managing the movement of raw materials into an organization, certain aspects of the internal processing of materials into finished goods, and the movement of finished goods out of the organization and toward the end-consumer. As organizations strive to focus on core competencies and becoming more flexible, they reduce their ownership of raw materials sources and distribution channels. These functions are increasingly being outsourced to other entities that can perform the activities better or more cost effectively. The effect is to increase the number of organizations involved in satisfying customer demand, while reducing management control of daily logistics operations. Less control and more supply chain partners led to the creation of supply chain management concepts. The purpose of supply chain management is to improve trust and collaboration among supply chain partners, thus improving inventory visibility and the velocity of inventory movement.

Transportation management system

A transportation management system (TMS) is a subset of supply chain management concerning transportation operations and may be part of an enterprise resource planning system.
A TMS usually "sits" between an ERP or legacy order processing and warehouse/distribution module. A typical scenario would include both inbound (procurement) and outbound (shipping) orders to be evaluated by the TMS Planning Module offering the user various suggested routing solutions. These solutions are evaluated by the user for reasonableness and are passed along to the transportation provider analysis module to select the best mode and least cost provider. Once the best provider is

selected, the solution typically generates electronic load tendering and track/trace to execute the optimized shipment with the selected carrier, and later to support freight audit and payment (settlement process). Links back to ERP systems (after orders turned into optimal shipments), and sometimes secondarily to WMS programs also linked to ERP are also common

FACILITY LAYOUT: A facility layout is an arrangement of everything needed for production of goods or delivery of services. A facility is an entity that facilitates the performance of any job. It may be a machine tool, a work centre, a manufacturing cell, a machine shop, a department, a warehouse, etc. The layout design generally depends on the products variety and the production volumes. Four types of organization are referred to, namely fixed product layout, process layout, product layout and cellular layout Whenever an existing facility is renovated or a new facility designed, the chance exists to develop a layout that will improve process flow and minimize wasted space. When a new facility is designed, the facility layout should be integrated into the architectural design. Limitations on building lot size and shape, however, may heavily inuence the layout congurations available. In other situations, a new layout is achieved simply by renovating an existing area, in which case the size and shape of the area are set, and the limitations relate to the funds available. Planning facility layout is important for many reasons. The amount of capital invested in new construction or renovation is usually substantial. The results are long-term: while minor modications may be possible, the overall layout will last well into the future. Furthermore, layout has an enormous effect on daily operations. Not only does layout dictate the distance a patient must travel from one department to another; it also inuences which staff members are likely to interact and communicate

The basic goals in developing a facility layout should be functionality and cost savings. Functionality includes placing the necessary departments, such as the operating and recovery rooms, close together. Functionality also includes keeping apart those departments which should not be together. Overall, functionality includes aspects of a layout which may not be immediately quantiable, such as facilitating communication and improving staff morale.

Project Roles and Responsibilities

There are many groups of people involved in both the project and project management lifecycles. The Project Team is the group responsible for planning and executing the project. It consists of a Project Manager and a variable number of Project Team members, who are brought in to deliver their tasks according to the project schedule.

The Project Manager is the person responsible for ensuring that the Project Team completes the project. The Project Manager develops the Project Plan with the team and manages the teams performance of project tasks. It is also the responsibility of the Project Manager to secure acceptance and approval of deliverables from the Project Sponsor and Stakeholders. The Project Manager is responsible for communication, including status reporting, risk management, escalation of issues that cannot be resolved in the team, and, in general, making sure the project is delivered in budget, on schedule, and within scope. The Project Team Members are responsible for executing tasks and producing deliverables as outlined in the Project Plan and directed by the Project Manager, at whatever level of effort or participation has been defined for them. The Project Sponsor and/or Project Director is a manager with demonstrable interest in the outcome of the project who is responsible for securing spending authority and resources for the project. The Project Sponsor acts as a vocal and visible champion, legitimizes the projects goals and objectives, keeps abreast of major project activities, and is a decision-maker for the project. The Project Sponsor will participate in and/or lead project initiation; the development of the Project Charter. He or she will participate in project planning (high level) and the development of the Project Initiation Plan. The Project Sponsor provides support for the Project Manager; assists with major issues, problems, and policy conflicts; removes obstacles; is active in planning the scope; approves scope changes; signs off on major deliverables; and signs off on approvals to proceed to each succeeding project phase. The Project Sponsor generally chairs the steering committee on large projects. The Project Sponsor may elect to delegate any of the above responsibilities to other personnel either on or outside the Project Team

The Steering Committee generally includes management representatives from the key organizations involved in the project oversight and control, and any other key stakeholder groups that have special interest in the outcome of the project. The Steering committee acts individually and collectively as a vocal and visible project champion throughout their representative organizations; generally they approve project deliverables, help resolve issues and policy decisions, approve scope changes, and provide direction and guidance to the project. Depending on how the project is organized, the steering committee can be involved in providing resources, assist in securing funding, act as liaisons to executive groups and sponsors, and fill other roles as defined by the project. Customers comprise the business units that identified the need for the product or service the project will develop. Customers can be at all levels of an organization. Since it is frequently not feasible for all the Customers to be directly involved in the project. Stakeholders are all those groups, units, individuals, or organizations, internal or external to our organization, which are impacted by, or can impact, the outcomes of the project. This includes the Project Team, Sponsors, Steering Committee, Customers, and Customer co-workers who will be affected by the change in Customer work practices due to the new product or service; Customer managers affected by modified workflows or logistics; Customer correspondents affected by the quantity or quality of newly available information; and other similarly affected groups.

Project finance
Project finance is the long-term financing of infrastructure and industrial projects based upon the projected cash flows of the project rather than the balance sheets of its sponsors. Usually, a project financing structure involves a number of equity investors, known as 'sponsors', as well as a 'syndicate' of banks or other lending institutions that provide loans to the operation. They are most commonly nonrecourse loans, which are secured by the project assets and paid entirely from project cash flow, rather than from the general assets or creditworthiness of the project sponsors, a decision in part supported [1] by financial modeling. The financing is typically secured by all of the project assets, including the revenue-producing contracts. Project lenders are given alien on all of these assets and are able to assume control of a project if the project company has difficulties complying with the loan terms. Risk identification and allocation is a key component of project finance. A project may be subject to a number of technical, environmental, economic and political risks, particularly in developing countries and emerging markets. Financial institutions and project sponsors may conclude that the risks inherent in project development and operation are unacceptable (unfinanceable). To cope with these risks, project sponsors in these industries (such as power plants or railway lines) are generally completed by a number of specialist companies operating in a contractual network with each other that allocates risk in a way that allows financing to take place. "Several long-term contracts such as construction, supply, off-take and concession agreements, along with a variety of joint-ownership structures are used to align [2] incentives and deter opportunistic behaviour by any party involved in the project." The patterns of implementation are sometimes referred to as "project delivery methods." The financing of these projects

must be distributed among multiple parties, so as to distribute the risk associated with the project while simultaneously ensuring profits for each party involved. A riskier or more expensive project may require limited recourse financing secured by a surety from sponsors. A complex project finance structure may incorporate corporate finance, securitization, options (derivatives), insurance provisions or other types of collateral enhancement to mitigate unallocated risk.