GRADUATION EXERCISE
A STUDY ON INVENTORY PLANNING AND CONTROL : MEETING ORDER LEVEL AND AVOID SHORTAGES
A GRADUATION EXERCISE SUBMITTED TO THE SCHOOL OF BUSINESS AND MANAGEMENT IN PARTIAL FULFILLMENT FOR ADVANCED DIPLOMA IN BUSINESS ADMINISTRATION (TRANSPORT)
PREPARED BY :
INTAN FAUZIAH BINTI MOHD NAZIR
ADVANCED DIPLOMA IN BUSINESS ADMINISTRATION (TRANSPORT) MARA INSTITUTE OF TECHNOLOOGY, SHAH ALAM
SHAH ALAM, SELANGOR APRIL, 1993
T A B L E O F C O N T E N T S
ABSTRACT i i i
ACKNOWLEDGEMENT i v
LIST OF TABLES v
LIST OF FIGURES v i
CHAPTER
1.0 INTRODUCTION : HICOM BERHAD 1
1.1 THE NEW HICOM FOR A FUTURE MALAYSIA 1.2 HICOM-YAMAHA MANUFACTURING (M) SDN. BHD.
1.3 AN OVERVIEW OF THE OPERATIONS DEPARTMENT AND THE RELATIONSHIP WITH PHYSICAL DISTRIBUTION MANAGEMENT
2.0 BACKGROUND AND OVERVIEW OF THE STUDY... 10 2.1 OBJECTIVES OF THE STUDY
2.2 THE SCOPE AND LIMITATIONS OF THE STUDY 2.3 PROBLEM STATEMENTS
2.4 LITERATURE REVIEW 2.5 HYPOTHESIS
2.6 TERMS AND DEFINITIONS
3.0 PROBLEMS AND CHALLENGES : THE FINDINGS... .27 3.1 DELIVERY IDENTIFICATION SYSTEM
3.2 QUALITY PROBLEM IN CERTAIN PARTS AND THE REPLACEMENT
3.3 BUFFER STOCK FOR SUB MATERIALS PROCESSING 3.4 DELIVERY OF LOCAL PARTS
3.5 PACKAGING
4.0 RECOMMENDATIONS AND SUGGESTIONS... 47 4.1 SERIALISED DELIVERY IDENTIFICATION SYSTEM 4.2 QUALITY PROBLEM IN CERTAIN PARTS AND THE
REPLACEMENT : QUALITY ASPECTS AND SUPPLIER INVOLVEMENT
4.3 DETERMINATION OF BUFFER STOCK LEVEL 4.4 SUPPLIERS' EVALUATION
4.5 IMPROVEMENT IN PACKAGING
BIBLIOGRAPHY... 82
APPENDIX A PLANT LAYOUT... 84
B LOCAL PARTS FLOWW CHART... 85
C CKD FLOW CHART... 86
D SUB MATERIAL PROCESS FLOW... 87
E PROCESSING ROUTE:REPLACEMENT PROCEDURES ... 88
F EXAMPLE OF MASTER PURCHASE AGREEMENT... 89
5.0 CONCL U S I O N ... 79
T h e m a i n p u r p o s e of this G r a d u a t i o n E x e r c i s e is to i d e n t i f y so m e of the m a i n p r o b l e m s u n d e r the o p e r a t i o n a l a c t i v i t i e s in a m a n u f a c t u r i n g c om p a n y . H I C O M - Y a m a h a M a n u f a c t u r i n g (M) Sdn. B h d . is c o n s i d e r e d as o n e of the c o m p a n y that p r a c t i c e s d e p e n d e n t d e m a n d w h e r e their e n g i n e s d e m a n d is d i r e c t l y d e p e n d o n a n o t h e r c o m p any , i.e. Ha n g L e o n g Y a m aha . T h r o u g h o b s e r v a t i o n s , i n t e r v i e w s a n d s t a t i s t i c a l a n a l y s i s , th ere a re s e v e r a l f a c t o r s that i n f l u e n c e on the o v e r a l l p e r f o r m a n c e of t he c o m p a n y . T his f a c t o r s a r e d i s c u s s e d in f u r t h e r cfetail in C h a p t e r 3 a n d 4. E v e n t h o u g h the s c o p e of the s t u d y o n l y c o v e r s m a t e r i a l s m a n a g e m e n t that d i r e c t l y r e l a t e d to O p e r a t i o n s D e p a r t m e n t , some of them a l s o i n d i r e c t l y r e l a t e d to o t h e r d e p a r t m e n t su ch as Q d a 1 F t y “ C o n t r o l D e p a r t m e n t a n d E n g i n e e r i n g D e p a r t m e n t .
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1.0 INTRODUCTION
It was more than twelve years ago when Malaysia finally decided to involve seriously in heavy industries that would gear further development to the country.
HICOM was set up by the Government to realise its vision of rapid growth especially to spearhead the nation's industrial drive.
HICOM which stands for Heavy Industries Corporation of Malaysia Berhad was incorporated on December 27th. 1980 and within short space of a decade, it had pursued its mission with success.
Continuously, HICOM is still acting as a catalyst to heavy industries. It has been at the forefront and has keep on participating in major heavy industries investment including engineering, manufacturing, project management and joint- ventures, and has spurred the growth of support and ancillary enterprises. The four broad activities that HICOM is involved are Transport Automotive, Engineering, Realty and Building Material.
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