3.1 Objectives of Materials Management – Primary and Secondary | unit 3 project resources and site planning

Unit - 3

Project Resources and Site Planning

3.1 Objectives of Materials Management – Primary and Secondary

Objectives of Materials Management

To meet the primary objectives, the primary functions of the materials management are given as follows:

Materials Requirements Planning (MRP)

Planning of materials requirements in manufacturing is a necessary function in any organization, as inventory of materials involves about 60% of the total investment of the organization.

The profit earned depends on the utilization of these materials and reducing the inventory of the materials.

The latest technique used is called Just in Time (JIT) is referred practically to no inventory. However, in the present situations in any of the organization particularly manufacturing organization, it is not absolutely possible to keep no inventory of materials required for production.

The MRP is a technique used to plan the materials starting from the raw materials, finished parts, components, sub-assemblies and assemblies as per Bill of Materials (BOM) to procure or produce them to support a Master Production Schedule (MPS).

Purchasing

All the organizations need an efficient and economic purchasing and procurement of its various supplies of materials from the suppliers.

The function of purchasing can be stated as follows:

The requisition of material is necessary by proper authority to initiate its purchase.

To select proper supplier for the materials requisitioned, before placing an order.

To negotiate about the price of the material from the supplier and it will be purchased at the cheapest price.

The quality of material must be assured and should not be compromised with the cost of the material.

The material should be purchased of right quantity and right quality at proper time at the cheapest cost.

Inventories

The zero inventories are the ideal planning. There are three types of inventories.

Raw materials

Purchased goods

Finished parts and components

Inventory at different levels is necessary to make sure about the availability of all these types of materials and goods and their proper flow from one facility to another at different levels of production centers in a manufacturing concern.

Ascertaining and Maintaining the Flow and Supply of Materials

The distribution of materials requisitioned by the various production centers and other departments must be ascertained and the materials management department must maintain its flow and continuity of supply.

The management has to maintain continuity in production to meet this uncertainty in demand and control the situation by proper flow of materials supply and distribution at various production facilities and other departments as per changes in production quantity.

Quality Control of Materials

The quality of the product manufactured by the organization depends upon the quality of the materials used to manufacture that product. It is a very important and necessary function of materials management to purchase the right quality of materials.

The inspection, quality control, simplification, specification, and standardization are the activities which are to be followed for the measurement of quality of the materials.

Departmental Efficiency

The objective of this function is to ensure the efficiency of the system adopted. Management Information System (MIS) and feedback control at every stage of working must be adopted to control and make the management and employee work as efficiently as possible to achieve the best results.

There can be number of secondary functions.

Standardization and Simplification:

Standards define the quality, reduction in sizes and variety, interchangeability of parts and products. It ensures efficient utilization of materials and reduces wastages.

The objective of this function will be to produce standard product reducing the overall cost of the product.

2. Design and Development of the Product

The variety in product and functionality are the important factors to promote the sales of a product. The new techniques of designing a product using Computer Aided Design (CAD) has made possible to develop variety of products at faster rate.

3. Make and Buy Decisions

These types of decisions are the policy decisions of the management. The capacity of the organization and the various facility developed by the organization to manufacture various items is the main objective of every organization.

4. Coding and Classification of Materials

This is an important function of the materials management to help the production and purchasing department of every organization.

It uses its own methods of classification of materials used to manufacture the product or a company selling various goods.

ABC analysis is one of the simple and standard method used by most of the firms for classification and storing their variety of materials.

5. Forecasting and Planning Materials

Requirement’s planning is based on correct forecasting of sales and demand of the products in the market.

The market fluctuations are to be observed to control production of the organization. Forecast of future demand of sales sets the planning of materials supply.

Analytical methods are adopted for systematic forecasting and planning to procure the various materials required for production.

d. In case of fluctuating demands, there can be uncertainties in supply as well. This can be overcome by maintaining the proper quantity in inventory of short supply materials at proper time.

Key Takeaways:

The quality of the product manufactured by the organization depends upon the quality of the materials used to manufacture that product.

In case of fluctuating demands, there can be uncertainties in supply as well. This can be overcome by maintaining the proper quantity in inventory of short supply materials at proper time.

Requirement’s planning is based on correct forecasting of sales and demand of the products in the market.

3.2 Procedures -Material Requirement - Raising of Indents, Receipts, Inspection, Storage, Delivery, Record Keeping – Use of Excel Sheets, ERP Software, Inventory Control

Material Requirement

Raising of an Indent

Once need for a specific item or service has been established the next step shall be to transmit the need to the purchasing people for processing at their end. It may require certain paper work or electronic media to do this job.

Transmission of need to Purchase department is usually done through any one of the following three forms:

Standard Purchase Requisition

A Purchase requisition is a document that is used to list down the requirement and is sent to Purchase department for further processing.

Since material requirement is a regular phenomenon for an organization, every organization develops a formalized paper or electronic requisition which is filled up by the user department who has assessed the need for the item.

It is also known as "Raising of an indent" or “Raising a "Materials Purchasing Requisition”.

The indent carries a unique identification number and is also checked for its correctness by the higher authorities within the department, usually the Head of the Department.

In the indent, the Indenter gives complete information w.r.t. the description and specification of the material to be procured such as description of the jobs to be executed along with the materials to be supplied and equipment.

For the items to be supplied, the quantity along with detailed specifications and drawing number, etc., are given in the indent.

Similarly, for the equipment to be deployed the desired capacities of the equipment, their ownership, procurement through rent/lease, etc., are specified in the Indent.

The overall quality of the jobs to be executed along with the expected Performance Guarantees are also mentioned in the Indent.

In some organizations, especially bigger ones, the cost estimates also form part of the indent and as such are to be done by the indentor.

2. Traveling Purchase Requisition (TPR)

TPR are a means to communicate and activate purchase. It also carries information. It is mostly found in manually operated purchase systems done in inventory control section.

It is a simple printed card that is filed with the inventory control record for an item. List of approved suppliers for the items are maintained by the Materials Management department.

Complete description of the item to be purchased.

List of approved suppliers for the items, maintained by the Materials Management department

Last Purchased price

Past Consumption record

Reorder quantity value

Since TPRs are raised for Inventory items, the need of the item arises on the basis of certain forecasting methods employed by the Inventory control section. Popular methods are Periodic Review system, Fixed quantity system or Reorder point system

3. Bill of Materials

In brief, all the parts / components required to make a product are listed along with the individual quantity, are called Bill of materials.

This is basically a list, structured in the same way a product can be thought of.

For example, when a design personal produces design of a new product then he may be needing a number of parts that ultimately when assembled shall produce the item concerned.

List of such parts is called Bill of Materials (BOM). All other things remain the same as in case of other forms of transmission of need of an item.

Receipts and Inspection

Receiving of Materials

In small and medium-sized manufacturing concerns, functions of receipt and inspection of materials are to be performed by the stores department or the store-keeper. But in case of large manufacturing concerns, generally, a separate Receiving Department is set up. The Receiving Department has the following functions to perform:

To receive, unload and unpack the materials.

To check whether the packages and their contents are intact or not.

To verify and check the quality, quantity and other specifications regarding materials in accordance with the purchase order.

To segregate defective materials from the lot by comparing delivery note sent by the supplier with the copy of the purchase order.

Any shortage or breakage of material is intimated along with the acknowledgment sent to the supplier for the receipt of material.

To pass on the materials from the receiving clerk to the inspector for his thorough inspection of the materials received.

To prepare the ‘Goods Received Note’ showing the particulars of the materials received.

Inspection

When materials are received by the Receiving Department, they are unpacked and compared with the materials ordered for with the help of the purchase order.

If the materials are found to be in order, they are sent to the inspector for the inspection of the quality.

If the quality of the materials is found to be fit, the inspector shall prepare an Inspection Note certifying the quality

Format of Inspection Note

The specimen of the Inspection Note is given below:

Rejection Note

If the materials received are not found to be in accordance to the purchase order or fit for use, the inspecting staff rejects them for return to the supplier. For this purpose, a document known as Rejection Note is prepared.

Format Rejection Note

The specimen of the Rejection Note is given below:

Inspection of Materials - Rejection Note Specimen - Format

Material Receipt Book

It is the prime book used for the purpose of store accounting and keeps a date-wise record of the materials received in the stores. The Material Receipt Book provides the following information:

Name and address of the supplier.

Mode of Transport

Vehicle No.

Carrier’s Note No. and date and number of packages.

Brief description of materials.

Daily Receipt Voucher No. (D.R.V. No.) and date.

Stock Ledger Folio.

Format Material Receipt Book

The specimen of Material Receipt Book is given below:

Receiving of Materials - Material Receipt Book

Material Received Note (Or Goods Received Note)

Although the Material Received Note avoids the use of the Material Receipt Book, it is advisable to maintain this book since it is a prime book of store accounting and provides useful information.

Normally, five copies of Material Received Note are prepared and are sent to the Purchasing Department, Accounting Department, Stores Department and the department which has initiated the purchase requisition. The last copy is kept by the Receiving Department for future reference.

Specimen/Format Material Received Note

The specimen of a Material Received Note is given below:

Material Received Note

Damage/Shortage/Excess Report

This report is prepared by the receiving section of the stores department on opening the packages and comparing the actual materials received and materials ordered for with the help of the purchase order. Payment to the supplier of materials has to be adjusted according to this document. The proforma of this report is as follows:

Damages Shortage Excess Report Format

Storage:

Typically, a store has a few processes and a space for storage.

The main processes of store are

To receive the incoming materials (receiving)

To keep the materials as long as they are required for use (keeping in custody)

To move them out of store for use (issuing). The auxiliary process of store is the stock control also known as inventory control.

In a manufacturing organization, this process of receiving, keeping in custody, and issuing forms a cyclic process which runs on a continuous basis. The organizational set up of the store depends upon the requirements of the organization and is to be tailor made to meet the specific needs of the organization.

Main Processes of a store

An efficient stores management has normally the following main objectives.

To ensure uninterrupted supply of materials without delay to various users of the organization.

To prevent overstocking and under stocking of the materials

To ensure safe handling of materials and prevent their damage.

To protect materials from pilferage, theft, fire and other risks

To minimize the cost of storage

To ensure proper and continuous control over the materials.

To ensure most effective utilization of available storage space

To optimize the efficiency of the personnel engaged in the store

Classification of stores

Stores are classified basically in the following broad categories.

Functional stores – Functional stores are named based on the function of the materials stored

Examples are fuels store, chemicals store, tools store, raw materials store, spare parts store, equipment store, refractory store, electric store, explosives store, and finished goods store etc.

b. Physical stores – Physically stores can be centralized stores or decentralized stores. These stores are named based on the size and location of the store. Examples are central store, sub store, department store, site store, transit stores, receipt store, intermediate store, open yard store, and covered store etc.

c. Stores are also classified by naming them after the departments to which they serve.

Examples are construction stores, operation stores, rolling mill stores, blast furnace stores, and steel melting shop stores etc.

Advantages.

Centralized store can cater to a wider range of materials which is not possible in a smaller store. Hence user department is to look for the material of its need only at one place.

It contributes to the inventory control in the entire organization since the requirement of all the departments gets clubbed up.

It makes better control feasible.

It provides economy in storage space as materials when stored in larger quantities, occupy less specific space.

Large stores can be provided with better and modern handling facilities. The operation can also be automated.

Delivery at a single point decreases cost of delivery.

Disadvantages

If there are slippages or system not being well organized then there can be shortages of the materials which may results into unnecessary interruptions in production.

There may be necessity of additional internal documentation in the store.

The risks due to the fire and thefts are higher since the entire stock of the materials are concentrated at one place.

The variety of materials to be stored can be large and it can create complications in the systematic storage as well as in storage procedures.

Functions of a store

Store personnel are responsible for carrying out the following functions.

Receipt of incoming materials

Supervision of unloading of materials and tallying of materials

Checking for damages or shortages and preparation of the report

Filling of ‘goods inward’, ‘day book’, or ‘daily collection’ register

Completion of vendors consignment note (challan)

Making arrangement for inspection and getting the inspection completed

Preparation of ‘goods receipt note’ (GRN)

Preparation of ‘goods rejection memo’ (in case of rejection of materials)

Sending of materials to the respective stores

Sending of the relevant documents to the respective departments

Ensuring all storage and material handling facilities are in proper working order

Ensuring good housekeeping and cleanliness in the storage space

Checking, counting and tallying of materials before issue

Making prompt entries in ‘Bin card’ or stock card

Ensuring correct documentation of material receipts and material issues

Ensuring safe and proper handling of materials so as not to damage them

Ensuring proper record keeping and correct accounting of materials

Ensuring regular stock verification

Delivery

After inspection by Central Receiving, the team will make delivery of materials to the requesting department as indicated in the purchase order record.

If the delivery is a Materials management supply order, the delivery is made within 24 hours of the order being received by Materials Management Inventory. Peak receiving periods may extend the delivery time unless special handling is required.

Upon delivery, the driver will obtain the signature of the individual accepting the materials for the requesting department. The number of cartons delivered should be verified against the delivery log before signature.

After the driver leaves, the requesting department should verify the contents of each carton against the purchase order. The driver will not be responsible for opening cartons, stocking shelves, installation or assembly of items received.

Shortages, overages, or incorrect merchandise received must be reported to Central Receiving immediately upon receipt.

Record Keeping

One of the main parts of accounting is recordkeeping or bookkeeping. Recordkeeping is the process of recording transactions and events in an accounting system. Since the principles of accounting rely on accurate and thorough records, record keeping is the foundation accounting.

Accounting is used to identify events that need to be recorded, recording the transactions of these events, and communicating the effects of these transactions with people inside and outside of the company. As you can see, record keeping is only a small part of the broader definition of accounting.

Record Keeping using excel

Step 1: Start with a bookkeeping Excel sheet template.

The template is separated into three parts:

First, the chart of accounts is the bookkeeping Excel sheet that will include all of the accounts that make up your books. You can think of each account as a category. Every transaction you record needs to get sorted into one of these categories.

Next, the list of transactions will contain details of every business transaction you enter—the date, a description, the amount, and the account. Transactions may be divided into separate income and expense sheets, or all included in one big sheet.

Finally, the income statement sheet will be where the numbers from your list of transactions are copied over, either automatically or by hand. The income statement contains the calculations that summarize what you’ve spent and what you’ve earned, and also shows you your net income.

Step 2: Customize the chart of accounts within your template.

Customize the chart of accounts, the chart of accounts sheet will serve as your point of reference—reminding you how to categorize different transactions.

excel bookkeeping

As the figure displays, make a list of every type of expense or income your business uses, and create an account type for each. However, to keep your accounts in Excel, each account should be categorized as one of the following:

Income: Any account you use to track money coming into your business

Expense: Any account you use to track money leaving your business

Cost of goods sold (COGS): The money you spend creating the product you sell your customers or clients

Step 3: Customize the income statement sheet.

After customizing the chart of accounts, next work on customizing your income statement sheet. As shown in the figure enter the information from your chart of accounts making sure to include all accounts, but keeping them separated according to whether they’re income, expenses, or COGS.

excel bookkeeping

After editing the income statement Excel bookkeeping sheet, make sure to duplicate this sheet (if your template only has one). In order to generate monthly income statements, you’ll need separate sheets for each month. Make 12 copies of the original income statement, one for each month in the year—don’t forget to label each one and enter the date range in the appropriate cell.

excel bookkeeping

Step 4. Add a sheet for tracking invoices.

When you enter income from paid invoices into your transactions sheet, include the invoice number. By doing this, you can cross-reference it to avoid errors like forgetting to enter invoice payments, or entering the same payments twice. It’s much easier to cross-reference if you’ve got a separate sheet to track your invoices.

You can add a tab within your bookkeeping Excel document, or, once again, download an invoice tracking Excel template. If you download a template, you can copy and paste the contents into a new sheet within your master bookkeeping Excel document.

If you want to add an invoice tracking sheet, keep this sheet next to your transactions sheet within the Excel document—this will make it easier to check for reference.

Step 5. Add a sheet for projecting cash flow.

Just like the tracking invoice sheet, you can simply create a new sheet within your master document and paste a cash flow tracking template or, of course, make your own. Download Fundera’s cash flow template here.

Step 6. Save the file to a secure location on your computer.

After you’ve edited and added all of the different sheets within your master Excel bookkeeping document, save the file in a secure location on your computer or drive. Therefore, make sure the file is secure, yet accessible when you need it to perform your day-to-day bookkeeping tasks.

Inputting and Categorizing Transactions

In fact, inputting and categorizing transactions will be a major part of managing your basic bookkeeping in Excel. Every time a transaction takes place, you’ll record and categorize it using the following process:

Get a record of the transaction: Every time a transaction takes place, you’ll need a record to refer to for the relevant information that you’ll record within your Excel bookkeeping system. This record may be a credit or bank statement, the information in your PayPal account, or a receipt from a cash payment.

Enter the date: Based on the record you have, you’ll enter the date the transaction was recorded under the appropriate column.

Describe and categorize the transaction: Next, you’ll enter the relevant account under the appropriate column (as shown below). You’ll fill in what the transaction was, how much it was, and then the category based on the ones you’ve established within your chart of accounts. You’ll want to make sure the category appears exactly as it’s written in the chart of accounts.

excel bookkeeping

Generating Income Statements

Using this process of inputting transactions, you’ll manage your small business bookkeeping in Excel on a day-to-day basis.

At the end of every month, however, use the income statement sheet to get insights on your income, expenses, and profit.

If you’re not using a template with prebuilt formulas, enter manually to calculate the information to populate your income statement. To do this, review your transactions for the time period and then add totals for each account.

For example, if you have three expense transactions categorized as “Computers or Equipment,” you would take the dollar amounts from those three transactions and add them together—resulting in your “Computers or Equipment” total for the month. It may be helpful to create a separate calculations sheet within your master document where you can track and perform these calculations (the digital equivalent of a scrap piece of paper for calculations).

Through this process, you should be able to calculate and fill in all of the pieces of your income statement—revenues, cost of sales, and expenses.

Once you’ve completed your income statement for the month, make sure to save your Excel bookkeeping file.

Decide to save a separate file on your computer with the income statement for the month—this will be especially helpful for an accountant to reference when it comes to business taxes or other financial planning.

ERP Software

Enterprise resource planning (ERP) is a process used by companies to manage and integrate the important parts of their businesses.

Many ERP software applications are important to companies because they help them implement resource planning by integrating all of the processes needed to run their companies with a single system.

An ERP software system can also integrate planning, purchasing inventory, sales, marketing, finance, human resources, and more.

Features

ERP software can integrate all of the processes needed to run a company.

ERP solutions have evolved over the years, to make typical web-based applications that users can access remotely.

ERP applications also allow the different departments to communicate and share information more easily with the rest of the company. It collects information about the activity and state of different divisions, making this information available to other parts, where it can be used productively.

ERP applications can help a corporation become more self-aware by linking information about the production, finance, distribution, and human resources together.

Because it connects different technologies used by each part of a business, an ERP application can eliminate costly duplicate and incompatible technology. The process often integrates accounts payable, stock control systems, order-monitoring systems, and customer databases into one system.

ERP offerings have evolved over the years from traditional software models that make use of physical client servers to cloud-based software that offers remote, web-based access.

Benefits

High Productivity

Better insights

Accelerated reporting

Lower Risk

Improved Agility

4. Inventory Control

3.3 ABC analysis

ABC analysis is a system for inventory control used throughout materials and distribution management. It is also sometimes referred to as selective inventory control, or SIC.

ABC analysis can be put to use for a wide range of inventory items, such as manufactured products, components, spare parts, finished goods, unfinished goods or sub assemblies.

Therefore, ABC analysis is a system of categorization, using three classes, of which each class has a differing management control.

The first, A, is the category for items that are outstandingly important, or business critical.

The second, B, is the classification for items of average or middling importance.

Category C is the designation for relatively unimportant items.

As a basis for a control scheme, each class ought to be handled in a different way.

The Pareto Analysis, can be put to use with the ABC analysis for inventory management.

Under this rule, in terms of consumption, 80 percent of the value of inventory would be held in about 20 per cent of the items. By using this principle, categories B and C would make up the remaining 80 per cent of the items, perhaps B with 30 per cent and C with 50 percent.

However, in terms of their consumption value B and C would make up on 20 per cent of the value combined, with C the least, perhaps split at 15 per cent and 5 per cent respectively. The percentages will vary based on a distributor’s unique inventory control needs.

This means that ABC analysis conforms with the Pareto principle which states that items that account for a large proportion of the overall value are small in number and that items with a low overall value are high in number.

Uses and Applications

Supply chain management,

Inventory systems

Stock checking methods,

ABC analysis is often applied to the design of cycle counting systems.

Example a warehouse or factory store might choose to count A items, of high worth once a quarter, but B items only two times a year with and C items only counted once.

EOQ

Economic order quantity (EOQ) is the ideal order quantity a company should purchase to minimize inventory costs such as holding costs, shortage costs, and order costs.

This production-scheduling model was developed in 1913 by Ford W. Harris and has been refined over time.

The formula assumes that demand, ordering, and holding costs all remain constant.

Features

The EOQ is a company's optimal order quantity that minimizes its total costs related to ordering, receiving, and holding inventory.

The EOQ formula is best applied in situations where demand, ordering, and holding costs remain constant over time.

Formula and Calculation of Economic Order Quantity (EOQ)

Where

Q= EOQ units

D = Demand in units

S = order cost

H = holding cost

Example

A retail clothing shop carries a line of men’s jeans, and the shop sells 1,000 pairs of jeans each year. It costs the company $5 per year to hold a pair of jeans in inventory, and the fixed cost to place an order is $2.

The EOQ formula is the square root of (2 x 1,000 pairs x $2 order cost) / ($5 holding cost) or 28.3 with rounding. The ideal order size to minimize costs and meet customer demand is slightly more than 28 pairs of jeans. A more complex portion of the EOQ formula provides the reorder point.

Limitations

The EOQ formula assumes that consumer demand is constant.

The calculation also assumes that both ordering and holding costs remain constant.

This fact makes it difficult or impossible for the formula to account for business events such as changing consumer demand, seasonal changes in inventory costs, lost sales revenue due to inventory shortages, or purchase discounts a company might realize for buying inventory in larger quantities.

Key Takeaways:

The functions of materials management are

Primary Functions

Secondary Functions

2. The quality of the product manufactured by the organization depends upon the quality of the materials used to manufacture that product.

3. In case of fluctuating demands, there can be uncertainties in supply as well. This can be overcome by maintaining the proper quantity in inventory of short supply materials at proper time.

4. Requirement’s planning is based on correct forecasting of sales and demand of the products in the market.

5. In small and medium-sized manufacturing concerns, functions of receipt and inspection of materials are to be performed by the stores department or the store-keeper.

6. It is the prime book used for the purpose of store accounting and keeps a date-wise record of the materials received in the stores.

7. Recordkeeping is the process of recording transactions and events in an accounting system

8. In fact, inputting and categorizing transactions will be a major part of managing your basic bookkeeping in Excel

9. Enterprise resource planning (ERP) is a process used by companies to manage and integrate the important parts of their businesses.

10. ABC analysis is a system for inventory control used throughout materials and distribution management

11. Economic order quantity (EOQ) is the ideal order quantity a company should purchase to minimize inventory costs such as holding costs, shortage costs, and order costs.

3.4 Introduction to Equipment Management – Fleet Management, Productivity Studies, Site Layout and Planning, Safety Norms – Measures and Precautions on Site, Implementation of Safety

Fleet Management

A fleet management system is a bundled combination of hardware and software that includes three elements:

The FMS device. Hardware sensors and an interface are installed or plugged into every vehicle in the fleet

The vehicle software. This collects data like engine status and vehicle location from each vehicle.

The management interface software. Software that the fleet manager uses to receive and interpret data from all the vehicles.

Different FMSs record different data. Those with sensors installed into a vehicle’s engine will receive more comprehensive data about the engine status than plug-and-go dashboard devices.
The best FMSs come with active data trackers rather passive ones. This means the data sent by an FMS might refresh as often as every few seconds or as rarely as every ten minutes. A passive tracker collects data on the go but only transfers it to the software later. Near-real-time data updates are essential for a truly effective FMS, so fleet managers can react quickly to important updates, such as late deliveries, or vehicle faults. Some FMSs may even be operated using smart phone apps, making it even easier for managers to respond to situations.

Operation

Fleet management at its most basic level is based on the principal of the Internet of Things (IoT).

IoT connects physical devices, including vehicles or equipment, embedded with electronics, software, sensors and actuators, which allows the connected devices to collect and exchange data.

This data, once analyzed, can provide insight into next-steps or actions. In the case of fleet management technology, a telematics device connects to an engine, either on a vehicle or piece of heavy equipment, via its on-board diagnostics (OBD) or CAN-BUS port.

The sensors collect data, like engine and driver hours, speed, GPS position, time elapsed since the last maintenance service, which is then viewable in real-time through a software platform so managers have complete visibility into an asset’s location and conditions at all time.

As fleets monitor and track against more metrics like safety, maintenance and fuel usage, the more data is available to them. To make data management simple, fleet management solutions providers aggregate data into one central system, making it easier to digest data and examine trends via analytics.

Benefits of Fleet Management

The benefits of fleet management are multi-fold. Namely, effective fleet management yields fuel savings, increases productivity, and improves customer service.

Fleet management reduces fuel costs–

Fuel accounts for nearly 40% of fleet ownership. GPS vehicle tracking solutions as part of your fleet management strategy can reduce fuel costs by 20%-25%. These tracking solutions alert you to idle time per vehicle and deliver idle time averages across your fleet. They also empower you to monitor performance, track how improvements affect idle time, and help educate drivers about the need to reduce idle times.

GPS tracking solutions also reduce fuel by optimizing routes. You also can access driver and vehicle information while monitoring traffic and weather.

Best of all, you can improve efficiency by sending the vehicle closest to the destination via the most direct route to improve customer service.

Fleet management increases productivity–

Telematics solutions for fleet management also increase productivity. Robust telematics software features enhance productivity by helping you gauge maintenance, reduce idle time, downsize your fleet, improve your tracking and routing, monitor safety, and improve employee efficiency. One of the best ways that telematics solutions make fleets more productive is in tracking maintenance.

e. Fleet management improves customer satisfaction– You can use fleet management to improve customer satisfaction, especially with the aid of a GPS tracking solution. Your tracking solution will help ensure driver compliance to routes and schedules to avoid missing or delaying a delivery or appointment.

Productivity Studies

Several fleet experts offered insight to some key elements of what makes for a productive fleet operation.

Utilizing Telematics

One of the most useful tools fleets have available to enhance their productivity is telematics. Tracking drivers is a fundamental component of telematics technology, but being able to break down and assess the bountiful data that it also compiles and turning it into actionable concepts is key for a fleet looking to improve productivity.

Factoring Fuel

Fuel spend is the highest cost center for fleets, and having a better perspective into monitoring this category can also lead to benefits leading to a more productive fleet.

Establishing a fuel program and tracking fuel expenses by assigning a company card for vehicles will help cut down on discrepancies from cash purchases, which can give fleet managers insight into how much is being spent from fueling. Having a clear picture of this can identify where overspending can exist, to which fleets can plan accordingly and adjust.

In another aspect related to fuel: vehicle fuel economy has also impacted acquisition, with more fleets looking to right size to improve productivity. By converting to a fleet of vehicles with better MPG, or implementing vehicles more appropriately suited for the fleet’s needs, fuel benefits can be realized.

Maintenance and Replacement

Having an effective maintenance program will also help lay the foundations of a productive fleet.

Being aware of fleet maintenance needs and when to cycle out older vehicles should help fleets have a more properly maintained portfolio, and will thusly make them more productive.

Layers of Safety

Being better prepared to focus on safety will also help in terms of productivity. If a fleet experiences problems with driver crashes, this can open a window to myriad issues that will significantly hinder fleets productivity.

Handling the Data

But with all these categories that fleets need to consider, having a fleet management company, or other third-party vendor, help the fleet assess the abundant data will further contribute to improved productivity as that will be one less thing on their plate that needs to be addressed.

6.Equipment Down Time

Equipment downtime refers to the amount of time that equipment is not operating, whether that’s a result of unplanned equipment failure (like a fault or broken part) or planned downtime (like necessary downtime for preventive maintenance). Typically, the term “equipment downtime” refers to unexpected downtime that accumulates any time the production process stops.

Calculate equipment downtime

The term “equipment downtime” can apply to any event that halts manufacturing, it’s important for an organization to first figure out what kind of downtime they want to calculate.

For example, let’s say a factory has some particular problems with machines faulting out. They’ve identified that this is the main portion of their downtime, making it the most important variety of downtime for them to track.

One way to calculate the cost of equipment downtime is to look at the loss of revenue over downtime periods.

We can do this by looking at how many products are produced in a certain time period (per hour) against the amount of money made from each product. Then, we measure these numbers against how much downtime has occurred.

A facility can reduce equipment downtime by:

Investing in a robust CMMS that can track a large variety of fields (maintenance shift, location of issues, downtime reasons, accurate downtime tracking)

Ensuring a well-documented preventive/predictive (PM/PdM) maintenance schedule with high schedule compliance

Installing and maintaining sensor equipment to utilize condition-based maintenance

Documenting maintenance processes to resolve downtime events swiftly

Backing up important systems that can be lost to errors (e.g., PLC systems)

Additionally, a facility’s maintenance culture can come into play when attempting to reduce equipment downtime.

Fostering a culture based on proactive maintenance solutions is as important as installing sensors or creating maintenance documentation.

Benefits of tracking equipment downtime

Better prioritization of maintenance staff (lowered amount of unplanned downtime events means more time on PM/PdM schedules)

More accurate implementation of corrective maintenance tasks

Raises profit and lowers maintenance costs (especially on replacement equipment in emergency cases)

Higher machine uptime, efficiency, and reliability (due to PM/PdM plans being effectively implemented)

Sizing

Sizing is a for project planning, ensuring that plans and activities are relevant and that resources are properly used and allocated.

Matching are algorithms used to solve problems.

The problem arises when the design does not match requirements. Matching algorithms are used in areas such as scheduling, planning and pairing.

Site Layout and Planning

A site layout plan shows a detailed layout of the whole site and the relationship of the proposed works with the boundary of the property, nearby roads and neighboring buildings.

Most applications should include an existing site layout plan and a proposed site layout plan. For simple applications the existing and proposed site can be combined and shown on one plan so long as what is existing, what is proposed and what is to be demolished is highlighted and annotated clearly.

Site layout plans should:

show a scale bar or a measured dimension

be to a scale of 1:200 or 1:500

show the proposed development, all existing buildings and structures, the garden and other open areas

show proposed buildings shaded

show the position and size of existing and proposed hard surfaced areas e.g., parking spaces, turning areas, paths, etc

show the whole of the boundary of the property, indicating the position and height of all boundary walls and fences

identify any buildings to be demolished

include details of all trees, e.g., position, spread and species (e.g., oak, ash, etc)

identify trees proposed for felling

show all roads/footpaths/public rights of way adjoining the site

show all existing buildings and structures on land adjoining the application site (buildings and structures on land adjoining the site must be clearly shown unless the applicant has demonstrated that these would NOT influence or be affected by the proposed development) show the direction of north.

Safety Measures on Construction Sites

Working on a construction site is the dangerous occupation. Some of the potential hazards that construction workers face every day include:

Falls from heights

Scaffold collapse

Electrocution and arc blast/flash

Trench collapse

Repetitive motion injuries

Failure to use the required PPE (Personal Protective Equipment)

Construction workers are particularly exposed to high-risk environments that pose dangers which need to be addressed.

Here are the top construction site safety procedures you should have in place for construction sites:

Analyze Your Worksite or Worksites

Regularly analyze your work site to identify any potential hazards and come up with an effective way or plan to eliminate them. Be aware of the main potential hazards in construction sites:

Electrocution

Falls

Caught-between or caught-in

Struck-by

If workers are carrying out their work without the proper protective equipment, identify the problem and let them know. If workers are struggling to complete certain tasks safely, prioritize on the specific issue in your training program.

Check Equipment, Tools and Machines

Before any work commences, you should always check construction equipment, tools and machines in the construction site to ensure they’re safe for use. For instance, conducting proper planning and staging before starting the day ensures that employees have the right tools and equipment they need for their work.

Site Security

Ensure proper construction site security. You should have security measures in place that restrict access to the work site outside of working hours to protect workers or any other person from potential construction hazards. Strict safety and security protocols must always be followed.

Entry and Exit Points

Construction sites must also have separate entry and exit points for vehicle access and heavy machinery to ensure safety at high-traffic areas in the construction site.

Develop a Simple but Effective Training Plan

Based on worksite analysis, develop a simple training plan for your workers. It’s advisable to have more than one category. E.g.

Safety training on new equipment

Safety training for new workers

Safety training refresher courses for existing workers

Safety training updates for all employees

Your training plan should prioritize on the most common mistakes, safety risks and incidents that you’ve noted in a specific area. The training program should be simple but effective.

Environmental Conditions

Let your workers know the right time to work and when to stop working due to environmental conditions. Extreme weather conditions can easily cause safety hazards in construction sites.

Key Takeaways:

A fleet management system is a bundled combination of hardware and software that includes three elements

The benefits of fleet management are multi-fold. Namely, effective fleet management yields fuel savings, increases productivity, and improves customer service.

Fuel spend is the highest cost center for fleets, and having a better perspective into monitoring this category can also lead to benefits leading to a more productive fleet.

A site layout plan shows a detailed layout of the whole site and the relationship of the proposed works with the boundary of the property, nearby roads and neighboring buildings

References:

1.Construction Project Management 3rd Edition, by KK Chitkara

2. Site Planning, Third Edition by Kevin Lynch

3. Managing Global Software Projects by Gopalaswamy Ramesh

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