Production Operation Management

By: Jessamine R. Aplod

Exercises 1

What do you mean by “Production”?

Production/operations management is the process, which combines and transforms various

resources used in the production/operations subsystem of the organization into value added
product/services in a controlled manner as per the policies of the organization. Therefore, it is
that part of an organization, which is concerned with the transformation of a range of inputs into
the required (products/services) having the requisite quality level. The set of interrelated
management activities, which are involved in manufacturing certain products, is called as
production management. If the same concept is extended to services management, then the
corresponding set of management activities is called as operations management.

What is Job Shop Production?

JOB SHOP PRODUCTION

Job shop production are characterised by manufacturing of one or few quantity of
products designed and produced as per the specification of customers within prefixed time and
cost. The distinguishing feature of this is low volume and high variety of products. A job shop
comprises of general purpose machines arranged into different departments. Each job demands
unique technological requirements, demands processing on machines in a certain sequence.

Characteristics
The Job-shop production system is followed when there is:
1. High variety of products and low volume.
2. Use of general purpose machines and facilities.
3. Highly skilled operators who can take up each job as a challenge because of uniqueness.
4. Large inventory of materials, tools, parts.
5. Detailed planning is essential for sequencing the requirements of each product, capacitiesfor
each work centre and order priorities.

Advantages
Following are the advantages of job shop production:
1. Because of general purpose machines and facilities variety of products can be produced.
2. Operators will become more skilled and competent, as each job gives them
learningopportunities.
3. Full potential of operators can be utilised.
4. Opportunity exists for creative methods and innovative ideas.

Limitations
Following are the limitations of job shop production:
1. Higher cost due to frequent set up changes.
2. Higher level of inventory at all levels and hence higher inventory cost.
3. Production planning is complicated.
4. Larger space requirements.

What is Mass Production?

MASS PRODUCTION
Manufacture of discrete parts or assemblies using a continuous process are called mass
production.
This production system is justified by very large volume of production. The machines are
arranged
in a line or product layout. Product and process standardisation exists and all outputs follow the
same path.

Characteristics
Mass production is used under the following circumstances:
1. Standardisation of product and process sequence.
2. Dedicated special purpose machines having higher production capacities and output rates.
3. Large volume of products.
4. Shorter cycle time of production.
5. Lower in process inventory.
6. Perfectly balanced production lines.
7. Flow of materials, components and parts is continuous and without any back tracking.
8. Production planning and control is easy.
9. Material handling can be completely automatic.

Advantages
Following are the advantages of mass production:
1. Higher rate of production with reduced cycle time.
2. Higher capacity utilisation due to line balancing.
3. Less skilled operators are required.
4. Low process inventory.
5. Manufacturing cost per unit is low.

Limitations
Following are the limitations of mass production:
1. Breakdown of one machine will stop an entire production line.
2. Line layout needs major change with the changes in the product design.
3. High investment in production facilities.
4. The cycle time is determined by the slowest operation.
What is continuous Production?

CONTINUOUS PRODUCTION
Production facilities are arranged as per the sequence of production operations from the first
operations to the finished product. The items are made to flow through the sequence of
operations through material handling devices such as conveyors, transfer devices, etc.

Characteristics
Continuous production is used under the following circumstances:
1. Dedicated plant and equipment with zero flexibility.
2. Material handling is fully automated.
3. Process follows a predetermined sequence of operations.
4. Component materials cannot be readily identified with final product.
5. Planning and scheduling is a routine action.

Advantages
Following are the advantages of continuous production:
1. Standardisation of product and process sequence.
2. Higher rate of production with reduced cycle time.
3. Higher capacity utilisation due to line balancing.
4. Manpower is not required for material handling as it is completely automatic.
5. Person with limited skills can be used on the production line.
6. Unit cost is lower due to high volume of production.

Limitations
Following are the limitations of continuous production:
1. Flexibility to accommodate and process number of products does not exist.
2. Very high investment for setting flow lines.
3. Product differentiation is limited.

Define Production Management?

Production management is a process of planning, organizing, directing and controlling

the activities of the production function. It combines and transforms various resources used in
the production
subsystem of the organization into value added product in a controlled manner as per the
policies
of the organization.
E.S. Buffa defines production management as, “Production management deals with
decision making related to production processes so that the resulting goods or services are
produced according to specifications, in the amount and by the schedule demanded and
out of minimum cost.”
Define Operating System?

Operating system converts inputs in order to provide outputs which are required by a customer.
It converts physical resources into outputs, the function of which is to satisfy customer wants
i.e.,
to provide some utility for the customer. In some of the organization the product is a physical
good (hotels) while in others it is a service (hospitals). Bus and taxi services, tailors, hospital and
builders are the examples of an operating system.
Everett E. Adam & Ronald J. Ebert define operating system as, “An operating system
( function) of an organization is the part of an organization that produces the organization’s
physical goods and services.”
Ray Wild defines operating system as, “An operating system is a configuration of resources
combined for the provision of goods or services.”

What do you mean by “Globalization”?

The term ‘globalization’ describes businesses’ deployment of facilities and operations around the
world. Globalization can be defined as a process in which geographic distance becomes a factor
of diminishing importance in the establishment and maintenance of cross border economic,
political
and socio-cultural relations. It can also be defined as worldwide drive toward a globalized
economic system dominated by supranational corporate trade and banking institutions that are
not
accountable to democratic processes or national governments.
There are four developments, which have spurred the trend toward globalization. These are:
1. Improved transportation and communication technologies;
2. Opened financial systems;
3. Increased demand for imports; and
4. Reduced import quotas and other trade barriers.

Explain the different types of production systems.

The types of production system are categorized by the following:

1. Intermittent Production System
2. Continuous production system

Intermittent Production System means something that starts and stops at irregular intervals.
In the intermittent production system, goods are produced based on customer’s orders.
These goods are produced on small scale. The flow of production is intermittent (irregular). In
other words, the flow of the production is not continuous. In this system, large varieties of
products are produced. These products are of different sizes. The design of these products goes
on changing. It keeps changing according to the design and size of the product. Therefore, this
system is very flexible.
 Following chart highlights the concept of an intermittent production system.

Following are examples on the intermittent production system. Please refer above chart while
reading examples given below.
1. The work of a goldsmith is purely based on the frequency of his customer's orders. The
goldsmith makes goods (ornaments) on a small-scale basis as per his customer's requirements.
Here, ornaments are not done on a continuous basis.
2. Similarly, the work of a tailor is also based on the number of orders he gets from his
customers. The clothes are stitched for every customer independently by the tailor as per
one's measurement and size. Goods (stitched clothes) are made on a limited scale and is
proportional to the number of orders received from customers. Here, stitching is not done on
a continuous basis.

Continuous production system

Continuous means something that operates constantly without any irregularities or frequent
halts.
In the continuous production system, goods are produced constantly as per demand forecast.
Goods are produced on a large scale for stocking and selling. They are not produced on
customer's orders. Here, the inputs and outputs are standardized along with the production
process and sequence.

Following are examples on the continuous production system. Please refer above chart while
reading examples given below.
1. The production system of a food industry is purely based on the demand forecast. Here, a
large-scale production of food takes place. It is also a continuous production.
2. Similarly, the production and processing system of a fuel industry is also purely based on,
demand forecast. Crude oil and other raw sources are processed continuously on a large scale
to yield usable form of fuel and compensate global energy demand.

The characteristics of a continuous production system are listed as follows:

1. The flow of production is continuous. It is not intermittent.
2. The products are standardized.
3. The products are produced on predetermined quality standards.
4. The products are produced in anticipation of demand.
5. Standardized routing sheets and schedules are prepared.

Explain the framework of managing operations

Globalization, business operation outsourcing, contract manufacturing, mergers and

acquisitions, and business renovation require a company to shift its business strategy more
globally and dynamically. The shifting business environment makes the management of business
operations extremely challenging to an enterprise. In order to face the challenges posed by
constant business shifts, enterprises need unprecedented capabilities to gain the entire and
holistic picture of their business operations across the value chain in order to gain the total
visibility of their business operations; to analyze the impact of these changes to business
operations; to understand potential responses to the shifting business environment and
underlying constraints through analysis and simulation; and to implement and monitor the
targeted operational changes and the total cost of ownerships with the changes of business
operations or new ones. Nowadays, enterprises are operated in an environment that supports
different business roles employed in various functions across the enterprise, as well as beyond
the company boundaries; business processes that span the company operations and go across
boundaries to include the operations of business partners, such as customers and suppliers;
business information that is extensive and distributed; and business applications and systems,
such as Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), Supply
Chain Management (SCM), Supply Relationship Management (SRM), Product Lifecycle
Management (PLM), and a multitude of other systems that are required to operate the
enterprise. Any change in business strategy, whether it is a merger, an outsourcing decision, or a
competitive challenge, requires the enterprise to rationalize its operations across the value
chain, which involves managing the key dimensions of enterprise artifacts: people, information,
processes, and systems, against targeted operational goals.
Today, new trends in technology, such as enterprise service-oriented architecture, software
as a service, Enterprise 2.0 technologies, event-driven architecture, embedded analytics,
RFID/Auto-ID technology, and Web 3.0 provide new opportunities to enrich the existing business
applications. Evaluating the potential impact of these new technologies to the existing IT
infrastructure and raising the requirements for changes are critical to manage the success of the
business for a company. A new system on the top of the expanded IT infrastructure including all
business application systems and other IT systems from related enterprise organizations is
required. This new system can support users to explore the artifacts and the relationships
between the artifacts (understand/analyze), to find where to make changes for a new business
need (discover), to create a new business process or modify an existing business process to
support the new business need (enhance), to evaluate the impact of the change, and to monitor
the entire environment, in particular the impact of the changes (monitor). This system will help
business users to untangle the current complex web operations that characterizes many
 enterprises and show how the key dimensions (people, information, processes, and systems) are
interrelated to that enterprise, how business shocks and shifts impact these associations and
what constraints (such as unmatched supply, extent of product overlap in a merger, gaps in
service coverage, etc) lie ahead for the operational changes contemplated. A Business OPeration
Management (BOPM) is such a new system that sites on the top of existing business application
and other IT systems for supporting users to understand, change, manage, and monitor these
artifacts. BOPM can also be used to evaluate the impact of new technology trends to existing IT
infrastructure. For convenience, we define a BOPM environment that consists of a BOPM
system, all business application systems and other IT systems to be dealt by the BOPM system.
The rest of the paper is organized as follows. Section 2 describes two use cases: one with
business process renovation driven by a new tax policy, and the other one with transportation
business process outsourcing. Based on these two use cases, both business and technical
requirements of a BOPM are discussed in Section 3. Section 4 presents a conceptual
architecture and some key technical features for the framework of the BOPM environments.
Section 5 concludes this paper, shows some related works, and discusses future works.

Explain the scope of production and operation management

Production and operations management concern with the conversion of inputs into outputs,
using
physical resources, so as to provide the desired utilities to the customer while meeting the other
organizational objectives of effectiveness, efficiency and adoptability. It distinguishes itself from
other functions such as personnel, marketing, finance, etc., by its primary concern for
‘conversion by using physical resources.’ Following are the activities which are listed under
production and operations management functions:

1. Location of facilities
2. Plant layouts and material handling
3. Product design
4. Process design
5. Production and planning control
6. Quality control
7. Materials management
8. Maintenance management.
Exercise 2

What do you mean by plant location?

Plant location or the facilities location problem is an important strategic level decisionmaking
for an organisation. One of the key features of a conversion process (manufacturing
system) is the efficiency with which the products (services) are transferred to the customers.
This fact will include the determination of where to place the plant or facility.
The selection of location is a key-decision as large investment is made in building plant and
machinery. It is not advisable or not possible to change the location very often. So an improper
location
of plant may lead to waste of all the investments made in building and machinery, equipment.
Before a location for a plant is selected, long range forecasts should be made anticipating
future needs of the company. The plant location should be based on the company’s expansion
plan and policy, diversification plan for the products, changing market conditions, the changing
sources of raw materials and many other factors that influence the choice of the location
decision. The purpose of the location study is to find an optimum location one that will result in
the greatest advantage to the organization.

What is plant layout? Plant layout refers to the physical arrangement of production facilities. It is
the configuration of

departments, work centres and equipment in the conversion process. It is a floor plan of the
physical facilities, which are used in production.
According to Moore “Plant layout is a plan of an optimum arrangement of facilities including
personnel, operating equipment, storage space, material handling equipment and all other
supporting services along with the design of best structure to contain all these facilities”.

Mention any four objectives of plant layout? The objectives of plant layout are:

1. Streamline the flow of materials through the plant.

2. Facilitate the manufacturing process.
3. Maintain high turnover of in-process inventory.
4. Minimise materials handling and cost.
5. Effective utilisation of men, equipment and space.
6. Make effective utilisation of cubic space.
7. Flexibility of manufacturing operations and arrangements.
8. Provide for employee convenience, safety and comfort.
9. Minimize investment in equipment.
10. Minimize overall production time.
11. Maintain flexibility of arrangement and operation.
12. Facilitate the organizational structure.
Explain different operations strategies in case of location choice for existing organization.

Being in the right location is a key ingredient in a business's success. If a company selects the
wrong location, it may have adequate access to customers, workers, transportation, materials,
and so on. Consequently, location often plays a significant role in a company's profit and overall
success. A location strategy is a plan for obtaining the optimal location for a company by
identifying company needs and objectives, and searching for locations with offerings that are
compatible with these needs and objectives. Generally, this means the firm will attempt to
maximize opportunity while minimizing costs and risks.
A company's location strategy should conform with, and be part of, its overall corporate
strategy. Hence, if a company strives to become a global leader in telecommunications
equipment, for example, it must consider establishing plants and warehouses in regions that are
consistent with its strategy and that are optimally located to serve its global customers. A
company's executives and managers often develop location strategies, but they may select
consultants (or economic development groups) to undertake the task of developing a location
strategy, or at least to assist in the process, especially if they have little experience in selecting
locations.
Formulating a location strategy typically involves the following factors:

1. Facilities. Facilities planning involves determining what kind of space a company will need
given its short-term and long-term goals.
2. Feasibility. Feasibility analysis is an assessment of the different operating costs and other
factors associated with different locations.
3. Logistics. Logistics evaluation is the appraisal of the transportation options and costs for
the prospective manufacturing and warehousing facilities.
4. Labor. Labor analysis determines whether prospective locations can meet a company's
labor needs given its short-term and long-term goals.
5. Community and site. Community and site evaluation involves examining whether a
company and a prospective community and site will be compatible in the long-term.
6. Trade zones. Companies may want to consider the benefits offered by free-trade zones,
which are closed facilities monitored by customs services where goods can be brought
without the usual customs requirements. The United States has about 170 free-trade
zones and other countries have them as well.
7. Political risk. Companies considering expanding into other countries must take political
risk into consideration when developing a location strategy. Since some countries have
unstable political environments, companies must be prepared for upheaval and turmoil if
they plan long-term operations in such countries.
8. Governmental regulation. Companies also may face government barriers and heavy
restrictions and regulation if they intend to expand into other countries. Therefore,
companies must examine governmental—as well as cultural—obstacles in other
countries when developing location strategies.
9. Environmental regulation. Companies should consider the various environmental
regulations that might affect their operations in different locations. Environmental
 regulation also may have an impact on the relationship between a company and the
community around a prospective location.
10. Incentives. Incentive negotiation is the process by which a company and a community
negotiate property and any benefits the company will receive, such as tax breaks.
Incentives may place a significant role in a company's selection of a site.

Depending on the type of business, companies also may have to examine other aspects of
prospective locations and communities. Based on these considerations, companies are able to
choose a site that will best serve their needs and help them achieve their goals.

Explain the reasons for global or foreign location.

Successful small businesses are figuring out how to master the transition from being a local
company to global. According to the U.S. Department of Commerce, more than 70 percent of
the world’s purchasing power is located outside of the United States. That’s why many
businesses are jumping on the global bandwagon – to capitalize on the potential of tremendous
growth. Here are ten reasons to do so.

1. Increase sales and profitability.

Going global can provide new sources of revenue, yield greater returns on investments and
secure long-term success for a business. The Internet makes it even easier to reach out to the
world for business.

2. Enter new markets.

Have you saturated your local, core market? Then look beyond your region and consider a
market overseas. Be sure to pick one that offers opportunity. You want a market where it’s easy
to enter, whose buyers desire your product or service. For example, is there a market for your
products or services in Ireland? If so, get a jump on your competitors and get there before they
do. This is called first-mover advantage.

3. Create jobs.

As you grow your business globally, you must support the additional workload. Hiring people is
the solution and we know that the strength of our country lies in its ability to create jobs that
help people live and prosper.

4. Offset slow growth in your home market.

Are you selling kale in your home market and only so many customers will buy it? Or are you
selling specialized software and there’s been a sudden decrease in demand for it? A way to
overcome low growth in your home market is to look at overseas markets. Protect your company
by exporting, using the Internet, licensing or franchising your products.

5. Outmaneuver competitors.

Taking one step to enter a new overseas market that your competitor hasn’t entered might
outmaneuver that domestic-only rival with stronger company performance.

6. Enlarge the customer base.

If the company currently has 1,000 customers, why not increase the base to 2,000 by entering a
foreign market via ecommerce or a collaborative sales partnership? You’ll need support to get
the work done so consider adding people to get the processes in place.

7. Create economies of scale in production.

Your company is ramping up and producing 20,000 hammers at once because an outfit in
Ireland, Japan or Australia wants to buy them and won’t buy a single case. The more you
produce, the greater the chances of lowering the per-unit manufacturing costs.

8. Explore untapped markets with the power of the Internet.

With an ecommerce site, customers worldwide might eventually find you, provided you’ve made
it easy for them to do so. Move into the markets that generate a heavy concentration of
inquiries on your website. You may not have anticipated a particular geographic area would be a
ripe market, but the people there are telling you it is.

9. Make use of excess capacity off-season.

To insulate the business from seasonal sales fluctuations, find foreign markets to counterbalance
dips in demand. For instance, some firms gear up for the holiday season, only to see sales
nosedive in January. Sell to other nations with peak-buying seasons early in the new year to
avoid a winter sales slowdown.

10. Travel to new countries.

Then there's the fun factor in taking a business global. Not only will you connect with people
from all over the world, but you'll also have an excuse to meet with them in person to grow the
relationship and the business. Treat it as an exciting learning adventures.

Explain the need for selecting a suitable location.

I. Cost economies are always important while selecting a location for the first time, but should
keep in mind the cost of long-term business/ organizational objectives. The following are the
factors to be considered while selecting the location for the new organizations:

1. Identification of region:
The organizational objectives along with the various long-term considerations about
marketing, technology, internal organizational strengths and weaknesses, region-specific
resources and business environment, legal-governmental environment, social
environment and geographical environment suggest a suitable region for locating the
operations facility.
2. Choice of a site within a region:
Once the suitable region is identified, the next step is choosing the best site from an
available set. Choice of a site is less dependent on the organization’s long-term strategies.
Evaluation of alternative sites for their tangible and intangible costs will resolve facilities-
location problem. The problem of location of a site within the region can be approached
with the following cost-oriented non-interactive model, i.e., dimensional analysis.
3. Dimensional analysis:
If all the costs were tangible and quantifiable, the comparison and selection of a site is
easy. The location with the least cost is selected. In most of the cases intangible costs
which are expressed in relative terms than in absolute terms. Their relative merits and
demerits of sites can also be compared easily. Since both tangible and intangible costs
need to be considered for a selection of a site, dimensional analysis is used.
Dimensional analysis consists in computing the relative merits (cost ratio) for each of the
cost items for two alternative sites. For each of the ratios an appropriate weightage by means
of power is given and multiplying these weighted ratios to come up with a comprehensive
figure on the relative merit of two alternative sites,
C1M, C2M, …, CzM are the different costs associated with a site M on the ‘z’ different cost
items.
C1N, C2N, …, CzN are the different costs associated with a site N and W1, W2, W3, …, Wz are
the weightage given to these cost items, then relative merit of the M and site N is given by:
(C1M/ C1N)W1X (C2M/ C1N)W2 ,..., (CZM/ CZN)WZ
If this is > 1, site N is superior and vice-versa. When starting a new factory, plant location
decisions are very important because they have direct bearing on factors like, financial,
employment and distribution patterns. In the long run, relocation of plant may even benefit
the organization. But, the relocation of the plant involves stoppage of production, and also
cost for shifting the facilities to a new location. In addition to these things, it will introduce
some inconvenience in the normal functioning of the business. Hence, at the time of starting
any industry, one should generate several alternate sites for locating the plant. After a critical
analysis, the best site is to be selected for commissioning the plant.
Need for Plant Location
The plant Location of warehouses and other facilities are also having direct bearing on the
operational performance of organizations.
 The existing firms will seek new locations in order to expand the capacity or to place the
existing facilities. When the demand for product increases, it will give rise to following
decisions:
 Whether to expand the existing capacity and facilities.
 Whether to look for new locations for additional facilities.
 Whether to close down existing facilities to take advantage of some new locations.

Explain the different types of layouts.

TYPES OF LAYOUTS

There are four basic layout types: process, product, hybrid, and fixed position. In this section we
look at the basic characteristics of each of these types. Then we examine the details of designing
some of the main types.
Exercises 3

What do you mean by material management?

Materials management is a function, which aims for integrated approach towards

the management of materials in an industrial undertaking. Its main objective is cost
reduction and efficient handling of materials at all stages and in all sections of the
undertaking. Its function includes several important aspects connected with material,
such as, purchasing, storage, inventory control, material handling, standardisation etc.

What is material planning and budgeting?

The objective of materials management is to have the right material required

formanufacturing, or production, in the right amount, at the right place, and at the
righttime, and, as we have already noted, this implies that the what, how much, and
whenof material requirements must be determined first. This is the basic objective of
thematerials planning and budgeting function. The questions that must be answered
arethe following:
1 ) W h i c h m a t e r i a l i n p u t s m u s t w e g e t ? Note: The inputs required are
dependent on the outputs/end products planned tobe manufactured.
2)How much of each of these inputs do we need, and based on how much
isavailable in stores and/or has already been ordered (inventory on hand and
ororder), how much of each of these should be ordered? The gross requirementsof
each of the required material inputs is calculated first and the net requirementsare
derived by subtracting from it the on hand and on order inventory.
3)When should the orders for each of these material be placed?
Note: This decision is dependent on (i) where in the manufacturing process for
theend product is the particular material required, namely, the crankshaft forging for
themachining of the crankshaft prior to its assembly with the piston, cylinder etc. for
theengine subassembly of the automobile, and (ii) the lead times for procurement
andmanufacturing, namely procurement lead times for raw materials (including
forgingsand castings) and purchased, or bought-out, components and subassemblies,
andmanufacturing lead times for the in-house manufactured components and
assemblyoperations, both subassemblies and final assembly.

Materials requirement planning (MRP) is a computational technique that converts

themaster schedule for the end products (MPS) into a detailed schedule for the
rawmaterials and components used in the end products. The detailed schedule
identifieseach raw material and component item required for a particular end
product. It alsodetermines when each of these items must be ordered by the factory
 and deliveredby the vendor/supplier to the factory so as to meet the planned
completion date forthe end product as per the MPS. The underlying concepts for the
techniques collectedand unified by Orlicky under MRP in the early 1960’s had been
known for manyyears, but they could not be fully exploited without the data
processing power of themodern computers. Its early application, in the 1960’s, was a bill of
material explosiontechnique (desegregation of the end product) for determining
the time-phasedrequirement of the components and subassemblies (for the quantity
of end productgiven in the MPS) and a method of releasing manufacturing and
purchase order tothe shop and vendors/suppliers. Orlicky called the technique ‘time-
phased materialrequirements planning’. Before we take up the discussion the MRP
technique, oralgorithm, we must note the distinction between independent and
dependent demandinventory item. This is necessary since this distinction is basic to
the MRP technique.

Explain the objectives of material management

Materials management is concerned with management functions supporting the

complete cycle of material flow, from the purchase and internal control of production
materials to planning and control of work in process, to warehousing, shipping and
distribution of the finished product. An effective materials management process ensures
that the right kinds of materials are at the right place whenever needed.
Materials management is concerned with planning, directing and controlling the
kind, amount, location, movement and timing of various flows of materials used in and
produced by the process.

What are the functions of stores

Interestingly, Stores is a function that is visible in probably any physical house. Be it a hotel, a
hospital, a shop or industrial set up Stores is found every where.

Its presence every where adequately underlines the responsibility of Stores. Depending upon
where it is located a Stores has to burden from minor to major responsibilities.

The most common yet major responsibilities that are carried by any Stores are:

 Receipt of incoming goods

 Inspection of all receipts
 Storage and preservation
 Identification of all materials stored
 Materials handling
 Packaging
 Issue and despatch
 Maintenance of stock records
 Stores accounting
 Inventory control
 Stock-taking

 Receipt is the process of checking and accepting, from all sources (vendors, production
units, repair units etc.), all materials and parts which are used in the organisation. These
include supplies for manufacturing or operating processes, plant maintenance, offices
and capital installations.

 Identification is the process of systematically defining and describing all items of

materials in stock. It includes the preparation of a Stores Code or Vocabulary, the
adoption of materials specifications and the introduction of a degree of standardisation.
In certain cases, part of this work may be done by the design, planning or standards
departments or sometimes the purchase department.

 Inspection involves the examination of incoming consignments for quality. Very often
there is a separate Quality Control or inspection department, which undertakes this
work for most, materials. Otherwise goods are inspected by Stores to ensure that the
inspection procedures laid down are carried out before materials are accepted into
stock.

o Storage and preservation involves items to be binged and kept

in storage bins and impounds; as usually indicated in the yard.
The location is usually indicated in the transaction card. The
storage period may vary between one day and one year or
more, depending upon recoupment procedures/safety stock
required, etc. storage is the physical act of storing the
materials. The general rule is: "A place for everything in its
place". Presentation involves the maintenance, of materials to
retain their quality. Quite often, temperature, humidity, dust
and other factors cause deterioration of materials.

o Materials handling involves movement and handling. This can

be manual or mechanical (e.g. by use of forklifts) heavy items,
dangerous or inflammable goods, and delicate merchandise
have all to be handled differently.
 o Packaging : Materials dispatched to customers from the
finished goods store or from one store to another at different
location require to be packed. Materials required packing
according to their nature and this may vary from heavy wooden
crates to ordinary paper cartons.

o Issue and Despatch is the process of receiving demands,

selecting the items required and handling them over to users,
or despatching them to customers.

Stock Records are the documents which record, form day to

day, full particulars of individual receipts, issues and balances of
materials in stock.

Stores accounting is the process of recording details of stock

movements and balances in terms of financial value. It is
sometimes undertaken by accounts department, but

there is much to be said for it being handled by stores. In practice, it is often found that such an
arrangement saves a good deal of work and duplication. It has the added advantage of making
Stores personnel responsible for providing their own financial information, which they require
for the purpose of inventory control

o Inventory control is the operation of continuously arranging receipts and issues in such
a way so as to ensure that stock balances in quantity and/or value are adequate to
support the current rate of consumption at all times with due regard to economy. It
involves the related process of provisioning, which is the means whereby instructions
are given for the placing of orders to correspond with future estimated requirements.
In some industrials concerns, the production control department may have a large
share in provisioning, at least as far as production materials are concerned.
Nevertheless this should always ultimately be the function of Stores.

Stock-taking is the process of physical verification of the quantity and condition of

goods in store
Discuss the ten ‘R’’s of purchasing.

The success of any manufacturing activity is largely dependent on the procurement of

raw materials of right quality, in the right quantities, from right source, at the right time and at
right price popularly known as ten ‘R’s’of the art of efficient purchasing. They are described as
the basic principles of purchasing. There are other well known parameters such as right
contractual terms, right material,right place, right mode of transportation and right attitude are
also considered for purchasing.

1. Right price:

It is the primary concern of any manufacturing organization to get an item at the right price.
But right price need not be the lowest price. It is very difficult to determine the right price;
general guidance can be had from the cost structure of the product. The ‘tender system’ of
buying is normally used in public sector organizations but the objective should be to identify the
lowest ‘responsible’ bidder and not the lowest bidder. The technique of ‘learning curve’ also
helps the purchase agent to determine the price of items with high labour content. The price can
be kept low by proper planning and not by rush buying. Price negotiation also helps to determine
the right prices.

2. Right quality:

Right quality implies that quality should be available, measurable and understandable as far as
practicable. In order to determine the quality of a product sampling schemes will be useful. The
right quality is determined by the cost of materials and the technical characteristicsas suited to
the specific requirements. The quality particulars are normally obtained from the indents. Since
the objective of purchasing is to ensure continuity of supply to the user departments, the time at
which the material is provided to the user department assumes great importance.

3. Right time:

For determining the right time, the purchase manager should have lead time information for all
products and analyse its components for reducing the same. Lead time is the total time elapsed
between the recognition of the need of an item till the item arrives and is provided for use. This
covers the entire duration of the materials cycle and consists of pre-contractual administrative
lead time, manufacturing and transporting lead time and inspection lead time. Since the
inventory increases with higher lead time, it is desirable to analyse each component of the lead
time so as to reduce the first and third components which are controllable.
While determining the purchases, the buyer has to consider emergency situations like floods,
strikes, etc. He should have ‘contingency plans’ when force major clauses become operative, for
instance, the material is not available due to strike, lock-out, floods, and earthquakes.
4. Right source:

The source from which the material is procured should be dependable and capable of supplying
items of uniform quality. The buyer has to decide which item should be directly obtained from
the manufacturer. Source selection, source development and vendor rating play an important
role in buyer-seller relationships.
In emergencies, open market purchases and bazaar purchases are restored to.

5. Right quantity:

The right quantity is the most important parameter in buying. Concepts, such as, economic order
quantity, economic purchase quantity, fixed period and fixed quantity systems, will serve as
broad guidelines. But the buyer has to use his knowledge, experience and commonsense to
determine the quantity after considering factors such as price structure, discounts, availability of
the item, favourable reciprocal relations, and make or buy consideration.

6. Right attitude:

Developing the right attitude too, is necessary as one often comes across such statement:
‘Purchasing knows the price of everything and value of nothing’; ‘We buy price and not cost’;
‘When will our order placers become purchase managers? ’; ‘Purchasing acts like a postbox’.
Therefore, purchasing should keep ‘progress’ as its key activity and should be future-oriented.
The purchase manager should be innovative and his long-term objective should be to minimize
the cost of the ultimate product.
He will be able to achieve this if he aims himself with techniques, such as, value analysis,
materials intelligence, purchases research, SWOT analysis, purchase budget lead time analysis,
etc.

7. Right contracts:

The buyer has to adopt separate policies and procedures for capital and consumer items. He
should be able to distinguish between indigenous and international purchasing procedures. He
should be aware of the legal and contractual aspects in international practices.

8. Right material:

Right type of material required for the production is an important parameter in purchasing.
Techniques, such as, value analysis will enable the buyer to locate the right material.
9. Right transportation:

Right mode of transportation have to be identified as this forms a critical segment in the cost
profile of an item. It is an established fact that the cost of the shipping of ore, gravel, sand, etc. ,
is normally more than the cost of the item itself.

10. Right place of delivery:

Specifying the right place of delivery, like head office or works,would often minimize the
handling and transportation cost
Exercise 4:

Define material handling

Material handling involves short-distance movement within the confines of a building or

between a building and a transportation vehicle. It uses a wide range of manual, semi-
automated, and automated equipment and includes consideration of the protection, storage,
and control of materials throughout their manufacturing, warehousing, distribution,
consumption, and disposal. Material handling can be used to create time and place
utility through the handling, storage, and control of material, as distinct from manufacturing,
which creates form utility by changing the shape, form, and makeup of material.

Mention any four objectives of material handling

The primary objective of a material handling system is to reduce the unit cost of production. The
other subordinate objectives are:

1. Reduce manufacturing cycle time

2. Reduce delays, and damage
3. Promote safety and improve working conditions
4. Maintain or improve product quality
5. Promote productivity

i. Material should flow in a straight line

ii. Material should move as short a distance as possible
iii. Use gravity
iv. Move more material at one time
v. Automate material handling

6. Promote increased use of facilities

i. Promote the use of building cube

ii. Purchase versatile equipment
iii. Develop a preventive maintenance program
iv. Maximize the equipment utilization etc.

7. Reduce tare weight

8. Control inventory
Explain the objectives of material handling

The main objectives of material handling are as follows:

 It should be able determine appropriate distance to be covered.

 Facilitate the reduction in material damage as to improve quality.
 Reducing overall manufacturing time by designing efficient material movement
 Improve material flow control
 Creation and encouragement of safe and hazard-free work condition
 Improve productivity and efficiency
 Better utilization of time and equipment

It is critical for manufacturing organization to identify importance of material handling principle

as the critical step in promoting the job improvement process. Manual material handling
significantly increases health hazard for the workers in from lower back injuries.

In the current competitive and globalized environment, it is important to control cost and reduce
time in material handling. An efficient material handling process promotes:

 Design of proper facility layout

 Promotes development of method which improves and simplifies the work process
 It improves overall production activity.
 Efficient material handling reduces total cost of production.

Explain the principles of material handling

Principles of Material Handling

Material handling principles are as follows:

 Orientation Principle: It encourages study of all available system relationships before

moving towards preliminary planning. The study includes looking at existing methods,
problems, etc.
 Planning Principle: It establishes a plan which includes basic requirements, desirable
alternates and planning for contingency.
 Systems Principle: It integrates handling and storage activities, which is cost effective into
integrated system design.
 Unit Load Principle: Handle product in a unit load as large as possible
 Space Utilization Principle: Encourage effective utilization of all the space available
 Standardization Principle: It encourages standardization of handling methods and
equipment.
 Ergonomic Principle: It recognizes human capabilities and limitation by design effective
handling equipment.
 Energy Principle: It considers consumption of energy during material handling.
  Ecology Principle: It encourages minimum impact upon the environment during material
handling.
 Mechanization Principle: It encourages mechanization of handling process wherever
possible as to encourage efficiency.
 Flexibility Principle: Encourages of methods and equipment which are possible to utilize
in all types of condition.
 Simplification Principle: Encourage simplification of methods and process by removing
unnecessary movements
 Gravity Principle: Encourages usage of gravity principle in movement of goods.
 Safety Principle: Encourages provision for safe handling equipment according to safety
rules and regulation
 Computerization Principle: Encourages of computerization of material handling and
storage systems
 System Flow Principle: Encourages integration of data flow with physical material flow
 Layout Principle: Encourages preparation of operational sequence of all systems available
 Cost Principle: Encourages cost benefit analysis of all solutions available
 Maintenance Principle: Encourages preparation of plan for preventive maintenance and
scheduled repairs
 Obsolescence Principle: Encourage preparation of equipment policy as to enjoy
appropriate economic advantage.

Material handling operations are designed based upon principles as discussed above. Material
handling equipment consists of cranes, conveyors and industrial trucks.

What are the relationship between plant layout and material handling

There is a close relationship between plant layout and material handling. The material
handling technique to be used definitely effects the plant layout and the factory building.

A sound low cost method can be designed and installed only if material handling is
considered an integral part of plant layout.

A well considered arrangement of production equipment, the proper location of different

departments, a logical sequence of operation within the department and convenient

location of store areas, tool cribs and similar activity centres is required for a good

material handling arrangement. The efficient and economical material handling system
 can be designed and selected for installations only after the floor plan has been
adequately organized.

In all types of plant layout provisions for the receiving and shipping of materials by

various possible means (like trucks or train etc.) should be made. If it is required to move

the materials by hand operated or power operated trucks, sufficient passage should be
provided.

If the building is multi storied, lift, elevators and conveyors of different types must be

utilized to enable efficient material handling. The location of items in the store room

should provide for minimum handling of materials to the point of issue, accessibility and
efficient space utilization.

Discuss the factors to be considered while selecting material handling equipment

Factors Affecting the Selection of Material Handling equipment

The following factors are to be taken into account while selecting material handling equipment.
1. PROPERTIES OF THE MATERIAL
Whether it is solid, liquid or gas, and in what size, shape and weight it is to be moved, are
important considerations and can already lead to a preliminary elimination from the range of
available equipment under review. Similarly, if a material is fragile, corrosive or toxic this will
imply that certain handling methods and containers will be preferable to others.
2. LAYOUT AND CHARACTERISTICS OF THE BUILDING
Another restricting factor is the availability of space for handling. Low-level ceiling may
preclude the use of hoists or cranes, and the presence of supporting columns in awkward
places can limit the size of the material-handling equipment. If the building is multi-storied,
chutes or ramps for industrial trucks may be used. Layout itself will indicate the type of
production operation (continuous, intermittent, fixed position or group) and can indicate
some items of equipment that will be more suitable than others. Floor capacity also helps in
selecting the best material handling equipment.
3. PRODUCTION FLOW
If the flow is fairly constant between two fixed positions that are not likely to change, fixed
equipment such as conveyors or chutes can be successfully used. If, on the other hand, the
flow is not constant and the direction changes occasionally from one point to another
 because several products are being produced simultaneously, moving equipment such as
trucks would be preferable.
4. COST CONSIDERATIONS
This is one of the most important considerations. The above factors can help to narrow the
range of suitable equipment, while costing can help in taking a final decision. Several cost
elements need to be taken into consideration when comparisons are made between various
items of equipment that are all capable of handling the same load. Initial investment and
operating and maintenance costs are the major cost to be considered. By calculating and
comparing the total cost for each of the items of equipment under consideration, a more
rational decision can be reached on the most appropriate choice.
5. NATURE OF OPERATIONS
Selection of equipment also depends on nature of operations like whether handling is
temporary or permanent, whether the flow is continuous or intermittent and material flow
pattern-vertical or horizontal.
6. ENGINEERING FACTORS
Selection of equipment also depends on engineering factors like door and ceiling dimensions,
floor space, floor conditions and structural strength.
7. EQUIPMENT RELIABILITY
Reliability of the equipment and supplier reputation and the after sale service also plays an
important role in selecting material handling equipments.

1. Discuss different material handling equipment

Material handling equipment is the machinery used for the transportation, storage and control
of goods. The mechanical equipment used makes what would be a difficult job for someone, one
that can be completed with ease. Material handling equipment doesn't just allow you to
complete jobs faster, it also allows you to complete jobs without the risk of injuring yourself.
As you can imagine, that covers a huge range of different equipment and we supply
diverse types of material handling equipment to accommodate various tasks.
Palette Trucks
Made for transporting palleted loads around the warehouse and other spaces.

Sack Trolleys
Trolleys are easy to work with and sturdy enough to make moving jobs much faster.

Material Lifts
Need to lift heavy goods? A material lift drastically changes the difficulty of this task. Lightweight
and easy to manoeuvre.

Portable Lifting Platforms

If you need to raise the height of goods or equipment, a portable lifting platform can be of help.
Hand and foot operated for quick control.

Outdoor Carts
Whatever you need moving on an outside terrain, an outdoor cart is a great help. Save yourself
multiple trips with this cart.

Furniture Moving Equipment

Moving house? Rearranging furniture? Don't risk injuring yourself lifting heavy furniture, that's
what furniture lifting equipment is for!

Platform Trolleys
Compact and lightweight, platform trolleys allow you to move lots of heavy goods with ease.

Manual Stackers
These heavy-duty machines allow for you to stack heavy goods without ever breaking a sweat.
Control lifting easily with hand and foot controls.

Moving Stackers
Skates allow you to move heavy machinery around with ease. Don't risk damage to yourself or
the equipment you are trying to move.

Each of our types of material lifting equipment has its own height and weight limit. Be sure to
read the product descriptions carefully before buying or hiring any material handling goods to
make sure it fits your requirements.
Exercise 5

What do you mean by production, planning and control?

Production planning and control is concerned with implementing the plans, i.e. the detailed
scheduling of jobs, assigning of workloads to machines (and people), and the actual flow of
work through the system. Production is an organized activity of converting row materials into
useful products. Production activity takes place in a wide range of manufacturing and service
sectors. Production system requires the optimal utilization of natural resources like men,
money, machine, materials and time. Production planning and control coordinate with
different departments: such as production, marketing, logistics, warehouse and other
departments depending upon the nature of organization. Production planning and control
receives data related to orders from marketing departments. Production plan based on
marketing and production data is prepared in production planning and control. This
production plan provides clear idea about utilization of manufacturing resources for
production. Prepared production plan is delivered to production department. Production
department manufacture products according to that plan.
1. What is master production schedule
A master production schedule (MPS) is a plan for individual commodities to be
produced in each time period such as production, staffing, inventory, etc.[1] It is usually
linked to manufacturing where the plan indicates when and how much of each product
will be demanded.[2] This plan quantifies significant processes, parts, and other resources
in order to optimize production, to identify bottlenecks, and to anticipate needs and
completed goods. Since an MPS drives much factory activity, its accuracy and viability
dramatically affect profitability. Typical MPSs are created by software with user tweaking.
Due to software limitations, but especially the intense work required by the "master
production schedulers", schedules do not include every aspect of production, but only
key elements that have proven their control effectivity, such as forecast demand,
production costs, inventory costs, lead time, working hours, capacity, inventory levels,
available storage, and parts supply. The choice of what to model varies among companies
and factories. The MPS is a statement of what the company expects to produce and
purchase (i.e. quantity to be produced, staffing levels, dates, available to promise,
projected balance).[1][3]
The MPS translates the customer demand (sales orders, PIR’s), into a build plan using
planned orders in a true component scheduling environment. Using MPS helps avoid
shortages, costly expediting, last minute scheduling, and inefficient allocation of
resources. Working with MPS allows businesses to consolidate planned parts, produce
master schedules and forecasts for any level of the Bill of Material (BOM) for any type of
part.
 What is capacity planning

Capacity planning is the science and art of estimating the space, computer hardware,
software and connection infrastructure resources that will be needed over some future
period of time. A typical capacity concern of many enterprises is whether resources will be in
place to handle an increasing number of requests as the number of users or interactions
increase. The aim of the capacity planner is to plan so well that new capacity is added just in
time to meet the anticipated need but not so early that resources go unused for a long
period. The successful capacity planner is one that makes the trade-offs between the present
and the future that overall prove to be the most cost-efficient.

Why do you neeed production, planning and control

Production planning and control serves as a useful tool to coordinate the activities of
the production system by proper planning and control system. ...Production planning and
control is needed to achieve: Effective utilization of firms' resources.

What are the objectives of production planning and control

Following are the objectives of production planning and control functions:

1. Systematic planning of production activities to achieve the highest efficiency in production of
goods/services.
2. To organize the production facilities like machines, men, etc., to achieve stated production
objectives with respect to quantity and quality time and cost.
3. Optimum scheduling of resources.
4. Coordinate with other departments relating to production to achieve regular balanced and
uninterrupted production flow.
5. To conform to delivery commitments.
6. Materials planning and control.
7. To be able to make adjustments due to changes in demand and rush orders.

What are the guidelines for aggregate planning

The following are the guidelines for aggregate planning:

1. Determine corporate policy regarding controllable variables.
2. Use a good forecast as a basis for planning.
3. Plan in proper units of capacity.
4. Maintain the stable workforce.
5. Maintain needed control over inventories.
6. Maintain flexibility to change.
7. Respond to demand in a controlled manner.
8. Evaluate planning on a regular base.

How do you measure capacity

In apparel Manufacturing, “Production capacity” is one of the most important criteria used for
vendor selection by the buyers. It is because; the production time of an order is directly
proportional to the vendor’s production capacity. So it is very important that marketing and
planning personnel should aware of the production capacity of their production units.

The capacity of a factory is primarily expressed in terms of total machines factory have. Secondly,
how much pieces the factory produces on daily for the specific products? In general, total
numbers of machines in a factory mostly remains the same for a period. But factory may
produce various types of the product during the season. According to the product (style)
category, machine requirement may change and daily average production in each style may vary.
So to be specific during booking orders, a planner should know exactly how much capacity he or
she needed to procure the order in a given time period.
Exercise 6

Define quality

In manufacturing, a measure of excellence or a state of being free from defects,

deficiencies and significant variations. It is brought about by strict and consistent commitment to
certain standards that achieve uniformity of a product in order to satisfy specific customer or
user requirement. ISO 8402-1986 standard defines quality as “the totality of features and
characteristics of a product or service that ebars its ability to satisfy stated or implied needs.” If
an automobile company finds a defect in one of their cars and makes a product recall,
customemr reliability and therefore production will decrease because trust will be lost in the
car’s quality.

What do you mean by inspection

Quality related in-process inspection/verification is an essential part of quality control in

manufacturing.
Inspection in manufacturing includes measuring, examining, testing, or gauging one or more
characteristics of a product or process and comparing the results with specified requirements to
determine whether is the requirements are met for each characteristic.[3][4] Common examples
of inspection by measurement or gauging include using a caliper or micrometer to determine if a
dimension of a manufactured part is within the dimensional tolerance specified in a drawing for
that part, and is thus acceptable for use.
Design for Inspection (DFI) is a concept that should complement and work in collaboration
with Design for Manufacturability(DFM) and Design for Assembly (DMA) to reduce product
manufacturing cost and increase manufacturing practicality.
Photogrammetry is a modern way of visual inspection, delivering high accuracy and traceability
for various industries. The portable 3D system is a versatile optical coordinate measuring
machine (CMM) with a wide range of capabilities. Highly accurate point measurements can be
taken with inspection carried out directly to CAD models, geometry or drawings.

Mention the objectives of inspection

Inspections, either at the project or program level, are the primary method used by FHWA for
fulfilling its construction program oversight responsibilities. Oversight represents the compliance
or verification component of FHWA's stewardship activities.

Project oversight requirements may be different depending upon the stewardship agreements,
but the general objectives of construction inspections are the same. Although STAs may be
delegated the authority to administer the program within the scope of 23 USC and related
 Federal laws, FHWA retains the responsibility to assure that projects are being administered in
full compliance. Specific objectives are as follows:

1. Obtain assurance that the project has been completed in reasonably close conformity
with plans and specifications including authorized changes and extra work. Provide a
basis for acceptance of the project and reimbursement of project costs with Federal-aid
funds.
2. Acquire information on problems and construction changes. Provide an opportunity for
timely remedial action where applicable. Provide documentation of solutions to problems
or commitments. Encourage other STA units' involvement and awareness of problems to
avoid future reoccurrence.
3. Assess the State's abilities and effectiveness in managing and controlling Federal-aid
construction projects with respect to items such as these:
o Qualifications-training, certification, written guidance
o Staffing, equipment, and facilities
o Performance
o Project documentation, including inspection diaries, test reports, etc.
4. Promote the development and implementation of quality management programs.
5. Offer technical and procedural advice. Recommend improved construction techniques
and engineering supervision.
6. Report on special or innovative construction materials, methods, procedures, new
equipment, and other technological innovations.
7. Professional development of FHWA and State review personnel.
8. Other items, such as these:
o Establish contact and communications with project staff.
o Become familiar with project.
o Attend partnering workshops and project progress meetings.
o Monitor and evaluate progress of work.
o Provide support and encouragement for project personnel.
o Focus division resources on critical construction features and practices.
o Follow up on previous inspection findings.
o Lessons learned.

Mention any four drawbacks of inspection

Drawbacks of Inspection
Following are the disadvantages of inspection:
1. Inspection adds to the cost of the product but not for its value.
2. It is partially subjective, often the inspector has to judge whether a products passes or not.
3. Fatigue and Monotony may affect any inspection judgment.
4. Inspection merely separates good and bad items. It is no way to prevent the production of
bad items.

What do you mean by control

The process through which the standards are established and met with standards is called
control. This process consists of observing our activity performance, comparing the performance
with some standard and then taking action if the observed performance is significantly too
different from the standards.

Mention the control process

The control process involves a universal sequence of steps as follows:

1. Choose the control object
2. Choose a unit of measure
3. Set the standard value
4. Choose a sensing device which can measure
5. Measure actual performance
6. Interpret the difference between actual and standard
7. Taking action.

Define “quality control”

Quality Control in Production Management

Quality Control (QC) may be defined as a system that is used to maintain a desired level of
quality in a product or service. It is a systematic control of various factors that affect the quality
of the product. It depends on materials, tools, machines, type of labor, working conditions etc.
QC is a broad term, it involves inspection at particular stage but mere inspection does not mean
QC. As opposed to inspection, in quality control activity emphasis is placed on the quality future
production. Quality control aims at prevention of defects at the source, relies on effective
feedback system and corrective action procedure. Quality control uses inspection as a valuable
tool.

According to Juran “Quality control is the regulatory process through which we measure actual
quality performance, compare it with standards, and act on the difference”. Another definition
 of quality control is from ANSI/ASQC standard (1978) quality control is defined as “The
operational techniques and the activities which sustain a quality of product or service that will
satisfy given needs; also the use of such techniques and activities”.

Alford and Beatty define QC as “In the broad sense, quality control is the mechanism by which
products are made to measure up to specifications determined from customers, demands and
transformed into sales engineering and manufacturing requirements, it is concerned with
making things right rather than discovering and rejecting those made wrong”.

Types of Quality Control

QC is not a function of any single department or a person. It is the primary responsibility of any
supervisor to turn out work of acceptable quality. Quality control can be divided into three main
sub-areas, those are:
1. Off-line quality control,
2. Statistical process control and
3. Acceptance sampling plans.
1. Off-line quality control:
Its procedure deal with measures to select and choose controllable product and process
parameters in such a way that the deviation between the product or process output and the
standard will be minimized. Much of this task is accomplished through product and process
design.
Example:
Taguchi method, principles of experimental design etc.
2. Statistical process control:
SPC involves comparing the output of a process or a service with a standard and taking
remedial actions in case of a discrepancy between the two. It also involves determining
whether a process can produce a product that meets desired specification or requirements.
On-line SPC means that information is gathered about the product, process, or service while it
is functional. The corrective action is taken in that operational phase. This is real-time basis.
3. Acceptance sampling plans:
A plan that determines the number of items to sample and the acceptance criteria of the lot,
based on meeting certain stipulated conditions (such as the risk of rejecting a good lot or
accepting a bad lot) is known as an acceptance sampling plan.
Steps in Quality Control
Following are the steps in quality control process:
1. Formulate quality policy.
2. Set the standards or specifications on the basis of customer’s preference, cost and profit.
3. Select inspection plan and set up procedure for checking.
4. Detect deviations from set standards of specifications.
5. Take corrective actions or necessary changes to achieve standards.
6. Decide on salvage method i.e., to decide how the defective parts are disposed of, entire scrap
or rework.
7. Coordination of quality problems.
8. Developing quality consciousness both within and outside the organization.
9. Developing procedures for good vendor-vendee relations.
Objectives of Quality Control
Following are the objectives of quality control:
1. To improve the companies income by making the production more acceptable to the
customers, i.e., by providing long life, greater usefulness, maintainability etc.
2. To reduce companies cost through reduction of losses due to defects.
3. To achieve interchangeability of manufacture in large scale production.
4. To produce optimal quality at reduced price.
5. To ensure satisfaction of customers with productions or services or high quality level, to build
customer goodwill, confidence and reputation of manufacturer.
6. To make inspection prompt to ensure quality control.
7. To check the variation during manufacturing.
The broad areas of application of quality control are incoming material control, process control
and product control.

Benefits of Quality Control

 Improving the quality of products and services.
 Increasing the productivity of manufacturing processes, commercial business, and
corporations.
 Reducing manufacturing and corporate costs.
 Determining and improving the marketability of products and services.
 Reducing consumer prices of products and services.
 Improving and/or assuring on time deliveries and availability.
 Assisting in the management of an enterprise.
Seven Tools for Quality Control
To make rational decisions using data obtained on the product, or process, or from the
consumer, organizations use certain graphical tools. These methods help us learn about the
characteristics of a process, its operating state of affairs and the kind of output we may expect
from it. Graphical methods are easy to understand and provide comprehensive information; they
are a viable tool for the analysis of product and process data. These tools are effect on quality
improvement. The seven quality control tools are:
1. Pareto charts
2. Check sheets
3. Cause and effect diagram
4. Scatter diagrams
5. Histogram
6. Graphs or flow charts
7. Control charts
1. PARETO CHARTS
Pareto charts help prioritize by arranging them in decreasing order of importance. In an
environment of limited resources these diagrams help companies to decide on the order in
which they should address problems. The Pareto analysis can be used to identify the problem
in a number of forms.

a. Analysis of losses by material (number or past number).

b. Analysis of losses by process i.e., classification of defects or lot rejections in terms of the
process.
c. Analysis of losses by product family.
d. Analysis by supplier across the entire spectrum of purchases.
e. Analysis by cost of the parts.
f. Analysis by failure mode.
Example:
A Pareto chart of reasons for poor quality. Poor design will be the major reason, as indicated
by 64%. Thus, this is the problem that the manufacturing unit should address first.
G. Poor Design
H. Defective Parts
I. Operator Error
J. Wrong Dimensions
K. Surface Abrasion
L. Machine Calibrations
M. Defective Material
2. CHECK SHEETS
Check sheets facilitate systematic record keeping or data collection observations are
recorded as they happen which reveals patterns or trends. Data collection through the use of
a checklist is often the first step in analysis of quality problem. A checklist is a form used to
record the frequency of occurrence of certain product or service characteristics related to
quality. The characteristics may be measurable on a continuous scale such as weight,
diameter, time or length.
 Pareto chart

Example:
The table is a check sheet for an organization’s computer related problems.
Checklist

3. CAUSE AND EFFECT DIAGRAM

It is sometimes called as Fish-bone diagram. It is first developed by Kaorv Ishikawa in 1943
and is sometimes called as Ishikawa diagram. The diameter helps the management trace
customer complaints directly to the operations involved. The main quality problem is referred
to Fish-head; the major categories of potential cause structural bones and the likely specific
causes to ribs. It explores possible causes of problems, with the intention being to discover
the root causes. This diagram helps identify possible reasons for a process to go out of control
as well as possible effects on the process.
 Fishbone diagram

4. SCATTER DIAGRAM (SCATTER PLOTS)

It often indicates the relationship between two variables. They are often used as follow-ups
to a cause and effect analysis to determine whether a stated cause truly does impact the
quality characteristics.

Scatter diagram

Example:
The plots advertising expenditure against company sales and indicates a strong positive
relationship between the two variables. As the level of advertising expenditure increases sales
tend to increase.
5. HISTOGRAM (OR) BAR CHARTS
It displays the large amounts of data that are difficult to interpret in their raw form. A
histogram summarizes data measured on a continuous scale showing the frequency
distribution of some quality characteristics (in statistical terms the central tendency and the
dispersion of the data).
 Histogram

Often the mean of the data is indicated on the histogram. A bar chart is a series of bare
representing the frequency of occurrence of data characteristics, the bar height indicates the
number of times a particular quality characteristic was observed.
6. FLOW CHARTS (OR) GRAPHS
It shows the sequence of events in a process. They are used for manufacturing and service
operations. Flow charts are often used to diagram operational procedures to simplify the
system. They can identify bottlenecks, redundant steps and non-value added activities. A
realistic flow chart can be constructed by using the knowledge of the person who are directly
involved in the particular process. The flow chart can be identifies where delays can occur.

Flowchart

7. CONTROL CHARTS
It distinguishes special causes of variations from common causes of variation. They are used
to monitor and control process on an ongoing basis. A typical control chart plots a selected
quality characteristic found from sub-group of observations as a function of sample number.
Characteristics such as sample average, sample range and sample proportion of non-conforming
units are plotted. The centre line on a control chart represents the average value of
characteristics being plotted. Two limits know as the upper control limit (UCL) and lower control
limit (LCL) are also shown on control charts. These limits are constructed so that if the process is
operating under a stable system of chance causes, the problem of an observation falling outside
 these limits is quite small. The following figure shows a generalized representation of a control
chart.

Control chart shows the performance of a process from two points of view. First, they show a
snapshot of the process at the moment the data are collected.
Second, they show the process trend as time progresses. Process trends are important because
they help in identifying the out-of-control status if it actually exists. Also, they help to detect
variations outside the normal operational limits, and to identify the cause of variations. Fig.
shows a generalized representation of a control chart.
Control charts

Causes of Variation in Quality

The variation in the quality of product in any manufacturing process is broadly classified as:
A. Chance causes
B. Assignable causes.
A. CHANCE CAUSES
The chance causes are those causes which are inherit in manufacturing process by virtue of
operational and constructional features of the equipments involved in a manufacturing
process.
This is because of

1. Machine vibrations
2. Voltage variations
3. Composition variation of material, etc.
They are difficult to trace and difficult to control, even under best condition of production.
Even though, it is possible to trace out, it is not economical to eliminate. The chance causes
results in only a minute amount of variation in process. Variation in chance causes is due to
internal factors only the general pattern of variation under chance causes will follow a stable
 statistical distribution (normal distribution). Variation within the control limits means only
random causes are present.
B. ASSIGNABLE CAUSES
These are the causes which creates ordinary variation in the production quality. Assignable
cause’s variation can always be traced to a specific quality. They occur due to

1. Lack of skill in operation

2. Wrong maintenance practice
3. New vendors
4. Error in setting jigs and fixtures
5. Raw material defects
Variation due to these causes can be controlled before the defective items are produced. Any
one assignable cause can result in a large amount of variation in process. If the assignable causes
are present, the system will not follow a stable statistical distribution. When the actual variation
exceeds the control limits, it is a signal that assignable causes extend the process and process
should be investigated.