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(Download PDF) Introduction To Materials Management Steve Chapman Online Ebook All Chapter PDF
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(Download PDF) Introduction To Materials Management Steve Chapman Online Ebook All Chapter PDF
Steve Chapman
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Introduction to
Materials
Management
Introduction
to Materials
Management
E IG H T H E D IT IO N
G L O B A L E D IT IO N
PEARSON
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Editor-in-Chief: Andrew Gilfillan Team Lead Program Manager: Laura
Product Manager: Anthony Webster Weaver
Program Manager: Holly Shufeldt Director of Marketing: David Gesell
Project Manager: Rex Davidson Senior Product Marketing Manager:
Editorial Assistant: Nancy Kesterson Darcy Betts
Team Lead Project Manager: Bryan Pirrmann Field Marketing Manager: Thomas
Project Manager, Global Editions: Vamanan Hayward
Namboodiri Procurement Specialist: Deidra M. Skahill
Senior Acquisitions Editor, Global Editions: Creative Director: Andrea Nix
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Project Editor, Global Editions: Rahul Arora Cover Designer: Lumina Datamatics, Inc.
Manager, Media Production, Global Editions: Cover Image: SantiPhotoSS/Shutterstock
M. Vikram Kumar Full-Service Project Management: Sivakumar
Senior M anufacturing Controller, Production, Krishnamoorthy/Integra Software Services
Global Editions: Trudy Kimber Private Ltd.
The rights of Stephen N. Chapman, J. R. Tony Arnold, Ann K. Gatewood, and Lloyd M. Clive to be identified as the
authors of this work have been asserted by them in accordance with the Copyright, Designs and Patents Act 1988.
Authorized adaptation fro m the United States edition, entitled Introduction to Materials Management, 8th edition,
ISBN 978-0-13-415632-3, by Stephen N. Chapman, J. R. Tony Arnold, Ann K. Gatewood, and Lloyd M. Clive,
published by Pearson Education © 2017.
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in
any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without either the prior
written permission of the publisher or a license permitting restricted copying in the United Kingdom issued by the
Copyright Licensing Agency Ltd, Saffron House, 6– 10 Kirby Street, London EC IN 8TS.
All trademarks used herein are the property of their respective owners. The use of any trademark in this text does
not vest in the author or publisher any trademark ownership rights in such trademarks, nor does the use of such
trademarks imply any affiliation with or endorsement of this book by such owners.
10 9 8 7 6 5 4 3 2 1
19 18 17 16
Preface 9
3 Master Scheduling 57
Introduction 57 / Relationship to Production Plan 58 / Developing a Master Production
Schedule 60 / Production Planning, Master Scheduling, and Sales 65 / Summary 71 /
Key Terms 71 / Questions 71 / Problems 72 / Case Study 3.1: Acme W ater Pumps 78 / Case
Study 3.2: The MasterChip Electronics Company 79 / Case Study 3.3: M acarry’s Bicycle Company 81
5
6
7 Purchasing 180
Introduction 180 / Establishing Specifications 183 / Functional Specification Description 185 /
Selecting Suppliers 187 / Price Determination 190 / Impact o f Material Requirements Planning on
Purchasing 192 / Environmentally Responsible Purchasing 194 / Expansion of Purchasing into Supply
Chain M anagement 195 / Some Organizational Implications of Supply Chain M anagement 197 /
Summary 198 / Key Terms 198 / Questions 198 / Problems 199 / Case Study 7.1: Let’s
Party! 199 / Case Study 7.2: The Connery Company 200
13 Physical Distribution 3 23
Introduction 323 / Physical Distribution 326 / Physical Distribution Interfaces 329 /
Transportation 330 / Legal Types o f Carriage 332 / Transportation Cost Elements 333 /
W arehousing 338 / Packaging 343 / Material Handling 345 / Multi-W arehouse Systems 345 /
Summary 348 / Key Terms 348 / Questions 349 / Problems 350 / Case Study 13.1: ABC
Footwear Limited 351
7
Readings 449
Index 453
PREFACE
9
10
List of Supplements
■ Instructor’s Manual
■ Computerized Test Bank
■ PowerPoint
■ Image Bank
ACKNOWLEDGMENTS
The period of time since the seventh edition of this book was published included the very
unfortunate passing of two of the authors of the seventh edition— Tony Arnold and Lloyd
Clive. Tony Arnold was responsible for the original vision and creation of the book many
11
years ago, and Lloyd Clive brought significant additional insights and knowledge in the
creation of the last two revisions. Both of these gentlemen were well known and highly
respected both by students and colleagues, and will be greatly missed.
The addition of Ann Gatewood as a new coauthor brings her extensive experience,
knowledge, and insight to this eighth edition. However, this eighth edition continues to
reflect the original vision of providing a clear and understandable introductory look at the
field of Materials Management.
Help and encouragement have come from a number of valued sources, among
them friends, colleagues, and students. We thank the many readers of the book who
have provided comments and suggestions. We especially wish to thank members of the
various APICS CPIM Committees who have provided specific guidance for the revision.
Specifically, we would like to thank Andrea Prud’homme (The Ohio State University),
Jim Caruso (Covidien), Frank Montabon (Iowa State University), and Mark Hardison
(SIGA Technologies) for their significant insights and suggestions. In addition, we
received several worthwhile suggestions from John Kanet (The University of Dayton) and
Keith Launchbury (Keith Launchbury and Associates). Other academic reviewers include
Vahid H Khiabani (Minnesota State University— Moorhead), Michael Gallaway (North
Lake College), John Kros (East Carolina University), and Sunderesh Heragu (Oklahoma
State University— Stillwater). Steve Chapman would also like to thank his wife Jeannine
for her continued support and encouragement during the revision process.
Overall, this book is dedicated to those who have taught us the most— our colleagues
and our students.
Stephen N. Chapman, Ph.D., CFPIM, Associate Professor Emeritus
Department o f Business Management, Poole College o f Management
North Carolina State University
Raleigh, North Carolina
Pearson wishes to thank and acknowledge the following people for their work on the
Global Edition:
Contributors
Kunal K. Ganguly (Indian Institute of Management Kashipur)
Yash Daultani (International Management Institute Kolkata)
Reviewers
Yash Daultani (International Management Institute Kolkata)
Chen Chien-Ming (Nanyang Technological University, Singapore)
T. T. Niranjan (Indian Institute of Technology Bombay)
V. G. Venkatesh (Symbiosis International University, Pune)
CHAPTER
ONE
IN T R O D U C T IO N T O M A T E R IA L S
M ANAG EM ENT
INTRODUCTION
The wealth of a country is measured by its gross national product— the output of goods
and services produced by the nation in a given time. Goods are physical objects, some
thing one can touch, feel, or see. Services are the performance of some useful function
such as banking, medical care, restaurants, clothing stores, or social services.
But what is the source of wealth? W ealth is measured by the amount of goods
and services produced, but where does it come from? Although rich natural resources
may exist in an economy, such as mineral deposits, farmland, and forests, these are
only potential sources o f wealth. A production function is needed to transform these
resources into useful goods. The transformation process begins with extracting minerals
from the earth, farming, lumbering, or fishing, and then using these resources to m anu
facture useful products.
There are many stages between the extraction of resource material and the final con
sumer product. At each stage in the development of the final product, value is added, thus
creating more wealth. If ore is extracted from the earth and sold, wealth is gained from the
efforts, but those who continue to transform the raw material will gain more and usually
far greater wealth. Japan is a prime example of this. It has very few natural resources and
imports most of the raw materials it needs. However, the Japanese have developed one of
the wealthiest economies in the world by transforming the raw materials they purchase
and adding value to them through manufacturing.
Manufacturing companies are in the business of converting raw materials to a form
that is of far more value and use to the consumer than the original raw materials. Logs are
converted into tables and chairs, iron ore into steel, and steel into cars and refrigerators.
This conversion process, called manufacturing or production, makes a society wealthier
and creates a better standard of living.
To get the most value out of resources, production processes must be so designed
that they make products most efficiently. Once the processes exist, operations are man
aged so they produce goods most economically. Managing the operation means planning
for and controlling the resources used in the process: labor, capital, and material. All
are important, but the major way in which management plans and controls operations is
through the flow of materials. The flow of materials in turn controls the performance of
the process. If the right materials in the right quantities are not available at the right time,
the process cannot produce what it should. Labor and machinery will be poorly utilized.
The profitability, and even the existence, of the company will be threatened.
OPERATING ENVIRONMENT
Operations management works in a complex environment affected by many factors.
Among the most important are government regulation, the economy, competition, cus
tomer expectations, and quality.
Government. Regulation of business by the various levels of government is exten
sive. Regulation applies to such areas as the environment, safety, product liability,
and taxation. Government, or the lack of it, affects the way business is conducted.
13
14
O r d e r Q u a lif ie r s a n d O r d e r W in n e r s
including introduction, growth, maturity, and decline. For example, in the introduction
phase, design and availability are often much more important than price. Quality and
delivery tend to have increased importance during growth, while price and delivery are
often the order winners for mature products. This life cycle approach is complicated in
that the duration of the life cycle will be very different for different products. Although
some products have life cycles many years long, the life cycle of other products (certain
toys or electronics, for example) can be measured in months or even weeks.
Manufacturing Strategy
A highly market-oriented company will focus on meeting or exceeding customer expec
tations and on order winners. In such a company, all functions must contribute toward a
winning strategy. Thus, operations must have a strategy that allows it to supply the needs
of the marketplace and provide fast on-time delivery.
D eliv ery lea d tim e From the supplier’s perspective, delivery lead time is the time
from receipt of an order to the delivery of the product. From the customer’s perspective, it
may also include time for order preparation and transmittal. Most customers want delivery
lead time to be as short as possible, and manufacturing must determine a process strategy
to achieve this. There are five basic process strategy choices: engineer-to-order, make-to-
order, configure-to-order, assemble-to-order, and make-to-stock. Customer involvement
in the product design, delivery lead time, and inventory state are influenced by each
strategy. Based on the type of products a company makes, and their customer base, a com
pany may determine that more than one process strategy is required. Figure 1.1 shows the
effect of each process strategy on lead time.
E n g in eer-to -o rd er means that the customer’s specifications require unique engineer
ing design or significant customization. Usually the customer is highly involved in the
product design. Inventory will not normally be purchased until needed by manufacturing.
Delivery lead time is long because it includes not only purchase lead time but also design
lead time.
M ak e-to -o rd er means that the manufacturer does not start to make the product until
a customer’s order is received. The final product is usually made from standard items but
may include custom-designed components as well. Delivery lead time is reduced because
there is little design time required and inventory is held as raw material.
23. W hich manufacturing strategies are used in a fast-food business? How does this affect the lead
time from the custom ers’ point of view?
24. Give an example of a postponement activity.
PROBLEM S
1.1 If the cost of manufacturing (direct material and direct labor) is 60% of sales and profit
is 10% of sales, what would be the improvement in profit if, through better planning and
control, the cost of manufacturing was reduced from 60% of sales to 50% of sales?
Answer. Profits would improve by 100%.
1.2 In problem 1.1, how much would sales have to increase to provide the same increase
in profits?
Answer. Sales would have to increase 25%.
1.3 On the average, a company has a 12-week production lead time and an annual cost of
goods sold of $38 million. Assuming the company works 50 weeks per year:
a. What is the dollar value of the WIP?
b. If the lead time could be reduced to 5 weeks, what would be the reduction in the WIP?
Answer, a. $9,120,000
b. $5,320,000
1.4 On the average, a company has a WIP lead time of 8 weeks and an annual cost of
goods sold of $40 million. Assuming that the company works 50 weeks a year:
a. What is the dollar value of the work-in-process?
b. If the work-in-process could be reduced to 5 weeks and the annual cost of carrying
inventory was 15% of the WIP inventory value, what would be the annual savings?
1.5 Flex Electronics has recorded sales of $20 million in the last year. The company’s
spend on the cost of direct material was 55%, direct labor was 15%, and overhead was
25% of sales. What will be the improvement in profit if the cost of direct material is
reduced to 50%?
a. What will be the profit before improvement?
b. What will be the profit after improvement?
c. How much will sales have to increase to give the same increase in profit?
C A S E S T U D Y 1.1
Priya’s Cakes
Three years ago, Priya decided to pursue a profession that combined her passion for bak
ing and her unique artistic ability. She opened a cake shop in the heart of her city. She
focused on using the best and latest technology in the field of baking and confectionery.
Soon, her talent and her dedication to providing quality products made her shop, Priya’s
Cakes, one of the most popular local cake shops. In the first two years of operations, she
focused primarily on make-to-stock standard cake orders. She also supplied her friends
and family with uniquely designed cakes on special occasions such as baby showers,
wedding ceremonies, anniversaries, and birthdays. This triggered positive word-of-mouth
advertising for her business, resulting in frequent requests for custom cakes. In the third
year, she finally introduced make-to-order custom cakes as a formal product offering.
Since then, her business has grown substantially, and revenue from custom cakes now
makes half of her total revenue. But introducing custom cakes has also brought numer
ous unanticipated challenges for her business. She pondered over how to deal with these
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Herrensitze der Lößnitz
Von Oberstaatsarchivar Dr. Hans Beschorner
Manch guter Dresdner, der in seinem Leben oft nach der Lößnitz
hinausgekommen ist und auf diesem schönen Fleckchen Erde
Bescheid zu wissen glaubt, kennt zwar den Russen, die Meierei, das
Bilzsche Lustbad, den Pfeifer, die Friedensburg und die Sektkellerei,
aber die Hoflößnitz und Wackerbarths Ruhe sind ihm fremd;
allenfalls weiß er von ihnen durch Hörensagen, mehr nicht. Und
doch sind beide nicht nur landschaftlich und künstlerisch von
großem Reize, sondern auch Marksteine der kulturgeschichtlichen
Entwicklung des ganzen Lößnitzgebietes. Erstere liegt in seiner Mitte
unterhalb des weithin sichtbaren Spitzhauses, das leider bei dem
Umbau im Anfang unseres Jahrhunderts seine bezeichnende
Gestalt eingebüßt hat, auf einem Bergabsatze rechter Hand am
Eingange zum Lößnitzgrunde, letztere zwischen Kötzschenbroda
und Zitzschewig, also ganz im Westen der Lößnitz, überragt von
dem sogenannten Jakobstein, 1743 von dem Hofböttchermeister
Jakob Krause auf dem Weinberge »der Fliegenwedel« erbaut und
1799 mit Wackerbarths Ruhe vereinigt. Das auf einem
Felsenvorsprung äußerst geschickt in die Landschaft hineingestellte
und auch in seinen Formen fein empfundene Tempelchen (s.
Abbildung 1) kann sich mit den anderen berühmten
Aussichtspunkten der Nachbarschaft getrost messen, dem Hohen
Hause (durch Gerhart Hauptmanns »Jungfern vom Bischofsberg«
besonders bekannt), der Wettinshöhe, der Mätressen- oder
Friedsteinburg (die ersten Namen noch weniger verdient, als
letzteren, da das luftige Häuschen in den Teuerungsjahren 1771/72
von dem biederen Kaufmann Ehrich als »Denkmal der
Wohltätigkeit« erbaut wurde), der Friedensburg oberhalb der alten
»Lezenitzberge«, die ihren Namen allmählich der ganzen Gegend
liehen, der Sängerhöhe, der Sennhütte, dem Paradies, dem Pfeifer,
dem Spitzhaus und der Wilhelmshöhe. Wohl von keinem hat man
einen umfassenderen Blick auf die Elbniederung und die Hänge des
Erzgebirges von der Sächsischen Schweiz bis nach Meißen und
darüber hinaus. Großartig! Entzückend aber der Blick auf die
Lößnitzortschaften, die, nach Osten hin von dem türmereichen
Dresden begrenzt, eine einzige Gartenstadt bilden. Eine Perle darin
Wackerbarths Ruhe, das sich von dem Jakobsturm aus dem
Beschauer so darbietet, wie die Abbildung 2 zeigt. Nach der
Dresden–Meißner Straße zu dehnen sich herrliche Parkanlagen: in
der Mitte große, ruhige Rasenflächen, rechts und links davon
schattige alte Baumbestände und zwei prächtige Alleen (s.
Abbildungen 9 und 10). Hinter dem Herrenhause aber steigt, in
mehrere Terrassen gegliedert, ein mit zugespitzten Buchsbäumen,
Rosenhecken und Putten geschmückter Garten in französischem
Geschmack empor. Er wird von zwei je vierzig Meter langen und
zehn Meter breiten Wirtschaftsgebäuden eingefaßt. Das rechte
enthält die Weinpresse und den schönen, tiefen Keller. Das linke
diente einst als Küchengebäude. Dahinter, nach Zitzschewig zu,
liegt, lauschig in Obstanlagen gebettet, das sogenannte
Traiteurgebäude, das im vorigen Jahrhunderte lange Zeit ein
beliebter Ausflugspunkt der Dresdner war. Die Krönung der
französischen Gartenanlage bildet das Belvedere, wegen seiner
Gestalt im Volk allgemein als »Kapelle« bekannt, in Wahrheit aber
als Stätte ländlichen Genießens und ausruhenden Schauens
gedacht (s. die Abbildung 3). Der heitere Bau, dem nur die allerdings
von Anbeginn vorhandene Blechuhr nicht recht steht, leitet zu den
ausgedehnten Weinbergterrassen über, die heute wieder mit
dreißigtausend Stöcken bestanden sind und manchen edlen Tropfen
liefern (s. Abbildung 4).
Aufnahme von Josef Ostermaier, Dresden-Blasewitz
Abb. 1 Der Jakobsturm
Lange war das Grundstück bös verwildert. Auch hatten ihm
ungeschickte Umbauten schwer geschadet und seinen Charakter
verwischt. Glücklicherweise setzte sein jetziger Besitzer seinen
Ehrgeiz hinein, dem Ganzen einigermaßen wieder sein
ursprüngliches Aussehen zu geben (s. Abbildung 5 und 6) und die
Innenräume vornehm auszugestalten (s. Abbildung 7 und 8).
Denken wir uns den auf vier Säulen ruhenden Balkonvorbau über
dem Haupteingange, die beiden kleinen Eckanbauten und die
Mansarde mit dreieckigem Giebel weg, so haben wir das Haus
ungefähr so wieder vor uns, wie es der Generalfeldmarschall
Reichsgraf August Christoph von Wackerbarth 1727 bis 1729 schuf.
Dieser hervorragende Mann, der August dem Starken über dreißig
Jahre lang als Hofmann, Verwaltungsbeamter, Staatsmann und
Soldat ausgezeichnete Dienste leistete, war auch Baumeister von
Beruf. Seit 1748 betraute ihn deshalb auch sein königlicher Herr und
Gönner mit dem wichtigen Amt eines Generalintendanten der Zivil-
und Militärgebäude. Dadurch aber gewinnt die Vermutung an
Wahrscheinlichkeit, daß er selbst die Pläne zu seinem Alterssitze
entwarf, in Gemeinschaft mit seinem Lieblingsarchitekten Johann
Christoph Knöfel (1686 bis 1752, seit 1730 Oberlandbaumeister),
dem er auch die Ausführung anvertraut haben mag. Beide
zusammen schufen etwas Ganzes, in seiner Art Einzigartiges. Was
der alte Wackerbarth damit bezweckte, hat er selbst in der Inschrift
zusammengefaßt, die er 1729 an der Aufmauerung unter dem
Belvedere anbringen ließ:
Die Inschrift ist heute nicht mehr da. An ihrer Stelle stehen die
Worte: »Menschengeschlechter, die ziehen vorüber wie die Schatten
vor der Sonne.« Sie stammen von dem Großgroßneffen des
Generalfeldmarschalls: August Ludwig von Wackerbarth, der das
Grundstück 1809 von dem Bankherrn Christian Friedrich Freiherrn
von Gregory kaufte. 1733, nach dem Tode des
Generalfeldmarschalls, hatte es zunächst sein Adoptivsohn Graf
Joseph Anton Gabaleon von Wackerbarth-Salmour besessen, der
bekannte Mithelfer des Prinzen Friedrich Christian bei Beseitigung
der Brühlschen Mißwirtschaft. Nach dessen Tode, 1761, aber hatte
es oft seine Besitzer gewechselt. 1764 bis 1776 gehörte es der
gräflich Rexschen Familie, 1776 bis 1789 der Gräfin Hohenthal,
geborene von Rex, 1789 bis 1798 einem Kaufmann Hetzer aus
Leipzig, von dem es an den genannten Freiherrn von Gregory
überging. Der »Rauhgraf«, wie sich August Ludwig von Wackerbarth
gern, aber ohne jede Berechtigung nannte, und damit sein
Sonderlingswesen traf, übernahm den alten Wackerbarthschen
Familienbesitz dem Rate folgend, den ihm seine Großmutter auf
dem Sterbebette gegeben hatte. Er verband große Hoffnungen
damit. Hier dachte er sein Leben zu genießen inmitten seiner auf
weiten Reisen gesammelten Kunstschätze (namentlich Bilder), in
eifriger schriftstellerischer Tätigkeit und in anregendem Verkehre mit
geistig hochstehenden Menschen. Er brachte aber sich selbst um
den ruhigen Genuß durch sein verschrobenes Wesen und seine
Zügellosigkeit. Trotz seines großen Reichtums von Haus aus immer
in Geldnöten, die namentlich durch die wahnwitzige Verfolgung einer
in die Hunderte von Millionen gehenden Schuldforderung an die
Rechtsnachfolger der Herzöge von Lauenburg hervorgerufen waren
und 1811 sogar zum offenen Konkurs führten, mußte er seine
geliebte Wackerbarths Ruhe zeitweise verkaufen oder vermieten.
1816 bis 1823 war sie infolgedessen Knabenerziehungsanstalt unter
dem bekannten Jugendschriftsteller Carl Lang und seinem
Schwiegersohn Dr. Carl Vogel (dem Vater des Afrikaforschers
Eduard Vogel und der Schriftstellerin Elise Polko) und von 1835 ab
Privat-Irrenanstalt, erst unter Dr. Bräunlich, dann unter Dr. Matthiae,
der die Anstalt 1864 nach dem Lindenhof in Neu-Coswig verlegte
(seit 1888 in Dr. Piersons Händen). Durch seine kostspieligen
Liebhabereien, seinen Leichtsinn in Geldsachen, seine blinde
Vertrauensseligkeit an den Bettelstab gebracht, starb dieser
Sonderling mit dem goldenen Herzen, aber eisernen Starrsinn 1850
in der Nähe von Wackerbarths Ruhe.
Abb. 5 Wackerbarths Ruhe Blick auf das Herrenhaus vom Park aus
Aufnahme von P. Georg Schäfer, Dresden