Manufacturing Logistics Overview

Manufacturing Logistics

• Manufacturing systems logistics manages and coordinates components in a manufacturing environment to ensure smooth, efficient operations.
• Key aspects include procurement, warehousing, inventory management, transportation, and production planning & scheduling.

Manufacturing Logistics Advantages

• Reduce costs by minimizing waste and optimizing inventory levels.
• Improve production efficiency by ensuring materials are available when and where needed.
• Enhance customer satisfaction by delivering products on time and in full.
• Gain a competitive advantage by being more efficient and responsive than competitors.

Factors Impacting Manufacturing Systems Logistics

• Type of product being manufactured
• Production process
• Size and layout of the manufacturing facility
• Location of suppliers and customers
• Overall business strategy

Quality Assurance (QA) and Total Quality Management (TQM)

• QA and TQM are the responsibility of all involved in product design and manufacturing.
• Product integrity is defined by function, suitability, and maintainability throughout its lifespan.
• Defective products are costly to manufacturers.

Lean Production

• Lean production is a methodology for assessing and improving each process in a company.
• Seeks to minimize waste and eliminate unnecessary operations not adding value to the product.
• Focuses on, efficiency and effectiveness of processes, machinery, and personnel.
• Aims for continual improvement in efficiency and profitability by removing waste.

Agile Manufacturing

• Agile manufacturing is a strategy for adapting to changing customer needs and market demands.
• Key aspects are:
  • Flexibility, adjusting production processes to changes.
  • Rapid response, quickly producing or changing existing products.
  • Continuous improvement, consistently looking for ways to enhance processes.

Lean vs. Agile

• Lean focuses on efficiency and repeatability of operations, while agile focuses on adapting to changes.
• Lean often emphasizes highly structured teams and processes, whereas agile favors flexibility and decentralized decision-making.

Manufacturing Costs

• Manufacturing costs typically account for about 40% of a product's selling price.
• Crucial for competitiveness, given global competition and increasing demand for high-quality goods at low prices.
• Typical cost breakdown includes design, materials, manufacturing, direct labor, and indirect labor.
• Repair costs increase significantly as a product moves through production, assembly, and distribution.

Manufacturing Costs Components

• Materials (raw material cost depends on material itself and supply/demand)
• Tooling (costs vary based on tools, dies, molds, work-holding devices, and fixtures)
• Fixed costs (energy, rent, insurance, real estate taxes)
• Capital (production machinery, equipment, buildings, and land)
• Labor (direct labor is labor directly involved in production; indirect labor supports manufacturing)

Manufacturing Cost Calculations

• Direct Material Cost (DMC)
• Direct Labor Cost (DLC), calculated based on production volume
• Variable Manufacturing Overhead (VMO)
• Fixed Manufacturing Overhead (FMO)
• Total Manufacturing Cost (TMC) is the sum of all component costs.