A: An understanding of depreciation techniques and rules is necessary in order to perform an after-tax cash flow analysis of any investment involving depreciable equipment -- loosely defined as equipment with a useful life greater than one year that is used to generate revenue.
Most industrial engineering students take a course in accounting, but this is generally not necessary, as textbooks in engineering economy cover the basics of depreciation and after-tax analysis. Given the great influence of taxes (and therefore depreciation) on investment decisions, I strongly recommend acquiring at least a basic knowledge of current depreciation rules -- the Modified Accelerated Cost Recovery System, or MACRS, in use in the United States.
Joseph C. Hartman, Ph.D., P.E.
A: While this seems like a straightforward question -- pallet loads vs. floor loads -- the answer is that it depends on your business. From a transportation expense perspective, floor loads will always result in a larger load.
Let’s look at your question in three areas: loading, transportation, and unloading. When loading the trailer at the distribution center, do you use fork trucks, pallet jacks, flexible conveyors, or extendable conveyors? Do you have the ability to sort the merchandise onto each pallet? The logistics department doesn’t want to ship by air, so they will prefer floor loads. How long do you wait for a trailer to fill up -- one day? two days? a week? What is the required frequency of deliveries from the DC to the store to maintain your level of service? When unloading at the store, is the trailer dropped or is it a live unload?
My experience is that stores are better able to handle smaller, more frequent deliveries. If product can be palletized by store zones, the pallet could be delivered from the trailer directly to the floor location in the store. I have seen various combinations of loading trailers. For example, one can co-load the merchandise for two stores onto one trailer to meet service levels. The front end is bulk stacked and the back end has pallets. The first store’s merchandise is on pallets that are unloaded live; the trailer is then dropped at the second store with a floor bulk load.
There is no one-size-fits-all solution for palletized loads versus floor loads. Determine your objective and constraints and cost out each method. In the end, it comes down to the number of footsteps and touches for your labor costs and transportation expenses.
A: Generally speaking, when an organization implements a cost of quality process, it does not allocate amounts to any of the categories; instead, it directly measures the amount. According to the most recent survey I've seen, the cost of quality (or the cost of poor quality) can be as much as 65 percent of the cost of sales depending on the type of business.
Larry Aft, P.E.
A: There is no difference. Some people use different techniques, but the objective is the same: to serve the customer better and to ensure repeat business.
A: The quick answer is that there are no predefined general document formats required by ISO 9001.Some documents, such as a quality manual, must contain certain sections in order to meet ISO standards, but the format of the document itself is not specified.
In general, ISO does attempt to direct a company to create documentation in a certain way. The document needs to meet the requirements of the standard, but the format is not the overriding factor. ISO demands that processes be documented in sufficient detail to ensure their quality, and then the company must perform the work as documented. This is the core of ISO 9001 and is the basis of an audit. Look at the documentation, then observe the operation to ensure it is being done as documented.
So if you wish to create a health and safety manual, that’s great. The quality system dictates documentation concerning the content and use of the manual, but the format is your choice.
One other point is that some ISO auditors will suggest certain formats for some documents or have favorite ways they like to see documents structured. This is really an auditor preference, however, and not something hard-coded into ISO.