essentials of co-operative societies by osoba- enakali c. o. (chapter ten)
Chapter’s Objective
After reading through this chapter you would be able to:
i.
Know
how the co-operative carefully plans its activities;
ii.
Know
how the co-operative determines its manpower needs;
iii.
Understand
how the co-operative execute its production plans;
iv.
Understand
how the co-operative sources its raw materials and controls its inventory.
General Principles of
Factory and Workshop Management in Co-operative
The decision to set up a co-operative manufacturing or
processing plant is to serve the interest of its members as producers or
consumers. In this regard, the manager conceives a fairy definite idea as to
the quantity of produce members are to produce in a season. This will assist in
determining the size of the factory and its output.
The co-operative also gives a thorough and careful
consideration to the capital that would be required for machinery, building,
raw materials, electricity and wages as well as other payments that are
necessary to be paid before payments for manufactured or processed goods start
to flow into the co-operative.
The advantage of the producers or consumers co-operative is
that they have a readymade source of raw materials, which are produced by their
members.
Another advantage is a ready made market which is provided by
the co-operative members themselves.
The Factory Building
After decision has been made on what is to be manufactured,
the design of the building that will house the machines equipment and the required
raw materials is undertaken. The building should be strong enough to
accommodate the weight of the machines to be installed. The store or warehouse
should be conveniently located to facilitate the receipt and dispatch of goods.
The choice of the machines to be bought should be based on the available
resources and the quality of the products the machine would be able to produce.
Where the machinery is highly complicated the firm supplying it should be made
to advice on how it should be installed to allow smooth flow of raw materials,
good performance, economic use of space as well as how workers could be
protected from possible accident. Where possible installation engineer may be
made to install the plant (machinery) and provide training for the co-operative
staff on the operation of the machines.
The Co-operative
Factory Worker
Before any staff is engaged to work in the factory, stock is
first taken of the required number of workers. This is followed by the
determination of the required skills. The next step is to look for men and women
of the desired skills for employment. The trained personnel are made to train
new comers. The reason for this is to maintain a regular flow of qualified
workers. In every skilled area, a minimum of two persons are trained. This is
to ensure continuity in the absence of a skilled worker. Where such a situation
occurs, the plant will still be able to continue its operation until a
replacement is made. A pioneering cooperative in an area not previously
operated in the locality may find it difficult to effect this process. However,
as a guide to possible staff shortage, there should be personnel auditing from
time to time.
Production Plan and Its
Control
As soon as the machinery has been installed and the required manpower
employed, a production plan that would maximize the utilization of all the
facilities is set in motion.
In order to avoid idle time by the plant and the workers,
once the work’s manager knows the process and time that would be involved to
complete a production output, he sets other activities in motion. At this
juncture he determines the quality or raw materials that could be ordered every
week; the number of men to unload and inspect the raw materials on arrival; the
space the raw materials will occupy in the warehouse; the number of workers to
man each machine; the number of foremen to look after the workers; the number
of maintenance technicians to keep the engine in operation when it breaks down;
and the number of electricians required to maintain regular electricity supply.
As soon as the plan of action has been determined, it is
documented and the departments in turn pass the instructions to the concerned
workers. To ensure the expected activities of the workers are judiciously
executed, regular checks in the form of verbal or written report are received from
all concerned units. This is to ensure that the raw materials are being
processed at the expected rate and finished goods being produced and sold as
planned. While the sales department files in the number of new orders, the
workshops file in report of delays and their causes. Inspectors on their part
report on the quality of the finished products.
A peculiar problem of the co-operative manufacturing
agricultural products is that their raw materials are seasonal and also
perishable. This makes it mandatory that all plans must be tailored along
seasonal line as well. Besides, the plans should be based on the supplies the
factory has to work on.
This however does not involve the ideal quantity of supplies
the capacity of the plant would have been able to utilize. With this
limitation, for the work’s manager to be successful in his work he must plan,
execute, and control his work within the framework of the corporate plan. Indeed,
unless the factory plan is part of the corporate plan it will not succeed. It
is discomforting to remark that no matter how skillful operations may have been
planned out, there are always slack seasons. At this period, the stores are
fifty percent empty, machines and workers become idle. At this stage, the plant
operators are at a loss.
The only way of overcoming this shortcoming is by the
co-operative growing late or early varieties of the crops that serve as its raw
material. On the other hand, the co-operative could engage in the manufacturing
of byproducts. However, this will only reduce the idle period.
Procurement and
Inventory Control
The procurement of raw materials in co-operative constitutes
one of its major operations that determine its success.
In agricultural processing co-operative, its raw materials
are supplied by its members in which case the co-operative has some control
over its quantity and quality.
In the case of a consumer’s co-operative in which case goods
are manufactured, raw materials are procured from outside sources. Successful
procurement of the raw materials depends on wise buying, making accurate
decisions on quality and price of the raw materials and scheduling deliveries
in such a manner that the factory never runs out of materials.
Buying of raw materials at the right quantity depends on a
sound management of the quantity required and the timing of its purchase. Where
the quantity of purchased is too small, it attracts a higher per unit cost. On
the hand, where the quantity purchased is too large, it attracts additional
storage facilities, which in turn adds to cost. Deterioration of the purchased
items could even set in to further deplete the profit base resulting from
wastage and losses. In order to avoid these problems necessitate the need for a
specified quantity of materials at a given time with due consideration to price
variation, delivery schedules demands and sales forecast.
The procured materials should be suitable for its intended
use. Hence, the user department must specify the desired quantity of the
materials before its purchase is embarked upon.
With the buyer’s sound knowledge of cost, economic and
competitive factors, he is able to buy the materials at a fair price.
Buying at the right time is also very important. It minimizes
the unfavorable effects of changes in price levels. However, the aim is to buy
to meet production schedule without overstocking or under stocking the
warehouse with inventory.
Materials Sourcing
Materials sourcing refer to identification of suitable
sources of supply. This involves a systematic process of investigation and
comparison of sources. This enables the decision on the suppliers to patronize.
As soon as the supplies have been identified, a
sustainable continuous relationship is established.
Sourcing requires supply market research which could be
conducted formally and informally.
Formal supply market research is carried out by research
personnel in a purchasing service section as a support function to the buyers.
Informal supply market research is usually undertaken by the
buyers themselves as a part of their function. They interview sales men, read
trade journals, visit exhibitions, obtain catalogues and search the market
before placing an order.
Supply market research identifies the set of actual and
potential supply sources that constitutes the structural characteristics of the
market and its pricing behavior. It also attempts to forecast market trends and
long term supply prospects.
Suppliers Evaluation
There is the need to regularly evaluate actual and potential
sources of supply. However, the evaluation actual sources of supply depend on
the actual history of transaction with them.
On the other hand, potential sources are evaluated on the judgment
of their capabilities.
Extent of investigation into suppliers depends on the volume
and value possible expenditure with them. The choice of supplies is based on
quality, quantity, price time and service.
Specialization
In sourcing materials from suppliers, the need to specify
what is required becomes obvious. Specialization is a definitive description of
what is wanted. It is a list of characteristics laid down for materials
components, processes or services. The aim behind specialization is to
communicate in clear terms to a supplier, what the specifier wants to be
supplied to him in terms of goods and service. It also provides basis for
comparison of goods and services actually supplied. Where any specialization,
is intended for repeated use, It becomes a standard.
Inventory Control
Inventory control is a set of policies and procedures by
which an organization determines the materials to hold in stock and the
quantity of each of them to carry.
The fundamental objective of inventory control is to ensure
customer satisfaction. This involves the readiness with which the customer is
able to get what he wants without having to wait for a delivery or resorting to
a special order.
Through effective inventory control, the idle time cost of
machines and works are substantially minimized. This in turn enhances the
profit margin of the organization.
SELF EVALUATION
QUESTIONS
1.
How
does the worker’s manager execute his production plans?
2.
Describe
how raw materials are sourced in co-operative.
3.
Why
is inventory control necessary in Co-operative?
4.
What
are the functions of the worker’s manager in Co-operative?
Comments
Post a Comment
Comment from message gained, lessons learned, and suggestions to improve this blog.