Human Capital Management and Production Strategies - Assignment Example

IT Name: Course: Institution: Instructor: Date: IT Multiple Answer Questions 1. Which of the following are examples of instance-level information relevant to the fulfillment process? ( 3 ) a. When did we send the goods? b. Which suppliers are prompt and which ones are habitually late in delivering the materials ordered? c. What was the total of the sales order? d. What was the total of the invoice? e. Which materials are sold most frequently? 2. Which of the following accounts are affected by a shipment of goods to a customer? (3) a. accounts payable b. accounts receivable c. cost of goods sold d. finished goods inventory e. bank account 3. Which of the following are examples of process-level information relevant to the fulfillment process? (3) a. Which customers are prompt and which ones are habitually late in sending the payment? b. Which materials are sold most frequently? c. Which materials are procured most frequently? d. Which vendor do we buy from most frequently? e. What is the average time between creating a sales order and sending the shipment? 4. Which of the following information is included in the definition of each operation in a product routing? (3) a. the work center where the operation is performed b. the person performing the operation c. time needed to complete the operation d. materials used in the operation e. status of the operation 5. Which of the following are examples of process level information from the production process? (2) a. What is the average time needed to produce a product? b. What is the average time taken to complete each step in the routing? c. What are our company’s bestselling products? d. How much time did it take to complete production order #1? e. What is the status of production order #1? 6. Which of the following are master data used during the production process? (3) a. bill of materials b. customers c. routings d. work centers e. suppliers 7. Which of the assumptions of the fulfillment, procurement, and production processes are not valid in the integrated process? (3) a. Sufficient production capacity is available. b. Sufficient quantities of the finished products are available to meet a customer order. c. Sufficient quantities of raw materials are available to make the needed products. d. The procurement process is triggered by a need to increase inventory. e. The fulfillment process is triggered by a need to fill a specific customer order. 8. In the integrated process, after which of the following steps is there a decision point? (3) (Wang 1997). a. Create purchase order b. Create sales order c. Authorize production d. Receive shipment from vendor e. Create purchase requisition 9. A stock requirements list can display which of the following information about a material? (3) a. planned orders b. invoices from vendors c. production orders d. customer invoice e. order reservations 10. Which of the following are intra-company processes? (2) a. Human capital management b. Supply chain management c. Asset management d. Customer relationship management e. Supplier relationship management   Part B: Written 1. Define the following terms: 1. Human capital management (HCM) refers to an integrated approach that aims to direct and develop people’s capabilities to realize considerably higher levels of organizational performance. 2. Lead time refers to the time period between the commencement and completion of any activity. 3. Succession planning is the process of identifying and developing potential workers or individuals for the top managerial or administrative positions that are likely to become vacant for one or other reasons in the future. 4. Activity-based costing (ABC) refers to a costing approach that allocates overhead costs to multiple activity cost pools and the assigns the activity cost pools to products and services by means of cost drivers. 5. Cash-to-cash cycle time refers to the duration that an investment on raw materials takes to generate returns for an organization. Essay 2. Discuss how variances between standard and actual costs result and how a product cost per unit sold can be calculated. Also, include in your discussion why cost variances would be difficult to research in a paper-based system. Standard costs refer to rational cost approximations done using historical and future overhead financial risks. Normally stated in cost per unit, the costs provide a predetermined, performance level for use in variance analysis. This refers to the process used to evaluate the variation between actual and standard costs as well as to identify sources of those disparities. This indicates that actual costs include historical costs that are based on actual transactions and operations for the just ended business period. On the other hand, cost variances refer to the “differences between actual and standard costs” (Shim & Siegel 2009, p.206). For most cost items, there exist two general kinds of variances: price and quantity variances. They can be applied in computing direct materials, factory overhead, and direct labor. In addition, cost variances may be favorable or unfavorable, with favorable cost variance resulting when standard cost exceeds actual cost and it shows efficiencies in incurring production costs and in using direct materials and labor as well as production overhead. In contrast, unfavorable variance result when actual cost surpasses standard cost and it either suggests inefficiencies in use of the three variable cost items or an organization spend much for one or more of the cost items. The nature of cost variance indicates that it would be difficult to research cost variance in a paper-based system. This is because the system makes it impossible to dynamically update and disseminate information on actual costs over time (Shim & Siegel 2009). Product cost per unit sold is given by, where 3. Compare and contrast make-to-stock and make-to-order production strategies from an integrated process viewpoint. Include in your discussion issues related to excess inventory, and delayed deliveries due to stock outs and how an integrated enterprise system can reduce these problems. Illustrate your points with real world case studies. Production strategies reflect the degree to which supplies of materials must anticipate actual demands. According to Gattorna (1998), the strategies are classified into make-to-order (MTO) and make-to-stock (MTS). MTS only applies to standard products, while MTO applies to both custom and standard products. In MTO environment, procurement of materials and product components occurs upon receipt of a customer order. This is to mean that the customer order initiates all supply chain activities from the materials’ procurement, in-house fabrication of components to the final assembly of the products. Therefore, MTO product reflects a “standard or custom item” only manufactured upon entry of a sales order (Miltenburg 2005, p.317). Classical example of companies employing this form of production strategy includes aircraft manufacturers. For instance, Boeing 767 is designed with two engines, fuselage, two wings, and tail section. Thus, a customer cannot order a 767 with four engines. Using MTO enables low or nil finished product inventories, but on the negative side, the inconsistent manufacturing results in low rates of utilization of organizational capacity. In addition, there exists delivery delays due to stock outs (a case that happens when consumer demand for a product surpasses the obtainable inventory) because lack of finished inventory implies longer lead times for customer orders and less reliable dates of delivery (Gattorna 1998). Since MTO does not depend on forecasting, poor communication within the supply chain and failure of the company to respond to future changes in customer demand does not affect performance of the company. First, MTO strategy relies on previous product models in production of on-demand products. Secondly, sales order initiates production of items meaning that changes in customer wants will be integrated into the production planning. In contrast, in MTS environment, production occurs ahead of sales order and therefore, there exists finished products inventory. This implies that there are no delivery delays due to stock outs. However, company using this strategy bears the costs involved in carrying finished inventory and as such, the strategy is more suitable for reliable demand products such as chemicals, soft drinks, and electronic components. Because production happens ahead of demand, MTS environment depends on forecasts of future demand. In this sense, predictions of what to manufacture can occur with some accuracy, and the advantages include better delivery performance and higher capacity use than attainable by MTO strategy. However, poor communication within the supply chain and failure of the company to respond to rapid changes in consumer demand may result to business losses. Bas, Gasquet, and Franco (2010) argue that poor communication may result to production of products that will not meet customers wants in the future and thus, result to accumulation of obsolete finished products inventory in the supply chain. A classical example in this case is Coca Cola Company, which produces and stores soft drinks. The company collects information on customer preferences to enable it to produce soft drinks that will be able to satisfy consumer wants in the future. An integrated enterprise system can reduce problems associated with these two production strategies efficiently. An integrated enterprise system uses advanced information technology (IT) to enable close coordination within an organization as well as suppliers, customers and partners. It uses supply chain management systems, which manages chain of suppliers and purchases including all phases of processing. As such, integrated enterprise system enables companies to achieve the correct balance of low inventory levels and customer responsiveness. Low inventory levels reduce the problems of late deliveries due to stock outs, ineffective utilization of capacity and excessive carrying inventory costs. On the other hand, the aspect of customer responsiveness in integrated enterprise systems enables organizations to respond rapidly to changes in customer wants (Gattorna 1998). References Bas, AO, Gasquet, PG, & Franco, RD 2010, Balanced automation systems for future manufacturing networks, Springer. Gattorna, J 1998, Strategic supply chain alignment: best practice in supply chain management, 6th edn., Gower Publishing Ltd, Aldershot, UK. Miltenburg, J 2005, Manufacturing planning: how to formulate and implement a winning plan, 2nd edn., Productivity Press. Shim, JK, & Siegel, JG 2009, Modern cost management and analysis, 3rd edn., Barron’s Educational Series, Hauppauge, NY. Wang, B 1997, Integrated product, process, and enterprise design, Springer, Berlin. Read More