UNIT .I

What is Production Management? Meaning

Production management means planning, organising, directing and controlling of production activities.

Production management deals with converting raw materials into finished goods or products. It brings together the 6M's i.e. men, money, machines, materials, methods and markets to satisfy the wants of the people.

Production management also deals with decision-making regarding the quality, quantity, cost, etc., of production. It applies management principles to production.

Production management is a part of business management. It is also called "Production Function." Production management is slowly being replaced by operations management.

The main objective of production management is to produce goods and services of the right quality, right quantity, at the right time and at minimum cost. It also tries to improve the efficiency. An efficient organisation can face competition effectively. Production management ensures full or optimum utilisation of available production capacity.

Definition of Production Management

"Production management deals with decision-making related to production processes so that the resulting goods or service is produced according to specification, in the amount and by the schedule demanded and at minimum cost." According to Elwood Spencer Buffa

Importance of Production Management

The importance of production management to the business firm:

1. Accomplishment of firm's objectives : Production management helps the business firm to achieve all its objectives. It produces products, which satisfy the customers' needs and wants. So, the firm will increase its sales. This will help it to achieve its objectives.

2. Reputation, Goodwill and Image : Production management helps the firm to satisfy its customers. This increases the firms reputation, goodwill and image. A good image helps the firm to expand and grow.

3. Helps to introduce new products : Production management helps to introduce new products in the market. It conducts Research and development (R&D). This helps the firm to develop newer and better quality products. These products are successful in the market because they give full satisfaction to the customers.

4. Supports other functional areas : Production management supports other functional areas in an organisation, such as marketing, finance, and personnel. The marketing department will find it easier to sell good-quality products, and the finance department will get more funds due to increase in sales. It will also get more loans and share capital for expansion and modernisation. The personnel department will be able to manage the human resources effectively due to the better performance of the production department.

5. Helps to face competition : Production management helps the firm to face competition in the market. This is because production management produces products of right quantity, right quality, right price and at the right time. These products are delivered to the customers as per their requirements.

6. Optimum utilisation of resources : Production management facilitates optimum utilisation of resources such as manpower, machines, etc. So, the firm can meet its capacity utilisation objective. This will bring higher returns to the organisation.

7. Minimises cost of production : Production management helps to minimise the cost of production. It tries to maximise the output and minimise the inputs. This helps the firm to achieve its cost reduction and efficiency objective.

8. Expansion of the firm : The Production management helps the firm to expand and grow. This is because it tries to improve quality and reduce costs. This helps the firm to earn higher profits. These profits help the firm to expand and grow.

The importance of production management to customers and society:

1. Higher standard of living : Production management conducts continuous research and development (R&D). So they produce new and better varieties of products. People use these products and enjoy a higher standard of living.

2. Generates employment : Production activities create many different job opportunities in the country, either directly or indirectly. Direct employment is generated in the production area, and indirect employment is generated in the supporting areas such as marketing, finance, customer support, etc.

3. Improves quality and reduces cost : Production management improves the quality of the products because of research and development. Because of large-scale production, there are economies of large scale. This brings down the cost of production. So, consumer prices also reduce.

4. Spread effect : Because of production, other sectors also expand. Companies making spare parts will expand. The service sector such as banking, transport, communication, insurance, BPO, etc. also expand. This spread effect offers more job opportunities and boosts economy.

5. Creates utility : Production creates Form Utility. Consumers can get form utility in the shape, size and designs of the product. Production also creates time utility, because goods are available whenever consumers need it.

6. Boosts economy : Production management ensures optimum utilisation of resources and effective production of goods and services. This leads to speedy economic growth and well-being of the nation

Functions of Production Management

The components or functions of production management are as follows:

1. Selection of Product and Design,

2. Selection of Production Process,

3. Selecting Right Production Capacity,

4. Production Planning,

5. Production Control,

6. Quality and Cost Control,

7. Inventory Control, and

8. Maintenance and Replacement of Machines

The above functions of production management are briefly discussed below.

1. Selection of Product and Design

Production management first selects the right product for production. Then it selects the right design for the product. Care must be taken while selecting the product and design because the survival and success of the company depend on it. The product must be selected only after detailed evaluation of all the other alternative products. After selecting the right product, the right design must be selected. The design must be according to the customers' requirements. It must give the customers maximum value at the lowest cost. So, production management must use techniques such as value engineering and value analysis.

2. Selection of Production Process

Production management must select the right production process. They must decide about the type of technology, machines, material handling system, etc.

3. Selecting Right Production Capacity

Production management must select the right production capacity to match the demand for the product. This is because more or less capacity will create problems. The production manager must plan the capacity for both short and long term's production. He must use break-even analysis for capacity planning.

4. Production Planning

Production management includes production planning. Here, the production manager decides about the routing and scheduling.

Routing means deciding the path of work and the sequence of operations. The main objective of routing is to find out the best and most economical sequence of operations to be followed in the manufacturing process. Routing ensures a smooth flow of work.

Scheduling means to decide when to start and when to complete a particular production activity.

5. Production Control

Production management also includes production control. The manager has to monitor and control the production. He has to find out whether the actual production is done as per plans or not. He has to compare actual production with the plans and finds out the deviations. He then takes necessary steps to correct these deviations.

6. Quality and Cost Control

Production management also includes quality and cost control. Quality and Cost Control are given a lot of importance in today's competitive world. Customers all over the world want good-quality products at cheapest prices. To satisfy this demand of consumers, the production manager must continuously improve the quality of his products. Along with this, he must also take essential steps to reduce the cost of his products.

7. Inventory Control

Production management also includes inventory control. The production manager must monitor the level of inventories. There must be neither over stocking nor under stocking of inventories.

If there is an overstocking, then the working capital will be blocked, and the materials may be spoiled, wasted or misused.

If there is an understocking, then production will not take place as per schedule, and deliveries will be affected.

8. Maintenance and Replacement of Machines

Production management ensures proper maintenance and replacement of machines and equipments. The production manager must have an efficient system for continuous inspection (routine checks), cleaning, oiling, maintenance and replacement of machines, equipments, spare parts, etc. This prevents breakdown of machines and avoids production halts.

HISTORICAL EVOLUTION OF PRODUCTION AND OPERATIONS MANAGEMENT PRODUCTION AND OPERATIONS MANAGEMENT

operations and production management has been recognized as an important factor in a country’s economic growth. The traditional view of manufacturing management began in eighteenth century when Adam Smith recognized the economic benefits of specialization of labor. He recommended breaking of jobs down into subtasks and recognizes workers to specialized tasks in which they would become highly skilled and efficient. In the early twentieth century, F.W. Taylor implemented Smith’s theories and developed scientific management. From then till 1930, many techniques were developed prevailing the traditional view. Brief information about the contributions to manufacturing management is shown in the following table.

History of Operations Management

Operations management is the act of controlling and directing the design, production and delivery of products. Although people have been producing and selling products since the very beginning of civilization, the implementation of operations management is a relatively new phenomenon. Operations management came to prominence in the 20th century, but its roots can be traced back to the 18th and 19th centuries.

PRE-INDUSTRIAL REVOLUTION

One of the first people to address the issues of operations management was the Scottish philosopher -- and father of modern economics -- Adam Smith. In 1776 Smith wrote "The Wealth of Nations," in which he described the division of labor. According to Smith, if workers divided their tasks, then they could produce their products more efficiently than if the same number of workers each built products from start to finish. This concept would later be used by Henry Ford with the introduction of the assembly line.

POST-INDUSTRIAL REVOLUTION

During the industrial revolution, machinery allowed factories to grow in capacity and greatly increased their output. Despite this growth, there was considerable inefficiency in production. Two individuals helped to overcome these inefficiencies in the early 20th century: Frederick Winslow Taylor and Ford. Taylor developed a scientific approach for operations management, collecting data about production, analyzing this data and using it to make improvements to operations. Ford increased efficiency in production by introducing assembly line production and improved the supply chain through just-in-time delivery.

POST-WORLD WAR II

Technological developments during the second world war created new possibilities for managers looking to improve their operations. Specifically, the development of computational technology allowed for a greater degree of data to be analyzed by firms. The abilities of computers have continued to increase exponentially, allowing for a high degree of data analysis and communication. Modern producers are now able to track their inventory from raw materials, through production and delivery.

MODERN DAY

Quality management systems are popular in today's operations management. Quality management is a system for mapping, improving and monitoring operations processes. A variety of quality management systems are in use among top firms, the most notable systems being the ISO systems and Six Sigma. These systems aim to increase the efficiency of business processes. Although operations management has typically dealt with the manufacturing process, the growth of the service industry has created a field of service operations management.

Production management becomes the acceptable term from 1930s to 1950s. As F.W. Taylor’s works become more widely known, managers developed techniques that focused on economic efficiency in manufacturing. Workers were studied in great detail to eliminate wasteful efforts and achieve greater efficiency. At the same time, psychologists, socialists and other social scientists began to study people and human behavior in the working environment. In addition, economists, mathematicians, and computer socialists contributed newer, more sophisticated analytical approaches.

With the 1970s emerge two distinct changes in our views. The most obvious of these, reflected in the new name operations managementwas a shift in the service and manufacturing sectors of the economy. As service sector became more prominent, the change from ‘production’ to ‘operations’ emphasized the broadening of our field to service organizations. The second, more suitable change was the beginning of an emphasis on synthesis, rather than just analysis, in management practices.

WHAT IS PRODUCT DESIGN?

Product design is the process of planning new products or services. The multi-stage process involves extensive user research, market analysis, creative thinking, ideation, concepting, prototyping, testing and more. A product designer combines extensive creative, analytical and technical skills to effectively design new, innovative and commercially viable additions to a company’s suite of products and services.

The process of creating a new product for sale to customers is known as product design. Thought this definition tends to oversimplify, product design is actually a broad concept which encompasses a systematic generation and development of ideas that eventually leads to the creation of new products. Design experts work on concepts and ideas, eventually turning them into tangible products and inventions.

12 STEPS TO PRODUCT SUCCESS!

Step 1: PRODUCT CONCEPT

This consists of basic sketches around your product idea. So ask yourself -what is your product and how is your product going to be used?

Step 2: RESEARCH

It is vital to research the current markets and demands. So you need to find out what is already on the market what is similar to your product idea? If there is a similar product, how is yours going to be better?

Step 3: PRODUCT DESIGN DEVELOPMENT

Using the information you have gathered from your research you can now develop your product designs. When you are designing your product need to answer the following questions:

– What is the function of my product?

– Will my product be able to withstand use?

– Will the product be reliable?

– Can the product be produced at a cost effective price?

– Will the manufacturing process be easy to produce the final product? Does it contain multiple parts?

– Will the process be cost effective? Can you still make profit after manufacturing your product?

– Do you want your product to be of a high quality?

– Can your product be maintained or will it break after one use?

– Which material(s) will your product be made from? This will depend on the use and the forces your product is expected to withstand.

Step 4: RESEARCH AND DEVELOPMENT OF THE FINAL DESIGN

This is the final tweaks to your drawings with dimensions and material selection so when you progress to step 5 you have a detailed drawing to work from.

Step 5: CAD

Using 3D modelling software (CAD – computer aided design) you will get a computerised 3D model of your final product design. These designs will often highlight problem areas where the theoretical stresses and strains on the product will be shown. If there are problems now is a good time to address the design faults and revisit step 4.

Step 6: CAM

A prototype of your design will be created using computer aided engineering systems.A physical representation of your design is great for testing and developing.

Step 7: PROTOTYPE TESTING

This is the point where you may have to go back to the drawing board when you test your prototype. Be critical – will your product function properly? If your product isn’t right, go back to Step 3 and re-develop your designs.

Step 8: MANUFACTURING

Once you are happy with your product prototype you can then manufacture your product! Manufacturing costs depend on complexity of your product, if there are multiple components, material selection, low batch product or high batch numbers. These factors need to be considered to ensure you will make a healthy profit on your end product.

Step 9: ASSEMBLY

The assembly of your product is vital – if you use a glue that will degenerate quickly you will not sell many products. It is recommended that your product should have the minimum number of joins; this will not only spend up manufacture and reduce manufacturing costs it also makes assembly of your product quicker. So the overall costs of your product will be considerably less than a complex product.

Step 10: FEEDBACK AND TESTING

Test your final product with family, friends and focus groups. Again it is important to be critical of your product and listen to the feedback you get back from other people. This will help with any further product development.

Step 11: PRODUCT DEVELOPMENT

If your testing and feedback have highlight areas that need improvement, you will need to revisit your product development – most manufacturing companies would have flagged up obvious issues before you get to this stage so at this point you are just tweaking or you might be skipping straight to Step 12.

Step 12: FINAL PRODUCT

You now have your final product so you need to focus on your marketing campaign and how you are going to sell your product. Remember, the more you sell, the larger the manufacturing batches, the lower the cost of manufacture = more profits!

THE NEW PRODUCT DEVELOPMENT PROCESS (NPD) – OBTAIN NEW PRODUCTS

In order to stay successful in the face of maturing products, companies have to obtain new ones by a carefully executed new product development process. But they face a problem: although they must develop new products, the odds weigh heavily against success. Of thousands of products entering the process, only a handful reach the market. Therefore, it is of crucial importance to understand consumers, markets, and competitors in order to develop products that deliver superior value to customers. In other words, there is no way around a systematic, customer-driven new product development process for finding and growing new products. We will go into the eight major steps in the new product development process.

The 8 steps in the New Product Development Process

1. IDEA GENERATION

The new product development process starts with idea generation. Idea generation refers to the systematic search for new-product ideas. Typically, a company generates hundreds of ideas, maybe even thousands, to find a handful of good ones in the end. Two sources of new ideas can be identified:

§ Internal idea sources: the company finds new ideas internally. That means R&D, but also contributions from employees.

§ External idea sources: the company finds new ideas externally. This refers to all kinds of external sources, e.g. distributors and suppliers, but also competitors. The most important external source are customers, because the new product development process should focus on creating customer value.

2. IDEA SCREENING

The next step in the new product development process is idea screening. Idea screening means nothing else than filtering the ideas to pick out good ones. In other words, all ideas generated are screened to spot good ones and drop poor ones as soon as possible. While the purpose of idea generation was to create a large number of ideas, the purpose of the succeeding stages is to reduce that number. The reason is that product development costs rise greatly in later stages. Therefore, the company would like to go ahead only with those product ideas that will turn into profitable products. Dropping the poor ideas as soon as possible is, consequently, of crucial importance.

3. CONCEPT DEVELOPMENT AND TESTING

To go on in the new product development process, attractive ideas must be developed into a product concept. A product concept is a detailed version of the new-product idea stated in meaningful consumer terms. You should distinguish

§ A product idea à an idea for a possible product

§ A product concept à a detailed version of the idea stated in meaningful consumer terms

§ A product image à the way consumers perceive an actual or potential product.

Let’s investigate the two parts of this stage in more detail.

4. Marketing strategy development

The next step in the new product development process is the marketing strategy development. When a promising concept has been developed and tested, it is time to design an initial marketing strategy for the new product based on the product concept for introducing this new product to the market.

The marketing strategy statement consists of three parts and should be formulated carefully:

§ A description of the target market, the planned value proposition, and the sales, market share and profit goals for the first few years

§ An outline of the product’s planned price, distribution and marketing budget for the first year

§ The planned long-term sales, profit goals and the marketing mix strategy.

5. Business analysis

Once decided upon a product concept and marketing strategy, management can evaluate the business attractiveness of the proposed new product. The fifth step in the new product development process involves a review of the sales, costs and profit projections for the new product to find out whether these factors satisfy the company’s objectives. If they do, the product can be moved on to the product development stage.

6. Product development

The new product development process goes on with the actual product development. Up to this point, for many new product concepts, there may exist only a word description, a drawing or perhaps a rough prototype. But if the product concept passes the business test, it must be developed into a physical product to ensure that the product idea can be turned into a workable market offering. The problem is, though, that at this stage, R&D and engineering costs cause a huge jump in investment.

The R&D department will develop and test one or more physical versions of the product concept. Developing a successful prototype, however, can take days, weeks, months or even years, depending on the product and prototype methods.

7. Test marketing

The last stage before commercialisation in the new product development process is test marketing. In this stage of the new product development process, the product and its proposed marketing programme are tested in realistic market settings. Therefore, test marketing gives the marketer experience with marketing the product before going to the great expense of full introduction. In fact, it allows the company to test the product and its entire marketing programme, including targeting and positioning strategy, advertising, distributions, packaging etc. before the full investment is made.

The amount of test marketing necessary varies with each new product. Especially when introducing a new product requiring a large investment, when the risks are high, or when the firm is not sure of the product or its marketing programme, a lot of test marketing may be carried out.

8. Commercialisation

Test marketing has given management the information needed to make the final decision: launch or do not launch the new product. The final stage in the new product development process is commercialisation. Commercialisation means nothing else than introducing a new product into the market. At this point, the highest costs are incurred: the company may need to build or rent a manufacturing facility. Large amounts may be spent on advertising, sales promotion and other marketing efforts in the first year.

PROCESS DESIGN

The activity of determining the workflow, equipment needs, and implementation requirements for a particular process. Process design typically uses a number of tools including flowcharting, process simulation software, and scale models.

WHAT IS THE DESIGN PROCESS

The Design Process is an approach for breaking down a large project into manageable chunks. Architects, engineers, scientists, and other thinkers use the design process to solve a variety of problems. Use this process to define the steps needed to tackle each project, and remember to hold to all of your ideas and sketches throughout the process.

THE DESIGN PROCESS CONSISTS OF 6 STEPS:

1. Define the Problem

You can’t find a solution until you have a clear idea of what the problem is.

2. Collect Information

Collect sketches, take photographs and gather data to start giving you inspiration.

3. Brainstorm and Analyze Ideas

Begin to sketch, make, and study so you can start to understand how all the data and information you’ve collected may impact your design.

4. Develop Solutions

Take your preliminary ideas and form multiple small-scale design solutions.

5. Gather Feedback

Present your ideas to as many people as possible: friends, teachers, professionals, and any others you trust to give insightful comments.

6. Improve

Reflect on all of your feedback and decide if or to what extent it should be incorporated. It is often helpful to take solutions back through the Design Process to refine and clarify them.

STEPS TO PROCESS DEVELOPMENT

The concept of a process is simple. A repeatable set of steps that reliably accomplish a goal. Unfortunately, the term “process” is reviled by many because they perceive processes as burdensome, overbearing, inefficient, and ineffective, and they could be correct.

However, poor processes and the results they produce do not have to be the default position. I’ve developed this acrostic to explain what a process should be, and to provide a mechanism for reliably improving results.

P.R.O.C.E.S.S. is defined as:

Proven

Repeatable

Owner driven

Compatible

Executable,Sustainable,Successful

Proven

The first part of any successful process is that it gives proven results. This simply means that it has been employed more than a few times and provided acceptable results, if not outstanding ones, every time.

Another way of thinking of “proven” is its reliability and predictability. Does the process provide you with the same outcome every time it is used with the same set of inputs? Does it fail when the process is followed but with substandard or incorrect inputs?

Repeatable

Repeatability is the core definition of any effective process. If its repeatable, then it can be used time and time again by any person trained in its use. If not, you don’t have a process and you are relying on luck rather than management.

Owner-driven

Ownership of the process by the people using it is a key to its success. Processes mandated without consultation and buy-in from those who will use it is a recipe for failure. Two reasons for this are:

Intelligent adults do not like to be told what to do. Ask them for their input and ask them to contribute to making improvements and most will do their very best to make the process and the company a success.
No one knows how the system better than those who do it eight hours a day, five days a week. Executives and managers worth their salt will provide guidelines and then have the front-line experts develop the most effective process. This is the basis of employee engagement.

Compatible

The process must be compatible with all of the departments with which it interfaces. If not, then the transfer of information or product within the company will be inefficient. Compatibility can be assured when all applicable departments are part of the “ownership” described above.

Executable

This goes without saying. If the process cannot be performed without Herculean effort, then it is useless. Go back to the drawing board and redesign the process.

It is possible that the design of the product is flawed in such a way that a reliable and executable manufacturing process may not be possible. In this case, both the product and process will require redesign.

Sustainable

A process that requires personnel to perform at a high level in stressful environments is not sustainable. Product quality and throughput will suffer, and employee turnover will skyrocket.

In these cases, both the product design and the production facility must be examined. Can the design be modified to improve the assembly process? Is there sufficient profit in the product to afford improving or changing the production facility?

Note: There are some products that require production in stressful environments; there is no way around this. In these cases, extraordinary efforts will be required to keep the personnel safe and engaged.

Successful

Lastly, the process must be successful and provide the desired results. If the goals are not met, then the process must be refined or scrapped. In business, ethically-attained results are the expectation and any process that does not provide them, is a detriment to the firm and must not be allowed to continue.

WHAT IS COMPUTER AIDED DESIGN?

It is the use of computer systems to assist in the creation, modification, analysis, or optimization of a design. CAD software is used to increase the productivity of the designer, improve the quality of design, improve communications through documentation, and to create a database for manufacturing. CAD output is often in the form of electronic files for print, machining, or other manufacturing operations.

Computer-aided design is used in many fields. Its use in designing electronic systems is known as Electronic Design Automation, or EDA. In mechanical design it is known as Mechanical Design Automation (MDA) or computer-aided drafting (CAD), which includes the process of creating a technical drawing with the use of computer software.

Beginning in the 1980s computer-aided design programs reduced the need of drafts men significantly, especially in small to mid-sized companies. Their affordability and ability to run on personal computers also allowed engineers to do their own drafting and analytic work, eliminating the need for entire departments and the traditional drafting supplies they used. In today's world, many students in universities do not learn manual drafting techniques because they are not required to do so. The days of hand drawing for final drawings are virtually over. Universities no longer require the use of protractors and compasses to create drawings, instead there are several classes that focus on the use of CAD.

Types of CAD Software

Computer Aided Design (or Drafting), also known as CAD, is a design tool that employs computers to create drawings and models of products while they are in the process of being created. CAD was first created in the early 1960s and today is used to design almost every product on the market in the world. Many types of CAD exist for different applications, and anyone interested in how products are designed may be interested in learning more.

2D CAD

Two-dimensional, or 2D, CAD is used to create flat drawings of products and structures. Objects created in 2D CAD are made up of lines, circles, ovals, slots and curves. 2D CAD programs usually include a library of geometric images; the ability to create Bezier curves, splines and polylines; the ability to define hatching patterns; and the ability to provide a bill of materials generation. Among the most popular 2D CAD programs are AutoCAD, CADkey, CADDS 5, CATIA v4 and Medusa.

2.5 D CAD

In between 2D and 3D CAD is 2.5-D CAD. The models created in this type of CAD are prismatic, that is, they represent the depth of the objects. Like 2D CAD, these objects are made up of geometric objects.

3D CAD

Three-dimensional (3D) CAD programs come in a wide variety of types, intended for different applications and levels of detail. Overall, 3D CAD programs create a realistic model of what the design object will look like, allowing designers to solve potential problems earlier and with lower production costs. Some 3D CAD programs include Autodesk Inventor, CoCreate Solid Designer, Pro/Engineer SolidEdge, SolidWorks, Unigraphics NX and VX CAD.

3D Wireframe and Surface Modeling

CAD programs that feature 3D wireframe and surface modeling create a skeleton-like inner structure of the object being modeled. A surface is added on later. These types of CAD models are difficult to translate into other software and are therefore rarely used anymore.

Solid Modeling

Solid modeling in general is useful because the program is often able to calculate the dimensions of the object it is creating. Many sub-types of this exist. Constructive Solid Geometry (CSG) CAD uses the same basic logic as 2D CAD, that is, it uses prepared solid geometric objects to create an object. However, these types of CAD software often cannot be adjusted once they are created. Boundary Representation (Brep) solid modeling takes CSG images and links them together. Hybrid systems mix CSG and Brep to achieve desired designs

COMPUTER AIDED MANUFACTURING (CAM)

Computer aided draughting (CAD sometimes referred to as computer aided design) and computer aided manufacturing (CAM) has allowed computer numerical control (CNC) of highly-automated end-to-end component design and manufacture.

Computers can produce files that translate design information into commands to operate machines, singularly or collectively, to perform pre-set sequences of tasks in the production of building components.

Modern machinery can be multi-functional, combining a number of tools in a single cell, or may deploy a number of different machines programmed to operate when the component is moved from machine to machine, either by human intervention or by computer control. In either case a series of steps are programmed to produce highly-automated components that closely match the original design.

The following functions lend themselves to this technology:

§ Hole punching or drilling.

§ Sawing.

§ Laser cutting.

§ Flame and plasma cutting.

§ Bending.

§ Spinning.

§ Routing and milling.

§ Pinning.

§ Gluing.

§ Fabric cutting.

§ Picking and placing.

§ Tape and fabric placement.

It can be relatively 'low-tech', such as the Wiki House initiative, which enables users to generate cutting files for components that can be manufactured from standard sheet materials such as plywood using a CNC router. The components can then be assembled, forming joints with pegs and wedges to create a basic dwelling.

However, the movement from 2D CAD to 3D BIM may enable the manufacture of entire assemblies using rapidly advancing robotic technology long established in the automotive industry. However, this is expensive technology and requires a protected, predictable environment. It also requires repetition and high numbers of units to make the investment in the robotics technology required viable. Consequently, CAM is most likely to be taken up in off-site pre-fabrication facilities for the development of repetitive building types such as in the residential market.

It may however, develop with the emergence of 'flying factories', temporary facilities used to manufacture prefabricated components. They are different from conventional off-site factories in that they only operate for the duration of a project and are then closed. Operations may then 'fly' to a new location to service another project. See flying factory for more information.

Computer aided manufacturing may also be transformed by the emergence of economically-viable 3D printing (sometimes referred to as Additive Manufacturing (AM)). This the computer-controlled sequential layering of materials to create 3 dimensional shapes. It is particularly useful for prototyping and for the manufacture of geometrically complex components.

UNIT ---II

Plant location or the facilities location problem is an important strategic level decisionmaking for an organisation. One of the key features of a conversion process (manufacturing system) is the efficiency with which the products (services) are transferred to the customers. This fact will include the determination of where to place the plant or facility.

The selection of location is a key-decision as large investment is made in building plant and machinery. It is not advisable or not possible to change the location very often. So an improper location of plant may lead to waste of all the investments made in building and machinery, equipment.

Before a location for a plant is selected, long range forecasts should be made anticipating future needs of the company. The plant location should be based on the company’s expansion plan and policy, diversification plan for the products, changing market conditions, the changing sources of raw materials and many other factors that influence the choice of the location decision. The purpose of the location study is to find an optimum location one that will result in the greatest advantage to the organization.

Factors Affecting Plant Location

Plant location must be selected properly by entrepreneurs while planning to set up their business units. While taking such a decision, they must consider some important factors.

The following image depicts important factors affecting a plant location.

The ten main factors that affect a plant location are as follows:

1. Law and order situation,

2. Availability of infrastructure facilities,

3. Good industrial relations,

4. Availability of skilled workforce,

5. Social infrastructure,

6. Investor friendly attitude,

7. Nearness to market,

8. Nearness to raw-materials' source,

9. Nearness to supportive industries and services, and

10. Must meet safety requirements.

Now let's discuss above factors affecting the location of a plant.

1. Law and order situation

Plant location must be at that place where law and order situation is in control. Entrepreneurs give a lot of importance to this factor while locating a business unit in any state or region. If a state has bad law and order situation, then the business must not be located within that state, unless it has other important factors such as availability of heavy or bulky raw materials.

2. Availability of infrastructure facilities

Plant location which is selected must have proper infrastructure facilities. Without good infrastructure facilities, it will be difficult to do business efficiently. The infrastructure facilities are the backbone of all industries. Without it, business cannot be done.

Crucial infrastructure facilities that help industries to grow:

1. Transport and communications,

2. Banking and insurance services,

3. Regular fuel supply,

4. Continuous supply of electricity and water, etc.

3. Good industrial relations

Plant location must be at those places where good industrial-relations are maintained. Industrial relations become bad, because of militant and selfish trade unions. Entrepreneurs do not want to locate their business at places where anti-social elements are rampant, although there are other favorable factors such as good infrastructure facilities, cheap labor, etc.

4. Availability of skilled workforce

Plant location must be convenient and easily accessible to skilled workforce. Most businesses require skilled-labor force such as engineers, management experts, computer programmers, etc. The entrepreneurs must consider the availability of competent and skillful-workforce at a particular place to locate their business.

5. Social infrastructure

Plant location must have good a social infrastructure. There is a need for social-infrastructure not only for employees but also for the development of their families. The availability of social-infrastructure will increase the employees' welfare.

There must be suitable social infrastructure facilities like;

· Education institutions,

· Hospitals and health centers,

· Community centers like worship place, garden, meditation center, etc.

· Recreation facilities like theaters, clubs, communication facilities, etc.

6. Investor friendly attitude

Plant location must be in those states whose governments have an investor-friendly attitude. Government must give attractive incentives and concessions to those who start business units in their states. There must not be any bureaucratic control for starting a business.

An investor-friendly attitude will not only attract investment, but will also result in the overall development.

7. Nearness to market

Plant location must be near a market. Every business unit depends on a market for selling its goods and services. The goods and services must reach the market on time, and it must be available to the consumers at a low price. Therefore, this factor is given importance while selecting location of a plant.

Locating a plant near the market is preferred, when the product is fragile (easily breakable), perishable, heavy or bulky and when quick service is required.

8. Nearness to raw-materials' source

Plant location must be usually near to the source of raw-material. Raw-materials' costs are about 50% of the total cost. So, it is important in the business to get the raw materials in time and at a reasonable price. Therefore, a business must be located close to the source of raw material, especially in the case of “Gross Materials.”

Gross Materials are those which lose weight in the production process. Examples of Gross Materials are sugarcane, iron ore, limestone, so on.

However, if the raw material is a “Pure Material,” then the business may be located away from the source of raw materials.

Pure Materials are those which add their weight to the finished product. Examples of Pure materials are cotton textiles, bakeries, silk fabrics, etc.

9. Nearness to supporting industries

Plant location must be near its supporting industries and services. If it purchases spare parts from an outside agency, then these agencies must be located very close to the business. If not, the business will have to spend a lot of extra money on transport. It will also be difficult, to control the quality of the spare parts because of the distant location.

10. Must meet safety requirements

Plant location must meet all essential safety requirements. Due to air, water and sound pollution, some factories have a bad effect on the health of the people. Therefore, these factories must be located away from residential areas. Safety of environment must also be given priority in this regards.

11. Miscellaneous factors

Following miscellaneous factors also affect a plant location:

· Availability and cost of land,

· Suitability of land - soil and topography,

· Climatic conditions,

· Location of a similar unit, etc.

FACILITY LAYOUT

A model facility layout should be able to provide an ideal relationship between raw material, equipment, manpower and final product at minimal cost under safe and comfortable environment. An efficient and effective facility layout can cover following objectives:

To provide optimum space to organize equipment and facilitate movement of goods and to create safe and comfortable work environment.
To promote order in production towards a single objective
To reduce movement of workers, raw material and equipment
To promote safety of plant as well as its workers
To facilitate extension or change in the layout to accommodate new product line or technology upgradation
To increase production capacity of the organization

An organization can achieve the above-mentioned objective by ensuring the following:

Better training of the workers and supervisors.
Creating awareness about of health hazard and safety standards
Optimum utilization of workforce and equipment
Encouraging empowerment and reducing administrative and other indirect work

Facility layout is an arrangement of different aspects of manufacturing in an appropriate manner as to achieve desired production results. Facility layout considers available space, final product, safety of users and facility and convenience of operations.

According to James Lundy, “Layout identically involves the allocation of space and the arrangement of equipment in such a manner that overall operating costs are minimized.”

In the words of Mallick and Gandreau, “Plant layout is a floor plan for determining and arranging the designed machinery and equipment of a plant, whether established or contemplated, in the best place, to permit the quickest flow of material, at the lowest cost and with the minimum handling in processing the product, from the receipt of raw material to the shipment of finished product.”

According to Apple, “Plant layout is planning the path each component/part of the product is to follow through the plant, coordinating the paths of the various parts so that the manufacturing processes may be carried out in the most economical manner, then preparing drawing or other representation of the arrangement and finally seeing that the plan is properly put into effect.”

Need of Plant Layout:

Many situations give rise to the problem of plant layout. Two plants having similar operations may not have identical layouts. This may be due to size of the plant, nature of the process and management’s calibre.

The necessity of plant layout may be felt and the problem may arise when:

(i) There are design changes in the product.

(ii) There is an expansion of the enterprise.

(iii) There is proposed variation in the size of the departments.

(iv) Some new product is to be added to the existing line.

(v) Some new department is to be added to the enterprise and there is reallocation of the existing department.

(vi) A new plant is to be set up.

Importance of Plant Layout:

The layout of a plant is quite important in view of the above definition but the importance of a layout may greatly vary from industry to industry.

(i) The Weight, Volume or Mobility of the Product:

If the final product is quite heavy or difficult to handle involving costly material handling equipment or a large amount of labour, important consideration will be to move the product minimum possible e.g. boiler, turbines, locomotive industries and ship building companies etc.

(ii) Complexity of the Final Product:

If the product is made up of a very large number of components and parts i.e. large number of people may be employed for handling the movement of these parts from shop to shop or from machine to machine or one assembly point to another e.g. automobile industry.

(iii) The Length of the Process in Relation to Handling Time:

If the material handling time represents a appreciable proportion of the total time of manufacturing, any reduction in handling time of the product may result in great productivity improvement of the industrial unit e.g. Steam Turbine Industry.

(iv) The Extent to which the Process Tends towards Mass Production:

With the use of automatic machines in industries for adopting mass production system of manufacturing the volume of production will increase. In view of high production output, larger percentage of manual labour will be engaged in transporting the output unless the layout is good.

Objectives of Good Plant Layout:

A good rather an optimum layout is one which provides maximum satisfaction to all concerned i.e. shareholders, management employees and consumers.

The objectives of a good layout are as follows:

(i) Should provide overall satisfaction to all concerned.

(ii) Material handling and internal transportation from one operation to the next is minimized and efficiently controlled.

(iii) The production bottle necks and points of congestions are to be eliminated so that input raw materials and semi-finished parts move fast from one work station to another.

(iv) Should provide high work in process turnover.

(v) Should utilize the space most effectively; may be cubical utilization.

(vi) Should provide worker’s convenience, promote job satisfaction and safety for them.

(vii) Should avoid unnecessary investment of capital.

(viii) Should help in effective utilization of labour.

(ix) Should lead to increased productivity and better quality of the product with reduced capital cost.

(x) Should provide easy supervision.

(xi) Should provide space for future expansion of the plant.

(xii) Should provide proper lighting and ventilation of the areas of work stations

Factors Affecting Plant Layout:

Whatever be the type of layout being contemplated the following factors are to be considered because these factors have got significant influence on the design of the layout.

(i) Man Factor:

The man is very flexible element who can be made suitable for all sort of layouts.

Main considerations are as follows:

(i) Safety and working conditions.

(ii) Man power requirements-skill level of workers, their number required and their training programme.

(iii) Man power utilization in the plant.

(iv) Human relations.

(ii) Material Factor:

It includes the various input materials like raw materials, semi-finished parts, and materials in process scrap, finished products, packing materials, tools and other services.

The main considerations are:

(i) Design and specifications of the product to be manufactured.

(ii) Quantity and variety of products and materials.

(iii) Physical and chemical characteristics of various inputs materials.

(iv) Component parts or material and their sequence of operations i.e. how they go together to generate the final product.

(iii) Machinery Factor:

The operating machinery is also one of the most important factors therefore all the information regarding equipment and the tools are necessary for inspection, processing and maintenance etc.

(i) The processes and methods should be standardized first.

(ii) Machinery and tools selections depend upon the type of process and method, so proper machinery and other supporting equipment should be selected on the basis of volume of production.

(iii) Equipment utilization depends on the variation in production, requirements and operating balance.

(iv)Machines should be used to their optimum levels of speed, feed and depth of cut.

(v) Machinery requirement is mostly based on the process/method.

(v) Maintenance of machines and replacement of parts is also important.

(iv) Movement Factor:

It mainly deals with the movement of men and materials. A good layout should ensure short moves and should always tend towards completion of product. It also includes interdepartmental movements and material handling equipment. This includes the flow pattern reduction of unnecessary handling, space for movement and analysis of handling methods.

(v) Waiting Factor:

Whenever material or men is stopped, waiting occurs which costs money. Waiting cost includes handling cost in waiting area, money tied up with idle material etc.

Waiting may occur at the receiving point, materials in process, between the operations etc.

The important considerations in this case are:

(a) Location of storage or delay points.

(b) Method of storing.

(d) Safeguard equipment for storing and avoiding delay.

(vi) Service Factor:

It includes the activities and facilities for personnel such as fire protection, lighting, heating and ventilation etc. Services for material such as quality control, production control, services for machinery such as repair and maintenance and utilities like power, fuel/gas and water supply etc.

(vii) Building Factor:

It includes outside and inside building features, shape of building, type of building (single or multi-storey) etc.

(viii) Flexibility Factor:

This includes consideration due to changes in material, machinery, process, man, supporting activities and installation limitations etc. It means easy changing to new arrangements or it includes flexibility and expendability of layouts.

Types of Plant Layout:

Production results from men, materials and machinery together with management. The characteristics are changed. To manufacture a product layout begins with which element or elements mentioned above move.

1. Product or Line Layout.

2. Process or Functional Layout.

3. Fixed Position Layout.

4. Combination type of Layout.

1. Product or Line Layout:

If all the processing equipment and machines are arranged according to the sequence of operations of a product, the layout is called product type of layout. In this type of layout, only one product or one type of products is produced in an operating area. This product must be standardized and produced in large quantities in order to justify the product layout.

The raw material is supplied at one end of the line and goes from one operation to the next quite rapidly with a minimum work in process, storage and material handling. Fig. 3.3 shows product layout for two types of products A and B.

Advantages offered by Product Layout:

(i) Lowers total material handling cost.

(ii) There is less work in process.

(iii) Better utilization of men and machines.

(iv) Less floor area is occupied by material in transit and for temporary storages.

(v) Greater simplicity of production control.

(v) Total production time is also minimized.

Limitations of Product Layout:

(i) No flexibility which is generally required is obtained in this layout.

(ii) The manufacturing cost increases with a fall in volume of production.

(iii) If one or two lines are running light, there is a considerable machine idleness.

(iv) A single machine breakdown may shut down the whole production line,

(v) Specialized and strict supervision is essential.

2. Process or Functional Layout:

The process layout is particularly useful where low volume of production is needed. If the products are not standardized, the process layout is more desirable, because it has greater process flexibility than other. In this type of layout the machines are not arranged according to the sequence of operations but are arranged according to the nature or type of the operations.

This layout is commonly suitable for non-repetitive jobs. Same type of operation facilities are grouped together such as lathes will be placed at one place all the drill machines are at another place and so on. See Fig. 3.4 for process layout. Therefore, the process carried out in any area is according to the machine available in that area.

Advantages of Process Layout:

(i) There will be less duplication of machines. Thus total investment in equipment purchase will be reduced.

(ii) It offers better and more efficient supervision through specialization at various levels.

(iii) There is a greater flexibility in equipment and man power thus load distribution is easily controlled.

(iv) Better utilization of equipment available is possible.

(v) Breakdown of equipment can be easily handled by transferring work to another machine/ work station.

(vi) There will be better control of complicated or precision processes, especially where much inspection is required.

Limitations of Process Layout:

(i) There are long material flow lines and hence the expensive handling is required.

(ii) Total production cycle time is more owing to long distances and waiting at various points.

(iii) Since more work is in queue and waiting for further operation hence bottlenecks occur.

(iv) Generally more floor area is required.

(v) Since work does not flow through definite lines, counting and scheduling is more tedious.

(v)Specialization creates monotony and there will be difficulty for the laid workers to find job in other industries.

3. Fixed Position Layout:

This type of layout is the least important for today’s manufacturing industries. In this type of layout the major component remain in a fixed location, other materials, parts, tools, machinery, manpower and other supporting equipment are brought to this location.

The major component or body of the product remains in a fixed position because it is too heavy or too big and as such it is economical and convenient to bring the necessary tools and equipment’s to work place along-with the man power. This type of layout is used in the manufacture of boilers, hydraulic and steam turbines and ships etc.

Advantages Offered by Fixed Position Layout:

(i) Material movement is reduced

(ii) Capital investment is minimized

(iii) The task is usually done by gang of operators, hence continuity of operations is ensured

(iv) Production centres are independent of each other. Hence effective planning and loading can be made. Thus total production cost will be reduced and

(v) It offers greater flexibility and allows change in product design, product mix and production volume.

Limitations of Fixed Position Layout:

(i) Highly skilled man power is required.

(ii) Movement of machines equipment’s to production centre may be time consuming.

(iii) Complicated fixtures may be required for positioning of jobs and tools. This may increase the cost of production.

4. Combination Type of Layout:

Now days in pure state any one form of layouts discussed above is rarely found. Therefore generally the layouts used in industries are the compromise of the above mentioned layouts. Every layout has got certain advantages and limitations therefore, industries would not like to use any type of layout as such.

Flexibility is a very important factor, so layout should be such which can be moulded according to the requirements of industry, without much investment. If the good features of all types of layouts are connected, a compromise solution can be obtained which will be more economical and flexible.

PRINCIPLES OF PLANT LAYOUT:

(i) Principle of Overall Integration:

According to this principle the best layout is one which provides integration of production facilities like men, machinery, raw materials, supporting activities and any other such factors which result in the best compromise.

(ii) Principle of Minimum Distance:

According to this principle the movements of men and materials should be minimized.

(iii) Principle of Flow:

According to Muther, the best layout is one which arranges the work station for each operation process in same order or sequence that forms treats or assembles the materials.

(iv) Principle of Cubic Space Utilization:

According to this, the best layout utilizes cubic space i.e. space available both in vertical and horizontal directions is most economically and effectively utilized.

(v) Principle of Satisfaction and Safety:

According to this principle best layout is one which provides satisfaction and safety to all workers concerned.

(vi) Principle of Flexibility:

In automotive and other allied industries where models of products change after sometime the principle of flexibility provides adoption and rearrangement at a minimum cost and least inconvenience.

Advantages of a Good Plant Layout:

To the Worker:

(i) Reduces the effort of the worker.

(ii) Reduces the number of handlings.

(iii) Extends the process of specialization.

(iv) Permits working at optimum conditions by eliminating congestions.

(v) Produces better working conditions by eliminating congestions.

(vi) Reduces the number of accidents.

(vii) Provides better employee service facilities/conditions.

(viii) Provides basis for higher earning for employees.

In Labour Cost:

(i) Increases the output per man-hour.

(ii) Reduces set up time involved.

(iii) Reduces the number of operations or some operations may be combined.

(iv) Reduces the number of handlers. Thus reducing labour cost.

(v) Reduces the length of hauls.

(vi) Reduces lost motions between operations.

(vii) Converts operator into a producer instead of a handler by eliminating the various unnecessary movements.

In Other Manufacturing Costs:

(i) Reduces the cost of expensive supplies.

(ii) Decreases maintenance costs.

(iii) Decreases tool replacement costs.

(iv) Effects a saving in power loads.

(v) Decreases spoilage and scrap. Thus waste is minimized

(v) Eliminates some of the waste in raw material consumption.

(vii) Improves the quality of the product by decreasing handling.

(viii) Provides better cost control.

WHAT IS AGGREGATE PLANNING? - IMPORTANCE AND ITS STRATEGIES

Introduction

An organization can finalize its business plans on the recommendation of demand forecast. Once business plans are ready, an organization can do backward working from the final sales unit to raw materials required. Thus annual and quarterly plans are broken down into labor, raw material, working capital, etc. requirements over a medium-range period (6 months to 18 months). This process of working out production requirements for a medium range is called aggregate planning.

DEFINITION: AGGREGATE PLANNING

Aggregate Planning is an immediate (annual) planning method used to determine the necessary resource capacity a firm will need in order to meet its expected demand. Aggregate planning generally includes combination of planned output, employment, sourcing, sub-contracting etc that can be planned for a period of 9-12 month. The goal of aggregate planning is to match 'demand' and 'supply' in the aggregate using mentioned combination in a cost effective manner.

Factors Affecting Aggregate Planning

Aggregate planning is an operational activity critical to the organization as it looks to balance long-term strategic planning with short term production success.

Following factors are critical before an aggregate planning process can actually start;

A complete information is required about available production facility and raw materials.
A solid demand forecast covering the medium-range period
Financial planning surrounding the production cost which includes raw material, labor, inventory planning, etc.
Organization policy around labor management, quality management, etc.

For aggregate planning to be a success, following inputs are required;

An aggregate demand forecast for the relevant period
Evaluation of all the available means to manage capacity planning like sub-contracting, outsourcing, etc.
Existing operational status of workforce (number, skill set, etc.), inventory level and production efficiency

Aggregate planning will ensure that organization can plan for workforce level, inventory level and production rate in line with its strategic goal and objective.

Aggregate planning as an Operational Tool

Aggregate planning helps achieve balance between operation goal, financial goal and overall strategic objective of the organization. It serves as a platform to manage capacity and demand planning.

In a scenario where demand is not matching the capacity, an organization can try to balance both by pricing, promotion, order management and new demand creation.

In scenario where capacity is not matching demand, an organization can try to balance the both by various alternatives such as.

Laying off/hiring excess/inadequate excess/inadequate excess/inadequate workforce until demand decrease/increase.
Including overtime as part of scheduling there by creating additional capacity.
Hiring a temporary workforce for a fix period or outsourcing activity to a sub-contrator.

Importance of Aggregate Planning

Aggregate planning plays an important part in achieving long-term objectives of the organization. Aggregate planning helps in:

Achieving financial goals by reducing overall variable cost and improving the bottom line
Maximum utilization of the available production facility
Provide customer delight by matching demand and reducing wait time for customers
Reduce investment in inventory stocking
Able to meet scheduling goals there by creating a happy and satisfied work force

Aggregate Planning Strategies

There are three types of aggregate planning strategies available for organization to choose from. They are as follows.

Level Strategy

As the name suggests, level strategy looks to maintain a steady production rate and workforce level. In this strategy, organization requires a robust forecast demand as to increase or decrease production in anticipation of lower or higher customer demand. Advantage of level strategy is steady workforce. Disadvantage of level strategy is high inventory and increase back logs.

Chase Strategy

As the name suggests, chase strategy looks to dynamically match demand with production. Advantage of chase strategy is lower inventory levels and back logs. Disadvantage is lower productivity, quality and depressed work force.

Hybrid Strategy

As the name suggests, hybrid strategy looks to balance between level strategy and chase strategy.

CAPACITY UTILIZATION

DEFINITION: CAPACITY UTILIZATION

A firm possesses a definite set of resources at its disposal. This enables the firm to produce a certain number of products or provide a certain amount of service in a given period of time. This ideal, maximum capability of the firm is called its capacity. However, in actual scenario, this capacity is not fully used at all the time. The fraction of this capacity (usually expressed in percentage) used within a given interval of time is called the capacity utilisation of the firm or a unit of the firm.

Capacity utilization is a percentage measure or KPI which indicates the amount of available capacity that is being used to supply current demand. It is a good indicator of business and market conditions as when times are good most plants are able to run at close to 70-80% capacity utilization and in some cases all the way up to 100%.

Capacity Utilization = Capacity utilized or gross production / Optimum capacity or production level

THE USE OF CAPACITY UTILIZATION AS A KPI

Capacity utilization is a widely used KPI and operational measure in many industries in the strategic capacity and business planning functions of many organizations. It can be used as a measure which helps determine optimum timing of capacity expansions, entry into new markets, market exits, cost curves for different manufacturers and profitability. Capacity utilization, along with other information, can also be used in operations and production management to calculate the average marginal cost of production, the split between fixed and variable costs, inventory, manning, overtime costs, and engineering/maintenance costs.

The Capacity Utilization figure can vary among different industries,inventory/production models, stock building cycles, seasonal demand cycles, and warehousing practices. It is important to set the aim capacity utilization rate with consideration to customer demands first and the other factors mentioned above. It may be that several aim rates will be set for different times in a year or business cycle. When Capacity utilization is at a high level it is important that most gross production is actually saleable production. This means the production process must produce minimal waste, monitor its safety stock levels and be efficient. Lean manufacturing principles are valuable in achieving these required efficiencies, as a lean well run production process will maximize revenue for the business and also cut down customer lead times.

FEASIBLE PRODUCTION ALTERNATIVES

Feasibility is defined as the practical extent to which a project can be performed successfully. To evaluate feasibility, a feasibility study is performed, which determines whether the solution considered to accomplish the requirements is practical and workable in the software. Information such as resource availability, cost estimation for software development, benefits of the software to the organization after it is developed and cost to be incurred on its maintenance are considered during the feasibility study. The objective of the feasibility study is to establish the reasons for developing the software that is acceptable to users, adaptable to change and conformable to established standards. Various other objectives of feasibility study are listed below.

· To analyze whether the software will meet organizational requirements

· To determine whether the software can be implemented using the current technology and within the specified budget and schedule

· To determine whether the software can be integrated with other existing software.

Types of Feasibility

Various types of feasibility that are commonly considered include technical feasibility, operational feasibility, and economic feasibility.

Technical feasibility assesses the current resources (such as hardware and software) and technology, which are required to accomplish user requirements in the software within the allocated time and budget. For this, the software development team ascertains whether the current resources and technology can be upgraded or added in the software to accomplish specified user requirements. Technical feasibility also performs the following tasks.

· Analyzes the technical skills and capabilities of the software development team members

· Determines whether the relevant technology is stable and established

· Ascertains that the technology chosen for software development has a large number of users so that they can be consulted when problems arise or improvements are required.

Operational feasibility assesses the extent to which the required software performs a series of steps to solve business problems and user requirements. This feasibility is dependent on human resources (software development team) and involves visualizing whether the software will operate after it is developed and be operative once it is installed. Operational feasibility also performs the following tasks.

· Determines whether the problems anticipated in user requirements are of high priority

· Determines whether the solution suggested by the software development team is acceptable

· Analyzes whether users will adapt to a new software

· Determines whether the organization is satisfied by the alternative solutions proposed by the software development team.

Economic feasibility determines whether the required software is capable of generating financial gains for an organization. It involves the cost incurred on the software development team, estimated cost of hardware and software, cost of performing feasibility study, and so on. For this, it is essential to consider expenses made on purchases (such as hardware purchase) and activities required to carry out software development. In addition, it is necessary to consider the benefits that can be achieved by developing the software. Software is said to be economically feasible if it focuses on the issues listed below.

· Cost incurred on software development to produce long-term gains for an organization

· Cost required to conduct full software investigation (such as requirements elicitation and requirements analysis)

· Cost of hardware, software, development team, and training.

Feasibility Study Process

Feasibility study comprises the following steps.

1. Information assessment:

Identifies information about whether the system helps in achieving the objectives of the organization. It also verifies that the system can be implemented using new technology and within the budget and whether the system can be integrated with the existing system.

2. Information collection:

Specifies the sources from where information about software can be obtained. Generally, these sources include users (who will operate the software), organization (where the software will be used), and the software development team (which understands user requirements and knows how to fulfill them in software).

3. Report writing:

Uses a feasibility report, which is the conclusion of the feasibility study by the software development team. It includes the recommendations whether the software development should continue. This report may also include information about changes in the software scope, budget, and schedule and suggestions of any requirements in the system.

4. General information:

Describes the purpose and scope of feasibility study. It also describes system overview, project references, acronyms and abbreviations, and points of contact to be used. System overview provides description about the name of the organization responsible for the software development, system name or title, system category, operational status, and so on. Project referencesprovide a list of the references used to prepare this document such as documents relating to the project or previously developed documents that are related to the project. Acronyms and abbreviations provide a list of the terms that are used in this document along with their meanings. Points of contact provide a list of points of organizational contact with users for information and coordination. For example, users require assistance to solve problems (such as troubleshooting) and collect information such as contact number, e-mail address, and so on.

5. Management summary:

Provides the following information.

6. Environment: Identifies the individuals responsible for software development. It provides information about input and output requirements, processing requirements of the software and the interaction of the software with other software. It also identifies system security requirements and the system's processing requirements

7. Current functional procedures: Describes the current functional procedures of the existing system, whether automated or manual. It also includes the data-flow of the current system and the number of team members required to operate and maintain the software.

8. Functional objective: Provides information about functions of the system such as new services, increased capacity, and so on.

9. Performance objective: Provides information about performance objectives such as reduced staff and equipment costs, increased processing speeds of software, and improved controls.

10. Assumptions and constraints: Provides information about assumptions and constraints such as operational life of the proposed software, financial constraints, changing hardware, software and operating environment, and availability of information and sources.

11. Methodology: Describes the methods that are applied to evaluate the proposed software in order to reach a feasible alternative. These methods include survey, modeling, benchmarking, etc.

12. Evaluation criteria: Identifies criteria such as cost, priority, development time, and ease of system use, which are applicable for the development process to determine the most suitable system option.

13. Recommendation: Describes a recommendation for the proposed system. This includes the delays and acceptable risks.

14. Proposed software: Describes the overall concept of the system as well as the procedure to be used to meet user requirements. In addition, it provides information about improvements, time and resource costs, and impacts. Improvements are performed to enhance the functionality and performance of the existing software. Time and resource costs include the costs associated with software development from its requirements to its maintenance and staff training. Impacts describe the possibility of future happenings and include various types of impacts as listed below.

15. Equipment impacts: Determine new equipment requirements and changes to be made in the currently available equipment requirements.

16. Software impacts: Specify any additions or modifications required in the existing software and supporting software to adapt to the proposed software.

17. Organizational impacts: Describe any changes in organization, staff and skills requirement.

18. Operational impacts: Describe effects on operations such as user-operating procedures, data processing, data entry procedures, and so on.

19. Developmental impacts: Specify developmental impacts such as resources required to develop databases, resources required to develop and test the software, and specific activities to be performed by users during software development.

20. Security impacts: Describe security factors that may influence the development, design, and continued operation of the proposed software.

21. Alternative systems: Provide description of alternative systems, which are considered in a feasibility study. This also describes the reasons for choosing a particular alternative system to develop the proposed software and the reason for rejecting alternative systems.

UNIT-III

WHAT DO YOU MEAN BY SCHEDULING?

The process scheduling is the activity of the process manager that handles the removal of the running process from the CPU and the selection of another process on the basis of a particular strategy. Process scheduling is an essential part of a Multiprogramming operating systems.

Assigning an appropriate number of workers to the jobs during each day of work.

Determining when an activity should start or end, depending on its

(1) duration,

(2) predecessor activity (or activities),

(3) predecessor relationships,

(4) resource availability, and

(5)target completion date of the project.

SHOP-LOADING

A load means the quantity of work, and allocating the quantity of work to the processes necessary to manufacture each item is called loading.

It is performed in the CRP (Capacity Requirements Planning) of the manufacturing planning. Each item planned in MRP is first explored to the processes necessary to manufacture it, which is usually called process explosion. Next loading is performed for the explored process. In loading, each load is usually piled up by time (hour), by which a setup time and a real operating time are determined. The real operating time may be set by manufacturing lot or by real operating time per item unit. In the former case, the time of hour is piled up as load, while in the latter case, loading is performed after calculating the real operating time per manufacturing unit by multiplying the number of manufacturing items by real operating time.

In addition, the calculated load is piled up for a certain period, which is determined by selecting either the earliest start date or the last start date as a base date. This method enables loading for each process or each period.

SEQUENCING

Sequencing refers to the order in which activities occur in the operations process. The operations manager constantly analyses the sequencing to improve the efficiency of the business. Scheduling refers to the length of time different activities take in the operations process

PRODUCTION CONTROL

Definition of production control. : systematic planning, coordinating, and directing of all manufacturing activities and influences to ensure having goods made on time, of adequate quality, and at reasonable cost.

Steps in Production Planning and Control

According to the British Standards Institute, there are four stages, steps, techniques or essentials in the process of production planning and control.

The four stages or steps in production planning and control are:

1. Routing,

2. Scheduling,

3. Dispatching, and

4. Follow-up.

1. ROUTING

Routing is the first step in production planning and control.

Routing can be defined as the process of deciding the path (route) of work and the sequence of operations.

Routing fixes in advance:

1. The quantity and quality of the product.

2. The men, machines, materials, etc. to be used.

3. The type, number and sequence of manufacturing operations, and

4. The place of production.

In short, routing determines ‘What’, ‘How much’, ‘With which’, ‘How’ and ‘Where’ to produce.

Routing may be either very simple or complex. This depends upon the nature of production. In a continuous production, it is automatic, i.e. it is very simple. However, in a job order, it is very complex.

Routing is affected by the human factor. Therefore, it should recognize human needs, desires and expectations. It is also affected by plant-layout, characteristics of the equipment, etc.

The main objective of routing is to determine (fix) the best and cheapest sequence of operations and to ensure that this sequence is followed in the factory.

Routing gives a very systematic method of converting raw-materials into finished goods. It leads to smooth and efficient work. It leads to optimum utilization of resources; namely, men, machines, materials, etc. It leads to division of labor.

2. SCHEDULING

Scheduling is the second step in production planning and control. It comes after routing.

Scheduling means to:

1. Fix the amount of work to do.

2. Arrange the different manufacturing operations in order of priority.

3. Fix the starting and completing, date and time, for each operation.

Scheduling is also done for materials, parts, machines, etc. So, it is like a time-table of production. It is similar to the time-table, prepared by the railways.

Time element is given special importance in scheduling. There are different types of schedules; namely, Master schedule, Operation schedule and Daily schedule.

Scheduling helps to make optimum use of time. It sees that each piece of work is started and completed at a certain predetermined time. It helps to complete the job systematically and in time. It brings time coordination in production planning. All this helps to deliver the goods to the customers in time. It also eliminates the idle capacity. It keeps labor continuously employed.

So, scheduling is an important step in production planning and control. It is essential in a factory, where many products are produced at the same time.

3. DISPATCHING

Dispatching is the third step in production planning and control. It is the action, doing or implementation stage. It comes after routing and scheduling.

Dispatching means starting the process of production. It provides the necessary authority to start the work. It is based on route-sheets and schedule sheets.

Dispatching includes the following:

1. Issue of materials, tools, fixtures, etc., which are necessary for actual production.

2. Issue of orders, instructions, drawings, etc. for starting the work.

3. Maintaining proper records of the starting and completing each job on time.

4. Moving the work from one process to another as per the schedule.

5. Starting the control procedure.

6. Recording the idle time of machines.

Dispatching may be either centralized or decentralized:

1. Under centralized dispatching, orders are issued directly by a centralized authority.

2. Under decentralized dispatching, orders are issued by the concerned department.

4. FOLLOW-UP

Follow-up or Expediting is the last step in production planning and control. It is a controlling device. It is concerned with evaluation of the results.

Follow-up finds out and removes the defects, delays, limitations, bottlenecks, loopholes, etc. in the production process. It measures the actual performance and compares it to the expected performance. It maintains proper records of work, delays and bottlenecks. Such records are used in future to control production.

Follow-up is performed by ‘Expediters’ or ‘Stock Chasers’.

Follow-up is necessary when production decreases even when there is proper routing and scheduling. Production may be disturbed due to break-downs of machinery, failure of power, shortage of materials, strikes, absenteeism, etc.

LINE OF BALANCE

Line of Balance (LOB) is a management control process for collecting, measuring and presenting facts relating to time (see Schedule Control), cost and accomplishment – all measured against a specific plan.

Line of Balance (LOB)

Line of Balance (LOB) is a management control process for collecting, measuring and presenting facts relating to time (see Schedule Control), cost and accomplishment – all measured against a specific plan. It shows the process, status, background, timing and phasing of the project activities, thus providing management with measuring tools that help:

1. Comparing actual progress with a formal objective plan.

2. Examining only the deviations from established plans, and gauging their degree of severity with respect to the remainder of the project.

3. Receiving timely information concerning trouble areas and indicating areas where appropriate corrective action is required.

4. Forecasting future performance.

The LOB itself is a graphic device that enables a manager to see at a single glance which activities of an operation are “in balance” – i.e., whether those which should have been completed at the time of the review actually are completed and whether any activities scheduled for future completion are lagging behind schedule. The LOB chart comprises only one feature of the whole philosophy which includes numerous danger signal controls for all the various levels of management concerned.

WORLD CLASS MANUFACTURING

World class manufacturing is a collection of concepts, which set standard for production and manufacturingfor another organization to follow. Japanesemanufacturing is credited with pioneer in concept ofworld-class manufacturing.

WORLD CLASS MANUFACTURING

Introduction

Manufacturing has evolved considerably since the advent of industrial revolution. In current global and competitive age, it is very important for organization to have manufacturing practice which is lean, efficient, cost-effective and flexible.

World class manufacturing is a collection of concepts, which set standard for production and manufacturing for another organization to follow. Japanese manufacturing is credited with pioneer in concept of world-class manufacturing. World class manufacturing was introduced in the automobile, electronic and steel industry.

World class manufacturing is a process driven approach where various techniques and philosophy are used in one combination or other.

Some of the techniques are as follows:

Make to order
Streamlined Flow
Smaller lot sizes
Collection of parts
Doing it right first time
Cellular or group manufacturing
Total preventive maintenance
Quick replacement
Zero Defects
Just in Time
Increased consistency
Higher employee involvement
Cross Functional Teams
Multi-Skilled employees
Visual Signaling
Statistical process control

Idea of using above techniques is to focus on operational efficiency, reducing wastage and creating cost efficient organization. This leads to creation of high-productivity organization, which used concurrent production techniques rather than sequential production method.

World Class Manufacturers

World class manufacturers tend to implement best practices and also invent new practices as to stay above the rest in the manufacturing sector. The main parameters which determine world-class manufacturers are quality, cost effective, flexibility and innovation.

World class manufacturers implement robust control techniques but there are five steps, which will make the system efficient. These five steps are as follows:

Reduction of set up time and in tuning of machinery: It is important that organizations are able to cut back time in setting up machinery and also tune machinery before production.
Cellular Manufacturing: It is important that production processes are divided into according to its nature, with similar nature combined together.
Reduce WIP material: It is normal tendency of manufacturing organization to maintain high levels of WIP material. Increased WIP leads to more cost and decreased WIP induces more focus on production and fast movement of goods.
Postpone product mutation: For to achieve a higher degree of customization many changes are made to final product. However, it is important that mutation conceived for the design stage implement only after final operation.
Removal the trivial many and focus on vital few: It is important for organization to focus on production of products which are lined with forecast demand as to match customer expectation.

Principles of World Class Manufacturing

There are three main principles, which drive world-class manufacturing.

Implementation of just in time and lean management leads to reduction in wastage thereby reduction in cost.
Implementation of total quality management leads to reduction of defects and encourages zero tolerance towards defects.
Implementation of total preventive maintenance leads to any stoppage of production through mechanical failure.

Aspects of World Class Manufacturing

The main aspects of the world-class manufacturing are as follows:

Industrial culture area
Market/client area
Product development area
Operations area
E-Performance area

THE MAIN TOOLS FOR WORLD CLASS MANUFACTURING

§ 2-Bin System: A 2-bin system is an inventory replenishment system. It can be considered a specialised form of a Kanban. In a 2-bin system, inventory is carried in two bins. As the first bin, the “working bin,” is emptied, a replenishment quantity is ordered from the supplying work center. During the replenishment period, material is used from the second bin which typically contains enough to satisfy demand during the lead time plus some safety stock. In this way, there is always a bin of parts available at the work center to be processed, and inventory is capped at two bins of parts.

§ 5 Why’s: The 5 Why’s process is used to uncover the root cause of a problem or defect. This technique relies on asking why something occurred, and then asking why this cause occurred. The process is repeated until the root cause if found.

§ 5W+2H:The 5W2H method is one of the most efficient management tools that exists and, oddly enough, one of the most simple and easy to apply. The 5W2H approach is nothing more than a qualified, structured and practical plan of action, with well-defined stages. In a dynamic and extremely competitive universe such as business, both operational activities as well as corporate communications need to be fast and agile, errors in the transmission of certain information can generate many losses

§ 5S: 5S is a system for cleaning, organising and maintaining a work area to maximize efficiency and consistency. 5S is often one of the first major initiatives of companies who implement lean.

§ 5G (Gemba, Gembutsu, Genjitsu, Genri & Gensoku): 5G is a 5 key suggestuns for Problem Solving, and a method to help elaborate a better description and analyse of phenomena and verify all hypothesis.

§ 8D: 8D stands for the 8 disciplines or the 8 critical steps for solving problems. It is a highly disciplined and effective scientific approach for resolving chronic and recurring problems. This approach uses team synergy and provides excellent guidelines to identify the root cause of the problem, implement containment actions, develop and then implement corrective actions and preventive actions that make the problem go away permanently.

§ 12 Step Kaizen: 12 Step Kaizen Story is a structured methodology to identify and eliminate the root cause of a chronic problem. The tool is mainly used inWorld Class Manufacturing (WCM) and Total Productive Maintenance (TPM) concept

§ A3 Report: An A3 Report is a presentation of a problem on a single sheet of paper, including all the background information on the problem, root causes, potential solutions and action plans. The name comes from the A3 paper size, typically 11″ x 17″. By presenting everything on one sheet of paper, the A3 Report can be a very useful root cause analysis tool. Many lean practitioners believe that when you confine your problem solving to one page of paper, your thinking becomes more focused and structured.

§ ABC Inventory: An ABC Inventory system categorizes inventory items in three levels – A, B and C. The A items are extremely important, and typically high volume or high value items. B items are moderately important. C items are a low priority and typically low volume items. The system is used to define inventory stock levels, reorder points and cycle counting frequencies for items.

§ Andon: Andon is a signaling system used in the manufacturing process when there is an abnormality or some sort of important action is required. It is a form of visual management.

§ Acceptance Quality Limit (AQL): Acceptance Quality Limit is a statistical measurement of the maximum number of defective goods considered acceptable in a particular sample size. Goods in a sample are tested at random, and if the number of defective items is below the predetermined amount, that product is said to meet the acceptable quality level (AQL) in ISO 2859-1. It represents the maximum number of defective units, beyond which a batch is rejected. Importers usually set different AQLs for critical, major, and minor defects.. If the acceptable quality level (AQL) is not reached for a particular sampling of goods, manufacturers will review the various parameters in the production process to determine the areas causing the defects.

§ Benchmarking: Lean benchmarking is the process of using a successful organization as a reference for identifying ways for another organization to improve. It can be conducted as a comparison with the best practices at other organizations, or it can provide a tool for comparing practices within an organization over time to prevent backsliding of performance.

§ Bottleneck Analysis: Bottleneck Analysis studies a process to identify the step in the process where the capacity available is less than the capacity required. That process is known as the constraint. The next step is to identify ways of removing the constraint.

§ Brainstorming: Brainstorming is a simple technique for gathering the ideas for developing creative solutions to problems. Brainstorming helps you to have diverse experience of all team members into play during problem solving and/or solution development. This increases the confidence and self satisfaction to all team members and a feeling of ownership of the problem which will also help to find better solutions to the problems you face.

UNIT-IV

DEFINITION AND CONCEPT OF WORK STUDY:

Work study, as defined by British Standard Institution, is a generic term for those techniques particularly ‘Method Study’ and ‘Work Measurement’ which are used in the examination of human work in all its contexts and which lead systematically to the investigation of all the factors which effect the efficiency of the situation being reviewed, in order to seek improvements.

Actually, work study investigates the work done in an organisation and it aims at finding the best and most efficient way of using available resources, i.e., men, material, money and machinery. Every organisation tries to achieve best quality production in the minimum possible time.

The main objective of work study is to improve productivity of men, machines and materials. The aim of work study is to determine the best method of performing each operation and to eliminate wastage so that production increases with less fatigue. The work study is also used in determining the standard time that a qualified worker should take to perform the operation when working at a normal place.

Role of Work Study:

1. To standardise the method of doing a work,

2. To minimise the unit cost of production,

3. To determine the standard time for doing a task,

4. To minimise the material movement, and operators movement,:

5. To eliminate unnecessary human movements,

6. To utilise facilities such as man, machine and materials most effectively, and

7. To a systematic investigation of all factors.

Objectives of Work Study:

The following are the objectives of work study:

1. Increased efficiency,

2. Better product quality,

3. To choose the fastest method to do a job,

4. To improve the working process,

5. Less fatigue to operators and workers,

6. Effective labour control,

7. Effective utilisation of resources,

8. To decide equipment requirements,

9. To pay fair wages,

10. To aid in calculating exact delivery,

11. To formulate realistic labour budgeting, and

12. To decide the required manpower to do a job.

ADVANTAGES OF WORK STUDY:

The advantages of work study are the following:

1. Work study ensures higher productivity,

2. Better working conditions with less fatigue,

3. Higher wages to workers,

4. Uniform production flow,

5. Job satisfaction and job security to workers,

6. Reduction in unit cost of production,

7. Quality products to consumers,

8. Fast delivery schedule,

9. Harmonious employer-employee relation, and

10. Better service to customers.

Method study in Production and Operation Management

Method study enables the industrial engineer to subject each operation to systematic analysis. The main purpose of method study is to eliminate the unnecessary operations and to achieve the best method of performing the operation. Method study is also called methods ENGINEERING OR WORK DESIGN.

Method engineering is used to describe collection of analysis techniques which focus on improving the effectiveness of men and machines. According to British Standards Institution (BS 3138): “Method study is the systematic recording and critical examination or existing and proposed ways or doing work as a means or developing and applying easier and more effective methods and reducing cost.”

Fundamentally method study involves the breakdown of an operation or procedure into its component elements and their systematic analysis. In carrying out the method study, the right attitude of mind is important. The method study man should have:

1. The desire and determination to produce results.

2. Ability to achieve results.

3. An understanding of the human factors involved.

Method study scope lies in improving work methods through process and operation analysis, such as:

1. Manufacturing operations and their sequence.

2. Workmen.

3. Materials, tools and gauges.

4. Layout of physical facilities and work station design.

5. Movement of men and material handling.

6. Work environment.

Objectives of Method Study

Method study is essentially concerned with finding better ways of doing things. It adds value and increases the efficiency by eliminating unnecessary operations, avoidable delays and other forms of waste. The improvement in efficiency is achieved through:

1. Improved layout and design of workplace.

2. Improved and efficient work procedures.

3. Effective utilization of men, machines and materials.

4. Improved design or specification of the final product.

The objectives of method study techniques are:

1. Present and analyze true facts concerning the situation.

2. To examine those facts critically.

3. To develop the best answer possible under given circumstances based on critical examination of facts.

Scope of Method Study

The scope of method study is not restricted to only manufacturing industries. Method study techniques can be applied effectively in service sector as well. It can be applied in offices, hospitals, banks and other service organizations. The areas to which method study can be applied successfully in manufacturing are:

1. To improve work methods and procedures.

2. To determine the best sequence of doing work.

3. To smoothen material flow with minimum of back tracking and to improve layout.

4. To improve the working conditions and hence to improve labor efficiency.

5. To reduce monotony in the work.

6. To improve plant utilization and material utilization.

7. Elimination of waste and unproductive operations.

8. To reduce the manufacturing costs through reducing cycle time of operations.

Steps or Procedure Involved in Methods Study

The basic approach to method study consists of the following eight steps. The detailed procedure for conducting the method study is shown in the following figure.

1. SELECT the work to be studied and define its boundaries.

2. RECORD the relevant facts about the job by direct observation and collect such additional data as may be needed from appropriate sources.

3. EXAMINE the way the job is being performed and challenge its purpose, place sequence and method of performance.

Method study procedure

4. DEVELOP the most practical, economic and effective method, drawing on the contributions of those concerned.

5. EVALUATE different alternatives to developing a new improved method comparing the cost- effectiveness of the selected new method with the current method with the current method of performance.

6. DEFINE the new method, as a result, in a clear manner and present it to those concerned, i.e., management, supervisors and workers.

7. INSTALL the new method as a standard practice and train the persons involved in applying it.

8. MAINTAIN the new method and introduce control procedures to prevent a drifting back to the previous method of work.

MEANING AND DEFINITION OF WORK MEASUREMENT:

Work measurement is concerned with the determination of the amount of time required to perform a unit of work. Work measurement is very important for promoting productivity of an organization. It enables management to compare alternate methods and also to do initial staffing. Work measurement provides basis for proper planning

Definition: Work measurement can be defined as the implementation of a series of techniques which are designed to find out the work content, of a particular task or activity, by ascertaining the actual amount of time necessary for a qualified worker, to perform the task, at a predetermined performance level.

The essence of work measurement is ascertaining the work content of the particular activity under consideration. It helps in:

§ Evaluating worker’s effectiveness

§ Making comparison between two methods

§ Developing labour standards, for planning and controlling operations.

The estimated time, needed by a qualified worker for carrying out the task, at a normal rate, is known as the standard time. The standard time acts as a benchmark for productivity.

TECHNIQUES OF WORK MEASUREMENT

§ Direct Time Study: Direct time study refers to the ascertainment of the time needed to carry out a unit of work. In this method, observation and recording of time is necessary for undertaking each unit of an operation are done, with a view to ascertaining, the actual time, in which the work can be accomplished.

§ Synthesis Method: A work measurement method, in which the job or activity is divided into various parts, after which the time consumed in performing each element of the job is recorded and then combined.

§ Analytical Estimating: This method of time measurement is used to ascertain the time values for the tasks, that are long and not repetitive in nature.

§ Predetermined Motion Time System (PMTS): In PMTS method, basic times are set up for basic human motions. Such time values are used to compute the time required by the job for its completion, with fixed standard. It is a new and improved version of motion study.

§ Work Sampling or Ratio Delay Method: A work measurement method, in which the work of several employees is sampled randomly, at periodic intervals, to ascertain the proportion of total operations, of a specific activity.

Work measurement techniques helps in preparing realistic work schedules, by proper evaluation of human work. It helps in comparing the actual time taken by the worker, with the time allowed, to keep a check on the workers and avoid idle time.

STEPS INVOLVED IN WORK MEASUREMENT

1. Divide jobs into elements

2. Observe and record each element, any of the work measurement techniques.

3. Set up unit time values, by extending observed time into normal time for each unit. This can be done by applying rating factor.

4. Evaluate relaxation allowance and add the same to the normal time, for each element to get the work content.

5. Ascertain the frequency of occurrence of each element in the job, then multiply the work content to it. After that total the times to reach the work content of the job.

6. Add contingency allowance, wherever required, to get the standard time for performing the job.

Work measurement is helpful in evaluating the labour cost. Further, gives information with respect to the estimation of tenders, assessment of delivery schedule and fixation of the selling price.

WORK SAMPLING

Work sampling is a method to determine the facts about the utilization of human or machineries with numerous observations taken at a random interval of time.

It helps to determine various categories like setting up a machine, idle time and assembling two parts.

And these results can be used to establish the utilization of workers and machineries, to improve their efficiency, product standard and also to determine the allowances applicable for their job.

In this study, large numbers of examinations are made at random intervals during the examination for work sampling. Thus, it helps to find out the standard moment in time for manual tasks.

FEATURES OF WORK SAMPLING STUDY:

The general characteristics of work sampling study are given below;

1. Sufficient time required for the study.

• It requires ample of time to carry out the study.

2. Multiple workers.

• Rather than examining one worker it is important to multiple workers examine

3. Long cycle time.

4. Non-repetitive work cycle.

Applications:

• It helps the administration to evaluate the efficiency among various departments

• Management can get the data's related to idle time and its cause

• Such data's helps in production planning

• It provides fair job distribution among the workers

Advantages:

• Reduced clerical time

• Uneconomical activities can be easily identified and it can be eliminated

• It takes only few man hours

• Several study can be made on several machine or people by a single analyst

• This method is very less than continuous time study

• It can be stopped at any time without affecting the consequences

WHAT IS ACCEPTANCE SAMPLING

Acceptance sampling is a statistical measure used in quality control that allows a company to measure the quality of a batch of products by selecting a specified number of products for testing. The quality of these products will be viewed as the quality level for the group of products. A company cannot test every one of its products due to either ruining the products, or the volume of products being too large.

Acceptance sampling solves this by testing a sample of the product for defects. The process involves batch size, sample size and the number of defects acceptable in the batch. This process allows a company to measure the quality of a batch with a specified degree of statistical certainty without having to test every unit of product. The statistical reliability of a sample is generally measured by a t-statistic.

Example of an attribute acceptance sampling plan

For example, you receive a shipment of 10,000 microchips. You either cannot or do not want to inspect the entire shipment. An attribute sampling plan can help you determine how many microchips you need to examine (sample size) and how many defects are allowed in that sample (acceptance number).

In this case, suppose your acceptable quality level (AQL) is 1.5% and the rejectable quality level (RQL) is 5.0%, and you assume alpha = 0.05 and beta = 0.1. Minitab generates a sampling plan that indicates that you need to inspect 209 chips. If 6 or less of the 206 inspected microchips are defective, you can accept the entire shipment. If 7 or more chips are defective, you must reject the entire shipment.

Example of a variables acceptance sampling plan

For example, you receive shipments of 2500 plastic pipe segments each week and you need to verify that the wall thickness measurements meet specifications. You either cannot or do not want to inspect the entire shipment. A variables sampling plan can help you determine how many pipes you need to measure (sample size) and the criteria for accepting or rejecting an entire lot (critical distance).

In this case, the lower specification for the wall thickness of the piping is 0.09". You and the supplier agree that the acceptable quality level (AQL) is 100 defectives per million and the rejectable quality level (RQL) is 300 defectives per million, and you assume alpha = 0.05 and beta = 0.1. Minitab generates a sampling plan that indicates that you need to measure 760 pipes and indicates that the critical distance is 3.55748. You then measure a sample of 760 pipes and use the accept/reject tool in Minitab to indicate whether a shipment should be accepted or rejected.

INDUSTRIAL ENGINEERING (IE):

Industrial Engineering (IE) is concerned with the design, Improvement, and installation of integrated system of men, material, and machines for the benefit of mankind .It draws upon specialized knowledge and skills in the mathematical and physical sciences together with the principles and methods of engineering analysis and design to specify, predict and evaluate the results to be obtained from such systems.

Tools of Industrial Engineering:

The main aim of tools are to improve the productivity of the organization by optimum utilization of organizations resources: men, materials, and machines. The major tools used in industrial engineering are:

1. Production planning and control.

2. Inventory control.

3. Job evaluation.

4. Facilitates planning and material handling.

5. System analysis.

6. Linear programming.

7. Simulation.

8. Network analysis (PERT, CPM).

9. Queuing models.

10. Assignment.

11. Sequencing and transportation models.

12. Games theory and dynamic programming.

13. Group technology.

14. Statistical techniques.

15. Quality control.

16. Decision making theory.

17. Replacement models.

18. Assembly line balancing.

19. MRP-JIT-ISO-TQM.etc.

Techniques of Industrial Engineering:

Planning and designing manufacturing processes and equipment is a main aspect of being an industrial technologist. An Industrial Technologist is often responsible for implementing certain designs and processes. Industrial Technology involves the management, operation, and maintenance of complex operation systems.

Techniques of industrial engineering

Method study: To establish a standard method of performing a job or an operation after thorough analysis of the jobs and to establish the layout of production facilities to have a uniform flow of material without back tracking.

Time study (work measurement): This is a technique used to establish a standard time for a job or for an operation.

Motion Economy:

This is used to analyses the motions employed by the operators do the work. The principles of motion economy and motion analysis are very useful in mass production or for short cycle repetitive jobs.

Value Analysis: It ensures that no unnecessary costs are built into the product and it tries to provide the required functions at the minimum cost. Hence, helps to enhance the worth of the product.

Financial and non-financial Incentives: These helps to evolve at a rational compensation for the efforts of the workers.

Production, Planning and Control: This includes the planning for the resources (like men, materials and machine) proper scheduling and controlling production activities to ensure the right quantity, quality of product at predetermined time and pre-established cost.

QUALITY ASSURANCE

Quality Assurance (QA) is a process that is used to control and improve the development of a product or service to ensure it will meet all specifications and requirements. QA involves improving the product development and manufacturing process, rather than looking at the end products themselves.

Although they are sometimes confused, QA is different than Quality Control (QC). QC focuses more on detecting problems in the finished products, rather than looking at the development process.

The overarching goal behind QA is to prevent flaws or defects before they occur. QA involves improving processes such as design, worker training, document control, management, and process audits. This is because flaws in these processes can lead to flaws in the products or services offered to customers further down the line.

Quality inspection are measures aimed at checking, measuring, or testing of one or more product characteristics and to relate the results to the requirements to confirm compliance. This task is usually performed by specialized personnel and does not fall within the responsibility of production workers

An inspection involves checking something, i.e., examining and assessing something. We may inspect a building or organization to make sure that it meets specific standards. The inspectors need to ensure that nothing is faulty and that nobody is breaking any laws. They also have to make sure that whatever they are inspecting is safe.

In the world of business, inspection is the critical appraisal of materials, items, or systems involving examination, testing, and gauging. Inspectors take measurements and make comparisons. Inspections are formal evaluations or organized examination exercises.

The inspectors determine whether the item or material is in proper condition and of the right quantity. They also determine whether it conforms to the company’s, industry’s, local, or national rules and regulations.

UNIT-V

Definition & Scope of Materials Management

	Material management is an approach for planning, organizing, and controlling all those activities principally concerned with the flow of materials into an organisation.
The scope of Materials Management varies greatly from company to company and may include material planning and control, production planning, Purchasing, inventory control, in-plant materials movement, and waste management. It is a business function for planning, purchasing, moving, storing material in a optimum way which help organisation to minimise the various costs like inventory, purchasing, material handling and distribution costs.

DefinitionS: Materials Management’ is a term used to connote “controlling the kind, amount, location, movement and timing of various commodities used in production by industrial enterprises”.

Materials Management is the planning, directing, controlling and coordinating those activities which are concerned with materials and inventory requirements, from the point of their inception to their introduction into the manufacturing process.

OBJECTIVES OF MATERIALS MANAGEMENT

(i) Material Selection:

Correct specification of material and components is determined. Also the material requirement in agreement with sales programme are assessed. This can be done by analysing the requisition order of the buying department. With this standardisation one may have lower cost and the task of procurement, replacement etc. may be easier.

(ii) Low operating costs:

It should endeavor to keep the operating costs low and increase the profits without making any concessions in quality.

(iii) Receiving and controlling material safely and in good condition.

(iv) Issue material upon receipt of appropriate authority.

(v) Identification of surplus stocks and taking appropriate measures to produce it.

The outcome of all these objectives can be listed as given below:

(i) Regular uninterrupted supply of raw-materials to ensure continuity of production.

(ii) By providing economy in purchasing and minimising waste it leads to higher productivity.

(iii) To minimise storage and stock control costs.

(iv) By minimising cost of production to increase profits.

(v) To purchase items of best quality at the most competitive price.

MATERIALS MANAGEMENT: MEANING, FUNCTIONS AND OBJECTIVES

Meaning of Materials Management:

Materials management is a balancing act. The objective is to be able to deliver what customers want, when and where they want it, and do so at minimum cost.

To achieve this objective, materials management must make trade-offs between the level of customer service and the cost of providing that service.

Materials management concerns itself not merely with the cost of materials but pays equal attention to the cost we incur on materials which, in most cases, are usually hidden. Even a rupee saved on these costs adds to the profits made by a manufacturing unit.

Materials management is a coordinating function responsible for planning and controlling materials flow.

ITS OBJECTIVES ARE:

1. Maximise the use of the firm’s resources.

2. Provide the required level of customer service.

Functions of Materials Management:

All activities concerned form the materials part of the materials management function.

These functions are:

1. Purchasing:

Purchasing is one of the basic functions of materials management.

The objectives of industrial purchasing are the following:

(a) To maintain continuity of production.

(b) To buy for the best ultimate value, not necessarily always at the lowest price.

Effective functioning of the purchasing function is vital to the smooth operation of many other departments.

2. Inventory Control:

The word ‘inventory’ is defined as the ‘materials lying in storage or idle materials’.

Inventory control is the technique of maintaining all classes of inventory at optimum levels, with the minimum investment of capital. In other words, inventory control means balancing the two opposite forces, i.e., overstocking with all financial hazards and under stocking leading to operational bottlenecks.

3. Stores Management:

Proper receipts, inspection, storage and preservations, safety and issue of materials with efficient documentation assist in good house-keeping of materials in a warehouse. This avoids shortage and surplus during annual or continuous stock taking and prevents loss or deterioration of materials in hand.

4. Disposal of Surplus/Scrap/Obsolete Materials:

Another important area where materials management can play an effective role is in the disposal of surplus/obsolete materials. Over a period of time manufacturing units accumulate large amounts of obsolete and surplus materials. Since the materials department is in constant touch with the market, the disposal of such materials is always to the advantage of the materials department.

OBJECTIVES OF MATERIALS MANAGEMENT:

“The objectives of materials management department are:

A. Primary Objectives:

1. Low price.

2. High inventory turnover (Inventory turnover = Sale/Average Inventory )

3. Low cost of acquisition and possession.

4. Continuity of supply.

5. Consistency of quality.

6. Low payroll (wage) cost.

7. Favourable supplier relations.

8. Development of personnel.

9. Maintenance of regular records.

These objectives may now be briefly described:

Low price:

This is one of the most important objectives of materials management. It means that the materials or services as received by the company should be purchased at the lowest possible cost.

High inventory turnover:

This means that the average inventory locked up is low compared to the sales volume. Inventory means idle money and, therefore, the lower it is, the higher will be the profit. Storage and carrying cost of inventory will, therefore, also be lower if the volume is small. Low cost acquisition and possession

This means that the materials are acquired and kept in stores at a low cost.

Continuity of supplies:

One of the main objectives of proper (scientific) materials management is to ensure that there is no disruption in supply which might hamper the smooth flow of production. Continuity of supply is necessary to ensure uninterrupted production.

Consistency of quality:

Materials of the right quality have to be bought. Otherwise the quality of the end-product may suffer. Hence, the quality will have to be good and consistent.

Low payroll cost:

Like any other department, the materials department should be run at the lowest possible cost.

Favourable supplier relations:

As the name signifies, in order to ensure continuity of supply and consistency of quality, it is necessary to have a favourable supplier/buyer relation.

Development of personnel:

Regular developments are taking place in the materials management field. It is necessary that the persons dealing with materials management are appraised of the latest ideas and trends. Hence, the development and training of personnel engaged in materials functions is absolutely essential.

Maintenance of regular records:

For any efficiently run department it is necessary to have good, updated and easily accessible records.

B. Secondary Objectives:

1. Favourable reciprocal relations.

2. New materials and products.

3. Make or buy decision.

4. Standardisation.

5. Product improvement.

6. Inter-departmental harmony.

7. Forecast.

Favourable reciprocal relations:

It sometimes pays to buy materials from the companies to whom the end products are sold. This is called reciprocal relationship. A good materials management department should encourage such reciprocal relationships with other companies.

New materials and products:

The materials manager is always in touch with the outside world. He acts as an information centre for the management and informs the management, not only about the materials and products which his company requires, but also about the development of new products produced by its competitors.

Make or buy decision:

The decision as to whether an item should be made from within the company, i.e., with its own resources, or purchased from outside (external) sources is a very important one.

The materials department, along with the help of the engineering department, by taking the pros and cons of making or buying, should buy from outside sources only if it is economical to do so.

Standardisation:

Materials required by the company and bought from outside should be standardised so as to have a fewer number of materials. This will reduce total inventory.

Product improvement:

The materials department should also help the company in improving the quality of the end product by suggesting various alternative methods.

Inter-departmental harmony:

The materials department should have a good relationship with the other departments inside the company.

Forecast:

The materials department has to prepare the materials budget and forecast of payments. The department will also forecast the prices of materials to be purchased.

OPERATION MANAGEMENT MBA II SEM SUBJECT

UNIT .I

What is Production Management? Meaning

Definition of Production Management

Functions of Production Management

1. Selection of Product and Design

2. Selection of Production Process

3. Selecting Right Production Capacity

4. Production Planning

5. Production Control

6. Quality and Cost Control

7. Inventory Control

8. Maintenance and Replacement of Machines

HISTORICAL EVOLUTION OF PRODUCTION AND OPERATIONS MANAGEMENT PRODUCTION AND OPERATIONS MANAGEMENT

History of Operations Management

PRE-INDUSTRIAL REVOLUTION

POST-INDUSTRIAL REVOLUTION

MODERN DAY

THE NEW PRODUCT DEVELOPMENT PROCESS (NPD) – OBTAIN NEW PRODUCTS

The 8 steps in the New Product Development Process

1. IDEA GENERATION

2. IDEA SCREENING

3. CONCEPT DEVELOPMENT AND TESTING

To go on in the new product development process, attractive ideas must be developed into a product concept. A product concept is a detailed version of the new-product idea stated in meaningful consumer terms. You should distinguish

4. Marketing strategy development

5. Business analysis

6. Product development

7. Test marketing

8. Commercialisation

The activity of determining the workflow, equipment needs, and implementation requirements for a particular process. Process design typically uses a number of tools including flowcharting, process simulation software, and scale models. WHAT IS THE DESIGN PROCESS

THE DESIGN PROCESS CONSISTS OF 6 STEPS:

1. Define the Problem

2. Collect Information

3. Brainstorm and Analyze Ideas

4. Develop Solutions

5. Gather Feedback

6. Improve

STEPS TO PROCESS DEVELOPMENT

WHAT IS COMPUTER AIDED DESIGN?

Types of CAD Software

2D CAD

2.5 D CAD

3D Wireframe and Surface Modeling

Solid Modeling

Factors Affecting Plant Location

1. Law and order situation

2. Availability of infrastructure facilities

3. Good industrial relations

4. Availability of skilled workforce

5. Social infrastructure

6. Investor friendly attitude

7. Nearness to market

8. Nearness to raw-materials' source

9. Nearness to supporting industries

10. Must meet safety requirements

11. Miscellaneous factors

DEFINITION: AGGREGATE PLANNING

CAPACITY UTILIZATION

THE USE OF CAPACITY UTILIZATION AS A KPI

Types of Feasibility

Feasibility Study Process

5. Management summary:

Provides the following information.

Steps in Production Planning and Control

2. SCHEDULING

3. DISPATCHING

4. FOLLOW-UP

Line of Balance (LOB)

WORLD CLASS MANUFACTURING

Introduction

World Class Manufacturers

Principles of World Class Manufacturing

Aspects of World Class Manufacturing

DEFINITION AND CONCEPT OF WORK STUDY:

Role of Work Study:

Objectives of Work Study:

ADVANTAGES OF WORK STUDY:

Method study in Production and Operation Management

MEANING AND DEFINITION OF WORK MEASUREMENT:

TECHNIQUES OF WORK MEASUREMENT

The activity of determining the workflow, equipment needs, and implementation requirements for a particular process. Process design typically uses a number of tools including flowcharting, process simulation software, and scale models.

WHAT IS THE DESIGN PROCESS