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As a business company, Sepakat Bakti Industries Sdn Bhd comprises of various departments. One of the main departments is finance department. The roles and responsibilities of a finance department are utmost important for the survival of the business. The most common role of finance department is concerned of the control of inflow and outflow of economic benefit (income and expenditure). Besides that, finance department carries functions such as preparing the financial report, tax report, audit report, wages payment and other matters that are concerned with money terms.
Another major function of finance department is budgeting with planning, allocating and control of company funds. It is an important managerial activity because it imposes financial discipline and structure throughout the organization. Budgeting helps managers to plan for future operations, allows managers to control overspending in less productive areas and encourages managers to anticipate problems before they arise because business organizations are always try to maximize the profit while minimize the cost.
Since Sepakat Bakti Industries Sdn Bhd is a sub-contractor, the routine task for finance department is control the cost of manufacturing. The company need to ensure the cost of manufacturing is under control because the company is responsible for the control of the quantity of the materials (sub-parts), tools and jigs supplied and specified by principal. If not, they might suffer loss on further material order supply and sometimes causing the delay on work delivery. This required cooperation with production department. The manager also give further explain that the company have measured the standard cost for each product that is produced. After that, they will record and analyze the actual cost of producing the product. If the actual manufacturing cost indicates much different from the standard cost set, the company needs to analyze and figure out what are the reasons and causes of these problems and try to do some adjustment if it is necessary to reduce the variance. By this, there is not much variance occurred.
Besides, finance department is dealing with each work order made by the principal. The department shall promptly dispatch the duplicates by authorized officer as either accepts or rejects of such order from principal within 3 business days of its receipt of each work order. They need to coordinate and communicate with production department to ensure whether it is possible to finish the work order in given time period because it may suffer loss if cannot fulfill the individual agreement. Without communication and coordination between these two departments, managers may each make their own decisions, believing they are doing in the best interest for the company and thus hurt the companyâ€™s interest.
On the other hand, the finance department of Sepakat Bakti Industries Sdn Bhd plays the role of the control of cash flow of company. It does budgeting as well. The budgeting is an important task for all business organization. It is an estimate about what will be required in monetary terms to carry your work. The company can allocated the money or resources of company more efficiently through proper budgeting. In addition, the manager also mentioned that budgeting is one of the ways to give a clear picture of estimated future inflow or outflow of money. Due to the budget constraint, company can easily to get the resources of company under controls.
The manager also give brief explains that how they do their budget. Because of the market demand changes have an immense affect the amount of work orders receipts (income), the budgeting is done by observe and analyze the past history of demand changes patterns and any expected changes in future industry demand. If there is indication that expected increasing demand in future, the company has to provide adequate manpower and factory space required to carry out the contracted manufacturing processes. All the cost must be taken into consideration. For example, it needs to consider hiring more workers with certain training cost to cope with the increasing demand for the future.
Functions of Production Department:
Another department that is very important to all business organizations is the production department. The main role of production department is turning the raw materials (input) into finished goods (output) with the required quality level and make sure it is delivered on time. It needs to make sure the every part of work is carried out smoothly and supervise production process for making work more effective and efficient.
According to the manager of Sepakat Bakti Industries Sdn Bhd, the responsibility of production department of the company can be simply divided into 4 core functions.
Firstly, as traditional role of production department, it is concerned with manufacturing of products (components of watch and thermal printer). It is responsible for the control of manufacturing process. The production department will set standards and targets for each stage of the production process. The production department is also concerned with the labor productivity, which is measured by output per worker. By this, the company is able to identify the worker productivity and reward pay based on it. The production department is also responsible for the training for new workers and closely monitor until they are able to fit themselves in their work. Besides, the production department also needs to ensure the production is made and delivery on time.
Secondly, the production department is concerned with the quality control. By setting a target or standard, the quality of products will be closely monitored to make sure it fulfilled the requirement in accordance with the inspection standards specified in the specification. In manufacturing process, quality will be monitored by supervisor at every stage of process. It needs to confirm the products (components) are conformed to the inspection and specification of the principal. For failure of comply the specifications, or a shortage is discovered, notices will be dispatched to the company.
Each work order dispatched by principal to the company will indicate the product code, quantity, standard time, expected completion date and delivery. If there is any defects that is detected or discovered during principalâ€™s inspection process is going be subjected to claim to Sepakat Bakti Industries Sdn Bhd.
Next, the production department has the function of inventory controlling. Instead of searching and buying raw materials from suppliers itself, Sepakat Bakti Industries Sdn Bhd, a sub-contractor, all materials needed is supplied by its principal. So, the manager needs not to carry responsibility of finding and buying the raw materials which need to put effort in concerned with certain quality and lower prices. It has saved the companyâ€™s time and effort on supplier. Thus, the company can focus on production process. On the other hand, the company would not keep the high level of materials. The company just needs to make sure there are available quantities of materials when the receipts of each work order. It is a must for them to keep good communication and interaction with principal so as to make sure there will not have any mistake or delay in the delivery of material needed. Besides, production department is responsible for the control of the quantity of the materials supplied to avoid wastages.
Besides, Sepakat Bakti Industries Sdn Bhd needs not required to have more space for inventory storage because the inventory is in small size. This has helped the company to save storage cost for the inventory. Most of the production is made according to each work order. However, it also needs to prepare production report with carrying stock take on the materials and inventory every month to track the inventory level.
Lastly, production department is also taking responsibility of maintaining facilities, equipments and production line and other necessary repairs. It needs to examine each operating machine to make sure the machine is in the performance. There would be few workers checking the performance of the machine before it start to operating. They have to ensure that the machines are functioning well so the manufacturing procedures will be smoothly throughout the process. It also needs to conduct stock take on the supplied tools, jigs, fixtures, facilities every month.
Total Quality Management in Sepakat Bakti Industries Sdn Bhd
In this dog eat dog world, as customers become more sophisticated, better informed with easily access to various brands through internet and more option provided, expectations has grown subsequently, the only way a business can survive and compete with their competitors is by commitment to continuously improved quality. Therefore, Total Quality Management (TQM) is a tool for many organizations today to continuously improve the quality and aim to drive their business into sustainability in long term. Meeting customer expectations become the goal for all organizations because only customers determine the level of quality and appreciate whatever you do for quality improvement. Basically, Total Quality Management refers to quality emphasis that encompasses the whole organization involves all employees in continual improvement of all aspects of the organization. The quality measurement will including managing the quality design and development, quality control and maintenance, quality improvement, and quality assurance.
Sepakat Bakti Industries Sdn Bhd, the company interviewed, is followed the Quality Assurance (QA). The company needs to confirm the products (components) are conformed to the inspection and specification of the principal. For failure of comply the specifications, it would subject claims to Sepakat Bakti Industries Sdn Bhd. So, before the inspection of principal, the company has the QA system itself for the product (components) to prevent the problem arises.
Quality Assurance is a systematic monitoring and reviewing procedures to set out expectations that company should meet. QA is process driven approach to increase customer confidence and companyâ€™s credibility with improve work processes and efficiency, and enable an organization to better compete with other competitors. A quality assurance system emphasizes detecting defects before they get into the final product.
The QA procedures require an objective review to assess the quality of the inventory, and also to identify aspects where improvements could be made. Quality control requirements improve accuracy, reduce uncertainty and need to be balanced against timeliness and cost effectiveness.
In developing QA system, it is expected that judgments will need to be made on the following:
Time allocated to conduct the checks and reviews
Availability and access to information on activity data
Frequency of QA checks on different part of the inventory
The level of QA appropriate for each source category
Whether sufficient expertise is available to conduct the checks and reviews
First of all, the system concerns with incoming inspection. The company should document the quality system and business process in detail. The QA unit will implement a documented procedure for procurement of material to make sure that supply of materials conforms to the standard as it subsequently influences the quality of products. For example, before the assembly process, the company must make sure the material received is effective consistency with the standard it should be. The operator should sampling check the sub-parts. It needs to check every 50 pieces with 0 reject with microscope then the lot can be flow (n: 50, r: 0). If it fails to fulfill the criteria (0 reject), it needs to check another 200 pieces (n: 200, r: <4) to have the lot flow. It needs to make sure there are no scratches on the surface of subpart.
Secondly, it is concerned with the process control. Product quality and reliability is built in during the manufacturing processes. In the stage of production, each of the process unit will implement a documented procedure to ensure that the components effectively conform to all requirements set. In every stage, it needs to sampling check against the previous stage and record parts lot number and quality onto the part combination form. If the workers found something abnormal in their each stage of process, they need to inform the supervisor immediately. For example, during the soldering process of assembly of thermal printer, it is expected to cut excess lead after soldering fly onto the motor PCB. If not, the thermal printer cannot be operated.
Besides, they have a control chart for their production. Control points are determined within the actual manufacturing process to ensure that quality is an integral part of the procedures. Process control involves specifying these control points and control methods. The output is checked from key processes, and this data is subjected to variation control using statistical process control (SPC). SPC involves establishing and monitoring standards, making measurement and taking correction action as product or service is being produced. SPC control is applied to special characteristic that the extent of variation within manufacturing process is operating within the control. Sample of process output will be tested; if they are within the control, the process is permitted to continue. Otherwise, it will be sent back to the principal. The defective part cannot be continued to use in following stage because the added cost of each process until the end will be higher and the loss incurred (the principal will claim against Sepakat Bakti Industries Sdn Bhd). For example, the weight of uke neji(sub-part) must be within the range between 75g/cm and 135g/cm. (referred to appendix).
When there is problem arises in manufacturing process or at customer sites identified (principal company), posing the risk of incurred of loss, and the process of solving the problem is shown below:
Another key element of process control is machine or equipment control. The control is carried through daily and periodic inspections. It is used to ensure the machine is function well and enhance preventive maintenance. For example, according to the manager, the machine needs to be adjusted because after continually use about 500 times to maintain the quality of outputs.