Industrial Engineering and Management

by

Anu Shrestha

Department of Mechanical Engineering

Institute of Engineering
Purwanchal Campus,Dharan
 Objective of the course
The main objective of this course is to provide
fundamental knowledge of industrial engineering. After
completion of this course the students will be able:
1.To describe production systems ;loading and
scheduling techniques.
2.To describe forecasting techniques , inventory
control and material requirement planning.
3.To apply knowledge and skills for plant maintenance,
quality control and management
 Course outline

1. Introduction to Industrial Engineering and Management (1 hour)

1.1 Historical Development
1.2 System Concept
2. Design of Production Systems (18 hours)
2.1 Plant Location
2.1.1 Importance of Plant Location
2.1.2 Factors Affecting Plant Location
2.2 Factory Building and Plant Layout
2.2.1 Types of Factory Building
2.2.2 Types of Plant Layout
2.2.3 Flow Patterns
2.3 Material Handling
2.3.1 Engineering factors and Economic factors
2.3.2 Classification of Material Handling Equipments
2.4 Production, Planning and Control
2.4.1 Types of Production System
2.4.2 Routing, Scheduling and Loading
2.5 Product Research, Development and Design
2.5.1 Tools for Product Development
2.5.2 Standardization
2.5.3 Simplification and Specialization
2.6 Process Planning Introduction
 Course outline

3. Loading and Scheduling Techniques (4 hours)

4.1 Gantt Chart
4.2 Critical Path Method (CPM)
4.3 Program Evaluation and Review Technique (PERT)
4. Inventory Control (4 hours)
5.1 Economic Order Quantity
5.2 Safety Stock; Reorder Quantity; Lead Time
5.3 ABC Analysis
5. Material Requirement Planning (MRP I and MRP II) (6 hours)
6.1 Introduction
6.2 MRP Concept
6.3 Benefits and Application
6.4 MRP II (Manufacturing Resource Planning)
6.5 The Japanese approach to MRP
6.6 Comparing MRP and Just in time (JIT) Concept
 Course outline

6. Forecasting (4 hours)
6.1 Forecasting Techniques
6.1.1 Qualitative Techniques
6.1.2 Quantitative Techniques
6.1.3 Causal Quantitative Techniques
6.2 Forecast Errors
7. Plant Maintenance (4 hours)
7.1 Introduction
7.2 Preventive Maintenance
7.3 Scheduled Maintenance
7.4 Break –down Maintenance
7.5 Total Productive Maintenance (TPM)
7.6 Total Planned Quality Maintenance (TPQM)
8.Quality Management (4 hours)

8.1 Evolution of Quality Management

8.2 Quality –Definitions
8.3 Total Quality Management
 Evaluation Scheme

1.Internal Assessment = 20 marks

2.Final exam = 80 marks

Chapters Hours Marks Distribution
1&2 19 30
3 4 8
4 4 8
5 6 10
6 4 8
7 4 8
8 4 8
Total 45 80
 Chapter 1 INTRODUCTION TO INDUSTRIAL
ENGINEERING AND MANAGEMENT
Industrial means related to Industry , which means a process of production or
a complete process of converting input resources into useful products or
services .
Engineering may be defined as : The profession In which a knowledge of
mathematical , physical and social sciences obtained by experience and
practice is utilized economically for the conversion of materials into useful
for benefit of mankind.
Management consists of getting the things done by others and manager is
one who achieves goal or accomplishes objectives by directing efforts of
others .Basically, industrial manager have to perform following :
Planning, organizing, directing, controlling and staffing.
 1.Historical development

IE has developed during passed 250 years. Five different phases

of industrial engineering have almost passed. These phases
are:
Phase I:Pre-industrial revolution Era( upto early 1800s)
Phase II: Industrial revolution ( early 1800s to late 1800s)
Phase III: Scientific management phase(1890s to 1940s)
Phase III: Operations Research and quantitative phase(late 1940s
to early 1980s)
Phase IV Automation and computer integrated manufacturing
phase(since early 1980s)
 Chapter 1 INTRODUCTION TO INDUSTRIAL
ENGINEERING AND MANAGEMENT
American Institute of Industrial Engineers (AIIE) defines Industrial
Engineering as follows;
Industrial Engineering is concerned with the design improvement
and installation of integrated system of people, materials
,equipment and energy. It draws upon specialized knowledge and skill
in the mathematical, physical and social sciences to get herewith
the principles and method of engineering analysis and design,
predict and evaluate the results obtained from such systems.
The main objective of industrial engineering is;
1.To increase in volume of production.
2.Better quality of production.
3.Minimization of human efforts.
4.Eliminating waste and non-value added activities.
5.Improving the effective utilization of resources.
 Functions of Industrial Engineering
Following tools and techniques are used to improve productivity
of the organization by optimum utilization of resources.
1.Method Study.
2.Time Study (Work Measurement).
3.Motion Economy.
4.Financial and Non Financial Incentives.
5.Value Analysis.
6.Production, Planning and Control.
7.Inventory Control.
8.Job Evaluation.
9.Material Handling Analysis.
10.Ergonomics (Human Engineering).
11.System Analysis.
12.Operations Research Techniques.
1.Historical development
 1.Historical development
Phase I:Pre-industrial revolution Era ( upto early 1800s)
 Focused on hand operated manufacturing activity
 No focused factory concept
 Major development
1774:James watt developed steam engine
1776:Adam Smith wrote wealth of nation and advocated concept of division
of labour , skill, development,specialisation etc.
Pre-industrial revolution Era can be classified as given below:
• Self sufficiency stage
• Commercial stage with marketable surplus
• Barter system
• Money system
• Development of means of transportation
 Historical Developments
The industrial revolution(Circa 1760-1830) had major impact on production in several
ways .It marked the change from an economy based on agriculture and handicraft to
one based on industry and manufacturing. The changes begun in England where the
series of machines were invented and and steam power replaced by water,wind and
animal. British industry significant advantages over other nations and England
attempted to restrict export of the new technologies.However,the revolution
eventually spread to other European countries and united nations.
Several inventions of industrial revolution greatly contributed to the development of
manufacturing:1)Watt’s steam engine, a new power generating technology for
industry.2)machine tools, starting with Johan Wilkinson’s boring machine around
1775. 3)The spinnning Jenny,power loom and other machinery for the textile industry
that permitted significant increases in productivity. and 4)the factory system new way
of organizing large number of production workers based on division of labour.
Developed concept of Interchangeable parts of manufacture(American system of
manufacture) in the united state by Eli Whitney(1765-1825). Whitney negotiated a
contract to produce 10,000 muskets for U.S. government.
 Historical Developments

The mid and late 1800s witnessed the expansion of rail roads,steam powered ships ,and
other machines that created a growing need for iron and steel. New steel production
methods were developed to meet demand .Also during this period ,several consumer
products were developed including the sewing machine ,bicycle, and automobile. To
meet mass demand of these products ,more efficient product methods were
required.Some historian identity developments during the second Industrial revolution
, characterized In terms of its effects on manufacturing system by :1)Mass production
2)Scientific management movement,3)assembly lines and 4)electrification of factories.
In the late 1800s,the scientific management movement was developing in the United
States in response to the need to plan and control the activities of growing numbers
of production workers.
 Historical Developments
The movement’s leaders included Frederick W.Taylor (1856-
1915),Frank Gilbreth(1868-1924),and his wife Lilian(1878-
1972).Scientific management included several features .1)motion
study.2)time study. 3)standards in industry. 4)Piece rate system and
similar labour incentive plans ,and 5)Use of data collection,record
keeping,and cost accounting in factory operations.
 1.1. Introduction
Historical Developments
The second Industrial Revolution
– computational power by computers, even
replace mental power
– availability of microchip
– introduction of true automation
– jobs performed by machines or robots
– Improving quality
– Rising Productivity
 Contributions to Industrial Engineering

1.Adam Smith(1776):through his book titled Wealth of Nations laid

foundation to scientific manufacturing.
Through his concept of division of labor which included the skill
development, time savings and the use of specialized machine was
able to influence.
2.James Watt(1864): Steam Engine advanced the use of mechanical
power to increase productivity.
3.Charles Babbage worked on the same line as Adam Smith .
 Contributions to Industrial Engineering

4.FrederickTaylor(1859-1915): was a mechanical engineer and initiated

investigations of better work methods and develop an integrated
theory of management principles and methodologies. He proposed
following actions;
•Data Collection and standards for workers.
•Scientifically training of workers.
•Cooperation between management and labour for better production.
•Divide work between management and labour and assigning to those
who are best suited.
 Contributions to Industrial Engineering
5.Henry L. Gantt (1893):His contributions are;
•Work in the area of motivation field, development of task and
bonus plan.
•Measurement of management results by Gantt Charts.
•Recognition of social responsibility of business and industry.
•Advocated training of workers by management.

6.Frank and Lillian Gilbreth (1917): developed method study as a

tool for work analysis.
•He developed micro-motion study, a breakdown of work into
fundamental elements called therbligs.
 Contributions to Industrial Engineering

7.Harrington Emerson(1913): Developed his managerial concepts

simultaneously with Taylor, Gantt and Gilbreth.
•Amongst his contributions is the Emerson’s Efficiency Bonus Plan, an
incentive plan which guarantees the based ay rate and pays a
graduated bonus.
•He also proposed twelve principles of efficiency.
8.L.H.C Tippet(1937): Developed the concept of work sampling to
determine the equipment and man power utilization and setting
performance standards for long cycle ,heterogeneous jobs involving
team work.
Scope of Industrial Engineering
Role of Industrial Engineer
Industrial Engineering Approach
At problem identification/definition stage following steps must be taken;
1.All the facts about the operation are collected and recorded using
various recording techniques like charts, diagrams or models.
2.Critical Examination of all facts by asking series of questions.
3.Alternative ways are found by techniques like brainstorming.
4.based upon the criteria fixed for evaluation ,the best alternative is
selected
Industrial Engineering Approach
In carrying out various activities, the industrial engineer;
•Gathers and analyses facts.
•Prepares the alternative solutions taking into consideration all the
constraints both internal and external.
•Selects the best solution for implementation.

Industrial Engineering in Service Sector

Large number of industrial engineers are in demand and attracted to
careers in exciting, challenging and rewarding new fields. The various
service industries are;
1.Health Service.
2.Government Organizations.
3.Banking.
 2. System concept
• Productive system is defined as the means by which we transform
resource inputs to create useful goods and services as outputs. An
operation is some step in the over all process of producing a
product or service that leads to the final product.

• Production management may be defined as a task of planning,

coordinating, motivating and controlling the efforts of others to
wards a production of goods or services in an efficient, effective
manner.
Productionsystem
 Types of production System
• Job shop production
• Batch production
• Mass production
 Production system
Job shop production / Unit production system
-Produce one or several articles which are seldom or never to be produced again.
It has following characteristics:
1.Commonly used to meet a particular customer need.
2.Production lot size is very small .
3.Production variety is generally high.
4. General purpose machines tools ,equipment and jigs and fixtures are used to
produce variety of articles.
5. Requires high skilled operators and technicians
 Production system
Batch Production System
-More than 75% parts manufactured worldwide are in batches of 50 or
less.
It has following characteristics:
1.Commonly used to meet repeated customers orders.
2.Suitable for moderate product variety.
3.Specially designed jigs and fixtures may be used to reduce se up
time and increase the production rate.
4.Skill level of labour in batch production should be reasonably high but
may be less as compared to job shop.
5.Production equipments are general purpose but suitable for higher
production volume.
 Production system
Mass production system:
It is suitable for the manufacturing of continuous identical
parts. Production rate is generally very high. It has the
following characteristics:
1.Particularly suited for high demand items.
2.Production lot size is very high and production rate is
continuous.
3.Product variety is very low,which may be needed.
4.Skill level of workers may be moderately low as repeated
work on same machine is needed.
5.Special purpose tools and equipments may be needed.
6.Higher investmentin machine is neededdue to specialised
machine and special purpose operations.
 Chapter 2
DESIGN OF PRODUCTION SYSTEMS
2.1 Plant Location
2.2 Factory Building and Plant Layout
2.3 Material Handling
2.4 Production, Planning and Control
2.5 Product Research, Development and Design
2.6 Process Planning Introduction
 Design of production system

The conscious effort to design for producibility and low manufacturing

cost is referred to as‘production design ’fulfilling all the functional
requirement of the product. Design process is always iterative one.
The three aspects of production system design are
1.Plant location
2.Plant layout and design
3.Material handling
 1. Introduction to plant location

Plant location/Site selection

Plant location means deciding a suitable choice of region,place,area
and the selection of a particular site for setting up a
bussiness,interprise or factory.
Plant or facility location is the placement of a facility with respect to
customers, suppliers, and other facilities with which it interacts.
But the choice is made only after considering cost and benefits of
different alternative sites. It is a strategic decision that cannot be
changed once taken. If at all changed only at considerable loss, the
location should be selected as per its own requirements and
circumstances. Each individual plant is a case in itself.
Businessman should try to make an attempt for optimum or ideal
location.
 Introduction

When to select site to house the factory/plant?

There may be three conditions as follows:

• While starting a new factory/enterprise
• During the expansion of existing plant
• When the existing plant is to be relocated at some other place to
remove its drawbacks or to gain the benefits of still better location.
 
 Introduction

What is an ideal location?

• An ideal location is one where the cost of the product is kept to
minimum, with a large market share, the least risk and the maximum
social gain. It is the place of maximum net advantage or which gives
lowest unit cost of production and distribution. For achieving this
objective, small-scale entrepreneur can make use of locational
analysis for this purpose.
 Importance of plant location
The selection of location is an important activity for the success of the
business and requires careful analysis for new and already established
enterprises.
• A good location may reduce the cost of production and distribution to the
considerable extent.
• Locating a business may involve a large, relatively permanent investment. If
the site selection is improper ,all the money spend on factory building ,
machinery, and their installation will go waste and the owner will have to
suffer a great loss.
• Location fixes some of the physical factors of the overall plant design e.g.
heating and ventilation requirements , storage capacity of raw materials ,
taking into consideration their local availability, transportation need for raw
materials and finished goods , power needs , cost of labor , taxes , land
construction and fuel etc.
• Location plant determines the nature of investment costs to be incurred and
also the level of many operating costs.
• Government sometimes plays an important role in the choice of the location
keeping in the view the national benefits.
• Bad locations can be bad as to bankrupt a company.
 Plant location analysis

Location analysis is a dynamic process where entrepreneur

analyses and compares the appropriateness or otherwise of
alternative sites with the aim of selecting the best site for a given
enterprise. It consists the following:
1.Demographic Analysis: It involves study of population in the area
in terms of total population , age composition , per capita income ,
educational level , occupational structure etc.
2.Trade Area Analysis: It is an analysis is of the geographic area
that provides continued clientele to the firm. He would also see the
feasibility of accessing the trade area from alternative sites.
3. Competitive Analysis: It helps to judge the nature, location, size
and quality of competition in a given trade area.
 Plant location analysis

4. Traffic analysis: To have a rough idea about the number of potential

customers passing by the proposed site during the working hours of
the shop, the traffic analysis aims at judging the alternative sites in
terms of pedestrian and vehicular traffic passing a site.
5. Site economics: Alternative sites are evaluated in terms of
establishment costs and operational costs under this. Costs of
establishment is basically cost incurred for permanent physical
facilities but operational costs are incurred for running business on
day to day basis, they are also called as running costs.
 2. Factors affecting plant location

The important considerations for selecting a suitable location are given as

follows:
1. Availability of raw- materials.
 To reduce cost of transportation and storage (due to lead time).
 To reduce the loss of good amount of weight during processing.
2. Proximity to markets.
 To reduce cost of transporting finished goods, advertising and distribution
etc.
3. Availability of labor.
 To assure right kind of labor is available at right number and reasonable
price.
4. Transport and communication facilities.
 For transporting raw materials, parts and finished goods.
 For regularity of service, safety, speed and low cost.
 2. Factors affecting plant location

5. Availability of power and fuel.

 coal, electricity, oil and natural gas are the important sources of power in the
industries.
6. Climatic conditions.
 Moist climate is working climate and reduce the cost due to air-conditioning
techniques.
7. Availability of water.
 For drinking and sanitary purposes, water should be available in adequate
quantity.
8. Ancillary industries.
 Will be an added advantage if there is industry producing the assembling
parts etc.
 2. Factors affecting plant location

9. Financial and other aids.

 By government i.e. certain incentives and facilities such as cash
subsidy concessional financial assistance, land, power, tax
concessions etc.
10. Business and commercial facilities.
 Banking services for day to day management of finance and
working capital needs.
 Facilities depositing surplus cash, discounting of bills, sending out
stations cheque for collection and withdrawals, meeting cash
storage.
11. Educational, recreational and civic facilities.
12. Population statistics.
13. Analysis of communities
 PLANT LOCATION DECISION-MAKING
Analysis or evaluation methods
1.Factor Ratings Method:
One way to make the location decision is to assign weights to the critical factors considered important. Each
alterative site in evaluations are totaled for each site to provide insights into the location decision.

Factors Factor Rating Location Rating Product of Rating

4 8 32
Tax advantages
Tax advantages 3 2 6
Suitability of labor skills
Proximity to customers 3 6 18
Proximity to suppliers 5 2 10
Adequacy of water 1 3 3
Receptivity of community 5 4 20
Quality of educational system 4 1 4

Access to rail and air transportation 3 10 30

Suitability of climate 2 7 14
Availability of power 2 6 12

Total Score 149

 PLANT LOCATION DECISION-MAKING

An electronics manufacturer wants to expand by

building a second facility. The search has been
narrowed to four locations. Assessment of
these sites in terms of seven location factors is
shown below. The score is based on a rating
form 1 to 5, where 1 is poor and 5 is excellent.
 PLANT LOCATION DECISION-MAKING
Factor location rating method
Location Factor Location rating for each locations
factor rating
A B C D
Labor 20 5 4 4 5
climate
Quality of life 16 2 3 4 1
Transportati 16 3 4 3 2
on system
Proximity to 14 5 3 4 4
market
Proximity to 12 2 3 3 4
materials
Taxes 12 2 5 5 4
utilities 10 5 4 3 3
Calculate the weighted scores for each location. Which location
should be recommended?
 PLANT LOCATION DECISION-MAKING
Factor location rating method

Location Factor A B C D
factor weight

Scor Wt. Score Wt. Scor Wt. Scor Wt.

e Score Score e Score e Score

1 20 5 100 4 80 4 80 5 100
2 16 2 32 3 48 4 64 1 16
3 16 3 48 4 64 3 48 2 32
4 14 5 70 3 42 4 56 4 56
5 12 2 24 3 36 3 36 4 48
6 12 2 24 5 60 5 60 4 48
7 10 5 50 4 40 3 30 3 30
348 370 374 330

Highest weight score of location is favourable location. Select C location.

2.Economic Survey of Site Selection method
The ideal location for the plant should be such that the cost procuring the materials
and processing them into products and the cost of distribution of finished products to
the customer should be minimum. The method is illustrated through an example.
(a)Computation of investment and cost of production and distribution.
(b) Rate of return

Determination of costs of production & distribution, an example:

1. Various costs and other considerations have been listed below as regards to locations 1 and 2. It
is required to determine the overall best location.
Factors Location – 1 Location – 2 →Cost of location 1 is
 Cost of (Rs.) (Rs.) only a bit different
a. Land 100,000 90,000 than location 2.
b. Building 1,200,000 1,300,000 But considering
c. Water 5,000 6,000 other factor the
d. Power 15,000 17,000 plant2 is overall
e. Labor 140,000 120,000 best location.
f. Freight
i) In – coming 120,000 110,000
ii) Out – going 160,000 150,000
g. Fuel 40,000 35,000
h. Raw materials and
other supplies 140,000 130,000
i. Taxes 4,000 2,000
Total Cost 1,924,000 1,960,000
j. Community facilities Good Excellent
k. Community attitude Alright Encouraging
l. Housing facilities Very Good Good
m. Cost of living High Normal
n. Community size Small Medium
 Computation of investment and cost of production
and distribution
Q. Two sites A and B are evaluated in terms of above mentioned two costs as follows:
Costs Site A(Rs.) Site B(Rs.)
Cost of establishments:
• Land and building 350000 270000
• Equipment 60000 60000
• Transport facilities 20000 30000
Cost of operations:
• Materials, freight and Carriage 34000 24000
• Taxes and insurance 10000 7500
• Water, power and fuel 10000 8000
Total: 584000 429500
The above cost statement indicates that site B is preferable to site A keeping in mind
economic considerations only although in some respects site A has lower costs. By
applying the definition of ideal location which is the place of maximum net advantage
or which gives lowest unit cost of production and distribution, site B would be
preferred.
Q. From the following data select the most advantageous location for setting
a plant for making transistor radios.

size particulars Site –A (Rs.) Site –B (Rs.) Site –C (Rs.)

1 Initial investment 2,00,000 2,00,000 2,00,000

2 Expected sales 2,50,000 3,00,000 2,50,000

3 Distribution expenses 40,000 40,000 75,000

4 Raw material expenses 70,000 80,000 90,000

5 Power and water supply 40,000 30,000 20,000

expenses
6 Wages and salaries 20,000 25,000 20,000

7 Other expenses 25,000 40,000 30,000

8 Community attitude Indifferent Want business Indifferent

9 Employment housing Poor Excellent Good

 Determination cost by ROR

Solution: we can select on the basis of Rate of Return which is given

by:
Rate of Return = ((𝑡𝑜𝑡𝑎𝑙 𝑠𝑎𝑙𝑒𝑠−𝑡𝑜𝑡𝑎𝑙 𝑒𝑥𝑝𝑒𝑛𝑠𝑒𝑠 )/𝑡𝑜𝑡𝑎𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡)X 100%
For site X,
Rate of return = ((2,50,000 –1,95,000)/2,00,000)*100% =27.5%
For site Y,
Rate of return = ((3,00,000 –2,15,000)/2,00,000)*100% =42.5%
For site Z,

Rate of return = ((2,50,000 –2,35,000)/ 2,00,000)*100% =7.5%

Hence, select site Y.
 Break Even analysis
• Break even analysis:BEA is a graphical and algebraic representation of the
relationships among volume of output, costs, and revenues. There is an increase
in costs and revenues as the volume of output from a plant (facility) increases.
Costs can generally be divided into two categories: 
(a) fixed costs and
(b) variable costs.
• Fixed costs include expenditure on land, building, machines and other
equipments etc. Fixed costs are those incurred regardless of output volume such
as heating, lighting, and administrative expenses. These costs are same whether
one or one thousand units of output are produced.  
• Variable costs are those that fluctuate directly with volume of output. Higher
output results in higher total variable costs. Lower output results in lower variable
costs. In general, they are the costs associated with direct labor and material.
 
• The fundamental object of location analysis is to maximize the
profits by minimizing the total cost of production associated with the
production process.
It is easy to prepare the Break even point(BEP) as it would facilitate for
optimal decisions by taking into account volume of business. BEP are
drawn for different locations to compare the sites. Fixed Costs, Variable
Costs & Revenue/Output are taken into account to do so.
Calculation of break even point
1.In terms of physical units:
B.E.P.=F/(S.P.-V.C.) or F.C./C
Where, F.C.=Fixed cost, C=Contribution cost per unit(C=SP-VC), VC=Variable
cost, SP= sales price per unit
.
 Break even analysis
2.In terms of rupees of sales revenue
B.E.P.=(FCxSP)/(SP-VC)=FC/1-(VC/SP) Rs.
 Break Even Analysis
• Q. Potential location A, B and C have the cost structure shown below for
manufacturing of product expected to sale for Rs.2700/unit. Find the most
economical location for an expected volume of 2000 units/year. Also find out
volume of production for each unit .
Site Fixed cost/year (Rs.) Variable cost/unit(Rs.)
A 6,000,000 1500
B 7,000,000 500
C 5,000,000 400
 Break Even Analysis
Solution: Table below shows the total costs for different units in sites A,B and
C. Total Costs
Units Site A Site B Site C
0 6000000 7000000 5000000
250 6375000 7125000 5100000
500 6750000 7250000 5200000
750 7125000 7375000 8000000
1000 7500000 7500000 9000000
1250 7875000 7625000 10000000
1500 8250000 7750000 11000000
1750 8625000 7875000 12000000
2000 9000000 8000000 13000000
2250 9375000 8125000 14000000
2500 9750000 8250000 15000000
2700 10050000 8350000 15800000
• For break even point and break even sales revenues,
• Break even point=𝑓𝑖𝑥𝑒𝑑 𝑐𝑜𝑠𝑡/(𝑟𝑒𝑣𝑒𝑛𝑢𝑒 𝑝𝑒𝑟 𝑢𝑛𝑖𝑡−𝑣𝑎𝑟𝑖𝑎𝑏𝑙𝑒 𝑐𝑜𝑠𝑡 𝑝𝑒𝑟 𝑢𝑛𝑖𝑡)
• Break even sales revenues=𝑏𝑟𝑒𝑎𝑘 𝑒𝑣𝑒𝑛 𝑝𝑜𝑖𝑛𝑡×𝑟𝑒𝑣𝑒𝑛𝑢𝑒 𝑝𝑒𝑟 𝑢𝑛𝑖𝑡
• For site A,
• BEP=6000000/(2700-1500)=5000 units.
• BE sales revenues=5000*2700=Rs.13,500,000.
• For site B,
• BEP=7000000/(2700-500)=3182units.
• BE sales revenues=3182*2700=Rs.85,591,400.
• For site C,
• BEP=5000000/(2700-400)=2174 units
• BE sales revenues= 2174*2700=Rs.5,869,800
Total Costs Site A Total Costs Site B Total Costs Site C
From the graph,
1.The most economical location for an expected volume of
2000units/year is Site B.
2. If Q≤400, select C.
3. If 400≤Q≤1000, select A.
4. If Q≥1000, select B.
 Factory building and plant layout
Factory building provides the housing for men , materials and
machines.
The building must possess the functional , constructional and
architectural characteristics.
1.The functional characteristics consider the production processes
intended to be performed in the factory.
2.Constructional characteristics consider the safety and durability of the
building.
3.While,the architectural aspect is mainly concerned with the
beautification of the factory building.
According to James Lundy , ”The ideal plant is one which is built to
house the most efficient lay out that can be devised for the process
involved , yet which is architecturally attractive and of such a
standard , shape and design as to be flexible in its use and in
expensive in construction”.
 Factory building and plant layout

Factors affecting the factory building

1. Type of Manufacturing Process
2. Plant Location
3. Material Handling
4. Factory Layout
5. Provision of facilities
6. Future Expansion
7. Safety and Security
8. Employee Facilities
9. Flexibility
10. Appearance
Factory building and plant layout

Future expansion of Factory building

 Factory building and plant layout

Types of Factory Buildings

• Single Storey or Horizontal Buildings
• Multi- storey building
Advantages Single Storey Buildings:
– Greater flexibility in layout
– Cheaper and efficient material handling
– Efficient supervision
– Facilities Expansion
– Effective utilization of floor space
– Reduced fire hazards
– Use of natural light and ventilation
 Factory building and plant layout

Disadvantages
– High cost of land
– Non – availability of gravitational flow
– Cost of heating is high
Multi- storey building
- Advantages
– Use of gravity flow
– Low cost of land
– Lower heating cost
– More storage space
– Compact layout
– Upper stories free from noise
– Safe storage
 Factory Building and Plant Layout

Disadvantages
– High cost of construction
– Wastage of floor space
– Poor natural lighting
– Rigid layout
– High cost of supervision
– Difficulty in material handling
– Low load bearing capacity
– Difficulty in expansion
 Factory Building and Plant Layout

Types of Construction of Factory Building

– Wood frame construction
– Brick Construction
– Steel Construction
– Reinforced Concrete Construction
– Pre-cast concrete Construction
• Specific Parts of Factory Building
– Roof
– Walls
– Floor
Factory Building and Plant Layout
 Factory Building and Plant Layout
• Plant Layout
It is an arrangement of facilities and services in the plant.
– It can be defined as: “A technique of locating machines,
processes and plant services within the factory in order to
secure the greatest possible output of high quality at the lowest
possible total cost of production”.
Objectives of a good Plant Layout
 Integrate the production centers
 Reduce Material handling
 Effective utilization of a available space
 Worker convenience and Job satisfaction
 Flexibility
 Removal of bottleneck
 Quick disposal of work
 Avoids industrial accidents
 Eliminates physical efforts required of operative workers
 Maintenance of decency orderliness inside the plant area
 Factory Building and Plant Layout
Importance of plant layout
1.It outlines the relationship between production centers and service
departments.
2.It outlines the nature of flow in the plant and affects the distance travelled by
materials and personnel, hence it is concern with the time ,effort and cost
spend on transportation.
3.It determines the type of handling systems their integration in the overall
production program.
4.It specifies the location , accessibility , and size of stores and also the space and
location of temporary storage of work in process.
5.Machine utilization is partly determined by layout.
6.Production planning and control systems may be greatly affected ,particularly
the complexity of routing, machine loading and paper work involved in
control mechanism.
7.The amount of supervision required and the degree of specialization necessary
in supervision is sometimes dependent on layout.
8.It affects the amount of work in process and work awaiting further processing.
9.operator’s span of activities ,working time ,fatigue and efficiency may be
affected by layout considerations.
 Factory Building and Plant Layout
Situations in which layout problem may arise
A lay out problem may arise in any one of the following
situation:
1. When starting a new plant
2. Changes in the product design
3. Necessity of introducing a new product
4. Necessity of changes in the new volume of production
5. Poor working conditions
6. Frequent accidents
7. Changes in location of the industry.
 Factory Building and Plant Layout
• Factors influencing Plant Layout
1. Management Policy:decides on many matters e.g.nature
and quality of product,size of plant,integration of
production process,plans for expansion,amount of
inventory in stock,employee facilities etc.
2. Manufacturing Process : continuous-
intermittent ,repetitive/non repetitive manufacturing
processes
3. Nature of Product:small-light products ,heavy and large
products,quality and fragility products need differents types
of material handling equipment as well as different layout
4. Volume of Production: material handling devices
/equipment , proper layout
 Factory Building and Plant Layout

5. Type of building : Number of Storey , elevators , stairs ,

storage area all affect the layout
6. Availability of total floor area : Allocation of machines ,
workbenches , sub stores etc./use of overhead space
incase of shortage of space
7. Arrangement of material handling equipment :handling
services,/free movement material equipment
8. Service facilities : Canteens,lockers,drinking water ,first aid
etc.
9.Possible of future expansion : plant layout for future
requirements and installation of additional facilities
 Factory Building and Plant Layout

According to Riggs , “the overall objective of plant layout is to design a physical

arrangement that most economically meets the required output quantity and
quality.”
According to J.L.Zundi,“Plant layout ideally involves allocation of space and arrangement
of equipment in such a manner that overall operating costs are minimized.”
According to Mathur,the six basic principles of best layout ,which may guide the plant
layout engineers for good plant layout.
Principles of plant layout
1.Principle of over all integration.
2.Principle of minimum movement.
3.Principle of smooth and continuous flow.
4.Principle of satisfaction and safety.
5.Principle of flexibility.
6.Principle of Cubic space
 Factory Building and Plant Layout
Techniques used in plant layout:
1. Dimensional plan of space layout
2. Description of the operations,their sequences and standard times in
production process
3. Volume of work to be taken from the space at present and future
4. Nature of machines and equipment needed to perform the operations
5. Type and quality of labor required
6. Amount of material, buffer stock required at each work staton
7. Size of finished and semi-finished product inventory
8. Kind of communications and fire exist necessary for the plant
9. Special requirement if any to fulfill the local by law
10.Special geographical and inspection requirements on the basis of above
information.
 Factory Building and Plant Layout

• Types of Plant Layout

– Process Layout
– Product Layout
– Combination Layout/Hybrid (mixed)
– Fixed Position Layout
 Types of Plant Layout

I. Product (line) layout:

• Machines and auxiliary services are arranged in line according to the
sequence of operations to be performed on the work.
• The raw material enters in the line at one end , the operation are carried
out in succession , in a smooth flow and finished goods is delivered at
the other end of the line.
• Separate production line for each type of layout.
• Suitable for continuous production.
 Types of Plant Layout

Advantages
• Smooth and logical flow lines.
• Small in process inventories.
• Total production time / unit short.
• Reduced material handling.
• Lower labor-skill requirements
• Reduced worker training
• Reduced supervision
• Ease of planning and controlling production
• Less space for work in transit and temporary.
• Disadvantages
• Higher initial investment level
• Relatively low product flexibility
 Types of Plant Layout
2. Process (functional/job) layout
•All similar machines are grouped together.
•Different sections or shops such as turning section , milling section , drilling section ,
welding section , assembly line etc.
•Used in job and batch production and non-repetitive work.
•Leaves the equipment in flexible condition.
Types of Plant Layout
 Types of Plant Layout
Advantages
• Better utilization machines , hence fewer machines required.
• High degree of flexibility with regard to equipment or manpower allocation
for specific tasks.
• Comparatively low investment in machines required.
• Greater job specification for operator.
• Specialized supervisor is possible.
Disadvantages
• Since longer flow lines usually results material handling time is more
expensive.
• More complex production planning and controlling
• Total production time usually longer.
• Large in process inventories.
• Because of the diversity of jobs in specialized departments , higher grades
of skill are required.
• More worker training
• More supervision
 Types of Plant Layout

3. Mixed and combined layout

•Combination of process and product layout.

•In corporates the benefits of process and product layout.
•Production shops may be arranged by process layout , while the
assembly is accomplished online.
•Some processes may be segregated from the product line e.g.
Objectionable , hazardous , requiring special treatment and
repetitive performance etc
 Types of Plant Layout

Cellular Manufacturing (CM) Layout

• Cellular manufacturing is a type of layout in which machines are
grouped into what is referred to as a cell.
• Groupings are determined by the operations needed to perform
work for a set of similar items, or part families that require similar
processing.
• Cellular layout provides faster processing time, less material
handling, less work-in-process inventory, and reduced setup time.
• Used when the operations system must handle a moderate variety of
products in moderate volumes.
Types of Plant Layout
 Types of Plant Layout
IV. Static or fixed position layout
• Adopted when the work-piece is very big or too heavy to move from one
position to the other and is consequently fixed in one place.
• The machines and men move with respect to the work to perform the
required operation. E.g. in construction work , ship-building , in fabrication of
tanks , aircrafts.
Advantages
• It saves time and cost.
• The layout is flexible.
• It is more economical when several orders indifferent stages of progress are
being executed simultaneously.
• Adjustments can be made to meet shortage of materials or absence of
workers.
Disadvantages
•Production period being very long , capital investment is very heavy
•Very large space is required for storage of material and equipment near the
product.
•there is possibility of confusion and conflicts among different work groups.
Types of Plant Layout
 Static or Fixed position layout

Machines
Tools
Workers

Ramaterial

Components

Assembled product from several components

 Flow patterns

Flow patterns means the system to be adopted for the movement of raw-
materials from the beginning and upto the point when it is converted into
finished product.
Factors governing flow pattern
• External transport facilities.
• Number of products to be handled.
• Number of units to be processed.
• Number of sub-assemblies made up a head of assembly line.
• Type of plant layout , availability of floor space etc.
• The material flow system can be broadly classified as
1.Horizontal flow system.
2.Vertical flow system.
 Flow patterns

1.Horizontal flow system

The horizontal flow system is adopted on a shop floor in the single
storey building. The starting point is the receiving(R) of the raw-
material and the terminal point is the shipment(S) of finished goods
or components. In between these two points the materials move
from one work station to another for the purpose of processing.
There are five basic types of horizontal flow system.
1.I–flow.
2.L–flow.
3.U–flow.
4.S–flow.
5.O–flow.
 Flow patterns

-simple form
-Material enters at on end (R) and
leaves at other end(S)
-economical and convenient in I-
shaped building
R -not suitable for longer production lines
Lflow

-Used where buildings are wide but

S
less long as compared to line flow

-suitable for longer

production lines and square
shaped buildings
-Raw materials enters and
finished goods exist on the
same side
-easier for supervision
Flow patterns

-compact system , better

utilization of space and efficient
supervision
-used for production lines
longer than U type flow
-preferred in square shaped
buildings

-used on rotary table or

rotary handling system
-suitable for longer
production line

89
Flow patterns

90
Flow patterns

91
 Flow patterns

2.Vertical Flow system

The vertical flow system is used in multi-storey buildings . Multi-storey
buildings are used where limited area is available and the
processing is done on light materials. The advantages of gravity
flow can be tapped.
• Following are some of the important vertical flow system.
1.Processing upwards.
2.Processing downwards.
3.Retraction type of flow.
4.Inclined flow
 Flow patterns

Processing upwards
Flow patterns

94
 Line Balancing

Line balancing is a layout means balancing the production line

It is arise due to the following factors :
i. finished product is the result of many sequential operations
ii. Production Capacity of each machine in the sequence is not
identical
The main objective of line balancing is to distribute tasks
evenly over the workstation so that idle time of man and
machine is minimized.
It is done grouping facilities or tasks and workers in an
effective pattern in order to obtain an optimum balance of
the capacities.
 Line balancing

• Example of line balancing:

• Suppose,there are three machines (workstations) A,B and C which can
process 25,50 and 100 pieces per hour .The pieces flow from A,B and C.The
line balancing for the production of 100 pieces per hour will be arranging
four machines of type A,two machines of type B with one machine of type
C
M/C M/C
A1 B1
M/C
M/C
Receiving C Shipping
A2
M/C M/C
A3 B2
M/C
A4
 Material Handling-course outline

• Engineering factors and economic factors.

• Classification of material handling equipment.
 Material Handling

Material handling may be defined as the handling of raw-

materials , semi finished parts and finished products ,
mechanically or manually through the production as well as
storage areas.
Material handling emphasizes up on the need of installing efficient
and safe and economical methods and equipment for material
handling. A material handling equipment is not a production
machinery , but is an auxiliary equipment that improves the flow of
materials which in turn reduces stoppages in production machines
and thus increases productivity.
It has been estimated the average material handling cost is 20 -25% of
the total production cost.
 Functions of Material Handling

The following are the most important functions of material handling:

1. The movement and positioning of purchaged materials , tools , spares etc.
for the purpose of storage.
2. The internal transportation of materials from the stores to shops or
departments.
3. The movement of materials within departments from one machine to
another while processing and from one department to another.
4. The movement and positioning of finished products or components for
the purpose of stocking or sale.
5. Unloading raw materials from trucks or other transports.
6. Loading packed materials on trucks or other transport.
 1. Engineering factors and economic factors
The two most important factors for analyzing or solving material handling
problems are
1.Engineering factors , and
2.Economic factors.
The engineering factors are:
1.Nature of materials and products to be handled.
–process,quantities,distance travelled ,state of raw materials(solid ,
liquid ,gases),size,shape,weight,safe handling system for fragility,bulk.
2.Production process and equipment.
-production process,sequence of operation ,maximum output
3.Building construction.
-multistorey buildings need vertical transportation systems
i.e.coveyors,elevators,pipes etc. where as single storey buildings may need
trucks,overhead bridge cranes,conveyors.
- Various features of building such as the door locations and sizes,ceiling
height,roof strength , stair column etc.
1. Engineering factors and economic factors
4.Layout:
-It utilizes existing buildings in most efficient way and decreases
material handling problems.
5.The existing material handling equipment:
-Evaluate performance of existing material handling equipment.If
necessary additional material handling equipments are
installed/provided or necessary changes in the existing equipments.
6.Production,planning and control:
-routing and scheduling functios
7.Packaging:
-Finished products are packed in the containers,wooden boxes,card
boards,cartons in convenient size to perform effective handling
operations.
 1. Engineering factors and economic factors

The economic factors

For economic analysis while selecting material handling equipment
following cost factors must be taken into consideration.
Initial cost of equipment , cost of installation , rearrangement of the
present equipment , cost of alternation necessary to the building ,
cost of maintenance , repairs , supplies etc. , cost of power ,
depreciation , cost of labor to operate , cost of any necessary
auxiliary equipment (such as charging equipment for truck
batteries , etc.) , savings that the equipment will bring about indirect
labor cost , (number of men released for other work) , space
required , increased production brought about etc. A material
handling equipment with the lowest prospective cost is selected
 Computation of materials handling cost
The general approach with reasonable accurate result is as follows:
I=Initial cost of equipment or installed cost,
A=Annual return on investment( percentage of I)
B=Annual allowance ( percentage of I) of insurance and taxes etc.
M= Average annual maintenance cost ( percentage of I)
D=Annual depreciation and obsolescence allowance ( percentage of I)
E=Annual cost of power and supplies , F=Annual fixed cost of old equipment
S=salvage value of equipment to be replaced ,U= Unmortised value(capital of
equipment to be replaced exceeding salvage value,
O=Annual overhead savings,N=annual fixedcharges ( percentage of I)
=(A+B+M+D),L=Annual direct labour cost saving,P=Annual production
savings due to change in capacity
Y=Expected total annual cost=I(A+B+M+D)+E
Z=Maximum Justifiable investment=L+O+P+F-E+AS/N
V=Surplus gain=L+O+P+F-E+AS-Y-NU
 1. Engineering factors and economic factors
Principles of material handling
1.Reduction in handling: Process changes , layout improvement , use of proper
equipment,increased size of units handled
2.Reduction in time: Waiting time may be reduced by proper scheduling,well organization
of labour force , removing conjestion in plant,sufficient facilities for loading and
unloading,minimize travel time
3.Unit load Principle:Increase quantity,size,weight of load handled to reduce labour
cost,packing cost, elimination of damage,saving in time by effictive utilisation of
material handling equipment
4.Gravity principle :utilise gravity to move a material whenever practicable.It is the
cheapest sourse of motive power.
5. Ergonomic Principle. Human capabilities and limitations must be recognized and
respected in the design of MH tasks and equipment to ensure safe and
effective operations
6.Use of containers:Design containers,pallets,drums etc. to reduce the cost of
handling and damage of material transit.
7.Standby facility:The provision of stand by facilities should be made so that the
sudden break down may not stop the operations due to unavailabilitynof
materials.
 Principles of material handling
8.Periodical check up:The check up repairing and maintenance of
existing material handling equipment should be made periodically.
9.Avoid interference with production line: the material handling services
should not interfere with the production line.
10.Flexibility :necessary changes should be incorporated when ever it
is possible.
11. System Principle. Material movement and storage activities should
be fully integrated to form a coordinated, operational system which
spans receiving, inspection, storage, production, assembly,
packaging, unitizing, order selection, shipping, and transportation,
and the handling of returns.
12. Standardization Principle. MH methods, equipment, controls and
software should be standardized within the limits of achieving
overall performance objectives and without sacrificing needed
flexibility, modularity, and throughput.
 Principles of Material Handling
13. Automation Principle. MH operations should be mechanized and/or
automated where feasible to improve operational efficiency,
increase responsiveness, improve consistency and predictability,
decrease operating costs, and to eliminate repetitive or potentially
unsafe manual labor.
14. Environmental Principle. Environmental impact and energy
consumption should be considered as criteria when designing or
selecting alternative equipment and MHS.
15. Life Cycle Cost Principle. A thorough economic analysis should
account for the entire life cycle of all MHE and resulting systems.
16.Planning Principle. All MH should be the result of a deliberate plan
where the needs, performance objectives, and functional
specification of the proposed methods are completely defined at the
outset.
2. Classification of material handling equipment
Material handling devices are of five types.
1.Lifting and lowering devices (vertical movement -up and down)
i. Block and tackle
ii. Hand and power winches
iii. Hoists
iv. Elevators
v. Pillar crane
vi. Overhead crane
2.Transporting devices (horizontal movement)
i. Wheel barrows
ii. Hand and power trucks
iii. Industrial narrow railways
iv. Tractors and trailers
v. Pipelines
vi. Pumps
Vii .Aerial tram ways
 2. Classification of material handling equipment

3.Devices which lift and transport (combination devices)

i. Chutes
ii. Hoists with trolleys running on overhead rails
iii. Fork lift truck
iv. Crane trucks
v. Different type of conveyors
vi. Spiral chutes
vii. Spiral rollers
viii. Cranes
4.Robots
5.Automatically guided vehicles
 Material Handling Equipment I. Transport Equipment
I. Transport Equipment
A. Conveyors
1. Chute conveyor B. Cranes C. Industrial Trucks D. No Equipment
2. Wheel conveyor
1. Hand truck
3. Roller conveyor
4. Chain conveyor 1. Jib crane 2. Pallet jack 1. Manual
5. Slat conveyor 2. Bridge crane
6. Flat belt conveyor 3. Gantry crane 3. Walkie stacker
7. Magnetic belt conveyor
8. Troughed belt conveyor
4. Stacker crane 4. Pallet truck
9. Bucket conveyor 5. Platform truck
10. Vibrating conveyor 6. Counterbalanced lift truck
11. Screw conveyor 7. Narrow-aisle straddle truck
12. Pneumatic conveyor
13. Vertical conveyor
8. Narrow-aisle reach truck
14. Cart-on-track conveyor 9. Turret truck
15. Tow conveyor 10. Order picker
16. Trolley conveyor 11. Side loader
17. Power-and-free
conveyor 12. Tractor-trailer
18. Monorail 13. Personnel and burden carrier
19. Sortation conveyor 14. Automatic guided vehicle
• A block and Tackle :oldest and simplest method of lifting through vertical
distance.

Winches:Used in heavy equipment

into ships, construction equipment
in building and similar job
• Hoists:A hoist is a device used for lifting or lowering a load by means of a
drum or lift-wheel around which rope or chain wraps. It may be manually
operated, electrically or pneumatically driven and may use chain, fiber or
wire rope as its lifting medium. The most familiar form is an elevator, the
car of which is raised and lowered by a hoist mechanism. 
• Monorail: Monorail is an I-section beam
attached to the ceiling and having either a
trolley or carrier moving along it.The material
can be transferred along the beam from one
place to another.
• Cranes : Cranes are used to move materials vertically and
laterally in an area of limited length.They may be operated
hydraulically , pneumatically or electrically ,the important
types of cranes are:
1.pillar crane
2.overhead bridge crane
3.Jib crane
4.Mobile crane (crane truck)
1.Pillar crane : It may be stationary type or mobile type.It is used
for light duty and for lifting loads upto 20 tonnes.
2.Overhead bridge crane :It can be moved verically and
longitudinally.It is used in foundry ,power house ,chemical plants
and heavy fabrication indusries.
3.Jib cranes : It can be moved in circular path.It is used in lifting
and positioning jobs.
4.Grandy Cranes:It acts as auxilliary to bride crane .It is provided
with wheels and can be moved from one place to other.
• Hand trucks and wheel barrows:These are used to handle
materials inside the shops .These euqipments involve a large
amount of man power for relatively small load.
• Industrial railways: These are narrow guage rail roads.It is
cheaper to lay tracks than to pave the entire area.
• Tractors and Trailors:These are used to transport material
horizontally.Trailors can be disconnected from tractors , left
loaded and picked up by different tractors.
Cranes

1. Jib crane
2. Bridge crane
3. Gantry crane
4. Stacker crane
 Industrial Trucks

Floor hand truck

Two-wheeled Order
hand truck picking
cart
 MATERIAL HANDLING EQUIPMENT

Sit-down counterbalanced lift truck Tractor-trailer

• pipe lines:Pipe lines and pumps are used for transportation of
natural gas,and oils.
• Slides and chutes : These are used for movent of materials in
vertical and horizontal .It may be spiral and straight and is
static in nature.Chutes are common in railwayband air line
terminals for handling packages and baggages.Chutes are also
used in department stroes in spiral form to ship stock from
reserved on the upper floors to lower floors.Where the sliding
down process tends to be slow , the vibrating chutes are used
where the materials are moved downwards through
vibrations.
• Lifts:In a multistried plants material may be
lifted up and transported by lifts.Buckets or
trays can be mounted on the endless chain
running from ground floor to the top floor.The
material can be loaded on trays automatically.
• Trucks: They are used to move the heavy materials
over varying path. They are either manually operated
or power operated , high lift trucks,low lift
trucks,forklift trucks,crane trucks,auto trucks etc.
• Crane Truck: It operates in the same principle as lift
trucks.They are used for materials that can not be put
oln skids .or is not available on skids at the present
time,or ios much too heavy to handle lift with lift
trucks.
• Auto truck:Manual lifting is avoided.
• Conveyorts:They are used to move materials in either vertical
or horizontal direction between two fixed points.It can be
employed for :
1. Processing activities performed during transportation
2. workholding devices on a moving workstations.
3. A medium for providing storage.
4. Inspections of the product in transit.
Processing activities that can be performed on materials in transit
include heat treatment , baking ,cleaning , painting , drying ,
hardening and cooling.
• Types of Coveyors:
a) Roller conveyors
b) Belt conveyors
c) chain conveyors
d) Bucket conveyors
e) screw conveyors
Roller coveyors are flat , circular or spiral.They consist of rollers
supported in frames over which materials are allowed to move
.They are driven through gravity.Generally materials having flat
bottoms are moved , otherwisenboxes or pallets are used.
• Belt coveyor has power driven pulley at one end which moves
the belt continuously.
• Chain conveyor:It is supported from the ceiling and has fixed
path to travel.
• Bucket coveyor:The bucket is mounted on a chain or a belt.It
is used to move granular , powder or liquid materials.
• Screw conveyor:It is used for transmitting materials in the
form of powder or paste with application of rotating screw.For
example, feeding puverised coal into a furnace.
 r

Robotic pick and

Manual
place palletizers
palletizing
 Positioning Equipment

Positioning Equipment
Lift/tilt/turn Dock leveler
table

Ball transfer
table
 Positioning Equipment

• Rotary index table

 Positioning Equipment

Parts feeder Air film device

 Positioning Equipment

Hoist
Balancer

Manipulator
 Positioning Equipment

Articulated jib crane manipulator

Vacuum manipulator
Industrial robot
 conveyor

Wheel conveyor Gravity roller conveyor

Chute conveyor
 conveyor

Live (powered) roller

conveyor Flat belt conveyor
Chain conveyor
Magnetic belt conveyor

Troughed belt
conveyor Bucket conveyor

Screw conveyor
 Coveyor

Trolley conveyor Monorail

 Material handling Equipment

Manual pallet jack Powered pallet jack

Manual walkie
stacker
 AGV

Tow AGV
Assembly AGV

Fork AGV
Material handling Equipment
Sit-down counterbalanced lift truck
 D. Production, Planning and Control

• Types of production system

• Routing, Scheduling and Loading
 TYPES OF PRODUCTION SYSTEM
JOB ORDER PRODUCTION
– A Small number of pieces produced only once
– A Small number of pieces produced intermittently when the need arises
– A Small number of pieces produced periodically at known intervals of
time
– Characteristics
• Small production runs
• Discontinuous Flow of materials
• Long Manufacturing cycle time
• Process Layout of plant and equipment
• Skill required
• Quality of supervision
• Cost of production
 TYPES OF PRODUCTION SYSTEM
Batch production system
It is the manufacture of number of similar articles , either to meet a specific order
or to satisfy continuous demand. When the batch is terminated the plant and
equipment are available for production of similar or other products.
If the order is only executed only once , there will be less justification for providing
elaborate production aids than when the order is repeated.
Characteristics
1.Shortruns.
2.Highinvestment.
3.Skilledlabor.
4.Specific processs uper vision of quality.
5.Plant layout is process
6.Less material handling than job production.
7.Flexibility in production schedule.
 TYPES OF PRODUCTION SYSTEM

Continuous production system

It is the specialized manufacture of identical articles on which the equipment is
fully engaged.It is normally associated with large quantities and high rate of
demand.Since identical articles are produced the operation are repetitive ,
production auxiliary aids such as special tools, jigs and fixtures, inspection devices
can be advantageous.It can be mass production and also flow production.
Characteristics
1.Continuous flow of material.
2.Product layout.
3.Less material handling.
4.Relatively low skilled labor.
5.Very short manufacturing cycle time.
6.Easier supervision of quality.
7.Flexibility in production schedules.
 Production, Planning and Control

• Production is defined as a means of converting raw materials into finished

products by performing a set of manufacturing operations in a pre-
determined sequence that transforms material from a given desired
form.The transformation may be done in one or in a combination of the
following ways:
• Transformation by disintegration: one integration as input and
producing several outputs.
• Transformation by integration or assembly:using several components as
inputs and obtaining essentially one product as output.
• Transformation by service:Certain operations may be performed to
change one of the parameters which define the object.
 Production, Planning and Control
Planning: It is the important function of a manager .It is the process of
deciding what to do in the future . To plan means to think , dream , set goals
, organise , and initiate. A plan is a source of action to achieve the desired
goal. A plan is followed by action i.e. it has to be implemented .
Planning means preparing the scheme in advance before the actual work is
started. It may be defined as the pre-determination of future achievement to
meet the desired objectives. Planning begins with an analysis of the given
data on the desired target may be most effectively attained . Planning in
facts setup the standards of performance.
Before starting the production , it is necessary to decide in advanced what
to produce, how much to produce , where to produce and where to sell.
Controlling means the supervision of all the relevant operations with the
help of control mechanism that feedback the progress of the work.
Controlling is made by comparing the actual performance with the present
standards(plans) and deviations are analyzed. The control mechanism is
also responsible for subsequently and adjusting , modifying and redefining
plans and targets , in order to ensure attainment of pre-specified production
goals , in the most efficient and effective manner.
 Production, Planning and Control

Production planning and control is an essential management technique

which embrace all management decisions , plans , policies and activities
which have something to do with optimization of manufacturing
objectives.
Production planning systemizes in advance the five M’S i.e. Men ,
Materials , Machines , Methods and Money to achieve the outputs(may
be final product) which is predetermined in connection with desired profit
, market demand, jobs creation, plant capacity and its utilization.
Production control is the process of maintaining a balance between
various activities evolved during production planning thus providing the
most effective and efficient resource utilization . In other words the aim of
production control is to produce the products/items/goods of right quality
, in right quantity , at desired time by utilizing the best and least
expensive methods.
 Production, Planning and Control
Production planning and control may be defined as “the directions and co-
ordination of the firm’s resources(i.e. materials and physical facilities )
towards the achievement of pre-decided production goal in the most
efficient available way.”
 Production, Planning and Control
Objectives of PPC
1.To implement production plans by issuing orders to those who are
supposed to implement them.

2.To ensure that various inputs like men, machine , materials etc. are
available in the required quantity and quality.

3.Making efforts to adhere to the production schedules.

4.To ensure that goods are produced according to the prescribed

standards and quality norms.

5.To undertake the best and most economic production policies.

6.To introduce a proper system of quality control.
7.To ensure rapid turnover of production and minimizing of inventories of
raw materials and finished products.
 CHARACTERISTICS OF
PRODUCTION PLANNING AND CONTROL
1. It is the planning and control of manufacturing process in an enterprise.
2.Questions like-what is to be manufactured? when it is to be
manufactured? etc.
3.All types of inputs like materials,men,machines are efficiently used for
maintaining efficiency of manufacturing process.
4.Various factors of production are integrated to use them efficiently and
economically.
5.The manufacturing process is organised in such a way that none of the
work centres is either overworked or under worked.
6.The work is regulated from the first stage of procuring raw materials to the
stage of finished goods.
 Need/Importance of Production Planning and Control

For Increasing Production:- The main purpose of production planning,

function is to arrange various inputs like men, materials and machines and
integrating them for making their best use. When various factors of
production are economically used then production will certainly go up.
Efforts are made to avoid production stoppages for want of various
inputs. A production control Programme will minimize the idleness of men
and machines.

For Co-coordinating Plant Activity: - Production planning helps in controlling

plant activities. Production targets are set on the basis of sales forecasts.
The raw materials, men and equipment are arranged by keeping in view
production plans. Different production activities are adjusted as per the
plans. If production is carried out in a number of processes then their
activities are synchronized ( operate at the same time or rate)for smooth
working.
 Need/Importance of Production Planning and
Control
• For Cost Control: - It helps in controlling various costs. In the
absence of a proper production plan, the idleness of men, material
and equipment may not be noticed. Whenever performance is below
standards then corrective measures are taken to rectify it. A
properly planned system of production will help in controlling costs
by not only making full utilization of various inputs but also by
increasing output and lowering overhead expenses per unit.

• For Rationalisation of Production Activities: - An important objective

of production planning and control is also to regulate the flow of
various inputs into the production system for running it smoothly.
The system is planned in such a way that everything is done
automatically. The supply of materials and men follows the demand
for goods. The quality standards are followed in routine and sub-
standard products are discarded in the processes. The process of
entering of raw materials and converting them into finished
 PRODUCTION PLANNING AND CONTROL
• Functions of PPC
A. Planning Phase
1.Pre/Prior Planning
• Customer’s needs regarding quality,quantiity and price of the product
are of first consideration.
• Analysis of data and prepare the basic planning policy based on the
sales reports, market research , product engineering desgn of the
product , basic materials specifications, with sales forecasting , and
estimatings , development of new processes, equipment selection
and replacement policy,factory layout and work flow
– Forecasting (Estimation of future work)
– Order Writing (Preparation of work authorization)
– Product Design (Preparation of Specification)
2. Action Planning
– Process Planning and Routing
– Material Control
– Tool Control
– Loading
– Scheduling 152
 Production, Planning and Control

B.Action phase-Dispatching
C.Control phase: Data collection(Progress reporting) , Data interpretation
i.Progress reporting
a)Data collection
b)Data interpretation(explanation )
ii.Corrective action
a)Expediting(make an action or process that happen sooner or be
accomplished more quickly)
b)Replanning
Production, Planning and Control
Production, Planning and Control
 Techniques or Elements of Production Planning
and Control
• The following are the techniques of production planning and control:
A. Planning B. Routing
C. Scheduling D. Dispatching
E. Follow-up and Expediting F. Inspection
 Techniques or Elements of Production Planning
and Control
Planning

• It is the first element of production planning and control. Planning

is given an important role in every business. A separate
department is set up for this work. Planning is deciding in
advance what is to done in future. Control devices are also
decided in advance so that all activities are carried on properly.
An organizational set up is created to prepare plans and policies.
Various charts, manuals and production budgets are also
prepared. If production planning is defective then control will also
be defective. Planning provides a sound base for control.
 Techniques or Elements of Production Planning
and Control
Routing

• It is determining the exact path or routing which will be followed in

production. The stages from which goods are to pass are decided
after a proper thought.
 Routing Procedure

• Deciding what part to be made or purchased: - The product is

thoroughly analyzed to find out which parts are required for it. The
second decision is taken regarding the production or purchase of
various components. Some components may be manufactured by the
firm and others may be procured from the market. During slack periods
most of the components may be manufactured by the firm but when
industrial activity is at its peak then supplies from outside may be
contracted.

• Determining Materials Required: - The analysis of the product will

enable us to know the type of materials required for producing
various components. The right type of quality, quantity, and time
when needed should also be decided in advance.
 Techniques or Elements of Production Planning
and Control
• Determining Manufacturing Operations and Sequences: - The
manufacturing operations and their sequences can be determined from
technical experience and layout of machines. A sound and economical
operation is selected for manufacturing various components.

• Determining of Lot Sizes: - A decision has to be taken about the number

of units to be produced in one lot. If production is carried on the basis
of orders then size of the lot depends upon the quantity ordered plus
some units for possible rejections during the process.
 Techniques or Elements of Production Planning
and Control
• Determining of Scrap Factors: - There may be some scrap during
the course of manufacture. The finished products are generally less
then the units introduced at the beginning. The scrap during
manufacturing should be expected so that routing is facilitated. If
products pass through three processes and a normal scrap is 5% of
input at every stage then it will be easy to anticipate the units
entering various processes and arrange equipments, and
manpower
 DISPATCHING

• It is concerned with starting the process and operation on the basis

of route sheets and schedule charts.
• "Dispatches put production in effect by releasing and guiding
manufacturing order in the sequence previously determined by route
sheets and schedule.”
 Functions of dispatching

1.Moving of materials from stores to machines and from operation to

operation.
2.To distribute machine loading and schedule charts , route sheets , and
identification tags for each work order.
3.Issuing of tools to production departments.
4.Issuing of job orders.
5.Recording of time taken.
6.Ensuring necessary changes.
7.Having proper liaison with routing
 IMPORTANT DOCUMENTS

1.Material requisitions
2.work order
3.control sheet
4.Internal delivery note
5.Tool and gauge ticket
Techniques or Elements of Production Planning
and Control
Follow-up
This is the last function of production control. It expedites the movement of
materials & production process as a whole. It looks into determination of the
present situation expediting the department lagging behind & removing the
bottleneck in the production line. Once production commences(starts) it is
necessary to check that it is proceeding according to plan. Before dispatching new
orders to the manufacturing department the progress of outstanding orders must
be known. There are certain factors over which the manufacturing department has
no control & hence follow-up is necessary. The production schedule is likely to
suffer even if slight irregularity is caused by one or more of these factors. The most
important factors causing disturbances in production schedule are: excessive
labour, absenteeism, machine breakdown, errors in drawings, strikes, late delivery
of materials etc. the function of follow-up is to maintain proper records of work,
delays & bottleneck. Such records can be used in future to control production.
 Techniques or Elements of Production
Planning and Control
• Follow-up Documents:
Follow-up
Follow-up documents are prepared with the objective to identify the
products. They also help to check completion dates with due dates. They
vary greatly according to the type of production. These documents
include the following information:
1. Labels with part numbers.
2. Order numbers mentioned on the article.
3. Number of products or batches of products.
4. Daily progress sheets showing the position of every order in process.
5. Reports showing orders behind schedule.
6.Advertisements
 
 Techniques or Elements of Production Planning
and Control

• Analysis of Cost of the Product: - The determination of cost of products

may be the duty of department but still production department makes
records of direct materials, labour, direct and indirect expenses. These
estimates are greatly useful to costing department also.

• Preparation of Production Control Forms: - The carrying out of routing

will be facilitated if forms are prepared to collect information for
control purpose. The requirements are: job cards, inspection cards,
move tickets, labour cards, tool tickets, etc.
 1. Types of production system

Production system
A collection of work stations that perform operations such as manufacturing ,
assembly , inspection , finishing , testing , etc. to create products
Production system design
The general arrangement of workstations, dictating the pattern of flow of the
products, and the resource requirements at each workstation
 1. Types of production system
Workstation
• A collection of machines/operators that perform the same operation for the
same set of products
 A machine/operator may be:
 An automated machine
 A machine operated by a human
•A human operator performing a manual operation
The production systems to be addressed are discrete part production systems
• Each part produced is a distinctentity
-Vehicle , computer , hamburger,etc.
• This is in contrast to continuous goods production such as fluids , powders ,
etc. Often in the domain of chemical process engineers
Thus, the product being produced will be referred to generically as a part or
job
 1. Types of production system

The different types of production system are

1.Job production
2.Batch production
3.Continuous production
4.Computer aided manufacturing
5.Group technology
6.Flexible manufacturing
7.Just in time manufacturing
8.Computer integrated manufacturing
 2. Routing, Scheduling and Loading

Routing
This the process of determining the sequence of operations to be
performed in the production process .Routine determines what work
must be done ,where and how?
Routing information is provided by product or process engineering
function and it is useful to prepare machine loading charts and shedules.
OR
Routing may be defined as the selection of the path which each part of
the product will flow , while being transferred from raw materials to
finished products. Path of the product will also give sequence of
operations to be adopted while manufacturing. It is an important function
of the production planning and control because it has direct bearing on
the time as well as ‘cost ’of the operations.
 2. Routing, Scheduling and Loading

In fact, production planning starts with routing which includes the following activities:
• An analysis of the article to determine what to make and what to buy
• Determining the manufacturing operations and their sequence
• An analysis of cost of the article
• Determination of scrap factors
• Determining the quality of the product to be manufactured.
• Determining the men, machines & materials to be used;
• Determining the place of production.
Routing has the following objectives:
1. It determines the sequence of manufacturing operations.
2. It ensures the strict adherence to the sequence so determined.
3. It strives for the best possible & cheapest sequence of operations.
4. It influences the design & layout of the factory building with a view to get quick &
better production results.
 2. Routing, Scheduling and Loading
Routing procedure
1.Analyze the product
The finished product is analyzed and broken into number of components
required for the product
2.Make and buy decision
It means to decide whether all components are to be manufactured in the
plant or some are to be purchased from outside. Make or buy decision
depends upon the work load in the plant already existing , availability of
equipment , labor and economy considerations.
3.Raw materials requirements
• A part list and bill of materials is prepared showing name of the part ,
quantity , material specifications , amount of material required etc.
4.Operations through which raw materials are to undergo are listed (in a
proper sequence).
 2. Routing, Scheduling and Loading
5.Machines are to be used , their capacity is also listed.
6.Time required for each operation and subassemblies is listed.
7.The lot size is also recorded
Advantages of routing
• Production of goods according to schedule.
• scientific layout of the plant.
• Efficient use of available resources.
• Reduction of manufacturing costs.
• Improvement in quality and quality of the product.
• Well chalked out division of labour.
 2. Routing, Scheduling and Loading

Routing sheet includes:

• Operations required and their desired sequences.
• Machine or equipment to be used for each operation
• Estimated set up time and operation time /piece (standard time).
• Tools,jigs and fixtures required for the operations.
• Detaied drawings of the parts,sub assemblies and final assemblies.
• Specification,dimensions,tolerance,surface finished and quality
standards to be achieved.
• Cutting variables
• Packing and handling instructions during movements of the of parts
Route sheet
 2.Routing, Scheduling and Loading
Scheduling
It involves fixing priorities for each job and determining the
starting time and finishing time for each operations, the starting
dates and finishing dates for each part , subassembly and final
assembly.Scheduling lays down a time table for
production,indicating a total time required for manufacture of
the productand also the time required for carrying out the
operations for each part on each machine or equipment.
OR
It may be defined as the assignment of work to the facility with the
specification of times and the sequence in which the work is to be
done.‘ The determination of time that is required to perform each
operation and also the time required to perform the entire series as
routed in scheduling.
 2.Routing, Scheduling and Loading

Objectives of Scheduling:
1. To prevent unbalanced use of time among work centers and
departments.
2. To utilize labour such that the output is produced within established
lead time or cycle time so as to deliver the products in time and
complete production at minimum total cost.

Factors affecting scheduling

A .External factors
1.Customer’s demand.
2.Customer’s delivery date.
3.Stock of goods already lying with dealers and retailers
 2.Routing, Scheduling and Loading

B.Internal factors
1.Stock of finished goods within the firm.
2.Time interval to process finished goods from raw materials
3.Availability of machines.
4.Availability of manpower.
5.Availability of facilities.
6.Feasibility of economic production runs
 2. Routing, Scheduling and Loading
Loading:
Facility loading means loading of facility or work centre and
deciding, which job to be assigned to which work centre or machine.
Loading is the process of coverting operation schedule into practice.

Machine loading
It is the process of assigning specific jobs to machines, or work
centres based on relative priorities and capacity utilisation.
Machine load charts are prepared to assist in production scheduling as
routing. Machine load charts show the amount of work(in terms of
hours,days and weeks) that has been assigned and scheduled to each
machine,groups of identical machines or shop departments.
Objectives of loading
•To plan new work order so on the basis of space capacity available.
•To balance the work load in a plant.
•To maintain the delivery promises.
•To check the feasibility go production programs.
They are also used during plant layout for balancing capacity and a
uniform flow of work.
 2. Routing, Scheduling and Loading
Dispatching
Dispatching is concerned with starting the processes & operations of
production. Dispatching is based on the route sheets & schedule sheets.
Dispatching provides the necessary authority to start the routed & schedule
work. It is similar to putting oneself into the train after deciding the route of
the particular train & the destination.
Functions of dispatching:
1. To ensure that the right materials are moved from stores to machines & from
operation to operation.
2. To distribute machine loading & schedule charts, route sheets, operation
instruction cards & identification tags for each works order.
3. To instruct tools department to issue the right tools, accessories & fixtures in
time.
4. To authorize the work to be taken in hand as per the predetermined dates & time.
5. To direct inspection at various stages of production for inspection report.
6. To maintain proper report of the various subsidiary orders issued with each
production order, for filing & reference.
7. To inform the follow-up section that production is starting.
2. Routing, Scheduling and Loading
• Follow-up
This is the last function of production control. It expedites the movement of
materials & production process as a whole. It looks into determination of the
present situation expediting the department lagging behind & removing the
bottleneck in the production line. Once production commences it is necessary to
check that it is proceeding according to plan. Before dispatching new orders to the
manufacturing department the progress of outstanding orders must be known.
There are certain factors over which the manufacturing department has no control
& hence follow-up is necessary. The production schedule is likely to suffer even if
slight irregularity is caused by one or more of these factors. The most important
factors causing disturbances in production schedule are: excessive labour,
absenteeism, machine breakdown, errors in drawings, strikes, late delivery of
materials etc. the function of follow-up is to maintain proper records of work,
delays & bottleneck. Such records can be used in future to control production.
 2. Routing, Scheduling and Loading

Production control
Production control is the function of management which plans ,
directs and control the material supply and processing activities of
an enterprise ; so that specified products are produced by specific
methods to meet an approved sales programs. It ensures that the
activities are carried in such a way that the available labor and
capital are used in the best possible way.
1.Progress reporting
a.Data collection.
b.Data interpretation.
2.Corrective action
 Product Research, Development and Design
The PDR&D process is a cycle of continuous improvement over time with iterative
feedback and recurring input from development team members as well as executives,
sales and marketing groups, and production teams. The process involvesfour stages:
product idea generation; product selection; product development; and launch (Figure
1).
Product Research, Development and Design

The growing productivity of industry is the result of technological

progress made possible by research and development. The
research may be of two types:
a.Pure Research
b.Applied Research
Pure research examines nature’s secrets and attempts to find out
why and how certain phenomena come into being. Pure
research may be thought of as uncommitted research to advance
the boundary of knowledge but with no thought being given to
practicality, utility, or specific commercial applications to the
project.
It is concerned with discovering new facts and to learn more
accurately about characteristics of known facts, without any
particular thought of its immediate practical utility.
 Product Research, Development and Design

• Applied research deals with solving problems that will have a direct
bearing(relation) on product utility , consumer demand , and the like.
Applied research is usually aimed at solving a particular problem
which will increase the potential of a firm.
In general, research departments are usually expected to perform the following
important functions:
1. Improve current products
2. Develop new products
3. Protect the company’s patent position
4. Plan for the future
5. Test products
6. Give scientific advice
7. Evaluate diversification possibilities
8. Help evaluate scientific markets
Product Research, Development and Design

Primary aims of research and development

i. To preserve profitability of the firm’s current investment.
ii. To protect the firm from technological obsolescence.
iii. To insure success in the firm’s primary field of business.
iv. To reduce the cost of production and increase productivity to face
the competition in the market.

Objectives of Applied Research

•Development in Materials
•Development in Energy and Fuel
•Development in Processes
•Development in Products
•Development in Scientific Management
 Product Research, Development and Design
Product development
Product development involves design , redesign and fabrication of new
or modified product and then testing it to find its usefulness.
Product development is a sequential decision process.  It's a series of decisions,
not one.  It is key, therefore, to concentrate attention on the precise new product
decision at hand, and think through the market research and creative tools
needed for that stage.
Product development is carried out after applied research which follows pure
research. Development is the work contributing towards improvement in the
existing knowledge by way of improved ideas , systems , techniques etc.
Product development is essential in order to:
1. Meet changing needs of customers( to provide the products the market demands
with time).
2. Adjust the variation in quantity required.
3. Manufacture improved and low cost products, change the prices which the
customer is willing to pay as well as under conditions that it may have net profit .
4. Maintain (one’s) sales position and net profit ( to face competition in the market).
 Product Research, Development and Design

Product development procedure

1.Venture new product ideas
2. Idea Screening
3.Concept development
4.Product analysis
5.Product design and development program.
6.Test marketing.
7.Commercialization
 Product Research, Development and Design
Product development procedure
1.Venture new product ideas
a. Imitation.
b. Adaptation.-developing an improved product for an already existing
in the market.
c. Invention(research and development)-involves a lot of money ,
time ,risk of failure or unsuccess in the consumer market.
d. Other sources: some new ideas may be obtained from the following
sources:
• Dealers , customers
• By advertising , asking people to send their ideas and announcing
prizes for the best ideas.
• Success stories of friend/relative ,experience of other manufactures.
• Chances of producing substitute of an article for which there is a good
demand .
• Internal resources for new ideas.
Product Research, Development and Design
Types of Product Ideas
• Resource base ideas:(1)Industries based on mineral , agriculture ,
forest resources(2)waste based products such as agro waste, wood
waste and metal waste
• Linkage related ideas i.e. Industrial based on substitution –products
which are either obtained from outside , other regions or the country
at large
• Export – Import related ideas
• Market growth ideas-as a result of increased population ,
purchasing power , change in fashion , improved standard of living
etc.
• Special Product ideas-foreign collaboration , skill/ knowledge base
products, product based on institutional requirements etc.
Idea screening: Idea Screening (poor ideas are dropped and only the most
promising , feasible and profitable ideas are selected)
Screening consists of a preliminary evaluation whether the idea has
possibilities and should be further pursued , or whether it should be
dropped, In this phase of preliminary evaluation , question such as the
following should be asked about the product:
a. What is the approximate market for this new product in units or and in
dollars?
b. Can this product be sold by the existing sales force , dealers?
c. Are any difficulties foreseen in producing e.g. additional
equipment ,new process,unusual skills, costly operations?
d. Are there any important patents,licensing,agreements, or other
restrictions which effects either manufacturer or sales of this product?
e. Will there be any serious difficulty in obtaining raw material,
personnel and so on?
f. How much money will be needed for the production and distribution
this item?
g. Can financing be obtained and a reasonable cost?
h. What is the estimated cost , production cost , selling price and gross
margin?
i. What effect will production and sales of this item have existing
suppliers, consumers, employees, investors, and management?
j. Are there any unusual features inherent in this situation that need
special analysis?
 Product Research, Development and Design

Concept development :(develop ideas into mature product concepts )

All ideas selected after preliminary investigation (screening ) are subjected to
detailed investigation and analysis. The purpose is to develop ideas in to
mature product concepts, which possess utility and marketed profitably.
Product analysis:
a. Marketing aspects
b. Product characteristics. (functional , operational , durability and reliability,
aesthetic aspects)
c. Economic analysis.(profit , break even analysis)-increase sales price by
increasing the profit per unit , reduce cost by reducing scrap , wastage and
maximum utilization of resources
d. Production aspects.
5.Product design and development program.
6.Test marketing.
7.Commercialization.
Product Research, Development and Design
Product design
Product design incorporates features desired by the customers as well as
the producers to make manufacturing easier and faster.
It is necessary to design the product before starting its manufacture.
When a product idea is conceived and then developed to the point at
which it shows itself to be both technically and commercially viable , it is
considered how the product should be made. Design is the conversion of
knowledge and requirement into a form , convenient and suitable for use
or manufacture.
Product design a specialized field of engineering has two basic aspects:
1. Functional design
It should serve the purpose for which it is designed.
2.Production design
It is concerned with the economy of production
 Product Research, Development and Design
• Technical product development:
• Test marketing
This is the critical stage where the worth of the original product idea
and the judgement about its feasibility proved or disproved .Sample
products are market tested to learn how consumers react to the
product’s features , its performance and its marketing program
including branding , packaging , price and distribution. In adittion
faults , and flows in the design of the product as well as ways it is
made are studied. When the final agreement is reached on the
exact specifications for the product, the design is frozen i.e. on
additional design changes are made. The product is then ready to
be produced.
 Product Research, Development and Design

Technical product development:

Commercialization
• This is the final step in the series and is the one with which we are most
familiar. Commercialization consists of all the actions involved in full
scale production of the product , advertising , selling the product and
pledging that the company with its resources will stand behind and
guarantee the new product.

• Once the test marketing gives a green signal the company can undertake
the full scale manufacture , considering the necessary modifications. The
marketing management can then launch a full fledged advertising and
promotion campaign for distribution of the product in the entire market
 Product Research, Development and Design
Product development principles
The three S’s (Standardization ,Simplification and Specialization) are at
the root of any economic analysis of product design.
• Webster’s Dictionary defines a standard as “something that is set up and established
by authority as a rule for the measure of quantity, weight, extent, value, quality, or
time.”
Or
• Standard is a criterion used for comparison of measurement, quality practiced over
period of time and established by authority.
Standardization
The establishment of standards for the product and the coordination of various
industrial factors to comply with these standards and their maintenance for a
certain period during which such standards is called is called ‘Industrial
standardization”.
or
It is the process of defining and applying the conditions necessary to ensure that a
given range of requirements can normally be met with a minimum variety and in a
reproducible and economic manner on a basis of the best current technique.
Product Research, Development and Design
Product development principles
 Product Research, Development and Design
Advantages
1.It reduces complexity of manufacturing system.
2.Reduced investments in stocks and reduced inventories.
3.Less set up costs.
4.Lesss skill is required.
5.Manufacturer can gain confidence of the customer by
introducing and maintaining confidence.
6.PPC be comes easier.
7.Better inspection and quality control.
8.It helps in the process of interchangeability of products.
9.the repair and maintenance of standard goods/products is
quite easy, simple and less costly.
10.since perfection is possible only with practice and repetition
products which are standardized will be more satisfactory and
reliable than those specially manufactured.
 Product Research, Development and Design

Disadvantages
1.It reduces the variety of products to be offered to consumer.
2.Too much standardization has an adverse effect on the efficiency
and morale of the workers.
3..Due to monotonous work the spirit of challenge and initiative
vanishes with the passage of time.
4..Difficult to introduce new models..
5.For small scale enterprises standardization may not be
advantageous.
6.Changes in consumer taste may affect sales volume.
Product Research, Development and Design

Simplification is the process of reducing the variety of products

within a definite range . In this case we try to cut down the range of
products their sizes and types . so the use of extra materials in
manufacturing of the products is eliminated and the complex
technique of manufacturing also simplified.
Advantages
1. Lower the production costs.
2.Efficiency of production process increases ; more productivity.
3.Quick delivery and after sales service.
4. Better inventory control.
5.Simplifies inspection and control.
6. Reduction in storage spaces.
7.Less overheads and handling expenditure.
Product Research, Development and Design
Specialization means concentrating efforts on particular field of
action or towards a specific attempt. Thus it is very much related to
expert knowledge and skill . The application of specialization
depends on type of products being manufactured , processes
used ,function and type of the market apart from usual parameters.
Advantages
1.Lowers down the cost of finished products.
2.Increase in output and reduction in per unit cost of production.
3.Saving in purchase of raw material and improvement in quality of the
finished product.
4.The firm can afford to carry out research and development for further
improvement.
5.Workers achieve a high skill and proficiency.
Disadvantages
1.Specialized labour and equipment are not flexible.
2.specialization may result in monotony.
 Process planning
Process can be defined as a method of converting the raw material into
finished products which possesses utility or which can be sold in the
market.
The various manufacturing process are
1.Forming processes.
2.Moulding processes.
3.Machining processes.
4.Assembly processes.
 Part
• Unit
• Sub - assembly
• Sub – assembly of the first order
• Sub – assembly of the second order
• Types of Assembly
– Fixed assembly
– Line assembly
• Assembly Chart
 Process planning

 Finishing Processes

 Transport Processes

• Process planning is the systematic determination of method or

process by which the product is to be manufactured
economically and competitively the limits of design
consideration(specification) laid down . It consists of selecting
and specifying processes , machine tools and other equipment
to convert raw materials into finished product.
 Process planning

• Factors to be considered
– Functional requirement of the product
– Volume of output
– Necessary operations and their sequence
– Tools and equipments requirements
– Estimated manufacturing cost
– Requirements of tools, labor
 Process planning

• Functions of Process Engineering

– Parts to be purchased and manufacture
– Most economical manufacturing Process
– Sequence of operations
– Selection of Blank sizes of raw materials
– Material list for purchasing
– Order for purchase of equipments, machine tools
– Tooling and gauges
– Stages of inspection and devices
– Kind of labor
– Time standards of performance of the job
– Estimate cost of tooling and equipment
– Changes necessary to ease manufacture or reduce cost
 Process planning
• Prerequisites of Process Planning
The following information is necessary for process planning:
– Working drawings
– Assembly Drawings
– Part Lists
– Annual output
– Number of components for each product
– Accuracy and Surface finish
– Material and need for its treatment
– Equipment data
– Data on cutting fluids
– Available stock sizes
– Data on cutting tools , cutting conditions , holding and setting
times
 Process planning
Steps in process planning procedure
1.Analysis of the product print and specifications.
2.Improvement of the specifications.
3.Make or buy decision.
4.Selection of basic manufacturing process.
5.Determine the sequence of operations.
6.Combine the operations.
7.Prepare the list of raw materials.
8.Selection of the machine tools or equipments
9.Inspection
10.Requirements of tools , gauges etc.
11.Labour requirements
12.Time standards
13.Cost of production
14.Prepare the operation sheet and route sheet
 Process planning

Factors affecting process planning.

1.Size and form of raw materials.-Selection of raw material
2.Processing method.
3.Choice of plant layout for deciding sequence of operations
4.Capacities of machine tools.
5.Tolerance and surface finish.
6.Surface finish.
7.Quantity to be manufactured
 Process planning

• Contents of a Process Plan

A process plan should contain those items which clearly show
how it is possible to solve effectively the problem at hand .The
items to be included in process plan are:
– An identification of the purpose of the process(Name and
numbers..)
– List of operations required for each component
– Specification needed to make each operation conforming to
the principle of interchangeable manufacture and quality
control-(locating surfaces and clamping areas on the work-
piece….)
– Specification of the methods, machines, tools and equipments
to produce the required quantity and quality of the component
at the lowest cost(Description of operation-operation sheet…)
– Specification of performance expected from each
operation(estimated cycle time…)
 Process planning
Make or buy decision
The decision of make or buy depends upon the following:
1.Volume required.
2.Economic advantage (Cost consideration)
3.Life of the product.-for short life –small lot size
4.Quality considerations.
5.Degree of product standardization.-screw, nuts , bolts should be
purchased
6.Degree of manufacturing standardization.-expensive parts should be
purchase from the specialized industries …tyres , crankshaft ,
bearings etc.
7.Emergency.
8.Seasonal variation.
9.Reliability of supplier.
10.Sub-contracting.
 Process planning
Process selection
There are many production processes , moreover , apart or a component
can be manufactured by two or more processes . The process engineer
should select a process that will be most suitable and economical for the
purpose.
The following factors should be considered for selection of process:
1.Quantity to be produced.
2.Requirement of the product.
3.Utilization of existing equipment.
4.Minimum idle time.
5.Less scrap.
6.Flexibility
7.Elimination of unnecessary operations
8. Safety
9.Economy
10.Skill required
 Process planning

Steps in process selection

1.Establish the process objectives.
2.Collect all the facts about the problem.
3.Plan alternative process.
4.Evaluate alternative process.
5.Establish as a standard process
 Operation planning
• Operation Planning : It is essential to establish operation sequence for a new
product or for new component, for cost estimating , plant layout and design
propose and also for the guidance of workers the process planner prepare the
operation sequence .
Casting before machining , machining before hardening , drilling before tapping
etc.
The operations are grouped into the following basic classes:
– Basic Process Operations: to give material to its initial shape prior to
process being planned i.e casting , forging , rolling etc.
– Principal Process Operations : includes all types of manufacturing
e.g.machining , forming , casting , assembly(soldering , brazing , welding
etc.
– Major Operations
• Critical Operations –critical area(close tolerances ,surface condition
and their relationship to other area) for locating and measuring of w/p
• Secondary Operations-no special efforts must be made i.e. drilling and
tapping
• Qualifying Operations-preliminary step(casting and forging)-out of
rough-qualifying locating surfaces prior to accomplishing process critical
area
• Re - qualifying Operations-re-establish shape before other operation i.e.
relief of casting stresses, warp or distortion control ,allowance
– Auxiliary Process Operations-heat treatment , finishing
– Supporting Operations-quality control , inspection , handling ,packing
 Process planning

Operation planning:
For establishing the operation sequence , the following
information is necessary:
1.List of available machines.
2.List of available general purpose tooling
3.Capacity of machine/equipment
4.Machine load chart
5.Plant lay out
6.Standard data
 PROCESS PLANNING STEPS
Sequence of operation
• Study the overall shape of the part. Use this information to classify
the part and determine the type of workstation needed.
• Thoroughly study the drawing. Try to identify every manufacturing
features and notes.
• If raw stock is not given, determine the best raw material shape to
use.
• Identify datum surfaces. Use information on datum surfaces to
determine the setups.
• Select machines for each setup.
• For each setup determine the rough sequence of operations
necessary to create all the features.
 PROCESS PLANNING STEPS
Sequence of operation
• Sequence the operations determined in the previous step.
• Select tools for each operation. Try to use the same tool for several
operations if it is possible. Keep in mind the trade off (act of
choosing) on tool change time and estimated machining time.
• Select or design fixtures for each setup.
• Evaluate the plan and make necessary modifications.
• Select cutting parameters for each operation.
• Prepare the final process plan document.
 Operation planning
• Operation sheet (process sheet):
After deciding the sequence of operations , it is necessary to prepare
operation sheet.
It will vary for different industries. It includes the following details:
1.Information concerning the components , its name and drawing
2.Information concerning the blank (size and stock)
3. Description of operation in a proper sequence and locating points of each
operation.
4.Type of machine tools ,auxiliary tools , and other manufacturing equipment
used for each operation.
5.Data on jigs and fixtures and tools(code numbers).
6.Inspection devices and limit gauges used.
7.Cutting variables data (Cutting speed ,feed , depth of cut )
8.Elements of standard time such as setting time, handling time and
machining time.
9.Job rating of the worker for each operation.
 Process planning
Sequence of operation

The following example illustrates the various steps involved in turning a pin
as shown in fig.
 Process planning
Sequence of operation

b.Facing
 Process planning
Sequence of operation
Process planning
 Process planning
Sequence of operation
 Process planning

Plant capacity
• Plant capacity is the rate of output of a plant i.e. the maximum
number of products manufactured in a given time (per year , per
month or per day per shift).In order to translate capacity into
workable units , it is necessary to understand two factors.
• Plant efficiency factor= (useful productive time)/(total working time)
• It range generally from 0.50 to 0.95.
• Scrap factor=(No. of defective units)/(total no.of units)
• This scrap factor may vary from 4 to15%.
 Process planning
Individual machine capacity
It is the out put of that machine for a specified method of operation.
In order to estimate number of machines required to meet the
determined production capacity the following steps to be taken :
1.The operation cycle time is calculated .
The cycle time =Operation cycle time loading + unloading time +
machining time + inspection time
2.Weekly load=(operation cycle time/piece)xNo. of pieces.
3.No. of machines required = weekly load / weekly working hours
For example, If there are 48 working hours per week the number of
machines required to meet the demand can be found as the
ratio machines required=(Cycle time Xvolume of production per
week)/48 hours per week
If the cycle time is T minutes , the theoretical output per machine
would be Q=60/T units per hour
 Process planning

Methods of reducing cycle time

Cycle time (T)=Preparation time + machining time + Inspection time
+ Idle time (if any)
The cycle time can be reduced by following ways :
1.Reducing the idle time by changing the sequence of operations
2.Combining as many operations as possible
3.Eliminating the delays at the end of each cycle
4.Eliminating the bottleneck operations through line balancing
 Process planning

Machine selection
The following factors should be considered while selecting a
machine for performing a definite operation:
1.Machine capability(tolerance , accuracy and surface finish)
2.Capacity of the machine(special purpose or general purpose)
3.Range of machine (and size and shape of the workpiece)
4.Machine available
5.Cost consideration
6.Sequence of operations
 Capacity planning and process planning
• The following capacities a work cycle .
I. Find the total time ,theoretical output obtained from the machine.
II. Calculate the number of machines required to produce the three components
from the information given below.
S.No. Activity Time (min)
1 Unloading 0.25
2 Inspection 0.35
3 Loading job on machine table 0.40
4 Machine operation time 0.90

Components A B C

1.Setup time 25min 55 min 45 min

2.Operation 1.75 3 2.1
time(min/piece)
3.Batch size 350 550 575
4.Production per month 2450 4400 2875
 Capacity planning and process planning
• Solution:
I. Total cycle time(T)=0.25+0.35+0.40+0.90=1.9 min
II. Out put of the machine = 60/T =60/1.9 =31.5=31units
III. Number of machine required
Assume that the plant works on the single shift basis per day of 8 hrs
each. The total time required for the processing the component is given
by :
The total time required =Set up time + operation time
 For component A,
Total time required =set up time + operation time
=[(production quantity/Batch size)x(setup time/Batch)]+operation time
=[(2450/350)x(25/60)+(2550x1.75/60)]=74.374 hrs.
 Capacity planning and process planning
• For component B,
Total time required=[(4400/550)x(55/60)+(4400x3/60)]=227.33 hrs
• For Component C,
Total time required =[(2875/575)x(45/60)+(2875x2160)]=104.375 hrs
Total time required to process all three the components=74.374
+227.33+104.375=406.079 hrs.
The total number of hours available( assuming 25 working days) per
month=8x25=200 hrs.
Number of machines required=Total number of machine hours
required/Total number of hours available=406.079/200=2.030=2machines
Assuming a machine efficiency of 85% required and operator efficiency of
75%,the number of machine required as:
Total hour required per month=406.079/(0.85x0.75)=636.98 hrs.
Number of machine required=636.98/200=3.18=3
 Process planning
• Q. Calculate the number of machines required to manufacture three
components from the following data:
The plant is working for 8hrs. Per day in one shift.
S.N. Components A B C

1. Setting time per lot. 25 min. 55 min. 45 min.

2. Operating cycle 1.75 min 3 min. 2.1 min.

time/piece

3. Lot size 350 550 575

4. Production per month 2450 4400 2875

 Process planning

• Machine occupancy time for the component A for one month=setup time
+ operation time={(2450/350)x(25/60)}+(2450x1.75/60)=74.374 hrs
• Machine occupancy time for the component B
=(4400*55/550*60)+(4400*3/60)=227.33 hrs.
• Machine occupancy time for the component C
=(2875*45/575*60)+(2875*2.1/60)=104.375 hrs.
Total number of hours available per month=8*6*4=192 hrs.(assuming six
working days per week)
Total machine hours required=74.374+227.33+104.375=406.079 hrs
Therefore , No. of machines required=(total machine hrs. required)/(No.
of working hours available)
=406.079/192=2.115=3
 Chapter 3 LOADING AND SCHEDULING TECHNIQUES

Course outline
 Gantt chart
 Critical path method (CPM)
 Program evaluation and review technique (PERT)
 Loading and scheduling techniques

Scheduling can be considered as a typical queuing problem with

following criteria:
i. Each job joins the end of the queue with first in first out priority.
ii. Job/activity with the longest duration always goes first.
iii. Jobs may be ranked according to earliest delivery date.

The schedules based on above criteria can be prepared with the help
of following techniques:
1. Gantt chart
2. CPM
3. PERT
 1. Gantt chart
• Prior to PERT and CPM ; scheduling technique mainly consisted of Gantt
Charts. Gantt Chart were introduced by Henry Gantt around 1900 AD.
Gantt chart still used on many projects of moderate magnitude.
• The Gantt chart is actually a modified bar chart in which horizontal bars
are drawn for each activity in proportion to the time required for
completing it. A cursor attached to the Gantt chart can be moved across
the chart to compare between actual progress and planned work till any
particular date.
• The Gantt chart displays the following information:
• 1.Plans for future
• 2.To total work in hand and their schedule
• 3. A cursor attached to Gantt chart can be moved across the chart to
compare between the actual progress and planned work till any particular
date.
• 4.Part performance till date.
 1. Gantt chart
• The basic types of Gantt charts are used:
• i. Order/activity control chart.
• ii. Machine load chart
• i.) Order control chart:
• In this the time is marked along the horizontal axis . Schedule period of
work is shown by firm line . The actual progress in work is shown in dotted
line below firm line
Example of bar chart
Gantt progress chart
Gantt progress chart
 How to prepare a Gantt chart
• The Gantt chart consists of two axes . On X-axis , generally , time is
represented . This may be in the units of years , months , weeks , days ,
hours or minutes . On Y-axis , various activities or tasks , machine centres
or facilities are represented.
• Example : Let us consider two machines and six jobs . The processing time
(in hour) for each job is given below . Assume that process sequence such
that machine M1 is need before M2 . We have to draw a Gantt Charted:

Jobs J1 J2 J3 J4 J5 J6
Machine M1 3 5 4 7 1 3
Machine M2 2 6 2 1 4 6
 How to prepare a Gantt chart

The Gantt is as follows:

 1. Gantt chart

In this fig. the cursor placed at the date indicates that order A-123 is going as per
schedule . The order no .B -245 started before schedule time. The order no. C-
601 started on time due to some reasons has got delayed.
 1. Gantt chart
ii)The machine load chart:
In this chart time is marked along the horizontal axis and various machines are listed
along the vertical axes.

Machine 2 started work on order B-246 before the schedule date and
the progress is very good.
Machine 1 which complete the order A-123 in time but could not taken
up the order.C-601.
 1. Gantt chart
Advantages
• A picture of plan and its comparative progress
• Time required for each activity for its completion.
• Dates on which different labors, materials and equipment are needed.
• Progress of each item
• Different activities to be performed.
• Bar chart has also advantage of preparing it for different levels of
authority as per requirements.
Limitations
• with any modifications in schedule , it is very difficult to incorporate the
corresponding changes in Gantt chart.
• Showing many activities become complicated.
• Not able to show interrelationships & interdependencies
• Critical activities are difficult to identify
• Floats are not known.
• Not useful for time uncertainty projects
 2. Critical Path Method (CPM)

The Critical Path Method or Critical Path Analysis, is a

mathematically based algorithm for scheduling a set of project
activities.
• It is an important tool for effective project management .
• It is commonly used with all forms of projects, including
construction, software development, research projects, product
development, engineering, and plant maintenance, among others.
• Any project with interdependent activities can apply this method of
scheduling.
CPM
CPM
CPM
CPM
 2. Critical Path Method (CPM)

The essential technique for using CPM is to construct a model of the

project that includes the following:
• A list of all activities required to complete the project (also known as
Work Breakdown Structure)
• The time (duration) that each activity will take to completion
• The dependencies between the activities.
 2. Critical Path Method (CPM)

CPM calculates
• The longest path of planned activities to the end of the project
• The earliest and latest that each activity can start and finish without
making the project longer
• Determines “critical” activities (on the longest path)
• Prioritize activities for the effective management and to shorten the
planned critical path of a project by:
• Pruning critical path activities i.e.  shorten the planned critical path 
• “Fast tracking" (performing more activities in parallel)
• “Crashing the critical path" (shortening the durations of critical path
activities by adding resources)
 2. Critical Path Method (CPM)
Definitions
Event : It is start or completion of task . e.g. Meeting started , meeting
completed
An event is a specific instant of time which indicates the beginning or end of
the activity. Event is also known as a junction. It is represented by a circle
and the event number is written within the circle. Unlike activity, an event
consumes neither time nor resources.
Activity :It is work or job.
Every project consists of number of job operations or tasks which are called
activities. An activity is any time or resource consuming part of the project
which has definable start and finish. It may be process such as moulding,
finishing, cutting etc.; a material handling or material procurement cycle.
An activity is represented by an arrow in the network diagram. It begins in
start event which is also known as ‘tail event’, and ends in completion event
or ‘head event’.
 2. Critical Path Method (CPM)

• Earliest Start Time (EST): It is the earliest possible time at which an

activity can start, and is calculated by moving from first to last
event in the network diagram.
• Earliest Finish Time (EFT): It is the earliest possible at which an
activity can finish.
• EFT = EST + duration of that activity
• Latest Start Time (LST): It is the latest possible time by which an
activity can start without delaying the date of completion of the
project.
• LST = LFT – duration of the activity.
• Latest Finish Time (LFT): It is the latest time by which the activity
must be completed so that the scheduled date for the completion of
the project may not be delayed. It is calculated by moving
backwards i.e. from last event to first event of the network diagram.
 2. Critical Path Method (CPM)
Float (slack): It is the amount of time that a task can be delayed
without causing a delay to:
• subsequent tasks (free float = EFT - EST)
• project completion date (total float = LST – EST = LFT - EFT)
Critical path: It is the sequence of activities which add up to the
longest overall duration. It is the shortest time possible to
complete the project. Any delay of an activity on the critical
path directly impacts the planned project completion date (there
is no float on the critical path). A project can have several,
parallel, near critical paths. An additional parallel path through
the network with the total durations shorter than the critical
path is called a sub-critical or non-critical path.
Critical activity: It is an activity with zero float
• Resource leveling: It is an iterative process of assigning crews
to activities in order to calculate their duration
 2. Critical Path Method (CPM)
Steps in CPM
1.Break the project into various activities.
2.Arrange all the activities in a logical sequence considering the pre-
operations , post operations and concurrent operations.
3.Construct the arrow diagram.
4.Number all the events and activities.
5.Mark the activity times on the arrow diagrams.
6.Calculate EST,LST,EFT,LFT for each activity.
7.Tabulate various times and mark EST and LFT.
8.Calculate total float and for each activity.
9.Identify the critical activities and mark the critical path on the arrow
diagram.
10.Calculate the total project duration.
 2. Critical Path Method (CPM)

Consider the following project:

Immediate
Activity Predecessor time (days)
A - 6
B -- 4
C A 3
D A 5
E A 1
F B,C 4
G B,C 2
H E,F 6
I E,F 5
J D,H 3
K G I5
2. Critical Path Method (CPM)

ES

LF
 2. Critical Path Method (CPM)

• Earliest/Latest Times
• Activity time ES EF LS LF Slack
EF = ES + t A 6 0 6 0 6 0 *critical
LS = LF –t B 4 0 4 5 9 5
Where t is the C 3 6 9 6 9 0*
Activity time
D 5 6 11 15 20 9
Slack = LF–EF
= LS -ES E 1 6 7 12 13 6
F 4 9 13 9 13 0*
G 2 9 11 16 18 7
H 6 13 19 14 20 1
I 5 13 18 13 18 0*
J 3 19 22 20 23 1
K 5 18 23 18 23 0*
–The estimated project completion time is the Max EF at node 7 = 23.
 Calculation on CPM

• Consider the following project. Draw the network diagram and find out
EST,LST,EFT,LFT,critical path, floats and critical path , floats and critical
time.
S.No. Activity Duration predecessor Successor
1. A 5 - B,C,D
2. B 3 A E
3. C 2 A F,H
4. D 3 A G
5. E 2 B H
6. F 1 C I
7. G 3 D I
8. H 1 C,E -
9. I 2 F,G -
 Calculation on CPM

• Solution:
8 10 10 12
2
0 0 3
5 5 3 6
B 2 E 7 10 1
5 1313
1 2 4 H 8
3 C 1 2
A 3 F
D 5 7 I
G
8 8
11 11
S. Activity Durati EST EFT LST LFT TF FF IF Remarks
No on
.
1 A 5 0 5 0 5 0 0 0 critical
2 B 3 5 8 7 10 2 0 0 Non critical
3 C 2 5 7 8 10 3 0 0 Non critical
4 D 3 5 8 5 8 0 0 0 critical
5 E 2 8 10 10 12 2 0 0 Non critical
6 F 1 7 8 10 11 3 0 0 Non critical
7 G 3 8 11 8 11 0 0 0 critical
8 H 1 10 11 12 13 2 0 0 Non critical
9 I 2 11 13 11 13 0 0 0 crtical
 Slack or float

14-9=5
 3. Program Evaluation and Review Techniques (PERT)

• PERT gives away of identifying critical activities right at the planning stage
so that management is aware of these potentially trouble some areas and
exercise proper control over them , so as to complete the project within
the scheduled time.
• PERT , actually developed as a research and development planning tool
where activity timings could not be estimated with enough certainty . It
can be employed at those places where a project can not be easily
defined in terms of time or resource required.
• PERT is mainly concerned with events and it is thus event-oriented system.
 3. Program Evaluation and Review Techniques
(PERT)
Estimation of activity time
1.Optimistictime(to): It is the shortest time in which an activity can be
completed assuming that every thing goes exceptionally well.It has
low probability of occurrence.
2.Most likely time (tm): It is the most likely time required to complete the
activity taking into consideration all favorable and unfavorable
elements . This estimate of time lies between the optimistic and
pessimistic time.
3.Pessimistic time(tp): it is the time which an activity will take to
complete if everything turns out to be against expectation (i.e. under
adverse conditions) .Similar to optimistic time it has low probability of
occurrence.
4.Expectedtime(te):The thre etime estimate to,tm,tp are combined
statistically to develop the expected time te.It is given by
Te=(to+4tm+tp)/6
Activity te EST EFT LFT LST TF Remarks
A 3.33 0 3.33 3.33 0 0 critical
B 6.66 3.33 9.99 9.99 3.33 0 critical
C 3 3.33 6.33 9.99 6.99 3.66 Non critical
D 11 9.99 20.99 20.99 9.99 0 critical
E 7.66 9.99 17.65 20.99 13.33 3.34 Non critical
F 6 20.99 26.99 26.99 20.99 0 critical
G 4 20.99 24.99 26.99 22.99 2 Non critical
Ts=+Te=18 x1.64+26.99=33.947
 PERT solution
A small engineering project consists of six activities .The three time estimates
in number of days for each activity are given below:
Activity to tm tp

1-2 2 5 8
2-3 1 1 1
3-5 0 6 18
5-6 7 7 7
1-4 3 3 3
4-5 2 5 14

a.Calculate the values of expected time (te) , standard deviation (e) and
variation (vi) for each activity .
b. Draw the network diagram and mark te on each activity
c.Calculate EST and LFT mark them on network diagram .
d.Calculate total slack for each activity.
e. Identify the critical path and mark on network diagram.
 Solution
• te(1-2)=(2+4x5+8)/6=5 [te=(to+4tm+tp)/6]
t(1-2)=(tp-to)/6=1 , vi=t 2=1
Similarly, the values of te ,t and vi for the remaining activities are calculated
as shown in table below:
Activitie to tm tp te =(to+4tm+tp)/6] t)=(tp-to)/6 vi=t 2
s
1-2 2 5 8 5 1 1
2-3 1 1 1 1 0 0
3-5 0 6 18 7 3 9
5-6 7 7 7 7 0 0
1-4 3 3 3 3 0 0
4-5 2 8 14 8 2 4
 Network Diagram
6 6
5 5 1
3
0 0 5 2 7
20 20
1 7
3 6
8 5
4
13 13
3 5
Activity EST LFT LST EFT float Remarks
1`-2 0 5 0 5 0 Critical
2-3 5 6 5 6 0 Critical
3-5 6 13 6 13 0 Critical
5-6 13 20 13 20 0 Critical
1-4 0 5 2 3 2 Non Critical
4-5 3 13 5 11 2 Non Critical

Critical path=1-2-3-5-6 and The total project duration time =20 days.
 Calculation
Example: A project is expected to take 12 months along the
critical path ,having a standard deviation of 4 months.What is
the probability the project within a)10 months?b)16 months?
c) 8 months?
Solution:
a) Probability factor is given by,z=(Ts-Te)/=(10-12)/4=-0.5
From table , for z=-0.5,Probability=30.85%
b)For Ts =16 months, z=(16-12)/4=1
From table , for z=1,Probability=84.13%
c)For Ts =8 months, z=(8-12)/4=-1
From table , for z=-1,Probability=15.87%
 PERT calculation
• Example: Fig. Shows the network diagram for a construction project , with
the three time estimates of each activity marked. Determine :
a. Critical path and standard deviation
b. Probability of completion of project in 40 days

c. Time duration that will provide 95% probability of its completion time.

17 17
3-5-13 31 31 35 35
5 5 8-11-20 3 2-4-6
12 6 7 8
0 0 4
2-5-8 2-3-10
1 2 4-7-1 7-10-13 4
4
5 8
10 6 27 27
4-9-20 17 17
10 3-7-17

5 8
15 19
 solution
Activit Duration EST LST EFT LFT Floa  2 Remarks
y t
1-2 (2+4x5+8)/6=5 0 0 5 5 0 1 1 Critical
2-3 12 5 5 17 17 0 2 4 Critical
3-4 Dummy 0 17 17 17 17 0 0 0 Critical
2-4 8 5 9 13 17 4 2 4 Non Critical
2-5 10 5 9 15 19 4 2.66 7.11 Non Critical
4-6 10 17 17 27 27 0 1 1 Critical
5-6 8 15 19 23 27 4 2.35 5.44 Non Critical
3-7 6 17 25 23 31 8 1.65 2.78 NonCritical
6-7 4 27 27 31 31 0 1.33 1.77 Critical
7-8 4 31 31 35 35 0 0.63 0.44 Critical
 Contd…
• Critical path 1-2-3-4-6-7-8
• Critical time =5+12+0+10+4+4=35
• Standard deviation along the critical path
• 2 =1+4+0+7.11+1.77+0.44=14.32
• =14.32=3.78

Now ,z =(Ts-Te)/ =(40-35)/3.78=1.07

Probability=85.7%

For 95% Probability , we have z=1.65

Ts=z +Te=(3.78x1.65)+35=41.2 days

 Inventory control

• Meaning and Definition of Inventory

• In dictionary meaning of inventory is a “detailed list of goods,
furniture etc.” Many understand the word inventory, as a
stock of goods, but the generally accepted meaning of the
word ‘goods’ in the accounting language, is the stock of
finished goods only. In a manufacturing organization,
however, in addition to the stock of finished goods, there will
be stock of partly finished goods, raw materials and stores.
The collective name of these entire items is ‘inventory’. The
term ‘inventory’ refers to the stockpile of production a firm is
offering for sale and the components that make up the
production.
Inventory control
 Inventory control

Classification of inventories
1.Direct inventories
a. Raw materials.
b. In process inventories (work in progress).
c. Purchased parts.
d. Finished goods.
2. Indirect inventories
a. Tools (standard and hand tools).
b. Supplies (miscellaneous).
Inventory control
Inventory control
 2. Safety stock, Re-order point, Lead time
• Safetystock
• It refers to the items of inventory kept in stock as an insurance stock
to meet the fluctuations in demand or lead time.
• Lead time
• The time between placement of the requisition of an item and its
receipt for actual use is called delivery lag or lead time.
• Re-order point
• Reorder point indicates that at this time the purchase order should
be initiated and if not done so,the inventory may exhaust and even
the reserve stock utilized before the new material arrives.It may
result in stoppage of production
2. Safety stock, Re-order point, Lead time
 Inventory control
Economic ordering ( purchase) Quantity(EOQ):
The evaluation of most economical ordering quantity purchased involves
calculations of the two costs :
A) procurement costs or buying cost or set up cost
B)Inventory carrying cost.
Procurement cost: It includes the expenditure made on :
Calling quotations , placing purchase order, receiving and inspections ,
verifying and payment of bills , other identical charges etc.
Inventory carrying cost: This consists of expenditure made for :
Insurance , storage and handling , obsolescence , and depreciations ,
deterioration , taxes and interest etc.
Procurement cost varies between 10 to 20 % of the product cost.
The economical order quantity is obtained by the quantity whose
procurement cost is equal to inventory carrying cost.
 Inventory control
• Relevant inventory costs
• Purchase cost: It is the actual price paid for procurement of
items. Its unit of measurement is in Rs. Per unit.
• Purchase cost=price per unit(Cu)x demand per unit time(S)
• Where , Cu=unit cost and S=annual demand.
• Ordering cost: It is the cost of placing an order from a vendor.
This includes all costs incurred from calling for quotations to
the point at which the item is taken in to stock.
• If S=annual requirement then
• Annual cost of ordering=SxCo/q or ,A P/Q
 1. Economic Order Quantity
• Inventory carrying cost per year =Average quantity of stock in inventory per
year x annul inventory carrying cost per year
• =(q/2)*i*Cu or, (Q/2)xC
• Total cost per year = (S/q)*Co + (q/2)*i*Cu or, (A/Q)xP+(Q/2)xC
• This will be minimum when Purchasing cost equals to the Inventory carrying cost
i.e. (S/q)*Co = (q/2)*i*Cu
• Q2 =2*S*Co/Cu*I
• Q=√ 2*S*Co/Cu*I or ,Q=(2AP)/C

• 0
1. Economic Order Quantity
(Ordering cost)
 1. Economic Order Quantity

• A motor cycle company requires 50000 units of a speedometer per

year. The ordering receiving and handling cost is Rs.3 per order ,
while inspection cost is Rs.12 per order .Further details of purchase
are as follows:
• Interest cost Rs. 0.06 per unit per year. Deterioration and
obsolescence cost Rs.0.004 per unit per year .
• Storage cost Rs.1000 per year for 50000 units.
• Calculate the following:
i)EOQ
ii)Reorder period
iii)Number of orders per year
iv)Total variable cost of inventory
 1. Economic Order Quantity

Solution: Procurement cost i.e handling and inspection cost C0=Rs.3+Rs.12

=Rs.15 per order
Annual consumption (S)=50000 units
Holding or storage cost per unit , Cu x i=0.06+ 0.004+1000/50000=Re.0.084
Substituting values in the relation
i) EOQ=√2{(Co*S)/(Cu*i)=√(2*50000*15)/0.084}=4226 units
ii) Total number of orders in a year=S/EOQ=50000/4116=11.82 or 12 units
iii) Reorder time =Total periods /Number of orders=1year/12=1 Month
iv) Total variable cost of inventory=Total ordering cost + total storage or
holding cost=(12*15)+(4226/2*0.084)=180+177.50=Rs.357.50
 1. Economic Order Quantity
2)A company requires 16000 units of raw material costing Rs. 2 per
unit. The cost of placing an order is Rs. 45 and the carrying costs
are 10% per year per unit of the average inventory. Determine:
i.The economic order of quantity
ii.Cycle time
iii.Total variable cost of managing the inventory.
Solution:
Now, S = 16000, C0 = Rs. 45, Cu= Rs. 2, i= 0.1
i)EOQ = √2×𝐶𝑜×𝑆/𝐶𝑢×𝑖= √2×45×16000/2×0.1= 2684 units.
ii)Cycle time = 1/(No. of orders/year) = 1/(16000/2684) year = 2 months
iii)Total variable cost of managing the inventory

(E) = Co.S/qo+ Cu.i.qo/2 = 45*6 + (2*0.1*2684)/2 = RS. 538.4

 Calculation

3)In an enterprise using fixed order quantity system ,find out various
parameter for an item with the following data. Annual consumption
=10000 units ,unit cost=Rs.10
• Set up cost=Rs .120 per production run
• Past lead time =15,25,14,30,13,17 days .Number of working days in a year
=300 .Inventory carrying cost 0.24 per unit per year.
• Solution:
• Given, A=10000 units ,P=120 per production run ,C=0.24 per unit per cost
I. EOQ=2AP/C=(2x10000x120)/0.24=3162 units ,Ans.
II. Demand per day=Annual demand / No.of working days
=10000/300=100/3
III. Average lead time =(15+25+14+30+13+17)/6=19 days
 Calculation

Iv. Safety stock=(Max. lead time-Average lead time)X demand per day=(30-
19)x100/3=367units ,Ans.
v.Reorder level =safety stock+lead time demand =367+633=1000units, Ans.
vi. Maximum inventory level=Safety stock+EOQ=367+3162=3529 units,Ans.
vii.Average Inventory level=Safety stock+EOQ/2=367+3162/2=1948 units,Ans.
Note: Lead time demand =Lead time x demand rate per
day=19X100/3=633.33 units.
Time of procurementcycle=EOQ/Demand per day =3162/100/3= 3162x3/100
= 94.86 days
 Economic Lot /Batch size(EBQ)
• In several plants, production can be manufactured at a higher rate than
they are used or demanded . It means that ,although the product may be
used at a uniform rate throughout the year, they can be manufactured in
varying lots. Some of the costs of manufacturing a lot size are
independed of the number of pieces in the lot.The cost of set up and tear
down(i.e. preparation or set up cost) cost include i) the labour cost for set
up of machines/equipments , tools , jigs and fixtures ii) paper work cost
involve in production planning and control iii) cost of scrap caused due to
initial trial run during production process and machine idle time during
this process ) is fixed cost while direct labour , material cost and
depreciation are the examples of variable cost .Thetotal cost and unit cost
will be affected by the lot size .It is necessary to determine the lot
sizethat will result in minimum cost.
 EBQ
• Let P= total number of products manufactured per year
• n= no. of lots
• Co=fixed cost or set up costs/per lot or ordering cost/per lot
• Cv =variable cost/unit
• Q=ELS=Economic lot size
• I= interest on investment on average inventory , expressed as a percent
variable production cost
• Cc=inventory carring cost /unit=cvxI
• d=consumption or demand rate
• Now , the economic lot size in production is obtained by the quantity
where fixed cost is equal to the variable production cost per year
• Fixed cost per year =No. of lot produced per year x set up cost per
lot=(d/Q)xCo……….(i)
 EBQ/ELQ
• Variable cost per year=average value of inventory in a year x inventory
carrying cost per product=Q/2[1-(d/P]x Cc….ii
• If no production takes place during use and replacement of inventory
were instantaneous , the average inventory would be Q/2.But here the
production rate is greater than the demand rate the average inventory is
reduced by the amount (Q/2) x(d/P).Therefore ,the total cost
=(d/Q)xCo+Q/2(1-d/P)xCc
• The total cost will be minimum when, (d/Q)xCo=Q/2(1-d/P)xCc
• Or, (d/Q)xCo =QCc/2[(P-d)/P]
• Or,Q2=2dCo P/Cc(P-d)
• Q=[2Cod)/Cc(1-d/P)]
• Example:A product is manufactured on a machine .The cost, production
and demand are as follows:
• Fixed cost per lot=Rs.30
• Variable cost per unit=Rs.0.10
• Percentage changes for interest, taxes ,insurance and storage =50%
• Production rate =100000 units per year
• Demand rate=10000 units/year
• Determine the economic manufacturing quantity.
• Solution: Given, P=100000 ,d=10000,Co=Rs.30, Cc=0.10(50/100)=1/20 =0.2
• We know that ,Q=[(2Cod)/Cc(1-d/P)]
• Q=[(2x10000)/0.2(1-10000/10000)]=3651 units
• Here , the economic manufacturing quantity will be 3651.
 1. Economic Order Quantity

Order quantity strategies

• Lot-for-lot: Order exactly what is needed for the next
period
• Fixed-order quantity: Order a predetermined amount
each time an order is placed
• Min-max system: When on-hand inventory falls
below a predetermined minimum level, order enough
to refill up to maximum level
• Order n periods: Order enough to satisfy demand for
the next n periods
 3. ABC analysis

• ABC Analysis of Inventories

• The ABC inventory control technique is based on the principle
that a small portion of the items may typically represent the
bulk of money value of the total inventory used in the
production process, while a relatively large number of items
may from a small part of the money value of stores. The
money value is ascertained by multiplying the quantity of
material of each item by its unit price. According to this
approach to inventory control high value items are more
closely controlled than low value items. Each item of inventory
is given A, B or C denomination depending upon the amount
spent for that particular item.
 3. ABC analysis
• It is also known as Always Better Control
• It divides inventories into three groupings in terms of
percentage of number of items and percentage of total
value.
A-items: constitutes about 10% of the total number of
items and 70% of the total money value for all items.
B-items: constitutes about 20% of the total number of
items and 20% of the total money value for alli tems.
C–items: constitutes about 70% of the total number of
items and 10% of the total money value for all items.
3. ABC analysis
3. ABC analysis
 3. ABC analysis

Objectives of ABC analysis

•It enables selective control
•The degree of control related to materials planning ,
forecasting , ordering , review, records, postings, revisions,
lead time analysis, safety stock etc. Is rigorous A items,
moderate for B items and minimum for C items.
•It is helpful to rationalize the number of orders and reduce
the over all inventory.
 3. ABC analysis
Control policies for A items
•Should be ordered more often, but in small quantities to reduce capital locked
up.
•Future requirement must be planned.
•Purchases and stock should be looked by top executives.
•Ordering quantities, re-order point and maximum stock should be revised more
frequently.
Control policies for B items
•General in between those for A and C.
•Order for these items must be placed less frequently.
•The safety stock should be medium (3 months or less).
•B items are subjected to moderate control
Control policies for C items
•The safety stock should be liberal (requirement of 3 months or more).
•Annual or six-monthly orders should be placed to reduce paper work and
ordering cost and to get advantage of quantity discount for large orders.
•In case of these items only routine check is required.
 3. ABC analysis

Advantages of ABC Analysis

1. It ensures a closer and a more strict control over such items,
which are having a sizable investment in there.
2. It releases working capital, which would otherwise have been
locked up for a more profitable channel of investment.
3. It reduces inventory-carrying cost.
4. It enables the relaxation of control for the ‘C’ items and thus
makes it possible for a sufficient buffer stock to be created.
5. It enables the maintenance of high inventory turn over rate.
 Forecasting
 Forecasting techniques
• Qualitative techniques
• Quantitative techniques
• Casual quantitative techniques
• Forecast errors
 Forecasting

• Forecasting is an interference of what is likely to happen in the future.It

is not absolutely certain prophesy but is fundamental to management.
• Underlying basis of all business decisions
–Production
–Inventory
–Personnel
–Facilities

• It involves a study of the present and past data with a view to

estimate the future activities. It often examines historical data to
determine relationships between key variables in a problem and
uses those relationships to make statement about the future.
Forecasting
Forecasting
Forecasting
Steps in Forecasting
Forecasting Methods
Qualitative forecasting
Forecasting Methods
Qualitative forecasting
Forecasting Methods
Qualitative forecasting
Forecasting Methods
Qualitative forecasting
Forecasting Methods
Quantitative forecasting
Forecasting Methods
Quantitative forecasting
Forecasting Methods
Quantitative forecasting
Forecasting Methods
Quantitative forecasting
Forecasting Methods
Quantitative forecasting
Forecasting Methods
Quantitative forecasting
Forecasting Methods
Quantitative forecasting
Forecasting Methods
Quantitative forecasting
Forecasting Methods
Quantitative forecasting
Forecasting Methods
Quantitative forecasting
Forecasting Methods
Quantitative forecasting
Forecasting Methods
Quantitative forecasting
Forecasting Methods
Quantitative forecasting
Forecasting Methods
Quantitative forecasting
Forecasting Methods
Quantitative forecasting
Forecasting Methods
Quantitative forecasting
Forecasting Methods
Quantitative forecasting
Forecasting Methods
Quantitative forecasting
Forecasting Methods
Quantitative forecasting
Forecasting Methods
Quantitative forecasting
Forecasting Methods
Quantitative forecasting
Forecasting Methods
Quantitative forecasting
Forecasting Methods
Quantitative forecasting
Forecasting Methods
Quantitative forecasting
Forecasting Methods
Quantitative forecasting
Forecasting Methods
Quantitative forecasting
Forecasting Methods
Quantitative forecasting
Forecasting Methods
Quantitative forecasting
Forecasting Methods
Quantitative forecasting
Forecasting Methods
Quantitative forecasting
Forecasting Methods
Quantitative forecasting
Forecasting Methods
Quantitative forecasting
Forecasting Performance measurement
Forecasting Performance measurement
Forecasting Performance measurement
Forecasting Performance measurement
 Forecasting

• Why do we need to forecast?

• In general , forecasts are almost always wrong.
• So , Throughout the day we forecast very different things
such as weather , traffic, stock market, state of our
company from different perspectives.
• Virtually every business attempt is based on forecasting.
Not all of them are derived from sophisticated methods.
However, “Best“ educated guesses about future are
more valuable for purpose of Planning than no forecasts
and hence no planning .
 Forecasting

• Requirements of forecasting for operations.

•For long-range , strategic decisions and shorter-range
decisions in day to day operations as an important input.
•To meet the level of demand of the company so that they
can have optimum amount of goods , services and
employees.
•Provide a basis for co-ordination of plans for activities in
various parts of a company.
 Forecasting
Importance of Forecasting in OM
•Departments throughout the organization depend on forecasts to
formulate and execute their plans.
•Finance needs forecasts to project cash flows and capital
requirements.
•Human resources need forecasts to anticipate hiring needs.
•Production needs forecasts to plan production levels, workforce,
material requirements , inventories , etc.
•Demand is not the only variable of interest to forecasters.
•Manufacturers also forecast worker absenteeism, machine
availability, material costs, transportation and production lead times,
etc.
•Besides demand, service providers are also interested in forecasts
of population, of other demographic variables, of weather, etc.
 1. Forecasting techniques

Forecasting horizon
•Short-range forecast
–Usually < 3 months
•Job scheduling, worker assignments
•Medium-range forecast
–3 months to 2 years
•Sales/production planning
•Long-range forecast
–> 2 years
•New product planning
 1. Forecasting techniques
The basic forecasting techniques are
I. Qualitative techniques
a. The Delphi method.
b. Market survey.
c. Sales force composite.
d. Executive judgment.
II. Quantitative (time series models)techniques
a. Naive
b. Moving average
c. Exponential smoothing
III. Casual quantitative techniques
a. Regression analysis.
b. Correlation analysis
 I. Qualitative techniques

• Executive Judgment: Opinion of a group of high level experts

or managers is pooled.
• Sales Force Composite: Each regional sales person provides
his/her sales estimates. Those forecasts are then reviewed to
make sure they are realistic. All regional forecasts are then
pooled at the district and national levels to obtain an overall
forecast.
• Market Research / Survey: Solicits input from customers
pertaining to
• Their future purchasing plans . It involves the use of
questionnaires , consumer panels and tests of new products
and services .
 I. Qualitative techniques
• Delphi Method: A sopposed to regular panels where the
individuals involved are indirect communication ,this method
eliminates the effects of group potential dominance of the most
vocal members. The group involves individuals from inside as
well as outside the organization.
• Typically, the procedure consists of the following steps:
• Each expert in the group makes his/her own forecasts inform of
statements
• The coordinator collects all group statements and summarizes them
• The coordinator provides this summary and gives another set of
questions to each group member including feedback as to the input
• to other experts.
• The above steps are repeated until a consensus is reached.
 II. Quantitative techniques

• Quantitative methods are based on ananalys is of historical data

concerning one or more time series.
• A time series is a set of observations measured at successive points
in time or over successive periods of time.
•If the historical data used are restricted to past values of the series
that we are trying to forecast,the procedure is called a time series
method.
• If the historical data used involve other time series that are believed
to be related to the time series that we are trying to forecast ,the
procedure is called a causal method.
• •Quantitative approaches are generally preferred
• A. Naive
• Demand in next period is the same as demand
in most recent period
• May sales = 48 → June forecast = 48
• Usually not good
 II. Quantitative techniques

• B. Simple Moving Average

• Assumes an average is a good estimator of future behavior
• – Used if little or no trend
• – Used for smoothing

• A + A + A +...+A
• F = Ft-1 Ft-2 Ftn -1

• Ft+1 = Forecast for the upcoming period, t+1

• n = Number of periods to be averaged
• A t = Actual occurrence in period t
• Problem :There exists a relationship between expenditure on research
and its annual profit .The details of expenditure for the last six years is
given below .Estimate the profit when the expenditure is 6 units .
Year Expenditure for Annual profit(y)
research(X)
1994 2 20
1995 3 25
1996 5 34
1997 4 30
1998 11 40
1999 5 31
2000 6 

(one unit corresponds to 1 Crore Rs.)

Solution:
Year Expenditure Annual xy x2
for research(X) profit(y)
1994 2 20 40 4
1995 3 25 75 9
1996 5 34 170 25
1997 4 30 120 16
1998 11 40 440 121
1999 5 31 155 25
Total 30 180 1000 200
x=30/6=5
y=180/6=30
The values of a and b are computed as follows:
Y=a+bx
b=( xy-x.y)/(x2 –nx2)
=(1000-6x5x30)/(200-6x5x5)=2
a=y-bx=30-2x5=20
Thus model is y=20+2x
The profit when expenditure is 6 units is
Y=20+2x6=32 units of Rs.
• Problem: The annual sales of a company are given below:
Year 1980 1981 1982 1983 1984
Sales in Rs. 50000 65000 75000 52000 72000

By the method of least squares .find the trend values for each of the five
years.Also estimate the annual sales for the year 1985.
Solution:

Year X Sales in Deviation x2 xy Trend values

(1000Rs) Y of X from Y’=a+bx
1982 x
1980 50 -2 4 -100 56.60
1981 65 -1 1 -65 59.70
1982 75 0 0 0 62.80
1983 52 1 1 52 65.90
1984 72 2 4 144 69.00
n=5 y=314 x=0 x2=10 xy=31
The equation of the line of trend is
Y’=a+bx
a=y/n=314/5=62.80
b=xy/x2 =31/10=3.1
Therefore , the equation of the straight line is Y’=a+bx=62.80+3.1x

Trend value for 1980, x=-2 , Y’=62.80+3.1(-2)=56.60

For 1981,x=-1, Y’=62.80+3.1(-1)=59.70

For 1982,x=0 , Y’=62.80+3.1(0)=62.80

For 1983,x=1 , Y’=62.80+3.1(1)=65.90

For 184 ,x=2 , Y’=62.80+3.1(2)=69

Expected value of sales for the year 1985.

For 1985, the value of x in the above table would be 3.

Hence , Y’=62.80+3.1(3)=66.10

The expected annual sales for the year1985=Rs.66100

 Problem : Starwars Co.Ltd.uses simple exponential smoothing with
smoothing constant =0.2 to forecast the demand . The forecast for the
first week of March was 400 units and the actual demand turns out to be
450 units.
i.Estimate the demand for the second week of March.
ii. If the actual demand for the second week of March is 460 units , forecast the
demand upto April second week.Assume that the demand for subsequent
weeks are465,434,420,498,462 and 470 units.
Solution :
i.The forecast for the period (F t ) is given by the equation
Ft=Ft-1+(Dt-1-Ft-1)
The forecast for March second week is,
Ft=400+0.2(450-400)=410 units
 ii)The forecasted demand for the third week of March to April second week is
worked out as shown in table below:
Week Demand Dt-1 Old forecast Forecast Correction New
Ft-1 error (Dt-1-Ft-1) forecast(Ft)
Dt-1-Ft-1 Ft-1+(Dt-1-Ft-1)
March week 2 460 410 50 10 420
March Week3 465 420 45 9 429
March Week4 434 429 5 1 430
April Week1 420 430 -10 -2 428
April week2 498 428 70 14 442
April week 3 462 442 20 4 446
April week 4 470 446 24 4.8 500.8
• Problem: A producer believes that the sales of the product for the past 10
years is related to an economic index and the data for that period is
shown in the following table.

Year Economic Index Sales in 10000 units

1 104 2.0
2 100 2.3
3 111 2.1
4 129 2.6
5 126 2.3
6 115 2.4
7 152 2.5
8 161 2.8
9 143 2.6
10 170 3.0
a) Determine the equation of the least squares line that describes the relationship
between sales and the economic indicator.
b) Determine the strength of the relationship between the two variables by
computing the value of coefficient of correlation .
c) If the value of economic index for the 11thyear is 175 , find out the sales in 11th
year. Year Economic Sales, Y Xy x2 y2
Index , x
1 104 2.0 208 10816 4
2 100 2.3 230 10000 5.29
3 111 2.1 233.1 12321 4.41
4 129 2.6 335.4 16641 6.76
5 126 2.3 289.8 15876 5.29
6 115 2.4 276 13225 5.76
7 152 2.5 380 23104 6.25
8 161 2.8 450 25921 7.84
9 143 2.6 371.8 20449 6.76
10 170 3.0 510 28900 9
x=1311 y=24.6 xy=3284.9 x2 =177253 y2=61.36
We know that,
y=na+mx
xy=ax+mx2
By substituting values , we get,
20.6=10a+1311m
3284.9=1311a+177253m
Solving these equations for a and m
We get, a=1.002 , m=0.011
So the linier equation of the trend line or least square line becomes.
Y=1.oo2+0.011x Answer.
ii) For computing the value of coefficient of correlation substituting the
values in the equation for r we get,

=0.89

The value of r indicates that the correlation between economic index

and sales is high.
iii)For the value of economic index 172 for the 11th year the sales can be
computed from equation of the trend line
i.e.y=1.002+0.011x=1.002+0.011x175=2.927 or the predicted value of
29270 units for the 11th year. Answer.
 Problem: The demand for different weeks of November and December
month of company is given below. Assume the initial forecast i.e., for first
week of November as 600 and corresponding initial trend is zero. Assume
=0.1 and =0.2.

Nove Dece
mber mber
Week 1 2 3 4 1 2 3 4
Demand 650 600 550 650 650 625 700 710
• Solution:In this problem trend adjusted smoothed forecast is used to
forecast the demand .Actually this model projects the next period forecast
by adding a trend component to current period smoothed forecaste, i.e.
Ft+1=Ft+Tt
Ft=Dt-1+(1-)(Ft-1+Tt-1)
Tt=(Ft-Ft-1)+(1-)Tt-1
Where,  and  are smoothing constant .The trend adjustment Tt uses a
second smoothing coefficient .
For first week of November ,
Ft= Dt-1+(1-)(Ft-1+Tt-1)
The initial forecast for November first week Is given as 600 units and initial
trend (T0) is 0.
Now , substituting the given values in Ft equation , for first week of November.
Ft=0.1x650+0.9(600+0)=605 units
Tt=(Ft-Ft-1)+(1-)Tt-1 =0.2(605-600)+(1-0.2)x0 (As initial trend Tt-1 is assumed
zero)
Ft+1=Ft+Tt=605+1=606
The adjusted smoothed forecast for second week of November is 606 units .
For second week of November,
Ft=o.1x600+0.9(605+1)=605.4 units
Tt=0.2(605.4-605)+0.8x1=0.88
Ft+1=605.4+0.88=606.28
The trend adjusted exponential smoothing forecaster is represented in the
table.
Table: adjusted exponential smoothing forecaster to November to December

Week Last period Actual Smoothed Smoothed Next period

of forecast Demand average trend forecast
Ft+1 Dt-1 Ft Tt Ft+1

Nov. Week 1 600 650 605 1 606

Nov. Week2 605 600 605.40 0.88 606.38
Nov. Week3 605.4 550 600.65 -0.246 600.40
Nov. Week4 600.65 650 605.36 0.742 606.10
Dec.Week1 605.36 625 607.99 1.120 609.11
Dec.Week2 607.99 675 615.70 2.440 618.14
Dec.Week3 615.70 700 626.33 4.080 630.41
Dec.Week4 626.33 710 738.37 5.670 644.04
• Problem: The forecast and the actual demand for the six months is given
below .Compute the various forecast errors and tracking signal and
comment on the forecast accuracy.

Month Actual Demand Forecated Deviation Cum.deviation

(Dt) demand (Ft) Dt-Ft (Dt-Ft)

1 71 78 -7 -7
2 80 75 5 -2
3 101 83 18 16
4 84 84 0 16
5 60 88 -28 -12
6 73 85 -12 -24
Solution:
The deviation and cumulative deviations are shown in the table above.
i)Mean Absolute deviation(MAD)
MAD is the mean absolute deviation of forecast demands from actual
demand values.

X1/n

Where, D=actual demand for period t

Ft=Forecast for period t
n=number of time period used
MAD=(7+5+18+0+28+12)/6=11.7
ii) Cumulative deviation or Running Sum Of Forecast Error(RSFE)
This is the algebraic sum of the forecasting error i.e. both positive and
negative signs are considered.
RSFE=-7+5+18+0-28-12=-24
iii)Tracking signal=RSFE/MAD=-24/11.7=-2.05=2.05
The tracking signal tells how well the forecast is predicting actual values, for it
yields a measurement of the consistent difference between actual and
forecasted values by expressing the comulative deviation in terms of
number of average deviations .
iv)Mean square error(MSE)
It is the mean of the squares of the deviations of forecast demands from the
actual demand values.

=[(-7)2+(5)2+(18)2+(-28)2+(-12)2]/6=221
v) Mean Forecast error(MFE)
Mean forecast errors is the mean of deviations of the forecast demands from
the actual demand

=(-7+5+18+0-28-12)/6=-4
vi) Mean Absolute Percentage Error(MAPE)
Mean absolute percentage error is the mean of the percentage
deviation of the forecast demands from the actual demands.

=0.294%
 MRP
• Introduction
• MRP concept
• Benefits and application
• MRP II (Manufacturing Resource Planning
• The Japanese approach to MRP
• Comparing MRP and Just In Time (JIT) concept.
 Introduction
• MRP stands for material requirement planning. It is computer
based technique that:
1.Converts master production schedule(MPS) into detailed
schedule for requirement of raw material, component parts,
sub-assemblies and assemblies used in the end product.
2.It then breaks the material requirements into two parts.
3.Finally,it develops a schedule of order for purchased materials
and produced parts over the planning period(horizon).
Inputs to MRP:
1.Master Production Schedule(MPS)
2.Billof Material(BOM)file defining the product structure.
3.Inventory status file.
 MRP Concepts

• Master Production Schedule

• The master production schedule is based on the
accurate estimate of demand which consists of two
parts, an amount determined from the orders received
and an estimate of the uncertain demand for the period
obtained by statistical forecasting.
• MPS is a list of end products to be produced.
• It contains item name(and code), quantity to be
produced , and time for completing the production
The planning Process
The planning process
Working of MRP (MRP processing)

1.Consolidating (cominining)period by period

requirements for end products.
2.Part explosion.
3.Off setting.
4.Finding gross requirement for each
component/raw material.
5.Determining net requirement.
6.Procurement schedule and lot sizing
• Benefits of MRP
1.Reduction in work-in-progress.
2.Priority benefits.
3.Effective utilization of capacity.
4.Improved customer service.
5.Reduction in lead time.
6.Reduction in past due orders.
7.Increased productivity.
8.Increased inventoryt urnover
 Limitations of MRP

1.Incorrectness in suppliers lead time or in manufacturing lead

time causes incorrectness in MRP calculations.
2.Highly computation a intensive approach of MRP causes over
dependence on MRP outputs. Any inaccuracy causes failure of
MRP to a large extent.
3.The data used in MRP system should be reliable. Unreliable
inventory data can cause a failure of MRP system.
4.Bill of material and inventory status should be computerized.
5.The product structure must be assembly oriented
 MRP Problem and solution
• Complete the material requirement plan for an item X shown below .The
item has an independent demand and a safety stock of 40 is maintained.

Order Qty.=70 Week

Lead time =4 1 2 3 4 5 6 7 8 9 10 11 12
weeks
Safety stock=40

Projected 20 20 25 20 20 25 20 20 30 25 25 25
Requirement
Receipts 70 70 70 70
On hand at the
end of the
period(65)
Planned order
release
 MRP Problem and solution
Solution:

Order Qty.=70 Week

Lead time =4 1 2 3 4 5 6 7 8 9 10 11 12
weeks
Safety stock=40

Projected 20 20 25 20 20 25 20 20 30 25 25 25
Requirement
Receipts 70 70 70 70
On hand at the 45 95 70 50 10 75 55 105 75 50 95 70
end of the 0 35 25
period(65) 30
Planned order 70 70 70
release
MRP II
MRP II
MRPII
 4. MRP II (Manufacturing Resource Planning)
• Once an MRP system is in place, inventory data can be augmented by
other useful information
• Labor hours
• Material costs
• Capital costs
• Virtually any resource
• System is generally called MRP II or Material Resource Planning
• “A method for the effective planning of all resources of a manufacturing
company” (APICS def.)
• –Financial accounting incorporated
• –Sales
• –Operations Planning
• –Simulate capacity requirements of different possible Master Production
Schedules
Just in Time manufacturing(JIT)
Just in Time manufacturing(JIT)
Just in Time manufacturing(JIT)
Just in Time manufacturing(JIT)
Just in Time manufacturing(JIT)
Just in Time manufacturing(JIT)
Just in Time manufacturing(JIT)
Just in Time manufacturing(JIT)
Just in Time manufacturing(JIT)
 4. The Japanese approach to MRP
• JustInTime(JIT)
• JIT is a Japanese production management philosophy which has been
applied in practices in the early 1970 s in many Japanese manufacturing
organizations.
• Just-In-Time production is defined as a‘ philosophy that focuses attention
one liminating waste by purchasing or manufacturing just enough of the
right items just in time’.
• Some observers have called JIT hand -to-mouth approach to production. It
aims at having the right part at precise right time and in the right quantity
to go into assembly.
• Other names of JIT are Stockless production, Continuous flow
manufacturing, Toyota system, Zero inventory, Loan production
 Major tools and techniques of JIT

1.A Kanban system is a system of inventory and production control (pull

inventory system) which uses Kanbans as the principal information
transmission device. Kanban is a Japanese word meaning signal. A Kanban
is a card or atag usually attached to work-in-progress parts and it is used
to facilitate the proper movement of the separts. This movement may be
within the same manufacturing plant or between plants.

• Basically there are two types of Kanbans:

• The‘ withdrawal Kanban’ is used to indicate the type and amount of product
which the next process should withdraw from the preceding process.
• The production Kanban ’specifies the type and quantity of product which
then extprocess must produce.
 Characteristics of JIT management

1.Pull system of production.

2.The degree of time lapsed between materials arrivals ,processing and
assembly of the final product for consumers is minimized.
3.JIT allows a reduction in raw materials , work-in-progress and finished
goods inventories,.
4.The JIT production techniques uses containers for holding parts. This allows
easy identification and monitoring of inventory levels.
5.An element of JIT production requires that the plant be clean,i.e. there
should be now sates present which may hinder production.
6.JIT production involves the use of‘ visible signals 'to display the status of
machinery.
 ElementsofJIT

• 1.Eliminating waste.
• 2.Continuous improvement.
• 3.People involvement and employee
empowerment.
• 4.Total Quality Management
5. Comparing MRP and Just In Time (JIT) concept

• MRP incorporates changes to orders into its scheduling process to

produce a dynamic production schedule .MRP embraces the concept of
dependent demand: for example ,if production of finished product A
requires three units of product B , and production of product B in turn
requires four units of product C and six of product D, then a production
level of a specific number of units of product A requires all the
corresponding units of products B, C, and D to reach completion.
• In contrast ,JIT is a manufacturing process that responds to actual orders.
It relies on the timely delivery of exactly the right raw materials in the
right place to allow for production as orders a rereceived.
 Comparing MRP and Just In Time
(JIT) concept
• An advantage of MRP is its ability to successfully organize the production
of each component so parts are ready when needed and the production
process doesn't stall for lack of finished components.
• An advantage of JIT is its reduction of the amount of raw material and
finished goods on hand, which can reduce carrying costs and the
likelihood of spoiled or damaged inventory.
• MRP is well-suited to a production line that operates on a batch or special
order basis.
• The JIT system works well in an environment of repetitive orders of similar
products.
• MRP is more responsive to fluctuations in production as it is a change-
based system. Production under the JIT system may be hampered by lack
of capacity if unexpected orders are received
 QUALITY MANAGEMENT
Course outline:
• Evolution of quality management.
• Quality –definitions.
• Total Quality Management
 Quality
• P Crosby-Quality is defined as conformance to
requirements, not as ‘goodness’ or ‘elegance’.
• Do it right the first time
• Zero Defects
• Cost of quality is only the measure of
operational performance
 Quality
A. V. Feigenbaum -Quality is total composite
product (goods and services) characteristics,
through which the product in use will meet
the needs and expectations of the customers.
K. Ishikawa-Quality does not only mean the
quality of product, but also of after sales
service, quality of management, the company
itself and the human life.
 Dimensional quality
• Key points concerning these dimensions of quality:
1.Performance:potential customers usually evaluate a product to determine if it will
perform specific functions and determine how it will perform them.
2.Reliability: (How often does the product fail?)
Complex products such as many appliances, automoboles , or aeroplanes will be
required some repair over their sevice life.
3.Durability(How does the product last?):This is the effective service life of the
product.
4.Serviceability(How easy is to repair the product?) there are many industries in which
the customer’s view of quality is directly influence by how quickly and
economically a repair and economically a repair or routine maintenance activity
can be accomplished .
5. Aesthetic(What does the product look like?)This is the visual appeal of the product ,
often taking into account factors such as style , colour , shape , packing
alternatives , tactile characteristics. And other sensory features.
 Dimensional quality

6.Features(what does the product do?)Usually , customers

associate high quality with products that have added
features : that is , those that have features beyond the
basic performance of the competion.
7.Peceive quality(What is the reputation of the company or
its product?)
8. Conformance to standards(Is the product made exactly
as the designer indeed?)
 Importance of Quality Management

• “Quality management” ensures superior quality products and

services. Quality of a product can be measured in terms of
performance, reliability and durability. Quality is a crucial
parameter which differentiates an organization from its
competitors. Quality management tools ensure changes in the
systems and processes which eventually result in superior quality
products and services. Quality management methods such as Total
Quality management or Six Sigma have a common goal - to deliver
a high quality product. Quality management is essential to create
superior quality products which not only meet but also exceed
customer satisfaction. Customers need to be satisfied with your
brand. Business marketers are successful only when they
emphasize on quality rather than quantity. Quality products ensure
that you survive the cut throat competition with a smile.
 Importance of Quality Management
• Quality management is essential for customer satisfaction which eventually
leads to customer loyalty. How do you think businesses run? Do businesses thrive
only on new customers? It is important for every business to have some loyal
customers.
• Customers would return to your organization only if they are satisfied with your
products and services. Make sure the end-user is happy with your product.
Remember, a customer would be happy and satisfied only when your product
meets his expectations and fulfills his needs. Understand what the customer
expects from you? Find out what actually his need is? Collect relevant data which
would give you more insight into customer’s needs and demands. Customer
feedbacks should be collected on a regular basis and carefully monitored. Quality
management ensures high quality products and services by eliminating defects
and incorporating continuous changes and improvements in the system. High
quality products in turn lead to loyal and satisfied customers who bring ten new
customers along with them. Do not forget that you might save some money by
ignoring quality management processes but ultimately lose out on your major
customers, thus incurring huge losses. Quality management ensures that you
deliver products as per promises made to the customers through various modes of
promotions. Quality management tools help an organization to design and create
a product which the customer actually wants and desires.
 Importance of Quality Management

• Quality Management ensures increased revenues and higher productivity for the
organization. Remember, if an organization is earning, employees are also
earning. Employees are frustrated only when their salaries or other payments are
not released on time. Yes, money is a strong motivating factor. Would you feel like
working if your organization does not give you salary on time? Ask yourself.
Salaries are released on time only when there is free cash flow. Implementing
Quality management tools ensure high customer loyalty, thus better business,
increased cash flow, satisfied employees, healthy workplace and so on. Quality
management processes make the organization a better place to work.
• Remove unnecessary processes which merely waste employee’s time and do not
contribute much to the organization’s productivity. Quality management enables
employees to deliver more work in less time.
• Quality management helps organizations to reduce waste and inventory. It
enables employees to work closely with suppliers and incorporate “Just in Time”
Philosophy.
• Quality management ensures close coordination between employees of an
organization. It inculcates a strong feeling of team work in the employees.
A Brief History of Quality control and
Improvements
History of Quality Management
A Brief History of Quality control and
Improvements
A Brief History of Quality control and
Improvements
A Brief History of Quality control and
Improvements
A Brief History of Quality control and
Improvements
A Brief History of Quality control and
Improvements
 Quality perspectives

Everyone defines Quality based on their own

perspective of it. Typical responses about the
definition of quality would include:
1. Perfection
2. Consistency
3. Eliminating waste
4. Speed of delivery
5. Compliance with policies and procedures
6. Doing it right the first time
7. Delighting or pleasing customers
8. Total customer satisfaction and service
 Quality perspectives

Judgmental perspective
• “goodness of a product.”
• Shewhart’s transcendental definition of quality –
“absolute and universally recognizable, a mark of
uncompromising standards and high achievement.”
• Examples of products attributing to this image: Rolex
watches, Lexus cars.
Product-based perspective
• “function of a specific, measurable variable and that
differences in quality reflect differences in quantity of
some product attributes.”
• Example: Quality and price perceived relationship.
 Quality perspectives
User-based perspective
• “fitness for intended use.”
• Individuals have different needs and wants, and hence
different quality standards.
• Example – Nissan offering ‘dud’ models in US markets
under the brand name Datson which the US customer
didn’t prefer.
Value-based perspective
• “quality product is the one that is as useful as
competing products and is sold at a lesser price.”
• US auto market – Incentives offered by the Big Three
are perceived to be compensation for lower quality.
 Quality perspectives
Manufacturing-based perspective
• “the desirable outcome of a engineering and
manufacturing practice, or conformance to
specification.”
• Engineering specifications are the key!
• Example: Coca-cola – “quality is about
manufacturing a product that people can
depend on every time they reach for it.”
Quality perspectives
PDCA Cycle
 Quality -Definition
• Joseph M Juran
•Management has to adopt a unified approach
to quality. Quality is defined as‘fitness for
use’. The focus is on customer.
• Quality Trilogy Process
1.Qualityplanning
2.Qualitycontrol
3.Qualityimprovement
• PhilipBCrosby
• •Inordertounderstandthemeaningofquality,Cr
osbyhasidentifiedfourabsolutesofqualitymana
gement.
• 1.Definitionofquality
• 2.Systemforachievementofquality
• 3.Performancestandards
• 4.Measurement
• Crosbyhasa14stepplantohelpbusinessimplemen
taqualityimprovementprogram.
• 1.Managementcommitment
• 2.Qualityimprovementplan
• 3.Qualitymeasurement
• 4.Costofqualityevaluation
• 5.Qualityawareness
• 6.Correctiveaction
 Quality-Definition
7.Committee for the zero defects program.
8.Supervisor training
9.Zero defect day
10.Goal setting
11.Error cause removal
12.Recognition
13.Quality councils
14.Do it over again
 Introduction-TQM
• Competition is getting harder and becoming
global. Companies now have to be more
responsive, offer a better product and keep
improving. Total quality management (TQM)
increases customer satisfaction by boosting quality.
It does this by motivating the workforce and
improving the way the company operates. In an
increasingly competitive market, firms with a
continuous improvement culture and external focus
are more likely to survive and prosper. TQM
is considered an important catalyst in this context
 What is Total Quality Management ?
• TQM is an approach to improving the
effectiveness and flexibilities of business as a
whole. It is essentially a way of organizing and
involving the whole organization, every
department, every activity and every single
person at every level. TQM ensures that the
management adopts a strategic overview of the
quality and focuses on prevention rather than
inspection.
 Objectives of TQM
• Meeting the customer's requirements is the
primary objective and the key to organizational
survival and growth.

• The second objective of TQM is continuous

improvement of quality. The management should
stimulate the employees in becoming
increasingly competent and creative.

• Third, TQM aims at developing the relationship of

openness and trust among the employees at all
levels in the organisation.
 Significance of TQM
The importance of TQM lies in the fact that it
encourages innovation, makes the organization
adaptable to change, motivates people for
better quality, and integrates the business
arising out of a common purpose and all these
provide the organization with a valuable and
distinctive competitive edge.
 Elements of TQM
• Be customer focused
It requires the company to check customers'
attitudes regularly and includes the idea of
internal customers as well as external ones.

• Do it right the first time

This means avoiding rework, i.e., cutting the
amount of defective work.
• Constantly improve
Continuous improvement allows the company
gradually to get better.

• Quality is an attitude
Every one has to be committed to quality. That means
changing the attitude of the entire workforce, and
altering the way the company operates.

• Telling staff what is going on

This involves improved communication. Typically, it
includes team briefing.
• Educate and train people
An unskilled workforce makes mistakes. Giving more skills
to workers means they can do a wider range of jobs, and do
them better. It also means educating staff in the principles of
TQM, which is a whole new style of working.

• Measure the work.

Measurement allows the company to make decisions based
on facts, not opinion. It helps to maintain standards and
keep processes within the agreed tolerances.

• Top management must be involved

If senior management is not involved, the programme will
fail.
• Make it a good place to work
Many companies are full of fear. Staffs are afraid of the
sack, their boss and making mistakes. There is no point in
running a TQM program unless the company drives out
fear.
• Introduce team work
Team work boosts employees' morale. It reduces conflict
and solves problem by hitting them with a wider range of
skills. It pushes authority and responsibility downwards and
provides better, more balanced solutions.
• Organize by process, not by function
This element of TQM seeks to reduce the barriers that exist
between different departments, and concentrates on getting
the product to the customer.
 TQM: Basic Principles

Objective TQM

Principles Customer Continuous Total

Focus Improvement Involvement

Leadership
Elements Education and Training Supportive structure
Communications Reward and recognition
Measurement
583
 TQM - Definition
• TQM is a proven corporate business
philosophy for competitive success, based on
systematic approach in which everyone
connected with organization is focused
towards customer satisfaction
 TQM - Basic Principles
1. Customer Focus: It is a concept of business
leadership in which products and services
exceed customer expectation delivered on
time and at the most competitive cost.

The customer determines whether a product

or service is good enough.

585
 Customer

• The customer is always right.”

• “Quality begins and ends with customers.”
• “The customer always comes first.”

586
 TQM - Basic Principles
2. Total Involvement: It is achieved by
consistent commitment of top management
in developing a Quality Culture, open
communication, inter-departmental
coordination and treating suppliers as
partners.

Upper management must provide the

impetus and motivation for the quality
programs.
587
 TQM - Basic Principles
3. Continuous Improvement: It involves a
systematic approach, using process workers
in measuring and controlling their process
and then improving it continuously.

588
 STATISTICAL QUALITY CONTROL
Introduction
Statistical quality control (sqc) analyze the production output through
random sampling from the whole lot of product. It consists of 4 general
activities
1. systematic collection of data
2. graphic recording of data
3. analysis of data
4. engineering /management action if there is significant deviation from
the standard.
The ultimate objectives of SQC are
• Exercising quality control
• Improvement of quality
• Creation of consumers confidence
• Entrancement of productivity
 STATISTICAL QUALITY CONTROL
• The following statistical tools are generally
used for the achieving the above objectives
1. frequency distribution
2. control chart
3. acceptance sampling
4. analysis of data
 Frequency distribution

• Graphical representation of data obtained

from measurement arranged in ascending
/descending order according to size. Let 50
pieces of shafts are taken from a lot whose
outside dia. has been turned. The graphical
representation of no of shafts as various
dimension range presented in the following.
 Frequency distribution

Recorded as Follows
Length in mm freq
9.50 – 9.51 6
952-9.53 2
9.54-9.55 20
9.56-9.57 32
9.58-9.59 22
9.60-9.61 8
9.62-9.63 6
9.64-9.65 4
A. Find arithmetic mean (X) Standard deviation and variance
B. What Percentage of pins Manufactured has length 9.52-9.63
Length
 Frequency distribution

Length Set Min Feq D=x=k fd Fd2

mm point (x) (f) K=9.565

9.50-9.57 9.505 6 -.06 -.36 -.216

9.52-9.35 9.525 2 -.04 -.08 .0032
9.54-9.55 9.545 20 -.02 -.40 .008
9.56-9.57 9.565 32 0 0 0
9.58-9.59 9.585 22 +.02 +.44 -0088
9.60-9.61 9.605 8 +.04 +.32 -0128
9.62-9.63 9.625 6 +.06 +.36 -0216
9.64.-9.65 9.645 4 +.08 +.32 -0256
 Process capability
The process capability of a m/c or a manufacturing process is
the minimum spread (or minimum tolerance ) to which
m/c or process is expected to work and produce negligible
defective under the specified condition.
In other words process capability : since is taken as a
measure of spread of the process. It is also called as
natural tolerance. Process capability study carried out
to measure the ability of the process to meet the
specified tolerance .
An idea of process capability can be obtained by
plotting the graph for the measurements of 50 to 100
consecutive pieces of products in the exact order in
which they are made. The following set of figures are
plotted to show different process capabilities.
 Types of Data
• Variable Data: quality characteristics that are
measurable values.
– Measurable and normally continuous; may take on
any value.
• Attribute Data: quality characteristics that are
observed to be either present or absent,
conforming or nonconforming.
– Countable and normally discrete; integer
 A. VARIABLES
When a record is made of an actual measured quality characteristic
the quality characteristic are called variables. Variable data are
measured on a continuous scale with individual measurement
rounded to some desired number of decimal point .
Example of variables are:
• A dimension of a part measured
• Hardness value of a part
• Temperature of a substance
• Tensile strength of some specimen
• Weight of some parts
B. Attributes
When a record shows only the number of parts article conforming
and number of parts/ articles not conforming to any & specified
requirement it is said to be recorded as attributes are discrete data
having integer values. Example:
• Number of defective pieces found in a sample
• Cracks in sheet by spot held etc
• Number of casting defects in a casting
 Variable treated as attributes

One can actually note the diameter variable or interested

in merely knowing whether the object is good or bad
attribute hence at certain times the variable are treated
as attributes. Thus the measured quality of objects in
dimension is called variable and growing of articles as
per the dimension is called attribute (good/bad).
 Control Chart
• A control chart is a graphical representation of
the collected information .
1.The control chart for measurable quality
characteristics includes Ẋ and R chart
2. Control chart for fraction of defective(P-chart)
3. . Control chart for number of of defective per
unit(C-chart)
 Control Chart

X chart :
• It shows changes in process average
• It shows eratic cyclic shift of the process
• X chart is always associated with R & (∂/s) charts
R chart: it is chart to measure the spread or variation in
ranges of samples.
plotting of X and R chart
• A good number of samples of items /products are collected
at random at different intervals of time. Let m samples are
taken each containing n observation on the quality
characteristic. Typically ‘n’ will be small either 4,5 or 6
Control Chart
Control Chart
 Control Chart

The values of A2,D4 and D3 are obtained from table

(factors for variable control chart) for
different sample size ‘n’
rough drawing of R& X chart
Control Chart
 Control Chart

The values of A2,D4 and D3 are obtained from

table (factors for variable control chart) for
sample size ‘n’ rough drawing of R& X chart
Prob-1:
• Determine the control limits for X and R chart
if X=357.50, R=9.90 number of subgroups
(=sample) =20 it is given that A2=0.18 , D3=
0.41, D4=1.59 and d2= 3.735. also find the
process capability
 Problem- 2
• A certain product has been satisfactorily controlled at a
process average of 36 and a standard deviation of 1.00. the
product is presently been to two user who have different
specifications,
• For user A- specification= 38.0+4
• For user B- specification = 36+4
• Based on the present process setup what % of the product
will not meet the specification set up by A
• What % of product will not meet the specification of user
B?
• Assuming that the two users need are equal a suggestion is
made to shift the process average to 37.
• At this suggested value what % of product will not meet the
specification of user A? At the suggested process target
what % of product will not meet the specification of user B?
• Do you think that this shift to a process target of 37
would be desirable ? explain your answer.
Distinguish between defects and detectives
An item is said to be defective if it fails to conform to the specification in any of the
characteristics. Each characteristic that does not meet the specification is a defect.
An item is defective if it contains at least one severe defect. For example if a casting
contains undesirable hard spots blow holes etc, the casting is defecting and the hard
spots blow holes etc. which makes the casting defective are defects.
A nonconforming item is a unit of product that does not satisfy one or more of the
specification for the product. Each specific point at which a specification is not
satisfied results in a defect or nonconforming, consequently a nonconforming item
will contain at least one nonconforming. However depending on their nature and
severity it is quite possible for a unit to contain several nonconformities and not be
classified as nonconforming (defective). As an example, we are manufacturing
personal computers. Each unit could have one or more very mirror flaws in the
cabinet finish and since these flaws do not seriously affect the units functional
operation it could be classified as nonconforming. However if there are too many of
these flaws the personal computer should be classified as nonconforming. Since
these flaws would be very noticeable to the customer and might affect the sale of the
unit. There are many practical situation in which we prefer to work directly with the
number of defects or nonconforming rather than the fraction nonconforming. These
include the no of defective welds in 100m of oil pipe line the number of broken rivels
in an aircraft wing, the number of functional defects in an electronic logic device and
so forth.
 Problem
The following table represents the inspection results of magnets for
19 observations . calculate the average fraction defective and 3
sigma control limits construct the control chart and state wheat her
the process is in statically control.
Week No No of magnet No of
Defective
Fraction of
Inspected magnets’ Defective
1 724 48 0.066
2. 736 83 0.109
3. 748 70 0.094
4. 748 85 0.114
5. 724` 45 0.062
6. 727 56 0.077
7. 726 48 0.066
 Contd…..

• 8. 719 67 0.093
• 9 759 37 0.049
• .10. 745 52 0.070
• 11. 736 47 0.064
• 12. 739 50 0.068
• 13. 723 47 0.065
• 14. 748 57 0.076
• 15. 770 51 0.066
• 16. 756 71 0.094
• 17. 719 53 0.074
• 18 757 34 0.045
• 19. 760 29 0.038
• Total 14091 1030 -
It is seen that sample no 2 and ,4th and 19th goes out of control limits.
Therefore the process does not exhibit statistical control.
 np chart
when the subgroup size is variable p chart is used however if the
subgroup size is constant np chart is used. The reasons are
1.np chart saves are calculation for each subgroup (ie division of no
of defective by subgroup size to get fraction defective)
2.some people may understand the np chart more readily however
to avoid confusion it would be better to use p chart even for
constant subgroup.
Control limits for np chart
The average fraction defective p is used as the best available
estimate of p i.e
C’ chart (const subgroup size)
C chart is used economically in the following causes.
1.number of surface defect in a role of coated paper or a sheet of
photographic film.
2.no of defective rivets in an aircraft wing
3.no of surface defects observed in a galvanized sheet or a painted plate.
4.no of small air holes in glass bottles etc.
Now the number of missing rivets of airplane no 24=28 falls above the
UCL.
Therefore to suggest e for subsequent period we have to revise the
limits by eliminating this reading.
 Quality tools
1. List the seven tools of quality.
1. Check sheets.
2. Histograms.
3. Cause and effect diagrams.
4. Pareto diagrams.
5. Stratification analysis.
6. Scatter diagrams, and
7. Control charts.
 Quality tools
What is check sheet?
• A check sheet or tally sheet is a form for systematic data
gathering and registering to get a clear view of the facts.
When do you use the check sheet?
• A check sheet is used to indicate the frequency of a certain
occurrence.
 
What are the types of check sheets commonly used?
1. Process distribution check sheet.
2. Defective item check sheet.
3. Defect location check sheet, and
4. Defect factor check sheet.
Quality tools
 Quality tools
• 5. What is histogram?
• A histogram is a bar chart / diagram showing a distribution of variable quantities
or characteristics. It is graphical display of the frequency distribution of numerical
data. 
• 6. When do you use histogram?
• A histogram is used to show clearly where the most frequently occurring values
are located and the data is distributed.
• It enables the analyst to quickly visualize the features of a complete set of data.
•  7. What are the various types of histogram?
• 1. Bell-shaped. 2. Double-peaked. 3. Plateau. 4. Comb. 5.
Skewed. 6. Truncated. 7. Isolated peak and 8. Edged peak.
 Quality tools
• 2. Define Histogram. Mention its types. Illustrate with an example.
• i. What is it?
• A histogram is a bar chart / diagram showing a distribution of variable
quantities or characteristics.
• It is a graphical display of the frequency distribution of the numerical data.
• The data are displayed as a series of rectangles of equal width and varying
heights.
•  ii. When do we use it?
• A histogram is used to show clearly where the most frequently occurring values
are located and the data is distributed.
• It is also a tool for determining the maximum process results.
• It enables the analyst to quickly visualize the features of a complete set of data.
•  
 Quality tools
• iii. How do we construct it?
• A histogram may be constructed using the following steps:
• 1. After the data collection, count the number of data values collected.
• 2. Determine the range of the data.
• Range = Highest value – Lowest value
Quality tools
 Quality tools
What is cause and effect diagram?
The cause and effect diagram or Fishbone diagram is a graphical-tabular chart to
list and analyze the potential causes of a given problem.
Under what situations, one can use cause and effect diagram?
• The cause and effect diagram has unlimited application in research manufacturing,
marketing, office operations, services, etc.
What are the uses of CE diagram?
• The cause and effect diagrams are used:
• To analyse cause and effect relationships
• To facilitate the search for solutions of related problems.
• To standardize existing and proposed operations and
• To educate and train personnel in decision-making and corrective action activities.
 
 Quality tools
• Explain the cause and effect diagram (or) fishbone diagram.
• What is it?
• The cause and effect (CE) diagram is a graphical-tabular chart to list and
analysis the potential causes of a given problem.
• The cause and effect diagram is also called the fishbone diagram because
of its appearance and the Ishikawa diagram after the man who developed
it in 1943.
• Fig illustrates the basic structure of a cause and effect diagram.
 Quality tools

As shown in fig the diagram consists of a central stem leading to the

effect (the problem), with multiple branches coming off the stem listing
the various groups of possible causes of the problem.
 Quality tools
What is Pareto diagram?
• A pareto diagram is a diagnostic tool commonly used for separating the
vital few causes that account for a dominant share of quality loss.
State the Pareto principle.
• Pareto principle states that a few of the defects accounts for most of the
effects.
What are the purposes of pareto principle.
• Pareto analysis can be used in a wide range of situations, where one need
to priorities problems based on its relative importance.
Quality tools
 Quality tools
Define the scatter diagram. Mention its types.
• The scatter diagram is a simple graphical device to depict the relationship
between two variables.
• A scatter diagram is composed of a horizontal axis containing the measured
values of one variable (independent, i.e., cause ) and a vertical axis,
representing the measurements of the variable (dependent, i.e., cause) and
a vertical axis, representing the measurements of the variable (dependent,
i.e., effect).
• This diagram display the paired data as cloud of points. The density and
direction of the cloud indicate how the two variables influence each other.
• Although this diagram cannot prove that one variable causes the other, but
they do indicates the existence of a relationship as well as the strength of
that relationship.
• Types of Scatter Diagram Patterns
• The possible patterns i.e., shapes of clouds are depicted in Fig.(a)
to (f).
Quality tools
sampling inspection
Definition
A technique to determine the acceptance /rejection of a lot /population
on the basis of no of defective parts found in a random sample drawn
from a lot.
A. Advantage of sampling inspection over 100% inspection
1.items subjected to destructive test must be inspected by sampling
inspection only
2.cost and time is less compared to 100% inspection
3.inspection fatigue is elimination
4.less staff for inspection
5;.the problem of monitory and inspection error is eliminated
6;.it chart more effective pressure an quality improvement (because the
rejection of entire lot is based on the quality at sample)
 sampling inspection

• B.Limitations
• 1.Risk of making wrong decision
• 2.provides less information about the product
• The success of sampling plan depends on
Randomness of sample .Sample size (sample
size= where N- batch size) Quality characteristics
to be used
• Acceptance criterion
• Let size
 sampling plan
• A first sample of n, is drawn the lot is accepted if there are no more
than c, defective a lot is rejected if there are more than r,
defectives. Otherwise a 2ndsample of n, is drawn the lot is
accepted if there are no more than c defective in the combined
sample n,+n. the lot is rejected if there are more than r defective in
the combined sample of n,+n. the procedure is continued in
accordance with the above table. If by the end of 4thsample the lot
is neither accepted nor rejected a sample of n is drawn.
The lot is accepted if the number of detectives in the combined
sample of
n+n+n+n+n does not excess c. otherwise the lot is rejected. Note
that c,<c,<....<c and c<r for all.
A multiple sampling plan will generally involve less total inspection
than the corresponding single & double sampling plan guaranties
the same protection. But they usually requires higheradministrative
cost and higher caliber inspection personal may be necessary.
sampling plan
 Acceptance Sampling
• It is a process of inspecting the product to find out whether it confirms to
the specification or not by taking samples.
• It can be performed on incoming materials , components , sub
assemblies , in-process operations or final product inspection.
• It is used when transferring products between suppliers and
manufacturers , manufacturer and customer or between departments or
divisions.
• An acceptance criteria must be defined so as to satisfy both customer and
supplier . The supplier wishes for all lots to be accepted . The customer
wishes no lots that contain defective items.
3 alternatives:
•Accept the lot without additional inspection.
•Control 100% of the products.
•Acceptance sampling (use one or more samples to find the information
about the lot
 Acceptance Sampling
Advantages
1.If the inspection is destructive,100% inspection is not feasible.
2.Sampling is more economical and causes less damages due to handling.
3.Sampling reduces inspection error.
4.Sampling provides strong motivation to improve quality.
5.Sampling require less resource and time
Disadvantages
1.Less information about the product and the process.
2.Risk of rejecting ‘good’ lots or accepting ‘poor’ lots.
3.Needs more time and effort in planning and documentation.
 Risk and quality level

1.Producer’s risk(α): This is the risk associated with rejecting a lot of

‘good’ quality.
2.Consumer’s risk(β) : This is the risk of accepting lot of ‘poor’ quality.
3.Acceptance Quality Level(AQL): It is given by maximum percentage of
non-conforming items in a lot that can be considered acceptable.
4.Limiting Quality Level(LQL) :It is given by the percentage of non-
conforming items in a lot that can be considered unacceptable.

We state that the producer’s risk is 10% for an AQL of 2%. It means that
we consider batches that are 2% nonconforming to be good and prefer to
reject such batches no more than 5% of time.
• Sampling Plans
• Single Sampling Plan: The information obtained from one sample is used
to make a decision to accept or reject the lot.
• N = lot size, n = sample size, c = acceptance number
• A random sample of size n is selected from the batch with N items. If the
number of non-conforming items is less than or equal to c, then the batch
is accepted otherwise rejected.
• Double Sampling Plan: A double sampling plan involves making a decision
to accept the lot, reject the lot, or take a second sample.
• N = 500, n1 = 40, c1 = 1, r1 = 4; n2 = 60, c2 = 5, r2 = 6.
• From the first sample, if defect ≤ 1, the lot is accepted. If defect ≥ 4, the
lot is rejected. If defect is between 1 and 4, we take second sample.
• From second sample, if combined defect ≤ 5, the lot is accepted. If
combined defect ≥ 6, the lot is rejected.
• Multiple Sampling Plan: It is the extension of double sampling plan. Many
samples are taken if no interference can be taken from first or second
sample.
• N = 4000, n1 = 20, c1 = 0, r1 = 3;
• n2 = 20, c2 = 1, r2 = 4;
• n3 = 20, c3 = 4, r3 = 5.
• Comparison:
• 1. Single sampling plan is the most simple one.
• 2. Administrative costs are the least for single sampling plan.
• 3. On average, the number of items inspected is higher for single plan
(higher inspection cost).
• 4. More information can be found with single sampling plan.
• Six Sigma
• • A process for developing and delivering near
perfect products and services
• • Measure of how much a process deviates
from perfection
• • 3.4 defects per million opportunities
• • Champion
• – an executive responsible for project success
 7.PLANT MAINTENANCE

• Introduction
• Preventive maintenance
• Scheduled maintenance
• Break-down maintenance
• Total productive maintenance (TPM)
• Total planned quality maintenance (TPQM)
 7.PLANT MAINTENANCE
• Plant maintenance is defined as a set of activities that are necessary to
keep machinery, parts & types of equipment in good operating conditions
to avoid production stoppage and loss.
• Maintenance can be defined as a combination of actions carried out to
replace , repair , service (or modify) the components or some identifiable
grouping of components in a manufacturing plant so that it will continue
to operate at a specified ‘availability’ for a specified time.
All actions necessary for retaining an item , or restoring to it , a
serviceable condition , include servicing , repair , modification , overhaul ,
inspection and condition verification.
•Increase availability of a system.
•Keep system’s equipment in working order
 7.PLANT MAINTENANCE
• Objectives of plant maintenance 
1.The objective of plant maintenance is to achieve minimum breakdown and
to keep the plant in good working condition at the lowest possible cost.
2.Utilization of optimum capacity.
3.To keep the life of the equipment.
4.To ensure highest availability.
5.To modify the machine tools and other production facilities.
6.Economy.
7.Improve productivity.
8.Ensure safety.
 7.PLANT MAINTENANCE

Problemsin Maintenance
•Lack of management attention to maintenance
•Little participation by accounting in analyzing and reporting costs
•Difficulties in applying quantitative analysis
•Difficulties in obtaining time and cost estimates for maintenance works
•Difficulties in measuring performance
 7.PLANT MAINTENANCE

Problems Exist Due To:

•Failure to develop written objectives and policy
•Inadequate budgetary control
•Inadequate control procedures for work order, service requests etc.
•Infrequent use of standards
•To control maintenance work
•Absence of cost reports to aid maintenance planning and control system
 7.PLANT MAINTENANCE

Types of Maintenance
Maintenance may be classified into four categories: (some authors prfer
three categories-scheduled and preventive maintenances are merged)
•Corrective or Break down maintenance
•Scheduled maintenance
•Preventive maintenance
•Predictive(Condition-based)maintenance
 7.PLANT MAINTENANCE

Principle–“Prevention is better than cure”

•Procedure-Stitch-in-time :It consists of routine actions taken in a
planned manner to prevent break down and to ensure operational
efficiency to the extent it is economically and practically possible.
 It locates weak spots of machinery and equipments
 It provides them periodic / scheduled inspections and minor repairs to
reduce the danger of unanticipated breakdowns
 7.PLANT MAINTENANCE

Objectives of preventive maintenance

1.To minimize the possibility of unanticipated production interruptions by
locating or uncovering any condition which may lead to it.
2.To make plant equipment and machines always available and ready for use.
3.To maintain the value of the equipment , machinery and other service
facilities by periodic inspection , repairs , overhauling etc.
4.To reduce the work content of maintenance jobs.
5.To ensure safety of life of employees
 7.PLANT MAINTENANCE

Elements of preventive maintenance

1.Inspection.
a. External inspection(abnormal sound ,vibration ,heat , smoke)
b. Internal inspection(inspection of internal parts)
2.Overhauls.
3.Lubrication.
4.Planning and scheduling.
5.Record and analysis.
6.Training of maintenance staff.
7.Storage of spare parts.
 7.PLANT MAINTENANCE

Advantages:
–Reduces break down and thereby down time
–Less odd-time repair and reduces over time of crews
–Greater safety of workers
–Lower maintenance and repair costs
–Less stand-by equipments and spare parts
–Better product quality and fewer reworks and scraps
–Increases plant life
–Increases chances to get production incentive bonus
 7.PLANT MAINTENANCE

Scheduled maintenance is a stitch-in-time procedure and incorporates

–inspection
–lubrication
–repair and overhaul of equipments
• If neglected can result in breakdown
• Generally followed for:
–overhauling of machines
–changing of heavy equipment oils
–cleaning of water and other tanks etc
 7.PLANT MAINTENANCE

Advantages of scheduled maintenance

1.It reduces down time during repairs.
2.The break-down is minimized and machines run at a higher level of
efficiency.
3.Pre-determination of date of commencement of work ensures to plan
the work load and distribution of maintenance work force for balanced
attention of all equipment.
 7.PLANT MAINTENANCE
Corrective or Breakdown maintenance implies that repairs are made
after the equipment is failed and can not perform its normal function
any more.
Typical causes of equipment breakdown may be as follows:
–Failure to replace worn out parts
–Lack of lubrication
–Neglected cooling system
–Indifference towards minor faults
–External factors such as too low or too high line voltage, wrong fuel etc.
• Quite justified in small factories where:
–Down times are non-critical and repair costs are less than other type of
maintenance
–Financial justification for scheduling are not felt
 7.PLANT MAINTENANCE
Disadvantages of corrective or break-down maintenance
• Breakdown generally occurs inappropriate times leading to poor and
hurried maintenance
• Excessive delay in production & reduces output
• Faster plant deterioration
• Increases chances of accidents and less safety for both workers and
machines
• More spoilt materials
• Direct loss of profit
• Can not be employed for equipments regulated by statutory provisions
e.g. cranes, lift and hoists etc
 7.PLANT MAINTENANCE
In predictive maintenance, machinery conditions are periodically
monitored and this enables the maintenance crews to take timely
actions , such as machine adjustment , repair or overhaul
•It makes use of human sense and other sensitive instruments , such as
Audio gauge , vibration analyzer , amplitude meter , pressure ,
temperature and resistance strain gauges etc.
•Unusual sounds coming out of a rotating equipment predicts a trouble
•An excessively hot electric cable predicts a trouble
•Simple hand touch can point out many unusual equipment conditions
and thus predicts a trouble
Comparison between break-down and
preventive maintenance
 Comparison between break-down and
preventive maintenance
It is natural that when cost of preventive maintenance increases , the cost
of break down decreases. But after certain limit , increase in expenditure
on preventive maintenance becomes un economical.For this purpose ,
these two costs should be plotted in a graph and cumulative costs of both
types of maintenance are superimposed as shown in figure above from
which an optimum point can easily be determined.
Maintenance Jobs in Lathe Machine
Maintenance Jobs in Lathe Machine
 Total Productive Maintenance (TPM)

• Total Productive Maintenance(TPM) is a concept which aims at ‘Zero

Down Time’. This demands a devoted participation of all concerned
units and individuals at all levels.
• The concept of maintenance management is an innovation ,non-
traditional approach to plant maintenance and is complementary with
Total Quality Management(TQM),Just-In-Time(JIT) , Total Employee
Improvement(TEI) which arealready developed and successfully
implemented world class manufacturing strategies.
TPM means
-Total employee involvement
-Total equipment effectiveness , and
-A total maintenance delivery system
 Total Productive Maintenance (TPM)

TPM aims to use equipment at its maximum effectiveness by eliminating

waste & loss caused by failure of the equipment , setup and adjustment ,
reduced speed , process defects and reduced yield.
TPM aims at improving the productivity by improving its personnel and
plant by changing the corporate culture. The operator carries out the daily
maintenance work such as clean up , lubrication , tightening and external
inspection so that the equipment does not breakdown
 Total Productive Maintenance (TPM)

A comprehensive definition of TPM involving company wide activities

includes the following main elements:
1.TPM aims to change corporate culture inorder to maximize over all
effectiveness of production systems.
2.It establishes a sound system to prevent all kind of losses (zero accidents ,
zero defects , zero break-downs) based on actual equipment and
workplace.
3.TPM is implemented not only by production related departments but also by
other departments such as product development , sales , administration
etc.
4.TPM involves every employee , from top management to workers , on the
shop floor
 Total Planned Quality Maintenance (TPQM)
• TQPM is a comprehensive program which is current in technology and
designed to maximize equipment reliability and plant availability while
minimizing maintenance cost and resources.
• TQPM considers maintenance to be an integrated function that includes
the element like maintenance tasks , logistic support , technical
documentation , personnel , work control , management organization and
administration , maintenance management information flow , measure of
effectiveness & maintenance engineering.
 Total Planned Quality Maintenance (TPQM)

• TPQM addresses both programmatic and technical concerns of

maintenance. It is designed to facilitate the integration of maintenance
element into the quality process (plan , do , check , act).
• TQPM employs reliability centered techniques to define life cycle
maintenance tasks and logistic engineering techniques to define the
resource required.
• TPQM permits preplanning of over 90% of all activities and is a ‘living
process’ designed for continuous improvement.