PRODUCTION AND OPERATIONS MANAGEMENT

Production Management and Operations Management

Course Description
This course is to equip students with knowledge and understanding of the nature,
significance and problems of the operations and production management. It
discusses techniques for analysis and decision making for operating systems;
explain the processes, activities and knowledge with other organizational
management function, explain recent trends in production and operations
management discuss productive and competitive strategies and discuss scientific
models for planning and problem solving

Learning Objectives

 Discuss techniques for analysis and decision making for operating systems.
 Explain the processes, activities and functions
 Explain recent trends in production and operations management
 Discuss productive and competitive strategies
 Discuss scientific models for planning and problem solving

Topics of Study

1. Introduction
 The nature of production
  Operations Management
 Productivity and competitiveness
 Strategy
2. Design of Production Systems
 Service characteristic and design
 Product and service design
 Design of work systems
3. Capacity Planning
 Planning Models
 Managing Capacity Changes
 Strategic Decision in Capacity Planning and Management
4. Facility Layout and Location
 Facilities Layout and decisions
 Location planning and analysis
 Global locations
5. Quality Management Control
 Quality management control
 Acceptance sampling
 Total quality management (TQM)
6. Operating and Controlling the system
 Aggregate planning
 Inventory management)
 Materials requirement planning (MRP)
 JIT
 Scheduling Systems
7. Project Planning
 Project evaluation and review technique (PERT)
 Critical Path Methods (CPM)
 Project Cycle
8. Forecasting
 Nature and Importance
 Models of Forecasting
  Accuracy and control forecasts

9. Automation and advanced technology

 Human machine interface
 Elements of automation in material handling
 Impacts of automation

Learning Activities

· Reading assignments;

· Classroom Lecture by course instructor;

· Class Discussion (on principles learned, presentation of assignments by students,

group discussions on practical problems organizations face);

· Case Analysis;

· Library research based assignments.

Mode of delivery
 In class teaching
 Written Assignments
 End of course examination
Assessment:

50% Course work (Exercises)

50% Examination

Prescribed Texts

Barnes, D. (2007) Operations Management, Thomson Learning, London

Oakland, J. (2000) Total Quality Management: Text with Cases, Butterworth

Heinemann Oxford

Slack, B.N. (2009) Operations Management, Financial Times Prentice Hall, London
Waller D (2003) Operations Management A supply Chain Approach, Thomson
Learning. London

NOTES

PRODUCTION AND OPERATIONS MANAGEMENT

Course Facilitator: Dr. Francis Mkandawire

Assistant Professor

CONTENT

UNIT 1 OPERATIONS MANAGEMENT

UNIT 2 FACILITIES PLANNING

UNIT 3 CAPACITY PLANNING

UNIT 4 OPERATIONS PLANNING AND CONTROL

UNIT 5 QUALITY CONTROL

UNIT 1

OPERATIONS MANAGEMENT

Introduction
 Innovations in technology have resulted in the development of manufacturing
capabilities of organization.

 The study and application of management techniques in managing the

affairs of the organization have also changed its nature over the period of
time. Therefore, managing a service system has become a major issue in
the global competitive environment.

 Operations Management has been a driving force in the improvement of

business practice around the world. Operations Management leads the way
for the organisations to achieve its goals with minimum effort. Operations
management is recognized as an important factor in a country’s economic
growth.

 Operations management is the crucial area in the functioning of

organisations and therefore, an in-depth study of the subject matter
becomes essential.

 Operations are concerned with the transformation of inputs into the

required output or services.

 Management is the continuous process, which combines and transforms

various resources used in the operations system of the organization into
value added services. Operations Management is the set of interrelated
management activities, which are involved in manufacturing of certain
products or services.

Concept of Production

 Production is the step-by-step conversion of one form of material into

another form through continuous process to create the utility of the
product tithe user.

 Production is a value addition process.

 Elwood S.Buffa defines production as, “the process by which goods and
services are created”.
  Production function is concerned with the transformation of a range of
inputs into the required outputs .For example, manufacturing of
standardized products like, car, motor cycle, radio, television, soaps, etc.

Production System

 The production system is that part of an organization, which produces

goods of an organization.

 It is a planned and integrated activity whereby resources are transformed

in a controlled manner to add value for the product.

 The production system has the following features:

1) Production is a well-organized activity with pre-established objectives.

2) The production system converts the various inputs into outputs.

Production function is integrated with other activities of the organization.

3) Feedback system is necessary to control and improve the system

performance.

4) It is a continuous process.

Fig, 1 Production System

INPUTS TRANSFORMATION OUTPUT

 Men  PRODUCT DESIGN  PRODUCTS

 Material’s  PLANNING PROCESS  SERVICES

 Machine  PRODUCTION CONTROL

 Information  MAINTENANCE

 Capital
 CONTROL

 INVENTORY

 QUALITY

 COST

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 products.

 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.

Objectives of production management

The objectives of the production management are given below:

1) Right Quality:

o Quality is the important factor, which should be considered at the

time of manufacturing process.

o All efforts should be taken to ensure the quality of the

manufactured goods.

2) Right Quantity:
 o The manufacturing organization should produce the goods in right
number.

o If they are produced in excess of demand the capital will block up in

the form of inventory.

o If the quantity is produced in short of demand, it leads to shortage

of product.

3) Timeliness:

o Timeliness of delivery is one of the important factors to judge the

effectiveness of production department.

o The production department has to make the optimal utilization of

resources to achieve its objectives.

4) Low Manufacturing Cost:

o Manufacturing costs are determined before the product is actually

produced.

o Hence, all attempts should be taken to produce the products at pre-

established cost so as to reduce the variation between actual and
standard costs.

Operations Management

 Operations Management is a part of management sciences.

 Operations Management is concerned with the production of quality goods

and services and ensures that the business operations are performed
smoothly, efficiently, effectively.

 It is a field of management that deals with effective planning, scheduling,

use and control of a manufacturing or service organization.
  Operations management is the business function that plans organizes,
coordinates, and controls, the resource needed to produce a company’s
goods and services.

 Operations Management is the process whereby resources, flowing within

a defined system, are combined and transformed by a controlled manner to
add value in accordance with policies communicated by management.

Definition of Operations Management

 According to S .Buffa, Production or Operations Management deals with

decision making related to production process so that the resulting goods
and services are produced according to specifications, in the amount and by
the schedule demanded and at a minimum cost.

 The Association of Operations Management defines operations

managements “the field of study that focuses on the effective planning
,scheduling, use and control of manufacturing or service organisations
through the study of concepts from design engineering, industrial
engineering, MIS, quality management, production management,
industrial management and other functions as they affect the
organization”.

 Operations management is the business function that manages that part of

business that transforms raw materials and human inputs in to goods and
services of higher value. Operations management is a business activity that
deals with the production of goods and services. The term operations
include management of materials, machines, and inventory control and
storage functions.

 Operations management includes a set of activities performed to manage

the available resources in an efficient manner in order to convert inputs in
to desired outputs.

 The value addition to an input can be done in the following ways. They are
mentioned below:
 1) Alteration

o It refers to the transformation of the state of input.

o This transformation can beat physical change in the input to

produce goods.

2) Transportation

o It refers to physical movement of goods from one location to

another.

3) Storage

o It refers to preserving goods in a protected environment.

4) Inspection

o It refers to the verification of and confirmation towards the

requirements of an entity.

 All the above activities in one way or another are making a product more
useful.

 The operations managers have the prime responsibility for processing

inputs into outputs. They must bring together the materials, capacity and
knowledge available for the purpose achieving its production objectives.

 The definition of the operations Management contains the concepts such

as Resources, Systems, Transformation and Value addition Activities etc. A
brief explanation about such words is given below:

1) Resources

o Resources are in the forms of the human, material and

capital inputs.

a) Human resources are the key resources of an

organization. By using the intellectual capabilities of
 people, managers can multiply the value of their
employees.

b) Material resources are the physical inputs, which are

needed for production.

2) Systems

o Systems are the arrangement of components designed to

achieve objectives.

o The business systems are subsystem of large social systems.

o Business system contains subsystem such as personnel,

engineering, finance and operations.

o The ability of any system to achieve its objective depends on

its design and control mechanism.

o System design is a predetermined arrangement of

components.

o It establishes the relationships between inputs,

transformation activities and outputs in order to achieve the
system objectives.

o System control consists of all actions necessary to ensure

that activities conform to preconceived plans.

3) Productivity

o The objective of combining resources is to transform the

inputs into goods and services having a higher value than the
original inputs.

o The effectiveness of the production factors in the

transformation process is known as productivity.
 o Productivity refers to the ratio between values of output per
work hour to the cost of inputs.

Scope of operations management

 As stated earlier, Operations Management is concerned with the

conversion of inputs into outputs using physical resources so as to provide
the desired utilities to the customers.

 It involves a number of well planned activities.

 Following are the activities that come under Production and Operations

A) Management functions:

1. Location of facilities.

2. Plant Lay Outs and Material Handling.

3. Product Design.

4. Process Design.

5. Production and Planning Control.

6. Quality Control.

7. Materials Management.

8. Maintenance Management

1. Location facilities

 Location of the proposed factory building is an important consideration in

operations management.

 It is an important strategic level decision-making for an organization.

 It deals with the questions such as •where our main operations should be
based?
  The selection of location is a key-decision because large amount of
investment is required in building plant and machinery.

 An improper location of plant may lead to waste of all the investments

made in plant and machinery. Hence, location of plant should be based on
the company’s future plans about expansion, diversification, nature of
sources of raw materials and many other factors.

 The very purpose of the location study is to identify the optimal location
facility that will results in the greatest advantage to the organization.

2. Plant Layout and material handling

 Plant Layout refers to the physical arrangement of facilities.

 It is the configuration of departments, work centers and equipment in the

inputs conversion process.

 The objective of the plant Layout is to design a physical arrangement that

meets the required output quality and quantity most economically.

 According to James More •, “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.”

 Material Handling refers to the moving of materials from the store room to
the machine and from one machine to the next machine during the
production process. It is the art and science of moving, packing and storing
of products in any form.

 Material cost can be reduced by judicious selection of materials and its

proper storage.

 Material handling devices increases the output, improves quality, speeds up

the deliveries and decreases the cost of production. Hence, material
handling should be a prime task in the designing of new projects.
3. Product design

 Product design deals with conversion of ideas into reality.

 Every business organization has to design, develop and introduce new

products as a commercial strategy.

 Developing the new products and launching them in the market are the
biggest problems faced by the organizations.

 The entire process of need identification to physical manufactures of

product involves three functions.

 Design, Product Development, and manufacturing. Operations

management has the responsibility of selecting the processes by which the
product can be produced.

4. Process design

 Designing of manufacturing process is another functional area of

operations management.

 It deals with how the process required to produce a product is selected.

 These decisions encompass the selection of a process, choice of

technology, process flow analysis and Layout of the facilities.

 The major consideration in process design is to analyze the workflow for

converting raw materials into final products.

5. Production Planning and Control

 Production planning and control can be defined as the process of planning

the production in advance, setting the exact route of each item, fixing the
starting and finishing dates for each item, to give production orders to
shops and to follow-up the progress of products according to orders.

 The principle of production planning and control lies in the statement ”

First Plan Your Work and then Work on Your Plan”
  Main functions of production planning and control include Planning,
Routing, Scheduling, Dispatching and Follow-up.

 Planning is deciding in advance what to do, how to do it, when to do it and

who is to do it.

 Planning bridges the gap from where we are and to where we want Togo. It
makes it possible for things to occur which would not otherwise happen.

 Routing is the process of selection of path, which each part of the product
will follow.

 Routing determines the most advantageous path to be followed for

department to department and machine to machine till raw material gets
its final shape.

 Scheduling determines the time programme for the operations.

 Scheduling maybe defined as the fixation of time and date for each
operations as well as it determines the sequence of operations to be
followed.

 Dispatching is concerned with the starting the processes.

 It gives authority so as to start a particular work, which has been already

been planned under Routing and Scheduling.

 Therefore, dispatching is the release of orders and instruction for the

starting of production.

 Follow-up is the process of reporting daily progress of work in each shop in

a prescribed preform and to investigate the causes of deviations from the
planned performance and to take necessary actions.

6. QUALITY CONTROL

 Quality Control 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.

 Quality Control aims at prevention of defects at the source, relies on

effective feedback system and corrective action procedure.

 Quality Control ensures that the product of uniform acceptable quality is

manufactured.

 It is the entire collection of activities, which ensures that the operations will
produce the optimum quality products at minimum cost.

The main objectives of Quality Control are:

1. To produce qualitative items

2. To reduce companies cost through reduction of losses due to defects.

3. To produce optimal quality at reduced price.

4. To ensure satisfaction of customers with productions or services or high

5. Quality level, to build customer good will, confidence and reputation of

manufacturer.

6. To make inspection prompt to ensure quality control.

7. To check the variation during manufacturing.

7. MATERIALS MANAGEMENT

 Materials Management is that aspect of operations management function,

which is concerned with the acquisition, control, and use of materials
needed and flow of goods and services connected with the production
process.

 The main objectives of Material Management are given below:

1. To minimize material cost.

 2. To purchase, receive, transport and store materials efficiently.

3. To reduce costs through simplification, standardization, value analysis

etc.

4. To identify new sources of supply and to develop better relations with

the

Suppliers.

5. To reduce investment made in the inventories and to develop high

inventory

Turnover ratios.

8. MAINTENANCE MANAGEMENT

 Equipment and machinery are very important parts of the total production
system.

 Therefore, their efficient usage is very mandatory. It is very important to

see that the organization maintains plant and machinery properly.

 The main objectives of Maintenance Management are given below:

1. To reduce breakdown of machineries

2. To keep the machines and other facilities in a good condition.

3. To ensure the availability of the machines, buildings and services

required by

Other sections of the factory also.

4. To keep the plant in good working condition.

History of Operations Management

 The traditional view of manufacturing management began in eighteenth-
century when Adam Smith recognized the economic benefits of
specialization of labour.

 He recommended breaking of jobs down into subtasks and recognizes

workers to specialized tasks in which they would become highly skilled and
efficient.

 In the early twentieth century, F.W. Taylor implemented Smith theories

and developed Scientific Management.

 From then till 1930, many techniques were developed prevailing the
traditional view.

 Production Management became the acceptable term from 1930s to

1950s.

 As F.W. Taylor’s works become more widely known, managers developed

techniques that focused on economic efficiency in manufacturing.

 Workers were studied in great detail to eliminate wasteful efforts and

achieve greater efficiency.

 At the same time, psychologists, sociologists and other social scientists

began to study people and human behavior in the working environment.

 In addition, economists, mathematicians, and computer socialists

contributed newer approaches.

 With the 1970s emerged other two distinct changes. The most obvious of
these, reflected in the new name Operations Management was a shift in
the Service and Manufacturing sectors of the economy.

 As the Service Sector became more prominent, the change from

Production to Operations emphasized the broadening of the field to
Service Organizations.
  The second, more suitable change was the beginning of an emphasis on
Synthesis, rather than just Analysis, in management practices.

A brief account of development of operations and production management is

given below:

YEAR CONTRIBUTION CONTRIBUTORS

1776 Specialization of Labour in manufacturing Adam Smith
1799 Interchangeable parts, cost accounting Eli Whitney and others
1832 Division of labour by skill; assignment of jobs by Charles Baggage
Skill; basics of time study
Scientific management time study and work Frederick W.Taylor
1900 study developed; dividing planning and doing of
work
1900 Motion of study of jobs Frank B. Gilbreth
1901 Scheduling techniques for employees, machines Henry L. Gantt
Jobs in manufacturing
1915 Economic lot sizes for inventory control F.W. Harris
1927 Human relations; the Hawthorne studies Elton Mayo
1931 Statistical inference applied to product quality: W.A. Shewart
quality control charts
1935 Statistical Sampling applied to quality control: H.F. Dodge H.G. Roming
inspection Sampling plans
1940 Operations research applications in world war II P.M. Blacker and others
1946 Digital Computer John Mauchlly and J.P.
Eckert
1950 Mathematical programming, on-linear and A. Charnes,
Stochastic processes W.W.Cooper and
others
1960 Organizational Behaviour: continued study of L. Cummings, L. Porter
people at work
1970 Integrating operations into overall Strategy and W. Skinner, J.Orlicky
Policy Computer applications to manufacturing, and G. Wright
Scheduling, and control, Material Requirement
Planning (MRP)
1980 Quality and productivity applications from Deming and J. Duran
Japan: robotics, CAD-CAMW.E.

Objectives of Operations Management

 Operations Management involves management of the entire process

responsible for converting inputs into outputs.

 The following are the objectives of Operations Management.

1. To provide customer service

 The main objective of any operating management systems is to

utilize resources judiciously for the satisfaction of customer needs
and wants.
  Therefore, customer satisfaction is a key objective of operations
management.

 Operations management focuses on providing the right products at a

right price at the right time. Hence, this objective will influence the
operations manager’s decisions to achieve the required customer
service.

2. Effective utilization of resources

 Resources that are used in the business organization must be

carefully utilized.

 Inefficient use of resources or inadequate customer service leads to

commercial failure of an organization.

 Operations management is concerned essentially with the utilization

of resources. It aims at obtaining maximum output from the available
resources with minimum cost.

3. To reduce cost of production

 Operations management aims at reduction in the cost of

production of goods and services.

 The cost per unit of the product has to be set properly and all efforts
should be taken to control the actual cost to pre-determined cost of
production.

 Cost can be classified in to fixed cost and variable cost.

 The variable cost changes with every level of production.

 This variable cost can be checked by means of inventory and labour

control techniques.

4. To improve product quality

  Quality control and maintenance are the two important objectives of
Operations Management.

 Quality control consists of all those activities, which are designed to

define, maintain and control specific quality of products within
reasonable limits.

 It is the systematic regulation of all variables affecting the goodness

of the final product. In other words, quality control involves
determination of quality standards and its actual measurement.

 It is necessary to ensure that the established standards are practiced

and maintained.

 It does not attempt to achieve the perfect quality but to secure

satisfactory or reasonable quality at a reasonable level of cost.

5. To fix time schedule

 Another important objective of Operations Management is to

establish time schedule for various operations activities. The
schedule fixation includes the operating cycle time, inventory
turnover rate, machine utilization rate, capacity utilization etc.

6. Proper utilization of Machinery

 Operations management has to take number of decisions with regard

to machinery and equipment.

 New machines should be installed and the old machines are to be

replaced. It has to ensure judicious utilization of machinery and
equipment.

7. Material control
  Based on the sales forecast and production plans, the materials
planning and control is done.

 This involves estimating the individual requirements of parts,

preparing materials budget, forecasting the levels of inventories,
scheduling the orders and monitoring the performance in relation to
production and sales.

MANUFACTURING AND NON .MANUFACTURING OPERATIONS

On the basis nature of operations the organizations can be divided in to:

1. Manufacturing organisations

2. Non-manufacturing organisations

The following are the differences between manufacturing organisations and non-
manufacturing

Organizations:

1. Manufacturing organization produces the goods that are tangible in nature. On

the other hand Service organizations render service to the customers instead of
tangible products.

2. The products of manufacturing units can be stored in physical form. But the
Products of non-manufacturing organization cannot be stored.

3. In manufacturing organization, most of the customers have no direct contact

with the operations. On the other hand, in the case of service organizations the
Customers are present during the creation of the service.

Differences between the goods and the service

 Goods are tangible Services are intangible

 Goods can be stored and transported/ Services cannot be produced

beforehand
  Goods are produced in a factory environment/Services are produced in a
market environment

 Goods are mainly standardized /Services are often customized

 Quality is inherent in the product/ Quality is inherent in the process

Interaction of operations management with other areas

 An organisations function can be broadly divided into:-

1. Finance

2. Operations

3. Marketing

 Operations as a function of management has relationships with marketing,

finance, engineering and other functional areas.

 Finance department is concerned with securing adequate financial

resources for the organization and its proper utilization.

 Allocation of the financial resources throughout the organization is the

major function of finance department including operations department.

 Marketing department is responsible for identification of needs and wants

of the prospective customers and developing a suitable marketing plan.

 Operations is a key activity in an organization, which is linked with

marketing and financial activities. For the successful functioning of the
organization, co-operative actions of all section of the organization are
needed.

 All functional departments have to work together. Here, operations

management is central to the functioning of all other parts of organization.
There should be functional collaboration among different departments. For
 this purpose information sharing between these departments is essential.
In short operations management is the business function that plans,
organizes, coordinates, and controls the resources needed to produce a
company’s products and services. For ensuring this, the co-operations and
support from all other department of the organization are essential.

Material handling equipment

 The material handling is an important activity in the operations system.

 The speed of the material flow across the supply chain depends on the type
of the material handling equipment is used.

 In the logistics operations the material handling system is designed in and

around the warehouse.

 The various operations activities like the unloading of incoming material

from transport equipment, moving the unloaded material to the assigned
storage place, lift the material from its storage place during order picking,
move the material for inspection and packing, and load the packages on to
the transport vehicle.

 These operations are performed using manual, mechanized controlled

material handling equipment

The following are some of the material handling equipment’s commonly used

1. Lifting Equipment

Lifting and transport equipment is used to move product around the Production
facility, from loading bay to storage, from storage to production, around
production, from production to storage, and from storage to loading bay.
Equipment that falls into this category is fork lift trucks, order picking trucks etc.

2. Storage Equipment

Storage equipment is used to store materials, components and assemblies. The

level of complexity of this type of equipment is wide ranging, from a welded
cantilever steel rack to hold lengths of stock materials to a powered vertical
carousel system.

3. Automated Handling Equipment

Manufacturers of automated handling equipment produce automated guide

vehicles, storage and retrieval equipment and product sortation equipment. The
level of automation varies depending on the handling requirements. Fully
automated handling systems ensure that the materials are delivered to the
production line when required without significant manual intervention.

4. Robotics

The usage of Robotics applications and versatility has increased dramatically. In

manufacturing applications, robots can be used for assembly work, process such
as painting, welding, etc. and for material handling. More recently robots are
equipped with sensory feedback through vision and tactile sense.

UNIT -2

FACILITIES PLANNING

PRODUCT DESIGN

 Designing of good product is the major challenge of any organization.

 Design gives the blueprint idea about the product.

 Design starts with conceptualization of ideas.

 Providing value to the customer, the return on investment and the

competitiveness of the organization should form the basis of the product
design effort.

 A product design has an impact on what materials and components would

be used, which suppliers will be selected, what machines or what type of
processes will be utilized, where it will be stored, how it will be transported
etc.
  Product design reflects a company’s overall strategy. Therefore, it should
be undertaken carefully.

 Product development and design is primarily governed by management

decisions.

 A marketing research can provide information as to market potentialities

as well as functional, operations, dependability, and durability
requirements of the customers.

 There are number of factors which affect the design of the product. They
are given below:

1. Requirements of customers

2. Production facilities of the manufacturers

3. Availability of materials

4. Method of works

 The following are the different stages involved in the product development
process:

1. Generation of ideas from multiple sources

2. Screening of ideas for further analysis

3. Business analysis of data

4. Development of product

5. Market testing

6. Commercialization of the products

PROCESS SELECTION
  A process is a way to convert raw materials in to finished products. Process
selection is a strategic decision as it involves allocation of men, material
and financial resources.

 Production engineering provides expert advices for process selection.

Process selection involves the decisions with regard to work station and the
choice of work flow. Work station selection involves the choice of machines
tube included in the manufacturing process. Work flow analysis concerns
with the flow of work between these stations.

 The following are the factors affecting the choice of process of

manufacture:

1. Product features

2. Requirements of customers

3. Availability of capital

4. Availability of technologies

5. Legal factors

6. Availability of employees

Types of Production Process

 There are mainly three types of production systems or production process.

They are discussed briefly below:

1. Continuous System

2. Intermittent System

3. Project systems

1. Continuous System

 Continuous production refers to the manufacturing of large volume of

single or a very few varieties of products with a standard set of processes.
  Themes production is carried on continuously for stock in anticipation of
demand.

 Features of the continuous production are given below:

1. The volume of output is generally large.

2. The product design and the operations stages are standardized

3. Special purpose automatic machines are used to perform standardized

operations.

4. Product Layout is designed according to a separate line for each product.

Merits of continuous production process

 The following are the advantage of continuous production system:

1. The main advantage of continuous production system is that work-in-

progress inventory is minimal.

2. The quality of output is kept uniform because each stage develops skills
of

Employees through repetition of work.

3. Any delay at any stage is automatically detected.

4. Handling of materials is reduced due to the set pattern of production line

5. Control over materials, cost and output is simplified.

6. The work can be done by semi-skilled workers because of their

specialization.

Demerits of continuous production system

1. Strict maintenance is necessary to avoid production hold ups.

2. Huge capital investment is required.

 3. Cannot make sudden changes in the production system.

Types of continuous production system:

1.1. Mass Production

 In this method, a few types of products are manufactured in large

quantities.

 The volumes are high and products are standardized which allows
resources to be organized around particular products. Mass Production is
characterized by the following features:

1. Standard products are manufactured.

2. Standardized inputs and standardized operations are used for

manufacturing.

3. Large volume of products.

4. Shorter cycle time of production.

5. Less supervision is required.

6. Perfectly balanced production lines.

7. Flow of materials, components and parts are continuous

8. Production planning and control are easy.

Advantages of mass production

Following are the advantages of Mass Production:

1. Higher rate of production with reduced cycle time.

2. Higher capacity utilization.

3. Less skilled operators can also be employed.

4. Low process inventory.

 5. Manufacturing cost per unit is low.

Limitation of mass production

Following are the limitations of Mass Production:

1. Breakdown of one machine will stop entire production line.

2. Line Layout needs major change with the changes in the product design.

3. High investment in production facilities is required.

1.2. Process Productions

 Production facilities are arranged as per the sequence of production

operations from the first operations to the finished product.

 It involves continuous physical flow of material from one stage to another

stage.

 The process usually operates round the clock to maximize utilization and to
avoid expensive shutdowns and start-ups.

Characteristics of process production

Process Production is characterized by:

1. Material handling is fully automated.

2. Process follows a predetermined sequence of operations.

3. It is used for bulk manufacturing.

4. Planning and scheduling is a routine action.

Advantages

Following are the advantages of process Production:

1. Standardization of product and process sequence.

2. Higher rate of production with reduced cycle time.

 3. Higher capacity utilization 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 process Production:

1. Flexibility to accommodate and process number of products does not

exist.

2. Very high investment for setting flow lines.

2. Intermittent Production System

 In this system, the goods are generally produced to fulfill

customer’sordersrather than producing against stock.

 Intermittent situations are those where the facilities must be flexible

enough to handle a variety of products and sizes.

 The flow of material is intermittent.

 The production facilities are flexible enough to handle a wide variety of

products and sizes.

 In the industries following the intermittent production system, some

components may be made for inventory but they are combined differently
for different customers.

 The finished product is heterogeneous but within a range of standardized

options assembled by the producers.
  Since production is partly for stock and partly for consumer demand, there
are problems to be faced in scheduling, forecasting, control and
coordination.

Characteristics Intermittent production

The Characteristics intermittent production is given below:

1. The flow of production is intermittent, not continuous.

2. The volume of production is generally small.

3. A wide variety of products are manufactured.

4. General purpose machines and equipment are used.

5. No single sequence of operations is used for a long period.

6. Process Layout is most suited in a highly competitive environment.

7. Periodical adjustments are made to suit different jobs or batches.

 Intermittent system is much more complex than continuous production

system because every product has to be treated differently.

 Intermittent system can be effective in situations which satisfy the

following conditions:

1. The production centers should be located in such a manner so that they

can handle a wide range of inputs.

2. Transportation facilities between production centers should be flexible.

3. It should be provided with necessary storage facility.

Types of Intermittent Production

Basically there are two types of intermittent production system. They are as
follows:

2.1. Job Production

  In the case of Job production, the products are manufactured as per the
specifications of the customers within pre-determined time and cost.

 The main feature of this method is low volume and high variety of products
compared to mass production.

 Under this method, each job demands unique production activities.

Features of job production:

The following are the features of job production system:

1. More variety of products is manufactured as per customer requirements.

2. Volume of production is low.

3. Highly skilled employees are required to do the work.

4. Detailed planning is essential for sequencing the requirements of each

product.

5. Employees should be able to take each job as a challenge.

Advantages

Advantages of job production are as follows:

1. It tries to satisfy the unique requirements of customers.

2. Employees will become more skilled, as each job gives them learning
opportunities to develop.

3. Full potential of employees can be utilized.

4. Opportunity exists for employees to do creative works.

Limitations

Following are the limitations of Job Production system:

1. Higher cost due to frequent set up changes.

 2. It results in higher level of inventory at all levels and also higher
inventory cost.

3. Production planning is complicated.

4. Larger space requirement is needed.

2.2. Batch Production

 Under batch production method, items are processed in lots or batches and
a new batch is undertaken for production only when the production on all
items of a bath is complete. In fact, batch type of production system can be
considered as an extension of job type system.

Characteristics of batch production

Batch Production is characterized by:-

1. Shorter production runs.

2. Products are manufactured in small batches.

3. Plant and machinery set up is used for the production of item in a batch
and change of set up is required for processing the next batch.

4. Manufacturing lead-time and cost are lower as compared to job order

production.

Advantages

Following are the advantages of Batch Production:

1. Better utilization of plant and machinery facilities.

2. It promotes functional specialization.

3. Cost per unit is lower as compared to job order production.

4. Lower investment in plant and machinery is required.

Limitations
Following are the limitations of Batch Production:

1. Material handling is complex because of irregular and longer flows.

2. Production planning and control are complex.

3. Higher set up costs due to frequent changes in set up.

3. Project Process

 A project process is one in which there is a very high degree of

customization and the job is undertaken to meet specific requirements.

 Each project is unique. Project process is valued more on the basis of their
capabilities to do certain kinds of jobs, rather than to produce specific
products at low cost.

 They tend to take a long time to complete the work.

 It involves several interrelated tasks that must be completed.

 Resources needed for a project are brought together at the beginning of

the project and are disbanded once the project is over.

FACILITY OR PLANT LOCATION

 Facility location decision is the systematic process of determining a

geographic site for a firms operations.

 Managers of both service and manufacturing organizations should consider

the desirability of a particular site, including proximity to customers and
suppliers, labour costs, and transportation costs.

 Location conditions are difficult to measure. Tangible cost based factors

such as wages and products costs can be quantified easily. On the other
hand nontangible features, which refer to such characteristics as reliability,
availability and security, cannot be measured exactly in quantitative forms.

Steps in Site Selection

  The following are the different stages involved in the site selection process:

1. Selection of the region in which the plant is to be established

2. After selecting the region, the next step is to select a locality with in the
region.

3. Selection of site for plant construction

4. Final investment decision

 There are mainly two sets of factors affecting the location decision:

1. General locational factors, which include controllable and uncontrollable

factors for all type of organisations.

2. Specific locational factors specifically required for manufacturing and

service organizations.

 The following are the general factors required for location of plant in case
of all types of organizations.

1. Proximity to markets

2. Supply of materials

3. Transportation facilities

4. Infrastructure availability

5. Labour and wages

6. External economies

7. Capital.

8. Government policy

9. Climate conditions

10. Supporting industries and services

 11. Community and labour attitudes

12. Community Infrastructure.

Controllable factors

1. Proximity to markets

 Every company is expected to serve its customers by providing goods and

services at the reasonable price and time.

 Organizations may choose to locate facilities near to the market.

 When the buyers are concentrated, it is advisable to locate the facilities

close to the market. Nearness to the market ensures consistent supply of
goods to customers and it reduces the cost of transportation.

 Locating nearer to the market is preferred if:

. The products are subject to spoilage.

. After sales services are promptly required very often.

2. Supply of raw material

 It is essential for the organization to get right type of raw materials at the
right time in order to have a continuous production.

 This factor becomes very important if the materials are perishable and cost
of transportation is very high.

 Nearness to raw material is important in case of industries such as sugar,

cement and cotton textiles.

 The following things are to be considered in this case:

. When a single raw material is used without loss of weight, locate

the plant at the raw material source or at the market place.
 . When weight loosing raw material is required, locate the plant at
the raw

Material source itself.

. When raw material is universally available, locate close to the

market area.

3. Transportation facilities

 Speedy transport facilities ensure timely supply of raw materials to the

production centers.

 The transport facility is a prerequisite forth location of the plant.

 There are different modes of transportation such as, air, road, rail, water
and pipeline.

 Goods that are mainly intended for exports demand, a location near to the
port is useful and economical. The factors influencing the choice locational
facility include costs, convenience, and suitability.

4. Availability of infrastructure facilities

 The infrastructure facilities like power, water and waste disposal etc., are
the important factors in deciding the location facility.

 Certain types of industries use more amount of power and such company
should be located close to the power station.

 The non-availability of power may become a survival problem for such

industries. Process industries like paper, chemical, cement etc. require
continuous supply of water in large amount. Availability of waste disposal
facility for process industries is an important factor in modern times.

5. Labour and wages

 The problem of securing adequate number of skilled and unskilled

workforce is a major factor to be considered at the time site selection.
 Importinglabour is usually costly and involves administrative problems.
Productivity of labour is also an important factor to be considered.
Prevailing wage pattern, quality of human resources in terms of education,
cost of living, industrial relation and bargaining power of the Unions form
important considerations.

6. External economies of scale

 Availability of various external economies of scale is major factor in

deciding the project location.

 Tax incentives, facility of industrial estates, special economic zone are some
of the factors to be considered at the time of taking location decision

 . Location economies of scale in the manufacturing sector have evolved

over time and have mainly increased competition due to production
facilities and lower production costs as a result of lower transportation and
logistical costs.

7. Availability of Capital

 Another important factor deciding the choice of location is the availability

of capital.

 Fixed capital is required for the construction of building and acquisition of

land. But on the other hand buildings can also be rented and existing plants
can be expanded. The availability of such factors is also affecting the
decision on site selection.

 A careful study on financial strength and weaknesses of the proposed

project should be undertaken.

8. Policies of the Government

 The policies of the Central, state governments and local bodies concerning
labour laws, building codes, safety, tax, etc. are the major factors which
affect the choice location for the industries. Government provides various
 kinds of incentives to entrepreneurs for industrial development in special
economic zone.

 The incentive package may be in the form of exemption from a sales tax
and excise duties for a specific period, soft loan from financial institutions
and investment subsidy.

 Some of these incentives may tempt to locate the plant to avail these
facilities offered.

9. Climatic conditions

 The natural condition of the geographical area needs to be considered

together with climatic conditions. Climates greatly influence human
efficiency and Behaviour and reflect the same in the labour productivity.
Some industries require specific climatic conditions e.g., textile mill requires
humidity.

 Therefore such special climatic factors have to be carefully examined in the

choice of project site.

10. Supporting industries and services

 Availability of supporting industries is another consideration which affects

the choice of location.

 Manufacturing organization will not make all the components and parts by
itself .Sometimes it subcontracts the work to vendors to manufacture.

 Soothe source of supply of component parts will be the one of the factors
that influences the location. The presence of healthy relationship among
different firms is also a pre-requisite for industries to develop. The various
services like communications, banking services, professional consultancy
services will play a vital role in selection of a location.

11. Community and labour attitudes

  The general attitude of the community towards proposed industry will have
an important bearing in the choice location.

 Sometimes, a specific location is not desirable because of labors’ negative

attitude towards management, which brings very often the strikes and
lockouts. Such conditions have to be seriously analyzed.

12. Availability of Community infrastructure

 All manufacturing activities require access to a transport infrastructure

such as roads, railways, port, power lines and other service facilities.

 The availability of social facilities like schools, universities and hospitals are
also the major determinants in the choice project site. These factors are
also required tube considered by managers.

PLANT/FACTORY LAY OUT

 Plant Layout refers to the physical arrangement of production facilities.

 It is the configuration of departments, work centers and equipment in the

conversion process.

 It is a floor plan of the physical facilities. There are several factors which
affect the choice of factory Lay Out.

Definition of Pant Layout

According to Moore, “a 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.”

OBJECTIVES OF LAY OUT

 The basic objective of the plant Layout is to arrange production facilities

economically. The objectives of plant Layout are given below:

1. Streamline the flow of materials through the plant.

2. Facilitate the manufacturing process.

3. Minimize materials handling cost.

4. Effective utilization of men, equipment and space.

5. Flexibility of manufacturing operations and arrangements.

6. Provide for employee convenience, safety and comfort.

7. Minimize investment in equipment

PRINCIPLES OFPLANT LAYOUT

The following are the principles plant Layout:

1. Principle of integration

 A good Layout is one that integrates men, materials, machines and

supporting services and others in order to get the optimum utilization of
resources and maximum effectiveness at least cost.

2. Principle of minimum distance

 This is concerned with the minimum movement of man and materials.

 The facilities should be arranged such a way that, the total distance
travelled by the men and materials should be minimum. As far as possible
straight line movement should be preferred.

3. Principle of cubic space utilization

 The good Layout is one that utilizes both horizontal and vertical space. It is
not only enough if only the floor space is utilized optimally but the third
dimension, i.e., the height is also to be utilized effectively.

4. Principle of flow
  A good Layout is one that makes the materials to move in forward direction
towards the completion stage. This means there should not be any
backtracking.

5. Principle of maximum flexibility

 The good Layout is one that can be altered without much cost and time

 The future requirements should be taken into account while designing the
present Layout of the plant.

6. Principle of safety, security and satisfaction

 A good Layout is one that gives due consideration to workers safety and
satisfaction and safeguards the plant and machinery against fire, theft, etc.

7. Principle of minimum handling

 A good Layout is one that reduces the material handling.

Factors to be considered in Plant Layout

The following are the important factors to be considered at the time of plant

Lay out:

1. Need for plant expansion

 The future requirements of the organization should be considered at the

time of planning for plant location.

2. Protection of operations equipment

 Every care should be taken to ensure the safety machinery and equipment.

 Shelter is required whenever there is need to protect equipment from

adverse climatic conditions.

3. Maintenance requirements
  Some equipment require continuous maintenance .There should be
adequate facilities in maintain the equipment and machinery. This
requirement has to be considered at the time of planning plant Lay Out.

4. Location

 The site selected for the plant also determines the plant lay out.

 The structure, geology, climatic conditions of the location influence the

decision on Plant Lay Out.

TYPES OF LAY OUT

Lay Outs can be classified into the following five categories:

1. Process Lay Out

2. Product Lay Out

3. Combination Lay Out

4. Fixed position Lay Out

5. Group Lay Out

PROCESS LAYOUT

In the case of process Layout all the machines performing similar type of
operations are grouped at one location. In process Layout the arrangement of
facilities is grouped together according to their functions and operations. The flow
of material through the facilities from one functional area to another functional
area varies from product to product. Process Layout is suggested for batch
production. Usually the paths are long and there will be possibility of back-
tracking. Process Layout is normally used when the production volume is not
sufficient to justify a Product Layout.

Advantages of Process Layout

Advantages of process Layout are as follows:

1. In process Layout machines are better utilized.

2. Flexibility is possible in process Lay Out.

3. Lower investment on account of comparatively less number of machines

4. Higher utilization of production facilities.

5. A high degree of flexibility with regards to work distribution to machineries and

workers.

6. The diversity of tasks and variety of job makes the job interesting.

7. Supervisors will become highly knowledgeable about the functions under their
department.

Limitations of Process Layout

1. Backtracking of materials.

2. Material handling cannot be mechanized which adds to cost.

3. Lower productivity due to number of set-ups.

4. Space and capital are tied up by work-in-process

5. Long movements may occur in the handling of materials thus reducing material
handling efficiency.

Product Lay Out

In product Lay Out, machines and other supporting services are located according
to the processing sequence of the product. It implies that various operations on a
product are performed in a sequence and the machines are placed along the
product flow line .In product Layout machines are arranged in the sequence in
which a given product will be operated upon.

This type of Layout is preferred for continuous production of goods.

Advantages of Product Lay Out

1. The flow of product will be smooth.

2. Work -in-process inventory is less.

3. Processing time is less.

4. Minimum material handling cost.

5. Simplified production, planning and control systems are possible.

6. Less space is occupied by work transit and for temporary storage.

7. Reduced material handling cost due to mechanized handling systems.

8. Perfect line balancing which eliminates all bottlenecks.

9. Manufacturing cycle is short due to continuous flow of materials.

10. Small amount of work-in-process inventory.

11. Unskilled workers can manage the production.

Limitations

1. A breakdown of one machine in a product line may cause stoppages of

machines in the downstream of the line.

2. A change in product design may require major alterations in the Lay Out.

3. Comparatively high investment in equipment is required.

4. Lack of flexibility.

5. A change in product may require the facility modification

Combination Layout

 A Combination Layout combines the advantages of both types of product

and process Lay Outs.
  A Combination Layout is possible where an item is being made in different
types and sizes. Here machinery is arranged in a Process Layout put the
process grouping is then arranged in a sequence to produce various types
and sizes of products. It is to be noted that the sequence of operations
remains same with the variety of products and sizes.

Advantages

The major advantages of this type of Layout are:

1. Helps in job enlargement

2. Upgrades the skills of the employees.

2. Greater flexibility is possible.

3. Layout capital investment is lower

Group Layout

 This type of Layout brings an element of flexibility into manufacturing

system as regards to variation in batch sizes and sequence of operations.

 Group Technology (GT) is the analysis and comparisons of items to group

them into families with similar features. GT can be used to develop a hybrid
between preprocess Layout and pure product Lay Out. This technique is
very useful for companies that produce variety of parts in small batches to
enable them to take advantage and economics of flow line Lay Out.

 The application of group technology involves two basic steps; first step is
to, determine component families or groups. The second step in applying
group technology is to arrange the plants equipment used to process a
particular family of components. This represents small plants within the
plants.

 The group technology reduces production planning time for jobs. It reduces
the set-up time.
  Thus group Layout is a combination of the product Layout and process Lay
Out.

 It combines the advantages of both Layout systems.

Advantages of Group Technology Lay Out

Group Technology Layout can increase.

1. Component standardization and rationalization.

2. Reliability of estimates.

3. Effective machine operations and productivity.

4. Customer service.

It can decrease the.

1. Paper work and overall production time.

2. Work-in-progress and work

Fixed Position Lay Out

 This is also called the project type of Lay Out. In this type of Lay Out, the
material, or major components remain in a fixed location and tools,
machinery, men and other materials are brought to this location.

 This type of Layout is suitable when one or a few pieces of identical heavy
products are to be manufactured and when the assembly consists of large
number of heavy parts, the cost of transportation of these parts is very
high.

Advantages

The major advantages of this type of Layout are:

1. Helps in job enlargement and upgrades the skills of the operators.

2. The workers identify themselves with a product in which they take interest and
pride in doing the job.

3. Greater flexibility with this type of Lay Out.

4. Layout capital investment is lower.

Organization of Physical Facility

The following are the most important physical facilities to be organized:

1. Factory building

2. Lighting

3. Climatic conditions

4. Ventilation

5. Work-related welfare facilities.

I. FACTORY BUILDING

 Factory building is a factor which is the most important consideration

forever industrial enterprise. Factory building is required to provide
protection for men, machines, materials. It should offer a comfortable
working environment.

 Itis for these reasons that the factory building acquires great importance.

Following factors are considered for an Industrial Building:

A. Design of the building.

B. Type of buildings.

A. Design of the Building

  The building should be designed so as to provide a number of facilities.
Such as lunch rooms, cafeteria, locker rooms, crèches, libraries, first-aid
and ambulance rooms, materials handling, facilities, heating, ventilation,
air-conditioning,etc. Following factors are to be considered in designing of a
factory building:

1. Flexibility:

 Flexibility is necessary because it is not always feasible to build a new plant,

every time a new firm is organized or the Layout is changed. With minor
alternations, the building should be able to accommodate different types of
operations.

3. Product and equipment

 The type of product that is to be produced determines column-spacing,

type of floor, ceiling, heating and air-conditioning.

 A product of a temporary nature may call for a less expensive building.

 Similarly, a heavy product demands a different building structure than a

product which is light in weight.

3. Expansibility

 Growth and expansion are natural to any manufacturing units.

The following factors should be taken in to account if the future expansion of the
concern is to be provided for:

i. The area of the land which is to be acquired should be large enough

to provide for the future expansion needs of the firm.

ii. The design of the building may be in a rectangular shape. Rectangular

shapes facilitate expansion on any side.

iii. If vertical expansion is expected, strong foundations must be

provided.
4. Employee facilities

 The employee facility should be given enough consideration because it may

affect the morale, satisfaction and attitude of the employees.

B. Types of Buildings

Industrial buildings may be grouped under two types:

1. Single-storey buildings,

2. Multi-storey buildings.

 Choosing a suitable type of building for a particular firm depends on the

manufacturing process and the area of land and the cost of construction.

1. SINGLE-STOREY BUILDINGS

 If land is available, an organization can construct Single -storey building.

 Single-storey buildings offer several operating advantages.

 A Single-storey construction is preferable when materials handling is

difficult because the product is big or heavy, natural lighting is desired and
frequent changes in Layout are anticipated.

Advantages

1. There is a greater flexibility in Lay Out.

2. Expansion is easily ensured by the removal of walls.

3. Low cost of transportation and material handling charges.

4. Since all the equipment are on the same level there is effective
Layout supervision and control.

5. The danger of fire hazards is reduced because of the lateral spread of

the building.

Limitations
Single-storey buildings have the following limitations:

1. More land is required for building construction.

2. High cost of heating, ventilating and cleaning of windows.

3. High cost of transportation for moving men and materials to the

factory

2. MULTI-STOREY BUILDINGS

Multi-storey buildings are useful in manufacture of light products, when the

acquisition of land becomes difficult and expensive.

Advantages

1. Maximum operating floor space. This is best suited in areas where

land is very costly.

2. Lower cost of heating and ventilation.

3. Reduced cost of materials handling because the advantage of the use

of gravity for the flow of materials.

Limitations

Following are the disadvantages of multi-storey building:

1. Materials handling becomes very complicated. A lot of time is wasted

in moving them between floors.

2. A lot of floor space is wasted on elevators, stairways and fire escapes.

3. Floor load-bearing capacity is limited.

4. Natural lighting is poor in the centers of the shop.

5. Layout changes cannot be effected easily and quickly.

Generally speaking, textile mills, food industries, detergent plants, chemical

industries and software industry use these types of buildings.
II. LIGHTING

 Good visibility of the equipment, the product and the data involved in the
work process is an unavoidable factor in accelerating production, reducing
the number of defective products and reducing waste.

 The use of natural light should be encouraged. Regular cleaning of lighting

fixture is obviously essential.

 Excessive contrasts in lighting levels between the worker task and the
general surroundings should also be avoided. Artificial lighting will enable
people to maintain proper vision.

III. CLIMATIC CONDITIONS

 Control of the climatic conditions at the workplace is important to ensure

the workers’ health and comfort. With excess heat or cold, workers may
feel very uncomfortable, and their efficiency drops. This can also lead to
accidents.

 This human body functions in such a way as to keep the central nervous
system and the internal organs at a constant temperature. It is essential to
avoid excessive heat or cold, and wherever possible to keep the climatic
conditions under control within the organization.

IV. VENTILATION

 Ventilation is an integral part of the good building system.

 Ventilation differs from air circulation. Ventilation replaces contaminated

air by fresh air, whereas as the air-circulation merely moves the air without
renewing it.

 Where the air temperature and humidity are high, merely to circulate the
air is not only ineffective but also increases heat .Therefore, proper steps
have to be taken to ensure the ventilation facility.

V. WORK-RELATED WELFARE FACILITIES

  Work-related welfare facilities include basically drinking-water and toilets
facilities.

 Others may seem less necessary, but usually have an importance to

workers.

 The planners of the factory building have to see that the organization has
enough work related facilities for its employees.

 It is all made mandatory in the Factories Act.

1. DRINKING WATER

 Safe, cool drinking water is essential for all types of work, especially in hot
environment. Without it fatigue increases rapidly and productivity falls.

 Adequate drinking water should be provided to employees.

2. SANITARY FACILITIES

 Hygienic sanitary facilities should exist in all workplaces.

 They are particularly important where chemicals or other dangerous

substances are used.

 Sufficient toilet facilities, with separate facilities for men and women
workers, should be ensured.

3. FIRST-AID AND MEDICAL FACILITIES

 Facilities for rendering first-aid and medical care at the workplace in case of
accidents are essential. First-aid boxes should be clearly marked and
conveniently located. They should contain only first-aid requisites
absorption.

4. REST FACILITIES

 Rest facilities help workers to recover from fatigue and to get away from a
noisy, polluted or isolated workstation.
  A sufficient number of suitable chairs or benches should be provided. Rest-
rooms enable workers to recover during meal and rest breaks.

5. FEEDING FACILITIES

 Organizations should arrange food facilities for its employees.

 A snack bar, buffet or mobile trolleys can provide tea, coffee and soft
drinks, as well as light refreshments.

 Canteens or a restaurant can allow workers to purchase a cheap, well-

cooked and nutritious meal for a reasonable price.

6. RECREATIONAL FACILITIES

 Recreational facilities offer workers the opportunity to spend their leisure

time in activities likely to increase physical and mental well-being.

 They may also help to improve social relations within the enterprise. Such
facilities can include halls for sports, reading-rooms, libraries, clubs for
hobbies and cinemas.

Objective of a good Lay Out

1. To reduce material handling cost

2. To provide enough production facility

3. To utilize labour efficiency

4. To provide ease of supervision.

5. To improve productivity

6. To provide safety to employees

7. To reduce the number of accidents

Material Requirement Planning (MRP)

  Material requirement planning is an inventory system that is computer
based and used to manage the manufacturing process .It is designed to
assist in the scheduling and filling of orders for raw materials that are
manufactured in to finished goods.

The following are the objectives of MRP:

1. Reduction in inventory cost

2. Meeting delivery schedule

3. Improve the performance of production

Material Handling

 The material handling involves the movement of material form one section
to another for the purpose of processing.

 They can be moved either manually or mechanically. For this purpose

different types material handling equipment aroused.

 The material handling system in any manufacturing setting plays an

important role in the performance of the entire manufacturing system.

 Material handling can be defined as the art and science involving the
movement, packing and storing of substances in any form.

Objectives of material handling

1. To reduce material handling cost

2. To reduce production life cycle

3. Better control of the flow of material

4. To ensure safety in the movement of goods

5. To avoid damage of the goods

Rules for Material Handling

1. Make handling distances as short as possible

2. Use right method and proper material handling

3. Eliminate wasteful material handling methods

4. Use mechanical equipment wherever it is useful

5. Use relevant handling equipment to the job

UNIT-3

CAPACITY PLANNING

 Capacity is the amount of goods that a firm is capable of producing over a

specified period of time.

 Capacity can be defined as highest reasonable output rate which can be

achieved with the current product specifications, product mix, work force,
plant and equipment.

 Capacity planning for manufacturing and service systems are different.

Both must be designed with capacity limitations in mind.

 The approaches for long-term and short-term capacity planning will help
the managers to make best use of resources.

 Capacity is the maximum possible output or use from a system under

normal design or planned conditions in a given time period.

 The effective capacity utilization is expressed as percentage of actual

capacity used to design capacity.

Capacity Requirement Planning

  A capacity requirement planning is a part of manufacturing resource
planning.

 Capacity resource planning is carried out after a manufacturing resource

planning program has been run.

 The important elements of the capacity requirement planning process are

of establishing, measuring and adjusting the limits or levels of the
production capacity based on the process of determining the amount of
labour and machine resources required to accomplish the tasks of
production.

Types of Capacity

1. Maximum Capacity

 Maximum capacity or design capacity is the highest rate of output process

or activity can achieve.

 It specifies a theoretical upper limit above the usual rate of routine

operations.

 The operations managers calculate the maximum capacity of a

manufacturing process.

 It is based on the number and duration of available shifts, the number of

available machines and employees per shift and the working days in a
period of the calculation.

2. Effective Capacity

 Effective capacity identifies the output rate that managers expect for a
given activity or process.

 It is the actual capacity to reflect current conditions and that could be less
than or more than design capacity. They base production plans and
schedules on this measure of output. Effective capacity normally falls short
of maximum capacity by some amount.
3. Demonstrated Capacity

 Demonstrated or actual capacity deals with actual rather than planned

production.

 It measures the actual level of output for a process or activity over a

specified period of time.

 Planners calculate theoretical values for maximum and effective capacity to

guide their arrangements for production purposes.

 Operations managers calculate demonstrated capacity simply by averaging

recorded figures for actual output over a period of time.

Guidelines for Calculating Capacity

 The operations managers need a methodology for evaluating capacity and

the activities that determine it in specific situations.

 The steps in this analysis from a process for calculating capacity are as
follows:

1. The first step is to describe the general flow of activities with in the process.

2. Establish the time period.

3. Establish a common unit of measurement for the entire process

4. Identify the maximum capacity for the overall process

5. Identify the effective capacity for the overall process

6. Determine the demonstrated capacity

7. Compare the demonstrated, effective and maximum capacities and take

appropriate actions.

Capacity Planning
 The effective management of capacity is the most important responsibility
of production management. The objective of capacity management is to
match the level of operations to the level of demand.

 Capacity planning is to be carried out keeping in mind future growth and

expansion plans, market trends, sales forecasting, etc.

 It is easy to plan the capacity in case of stable demand. But in practice the
demand will not be stable. The fluctuation in demand creates problems
regarding the procurement of resources and production to meet the
customer demand.

 Capacity decisions are strategic in nature. In simple words, capacity is the

rate of productive capability of a facility.

 Capacity is usually expressed as volume of output per period of time.

 Production managers are more concerned about the capacity for the
following reasons:

1. Sufficient capacity is needed to meet the customers demand in time.

2. Capacity affects the cost efficiency of production.

3. Capacity affects the scheduling system.

4. Capacity creation requires an investment.

 Capacity planning is the first step when a manufacturing organization

decides to produce new products.

 One of the major tasks in capacity management is the decision with regard
to capacity planning.

 Capacity planning is the process of predicting and defining the long-term

and the short-term capacity needs of an organization and determining how
those needs will be satisfied.
  Capacity planning decisions are taken based upon the consumer demand.

 Capacity planning also takes in to consideration the human, material and

financial resources of the organization.

 Capacity requirements can be evaluated from two perspectives: Long-term

capacity strategies and Short-term capacity strategies.

I. Long-term Capacity Strategies

 It is difficult to predict the long term capacity requirements because the

future demands are difficult to predict. Long-range capacity requirements
are dependent on marketing plans, product development and life-cycle of
the product.

 Long-term capacity planning is related with accommodating major changes

that affect overall level of the output in long-term.

 Designing and implementing the long-term capacity plans are the major
responsibilities of management.

 The following parameters will affect long-range capacity decisions:

1. Multiple Products

 The manufacturing of multiple products will reduce the risk of

failure.

 Production of a single product is always risky.

 If we produce multiple products, each products in different

stages of their life cycles, it is easy to schedule them to get
maximum capacity utilization.

2. Phasing in Capacity

 The rate of obsolescence is high in the case of high technology

industries compared to other types of industries.
  The products should be brought into the market quickly.

3. Phasing out Capacity

 The outdated manufacturing facilities cause excessive plant

closures.

 The impact of the closure will be huge in the case of

industries.

 The phasing out also affects the employability of employees

and which in turn affect the standard lining of the society.

 The phasing out options makes alternative arrangements for

men like shifting them to other jobs or to other locations,
compensating the employees etc.

II. Short-Term Capacity Strategies

 Another task in capacity planning is to develop short term capacity

strategies.

 Managers can predict the future demand for the product in the near
future based on statistical tools.

 Managers then compare requirements with existing capacity and then

take decisions as to when the capacity adjustments are needed.

 Fundamental capacity is fixed for short period.

 Major facilities will not be changed.

 Many short-term adjustments for increasing or decreasing capacity are

possible.

 The adjustments to be required depend upon the conversion process like

whether it is capital intensive or labour intensive or whether product can
be stored as inventory.
  Capital-intensive processes depend on physical facilities, plant and
equipment.

 Short-term capacity can be modified by operating these facilities more or

less intensively than normal.

The short-Term Capacity Strategies

The following are different types of short term capacity strategies:

1. Inventories: Stock of finished goods during slack periods to meet the

demand during peak period.

2. Backlog: During peak periods, the willing customers are requested to wait
and their orders are fulfilled after a peak demand period.

3. Employment level: Hire additional employees during peak demand period

and lay off employees when demand decreases.

4. Employee training: Develop multi skilled employees through training so

that they can be rotated among different jobs.

5. Subcontracting: During peak periods, hire the capacity of other firms

temporarily to produce the component parts or products.

6. Process design: Change job contents by redesigning the job.

Process of Capacity Planning

The process involved in capacity planning is as follows:

1. Demand Forecasting

 Capacity planning starts with the setting of up of a business plan which sets
out the types of goods or services to be produced.

 The Manager has to take along range forecast of demand in order to

determine the resources needed to produce and offer specified goods and
 services. Market trend changes, competitor role and technological changes
have to be carefully examined.

2. Capacity Decisions

 The demand forecasting of goods and services then must be translated into
a measure of capacity needed. On the basis of forecasting of demand for
products, organization will be able to determine the various resources
needed for producing such goods.

3. Facilities Planning

 Capacity decisions automatically lead to the setting up of necessary

facilities in order to produce goods and services as determined the previous
steps.

 Facility planning can be done either by the expansion or contraction of

existing facilities or by setting up of additional new facilities.

4. Decisions and Implementation

 Finally, alternative resource requirements plan should be properly

evaluated.

 The feasibility of plans along with its economic impact needs to be

analyzed.

 Detailed study of economic impact of resource requirements is essential to

make the capacity planning a reality.

Importance of Capacity Planning

1. Capacity decisions have an impact on the ability of the organization to meet

future demands for products and Services.

2. Capacity decisions affect operating costs. It should be seen that capacity

and demand requirements will be matched, which will tend to minimize
operating costs. In practice, this is not always achieved because actual
 demand either differs from expected demand or tends to vary. In such
cases, a decision might be made to attempt to balance the costs of over
and under capacity.

3. Capacity is usually a major determinant of initial cost.

4. Capacity decisions often involve long-term commitment of funds.

5. Capacity decisions can affect competitiveness.

6. Capacity planning reduces the complexity in manufacturing operations.

Principles of Capacity Planning

The following are the principles for planning for the adequate capacity resources
within an infrastructure:

1. Agree on a common definition of capacity planning

 Capacity planning means different things to different people.

 Agreeing on a common, formal definition of the process is essential in

designing and implementing an effective capacity planning program.

 Proper care should be taken in defining various concepts of capacity

planning.

2. Select a capacity planning process owner

 The next step is to select a suitable qualified individual to serve as the

process owner.

 The person will be responsible for designing, implementing and maintaining

the process and will be empowered to negotiate and delegate with
developers and other support groups.

3. Identify the key resources to be measured

 Once the process is selected, the next task is to identify the infrastructure
resources to be measured.
4. Compare current utilization to maximum capacities

 This principle aims to determine how much excess capacity is available for
selected components.

 The utilization or performance of each component measured should be

compared to the maximum usable capacity.

Time and Motion Study

 Both manufacturing and service organisations are working to increase their

rates of productivity.

 At the individual worker level the productivity labour is measured in terms

of a time standard.

 Work standards are determined through some means of work

measurement such as time study data, historical records, work sampling,
motion study.

 Out of these the time and motion study factors are studied in detail.

TIME STUDY

 Time study methods were originally proposed by Frederick Taylor.

 The time study methods are the most widely used means of work
measurement.

 The objective of time study is to determine as to how much time is required

to perform a job that would be considered as average time or normal time.

 The process of time study involves systematically recording, analyzing and

synthesizing the times required to perform a motion.

 By using time study, an analyst is taking a small sample of one worker

activity and using it to derive standard for tasks of that nature.

The following are the steps involved in conducting a time study:

 1. Select the work to be studied under time study.

2. Record all the information available about the job, the operator and the
working conditions which may affect the time study work.

3. Breakdown the operations into elements.

4. Measure the time by means of a stop watch taken by the operator to

perform each element of the operations. Either continuous method or snap
back method of timing could be used.

5. At the same time, assess the employee’s effective speed of work relative to
the observer concept of normal speed.

6. Adjust the observed time by rating factor to obtain normal time for each
element.

7. Incorporate the suitable allowances to compensate for fatigue, personal

needs, and contingencies.

8. Compute allowed time for the entire job by adding elemental standard
times considering frequency of occurrence of each element.

9. Make a detailed job description describing the method for which the
standard time is established.

10.Review standards.

Uses of Time Study

1. Setting wages and incentives;

2. Arriving at cost standards per unit of output for the various jobs used for
cost control and budgeting for deciding on sales price;

3. Comparing the work efficiency of different employees;

4. Arriving at job schedules for production planning purposes;

5. Human resource planning.

MOTION STUDY

 Frank and Lillian Gilbert developed the concept of motion study as an

engineering and management technique. The concept of motion study is a
widely discussed management tool.

The objectives of motion study are:

1. To eliminate all non-productive and ineffective motions.

2. To develop more effective and productive patterns of

movements.

3. To modify tools, lighting and other factors to help in optimizing

the effects of motions.

Principles of Motion Study

 There are a number of principles concerning the economy of movements

which have been developed as a result of experience at the workplace.

 These are first used by Frank Gilbert, the founder of motion study.

The principles are grouped into three headings:

1. Use of the human body.

2. Arrangement of workplace.

3. Design of tools and equipment.

1. USES OF HUMAN BODY

1. The two hands should begin and complete their movements at the same
time.

2. The two hands should not be idle at the same time except during periods of
rest.
 3. Motions of the arms should be made simultaneously.

4. Hand and body motions should be made at the lowest classification at

which it is possible to do the work satisfactorily.

2. ARRANGEMENT OF THE WORKPLACE

1. Definite and fixed stations should be provided for all tools and materials to
permit habit formation.

2. Tools and materials should be pre-positioned.

3. Tools, materials and controls should be located within a maximum working

area and as near to the worker as possible.

3. DESIGN OF TOOLS AND EQUIPMENT

1. The color of the workplace should contrast with that of work and thus
reduce eye fatigue.

2. The hands should be relieved of all work of holding the work piece where
this can be done by foot operated device.

3. Two or more tools should be combined where possible.

WORK MEASUREMENT

 Work measurement is also called time study.

 Work measurement is absolutely essential for both the planning and

control of operations.

 Without measurement one cannot determine the capacity of facilities and

costs.

Objectives of Work Measurement

  The use of work measurement as a basis for incentives is only a small part
of its total application.

The objectives of work measurement are as follows:

1. Comparing alternative methods.

2. Manpower requirement planning.

3. Planning and control.

4. Realistic costing.

5. Financial incentive schemes.

6. Delivery date of goods.

Techniques of Work Measurement

For the purpose of work measurement, work can be regarded as:

1. Repetitive work: The type of work in which the main operations repeats
continuously during the time spent at the job.

2. Non-repetitive work: It includes some type of maintenance and construction

work, where the work cycle is not repeated.

Various techniques of work measurement are:

1. Time study

2. Synthesis

3. Work sampling

4. Predetermined motion and time study

5. Analytical estimating

1. Time Study
  A work measurement technique for recording the times and rates of
working for the elements of a specified job carried out under specified
conditions.

 Time study is for analyzing the data so as to determine the time necessary
for carrying out the job at the defined level of performance.

2. Synthetic data: It is the method of totaling element times obtained previously

from time studies on other jobs containing the elements concerned or from
synthetic data.

3. Work sampling: A technique in which a large number of observations are made

over a period of time of one or group of machines, processes or workers. Each
observation records what is happening at that instant and the percentage of
observations recorded for a particular activity, or delay, is a measure of the
percentage of time during which that activities delay occurs.

4. Predetermined motion time study: A work measurement technique whereby

times established for basic human motions are used to build up the time for a job.

5. Analytical estimating: A work measurement technique, whereby the time

required carrying out elements of a job at a defined level of performance is
estimated partly from knowledge and practical experience.

Maintenance Management

 Equipment must be kept at the best operating condition. Otherwise, there

will be interruption of production if it is used in a mass production line.

 Poor working of equipment will lead to quality related problems. It is a

necessity to maintain the equipment in good operating conditions with
economical cost. Therefore, an integrated approach to minimize the cost of
maintenance is essential.

 In certain cases, the equipment will be obsolete over a period of time.

  If firm wants to be in the same business competitively, it has to take
decision on whether to replace the equipment or to retain the old
equipment by taking the cost of maintenance into account.

Types of Maintenance

 Equipment requires periodic maintenance.

 Belts need adjustment, alignment needs to be maintained, and proper

lubrication on rotating equipment is required. In some cases, certain
components need replacement.

The following are the different types of maintenance are given below:

1. Break down maintenance

 Under this type of method, a machine allows to operate till it breaks.

 No actions or efforts are taken to maintain the equipment as the designer

originally intended to ensure design life is reached.

 In the case of new equipment, we can expect minimal incidents of failure.

Advantages

1. Low cost investment for maintenance.

2. Less staff is required for maintenance.

Disadvantages

1. Increased cost due to unplanned downtime of equipment.

2. Increased labour cost.

3. Possible process damage from equipment failure.

2. Preventive maintenance
  This type of maintenance is preventive in nature. Preventive maintenance is
for increasing the reliability of the equipment. By simply expending the
necessary resources to conduct maintenance activities intended by the
equipment designer, equipment life is extended and its reliability is
increased.

Advantages

1. Cost effective.

2. Flexibility allows for the adjustment of maintenance periodicity.

3. Increased component life cycle.

4. Energy savings.

5. Reduced equipment or process failure.

Disadvantages

1. Labour intensive.

2. Includes performance of unneeded maintenance.

3. Predictive maintenance

 Predictive maintenance differs from preventive maintenance.

 Preventive maintenance is time-based.

 Predictive maintenance can be defined as Measurements that detect the

onset of a degradation mechanism, thereby\ allowing causal stressors to be
eliminated or controlled prior to any significant deterioration in the
component physical state.

 Results indicate current and future functional capability.

Advantages

1. Increased component operational life.

 2. Allows for pre-emptive corrective actions.

3. Decrease in equipment or process downtime.

4. Decrease in costs for parts and labour.

5. Better product quality.

6. Improved worker and environmental safety.

Disadvantages

1. High investment in diagnostic equipment.

2. High investment in staff training.

3. Savings potential not readily seen by management.

Maintenance Planning

 Maintenance planning deals with taking decisions in advance about

maintenance activities, It deals with what, How, where, when the
maintenance activities are to be taken.

Reliability Cantered Maintenance

 Reliability Cantered Maintenance (RCM) is defined as a process used to

determine the maintenance requirements of any physical asset in its
operating context.

 It recognizes that equipment design and operations differs and that

different equipment will have a higher probability to undergo failures from
different degradation mechanisms than others.

 Therefore different types of maintenance have to be followed.

UNIT 4

OPERATIONS PLANNING AND CONTROL

  Planning and control of Operational functions are essential to every
organization.

 In a modem industrial enterprise, production is a complex system and

therefore, steps must be taken to ensure that goods are produced in the
most efficient way economically.

 Ensuring the production of qualitative goods at minimum cost is the major

objective of operations planning and control.

PRODUCTION PLANNING

 Operations planning is concerned with deciding in advance what is to be

produced, when to be produced, where to be produced and how to be
produced.

 It involves foreseeing every step in the process of production so as to avoid

all difficulties and inefficiency in the operations of the plant.

 It determines the requirements for materials, machinery and man-power;

establishes the exact sequence of operations for each individual item and
lays down the time schedule for its completion.

Objectives of Operations Planning

The basic objectives of operations planning are as under:

1. To estimate resource requirements like men, materials, machines, methods

etc. in proper quantities and qualities.

2. It also estimates when and where these resources will be required so that
the production of the desired goods is made most economically.

3. It also aims to make all necessary arrangements to see that production

target is reached.

For an effective planning of operations activities, the manager concerned should

have complete information regarding the following:
 1. Information regarding the machine operations

2. The various types of tools and equipment required.

3. Full information regarding the type, quality and quantity of the raw
material to be used in each process or operations.

4. The characteristics of each job and the degree of skill and experience
required for the operations.

5. Information obtained from job analysis.

Levels or Categories of Production Planning

Production planning can be done at three levels namely:

1. Factory Planning,

2. Process Planning

3. Operations Planning.

1. Factory Planning

 At the factory level the broad operations planning has to be done.

 The sequence of work task is planned in terms of building, machines and

equipment required for manufacturing the desired goods and services.

 This stage deals with plant location and Lay Out.

2. Process Planning

 There are many operations involved in factory planning for transforming

the inputs into outputs.

 In process planning these operations are located and the sequence of these
operations in the production process is determined.

 Plans are also made for the Layout of work centers in each process.
3. Operations Planning

 Operations planning is concerned with planning the details of the methods

required to perform each operations .It involves the selection of work
centers, and designing of tools required for various operations.

 The sequences of work elements involved in each operations are planned.

 Specifications about each transfer, work centers, nature of tools required

and the time necessary for the completion of each operations are specified
in advance.

OPERATIONS CONTROL

 Operations control is an integral part of the total operations management.

 In small organizations, the operations control may be performed by one

person. Burin large industries the operations control department is
separately established.

 Production control makes use of production plans.

 It involves the use of various control techniques to ensure production

performance as per plans.

 Coordinating men and materials and machines are the major tasks of
operations control.

 Operations control is the art and science of ensuring that all which occurs is
in accordance with the rules established and the instructions issued.

 Operations control regulates the orderly flow of materials in the

manufacturing process from the raw material stage to the finished product.

 Operations control aims at achieving production targets, optimum use of

available resources, increased profits through productivity, better and more
economic goods and services etc.
  An effective operations control system requires reliable information, sound
organization structure and trained personnel. Effective operations control
also maintains working inventories at a minimum.

 Thus, good operations control helps company operate and produce more
efficiently and achieve lowest possible costs.

Objectives of Production Planning and Control

 The success of an enterprise mainly depends on the performance of its

production control department.

 The objectives of production and planning department are given below:

1. Provision of raw material, equipment, machines and labour to

production system.

2. To organize production schedule in conformity with the demand

forecasts.

3. To ensure that the cost of production is minimized and delivery date

is maintained.

4. Determination of economic production runs with a view to reduce

setup costs.

5. Proper co-ordination of the operations of various sections

responsible for production.

6. To ensure regular and timely supply of raw material.

7. To perform inspection of semi-finished and finished goods and use

quality control techniques to ascertain that the produced items are
of required specifications.

8. It is also responsible for product design and development.

Factors Determining Production Control Operations

The following factors affect the nature of production control methods.

1. Nature of production

 In job-oriented production system, operations are designed for some

particular order which may or may not be repeated in future.

 Production usually requires more time than other type of manufacturing.

2. Nature of activities

 The nature of activities also determines the pattern of production and

control system.

 Therefore, the control procedure requires continuous modifications and

adjustments to suit the requirements of each order.

3. Magnitude of operations

 Decentralization of production control function becomes necessary in a

highly complicated manufacturing system.

 The degree to which the performance of an activity should be decentralized

depends upon the scope of operations.

Objectives of Operations Control

The objective of operations control is given below:

1. Operational control tries to ensure the continuous flow of operations

through well-planned routing and scheduling of work.

2. Production planning and controlling seeks to ensure the availability

of all the inputs for the smooth production purpose.

3. It aims at minimum investment in inventories without disturbing the

production process.

4. Production planning and controlling aims at increased productivity by

increasing efficiency of the operating activities
Importance of Operations Control

The following are the significances of operations control:

1. 1.operations planning and control activities help in providing better

services to customers in terms of better quality goods .

2. A sound system of operations management system helps in maintaining

inventory at proper levels.

3. An efficient operations control system makes the most effective use of

equipment and other production facilities.

4. Operations control system helps in reducing the idle time involved in the
production system.

Limitations of Production Planning and Control

Operations planning and control system is not free from mistakes. The following
are the limitations of operational control system:

1. Operations planning and control is based on certain assumptions about

availability of materials, power, equipment etc. In case these assumptions
do not go right, the whole system will suffer.

2. Operations planning and controlling is a time consuming process.

3. Operations planning and control is a costly affair. Its effective

implementation requires services of specialists.

4. The effectiveness of operations planning and control is sometimes limited

because of external factors which are beyond the control of production
manager.

Steps in operations Planning and Control

The implementation of operations planning and control involves number of

stages.
They are discussed briefly below:

1. Routing

2. Loading

3. Scheduling

4. Dispatching

5. Expediting or Follow up

6. Corrective Action

1. Routing

 Production routing involves fixation of path through which work will flow.

 Itis the order in which various operations will be carried out. It consists of
the determination of operations through which the product must pass.

 It is the arrangement of operations in the sequence that requires a

minimum of handling, transportation, storage.

The following routing procedure is followed:

1. Determining What to Make and What to Buy

2. Ascertaining the Requirements of Materials

3. Preparation of Route Sheet

4. Determining Lot Sizes

5. Determining Scrap Factors

6. Estimation of the cost of the Product:

7. Preparation of Production Control Forms

2. Loading
  Loading deals with the amount of work assigned to a machine.

 It deals with the record of work-load of different shops.

 The total time required to perform the operations is computed by

multiplying the unit operations time given on the standard process sheet by
the number of parts to be processed.

 The total time is then added to the work already planned for the work
station.

3. Scheduling

 Scheduling involves fixing priorities for different tasks.

 It establishes the time sequence of operations.

 It indicates the time required for each job and operations.

 A schedule is a time-table of operations specifying the time and date when

each operations is to be started and completed.

 Scheduling is the process of determination of the time that should be

required to perform each operations and also the time necessary to
perform the entire series.

4. Dispatching

 Dispatching is the process of setting of productive activities in motion

through release of orders and instructions, in accordance with previously
planned timings.

 Dispatch provides official authorization for:

1. Movement of materials to different work stations,

2. Movement of tools and fixtures necessary for each operations,

 3. Beginning of work on each operations,

4. Recording of beginning and completion time,

5. Movement of work in accordance with a routing schedule

5. Expediting or Follow Up

 This is the last step in operations planning and control.

 It involves determination of the progress of work, removing bottlenecks in

the flow of work and ensuring that the productive operations are taking
place in accordance with the plans.

6. Corrective Action

 Corrective action is needed to make the system effective.

 By resorting to corrective measures, the production manager maintains full

control over the production activities.

 The production manager should try to rectify the routes and lay down
realistic and flexible schedules.

 Workload of machines and workers should also be determined

scientifical1y.

 If schedules are not being met, the causes should be fully investigated. It
should also be ensured that there is optimum utilization of the plant
capacity.
 UNIT 5

QUALITY CONTROL

 A widely accepted definition of the quality of a product is its fitness for use
for its intended purpose. For example; a ball pen should write well
throughout its life. For a cricket ball, some of the quality characteristics are
like its weight, size, shining, and quality of stitches etc.

 Therefore, quality is some prescribed or desired characteristics present in

raw material, semi-finished or finished items.

 It is a relative term and is generally used with reference to the end use of
the product viz. fitness for purpose, degree of preference, degree of
excellence, fulfillment of the promises made to the customer, quality of
design, etc.

 In every organization there are always some standard specifications.

 It is important that the finished products meet established specifications.

 A good quality item is one which conforms to the specifications.

 Producer is responsible for the production and marketing of his product.

His fundamental objective is to manufacture the product of desired quality
in the most economical manner with minimum risk of being rejected by the
consumer.

 For that quality of the product should be ensured.

Cost of Quality

 It is to be noted that poor quality creates dissatisfied customers and

eventually leads to loss of business.

 The following are the important costs of quality:

1. Prevention Costs
  This is the cost of all activities incurred to prevent poor quality in products
and services.

 They include cost of developing and implementing a quality plan.

2. Appraisal Cost

 This is the cost associated with measuring, evaluating, auditing products

and services to assure conformance to standards and performance
requirements.

3. Failure Costs

 This is the cost resulting from products and services not conforming to
requirements or customer needs.

Quality Planning

 Quality planning is a process that translates quality policy in to measurable

objectives and requirements and lays down a sequence of steps for
realizing them within a specified timeframe.

Quality Control

 Quality control is the process of verification or correction in the quality of

the product when the deviations in the quality are found to be more.

 According to. Y. Feigarbaum, “Quality-control is an effective system for

integrating the quality development, quality maintenance and quality
improvement efforts of the various groups in an organization, so as to
enable production of goods and services at the most economical levels
which allow full customer satisfaction.”

OBJECTS OF QUALITY CONTROL

 The basic purpose of Quality Control is to maintain the quality standard of

the manufactured product at an optimum cost.

The following are the objectives of quality control:

 1. To assess the quality standards at different stages of the production
process.

2. To recommend for the corrective action when the process goes out of
control.

3. To suggest suitable improvements in the quality of the product without

affecting the cost of production.

4. Quality control operations enhance confidence, goodwill and reputation

for the manufacturer.

5. Reliability regarding the quality of the product is improved.

Functions of Quality Control

The functions of quality control include the following:

1. To see that the product or service is designed in such a way so that it meets
customer’s specifications.

2. To maintain discipline amongst the employees and to increase their morale.

3. To see that the materials, parts, components, tools, equipment etc. of

standard quality only are purchased and used.

4. To make the employees quality conscious by fixing their responsibility at

various stages of production.

5. To reduce the proportion of scrap, waste and spoilage during the process:

Uses of Control Charts

1. It is a proven technique for improving productivity

2. It is an effective system in defect prevention

3. It prevents unnecessary process adjustments

4. It provides diagnostic information

 5. It provide about process capability

METHODS USED TO ASSURE OR TO CONTROL THE QUALITY

Quality of a product can be assured by the following methods:

1. Inspection method

2. Statistical Quality Control Method

1. Inspection

 Inspection is the process of examining an object for identification of

verification in quality and quantity.

 It is an important tool for ascertaining and controlling the quality of

product. Inspection is the art of applying tests, preferably by the aid of
measuring appliances to observe whether a given item or product is within
the specified limits of variability or not.

 According to Sprigeland Lansburg, “Inspection is the process of measuring

the qualities of a product or services in terms of established standards”.

Functions of Inspection

The following are some of the important functions of inspection:

1. Maintenance of specified standards of the quality of products.

2. Developing means for conducting inspection at lower cost.

3. Maintaining inspection equipment in good condition.

4. Detection of defects at source to reduce defective work.

5. Furnishing advice to Managers when production difficulties arise.

6. Reporting source of manufacturing troubles to management.

Essential Steps for Inspection

The following are the different steps involved in the process of inspection:

1. Carefully define the characteristics of the items to be inspected.

2. Take decision regarding the time and place of conducting the inspection.

3. Take decision on total number of items to be inspected.

4. If sampling is employed, the sampling scheme for the selection of item

from the lots should be selected.

5. Specification limits for the acceptance and rejection of items should be

formulated.

STATISTICAL QUALITY CONTROL

 Statistica1 quality control (SQC) is the term used to describe the set of
statistical tools used by quality professionals for the purpose of quality
control.

Statistical quality control can be sub divided into three broad groups:

1. Descriptive statistics

2. Statistical process control

3. Acceptance sampling

1. Descriptive statistics

 Descriptive statistics are used to describe quality characteristics and

relationships. It includes statistical methods such as the mean, standard
deviation, the range, and the measure of the distribution of data.

 Descriptive statistics are used to describe certain quality characteristics,

such as the central tendency and variability of observed data.

2. Statistical Process Control (SPC)

  Statistical process control involves inspecting a random sample of the
output from a process

 .Based on this data deciding whether the process is producing products

with characteristics that fall within a predetermined range.

 In short, SPC answers the question of whether the process is functioning

properly or not.

3. Acceptance Sampling

 Acceptance sampling is the process of randomly inspecting a sample of

goods and deciding whether to accept the entire lot based on the results.

 It determines whether a batch of goods should be accepted or rejected.

 Although this information is helpful in making the quality acceptance

decision after the product has been produced, it does not help us identify
and catch a quality problem during the production process.

 All three of these statistical quality control categories are useful in

evaluating the quality of products or services. Statistical process control
tools aroused most frequently because they identify quality problems
during the production process.

SOURCES OF VARIATION

There are mainly two sources of quality variations:

1. Common or Random Causes

 Common causes of variation are based on random causes that we cannot

clearly identify.

 These types of variation are unavoidable and are due to slight differences in
processing.

 For example if we look at bottles of a soft drink in grocery store we will

notice that no two bottles are filled to exactly the same level.
  Some are filled slightly higher and some slightly lower.

 These types of differences are completely normal.

 No two products are exactly alike because of slight differences in materials,

workers, machines, tools, and other factors.

 Common causes of variation are based on random causes that we cannot

identify.

 These types of variation are unavoidable and are due to slight differences in
processing.

2. Assignable Causes

 Another type of variation that can be observed involves variations where

the causes can be precisely identified and eliminated.

 These are called assignable causes of variation. Examples of this type of

variation are poor quality in raw materials, an employee who needs more
training, or a machine in need of repair.

 In these entire cases problem can be identified and corrected. We can

assign the variation to a particular cause (machine needs to be readjusted)
and we can correct the problem (readjust the machine).

DESCRIPTIVE STATISTICS

 Descriptive statistics are helpful in describing certain characteristics of

product and a process. The most important descriptive statistics are
measures of central tendency such as the mean, measures of variability
such as the standard deviation and range, and measures of the distribution
of data.

1. The Mean

 The mean is a statistic that measures the central tendency of a set of data.

 Knowing the central point of a set of data is highly important.

  Mean is the small the observations and divided by the total number of
observations.

2. The Range and Standard Deviation

 Information regarding range provides us with the amount of variability of

the data.

 It tells us how spread out the data is around the mean.

 There are two measures that can be used to determine the amount of
variation in the data.

 The first measure is the range.

 Range is the difference between the largest and smallest observations.

 Second measure of variation is the standard deviation.

3. Distribution of Data

 Another method of statistic used to measure quality characteristics is the

shape of the distribution of the observed data.

 When a distribution is symmetric, there are the same numbers of

observations below and above the mean.

 This is what we commonly find when only normal variation is present in the
data.

 When disproportionate number of observations are either above or below

the mean, we say that the data has a skewed distribution.

STATISTICAL PROCESS CONTROL METHODS

 Before using statistical process control we want to determine the amount

of variation that is common or normal.
  After that we monitor the production process to make sure production
stays within this normal range or not.

 We want to make sure the process is in a state of control.

 The most commonly used tool for monitoring the production process is a
control chart. Different types of control charts are used to monitor
different aspects of the production Process.

CONTROL CHARTS

 A control chart (also called process chart or quality control chart) is graph
that shows whether a sample of data falls within the common or normal
range of variation.

 A control chart has upper and lower control limits that separate common
from assignable causes of variation. The common range of variation is
defined by the use of control chart limits.

 We can say that a process is out of control when a plot of data reveals that
one or more samples fall outside the control limits.

 The control charts give us a very simple graphic method of finding if process
is in statistical control or not.

 Its construction is based on plotting 3ƒÐlimits and a sequence of suitable

sample statistics, e.g. mean (x), range (R), standard deviation (s), fraction
defective (p), etc., computed from independent samples drawn at random
from the product of the process.

 These sample points depict the frequency and extent of variations from
specified standards.

 Any sample point going outside 3-ƒÐ control limits is an indication of the
lack of statistical control, i.e., presence of some assignable causes of
variation, which must be identified and eliminated.
Types of Control Charts

Control charts are one of the widely used tools in statistical process control. They
can be used to measure any characteristic of a product, such as the weight, the
number of chocolates in a box, or the volume of bottled water. The different
characteristics that can be measured by control charts can bedividedintotwo
groups:

1. Variables

2. Attributes.

A control chart for variables is used to monitor characteristics that can be

measured and have a continuum of values, such as height. A control chart for
attributes, on the other hand, is used to monitor characteristics that have discrete
values and can be counted.

CONTROL CHARTS FOR VARIABLES

Control charts for variables monitor characteristics that can be measured and
have a continuous scale, such as height, weight, volume, or width. When an item
is inspected, the variable being monitored is measured and recorded. For
example, if we were producing candles, height might be an important variable.
We could take samples of candles and measure their heights. Two of the most
commonly used control charts for variables monitor both the central tendency of
the data (the mean) and the variability of the data (either the standard deviation
or the range). Note that each chart monitors a different type of information.
When observed values go outside the control limits, the process is assumed not to
be in control.

Mean (x-Bar) Charts

Mean chart is the most commonly used tool to evaluate the quality of products. A
mean control chart is often referred to as an x-bar chart. It is used to monitor
changes in the mean of a process. To construct a mean chart we first need to
construct the center line of the chart. To do this we take multiple samples and
compute their means. Usually these samples are small in size.
Construction of X- Chart

The control chart for mean is drawn on a graph paper by taking the sample
number along the horizontal scale, (x-axis) and the statistic x along the vertical
scale (y-axis). Sample points (sample means x-- 1, x-- 2, x--k (are then plotted as
points (dots) against the corresponding sample number. These points may or may
not be joined. The central line is drawn as a bold (dark) horizontal line at ƒÊ = ƒÊ'
(if ƒÊ is Known) or at x-- (if ƒÊ is not known). This UCL x-- and LCL x- - are plotted as
dotted horizontal lines at the computed values.

Range (R) Charts

Range (R) charts are another important type of control chart for variables.
Whereas x-bar charts measure shift in the central tendency of the process, range
charts monitor the dispersion or variability of the process. The method for
developing and using R-charts is the same as that for x-bar charts.

Construction of R-chart

As in case of x---chart, the sample number is taken along horizontal scale and the
statistic (Range) is taken along vertical scale. The sample points R1, R2, c., Rn are
then plotted as points (dots) against the corresponding sample numbers. The
central line is taken as bold horizontal line at R and UCLR and LCLR are plotted as
dotted horizontal lines at the computed values.

CONTROL CHARTS FOR ATTRIBUTES

Control charts for attributes are used to measure quality characteristics that are
counted rather than measured. Attributes are discrete in nature. P-Charts are
appropriate when both the number of defectives measured and the size of the
total sample can be counted. A proportion can then be computed and used as the
statistic of measurement. C-charts count the actual number of defects. For
example, we can count the number of complaints from customers in a month, the
number of bacteria on a petri dish
P-Charts

P-charts are used to measure the proportion that is defective in a sample.

The computation of the center line as well as the upper and lower control limits is
similar to the computation for the other kinds of control charts. The center line is
computed as the average proportion defective in the population.

C-Charts

C-charts are used to monitor the number of defects per unit. Examples are the
number of returned meals in a restaurant, the number of trucks that exceed their
weight limit in a month. Note that the types of units of measurement we are
considering are a period of time, a surface area, or a volume of liquid.

Management of Quality

Quality is said to be achieved when a product meets the customers’

requirements. The primary emphasis of modern business is on the satisfaction of
customer’s needs and requirements better than competitors do. Quality of the
product is one of the important factors which decide the acceptance of the
product in the market.

One of the purposes of quality management is to find out errors and defects as
early in the project as possible. Quality management is concerned with controlling
activities with the aim of ensuring that products and services are fit for their
purpose and meets the specifications. There are two parts in quality
management. They are discussed below;

1. QUALITY CONTROL

Quality control is concerned with checking and reviewing work that has been
done. Quality control is the process of detecting defective output, rather than
preventing it.

2. Quality assurance
Quality assurance covers all activities from design, development, production,
installation, servicing and documentation. Quality assurance is planned system of
review procedure conducted by personnel not directly involved in the inventory
compilation or development process. Review is generally conducted by a third
party.

ISO 9000

ISO9000 is an international standard that many companies use to ensure that

their quality assurance system is in place and effective. Conformance to ISO9000
is said to guarantee that a company delivers quality products and services. The
company desiring to get the certification of this authority has to go through
different formalities to ensure quality of the products .Then the agency examines
the company’s quality assurance system objectively. Once the company is assured
of quality, the authority will issue certificate for the same.

Quality circle

 Quality circle can be a most important supporter in solving problems and

effecting significant efficiencies in an organisations operations. Quality
control technique has played an important role in industrial development
of Japan.

 Quality circle is a unique management tool with which a suitable

atmosphere is created in which people attempt to solve the problems in
their own work area.

 Quality circle was born in Japan in 1961.

 Quality circle is a small group of employees who voluntarily meet at regular

intervals to identify, analyse and solve quality and other problems in their
work areas. Normally members of a particular quality circle come from the
same workshop that face and share similar problems in their daily work life.
Ideally the group size should seven or eight to give enough time to each
member to actively participate and contribute in each meeting.

Methods of Operations
QC normally composed of a small number of volunteers from a particular work
area or department who focus on improving quality, productivity and cost
reduction. The circle meets under the guidance of a facilitator to identify
problems and suggest possible solutions. When possible solution are generated
the circle meets to identify which of these are likely to be most appropriate given
the company’s culture, structure, and the costs and time frame
ofimplementation.in most quality circles there are no direct financial rewards for
coming up with good ideas or cost savings. However people are indirectly paid for
attendance in the circle meeting. Quality circle regularly meets on regular basis.

Objective of Quality Circle

The following are the objective of Quality Circle.

1. To improve quality

The primary objective in developing quality circle is to improve the quality of the
products.

2. To improve productivity

Customers always seek qualitative products. For this purpose the creative
capacity of the employees must be utilized for improving the quality of the
products.

3. To improve employee morale

Another objective of quality control is to develop the morale of employees.

Employees are given the opportunity to take part in the quality improvement
programmes. It leads to employee morale and satisfaction.

Benefits of Quality Circle

1. Increase in quality consciousness of employees

2. Development of an attitude of problem prevention

3. Promotion of employee motivation

4. Improvement in the human relations.

5. Utilization of employee problem solving skills

6. Increase job security

7. Development of safety awareness.

KAIZEN

Kaizen is a system for generating and implementing employee’s ideas developed

in Japan. It helped many companies to improve quality and productivity which
allowed them to offer better products at lower prices and therefore increase their
market share .Kaizen is a group of workers who do similar works .They meet
voluntarily, regularly, under the leadership of their supervisor to identify work
related problems and to recommend solutions to management.

Total Quality Management (TQM)

 Total Quality Management is an approach that seeks to improve quality and

performance which will meet or exceed customer expectations.

 TQM takes in to account all quality measures taken at all levels and
involving all company employees.

 TQM is a management system for a customer focused organization that

involves all employees in continual improvement at all aspects of the
organization.

 TQM focuses on identifying the basic causes of quality problems and

correcting them at the source instead of inspecting the product after it has
been produced.

 TQM not only covers the entire organization but it also stresses that quality
is customer driven.
  TQM attempts to achieve quality in every aspect of the organization. It is
concerned with technical aspects of quality as well as the involvement of
people in quality such as customers, employees and suppliers.

Principles of TQM

The main principles of TQM are given below:

1. Customer focus

Total quality management focuses on customer satisfaction .Quality should be

customer driven. The companies need to collect information from the customer’s
.Based on the needs and expectations of the customers products have to be
manufactured. A company should always remember that they would not exist in
the absence of their customers.

2. Continuous improvement

Continuous improvement requires that the company continually strive to be

better through learning and problem solving. It is difficult to achieve full
percentage perfection in the quality of products. But the firm should thrive
towards improving the quality of products on a continuous basis.

PLAN-DO-STUDY-ACT CYCLE (PDSA)

This cycle represents that continuous improvement of quality of products. It is a

never ending process and that should be undertaken without break. This cycle is
also called as Shewhart or Demining cycle.

3. Employee empowerment

The new concept provides incentives for employees to identify quality problems.
Employees are rewarded for solving quality problems. The contributions of
employees are highly valued and their suggestions are implemented. In order to
perform this function employees are given continual and extensive training in
quality is essential.

4. Team approach
TQM promotes team approach within the organization. Team is give due
consideration at the time of planning and implementing the problems. Team
usually meet weekly during work hours in a place designated for this purpose.
They follow pre-set process for analyzing and solving quality problems.

5. Measuring and controlling

Selecting correct measurement tools is essential .TQM provides better tools for
analyzing and solving problems. A systematic controlling mechanism is also
followed.

Benefits of TQM

1. It increases the productivity and efficiency of the organization.

2. It develops customer satisfaction.

3. It insures flexibility in the manufacturing system.

4. It promotes better relation with the customers.

5. It enhances the customer satisfaction.

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