The Measurement Of Attributes

Published Date: 02 Nov 2017

The main issue that we have identified is the stock management. From the case it can be seen that the business has been having various stock management problems. This biggest problem lies in the fact that the minimum and maximum stock level cannot be determined. The maximum and minimum stock level of the company is basically determined according to the perceived demand in the market and the requirements for the manufacturer (Abram, 2013). It is very essential for the business to have a good stock management system. Looking at the problem identified in the case it can be seen that there was a problem in having accurate stock levels in the AUTOPROCESS’s system. The problem behind inaccurate stock management is basically related to the inefficient handling of the stocks. The stock levels in the IT system used by the company seem to be in opposition to each other and are rarely in agreement.

The following is the stock management process of a typical manufacturing company. The diagram includes all the areas and processes involved in the stock management activity.

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The process basically starts with the purchase of items form the supplier. In case of the AUTOPROCESS Company, this situation arises at the start of the business activity in the input stage. The financial records of the suppliers need to be kept so that the documents of both the company and the suppliers match with each other. After the financial records with the supplier has been maintained then comes the business usage of the stocks. Some of the problems that can arise with the dandling of the stock include items being sent back to the supplier of the business because they might have some flaws and might not be in a good condition to sell to the customers. And the stock that seems to be fine is transferred into the production center for further processing.

Stock Management explained by Alternating log of sub-activities

The first stage comprises of procuring the goods from the supplier which sets off the whole process of Stock Management. The goods which are required by AUTOPROCESS are supplied to it by a specific company which acts as the supplier of AUTOPROCESS.

The second stage of the stock management activity is the recording of information which means that the information associated with the procured goods is then logged into specified software (Franco, 2010). This is just a basic entry journal which is used by managers to get a quick overview of the inventory log of procured goods in AUTOPROCESS.

The third stage is the storage of goods in physical inventory which in this case is a warehouse of AUTOPROCESS. The goods that are procured from the supplier need to be stored in a physical location so that whenever they are in need, they can be obtained quickly. This helps in speeding up the whole production process.

The fourth stage is the transfer of the products from the physical inventory to the actual production unit (Kim, 2013). The goods obtained from the supplier are stored in the warehouses for an intended use and when that need arises, the goods are then transferred to the concerned department in AUTOPROCESS. In this case, it is usually the production department.

The fifth and final step is the updating of stock information of the AUTOPROCESS. The stock left in the warehouse is then analyzed and recorded in a log book which is associated with the stock management department. The managers are usually tasked with this process and this is a detailed analysis of the company’s stock.

The following are the attributed that we wish to use in order to evaluate the quality of the stock management that is being performed.

Capability of the staff involved

Accuracy of the IT system used for recording stock levels

Coordination between the suppliers and the Company

The capability of the staff involved is related to the internal staff of the business. This staff is basically responsible for handling various business processes involved in the stock management of the company (Link, 2013). The staff of the business involved in stock management includes the line feeders, operators, workers, and the various departments of the business.

The IT system is used to order the inputs or the parts in the stock. The aim of the IT system is to have accurate stock levels, and this is where most of the problems usually emerge. The existence of accurate stock levels in the IT system will determine as to whether the stock management has been good or not (Miyake, 2013). If still there is variance in the stock levels held by the company, which can either be the lack of stocks or holding too many stocks, then it can be assumed that there is still a lot of problem in the management of the stock.

The coordination between the suppliers and the company is another aspect that will determine as to whether the quality of stock management has been fair or not (Morris, 2013). Looking at the AUTOPROCESS Company, the goods inward and the returns will determine whether correct stock level is recorded by the company and whether the return of stock made to the suppliers is correctly entered in the system of the company.

All these factors are perfectly related to the stock management process of the business and their performance will determine whether the improvements have been made in the quality management or not.

Section 2:

Considering the importance of the production process and keeping the stock level adjusted, there are numerous stakeholders in the whole scenario. Stakeholder is a person, group or organization that has interest or concern in an organization.

Stakeholders can affect or be affected by the organization's actions, objectives and policies. Some examples of key stakeholders are creditors, directors, employees, government (and its agencies), owners (shareholders), suppliers, unions, and the community from which the business draws its resources.

Not all stakeholders are equal. A company's customers are entitled to fair trading practices but they are not entitled to the same consideration as the company's employees.

An example of a negative impact on stakeholders is when a company needs to cut costs and plans a round of layoffs. This negatively affects the community of workers in the area and therefore the local economy. Someone owning shares in an business such as Microsoft is positively affected, for example, when the company releases a new device and sees their profit and therefore stock price rise.

The key stakeholders in this issue are:

Supplier

Worker

Manager

Customers

A supplier is a party that supplies goods or services. A supplier may be distinguished from a contractor or subcontractor, who commonly adds specialized input to deliverables. A supplier is also called vendor. The supplier of LLM in this case is AUTOPROCESS who provide LLM with first tier manufactured goods that are required for the production processes in the company. LLM is an automobile manufacturing company which works on the principle of assembling and finalizing their products which in this case are automobiles. The whole process of production depends upon the LLM relationship with its supplier which is AUTOPROCESS as they are responsible for providing the manufactured car goods to the company. These are translated as raw materials in this business activity because these goods are being turn into a final product by AUTOPROCESS.

A worker is any individual who works for an employer, whether under a contract of employment, or any other contract where an individual undertakes to do or perform personally any work or service. Workers are entitled to core employment rights and protections. Workers play the most integral part of the production method. They are the core to the whole manufacturing process in AUTOPROCESS. Human Resource in a production company is very important and the environment of that particular corporation affects them in a number of ways (Steodge, 2013). The staff that is directly involved in the production process is sensitive to the changes in the AUTOPROCESS’s working environment and the aspect of stock management plays a crucial role in their outlook.

A Manager is the person responsible for planning and directing the work of a group of individuals, monitoring their work, and taking corrective action when necessary. For many people, this is their first step into a management career. Managers may direct workers directly or they may direct several supervisors who direct the workers. The manager must be familiar with the work of all the groups he/she supervises, but does not need to be the best in any or all of the areas. It is more important for the manager to know how to manage the workers than to know how to do their work well.

A manager may have the power to hire or fire employees or to promote them. In larger companies, a manager may only recommends such action to the next level of management. The manager has the authority to change the work assignments of team members. Managers that are involved in the working of the production process in AUTOPROCESS are the ones who essentially decide that what is important for their department and what is not. Keeping them motivated and fulfilled gives the opportunity to AUTOPROCESS to capitalize on their strengths in the production department and this helps them in maintaining their positive work attitude (Vahidi, 2013). A share in company’s stock is a good way to make these managers motivated and their increased motivation has a great share in the overall performance of the company.

The end stakeholders in this business activity are the customers which in this case is LLM. AUTOPROCESS deals in manufactured car goods and provides them to the automobile manufacturer LLM (Vahidi, 2013). The end revenue and profits of AUTOPROCESS depends upon the business dealings with their customer which in this case is LLM and this means that the worth of the company is also determined by its business dealings. Stock management in AUTOPROCESS has played a crucial role in time in determining as how LLM reacts to their deals.

SUPPLIER

WORKERS

MANAGERS

CUSTOMERS

STOCK MANAGEMENT

Each of the stakeholders that are represented in the above chart influences the business activity of stock management or is influenced by it. This scenario works both ways as the whole prospect of Stock Management activity involves all of the concerned stakeholders. Maintaining a constructive relationship with their stakeholders is bound to benefit AUTOPROCESS in all of the aspects since their influence on the business activity cannot be neglected (Williams, 2013). Considering the performance of the business activity itself which is stock management in this case, it is also important to note that the effects of such kind of activity are also influential in determining the attitudes of stakeholders.

Talking about the supplier in the case of AUTOPROCESS, it seems that a respective stock inventory in the company will help in maintaining its profile and the supplier of the company will be content on providing them with the required goods. AUTOPROCESS is itself a supplier of LLM and understands the importance of this kind of relationship. Maintaining a healthy stock profile will make it more attractive towards a particular supplier and the activity of stock management is just the answer for this kind of scenario (Winter, 2013). The supplier also indirectly affects the stock management activity of AUTOPROCESS by determining the budget of products sold to them.

Workers are considered an important part in majority of the business activities of a corporation. Stock management is one of these activities and workers of AUTOPROCESS play an integral part in keeping up with the management system. Workers are responsible for keeping the optimum count in the stock management system when there is a physical and manual presence involved. A well-kept stock in AUTOPROCESS portrays the efficiency of the workers involved and hence their influence is more apparent (Abram, 2013). Stock management does not have a considerable impact on workers because they are the ones responsible for keeping it.

Effective managers are responsible for making sure that these kinds of business activities are being performed up to their optimum level and stock management is no exception to this matter. The stock management both affects and is affected by the managers in these kinds of cases and therefore a two way relationship. Managers influence the stock management activity in AUTOPROCESS by overseeing and organizing the workers physically involved in the process (Franco, 2010). They are also responsible for devising out strategies that are responsible for the upkeep of the stock of the company. Stock management in turns affects the profile of the manager that is handling it and a bad stock indicates that the manager is not performing optimally. Hence the most affected stakeholder in this kind of business activity is the managers.

Customers are the end stakeholders in stock management because they are responsible for determining the amount of stock that is to be kept in AUTOPROCESS. In this given case, the customer of AUTOPROCESS is LLM which is an automobile manufacturer. LLM details out the number of goods required from AUTOPROCESS and then send them the order. This shapes out the stock management strategy of AUTOPROCESS as they are required to keep a required level of stock.

SECTION 3

The following is the scope of the attributes that has been discussed in section 1. The staff of the AUTOPROCESS Company basically includes the operators, line feeders and the workers of the business. The staff is operating in the stock management section of the company. The coordination between the staff is very important for the business because if they have no coordination then the various management problems can arise in a business.

The line feeders are basically responsible to mark the off items on their issue sheets, which mean that they are responsible to keep a check on the stock that has arrived or the stock that has been returned to the supplier (Miyake, 2013). If they do not keep a proper check on the stocks coming in and going out, then there can be many inaccuracies in the stock management of the business.

Operators are the ones responsible for removing the stocks. They often mark the stock that has been removed on their issue sheets. If they somehow do not mark the stocks that have been removed then it can create a discrepancy for the business.

Employees of the business can be the managers and the workers. When it comes to workers it is very important for the management to ensure that they are motivated. The workforce of the business should be very flexible, content and well informed about the business process (Steodge, 2013). The motivation of the employees is very important, and if the employees of the business are motivated then their performance is better and favorable for thee business.

On the other hand accuracy of the IT systems used by the company is very important. If the system is updated and efficient then stock management of the business is improved. The key function of the IT system of the business is to keep a constant check on all the activities of the business related to the movements of stock. The system also informs the business as to whether the stock requirements of the business are being met or not. The record for the storage or the reserve stocks of the business is also controlled by the Efficient IT systems of today, and this has made stock management a lot easier than before. In case of AUTOPROCESS, the supplier is the tier 2 supplier in the supply chain of LMM ltd (Vahidi, 2013). This is because it supplies to AUTOPROCESS and AUTOPROCESS supplies to LMM ltd. It is very important for AUTOPROCESS to be very well informed about the stock requirements of LMM ltd, and should accordingly order stock from their own suppliers.

The coordination between the various stakeholders of the business is very important for the overall management of the business. In case of stock management, the coordination between the supplier and the business is everything. The business has to make sure that the supplier supplies the required raw material in time to the business. The role of AUTOPROCESS as a company is to supply the stock to LMM ltd. On the other hand it is responsible for collecting the stocks from their own suppliers (Williams, 2013). Basically the coordination in this supply chain has to be perfect in order to have an efficient stock management system. If the coordination between various suppliers is not good then the accuracy of stock management will be negatively affected and the stock levels of the company will be affected. This means that the lack of coordination will either results in surplus stocks or shortage of stocks. Therefore the importance of coordination between the suppliers and the business cannot be undermined.

MEASUREMENT OF ATTRIBUTES

The various attributes that have been discussed can be measured in various ways.

The capability of the staff involved can be measured by a performance review method. In case of the staff controlling the stock management activities of the business a performance appraisal method can be used to measure the effectiveness of the staff members. The appraisal will reveal as to how the employee has been performing his or her duties and activities in the business. For instance the effectiveness of the line feeders and the operators will be assessed by the number of markings made on their issue sheets (Abram, 2013). The markings made on the issue sheets by the lie feeders and the records kept by the operators of the stock removed will determine the accuracy of the work that they have performed. If there are missed entries on the issue sheets regarding the stocks, then this mean that the performance of the employees has been inaccurate, and therefore the quality of stock management has been inefficient. On the other hand the performance of the employees that work for the business will be measured by the coordination between different departments of the business and the flexibility of the employees. Line graphs will be used to analyze the performance of the employees comparing it to their previous years of work. Each and every activity performed by the employees will be analyzed and the targets achieved and targets missed will also be considered.

The accuracy of the IT systems will basically be measure in two ways

Version of software used

Number of bugs encountered.

Version of the software used for stock management will determine as to whether the It system used by the company or the business is efficient or not. On the other hand the number of bugs and glitches that prevail in the computer software will also be analyzed in order to measure the accuracy of the IT system. The best indicator to assess the accuracy of the IT system will be assessing the stocks that have been ordered using the software. The records of the stocks in the IT system and the stocks available in the store will be compared to see whether there is variance between the two alternatives or not (Morris, 2013). If there is or variance in records on the software and the stocks available in the stores, then this means that the IT system or the computer software used for stock management is performing efficiently and that the stock handling problems have minimized.

The coordination between the suppliers and the business will be based on the business deals between the two stakeholders. Of the business deals are high between the two stakeholders then this means that the dealing between both of them is accurate and that the business is having no problems dealing with the suppliers (Franco, 2010). On the other hand the financial records of both the stakeholders will also be analyzed to check the curacy of the accounting records of their dealings. Any errors revealed or any variance in their results will then reveal the epic center of the problems that might have occurred.

The efficiency of the dealings between the suppliers and the business will also be measured by the variance in stocks. This means that if the stocks are delayed by the supplier to the business or if the business has not ordered the stocks timely then this will have a considerable impact on the stock management of the business and the accuracy of the results. On the other hand if the business cycle had minimum stock related issues and there was never a shortage or a surplus of stocks available then this means that the dealing between the supplier and the business was perfect. The upper and lower minimum stock levels setup by the AUTOPROOCEESS will determine the accuracy of the dealings between the supplier and the business (Williams, 2013). The level of the minimum and maximum stocks will determine whether the coordination between the supplier and the business is good or requires improvement.

The capability of staff members will be used in ‘recording of information’, ‘storage of goods’ and ‘updating staff information’. The effectiveness of line feeders will be assessed in the recording of information. On the other hand the effectiveness of operators will be assessed in the storage of goods, and the effectiveness of the managers of the company will be assessed while updating the stock information of the business.

The IT system of the business will basically be used in the Procurement of goods and services, recoding of the information and the storage of goods. This is because the stock management software of the company starts its operations at the input level (Winter, 2013). This means that the process starts when the stocks are delivered to the business. The records of storage of stocks and the delivery of stocks are also addressed by the software. Therefore, the software of the business is used in the first three activities of the stock management process.

Coordination between the business and the suppliers will basically be used in each and every stage of the business activity. This is because the coordination is something that has to be present in the business at every stage. If there is lack of coordination in the collection of stocks or the recording of information, then there can be many problems related to stock management of the business (Vahidi, 2013). The final stage of the stock management process known as ‘updating the stock information’ will determine as to whether the records of the supplier and the business match with each other or if there is any variance in the results. If the records of the suppliers and the business are identical then this means that the coordination between both of them has been excellent throughout the stock management process.