Title: Production
1Production
2Definition of Term Production
- Generally it is possible to characterize
production as a process of a new product - arising.
- Production is company's activity usually
connected - With the mining of raw materials
- With the realization of products
- With supplies of works
- With delivering services
- Production in a building company is the activity
connected wit following supplies - Building up of new building objects
- Repairs, modernizations and reconstructions of
existing building objects - Production is main activity of a company and it
consists in the combination of - productive factors in order to achieve the
company's output. -
3The main idea of the productive process
4Inputs That Enter Production Basic Productive
Factors
- Basic productive factors
- Material
- Machines, machinery, equipment
- Labor power
5Material
- Basic characteristic of material in the frame of
building - production
- Material is in the building production volumetric
the most important basic productive factor -
- On average it creates 60 from the total costs
for the production, except line constructions
(higher costs for machines and machinery)
6Classification of Material
- Material can be classified according to following
- aspects
- Cost management
- Time of entering the production
- Price and costs calculation
- Amount of consumption assessment
7Classification of Material
- Classification of Material according to the cost
management - Basic
- It becomes directly the essential part of the
finished product - Auxiliary
- it enters the production
- Directly, but it does not become the essential
part - Indirectly as a material consumed for e.g.
managing works and activities -
- Fueling
- It ensures production, but it does not become a
part of finished products - Wrappings
- They serve for the protection of products e.g.
during transport, storage, manipulation
8Classification of Material
- Classification of Material according to the time
of entering production - Material enters directly the production
- Material enters store and it is filed as
inventory -
- Inventory
- Material and raw materials ensuring the fluent
production in the company - The highest volume of inventory is created mainly
by basic materials - Materials are bought sooner before their
consumption in the production and they are stored - Acquisition of inventory evokes in the company
the need of certain amount of financial resources - Expenditures connected with purchase (without
VAT) - expenditures for material purchase
- Expenditures connected with the transport of
materials - Expenditures connected with storage
- Expenditures connected with paid 19 VAT from
purchase price
9Inventory Management
- Main objective of inventory management
- To keep amount of inventory on the level that
allows to ensure fluent production with minimal
costs - For material acquisition
- For material storage
- To soften impacts of casual variations in
processes of inventory supply or processes of the
production - Characteristics of optimization requirements by
the inventory - management
- Minimization of total costs for acquisition and
maintenance of inventory with respect of - Full covering of expected needs
- Assurance of production also in the case of some
variances during supplies or during using of
inventory (creation of reserves) - Finding of suitable regime of orders that is
characterized by - Duration of cycle of supply
- Amount of supply
10Classification of Material
- Classification of material from the aspect of
costs and price calculation - Direct material
- It enters directly the production
- Its amount it is possible to calculate in the
form of norm of consumption expressed in m.u. of
material per m.u. of the product (e.g. number of
bricks per 1 m3 of masonry) - it concerns mainly about the basic material
- Indirect material
- its amount it is not possible to relate to
certain outputs in m.u. of material consumption
per m.u. of production - it is possible to allocate it to the certain part
of production or to the production per certain
time period - amount of this material and costs connected with
its consumption it is possible to calculate
indirectly with the help of calculated rates from
defined basis - the rate expresses relationship between material
(in CZK, m.u.) and basis (CZK, m.u.)
11Classification of Material
- Classification of material from the aspect of the
amount of - consumption assessment
- Determinable materials
- defined norm of consumption in m.u. of material
per m.u. of production for that the material was
intended - norm of consumptions defined only for volumetric
considerable materials (monitored amount of their
consumption) - norm of consumption serves for monitoring of
amount of consumption - with the observance of the norm of consumption it
is possible to avoid lost of material caused by
its wasting and adulteration - Indeterminable materials
- norm of consumption is not defined for low volume
of consumption or for the technical difficulty or
impossibility - amount of consumption is predicted from the
consumption of past periods
12Costs for Material
- CM M x P
- CZK m.u. x CZK/m.u.
- Amount of consumption assesment (M)
- determinable material
- M NC x Q
- m.u. m.u./m.u. x m.u.
- indeterminable material
- M Ms x i
- m.u. m.u. x index
- where
- Ms real consumption from past period
- i change index
13Control of Consumption and Costs for Material
- Planned data
- ?
- Real data
- They are compared
- per the amount of production
- per time period
- per an organizational unit of a company
- per a company totally
- Detected variations from the plan are immediately
repaired by - realization of suitable operations
14Control of Consumption and Costs for Material -
index
- Index of material intensity
- costs for material in CZK/amount of production in
CZK
-
- index expresses rate of costs for material
consumption per amount of production - the higher value of index, the more material
intensive the production is, and oppositely, the
lower index, the lower material intensity
15Machines and Machinery
- Machines and machinery in the frame of the
company - productive
- directly partake on the production
- are volumetric considerable from the aspect of
costs for production - it is necessary to monitor their utilization and
their operating costs in the production
- nonproductive
- used for the assurance of the company's operation
16Lifetime of Machines and Machinery
- machines and machinery are not consumed in one
productive cycle, but during certain time the
lifetime - Kinds of lifetime
- technical lifetime
- time, during that working machines offer
technically perfect use - economical lifetime
- time, during that it is efficient to use the
machines (from the aspect of operating costs,
possibility to use more efficient machine etc.) - it is usually shorter then technical lifetime
17Value of Machines and Machinery
- Using of machines and machinery in the productive
process - implicates the decreasing of their utility value
and market value - Utility value
- value brought by using of machines and machinery
for the purpose they were purchased - at the beginning it decreases slowly, later it
decreases faster - Market value
- value, for that it is possible to sell the
machine or machinery - this value decreases fast immediately
18Depreciation (Amortization)
- expresses decrease of value or working machines
and machinery - depreciation of the machine per a year it is
possible calculate according to the following
relation -
-
19Capacity of Working Machines
- performance ability of working machines and
machinery in qualitative and quantitative sense - Capacity can be
- technical
- amount of production in required quality
expressed in m.u. per time unit - economic
- amount of production that is from the economic
aspect optimal