Production and Operations Management

Production & Operations Management

Production: Action of Manufacturing

Especially in large quantities

: Things that have been produced esp film, theatre etc

: Quantities produced

example : increase in production by more efficient

methods

: Go in to / out of production

start / stop product being manufactured

The old vehicle model went out of production last year

: Showing , presenting

On production of Membership card , you will get discount


• Productivity : Ability to produce e.g goods or crops.Crop would depend upon the productivity of the soil : Efficiency , especially in industry Measured by comparing amount produced with the time taken or the resources used to produce it : Management are looking for ways of improving productivity example : Productivity bonus for workers Productivity agreement


• Operation : Way in which something is working

: Activity often involving several people

and /or spread over a period of time

: Medical

:Business , Company

Company involved in banking , building,

business operations

Management : People , who organise, control the business

of an enterprise

; organise and control


• Operations Management

Any organisation would consist of :--

--Marketing

--Production

--Human Resources

-- Finance


Production

Marketing

Finance

Human Resource


• Marketing : Promote product to the customers

:Get Substantial , large orders

Production : Manage physical resources for the

production of an item or of a service

:Manage facilities to meet to meet customer

or market requirement

: To manufacture product as per specs and

customer’s requirement ,

: Production function needs to organise resources of raw

materials, equipment , labour, and workicapital,according

to production plans.


• Human Resources : Provide persons to support all the functions

: Providing manpower to all other subsystems of

the management

In the Management functions of an organisation , all the systems are

interwoven , interlinked , as no function can work in isolation

All functions need to be well synchronised and they need to function

as an integral unit


• Products or services are outputs of an organisation• All outputs need Inputs• All inputs undergo a transformation process to generate

an output --which could be a Product or Service

Every organisation would have its own goal and its own

objectives, which are achieved when the inputs are passed through various processes so as to get the desired results.


• Organisations need to achive critically following --Effectiveness --Efficiency

Effectiveness : This is achieved when the output of transformation system satisfies customers expectation and at the same time achieve and at the same time achieve objective of the company

Note : When the Customers are evaluating product or service of company – they are actually evaluating the Operation Management of the company

Effectiveness – Measures value generated by the product for the customers Efficiency -- Management measures costs incurred in achieving that desired output --Work Efficiency –cost incurred to obtain desired output as compared to the effectiveness


• Efficiency : Any organisation would measure efficiency

in terms of following :--

: in terms of labour

: in terms of cost

which are incurred to obtain output as

compared to value of cost of input

Efficiency ; pretty important for short term operation and

survival of the company

Effectiveness: important for long term survival of the

company


• Production / Operations Management

Production / Operation Management can be defined as the process which combines and transforms

various resources used in production /operation into value added products or services in a controlled manner

as per objectives of the organisation


• Production Management• Inter related management functions / activities involved in manufacturing is referred to as Production

Management If the same concept is applied to services management then the corresponding set of management activities are referred to as Operations Management

Management activities provided for –for production/ services –called as Production /Operation Management

Production& Operations Management

• Production : manufacturing custom made products such as

machines with specific capacities, appliances, etc

Services : Custom made services such as clinical testing,

insurance, couriers etc

Characteristics of Services

--Products intangible items

--Quality of output highly variable

-- production and consumption occurs simultaneously

--No inventory is accumulated or gathered


• Management Decisions

--strategic

--tactical

--operational

Production and Operations Management

Strategic Decisions ( Top Management) Technical Decisions ( Middle Management) Operations Management (Bottom Level)


• Owing to Globalisation and competition arising out and competition arising out of same It is very important for the organisation to

proivde goods and services at globally competitive prices

If the market does not have high competition then the organisation can work out the cost of products by taking into account the cost incurred during the production administration and then add the

required profit for reaching at the selling price

However in case of high competition Company first needs to fix up the competitive prices then try to plan so as to cut out the

unnecessary expenses till the required profit level is attained That means “ working backward approach “


• System Concept of Production

System is by and large a collection ,interlinking of all related activites.

Operations Management is the management of transformatierials systems which converts inputs into goods and or services

Inputs : raw materials, labour , equipment, and capital Inputs are combined and converted by a process using technology into finished goods and or services During Conversion Process there are usually deviations in the product quality size ,shape and overall quantity of production etc so it is important to apply correction to these

deviations in the initial stage in the form of feed back These could be , qualtiy check on incoming raw materials , machine settings , toolings and changes , allocation of operators as per their technical skills , Change in production plans ,( Increase and decrease) , Tight Quality control so as to stop wastage and reworking


Input Operations Management Output

Capital Goods/ Services

Labour

Equipment

Materials

Feed Back

Transformation ( Conversion Process)

Production and Operation Management

• System operates in an environment Internal and external environment

Top management considered as internal envrionment, their instructions to change , modify ,feed back are to be responded by the system and achieve the profits , better results

Also the external environment –Uncertain, --Political --Economical -Social --Technological --Legal

Production and Operation Systems

• Production Systems

Corporate objectives of an organisation are achieved

by adopting right kind of production systems

This would depend on :--

--Market Demand

-- size of operation

--technological status of organisation

-- What are the kind of targets and objective

company has like, Return on investment

growth, survival , service etc etc

Production and Operation Systems

• Marketing strategy would is influenced by-----

---- Product Market

--- Segments to be serviced

--- Product range

---- Product Volume

--- Whether the product is standard product or customized product

--- Whether the demand is likely to be one time or repetitive regular demand

Above would decide to great extent which is type of production system which is appropriate for the company

Production and Operation System

• Also the type of technology would to a great

extent determine the selection of production

system .

This would be again influenced by

-- Size or volume of operation so whether go for general

machines or automated special versions or combination of

both

-- Traditionally automation requires would require less product

variety


--Critical and important factor for selection of Production systems would include cutting edge

factors , that would mean, those factors which

would lead to getting the order i.e price,

quality, lead time, committed maintenance and

technical support offered to the customers


• Production system : it is the integration of men , machinery, raw material, information system adopted by the organization.

Employee enthusiasm , motivation etc depend greatly on the type of production system which has been adopted by the organization

In many situations , the soft ware for management control etc is more costly than the machines ,as this

requires quite a bit of training and experience to achieve

the required efficiency and productivity in the organisation

So as to select the right type of production system ,trade off between various factors would be required


• Production Systems These are broadly classified under ;--

-- Project

-- jobbing -- Batch Production -- Line Production -- Continuous flow process


• Projects Projects are are carried out to complete a single

job at a place which is located at different location than

the company’s facilities

Projects require people with different skills and expertise

in large numbers, for completion

Project duration and depend on the size and nature of the project,availability of resources,

Project are different from other production systems

but one thing common that is there is a product at the

end of the project

Production and Operation Managemen

• Project Application : Projects can be small, medium, or of large size depending

upon the number of tasks involved Projects require combination of different resources whose requirements are

to scheduled for timely completion of project and for cost effectiveness, As and when the project is completed the resources which were depolyed there can be redeployed at other places Machine Selection and utilization Here usually generally purpose machines are procured for projects so that they may be utilised in other projects for multipurpose Special purpose machines are obtained ,if there are special requirements for

them and they are also required later on , in other projects. The special purpose machines can also be obtained on rent ,lease

etc


• Lay out : lay out of the project vary from project to project

and would depend on the final product.

Inventory Management: In projects ,the inventory has to

be kept ready in advance so that there is no delay in execution for want of stocks. There would be usually a huge “ Work in progress Inventory “. Since the materials are kept in open therefore there is likelyhood of theft etc for same.Also the materials do get spoiled or

damaged due to adverse storage envrionment Project does not have any finished goods inventory as the project completion in itself is a final product.


• Projects • Man power Requirements and Utilisation • Manpower during the project execution is specially trained and

they are to be selected keeping in mind that they are professional

and are able to solve the problems without looking up to supervisors

The difference between the project man power and the assembly

line power is that the later usually work under daily close supervision

where as the project people have to be competent to solve the

usual problems of their own

The manpower in a project work in an independent manner and carry quite a bit of responsibility .The project team needs to be

efficient, problem solving, reliable, enthusiastic


• Planning and Scheduling

Detailed planning and proper scheduling are important for proper implementation of the project

Since the projects are usually are at remote areas

therefore it is important that proper planning is done

in advance.Even a small problem can cause much delay and heav ycosts.

Management tools such as PERT and CPM are often used in project planning


• Quality Control

Strict quality control is very much necessary in case

of project , As to rectify any defect or to attend after

completion of the project may turn out to be very

costly .Any problem left unattended can cause

large costs later during production etc

Specialist agencies are to be used for measurement

and evaluation of the project work


• Project information System

Three important elements ;--

a) Details of the project and their updates must be provided to everybody involved on daily basis

b) Progress tracking and any deviation

c) Upto date information about actual expenditure relating

to labour, material ,services , and comparison with

planned expenditure should be provided

More important where payment has to be made on basis of work progress in different stages


• Flexible system : should have ability

to absorb any changes, Ability to adjust

and readjust according to changed situations should be there

Other factors : Cost of project, Estimated time of completion, nature of the project,

and technical know how are important

in the selection of projects


JOBBING ;; :: Manufacturing process in which comparatively few units are producedin as and when required : small lots produced in single lots or by flexible machines and skilled workers, irregularly are the special characteristics of jobbing Application: jobbing carried out in small shops or small facilities like garage etc for carrying out one or two jobs. various tasks carried out to complete a single order Job shop : When various small jobs are performed simultaneously at the same time , the process is referred to as Job-shop : Two categories under Job shop --a) Make to stock --b) Make to order Make to stock jobs shops: They produce more jobs which are to be stocked for present and future use Make to order :These products are not required on regular basis. Demand are for these items is unpredictable and these are not stocked in inventory also.


• Job shops are able to carry out small orders more economically as compared to regular manufacturing process

Machine selection and utilisation

-- Job shops usually have general purpose machines rather than the special purpose machines

and these are less costly .Although they can do more

jobs but their production rate is always lower than

the special purpose machines.


• Layout considerations :Flexible lay out is essential for job shops

Inventory Management : owing to flexible and unpredictable type of flow of work. The inventory

has to wait for processing or for transportation. Work in process inventory constitutes large

inventory of a job shop A make to order has low finished goods inventory. The raw materials inventory would depend upon the lead time..Quantity of raw materials would depend on the capability to produce quickly

Production and Operation Management• Manpower requirements and utilisation : Highly skilled manpower

capable of working on multiple machines is required . Need close

supervision and utilisation of manpower is very high

Planning and Scheduling : Supervisors would need to keep a close tracking of each and every job. In case of large size , then proper planning would be required .Planning and Scheduling would vary from one job to other job..

Quality control : Supervisors need to control , Usually no separate

quality control deptt


• Information Management : Normally in a small set up

an informal kind of information systems is required where a manager can keep track of all the activities

However in case of a big job shop a systematic information set up is required where under

--progress status of each job can be known

--History of the costs of previous jobs and costing

of new jobs

--evaluate the work load on each work centre

( on each machine and on each worker)

Above would enable the manager to plan properly and remploy

the workers on idle machines etc


• Flexible system: Job shops are suitable for development of new

products because of its flexibility in , layout, machines , utilization of man power

Also in case any new toolings are required these can be easily arranged in job shops. Operators are flexible and can easily adjust

to meet the demands and requirements for new product development.

Adaptible to change : highly adaptable to chaging needs of the

market demand situations .Also suitable in case production volume

required is low

Job shops are better to get orders at low profit margins and can

provide better customer satisfaction


• Batch Production : Here production is of moderate volume

Usually larger quantities than the job shops

production volume would depend on the capacity of the processing equipment

Advantages of Batch Production

-- Since the production volume is larger than job shop, cost of

set up and production per unit is very low

-- special purpose machines used increase efficiency and output therefore reducing the per unit cost

-- Man power requirement is comparatively less as special purpose machines are used

-- Less over head expenses


• Batch Production• Batch production is quite suitable when orders are of repetitive

nature.• Batch production is preferable to large scale production as this flexibility in production schedules and helps in producing different goods variety Application : Medical disposable products, automotive batteries, vehicles of different models (cars etc) confectionary biscuits Machine selection and utilization Equipments are generally general purpose machines . Special purpose machines can be used for faster production of batches


• Lay out : Usually product lay out is followed , Machines are arranged according to flow of the work .

raw material components enter at one stage and products come out of the other end . Usually a U shape kind of layout is used. Arrangement of machines are closer to each other which provides for better communication and understanding among the operators.

Inventory Management : Normally there is a substantial amount of “work In progress” inventory ,as in

various stages , special purpose machines can be used . So high level of scheduling is required to cut down the waiting time of the job to be done subsequently Also there is increase in investment of “ work in progress inventory” area of the floor occupied is more due to “work in progress inventory” More cost to manage additional inventory


• Batch Production• Manpower requirement and utilization

Batch production processes normally would require

simple set up which does not require very high trained or skilled workers , In case of the highly skilled workers are required , they can be hired for

that particular time.

Batch production requires very close cooperation

between various operators and the managers

team work is very important

Production and Operation Management• Batch Production

Planning and Scheduling : Due to volume of production, lay out plan of machines, scheduling has to be done very carefully so as to avoid built up in work in progress inventory

Quality control : Highly skilled quality controllers are needed control quality. It is more important so as to avoid large

rejection of the batch etc at later stage

Information system : comparatively simple as the data to be handled is smaller than jobbing

Flexibility : this can be low or high In case lay out is of specialized machines than the flexibility becomes rigid ,compared to the job production . As compared to the line production system Batch production is much flexible


• Line Production Here special purpose machinery is arranged in rigid sequence to perform repetitive tasks which are of large volumes. A large volume of standard products are manufactured at

comparatively cheaper in a line production system The ability and strenght of line production is to produce to

standard products for a competitive market in a quantity and at a high speed.

Application of line production : Mainly used in standard products such as fride, scooters , cars , airconditioners , assembly lines for automotvie engines etc.


Layout : follows a product layout :Special purpose machines ,tools,fixtures are arranged in a rigid

sequence which enable the fixed flow of parts over pre planned route

: Material handling devices could be automated

Inventory Management : small need for work in progress\

inventory due to good line balancing

: The need for holding the inventory is also minimized due to

high quality and extensive worker knowledge

: In case of lower demand , the work in process and finished goods inventory are likely to increase


• Manpower requirement and utilization

: Worker with proper and multiple task training are employed

:Skilled workers are required for quality and controlling rejection fo work

: However owing to repetitive nature of job , it might become

boring for the worker and therefore this can lead to quality decline

: Planning and scheduling

Relatively simple . Changes in demand are easily managed

with assistance of database for time taken to complete the job

Quality control : Quality control by a special team is necessary

to avoid rejection of products in large volumes


• Information system focusses on two functions -- tell the details fo task to do on each sub-assembly that comes down

the assembly line -- Coordinate with procurement group and upstream manufacturing

process about components needs of final assembly line. Information system provides information on labour hours , materials

and components used and compare the information against total out put produced .

Flexibility -- No flexibility -- rate of production is increased by rate of production time -output is reduced by by removing workers from line and relocating them


• Adaptability : Adaptability to change is limited

Other factors : Line production offers good prices, good quality

prodcuts and better delivery schedules

suited for automation.


• Continuous Flow Process

Continuous flow process produces streams of exactly similar materials like oil , gas , milk ,cement

etc

Continuous process is a production line of connected work stations as one unit and is highly

efficient

Application :Fertilisers, newspapers, cement

Machine Selection and utlization

Employs highly specialzed equipment that could achieve balanced output from the specified inputs


• Layout considerations

Layout that arranges equipment to enable smooth flow of raw materials, through processing steps until the finished product

is formed.

Inventory : Work in process inventory is important so as to keep

process in continuation without interruption .

Depending upon procurement lead time and sources of supply

work in process inventory is decided


• Work Measurement and Method of Study

Every organisation has to enusre that its customers are satisfied

Customer satisfaction in turn would depend upon

--Quality of the product

-- Cost of the product

--Customer Service

Cost of the product further depends upon to great extent on

the --time taken for producing the product

--Cost of labour

this further depends upon the work method

and machines used for production and working conditions


• Customer service to great extent would depend also on

timely delivery of the products

So as supplier the manufactuerer’s image depends on sticking to

its committed delivery schedule

In fact the future orders would also depend on the past performance

about honouring agreed delivery schedules

To ensure above the production managers have to accurately

plan the work and time required in completing the work

All of above are connected with the work measurement and method

study


• Management is faced with questions related to particular

work measuerment and method adopted to compele the work

such as :----

-- What is the right amount of the work expected from a worker

in a given time ?

-- How much time could be required to complete the work

--What could be the strength i.e number of workers required

to be engaged to meet the work load ?

-- How much pay compensation has to be given to the workers

-- How to further improve the out put and still maintain the quality

of the product


• Work Measurement

Work measurement refers to different ways of finding out

how long a job or part of job should take to complete

It is process of finding determining the time that a given task

would take when performed by a qualified worker working at

a defined level of performance

Here both physical and mental works are determined for

completing a specified task that use various techniques


• Work Measurement Plan The objectives of a work measurement plan are: -- To analyze the labour needs of an operation -- Tp develop labour standards for that operation -- To measure and analyze deviations from the standards and --To work for continuous improvement in the labour standards

The activities under the work measurement plan are:--- Tp develop a methodology for establishing and maintaining standard accuracy To improve operations by carrying out engineering analysis Revising standards and related system data and To assist in budgeting , estimating , production planning and

performance using labour standards


• Work Measurement Process

There are many ways and techniques to measure work

The basic procedure consists of three stages

a) The analysis phase

here job is divided into convenient and discrete elements

b) The measurement phase

A specific measurement technique is used to establish

the time required by a qualifed worker working at a defined

level of performance to complete each element of work

c) Synthesis phase

various elements of times are added together with appropriate allowances to work out the standard time for the compelete job


• Work Measurement Techniques

Two types of techniques are used for mesurements of work

--Time Study

-- Use of predetermined time standards

Factors affecting the choice of a suitable measurement technique

Selection of an appropriate measurement technique include

the following factors :--

-- purpose of measurement

--availability of database

-- Extent to which details are required

-- Availabe time for the measurement

-- Cost of measurement


• Time Study Time Study is carried out by direct observations of the work Purpose : to set normal times and then standard times to carry

out a specified work Time study aims at establishing the time for a qualified worker to perform a specified work under stated conditions and

at a defined rate of working

This study is done by a qualifed persons who observe the work then record the work being done , and then note down the time with help of time measuring devices (stop clock etc) At the same time he decides on rating by assessing the pace of work being done by the worker


• Time Study

There after the qualfied person observes the number of cycles

of the task depending on the variability of task , the level

of accuracy required

The total number of observations are made over a range of

working conditions,more so in cases where working conditions

are variable and are subject to change during the day or over

a period

The observations should also cover a range of workers to

neutralize the individual effect .

once normal time for each element of the work is determined

allowances are added to arrive at a standard time


• Requirements of Time study

The essential requirements for a time study are :--

--Time study should be carried out be qualified persons

-- The person carrying out the the time study should be

trained and experienced in the work

-- The work must be clearly defined and the method of doing

work shold be efficient

-- The working conditions should be defined


• There are two elements of the normal time for a spedified work --The first element is timing --The second element is the rating

Timing : It is the actual time recorded by the observer for doing the element of work or operation : The time recorded with help of stopwatch or computerised study board and is measured in centi minutes (0.01 minutes)


• Rating

The method of working of one worker usually differs from

the method of working of another worker. The result in different

observed times for each worker for the same work carried

The difference is due to

--difference is speed of movement or the pace of work

-- Efforts being put in by the worker

--Dexterity, consistency and training

Note : worker doing task for first time would take more time

than the experienced worker


• Rating The rating is on a scale with 100 as its standard rating Rating is direct observation technique to convert the observed time

required for a qualified worker working at a defined level of performance.

During the observation a trained observer makes an assessment of the worker’s rate of working relative to his concept of rate corresponding to standard rating

thus on scale of 0-100 the observer makes a judgement of the worker’s rate of working as a percentage of the standard rate

of working (100).The rating is then used to convert the observed time to normal time by using the following formula Normal time = (observed time x observed rating) standard rating


• Allowances Since the worker is unable to work with the same efficiency throughout his shift ( or the day ) . He suffers from fatigue both by the work undertaken and the conditions under which he works Time taken to complete job could also vary from conditions example : In middle east it is very hot : In cold country is very cold Some body who is used to work in normal environmental conditions would find it pretty difficult to work with same efficiency. Also the worker has to attend to his personal needs, medicine call of nature or something to eat therefore normal times needs to be adjusted to compensate for this additional requirements of time Normal practice is to make an addition to normal time by a suitable

amount which is commonly referred to as an “Allowance” to allow the worker to recover from fatigue and to attend the personal needs

Additonal allowance ar to be added to normal time to arrive at a standard time

Production and Operation Management• Standard Time

Knowledge of standard time for activity is very important plan

of work

It is necessary to know the standard time for each work activity

so that we are able to do the work as per required schedule

The time taken by a qualified worker to perform a particular operation is referred to as the standard time

Standard time = Normal time + Allowances


• Need for standard Times Standard time helps business in many ways . -- For work planning -- Man power planning as the number of workers have to be determined

accurately to complete the work --Production scheduling with exact knowledge of the time required for the

job -- Preparing cost estimates for contract bidding --- Determinning the productivity of the workers by comparing their

performance with standard time for tasks --Finalizing the pay compensation and the incentive schemes for the workers ---Establishing accurate delivery schedule for the products --- Reviewing the working conditions and environment for any modificaitons needed --- Identifying the reasons for excessive rejection and quality deterioration


• Use of predetermined Time standards Available database can be used for computing standard time from the techniques like “predetermined motion time systems” ( PMTS) , simulation studies or visualisation of work

labout times are set from times in in published tables To compute the standard time, -- the mannual work is divided into basic elements--the time for each basic element is obtained from the table-- The time for basic elements are summed up to work out the standard time for the task this is very fast way of working out the standard time for the work and could be

used for planning purposes The other advantage of working out the standard time for the work from tables

are that the times are established in laboratory setting and are widely accepted by the unions .The drawback in using the data from database is that the data is based on earlier studies and the conditions could be different at that time


• Steps in Conducting Time Study

Study is conducted by following some systematic steps

that inculde

Analysis of the task ,

Identifying the various elements of the taks Computing the normal time for each task element and ultimately

Working out the standard time


• 1. Define the task to be studied after analysing the method of doing work• 2. Idenfify various elements of the task precisely• 3. Decide the number of measurements to be made for each element of • the task 4.Measure and record the observed times and record ratings of performance for the

various elements of the task 5. Calculate the average element time

Average element time = ( ∑ Element times) / Number of Cycles 6. Calculate the normal time for each task element Normal time- = (Average acutal cycle time )x (Rating factor) Rating factor is the assessed rate of performance ,usually indicated as percentage of standard rating 7. Develop a total Normal time for the task by adding the normal time for each

element 8. Calculate the standard time

Standard time = (Total Normal time) / (1- allowance factor ) where allowance factor = Non working itme / total time


• Appropriate Method for Work Measurement• A job may take few seconds in a highly repetitive

works such as assembly of electronic items or

it might take days or months to complete a large

project or a major shut down for plant etc

Work measurement used in two cases differ.

In first case a stopwatch is required to measure time

where as in second case estimation of time is required

Therefore different methods of work measurement

are used in different applications


• Following methods of measurements are used as appropriate to

an individual job:--

-- Predetermined Motion Time System (PMTS)

-- Estimation

-- Timing

-- Models

Production and Operation Management• Predetemined Motion time System (PMTS)

The measurement units used in this method is in ten thousandth (0.0001) of a minute or hundered thousandth of an hour (0.0001)

The method is suitable for a very short cycle work of around

on minute of total duratioin such as assembly work .

the examples of such works are assembling or dissembling nuts and bolts , using a screw driver or doing spot welding on a small job

Production and Operation Management• Estimation

This method is suitable for a long cycle works or

project works where some estimation of time is

required for completing the job

Estimation is divieded into three categories :--

-- Analytical Estimation

-- Category Estimation

-- Comparative Estimation


• Analytical Estimation The estimator evaluates the work content and decides on the

probable time to be taken for the work by using his experience

According to his estimation the job might take about 3 days

to complete, The experience and judgement of the estimator

plays an important role in analytical situation


• Category Estimation• Here estimator prefers to give a range estimate such as

“ the job is expected to take between 4 days and 6 days

to complete “

this provides a margin for error in estimation . Such

ranges are usually calculated using statistical methods and are based on theory of probability


• Comparative Estimation

This is another example of range estimation and depends on the experience of the estimator about

the work in order to produce the estimates . He compares the time ranges with a few typical descriptive jobs that would be very close to the case

under consideration.The estimator selects the most

appropriate range


• Timing The observer measures the time taken by worker for each element

of the work . Each timing is rated by assessing the rate at which the

worker was working . This provides the normal time for the elements

and hence for the whole job which are independent of the worker

and could be used as the time for a trained , experienced worker to carry out the same element

Another method of assessing the works is by using activity sampling

, In this method snap observations are made at random or systematic

sample times, He observes the worker and notes down what the

worker or workers are dong at the time of those observations


• Models

Models are generated as mathematical formulae

to which the observed data are inserted to compile

time for completion fo the task or project

It is an easy and efficient method for recycling time

standards for elements of repetitive work over and over again,The volumes of the variables are changed

to suit each project


• Labour Standards• These are used to measure and control the time required to

perform a particular task or group of task. They can also be used in estimating and managing the cost of vast varietyof activities including engineering drafting,

clerical administration and other services

These are well accepted by unions and become base for various industrial activities ,management decisions, estimating

, production planning and performance evaluation Also used as to negotiate the contract price with contractors


• Labour standards are commonly grouped into two categories -- Engineering Standards -- Non Engineering Standards

Engineering Standarads These standards are developed with the assitance of work measure ment

techniques .The time in the engineered stanadards is the time arrived at after sytematic time studies following conditions to avoid any individual difference .The conditions to be satisfied in the development of the stanadad time are .:--- -The work is carried out by qualified worker -- The qualified worker works at a pace ordinarilly used -- The worker works imder capable supervision -- The worker experiences normal fatigue and delays durnig the period of performing task --Amount of work produced is of specified quality --The qualfied worker follows a prescribed method

Production and Operation Management• Engineering standards have three components -- Normal time also referred as leveled time. -- Personal fatigue and delay allowance -- Any applicable allowance

Non Engineering Standards these area developed without performing a detailed analysis but by using the best available information historical data is normally used for development of non engineered standards


Normal time --Initial set up time

--Operation timeStandard Time

Special Allowance-Machine Start up

--Job cycle &complexity,-- Power failures

PF&D Allowance

Personal Allowance

Handling heavyweight

Smoking time

Natural Calls time

Water or drinks

Break Time

Telephone,

Medicine

Fatigue AllowanceMental workDiffiicult person hazaradExcessive HeatingLighting on the job siteUse of safety DevicesAir conditioningNoise at Job site

Daily AllowanceSet up & Clean upMinor machine MaintnenanceSupervisor ChecksReferring to orders & filesNon availability of materialsDelay in managementDecisionsRejection of non standard partsMinor repairs on equipment


• Work Sampling Work Sampling involves observing a portion of the work activity . A

worker is observed at random times over a long period. Time standard based on statisitically determined observation of a

workeror process is developed by using work sampling . In work sammpling analysis is based on a large n umber of random ,

rather than continuous observations. Estimates are based on the proportion of time spent by one or persons on given activity . Work sampling does not use a stopwatch as

in the case of time study . It is based on a simple random sampling techniques of statistical sampling theoryNon Engineered standards are developed by work sampling .WorkSampling cannot be used alone to develop engineered standards.

However it is used to supplement or check standards developed by other definitive technique


• Application of work Sampling Work sampling is used to determine the job content and assess the productive vs non productive time The technique is suitable for jobs with irregular components

that vary in the amount of time per unit of out put . Work measurement using work sampling is particularly used in

service sectors like banks, health care, insurance companies, airlines, railservices ,water supply services,electricity services and telephone services

Accuracy in this techniques depends on the sample size. The number of observations in a work sampling study are very large , ranging from several hundereds to several thousands depending on the activity and degree of accuracy aimed at.


• The Procedure of Work Sampling

The main issue in work sampling are

-- The dedcide on desired level of statistical confidence

- To decide on the number of observation to be made

-- To decide on the schedule of obeservations

The number of observation is uniformly spread over the period

of study .

Normal time per part and standard time per part are computed

by work sampling .

Standard time is calculated by following formula

Standard time /Piece = (Total time in minutes )x (Working time proprotion) x( Performance index) x 1

total number of pieces produced (1-allowance)


• Steps in Conducting Work and sampling Study 1. Identify and define activities in the work sampling throught discussions with the

workers and premliminary observations .Define conditions to be taken as working and as non working

2. Develop the methods for observing and recording activities 3.Compute sample size ( number of observations) 4 Work out a schedule for observing the worker at appropriate /random times. 5. Observe and record the activities and rate of performance of worker 6. Record the number of units produced during the period of study 7.Compile and analyze the data 8. Calculate the ratio of the number of observations of the worker worked to total number of observations by using the formula below Proportion of the time (p) a worker is working on the work (P) is given by the formula p= Number of observations with working /Total number of observations 9. Compute the normal time by formula Normal =( Total time of study ) x (% of time the worker found working )x( pertotmsnce Time rating factor ) / number of pcs produced10 Compute the standard time


• Advantages of Work Sampling There are several advantages of work sampling which are: --One observer could conduct more than one work sampling study at the same time .This requires lesser resouces when compared with other techniques -- An untrained or semi trained person could conduct the work sampling study except in

case where standard time is required to be worked out -- Even a long cycle work needs fewer hours of observer -- It is less expensive than time study --work sampling eliminates the effects of short period variations as the duration of the work sampling study is usually long enough --It does not need any timing device such as stop watch -- work study is interrupted or delayed temporarily without any adverse effect on the final results. -- Influence on the change in method adopted by the worker during the period of study is not significant -- It is simple , easily adapted to services sectos and indirect laobur jobs

Production and Operation Management• Disadvantages of Work Sampling

-- Accuracy of work sampling studies are based on the subjective assessment and perception of the analyst

-- Results could be uneven from study to study

-- Difficult to conculde if the worker is working or not.This brings in inaccuracy

in the result

--Study is limited to few workers

-- It is ineffective with short cycles

--It does not provide a complete breakdown of elements as in time study

--Observers tend to follow a repetitive route of travel rather than follow a random sequence of operations. The time of observations are predicted in

a way to influence the results

--Work sampling gives misleading results if the system is in the process

of change .the basic assumption in the work sampling technique is that all the observations are made to pertain to same static system


• Numerical The number of observations of a payment counter found busy out of the observatons made on six days are given below

Day Number of observations Number of times (observations the counter was found busy}Day one 50 40Day two 30 20Day three 45 38Day four 48 40 Day five 25 12Day six 35 24Calculate the proportion of the time the counter was found busy .Does it call for an additional counter .If it is assumed that an additional counter is permitted when the workload is 90% or above of the total time.


• Total numberof observations made on six days =

(50+30+45+48+25+35) = 233

Total number of times ( observations) for which the counter

was found busy = 40+20+38+40+12+24 =174

Portion of the time counter was found busy = 174/233 =74.7%

Since the counter was busy at 74.7 % of the times therefore additional counter is not required as the proportion of the counter

found busy is less than the set limits of 90%


• Method of Study• Method of study is an important area in production to plan

various elements of production deciding on the type of machine to be used for a specific task, establishing the capacity of the

machine and planning the number of people to be deployed to

complete the task

Time study measures the time and planning the number of people to be deployed to complete the task whereas method

of study focuses on the method adopted for completing the task

In method study an attempt is made to look for alternate actions

to complete the task in an efficient manner and economic way


• Method Study • It is the process by which a method is developed

to do a work in the best way in a given situation

In method study, the work is subjected to systematic

and critical scrutiny in order to make it more effective

and more cost efficient

Also if examines whether two or more tasks can be done simultaneously without affecting the quantity and quality of the

work

There is a trade off between the benefits to arrive at an improved

method and saving additional cost and time .


• Following questions are adddressed in study :--

--If the particular element of the task is essential to complete

the work

-- If the element of the task could be eliminated

-- if the element of the task could be modified

-- if the element of task could be done more efficiently

and economically by the use of another device , technique,

, technology or skill

-- Which element of the work could be done parallel

-- If the work could be done with the same elements but with

modified sequence ?


• Applications of Method Study

Method study was originally designed for the analysis and improvement of repetitive and manual works.

However it could be used in all types of applications

example :--

-- serving food in the canteen

--processing files in the office

-- issuing materials from store

-- carrying out repair and maintenance jobs


• Process of Method Study

1. select the work to be studied

2. Record all the relevant information about the work

3. Analyse the recorded information

4. Examine the alternate ways of doing work

5. Decide the improved way of doing the work

6. Implement the new method as standarad practice

7. Evaluate the peformance and standardise the method


• Advantages of method study

Provides better understanding of the work

Improved planning the work and control

waiting time or in process inventory is reduced

Better delivery schedules to customers

Reduction in manpower requirements

Results in reduced production time

Cost reductioin

Improves quality of the product and better customer satisfaction


Method of Work and Machine Design

One of the main objectives of the method of study is to find if the

method adopted for doing the work is correct and if there is another

method to reduce the time taken by the work

Technological difference and machine design greatly affect the method of doing as well the time taken in completing the work


• Man , human engineering, Machine design and method of Doing work

-- Human Engineering plays an important part in machine design

and the method of doing work .

Machines are designed keeping in view the requirements of operator .

Machine’s controls knobs, buttons, and monitors etc are arranged in such a manner that results in minimum fatigue

and maximum comfort to the operator .The arrangement of various elements of the machine should be such that the

chances of making mistakes or missing steps is reduced

Machine design should take care arranging various elements

that helps the operator and in easy operations with less fatigue

and without waste of time


• Egonomics The science of designing the machine according to human needs is

referred to as Ergonomics An ergonomically designed product implies that the product has been designed to get integrated with a person’s body or actions that

provide efficient operations, safe, working environment and less fatigue in doing the job. The relationship between man and machine is of great importance in manufacturiing process . Automatic

manufacturing technology has greatly influenced this relationship

Ergonomics in manufacturing is very much concerned with the design of the products and the design of the process that make them


• Maintenance ManagementObjectives : Equipment is an important resource which is constantly

used for adding value to products . So it must be kept at the operating condition. Other wise there will be excessive breakdowns and interruption of production,if it is used in a mass production

Poor working condition of equipment will lead to qualtiy related problems.

therefore it is an absolute necessary to maintain equipments in good operating conditions with economical cost

Need is to have integrated approach to minimize the cost of maintnenance


• Breakdown Maintenance• Preventive Maintenance• Corrective Maintenance• Predictive Maintenance• Proactive Maintenance• Total Productive Maintenance• Comupterised Maintenance• World Class Maintenance


• Breakdown Maintenance

The sudden stoppage of a machine due to some failure or problem is termed as breadown of the machine. In some organisation the machines are attended only when they stop

functioing .The maintenance carried out in this manner is referred toas Breakdown maintenance

Here repair and corrective action is taken only after the problem

has actually happened

Breakdown maintenance normally is the outcome of

-- Negliegence

-- Ignorance

-- Lack of training\

--- Shortage of resources

--- Poor management


• Preventive Maintenance Preventive maintenance --- to prevent the breakdown of the machine Checklist concepts are developed . Checklist are developed for each equipment or machine so that

the machine parts are checked for any likely problems, Once the problem is identified

in advance the required corrective action is taken before the machine stops functioing Backbone of preventive maintenance is the trained

manpower,who can identify by visual inspection, or by hearing the sound of the operating machine or by touching the machine.


• Predictive maintenance

It is based on the measurement of certain parameters representing some characteristics , for example velocity, acceleration are measured for study of the type of severity of vibrations

They do not have fixed frequency of checks , The frequency

of checks is adjusted based on the condition of machine

example condition of ball bearing ..if good no need , if condition

is not good then the checks are carried out more frequently

and the measurement of parameters is done with special instruements

to provide accurate information about the condition of machine and predict the duration for which machine could be further used without any problem


• Preventive and predictive maintenance do not compete with each other .Both the systems are required to

effective maintenance and are complimentary to each other .Any investment on the procurement of equipment

required for predictive maintenance check is good investment and would give much more returns in short time.

Information obtained from predictive check reduces the need on frequent checks for preventive maintenance

This reduces total maintenance cost .Those who have practiced preventive and predictive maintenance checks

never think of discontinuing them once they have started


• Corrective maintenance During preventive maintenance checks certain problems

are noticed about the condition of the machine , the machine might be operating in a condition that could cause damage to the machine if continued to operate Therefore the machine is to be stopped without delay to correct the situation

The steps for corrective the situation are termed as corrective maintenance


• Proactive maintenance Two terms are often used in the context of

maintenance 1. Reactive maintenacne 2. Proactive maintenance Reactive maintenance concerns with the

maintenance actions that are required once the need for the same arisen. Break down of maintenance of a machine or

emergency repairs are such conditions -- Reactive maintenance.


• Proactive maintenance

Opposite to the reactive maintenance strategy

is the proactive maintenance strategy .The maintenance staff does not wait for the need to maintain and takes such actions as a normal proces

that is necessary to maintain the machine in high order. All those activities or oppurtunities that allow machine to work without an y problem are looked after


• Proactive maintenance

Preventive Maintenance

Predictive maintenance Correctivemaintenance

Plannedmaintenance

othersScheduledPreventiveCheck list

-- lubrication-- Cleaning

-- Adjustments-- Testing

Oil AnalysisVibration Analysis

-- Repairs of theDefects noticed

---Reconditioning of Components

--Manufacturing ofSpaces

--Construcition-- Modifications

-- Replacements-- Salvage operations

-- Painting

-- programmedoverhauls


• Total Productive Maintenance(TPM) It is an equipment maintenance based system involving all employees

in the organisation from top

management to production line workers and building custodians

Japanese developed concept of TPM in 1971

TPM basically integrates three concepts

--Equipment effectiveness

-- Maintenance systems

-- Employees Participation

The word Total has three featues which are

-- total equipment effectiveness TEE

-- total maintenance systems

--total participation of all employees


• Execution of works under TPM The works of TPM are organised and carried out through the following methodologies -- Operators are organised into zonal teams -- They are trained and certified to perform particular tasks in

their zone as the need arises Higher level of maintenance by operators is usually voluntary Individuals who notice problem put themselves to solve the problem and restore the equipment into operation thus reducing time Centralised maintenance teams attend to major maintenance

works requiring high craft skills objective : Zero Defects , Zero Breakdown


• Computerized Maintenance• Computerized maintenance enables online

information support for management of maintenance work

Essential Elements of computer information Systems -- Work order information -- planning and work measurement -- Scheduling and work assignment -- Equipment history sheet --- Reports -- Financial Control


• World Class Maintenance• It is based on an organizaiton ability to compete with any

other competitor anywhere in the world with product , price quality, and timely delivery.

Steps to world Class maintenance --- Evaluate the status of maintenance -- Prepare a blue print for the future -- Involve employees in the change process through

prototyping -- Roll out successes across the organisation -- System audits to avoid backsliding -- Automation of the systems


• Maintenance planning

--Elements of maintenance planning

Maintenance planning assumes great importance in a competitive world , where it plays a very important role to shape the organization as a profitable one or a loosing venture

-- Organizational structures for maintenance

-- Functions and responsibilities of key functionaries

--Facilities equipment and tools planning

--Space planning for the maintenance shops

--Settiing up a preventive and productive maintenance program

--Computerization of maintenance activities

-- Reporting and information systems


Management of Spare parts Spare parts are required for the repair and maintenance of mother unit

throughout its life time. There is no certainity as to when a part would fail and would require replacement .Regularly used parts are kept in the inventory for

replacement to keep machine downtime low The parts kept in the inventory are called spare parts The Need for keeping the spares in Inventory Essential to keep spare parts for following reasons ;-- --To make parts available for replacement when needed --To avoid undue long shutdown in the absence of spare parts especially when these spare parts are to be imported -- To avoid high cost of purchase of spare parts and freight in case of

emergency purchases -- To avoid stock out of spares especially in cases of machine which are likely

to be phased out of production by the machinery manufacturers


• Elements of Management of Spare parts management of spare parts is not limited to storage of spare parts in the warehouse but has many aspects which include following, :-- -- Maintain an upto date list of spare parts -- Maintain complete specs of spare parts -- Arrange drawing of spare parts -- Analyze spare parts from various considerations --Review of spare parts at regular intervals -- Appropriate maintenace approach -- Appropriate procedures for storing spare parts -- Review of requirement of spare parts -- Use of reconditioned and overhauled parts -- Obselete spare parts -- Proper selection of machine


• Classification of Spare Parts

ABC : Value of annual consumption of the item

VED : Vital Essential and Desirable

FSN : Fast moving, slow moving, Non moving

(trend of usage)

SDE :Scarce ,Difficult and Easy to obtain

GOLF : Govt , ordinary, local and foreign

(Source of Supply)

SOS : Seasonal, off seasonal (seasonal availability)

HML : High medium and low

( unit pricing)

XYZ : Inventory value of the item stored


• Categories of Inventory -- Finished goods inventory

-- In process inventory

-- Regular inventory items for production activities

Production and Operation Management• Advantages of Classification of Inventory--- Review of stock items such as rawmaterials ,spares.

consumables, etc is easily done separately for each class

-- Classification helps to keep similar items together

in the store.Recpts and issues are posted correctly

-- Classification of items under various heads helps in budgetory control ,

--- Clasification helps in logical codification of all items of inventory

----Material requisitions are prepared separately for different classes of items .Similarly enquiries are issued separately

for different classes of items


• Inventory Control Concept Inventory control is a management function to maintain

inventory items in such a quantity that the items in the inventory do not remain in stock for long

and do not block the usable financial resources. At the same time items should be in sufficient quantity so that

they are available when needed and donot result in loss of production or delay in repair and

maintenance of the machines

High inventory turnover Stocking of materials as per requirements controlling excessive inventory are part of inventory control


• Inventory Control Model

Elements of the inventory control model

-- Minimum Stock level

-- Maximum Stock level

-- Reorder level

--- Lead time

--- Safety Stock level


• Minimum Stock Level

It is the level below which the inventory is not allowed to fall

If the inventory is below this level , then there are chances that

plant operations are adversely affected

Maximum Stock level

It is the inventory level beyond which the stock is not allowed

to exceed. The maximum level is used as a control point to avoid any extra stocks. Order quantity for material is controlled

in such a way that when the material is received the inventory

level is below maximum


• Safety Stock level• Safety stock is the level of inventory which is always

maintained to take care of unforeseen factors such as delay in ordering , delay in supplier,

delay in transportation, or hinderance in execution

of orders by the supplier which are beyond his control like war, flood or strike

Lead Time

Lead time is the time from the point the requisition

for the material is prepared to the point when the material is received ,inspected and ready for use


• Role of Lot size in on lead time management

lot size is the amount of particular item that is ordered from plant or a supplier or issued as a standard quantity to the production process,

Lot sizes are to be kept as low as possible as it affects the size of the queue, which ultimately determines the actual lead time of an order


• Types of lot Sizes

following four types of lot sizes are considered for control of the lead time

-- Fixed order quantity (FOQ)

-- Economic Order Quantity (EOQ)

-- Lot for Lot

-- Period Order Quantity (POQ)


• Materials Requirement Planning (MRP) MRP Process includes planning and control of materials

Data inputs in MRP system are obtained from

-- Master production Schedule

-- Bill of Materials

-- Inventory status file

Master production Schedule (MPS)

MPS works out the quantity and timing of the requirement

of end items


• Bill of Materials

A list of all items to produce the product , indicating

the quantity of each item is called the “bill of materials” . A separate bill of materials is prepared

for each product .

Inventory Status file

A computerised system provides information such

as inventory on hand, lead time, lot size, and scheduled receipts etc


• Factors Influencing the Requirement of Materials -- Production plans -- Installed Capacity -- Market Demand -- Nature of the Market -- Political Scenario -- Organizational resources -- Reliable delivery schedule from vendors -- Relaibilty of records and store keeping


• Fixed Order Quantity (FOQ)

In this case the order quantity remains fixed but the time of ordering\

varies ,This may be due to various restrictions in the process such

as tool life , storage , restrictions on capactiy of the transportation

facility like a truck , trailer, tanker ,rail wagon

Economic Order Quantity (EOQ)

It is most economic order quantity where in two costs are considered i.e inventory carrying cost( ICC) and the cost of

a purchase item, the acquisition cost (AC) of a purchase,

The sum of the two costs i.e inventory carrying cost and Acquisition cost (AC) or set up cost is lowest at the economic

order quantity

Production and Operation Management• Economic Order Quantity (EOQ) The economic order quantity is the quantity which minimizes the sum

of acquisition cost and inventory cost I.e the quantity is related to minimum variable costs

Following symbols are used in EOQ formula

q : Order quantity

Q :Economic Order Quantity

U :Daily rate usage

n : Number of working days in the forecasted period

Ac :Ordering cost per order (Rs per order)

Ic : Inventory cost (Rs per order )

Pc: Unit cost of items (Rs / unit of measurement q = 2nUAc

√ Pc Ic


• Lot for Lot Planned orders are generated in quantities equal to

the net requirement in each period

Period Order Quantity (POQ)

In this case the lot size will be equal to the net requirement for

specific number of periods ,


• Factors affecting Inventory Control

--Change in rate of consumption

-- Change in Delivery Schedule

-- Shift in Reorder point

--Bulk Purchasing

-- Quantity Discounts

-- Forward Buying

-- Staggered Deliveries

-- Other External factors


• Objectives of Inventory Control --To ensure that items are needed are available items of regular use are kept in inventory as stock so that production process is not affected for want of them --Economic Buying Reduction in procurement cost is one of the important objectives of economic

buying --Ensure availability of materials -- Avoid overstocking of materials -- To keep inventory carrying cost as low as possible -- Provide flexibility to purchase department to apply apporpriate purchasing policies such as ; To avail quantity discounts for lower unit prices To decide on forward buying if cost of matriel islikey to increase in future To adjust quantity to match with economiclots To reduce tramsportation costs as much as possilbe by deciding on

appropriate quantity To keep packaging cost as low as possible by adjusting the quantity suitable

for the standard packaging


• ABC analysis --Normally inventory items are classified into categories to facilitate attention according to importance of each category. All items cannot be given equal attention by the invenory manager One of the most important considerations of control is the value of annual consumption of inventory items in a year . However it is found that only a samll number of inventory items

consume a very large share of the inventory consumption duing the year ,Moreoverlittle larger number covers a moderate share of the annual inventory consumption and very large number of inventory

items just cover a very small share of annual inventory consumption These gave rise to concept of ABC analysis It has been observed that 10% of items have 70 % share of annual

inventory consumption (deserve high attention –A class) 20% items have 20%annual inventory consumption( (---B class) 70% items have 10% annual inventory consumption(--C class)


• Steps in ABC analysis -- Determine the annual usage of units for each item

in the past one year

-- Multiply the annual usage quantity with the average

unit price of each item to calculate the annual usage

in Rs for each item

-- item with highest Rs usage annually is ranked first ,Then

the next lower annual usage item is listed till the lowest item is listed at the last.

-- Arrange the items in the inventory by cumulative annual usage and by cumulative percentage .Categorise items in A,B C categories


• Codification Codification plays an important role in inventory control and is

useful in following -- Identification of the item in the inventory ,Creation of unique codes for each item helps everyone understand the item with

the same meaning -- Codification eliminates the possibility of duplication in names -- Items of similar application but with different features can be differentiated easily with the help of codes -- Codes avoid long descriptions in the material requistions ,thus

saving a lot time in reviewing and processing of inventory item during review of stock levels --Codes are necessary in inventory control activities using

computer


• JIT ( just in time) The importance of just in time concept was realised in the context of the objective

of reducing inventory level and yet to maintain the schedule of repairs without loss of time and carry out other related production activities

The main focus of JIT Is towards waste and the linkage between

waste and variance .Waste refers to any activity or action that does

not add to the value There are various types of wastes in manufacturing operations such as

-- Excess production than demanded production

-- Waiting time in any operation results in waste

-- Unproductive movement of materials

-- Unnecessary process or operation

-- Excessive inventory

--Reduction in rates of rejecrtion


• Objectives of Just in time production process

-- To gain competitve advanatage

-- Improve resposiveness to the customer

-- Production planning

-- To achieve perfect quality

-- Minimum lead time

-- No waiting time

--Avoid Waste

-- Flexibility

-- Human resource development


• Principles of just in time

-- Continuous improvement

-- Quality at Source

-- Waste management

-- Develop and motivate people

-- Teamwork

-- Process Simplification

-- Visual control

--Take care of customers needs

-- Production to customer’s demand


• GANTT Chart Gantt chart is a graphical representation of a series activities drawn to a time scale . Horizontal axis , X axis represents time

and vertical axis Y axis shows the activities to be peformed.The Gantt chart shows

the activities to specific jobs at individual /work centers by horizontal bars. Also known as bar chart because of the graphic presentation of the information the position and the length of the horizontal bar indicate the chart and completion date of the activity.

Initially certain symbols were used but over a peroid only bars used to show the start and duration of the activity, When When the Gantt chart is used as a controlling technique the planned

and actual performances of the activities are presented on the same chart by two horizontal bars with different colours or by different presentation


TaskHours

1 2 3 4 5 6 7 8 9 10

1

2

3

4

5

6

7

8

BBSt

Bar chart indicating Planning time for each operation


• Strengths of Gantt Charts -- Very simple to understand by everyone: supervisors, managers top management-- useful information in a format that is simple to develop and

interpret-- Good tool for planning as well as monitoring the progress of

the work. It helps the planners to evaluate the progress of a project at various levels

--Helps in loading the work centre in relation to the available capacity

-- It provides the user with a quick visual indication of the actual status of each order and its anticipated or planned status-- The Schedule could easily incorporate changes in timing,

machine loads, and current status


• Strengths of Gantt Charts• Flexible to apply, It indicates the need for reassessing the resources

incase the load at one work station becomes too much

Work force could be temporarity adjusted to meet the high demand

of heavily loaded workstation by shfiting manpower from a relatively

less loaded work center .

Gantt charts suit the requirement of a wide range of media from a ruled paper to mechanical devices and computer systems


• Limitations It does not convey the variability of the task duration ,

equipment performance ( including breakdowns) and human

potential , any one of which could influence the accuracy of loading of work centers.

It does not clearly indicate the details regarding progress of the activities

The chart is static and has to be updated periodically

in account for new job arrivals and revised time estimates for existing jobs


• Program Evaluation and Review Technique (PERT) It is a network technique used for a project scheduling Developed by US Navy Application of PERT to plan and control the project helped them

project completion ahead of schedule time and with in budget Now PERT chart has become an essential component of project execution , expecially in large size projects where the number of acitivities are very largeand lot of competition are faced in

execution of projects. PERT has the ability to cope with uncertain activity completion times .( if an activity is most likely to be completed in 4 weeks It could be completed anywhere between 3 weeks to 8 weeks

Production and Operation Management• Program Evaluation and Review Technique (PERT)

Expected average activity time (tc) is worked out based on three

terms ,

-- the most optimistic (t 0 ) ,

---- the most pessimistic ( tp)

---- the most likely time ( tm )

t c = t 0 + t m + t p 6 Note that most likely time ( tm ) is given four times weight than the most optimistic and most pessimistic time


TTime

Lower

probability

High Probability

Pro

bab

ility of o

ccuren

ce

Optimistic time

Most likely timeExpected Average time


• Terms used in PERT

Activity : Activity is a time consuming effort needed to perform

a part of the network . It has a definite beginning and ending point

Event : o

Event is represented by a circle, which is a node in the network. Nodes

are points in time , which one or more activities start or finish

Expected time of an activity

Expected time of activity

The expected time in which an activity is expected to completed (Tc)

Optimistic time

time taken in most favourable conditions (to)

Pessimistic time

time taken in most adverse conditions (tp)


• Slack time : Time difference between latest time and earliest time of an event is the slack time for the event

(ts)• Dummy activity :

An imaginary activity with zero time


• Steps in PERT 1. Breaking of the project to various activities depends on the

extent of the details of the work to be planned.

2. Identify sub activities under each activity

3. Determine the sequencing of the relationship between activities and sub activities

4.Determine the estimated time ( tc )

by using the formula

5. Draw network diagram

Calculate the critical path for the project / work .Determine

the project time .


• Applications of PERT PERT is useful in following situations

--The project should have identifiable activities

-- The activities should have clear starting and ending points

-- Project is complicated and consists of many inter related goods

-- Technique is good for projects where alternative options

of activities and time period involved


• Critical Path Method

A key part of the PERT / CPM is the critical path for completing the project . The critical path is the subset of activities that are performed exactly as planned in order to

complete the project on time

Critical path is the sequence of activities and events where

there is no slack i.e zero slack . Critical path is the longest

through a project and takes minimum completion time

Here emphasis is to trade off between cost of the project and

overall completion time. It is used as control and monitoring tool.


• Acitvity on Arc Vs Activity on Node Network Diagram Project networks works on two conventions --- Activity –On the Arc (AOA) --- Activity – On the Node (AON) AOA : Salient points of AOA convention are --Each activity is represented by an arc in the network --If activity A precedes activity B it means that A leads the arc B .Thus Nodes represent events or milestones It is more popular as it is close to Gantt charts used in scheduling


• AON : Salient points of the AON convention are

: Each activity is represented by a node in the network

: A precedence relationship between two activities is

represented by an arc or link between the two

: Node is represented by a circle and indicates an “event”

a point where one or more activities start and / or finish


• Benefits of PERT and CPM• -- PERT and CPM compel the planners to think of varous activities in the project , their time estimates and sequencing , It develops a very good understanding of the project and its requirements --Sequencing of activities , information of the earliest and latest times helps to work out the slack time , if available at any event -- Helps in resouce planning , both in terms of quality and time when required -- Helps in planning of manpower requirements and the requirements of expertise. In case of some disturbance in the project executiion , the project manager could ue the manpower more effectively --Highlights the resource constraints and helps in timely project execution ,

with in budget provisions --Useful at many stages of project management


• --Give critical path and slack time at various points,

In case of emergencies or change of situations they help in

crashing the project activiities time and thereby controlling the project time

-- It is mathematically simple

computers can do the work of analysis much faster with accuracy

-- Helps in trade of between the project cost and project completion time

--Provides project documentation which is easily understandable

by all at different levels

--very useful in monitoring project cost


• The Project manager gets answer to the following questions

-- When is the completion date

-- on what schedul it can be completed

-- What is the budget of each project ?

-- What are the critical activities?

-- which are the dependent and independent

activities?

-- Which activities have positive slack ?

-- How the project could be finished early at the least cost?


• Preparation of a network The following steps are to be taken to produce a network 1. List the main acitivities to be performed and identify them by a code letter or numbering them 2. Establish the sequence of activities stating which activity is to be completed before starting the next activity 3.Start from left to right .Draw an arrow for the first activity to be carried out 4. At each end of the arrow , a circle is drawn and the information is recorded .The circle is used to provide information of an event or or node. The circle has three segements . The top portion is used to number the event . The two. lower segments are used for recording activity start and completion times

Production and Operation Management• Node Numbering

Node position (number)

Latest startDate(Backward pass)

EarliestStart date(forward pass)


---From the node , the dependent activities are drawn as arrows at the end of each , a node is drawn and numbered . This is continued till all the activities are presented in a diagram .--Activitiy time is shown on each arrow ---Eariiest node time is then calculated and entered into the left segment of each node .

-- The latest node is then calculated and entered into the right hand segment of each of the node. This gives the latest time of the activitiy so that the activity is completed for a node without delaying the overall project .

For calculating the latest time , start with the right hand node the ( the final node) and backward to the left

The critical path is the route through the nodes with no float which means the route where the earliest and the latest path are the same.

• From


• Compression of Project Duration compression of the project schedule without changing the project

scope is known as compression of the project .This is needed to meet the imposed dates or other schedule objectives In real time there could be situations where it is required to shorten the project scheduled time

Approaches in shortening the Duration of the project

various approaches are adopted for crashing the project

duration .All approaches or some of them could be adopted

to achieve the desired objective and target .

These approaches include the following

-- Crashing

-- Fast Tracking

--Simulation


• Crashing : In case of crashing the trade off is analyzed to determine how, if at all, to obtain the greatest amount of compression for the least incremental cost

• Fast tracking :here activities that are normally done in sequence

they are done in parallel .This can lead to increased cost

Simulation : Simulation modelling involves calculations of different

sceanrios . The most preferred scenario that meets the objective

is selected for execution


• Methods of Shortening the Project Duration

Utilization of extended work hours

Weekends working

Multiple shifts

increasing productivity


• Aspects to be considered in crashing program

• -- Which activities could be crashed

-- What is the maximum extent of crashing for each

activity

-- Which activity should be crashed first and what

principles are adopted in crashing the activities

-- How to select the activities to be crashed to meet the objective of reducing the project duration by

a specified time period


• Quality as an international Business language• Quality for customer satisfaction• Quality for Business Effectiveness• Quality as competitive connector• Quality in partnership• Quality in leadership• Quality in Modern Managerial Activity based

accounting• Quality in Time Management


• Total Quality Management TQM refers to to management of all organizational activities

with the objective to improve the quality of product and services to the customers.

The main objective of TQM is to design , develop, and deliver qualtiy products and services to customer It is a program that directs and redirects the corporate culture

to achieve higher levels of quality and use management and statisitical tools in the implementation of the quality program.

TQM improves the corporate practices , procedures and

policies and thereby the performance of the whole organization


• TQM stresses on each and every activity that helps

improves quality. These include price,delivery after

sales service , prompt response, favourable terms

and condtions, good packaging ,training to customers,

updating the customers with latest developments and

facilitate customer satisfaction

Customer satisfaction is the cardinal point in Total Qualtiy

management.

Production and Operation Management• Elements of total Quality Management

TQM

Use of Management and statistical tools

EmployeesCommitment& attitude

Involvement of all at every level

Continuous efforts for improvement


• Modular approach to Quality Management TQM is a continuous process , Improvement of quality is never ending .More the

number of reviews and implementation of quality program better the quality that emerges in each attempt

Quality planning , decision for improvements , control and monitoring the process or design and reviewing the detection of variances are a continuous process, which determine the quality level. Interaction and improvements at different levels , and control and monitoring of quality to bring it back to conformance , result in the next higher level of quality,There could be unlimited numbers of attempts to bring qualty improvements. Hence the process process of TQM is termed as “Modular approach”


• High Quality through TQM• There are various factors , which affect the quality of product and services , which

affect the quality of product and services .These factors need continuous examination and review . A program for

TQM includes various aspects which are listed below --Improve product design and services as and when needed -- Select the right material for contradiction of the product -- Improve the production process -- Select efficient plant and machinery of appropriate capacities --Adopt the latest technology and technological developments --Adopt automation and computerization --Select and employ human resources of right specialization for the job . Quality of

manpower is more important than the number of employees --Organizational structure should be given proper attention -- Develop efficient and short procedures, Red tapism and bureucracy should be

avioded -- Effective warehousing and inventory control improves productivity and contributes to higher quality


• Reward and Punishment system should encourage and motivate employees to do a high qualtiy work

• Motivate employees towards quality• Develop a culture of participation of all in the

organization.• Work for high standards• Employees should feel pride in their work .


• ISO 9000 – A Tool for total quality Management ISO is the international organization for standardization and is

based at GENEVA ISO has 91 member countries , each represented by a standard body.There are about 200 technical commitees

covering many sectors and products ISO 9000 is a program for process quality certification . It was

developed on behalf of European Economic Community and is becoming

a worldwide standard for external process verification , ISO 9000 is an accreditation to indicate that company operates with in laid down quality standards and in certain cases it further certifies that the regulated products must meet defined minimum standards. ISO 9000 is important because EC companies requiring their vendors, suppliers to be ISO 9000 for cross border trading between the countries.


• ISO supports TQM concept to assist companies to identify areas

that needs improvement . ISO 9000 is the international standard

for systems for 20 areas of business processes

ISO 9000 serires has been subdivided into five series starting from

9000 to 9004 which are :

-- ISO 9000 is an overview and explains the requirements for 9001 to 9004

-- ISO 9001 idenftifies 20 qualitiy elements . According to ISO 9001

companies must take their certification for their quality systems

from an independent quality auditor.This covers all aspects

of quality from product design to customer service


• ISO 9002 focusses on the production and installation functions identifying 18 of the quality elements

ISO 9003 confines to the certification to product inspection and testing process identifying 12 quality standards

ISO 9004 specifies the recommended standards

A company who wishes to be an ISO 9000 company needs to be registered .The retistration is done after the company has been audited by an independent agency authorized to give certificate for

quality adherence The certificate issued by such an agency is valid for a period of 3 years . However company is to be audited once in every year by external auditor as well as by internal auditors who

have been trained for the purpose.


• Benefits of ISO 9000 Two benefits are seen by registration as ISO 9000 company they

are

(i) It is a tool implementing an improved methodology

in running the company. It provides the management

a tool to identify areas requiring improvements and ensures an overall discipline through the company . It has become a tool for self improvement and to make the company more competitive

(ii) It has become a requirement to be registered as many

customers insist that their suppliers to be ISO 9000 companies

to ensure quality supplies from them.


• Six Sigma• Six sigma is a quantitative approach for improvement in the manufacturing ,services, or financial process. The approach is to achieve overall improvement through selection of right projects based on the potentials and merits for

performance improvements Results are achieved by selecting and training the right people to get the business results The key focus of all Six Sigma programs is to optimize the overall business results by balancing cost, quality, features, and availability of products as a best business strategy.Six sigma combines most effective statistical and non

statistical methods to achieve overall business improvements


In statistical terms ,Six sigma strategy means that there should not be more than 3 defects per million oppurtunities in any process or services

Elements of Six Sigma Improvement Programs

Six Sigma improvement programs have five phases , which are

-- Define

-- Measure

--- Analyze

---Improve

--Control

Production and Operations Management

Documents

services management

business operations

operations management

production function

level production

operational production

production start

production plans