PRODUCTION MANAGEMENT UNIT-I

Meaning of production management: The term production management was earlier used to the management of an organizations productive resources or its production system which converts inputs into tangible outputs needed by the customers of the organization. But many organizations create both goods and services through the transformation of inputs into outputs. Since the importance of services is gaining ground, the term production management has been changed to production and operations management as many business organizations produce both goods and services as their outputs.

Meaning of production: Production implies the creation of goods and services to satisfy human needs. It involves conversion of inputs into outputs .it is a process by which, raw materials and other inputs are converted into finished products. Earlier the word manufacturing was used synonymously with the word production, but nowadays, we use the term manufacturing to refer to the process of producing only tangible good where as the word production is used to refer to the process of creating both goods as well as services.

Definition: Production /operations management is the process which combines and transforms various resources used in the production /operations subsystem of the organization into value added products/services in a controlled manner as per the policies of the organization.

Evolution of production and operations management: Since immemorial, man has been actively engaged in the productive activities. But the traditional view of manufacturing began in the eighteenth century when Adam Smith recognized the economic benefit of specialization of labour. He gave the concept of division of labour and specialization required for doing specialized production activities. Then in 1875, F.W.Taylor has triggered long series of experiments with wage incentives. Taylor implemented

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Smiths theories and crusaded for scientific management throughout the vast manufacturing complex of his day. The work of Taylor emphasized application of work measurement, differential piece wage system, functional foremanship etc. Production management become the more widely accepted term from the 1930s through the 1950s.management began discovering that workers have multiple needs economic as well as social. Psychologist’s sociologist and other social scientists began to study. People and human behaviour in the work environment.

In 1970 there were two important changed in the philosophy of production management. As the service sector become more prominent, the change from production to operation emphasized the broadening of the field of production the second change was the beginning of an emphasis on synthesis rather than just analysis.

System concept of production: System is a collection of interrelated entities. As stated earlier ,operations management is the management of transformation systems which convert input into goods and services, the inputs to the system are materials, labour ,equipments and capital .These inputs are combined and converted into goods and services by a suitable process technology .The types of inputs used vary from one industry to another .In product manufacturing ,the major inputs are capital ,machines, equipments and tools and labour is required to operate and maintain the equipments, the materials input is the basis for the conversion process. The organization receives several inputs as indicated on the left hand side and converts them into useful products and /or services using its facilities (manufacturing facilities). In the process of conversion, definitely, there will be some deviations in the product’s attributes like quality, size, shape and number of units produced. Just to cope up with the predetermined plans and policies, it is highly essential to communicate these deviations to the input stage in the form of feedback for marking necessary corrections.

A sample list of corrections is presented below: Tight quality check on the incoming raw materials Adjustment of machine settings Change of tools Proper allocation of operators to machines with matching skills

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Change in production plan, like increase or decrease in volume of production

Rigid in – process quality programme to avoid rework

Based on this feedback, the system once again tries to produce the product/service with modified parameters, in order to meet the specifications. The feedback mechanism is a continuous excise to monitor the status of the system. The system operates in an environment. So, the system has to take feedback from its environment and adjust its parameters accordingly. The top management may be treated as the internal environment and its instructions and expectations will from internal feedback. The system must respond to these modifications for achieving better results. Managing the transformation system involves continual monitoring of the system and its environment. The environment outside the firm may change in terms of legal, political, social or economic conditions, thereby necessitating the corresponding change in the environment of production/operations. So, the production/operations system must consider these changes as feedback from external environment and adjust its parameters accordingly. This system receives different components of the production/operations system are indicated in the figure and converts them into useful products/services by utilizing the equipment at the transformation stage. This is usually achieved with the help of required manpower and by applying suitable techniques and procedures.

The techniques and procedures used in the production/operations system are as follows:

1. Forecasting2. location and layout techniques3. product design and analysis, work study4. production control techniques

a) Aggregate planningb) Master production schedulec) Materials requirements planning d) Capacity planninge) Scheduling and control

Line balancing Line of balance

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Single machine scheduling Flow shop scheduling Job shop scheduling

5. maintenance management6. feedback and control techniques

a) Quality controlb) Inventory control

The finished products/services produced by the system are to be checked for conformance with quality specifications and other design specifications. These are done at the output stage and corresponding feedbacks are given to the input stage for necessary corrections. This feedback mechanism is a continuous process, but the degree of correction required depends on the materials quality equipments’ conditions, employees’ skills and their commitments.

Types of production system- (FI)-9 [F-MAPSA, I-JB]Broadly production systems can be classified as:

1) Flow or continuous production: It is most useful for product of repetitive nature and each work is passed to the next stage immediately after the prestige operation is complete without waiting for the completion of work of total batch. According to Buffa,” continuous flow production situation are these where the facilities are standardized as to routings and flow since inputs one standardized. Therefore, a standard set a processes and sequence of activities should be so adjusted that there is no piling up of job in the line. Even if there is a fault inn any part in any part of the line, its must be cleared immediately otherwise it will produce a serious constraint creating earlier stages to be immediately stopped. This type of production system is applicable to steel mills, automobile plants, chemical plants, oil mills, sugar with etc.

a) Mass production: It refers to the manufacture of standardized parts of components o a large scale. Standardization of materials machines, products and processes is the basic feature of a mass production. The greater the volume of mass production, the more would be the reduction in direct labour cost per unit. Mass production system is employed without production is carried out without interruption for example automobiles plant, electronics

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industry, electricals etc. Quality of product tend to be inform and high due to the standardization and mechanization. The level of uniformity depends upon the quality control and managerial outlook.The advantage in favour of this type of production to that if a number of small factories all producing identical articles join or corporate into one large unit producing the same total quality of the same article, it is possible to increase considerably the effort of work study, tooling, plant, inspection and production control resulting considerable decrease in cost of all factors of production.

b) Assembly liners: It was developed in the automobiles industry in USA .here two or more components are combined to manufacture a finished product. Assembly line is particularly useful when a limited variety of similar products is to be produced on a mass scale or in fairly large batches on a continuous basis. The design of assembly line involves the proper balancing of technology and other manufacturing facilities as to develop a rational approach of optimization of results.

c) Process production: In this process are inter linked and production is carried in continuously through a uniform and standardized sequence of operations. This type of production is used in bulk processing of crude oil into petroleum, kerosene, diesel oil etc.

i) Synthetic process: It involves the mixing of two or more materials to manufacture a product. For example lauric acid, myristic acid, plasmatic acid, stearic acid, linoleic acids are synthesized to manufacture soap.

ii) Analytical process: Here a raw material is broken down into different products, for example crude oil in anaylzed into gas, petrol ,kerosene and diesel oil.

2) Intermittent production: Here the production is not continuous and is designed only when it is required. According to Buffa, intermittent production situations are hose where the facilities must be flexible enough to

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handle a variety of products and sizes or where the basic nature of the activity imposes change of important characteristics of the input. There ids not a single procedure and the production usually are not uniform and the basic product design changes time to time. The facilities are flexible to adjust production according to the order or time.

a) Job production: Job or make complete production is the system of manufacturing a single complete unit by an operator or a group of operators. Mostly, it is employed where there is absolutely no repetition and each product being different from the other produced. But with the help of parallel jobbing, indentical product can also be manufactured in small scale industries. Ship building, electronic power plant building, furnace making, Dam construction are common examples of job production. Job production is characterized by considering whole project as one operation and work is completed individually on each product. In this system, the goods are produced according to definite customer’s orders and all manufacturing set up depend on the receipt of specific items. In a printing shop, for example, many different jobs go on at any one time. The press will be set up to run one job. When that is completed, the press will be set up to run the next job. Mean while the first job is routed to other areas where it is folded, kept in order, stapled, trimmed, packed and transported. Each work area in the job shop performs its own functions as it arrives. One of the major problems in a job is to schedule the work and to sequence it to balance the costs of idle time against the cost of having jobs waiting.

b) Batch production: This type of production normally arises when either the product quantity increases, creating some repetitiveness or the market demand is not uniform throughout the year which results into occasional discontinuity in production and switching over to other product becomes essential. In this type ,the work on any product is decided into few operations and each operation is completed for the whole batch before proceeding to the next operations. Activities involved in export quality products, industrial blowers, electric motors and book printing are normally done by batch type of production. A number of same products done in job production can be done by batch type of production. A number of same product done in job

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production can be by batch production, each job is given o each group in order to complete the job from beginning to end by that group only. The same items can be produced in batch production by breaking the work content and each operation for all items are entrusted to each group for its completion and then passed or on to other groups for subsequent operation. Thus, batch production is a mixture of mass production and job production .under it machines turn out different products at intervals, each product being produced for comparatively short using mass methods.

Functions of production management: The major functions of production management may be categorized as shown below:

1) Product selection and design: The right kind of a product and a good design o the same are crucial for the success of a n organization. A wrong selection of t of a product or a poor design of a product can render the companys operations ineffective and non-competitive. Therefore, a product /service must be chosen after detailed evaluation of their alternatives in conformity with the organizations objectives.

2) Process selection and planning: Selection of the optimal conversion system is an important as choice of products, services and their design. Process selection decisions include decisions containing choice of technology, equipment, machinery handling systems, mechanization and automation. Process planning involves detailing of processes of resource conversion required and their sequences.

3) Production planning: Production planning is the main concern of the production manager .It facilities the supply of goods at the appropriate time to execute orders received by the company. It also helps control over the production process. The function of production planning involves the decision when, what, how and why to produce goods. To overcome such problems, guiding plans are prepared before production is commenced and these guiding plans are called production planning.

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4) Production control: After planning ,the next responsibility of the production manager is to control the production by taking steps to utilize the various factors of production in an efficient manner so that the goods are produced at the lowest cost and according o the requirements and satisfaction of the customers and are supplied o them on the scheduled date of delivery in the ordered quantity, this function calls for scheduling of the required work, providing necessary instructions to manufacturing departments and checking the production progress, etc.

5) Plant layout and material handling: Plant layout pertains to the arrangement machines equipment in such a manner so as to maintain the smooth flow of production without any interruption. An efficient pant layout aims at efficient material handling which in turn reduces wastage of men and materials and helps in reducing the cost of production. The production manager must ensure that efficient material handling system and plant layout are designed and developed.

6) Work measurement: One of main responsibility of the production manager is to control and reduce the labour cost per unit. A different levels of production ,the labour cost per unit differs. Here, application of work measurement is necessary. By applying work measurement techniques, the performance of workmen must be improved through positive or negative incentives. Time and motion studies are work measurement techniques.

7) Inventory control: Production manager is supposed to have control over the cost of production by reducing he wastage of raw material. Hence, he /she has to make best use of the raw material. For this purpose, he /she has to determine the economic lot size ,economic lot quantity, reorder levels so that the problems of over or under stock of materials may not arise. This involves the physical and financial control of materials. Thus, he /she has to arrange for the procurement of raw materials.

8) Method analysis: There may be several alternatives for manufacturing a product. As all alternatives o not work equally, some may be more

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economical than the others. The production manager must study the various alternatives and analyze them in right perspective in order to choose the best one. The activity of choosing the best alternative is called method analysis.

9) Maintenance and replacement: Maintenance and replacement involve selection of optimal equipment availability at minimum maintenance and repair cost. Preventive maintenance which includes preventive inspection, planned lubrication, periodic cleaning and upkeep, replacement of parts, condition-monitoring of the equipment, etc, For maintaining critical machine. Replacement decisions concern parts of machines and the most common problem will be to decide between individual replacement and group importance.

10) Capacity planning: Capacity planning concerns determination and acquisition of productive resources to ensure that their availability matches he demand. Capacity decisions have a direct influence on performance of the production system in respect of both resource productivity and customer service .excess capacity result in low resource productivity while inadequate capacity leads to poor service.

11) Cost reduction and cost control: Effective production management must ensure minimum cost of production and in this context cost reduction control quires significant importance.

12) Other functions: Apart from the above, the production m manager has to perform certain other functions pertaining to engineering economies, stores and warehousing management the labor efficiency ,standardization and storage ,process analysis, wage incentives to workers etc.

13) Facilities location: A poor location of a plant can be constant source of higher cost, create difficulty in marketing and transportation, cause dissatisfaction among employees and customers. Resulting in frequent disturbances in production, sub –standard quality and competitive disadvantage.

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14) Quality control: The production manager is also responsible for maintaining a specific quality of the products. Steps should be taken to produce as per specifications and to minimize the amount of defective work.

Different types of production/operations decisions: 3 (COS) The production/operations managers manage all activities of the production/operations systems which convert inputs into the desired outputs .the production/operations managers have the ultimate responsibility for the creation of goods or provision of services. Even though the king of jobs that production/operations managers oversee varies from organization to organization, their job is essentially managerial. They must co-ordinate the use of resources through the managerial process of planning, organizing, staffing, directing and controlling. A better insight to how production/operations managers’ manage can be had by examining the decisions in productions/operations management. Since all managerial functions such as planning, organizing, staffing, directing and controlling involve decision making. The decisions which production/operations managers make may be classified into three general categories:

Control decisions: Decisions about controlling operations concerned with day to day activities of the workers, quality of products and services, production costs, overhead costs and maintenance of plant and equipment. These decisions are concerned with problems in production such as variations in labour output, variation in product quality, breakdown of production equipments etc. production/operations managers need to control poor worker performance, inferior product quality and excessive equipment breakdown so that the profitable operating of the productive system is not affected. Examples of control decisions are:i) Deciding the course of action about a department’s failure to meet the planned labour cost target.ii) Developing labour cost standards for a new or modified product design which is about to be taken up for production. Deciding about the new quality control acceptance criteria for product for which the design has been changed.

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Deciding about the frequency of preventive maintenance for key machinery or equipments.

Operating decisions: These decisions must help to resolve the issues concerned with planning production to meet customer’s demands for products and services and to achieve customer satisfaction at reasonable costs.

Examples of operating decisions are:i) Deciding how much finished goods inventory to be carried for each product.ii) Deciding the next month’s production schedule for producing the products.iii) Deciding about hiring of casual workers for the next month.iv) Deciding about the volume of purchase from each vendor next month.

Strategic decisions: Decisions about products, processes and facilities. these decisions are strategically important and have long term significance for the organization. These are decisions concerning long range production/operation strategies .Some of the examples of strategic production/operations management (POM) decisions are:i) Deciding about launching of a new product development project.ii) Deciding on the design for a production process for a new product.iii) Deciding on how to allocate scarce resources such as materials, machines and labour capacities and utilities.iv) Deciding about what new facilities are needed and where to locate them.

Operation strategy: An organization production/operations strategy ids derived directly from the corporate mission and business strategy. An organizations strategy has a long term impact o the nature and characteristics of the organization. Strategies affect the ability of firm to compete or to serve its indented purpose. Top managers in a company are responsible for making the vital decisions that set the companies overall goals and

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objectives and keep all departments or units of the company pulling together toward these goals and objectives. Decisions that have along range impact on the general direction and basic character of a company are called strategic decisions. Through strategic planning, managers evaluate the company’s relationship with its external environment and establish the basic directions of the company. The nature of an organisation strategy depends ion its mission called corporate mission. corporate mission is a set of long range goals unit to the organization and including mission statements about the kind of business the company wants to be in, who its competition are ,its basic mission is the very reason for existence of an organization.It is important that an organization have a learn and simple mission statement, which is a clear statement of purpose that serves as a guide for strategy and decision making.

Strategies: Strategies are plans to achieve organizational goals. While goals are thought as destination strategies are the road maps for reaching those destinations. Strategies provide focus for decision making. The overall strategies of organizations are known as corporate strategies or business strategies or organization strategies which relate to the entire organization. Business strategy is a long range action plan of an organization and provides a road amp of how to achieve the corporate mission. These strategies include a plan for each functional area known as functional strategies. These functional strategies should support the overall strategies or business strategies of the organization, which in turn should support the corporate goals and mission of the organization.

Some of the decisions included in operations strategy are on such issues as: i) What new products or services must be developed and when they must be introduced into production and market?ii) What new facilities are needed and when they are needed?iii) What new technologies and processes must be developed and when they are needed? and iv) What production schemes will be followed to produce products/services?

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Porter classifies three generic enterprise or business strategies: 3 (FOD) Overall leadership, differentiation and focus. These three strategies and the role of production/operations functions are as follows:

Focus or market segmentation strategy: The purpose of this strategy is to segment the market for meeting the specialized needs of a particular market segment, providing lower costs for that market segment or both. This strategy is also known as focus strategy because market segmentation focuses on a particular customer group, a segment of the product line, a geographical portion of the market, or some other profitable niche of the market. This strategy provides comfortable but viable niche to the form which specializes in certain products or services for some market segments. It can take an approach that combines either the low cost sub strategy or the differentiation sub strategy. The disadvantages is that firms using the market segmentation strategy many not be successful in achieving the market share which the industry leaders would achieve by cost leadership strategy.

Overall cost leadership strategy: This strategy means low product/service and high product availability, usually off-the –shelf. This strategy requires concentration of the operations system on all the element of system design that makes the low cost possible. These elements are in line operations, fabrication and assemble lines, equipments dedicated to a restricted product mix, capital intensity, mechanization, automation and robotics, all specially designed for the specific operations problems and specific job designs.

Differentiation strategy: The firm using this strategy attempts to differentiate itself from other competition by offering something that ids perceived by the industry and its customers as unique. For example, it could the flexible. Factors such as quality, innovation and flexibility on which differentiation is based have extremely important implications for the production system and the design, operation and control of the production system. The other ways of differentiating are a strong dealer network, an extremely well designed distribution system or excellent after sales service. Building high brand image and high degree of flexibility are inimical for the success of this strategy.

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UNIT-II

What is a product?Anything that possesses utility is described as goods. A product is both what a seller has to sell and what a buyer has to buy. Thus, any enterprise that has something to sell, as tangible goods or not, is selling a product .people purchase products, because they are capable of realizing some benefits to the purchaser. A product is one which satisfies the needs of customers. According to Philip Kotler,” A product is anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a ant or need. It includes physical objects, services, persons, places, organization and ideas.”

Definition of product development: “Product development involves the adding, dropping, and modification of item-specification in the product line for a given period of time, usually one year” LIMPSON AND DARLING.

What is a new product? According to Stanton:Three recognizable categories of new products are:

1) Products that are really innovative –truly unique.2) Replacements for existing products that are significantly different

from the existing goods.3) Imitative products that are new to a company but not new to the

market.

New product development: Innovation is a process of converting an invention into some useful product which can satisfy human wants either directly or indirectly. A product which has been innovated in the past by an organization will definitely reach its maturity stage at some point of time. The rate at which it reaches the maturity stage depend on technology, level of competition, rate of obsolescence, culture, taste of customers, etc. So, the organization must continuously monitor the market and its environment for possible up gradation of its product, at least to retain its market share at he present level.

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The product may be upgraded either by changing some parts to improve its operational performance or by completely changing the technology employed in the manufacturing process. Sometimes, a change in the product must be introduced to reduce its price so that the price becomes competitive in the market. Companies require flexibility to enable themselves to introduce new products rapidly and to change their product mixes often. The design of the goods and services that a company offers in the market is strategic in nature. Apart from directly affecting the company’s success in the market place, the effects of design are interrelated and they may affect many functions f the company. Design is guided by objectives and policies that are best addressed when a company considers the type of goods and services it intends t offer and the level of quality it intends to provide .Furthermore, a products design and reputation affect perceptions of the company as viewed by its employees, customers and the public.

Some of the factors which are to be taken into account while designing a product are as listed below.1) External appearance of a manufacturing product which influences

potential buyers to make purchase decision.2) Internal components of a product which will have effect of its

performance, reliability and durability and hence the customers long term satisfaction.

3) The number, type and complexity of a products components which affect the type of suppliers with which a company must deal and h and the amount of work and operating costs involved .the types of components used in a product can also affects the production processes require to make it, ,and hence the capital investment and personnel skills, which are important to he company.

Reasons for product development:1) To meet market changes2) To adopt technological changes3) To avoid profitless competitions4) To adjust diversification of risk5) To incorporate changes in fashion

6) To effect development of new market 7) To meet consumer needs 8) To cover inadequacy of present lines

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9) To serve buyers betters10) To adopt product differentiation11) To overcome competitors challenges12) To emphasis new uses of products.13) To take advantage of existing reputation14) To improve product safety15) To produce goods more economically

Steps in new product development: 7 (IICBDTC)The steps involved in new product development process are as follows:

1) Idea generation.2) Idea screening.3) Concept development and testing4) Business analysis5) Development6) Testing7) Commercialization.

1) Idea generation: Ideas may be generated in many ways. They can arise inside the organization and outside it, they can result from formal search procedures well as informally, they may involve the organization creating the means of delivery in the new service product or they may involve the organization in obtaining rights o services product, like franchise.The creative process of developing new ideas has intrigued marketers although the process itself still defies detailed understanding. This has led, in some cases, to the adoption of techniques, like synectics, brainstorming and lateral thinking to help improve the creative dimension of new product development.

2) Idea screening: This stage is concerned with checking out which ideas will justify the time, expense and managerial commitment of further research and study. Two features usually associated with the screening phase are:The establishment or use of previously agreed evaluative criteria to enable the comparison of ideas generated.The weighing, ranking and rating of the ideas against the criteria used.

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Screening systems range from the highly sophisticated involving the collection and analysis on computers of a mass of data to simple checklists of a few factors considered to be vital.

3) Concept development and testing: Ideas surviving the screening process then have to be translated into product concepts. In the service product context this means concept development and concept testing.

Concept development: This phase is concerned with translating the service product idea, where the possible service product is defined in functional and objective terms, into a service product concept, the specific subjective consumer meaning the organization tries to build into the product idea. Thus a building society in attempting to sell the idea of regular saving to young, unmarried people might attempt to market the ideas on the basis that participants would be saving towards house purchase and might receive prefer initial treatment with a later mortgage application.

Concept testing: Concept testing is applicable in services contexts as well as in goods contexts. Concept testing consists of taking the concepts developed after the stages of idea generation and idea screening and getting reactions to f them from groups of large customers. An associated stage of the development of the service product ideas that of product positioning. service product positioning is a concept increasingly widely referred to though it remains imprecisely defined, loosely used and difficult to measure .Essentially positioning is the visual presentation of the image of an organization service product I relation either to competitive services products or to other service products in its own mix. The principle underlying this method of presentation is that it enables service product attributes to be compared with competitive offerings and with the customer’s perceptions of products relative to his or her needs.Comparison of the services and the perceptions of the occupations of persons who will use them reveal the existence of prestige and non prestige services which give useful insights for developing a promotional programme.

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4) Business analysis: This stage is concerned with translating the proposed idea into a firm business proposal. It involves undertaking a detailed of the attractiveness of the idea in business terms and its likely chances of success or failure .A substantial analysis will consider in detail aspects like the manpower requires to implement the new service product idea, the additional physical resources required ,the likely estimates of sales ,cost an profits over time ,the contribution off the new service to the range on offer, likely customer reaction to the innovation and the likely response of competitors. obviously it is not possible to generate accurate forecasts and estimate and it I customary involved. This stage may typically involve some initial technical and market research and initial timings and costing for a new service product launch.

5) Development: This stage requires the translation of the idea into an actual services product for the market. Typically this means that there will be an increase in investment the project. Staff may have to be recruited or trained, facilities may have to be constructed, and communications systems may need to be established. The tangible elements of the service product will be designed and tested. Unlike goods the development stage of new service product development involves attention to both the tangible elements of the service product and the service product delivery system.

6) Testing: Testing of new service products may not always be possible. Airlines may introduce a new class of services on a selected number of routes or a bank may make a new service available initially on a regional basis like automated cash dispensers. But some service products do not have such an opportunity. They must be available and operate to designed levels of quality ND and performance from their introduction.

7) Commercialization: This stage represents or organizations commitment to a full scale launch of the new service product. The scale of operation may be relatively modest like adding an additional service to an airlines routes or large scale involving the national launch of fast service footwear repair outlets operating on a concession basis.In undertaking the launch, Kotler suggests four basic decisions that apply:

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a) When to introduce the new service product.b) Where to launch the new service product, whether locally ,regionally

nationally or internationally,c) To whom to launch the new service product usually determined by

earlier exploration in the new service product development process.d) How to launch the new service product. unit trusts for example may

offer a fixed price unit on initial investments for a certain time period.e) With highly novel and innovative service products, organizations may

be guided by the extensive literature and experience on innovation and diffusion. However like many area of marketing most documented experience in this area has focused upon tangibles rather than intangibles and innovation and diffusion knowledge in the service sector requires further empirical study.

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UNIT-III

Aggregate planning: Demand forecast can be classified into long range, medium range and short range forecasts. Long range forecast acts as the basis for capacity planning. A company may be manufacturing several products using a set of facilities. The association between the facilities and the products is generally, many to many; i.e .a given facility is used to manufacture more than one product. Similarly, a product may need more than one facility to manufacture it. This type of association introduces complexities in scheduling. Aggregate planning is a process that follows capacity planning and it uses medium range forecast. The plans do not necessarily have to be so detailed as to provide specific instructions for daily or weekly operations such as loading, sequencing, expediting and dispatching.

Nature of aggregate planning decisions: The different capacities which are generally used to manufacture products are as listed below.Regular time production capacitySubcontracting capacityOvertime capacity Hiring and firing capacity Some time, the regular time production capacity may not be sufficient to cope with the demands of various products. Under such situation, we can use other optimal capacities in smoothing the impact of demand fluctuations. Given the sales forecast, the factory capacity, aggregate inventory levels and the size of the work force, the manager must decide at what rate of production to operate the pant over the intermediate term. Intermediate range planning is generally known as aggregate planning. Once various capacities which are available under different categories are known, the next task is to identify a feasible and optimal combination of these capacities to manufacture the given set of products as per predetermined production volumes such that the total cost of manufacturing is minimized. Since the company manufactures several products using the given set of facilities, requirements of resources of these products are to be aggregated into a common unit. Therefore the aggregate planning aims to find the best combination of various available capacities to match with the resource requirements in a given planning period at the most

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economical cost. Aggregate planning period ranges from an intermediate range of three months to one year.

Aggregate planning strategies: One can use any one or a combination of the following strategies for smoothing fluctuations in demand. Generally a mixture is preferred.Building and utilizing inventory through constant work forceVarying the size of the work forceOvertime utilizationSubcontracting If a single strategy is used to meet the demand, then it is called as a pure strategy. Each of the above strategies is called as a pure strategy. Instead of this, if a combination of the above pure strategies is used to meet the demand, then it is called as a mixed strategy. Several mixed strategies can be generated by taking two at a time or four at a time of the above pure strategies.

Pure strategies: The signifies of each of the pure strategies is discussed below:

a) Making changes in demand pattern: T o even out the fluctuations in demand of products, the company can offer some discount scheme during off-season or during periods with fewer loads on some service systems. This is nothing but influencing demand pattern to match with the capacity, the telephone companies level their loads by offering evening rates. Giving off season discounts during winter for refrigerators, air cooler, etc are some more examples of this strategy.

b) Subcontracting: This strategy can be considered as an alternative to meet the demands of products. In this strategy, orders can be placed with a subcontractor or a set of subcontractors depending on the demands of various products. This is generally used during the peak demand periods to increase the capacity .but the usage of this strategy may grow the level of competition, if the subcontractors become as competitors in future.

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c) Varying the size of the work force: T he Company can employ varying work force such that the output matches with the demand in each period of the planning horizon. This pure strategy can be implemented through hiring and firing of employees. During periods of increases demand, the company can hire employees and during periods of decreased demands, the company can fire employees such that there is an exact match between the production quantity and the demand of each period in the planning horizon.

d) Building and utilizing inventory through constant work force: The Company can use constant work force during the planning horizon, which will result into a constant output during each period in the planning horizon. Since the demand is not a constant quantity, there may be mismatch between the production quantity and the demand of each period. The excess production in a period can be carried as inventory for use in future periods. But this will result in inventory cost. If this pure strategy is used, the objective is to identify a desirable constant work force which leads to the minimum total inventory cost. Pure strategy helps in having stability in the work force. This in turn, helps in producing better quality products because of the experience gained by the work force and various force and various other related benefits.

Mixed strategies: In some cases usage of a pure strategy may often led to infeasible solution. So, a combination of pure strategies is to be identified to satisfy the demand at the minimum cost. For example, regular time production with constant work force along with overtime option can form mixed strategies. Similarly the regular time production with hiring and firing along with subcontracting option may form another mixed strategy. Similarly one can generate a number of mixed strategies by coming the pure strategies, two at a time, etc. Then these are evaluated in terms of costs and the one with the least cost is selected for implementation.

Aggregate planning methods: The various methods used to solve the aggregate planning problems can be classified as: Graphical method, heuristic rules, explicit mathematical solutions, simulation and other sophisticated search procedures.

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Graphical method: In this method, cumulative demand values and cumulative production capacities are plotted on the same graph. This would help us to identify the gap between demand and production capacity in different periods. This is a only a primitive method which yields less information on planning. In this method cost data is not taken into account.

Heuristic method: In this method a list of pure strategies and mixed strategies are generated and evaluated in terms of cost and finally a pure strategy or a mixed strategy with minimum total cost is selected implementation.

Master production plan/schedule: A master production schedule (MPS) is a product wise plan for manufacturing products. When a firm uses an MRP (material requirement planning) system, the mps provides the \op level input requirements .this gives the volumes of production during various periods in the planning horizon. As mentioned earlier, aggregate planning aims at an overall plan without distinguishing products. But master production plan /schedule aims to prepare a product –wise schedule which is consistent with the aggregate planning .this process of generating a feasible master production schedule is known as the aggregation planning. The aggregate planning problems provides a basis for decision making regarding specific production dates, available capacity, total demand lead time or inventory constraints. This information may not be sufficient for the smooth functioning of a firm. So we need a plan stated in terms of specific products that are to be produced in certain quantities by certain dates which is known as master production schedule/desegregations schedule. MPS is a series of time phased quantities for each item that a company produces, indicating how many are to be produced and when.MPS is initially developed from firm customer orders or from forecasts of demand before MRP system begins to operate. The MRP system accepts whatever the master schedule demands and translates MPS end items into specific component requirements. Most systems then make a simulated trial run to determine whether the proposed master schedule can be satisfied.

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Material requirement planning (MRP) Materials requirement planning is an integral part of production planning. For effective inventory control, production plans are converted into materials plans. Material planning techniques can be classified into two groups, viz

(i) Materials planning techniques for direct materials and

(ii) Materials planning techniques for indirect materials.

Materials planning techniques for direct materials requirements of sub assemblies components turn may be further classified into two sub –groups

(a) techniques for high value materials and

(b) techniques for low value materials.

Concept of materials requirement planning: Materials requirement planning is a scientific technique of planning for ordering and usage of materials at various levels of production and for monitoring inventories during these activities. MRP therefore, is both an inventory control and a scheduling technique. It utilizes the master schedule for the end products product structure for determining requirements of sub assemblies, components and raw materials, procurement manufacturing lead times inventory status of products and by utilizing data base in a series of steps, it draws up the timings of procurement /manufacture of all assemblies, parts and raw materials required over the production horizon to meet the given end production schedule. MRP is an ethnic of working backward from the schedule quantities and needs dates for end item specified in a master production schedule. To determine the requirements for components needed to meet the master production schedule. The technique determine what components are needed, how many are needed, when they are needed and when they should be ordered so that they are likely to be available when needed. The MRP logic serves as the key component in an information system for planning and controlling production operations and purchasing. The information provided by MRP is highly useful in scheduling, because it indicates the relative priorities of shop orders and purchase orders.

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Material requirement planning is a technique for determining the quantity and timing for the acquisition of dependent demand items needed to satisfy master production schedule requirement.MRP is one of he powerful tools that, when applied properly, helps managers in achieving effective manufacturing control. It is based on the concept of independent and dependent demand.

MRP terms: 8 (SCANRLPP) The MRP system explodes the finished product requirements schedule into time based requirement. The time based requirement schedule charts the lead time requirements for the completion of A LOT SIZE run of product. Besides, the MRP processing programs determine the quantities of dependent demand inventory needed for production in each time bucket during the planning horizon. To understand the MRP processing system behavior and some of the management planning information provided by the system, we must understand the following MRP terms:

1) Schedule receipts: This is the incoming supply of inventory from vendors or other sources. This serves as accounting information to know the arrival of inventory.

2) Cross requirements: This is the total demand for the inventory item per time bucket. For a finished product, the cross requirements come from the master schedule .for all other dependent demand inventory items ,the cross requirements are dictated by the parent products, planned order release.

3) Available inventory: This is the total inventory available that can be used to satisfy cross requirements. These inventories includes available inventory carried over from a period, period and the addition of a schedule receipts less, cross requirements.

4) Net requirements: T his is the total amount of inventory that must be obtained in the time periodic which it is listed. It is the difference between cross requirements and available inventory.

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5) Requirement explosion: The braking down of exploding parent items into components parts that can be individually planned and schedule.

6) Lead time effect: The supply time or number of time buckets between leasing an order and receiving the materials.

7) Planned ordered receipts: The amount of net requirements inventory we want to satisfy in the time period. The exact amount of net requirements we choose to satisfy depends on inventory ordering policy.

8) Planned ordered release: The amount of net requires net inventory we want to satisfy adjusted for lead time requirements. These usually involve pushing the planned ordered receipts backward in time equal to the lead time for the type of inventory.

Conditions required for MRP: MRP is particularly useful when one or all of the following conditions are present i) The final product is complex and is made up of several levels of assemblies which have many common parts and sub assemblies.ii) The procurement lead times for components and raw materials are relatively long.iii) The manufacturing cycle is long for the finished works.iv) The demand for the products is known and it is desirable to make specific procurement manufacturing plans (especially desirable when products are expensive)

Objectives of MRP 4 (RIRI)

1. Reduction in production and delivery lead time: MRP identifies materials and components quantity, timing, availability and procurement and production activities required to meet delivery deadlines. By coordinating inventories, procurement and production, decisions, MRP

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helps avoiding delay in production .It priorities production activities by specifying the date for completion of work on customer job orders.

2. Inventory reduction: MRP determines how many of components are needed and when, in order to meet the master schedule. MRP enables the manager to procure that component as and when it is needed, there by avoiding costs of excessive inventory.

3. Realistic commitments: Realistic delivery schedules keep customers satisfied can increase customer satisfaction by using MRP. Production can give information to the marketing department about likely delivery schedules to potential customers.

4. Increased efficiency: MRP provides close coordination among various work centers as products progress through them. Consequently, production can be processed with fewer indirect personnel, such as materials expeditors, and with fewer unplanned interruptions because MRP focuses on having all components available at appropriately schedule time. The information provided by MRP encourages production efficiency.

Functions served by materials requirement planning 3 (POP)

1) Priority planning and control: It also helps in studying how the expected data of availability is compared to the actual data of need for each component.

2) Order planning a control: It helps in timing the release of purchase order and also in arriving at the right quantity of materials/components.

3) Provision of a basis for planning capacity requirement and development a broad business plan.

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Manufacturing resource planning (MRP II): Manufacturing resource planning is an integrated information system that synchronizes all aspects of the business.MRP II system coordinates sales, purchasing, manufacturing, finance and engineering by adopting a focal production plan and by using one unified database to plan and update the activities in all the systems.

A manufacturing resource planning can be divided into three parts:

i) Product planning functions which take place at the top management level.ii) Operations planning handled by staff units.iii) Operations control functions conducted by manufacturing line and staff supervisors.

Check points among the three divisions provides feedback regarding the adequate of overall resources, completeness of resource commitments and the quality of performance in carrying out the plans. Feedback based on these checks permits a quick response to changing conditions using the latest operating data. The MRP II integrated system for planning and control process involves developing a production plan from the business plans to specify monthly levels of production for each product line over the next five years. The production department then is expected to produce the omitted levels, the sales department to sell at these levels, and the finance department to ensure adequate financial resources for these levels. Then the production plan guides the master schedule and gives the weekly quantities of specific products to be built. Then the capacity available is roughly adequate. If not either master schedule or capacity is changed .once settled, this master schedule is used in MRP to create materials requirement and priority schedules for production. Then an analysis of detailed capacity requirement determines whether capacity is sufficient at each work centre during scheduled time periods.

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Capacity requirement planning (CRP): Capacity is a measure of the productive capability of a facility per unit of time. Capacity decisions being with the initial facility layout and extend to aggregate planning, master scheduling, capacity requirements planning. CRP is a technique for determining what personnel and equipment capacities are needed to meet the production objectives embodied in the master schedule and the material requirement plan. CRP is an effort to develop a match between the MRP schedule and the production capacity of the company. Determination of the capacity of the work center and the capacity requirement imposed on those work centers by a particular product mix enables a company to know the level of sales its production system can support. Thus company will be able to make realistic sales commitments. Capacity planning to anticipate production bottlenecks in some work centre in time to take corrective actions. To be effective, capacity requirements planning must be coordinated with MRP Working together, MRP and CRP programmers translate the master schedule to requirements for components and capacity, simulating the impact of the master schedule that provided the input for MRP programme, CRP can be used to redefine the master production schedule (MPS) further after MRP is run.

Production scheduling: Production scheduling is the detailed planning of material, labour and machine time so that materials and parts will be at the right place, at the right time so that a job can be completed within the time planned and in accordance with the requirements.

Definition of scheduling: Kimball and Kimball defines scheduling as “the determination of the time that should be required to perform each operation and also the time necessary to perform the entire series as routed, making allowances for all factors concerned”.In the words of Alfred and Betty, scheduling means “ Fitting specific jobs into a general time table so that orders may be manufactured in accordance with contracted liability, or in mass production, so that each component may arrive at and enter into assembly in the order and at the time required.”

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Advantages of scheduling:

1) It is simple and easy to understand.2) It can be kept running.3) It involves less cost to make it and maintain.4) It can be maintained by non technical staff and5) A certain percentage of total weekly capacity can be allocated for rush orders.

Disadvantages of scheduling:

1) It provides only overall picture.2) It does not give detailed information.

Objectives of scheduling:

1) Ensure maximum utilization of the plant at minimum cost.2) Ensure that requirements of manpower is optimum and is evenly distributed, their being no peaks a valleys.3) Keep yourself abreast of hiring \Dismissals, retrenchment, holidays, leave etc, of the work force.4) Possess up to due information regarding availability of materials, expected data of delivery, materials rejection, shortages, purchase orders cancelled, etc.5) Update yourself with data on each machine regarding its, availability of spares, frequency of breakdowns, servicing and overhauling schedules, replacements schedule, etc.6) Have complete information on performance standards and their revisions, method improvement, changes in materials and machines, etc.7) Obtain quick feed back from machine shops regarding delays and interruptions which may hold up production activity.

Factors influencing scheduling:

Relative job priority: Relative job priority of incoming job is another important consideration in scheduling, especially in a job production unit. Certain jobs are given preference over the rest and hence require to be loaded and scheduled first.

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The job priority is generally gauged on the basis of the following:

i) Items with fewest remaining operations are scheduled first.ii) Delivery commitment of critical items is given preference over others.iii) Penalty clause items are given first preference over others.iv) Long pending jobs which might have been set aside due to delay in procurement of materials/tools are given preference over fresh jobs.v) Items with fetch better price always carry an edge over others.vii) Jobs which feed work to more centers are given preference over jobs going through limited work centers.viii) Critical items causing production hold-ups at the customer’s plant or the companies own plants are pushed through first.ix) Jobs currently being manufactured by the competitors are given preference over others.x) Load charts exhibit the accumulated load at a given time for a given machine and periods available for location to future incoming orders for the same machine .The failure to identify this undoubtedly will lead to broken promises, or involve overtime costs.

Degree of centralization: Degree of centralization determines the extent of detailed shop planning. The centralized system of scheduling relieves shop men of all scheduling problem, as the start and completion date for each operation listed on the process sheet is given by planning. The decentralized system of scheduling leaves complete scheduling activity into the hands of shop men. Then it is the foremen duty to determine when each operation should begin.

Decentralized scheduling: Decentralized scheduling has one major problem, there is no coordination between among men because each of them decides his/her own schedule which may completely obstruct operations in other departments. A midway approach is more rational where each department is told of the completion date, the latest finish date by which the job must leave the department. The day to day shop planning is left to the foremen. This approach eliminates much paper work and thus lowers the cost of scheduling.

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Procedure for scheduling: 4 (PAPS) Scheduling is a complex activity as there are too many variables. Therefore, systematic procedure to translate requirements into production schedule is necessary. The following steps are generally taken to prepare production schedule in a batch production unit.

i) Preparation of individual job schedules: A job schedule as mentioned earlier, is the graphic representation of operations. One job schedule is prepared for each component. A company which manufactures a wide range of products, Therefore, prepares several job schedules which are filed to be used as a basis for production control. The job schedules are not dated but specify the time required for each operation. A job schedule in a jobbing production unit is prepared on the finalization of the contract and is prepared for the quantity required by the customer.

ii) Assign start and finish dates to each of the operation on the job schedule: The job schedule of the component to be scheduled is withdrawn from the file and finish data, for each of the operations to be performed are entered. The most common practice is to proceeded operation wise ,consult load chart to fit the operation into the uncommitted capacity available on the machine, enter scheduled start and finish dates for operations, compare completion date of last operation with the delivery data when the job requires longer time than the delivery committed earlier.

iii) Post of each schedule into the load chart: Once each of the operations on the job schedule has been scheduled, the schedule should post the load due to each shop order into the load chart. The load can be derived only from the schedule and the schedule in turn can only be drawn up in consideration of the load. The accuracy of the delivery date depends upon how accurate the loading is. It is a bad practice to set a delivery data without considering the load. Such delivery promises usually cost lot of money for their fulfillment and are generally associated with broken promises.

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iv) Setting delivery date for an item: A real good situation is one when job can be fitted for the delivery date is desired by the customer. But rarely, it is possible to confirm or set a delivery date, the following steps are necessary.

a) Prepare a job schedule for the item.b) A design starting date and completion date for each operation considering the load.c) Add safely factor to get delivery date.

Types of scheduling:

i) Master production scheduling: Master production scheduling which results in an overall production schedule or master schedule (MPS) over the intermediate planning horizon.

ii) Detailed scheduling: Detailed scheduling which results in a current schedule for the short range planning horizon.

iii) Machine loading and loading departments or work centers which indicate parts assigned to a machine in particular priority sequencing, resulting in a machine loading charts and load charts.

iv) The master production schedule determines the overall detailed time table indicating start and finishes time for every part or sub unit needed to build the end product. This will help in the estimation of work load for each work centre or machine for the next few weeks or months.

v) Machine loading charts show the allocation of jobs to machines on a weekly basis, taking into consideration the priority and utilization of machine and labour. Machine loading chats are prepared for every work showing the jobs assigned to every machine or work centre by means of a horizontal bar indicating machine or work centre capacity in terms of standard hours.

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UNIT-IV

THE REENGINEERING PROCESS

What is Re-engineering?According to Michael Hammer of US who coined the term re-engineering, the definition of reengineering is as follows: Reengineering has been defined as “the fundamental rethinking and radical design of business processes to achieve dramatic improvements in critical contemporary measures of performance such as cost, quality, service and speed the term is also known as process reengineering or “business process reengineering”. Re-engineering does not strive to make changes in the existing process. It involves asking basic questions about business processes, why do we do it? Why is it done this way? Such questioning often uncovers absolute or inappropriate assumptions. Radical redesigning involves tossing out existing procedures and reinventing the process, not just incrementally improving it.

Why Reengineering?Business process reengineering or process reengineering or simply reengineering is focused on break through improvements to dramatically improve the quality and speed of work and to reduce its cost by fundamentally changing the processes by which work gets done. For organization that wants to survive and grow, improvement is not an option but compulsion. For organizations that seek to thrive, dramatic improvement is often the only key to success. Small improvements are always necessary, but sometimes quantum leaps are needed if an organization is to forge ahead.

Process engineering is an innovative process for which a disciplined approach to the effort is essential .It involves a six steps plan.

These steps are: 6 (SIEUCI)

Step 1: State a case for action: The need for change should be effectively communicated to the employees of the organization through

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educational and communication campaigns. Two key messages to be articulated are a) a need for action and b) a vision statement.

The objectives of reengineering must be in the form of a qualitative and quantitative vision statement. These objectives include goals for cost reduction, time –to –market, quality and customer satisfaction levels and financial indicators.

Step 2: Identify the process: All the major processes in the firm should be initially identified and few processes should be selected for reengineering

The following questions define the criteria for selecting processes for reengineering:Which processes are currently more problematic? Which processes are critical to accomplishing company strategy and have the greatest impact on the company customer?Which processes are most likely to be successfully redesigned?What is the scope of the reengineering project and what are the costs involved?What are the strength of the reengineering team and the commitment of process owners and sponsors?Can continuous improvement deliver the required improvements? Response to these questions can be weighted in accordance with the companies need for improvement. The selected process should have a manageable reengineering project scope with well defined process boundaries.

Step 3: Evaluate enablers: Information technology and human /organizational issues act as enablers of the reengineering process. Technology evaluation has now become a core competency required of all companies. Companies should develop the ability to evaluate current and emerging information technology and identify creative application to redesign their existing processes. The current organizational culture should also be evaluated in light of the impending change to be brought about by reengineering Participative and customer oriented cultures that have evolved from the quality revolution provide a suitable environment for further change. But the

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magnitude of change created by process redesign makes the management of change a necessity issue of measurement and compensation, career oaths, work enrichment and new skills training should be addressed.

Step 4: Understand the current process: The current process must be understand by making use of process evaluation techniques such as flow charts, fishbone diagrams and quality .The current process must be studied to understand the activities which are essential to completion. All activities can be classified into three types:

a) Value adding work-work for which customer is willing to pay.b) Non-value adding work-work which creates no value for the customer but is required in order to get the value adding work done.c) Waste-work that neither adds nor enables value.

Value adding work consists of all the activities that create the goods and services that customers want. For example, if a customers order has to be executed, value adding activities include inventory allocation, picking, packing, route planning and shipping. Waste work is work whose absence would not be noticed by the customer. Waste work needs to be eliminated.

Step 5: Create a new process design: Process is redesign requires beginning with a clean slate. Reengineers should suspend current rules, procedures and values so as to create new process design. They also need to utilize the principles of reengineering. The first emphasis in reengineering a process is to eliminate all waste work. Next, the focus is on the elimination of non value adding work. Hammer has found that less than 10 percent of the activities in a process are value adding activities.

Step6: Implement the reengineering process: Leadership is critical the implementation process as well as to the entire reengineering effort .process engineering teams are typically responsible for implementing then new designs. However, support and duty in from line managers are crucial to success. Training employees in additional skills needed to perform in the new environment is also essential.

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Principles of reengineering: Reengineering is about achieving a significant improvement in process so that contempary customer requirements of quality, speed, innovations, customization and service are met. This entails seven new rules of doing work proposed by Hammer, relating to who does the work, where and when it is done and information gathering and integration.

These seven rules are ( OHMTLPC)

Rule 1: Organize around outcomes, not tasks: Several specialized tasks previously performed by different people should be combined into a single job. The new job created should involve all the steps in a process that creates a well defined outcome. Organizing around eliminates the need for hand offs, resulting in greater speed, productivity and customer responsiveness.

Rule 2: Have those who use the output of the process performed the process: In other words, work should be carried out was it is makes the most sense to do it. This results in people closest to the process actually performing the work, which shifts work across traditional intra and inter organizational boundaries. For instance, employees can make some of their purchases without going through the purchasing department. Customers can perform simple repairs themselves and suppliers cab be asked to manage parts inventory.

Rule 3: Merge information processing work into the real work that produces the information: This means that people who collect information should also be responsible for processing it which greatly reduces errors by cutting the number of external contact points for a process.

Rule 4: Treat geographically dispersed resources as though they work centralized: Centralized database and telecommunication networks allow companies to link separate units or individual field

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personnel, providing them with economics of scale while maintaining their individual flexibility and responsiveness to customers.

Rule 5: Link parallel activities instead of integrating their results: The concept of only integrating the outcome of parallel activities that must eventually come together is the primary cause of rework, high costs and delays in the outcome of the overall process. Such parallel activities should be linked continuously and coordinated during the process.

Rule 6: Put the decision point where the work is performed and build control into the process: Decision making should be made part of the work performed .This is possible today with a more educated and knowledgeable workforce plus decision making aiding technology controls are now made part of the process.

Rule 7: Capture information once at the source: Information should be collected and captured in the companies on line information system only once at the source where it is created. This approach avoids erroneous (based on wrong information) data entries and costly reentries.

Application of Reengineering:

Reengineering as applied to any business process: Hammer states that business process may be defined as a set of logically related tasks to achieve a defined business outcome. A set of processes forms a business system-the way in which a business unit or a collection of units carries out its business. Assuming that a company has decided that processes are ineffective and inefficient, the following are the major steps that the company should follow for redesigning its process, according to Hammer:

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Develop business vision and process objectives: This step involves to listing the objectives and setting targets for the future. A BPR vision statement describes the ideal state of a process.

Identify processes to be redesigned: This involves identifying critical or bottleneck (a narrow or always busy) processes and envisioning (think about future) the steps to avoid shortcomings in them.

Understand and measure existing processes: This involves identifying current problems and setting a base line.

Identifying information technology levels: This involves bringing those involved in the process to a brain storming session to identify new approaches.

The three R’s of reengineering

JANSON states every reengineering effort involves three basic phases:

1) Rethink: This phase requires examining the organizational current objectives and underlying assumptions to determine how well they incorporate the renewed commitment to customer satisfaction. Another valuable exercise in this phase is to examine the critical success factors-those areas in which the organization clearly stand from the competition and to check whether they contribute the new customer satisfaction goals.

2) Redesign: This phase requires an analysis of the way the organization produces the products or services it sells-how jobs are structured, who accomplishes what tasks and the results of each procedure. Then a determination must be made as to which elements should be redesigned to make jobs more satisfying and more customers focused.

3) Retool: This phase requires a through evaluation of the current use of advanced technologies, especially electronic data processing systems, to

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identifying opportunities for change that can improve quality of services and customer satisfaction.

Just in manufacturing: The goal of just in time (JIT) manufacturing is not new. The basic desire for continued reductions in material resource requirements is quite common in the minds of many business managers. The means by which the goal of JIT is now being accomplished is considered to be new.The JIT may sometimes be a by product of a company wide quality improvement (CQI).Programmer or it may be one of a number of specific goals in such a programme. Either way, CQI is fundamental to the achievements of JIT. Companywide quality improvement is a type of management approach used in Japanese companies. Later, this is being rapidly adopted by many worlds leading companies. The primary goal of JIT is to achieve zero inventory within an organization as well as through out the entire supply chain. This achieved by questioning each and every aspect of stock at raw materials stores, in process buffers, etc. This is primarily to find out important causes for unnecessary stock at various points. A detailed analysis of these causes would further breakdown the major causes into a wide range of reasons for holding excessive stock. Just in time is not ajaron term for new concept. It represents a goal, that goal is the ultimate total eliminate of inventory ,minimal working progress and is monitored by a constant

reduction is so called working capital .It can be achieved only as a result of a fundamental change in management thinking and industrial cultural values. Basic principles: In JIT, the key theme is to work without buffer stock/with minimal buffer stock. To achieve this objective, identify every point in the organizing where buffer stocks normally occur. Then critically examine the reasons for such stock, if any.

A set of possible reasons for maintain high stock is listed below.Unreliable or unpredictable deliveriesPoor quality from suppliersIncreased variety of materialsMachine breakdown

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Labour absenteeismFrequent machine settingVariation in operator’s capabilitiesSchedule changesChanging product prioritiesProduct modifications

Kanban systems-pull system: Kanban system is a kind of production system which operates based on the information contained I cards called Kanbans. There are two types of Kanban anamely,withdral Kanban(WK) and production order Kanban(POK).For the purpose of working of the Kanban system, production line is divided into preceding process (PP) and succeeding process(SP),withdrawal Kanban contains information on how much materials draws the succeeding process should withdraw. Production order Kanban contains information on how much quantity the preceding process should produce.Kanban system brings immediately any problem in the system to the system, it should have a well designed maintenance system and motivated workforce.

The steps followed in the Kanban systems are summarized below:

1) Carrier of the succeeding process is sent to the stores of the preceding forces with a necessary number of work order (WKs)

2) The carrier of the succeeding process withdraws items from the stores against each work order. While doing this, it detaches the POK associated with the corresponding physical inputs and places it in the Kanban receiving post.

3) At the same time, it attaches a WK to physical units, if the carrier has more than one WK, it should be done properly based on one to one correspondence.

4) When the physical units are taken for processing which are associated with a WK, the WK must be placed in the WK post.

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5) In the previous process, the POK which was placed in the Kanban Receiving post is shifted to the POK post. The sequence by which the POKs are placed in the POK is as per first come first served (FCFS) principle. The items are produced against POK must be moved as an integral pair.

6) When the physical units are completed, then the units and the respective POK are shifted to the store –X which receives the output from the previous process. The carrier of the succeeding process will withdraw these units when necessary.

Value Analysis: Value analysis is one of the major techniques of cost reduction and cost prevention. It is a disciplined approach that ensures the necessary functions at minimum cost without comprising of quality, realibility, performance and appearance. According to the Society of Americans Value Engineers (SAVE), Value analysis is the systematic application of recognized techniques which identify the function of a product or service, establish a monetary value for the function and provide the necessary function reliably at the lowest overall cost. It is an organized approach to identify unnecessary costs associated with any product, material part, component, system or service by analysis of function and efficiently eliminating them impairing the quality, functional reliability or its capacity to provide service.

When to apply value analysis: One can definitely expect very good results by initiating VA programme when one or more of the following symptoms are observedCompanies’ products show decline in sales.Companies’ prices are higher than those of its competitors.Raw materials cost has gone up suddenly.New designs are being introduced.The cost of manufacturing is rising disproportionate to the volume of production.Rate of return on investment has a falling trend.The firm in unable to meet its delivery commitments.

Value analysis is the application of a set of techniques to an existing product with a view to improving its value. It is thus a remedial process.

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The term value is used in many different ways and consequently has many different meanings, the designer equates the value with realibility, purchase person with price paid for theitem, production person with what it costs to manufacture and sales personnel with what the customer is willing to pay. Value in any value investigation, refers to economicvalue, which itself can be divided into four typers: cost value, exchange value, use value and esteem value.

Cost value: It is the summation of the labour, material, overhead and all other elements of cost required to produce an item or provide a service.

Exchange value: It is the measure of all the properities, qualities and features of the product which make the product possible of being traded for another product or for money. In a conventional sense, exchange value refers to the price that a particular will offer for the product, the price being dependent upon satisfaction which he derives from the product. Value derived from the product consists of two parts: Value due to realizable performance of the product and the value which the possession bestows upon the buyer. These are often referred to as use value and esteem value.

Use value: It is known as the function value .the use value is equal to the value of their functions performed.therfore it is the price paid by the buyer or the cost incurred by the manufacturer in order to ensure that the product performs its intended functions efficiently. The use value is the fundamental form of economic value. An item without use value can have neither exchange value nor esteem value.

Esteem value: It involves the qualities and appearance of a product which attracts persons and creates in them a desire to possess the product. Therefore, esteem value is the price paid by the buyer or the cost incurred by the n\manufacturer beyond the use value.

Manufacturing automation: Automation is the technology by which a process or procedure is accomplished without human assistance. It is

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implemented using a program of instructions combined with a control system that executes the instructions. To automate a process, power is required, both to drive the process itself and to operate the program and control system. Although automation can be applied in a wide variety of areas, it is most closely associated with the manufacturing industries. It was in the context of manufacturing that the term was originally coined by an engineering manager at Frod Motor Company in 1946 to describe the variety of automatic transfer devices and feed mechanisms that had been installed in Fords production plants.

Basic elements of automated system:An automated system consists of three basic elements:Power to accomplish the process and operate the system.A program of instructions to direct the process and A control system to actuate the instructions. The number and sequence of processing steps and the process parameter changes in each step. Each work cycle consist of the same steps and associated process parameter changes with no variation from one cycle to the next. The program of instructions is repeated each work cycle without deviation. In fact many automated manufacturing operations require decisions to be made during the programmed work cycle to cope with variations into the cycle. In many cases, the variations are routine elements of the cycle, and the corresponding instructions for dealing with them are incorporated into the regular part program.

These cases include:

Operator interaction: Although the program of instructions is intended to be carried out without the human interaction, the controller unit may require input data from a human operator in order to function. For example, in an automated engraving operation, the operator may have to enter the alphanumeric characters that are to be engraved on the work unit. Having entered the characters, the engraving operation is accomplished automatically by the system.

Different part or product styles processed by the system: In this instance, the automated system is programmed to perform different work cycles on

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different part or product styles. An example is an industrial robot that performs a series of spot wielding operations on car bodies in a final assembly plant. These plants are often designed to build different body styles on the same automated assembly line, such as two door and four door sedans. As each car body enters a given welding station on the line, sensors identify which style it is and the robot performs the correct series of welds for that style. Variations in the starting work units: In many manufacturing operations the starting work units are not consistent. The dimensional variations in the raw casting sometimes necessitate an extra machining pass to bring the machined dimension to the specified value. The part program must be coded to allow for the additional pass when necessary.

Project management:

Concept of project management: Project management is a modern and exciting field of management. Projects are implemented in almost every organization wherever there is a work. A project is found, wherever the results are expected. In modern times, due to various complexities of management, project management has gained a great importance and is practiced as a field of specialization in the field of management..

Concept: The terms like power project, fertilizer project etc, are common. Hence, the term seems to be familiar to anyone. A project in short, is for achieving a mission. The mission may be anything. The most important aspect is, its time bound character and the project will be completed as soon as possible by co-coordinating all the resources. A project starts with a defined mission, generates activities, involves variety of human and non human resources, directions towards the fulfillment of the mission and stops once the mission is fulfilled. The project management if institute of USA defines a project as a ONE SHOT time limited member directed major undertaking requiring the commitment of varied skills and resources. It also describes a project s a combination of human and non human resources

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poled together in a temporary organization to achieve a specific purpose. The purpose and set of activities differentiate one project from the other.

Project lifecycle: 5 (CDPIP) The execution of a project is a complex process. All the projects are not given the same degree of importance. Even in the same project all the phases are to given the equal importance. It all depends upon the needs, resources, tie available etc. In a project or in a phase of a project. A specific project life is given attention depending upon the importance. It is to be given taking into account the various factors. Hence it becomes essential to have an idea about various phases in the life of a project

1) Conception phase: This is the phase in which the idea of the project is born. The idea may be the result of a serious problem which has been tried to be solved by the executives in the past. The problems may be relating to non utilization of resources like funds, land capacity, expertise and so on. Once the organization is aware of the problem the men concerned look in and point the ways of overcoming the problems. Sometimes the ideas may suddenly strike the mind of a person as he scans the environment. It is also possible the ideas may come from the people who are working long with a person or even from outsiders who are just observing the problem. Whatever be the source, the ideas must be pt in black and white and given a shape before they can be considered and evaluated along with competitive ideas which are modest and suggest certain changes only. It all depends upon the type of the situation, nature of the problem and need of the time. Usually at this stage, the method of the implementation of the project will not be considered. Here the idea is simply taken and it is subjected to certain arguments and considerations. Any way, this is the first stage and successful implementation of the men concerned and their experience come to the foreplay here.

2) Definition phase: In this stage ,the project will develop the idea generated during the conception stage will produce documents detailing the project will sufficient information governing all aspects necessary for the project sponsors to make up their minds on the project idea. Usually, various

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factors will be taken into consideration at this phase. If it is a construction project, the following may be factors for consideration:

i) Raw material-quality and quantity aspects.

ii) Plant size, capacity of the main plant and the capacity of other sub plant.

iii) Location and sites, description of location and other important areas with the help of modern technology and process, nature of technology reason for selection and the description of the technology chosen.

iv) Project Layout: Selection of optimum lay out, reason of selection property drawings.

v) Plant and machinery: Selection of proper equipments, reasons for selection, description of equipments, machines, tools, specifications, sources, costs and so on.

vi) Electrical and instrumentation work: project features of the major electrical and instrumentation items, giving a project scheme for power, distribution etc.

vii) Civil engineering work: Selection and description of utility with specification for quality, source and unit cost.

ix) Manpower and organizational design: Selection of employees, labour, taking into account, the organizational needs, structure, layout skills requirements, needs for training, levels of training and availability of cost estimate.

x) Financial analysis: Total investment costs, source of finance, production costs and details of financial feasibility.

xi) Implementation schedule: This will void any confusion during the implementation stage. This phase will shape the risk involved in going ahead with the project.

A project may either be accepted or be dropped at this stage.

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3) Planning and organizing Phase: This phase begins only after the definition phase. But in practice, this phase starts much earlier, almost immediately after the how conceptions phase. This phase overlaps greatly with the definition and with implementation phase. As a result, this phase is not recognized as a formal one by most organizations. Some organizations however prepare documents like PEP as an identifications if this phase. Generally, most organizations deal with the following, during this phase and take necessary actions.i) Project infrastructure and related services.ii) System design and basic engineeringiii) Organization and man power.iv) Schedule and objects.v) Licensing and other governmental clearance.vi) Financevii) Systems and proceduresviii) Identification of project managerix) Design basis, the general conditions for purchase and contractors.x) Site preparation an investigationxi) Construction, resources and materials.xii) Work package. Hence, this phase is for the preparation of the project to take off smoothly. This phase is often taken as a part of implementation phase, since it does not limit itself to paper work, but includes field work also which is undertaken as a part of this phase. Planning refers to taking decisions in advance. If this is not done in time, the project implementation will head towards a crisis, it is hence absolutely essential that this phase is totally gone through before the next stage namely implementation phase. Many of the decisions and actions taken during this phase without having an idea about the basics, the project are bound to fall in its implementation.

4) Implementation Phase: This is critical phase in which one will observe a number of activities .It is in this phase people who are associated with the project, will actually see the project growing. preparation of specifications for equipments ,machines order for the machines ,engaging contracted, issuing construction drawings, civil construction and construction of equipments, foundation, erection of machines and electrical

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equipments and preparing instrumentation, conducting and checking trial run and functioning of the plan will taken place during this phase. In terms of volume almost 80 percent of the project work will be done in this phase.

This phase needs a very high coordination and control. Time could have been taken at the time of construction and planning phases. But implementation phase have to be taken up in the speediest manner possible. Because once the project enters implementation phase, the time loss is money loss. Hence the meticulous coordination and high pressure management with an intelligent control system will be required in this phase. Detailed engineering, ordering, delivering, construction etc, will be the useful sub phases which have to be co-coordinated forthwith.

5) Project clean up Phase: This is a transition phase, in which the hard work built with active involvement of phase agencies is handed over for production to a different agency which was not s for involved. For the project personnel this is basically a clean up task. Drawings, documents, files, operation and maintenance records are properly arranged and handle over to the customer. The customer must be satisfied with the test runs. Any change required at the last minute for the fulfillment of contract applications in respect of performance must be completed during this phase to the entire satisfaction of the customer. Project accounts are closed, material re consultation is done, outstanding payments are made, dues are collected and accounts are settled. The most important issue during this phase is planning of the staff and workers involved in execution of the project. The project personnel cannot be sent out suddenly. Hence preparation for project cleaning must start a long time before actual physical handover. The first go, are the design engineers and in their place a few design engineers will be posted at the field for residual engineering. This will be followed by the other engineers must of the time in orders in which they can think. Their place will be taken up by the engineers appointed by the customer.

ABC Analysis:

Necessity: A is the size of the industry increases, the number of items to be purchased and then to be taken care of also increase. Purchase control of all items at a time and in bulk much before their use, irrespective of their usage

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value, price or procurement problems, blocks and involves a lot of money and man hours, and is therefore uneconomical. ABC analysis helps segregating the items from one another and tells how much valued the item is and controlling it to what extent is in the interest of the organization.

Procedural steps in ABC Analysis:

1) Identify all the items used in an industry.2) List all the items as per their value.3) Count the number of high valued, medium valued and low valued items.4) Find the percentage of high, medium and low valued items. High valued items normally contribute for 70% or so of the total inventory cost and medium and low valued items,20 and 0% respectively.5) A graph can be plotted between percent of item and percent of total inventory cost. It can be seen that 70% of he total inventory cost is against 10 % of the total items 20% against 20% of the items and 10%against a big bulk, i.e. 70% of the items.

Thus ABC analysis furnishes the following information:

A items are high valued but are limited or few in number. They need careful and close inventory control. Minimum and maximum limits and reorder points is set for A items. Such items should be though of in advance and purchased well in time. A detailed record of their receipt and issues should be kept and proper handling and storage facilities should be provided for them. Such items being costly are purchased in small quantities oftenly and just before their use. This of course increases the procurement cost and involves a little risk of non availability. However, the locked up inventory cost decreases and the problems of storage and caretaking are minimized.

1) A items generally account for 70%-80% of the total inventory cost and they constitute about 10% of the total items.

2) B items are medium valued and their number lies in between A and C items .Such items need moderate control .They are more important than C items. They are purchased on the basis of past requirements, a record of

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receipts and issues ifs kept and a procurement order is placed as soon as the quantity may be kept, whereas it needs a stock of fortnight or so in case A items B items also require careful storage and handling.In brief, B items need every care but not so intensive as is required for A items.B items generally account for 20 to 15% of the total inventory cost and constitute about 15 to 20% of the total items.

3) C items are low valued, but maximum numbered items, these items do not need any control, and rather controlling them is uneconomical. These are the least important items like clips, all pins, washers, rubber bands, etc. They are generally procured just before they finish. No expediting is necessary, no records are normally kept and a safety stock of 3 months or even more can be purchased at an instant. Future requirements of such items are never calculated and a two bin system is sufficient to hint procurement.C items generally account for 10 to 5% for the total inventory cast and they constitute about 75% of the total items.

Advantages of ABC Analysis: By concentrating on A class items the materials manager is able to control inventories and show visible results in a short span of time. By controlling the A class items and doing a proper inventory analysis, obsolete stocks are automatically pinpointed. Many organizations have claimed that the ABC analysis has helped in reducing their clerical costs and resulted in better planning and improved inventory turnover.ABC analysis has to be resorted in better to because equal attention to A,B and C items is not worthwhile and would be very expensive. Concentrating on all items is likely to have a diffused effect on all the items irrespective of their priorities.

Limitations of ABC Analysis: ABC analysis ,in order to be fully effective, should be carried out with standardization and codification.ABC analysis is based on grading the items according to the importance of performance of an item,i.e,vital essential and desirable analysis. Some items, though negligible in monetary value may be very vital for running the plant, demanding constant attention.

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VED Analysis: VED stands for Vital, Essential and Desirable. This type of analysis is applicable mostly in the case of spare parts. About spare parts is that they do not follow a predictable demand pattern as in the case of raw materials. The result is that if we follow the usual methods outlined earlier, we might get into difficulties when the demand pattern suddenly changes.

For example, the older a machine gets, the greater will be the spares required for maintenance. Hence, past trends do throw much light on stocking policies. To get over this difficulty, VED analysis is used .Here, the categorization is made in terms of importance or criticality of the part of the operation of the plant. If it is vary vital, it is given a V classification. If an item is important it is classified as E item .If it is not so important, it is given a D classification. How such a classification is done? This purely depends on the machinery or equipment involved and ones own experience, ease of availability of the parts, etc. For example, if some items are available off the shelf of supplier’s show room, there is no point in categorizing them as V. On the other hand a minor imported item automatically gets a V classification. In other words, the classification is not purely in terms of the critically of the items for proper working of the machine but it is a combination of several factors, including price, availability etc. For V items, a reasonably large quantum of stocks might b necessary, while for D items, no stocks are perhaps, required to be kept, especially if that item also happens to be in the A or B classification. For V items of A classification, a close control should be kept on stock levels, but if it is a C item, then large quantities may be stored. The whole objective is to select items for special control and thus expend time and effort in a prudent way.

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UNIT V

WORLD CLASS MANUFACTURING: The economy is integrated to the global economy and industry is facing global competition. It is therefore, necessary to improve performance. Performance measures indicate the real problems and how to overcome them. If a system does not deliver, the blame cannot be placed at the door of culture, level of technology or labour. Mostly it is due to faulty performance measures. Identification and definition of the right type of performance measure is thus a priority. World class manufacturing WCM (Concept has emerged of late. The following characteristics of WCM are used to fulfill the consumer expectations).1) Products of high quality2) Products at the right price3) Products with enhanced features4) Products with wide variety5) Products delivered in time, in fact short time6) Products delivered with shorter lead time.7) Products manufactured with shorter cycle time.8) Flexibility in fulfilling the demand for the product. The above listed performance measures are external to the manufacturing system but are vital for the success for the organization. These can be measured internally. Such performance measures improve the acceptability of the product. The success of an organization in this competitive environment is due as its superior performance measuring system in manufacturing .Under WCM, the products should performance measuring system in manufacturing. Under WCM, the products should have specifications closure to the customer needs.

Flexible manufacturing systems: FMS is the latest level of automation to achieve ever more productivity and flexibility from manufacturing facilities. An FMS is a collection of production equipments logically organized under a host computer and physically connected by a central transport system. The objective of the FMS is to simultaneously

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manufacture different piece part type mixes without costly, time consuming and change over requirements between mixes. FMS consists of two types of equipment namely, primarily and secondary .the primary equipment adds value to the components being manufactured. Secondary equipment supports the primary equipment in achieving this goal.

Lean manufacturing: Lean manufacturing is a systematic approach to identify and eliminate wastes of all non-value added activities through continuous improvement that is being adopted by world class, high performance firms to products remarkable results. It is also called as a manufacturing system in which friction is absent. Global competition is forcing companies to improve quality reduce delivery time and lower costs. The traditional manufacturing way of thinking has been cost + profit =selling price .But in the competing global environment, customers more or less influence the selling price of a product. Hence, the lean way of thinking is selling price-cost= profit. Under this redefined scenario, the only way to survive in the market is to decrease cost by eliminating all forms of wastes. The essence of lean manufacturing is to compress the time from the receipt of an order to the receipt of payment for that order.In specific terms, lean manufacturing achieves the following.Reduction in cycle times.On time deliveries.Reduction in work in process inventory.Improvement in quality.Increase in the availability of machines.Reduction in scrape/rework. Lean manufacturing which is often called Just in time or agile manufacturing is an operating strategy that seeks to maximize operational effectiveness by creating value in the eyes of the end customers. The focus is not on a department, area or process, but on the optimization of the entire value stream which is the series of processes between receipt of customer order and delivery of finished product.

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Steps of lean manufacturing: 5 (SIMPP)

The steps of lean manufacturing are as listed below:

1) Specific value: Value is defined by the customer and is only meaningful when expressed in terms of a specific product, which means the customers needs at a specific price and a specific time. So the value from the perspective of the final customer should be specified.

2) Identify value stream: The value stream is all the steps and processes required to bring a specific product, from raw materials to finished product, in the hands of the customers. Analysis the entire flow of a product will almost reveal enormous amount of waste and non-value adding sequence. This frequently referred to as process reengineering.The value stream analysis will always show three types of actions which occur along the value stream, as listed below:Steps that create value.Steps that create no value they are unavoidable due to current technologies or production methods or assets.Steps that treated no value and they are avoidable.

3) Make value flow: The value flow is a flow of raw material through a dedicated arrangement of facilities with distinct value addition at each stage of the value stream, to produce products continuously which may result in less cost, decreased delivery time and other benefits of lean system, though other types of production are possible. So make the value flow without interceptions.

4) Pull: Pull is defined as designing the production system based on customer needs. Here customers pull their required product from a producer as and when thy need that product. The implementation of value stream automatically reduces the product lead time to a greater extent. This enables the producers to provide the products as and when they are needed by the customer which helps the customer to pull their products on their necessity

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for those products. So the value stream and pull are complementary to each other.

5) Perfection: Perfection is defined as achieving all the required system performance measures at the highest levels. If an organization begins to accurately specify value, identify the entire value stream and make the value added steps for specific enterprise, achieving perfection is trivial

Components of lean manufacturing: 8 (CPC SJS DF)

The components of lean manufacturing are as listed below:

1) Cellular manufacturing: Cellular manufacturing also known as group technology is an approach whereby production can be done in small batches while taking advantage of the flow characteristics of the product or line layout. Components that may appear to be dissimilar but which require similar manufacturing processes and /or similar setups of the machine are grouped together and go through a particular group of such machines which may be dissimilar.

2) Poka yoke: Poka yoke is a bunch of small devices like fixtures, jigs, gadgets, warning signals, paper systems and the like which are used to detect or prevent defects from occurring in the first place before additional value is added to the parts/products and it eliminates subsequent inspection steps which are used to determine whether the parts are correctly produced.

3) Continuous improvement: Continuous improvement means change to become good. It is a culture of sustained continuous improvement focusing on eliminating waste in all systems and processes of n organization. It guides people to continuously improve their ability to meet expectations of high quality, low cost and on time delivery.

4) Standardized production: This production involves setting, documenting and maintaining standards for three major areas of production.

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Cycle time.Work processWork in processTo maintain standardized production, lean manufacturing rely heavily on documentation. This documentation is typically posted at all workstations and coinstanly revised to reflect current procedures and processes.

5) Just in time production: In this type of production, as explained at the beginning of this chapter, each station makes only the item in the required quantity when it is needed.

6) Single minute exchange die: T his enables the operator to minimize the setting time and also the processing times on a machine with the aid of jigs and fixtures. The jigs and fixtures will facilitate the operator to load more than one component on a machine or to drill more than one hole simultaneously on the job mounted on a machine.

7) Design for Manufacturing (DFM): In a product, after careful examinations, all useless parts should be eliminated and the parts which are retained/ newly designed and added in that product must be easily made with the existing infrastructure of the company or its supplier firms.

8) Flexible workforce: This is necessary because lean manufactures do not maintain a pool of back up/relief workers. In the event of absence of workers, retooling or changing production needs, workers must be able to perform varying tasks.

Agile manufacturing: As an observed system of doing business, agile manufacturing emerged after lean production yet shares many aspects as we shall see when we compare the two.

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Agile manufacturing can be defined as

1) An enterprise level manufacturing strategy of introducing new products into rapidly changing markets and

2) An organizational ability to thrive in a competitive environment characterized by continuous and sometimes unforeseen change.

The 1991 a study identified four principles of agility manufacturing companies that are agile competitors tend to exhibit these principles or characteristics.

These four principles agile manufacturing are: 4 (COLE)

1) Cooperate to enhance competitiveness: Cooperation internally and with other companies is an agile competitor operational strategy of first choice. The objective is to bring products to market as rapidly as possible. The required resources and competencies are found and used, wherever they exit. This may involve partnering with other companies, possibly even competing companies to form virtual enterprises.

2) Organize to master change: An agile company is organized in a way that allows it to thrive on change and uncertainty .In a company that is agile, the human and physical resources can be rapidly reconfigured to adapt to changing environment and market opportunities.

3) Leverage the impact of people and information: In an agile compny, knowledge is valued, innovation is rewarded, and authority is distributed to the appropriate level of the organization.amangement provides the resources that personnel need. The organization is entrepreneurial in spirit. There is a climate of mutual responsibility for joint success.

4) Enrich the customer: An agile company is perceived by its customers as enriching them in a significant way, not only itself. The product of an agile company is perceived as solutions to customer’s problems. Pricing of the

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product can be based on the value of the solution to the customer rather than on manufacturing cost.

Market forces and agility: 5 (ICICF) A number of market forces can be identified that are driving the evolution of agility and agile manufacturing in business.

These forces include:

1) Intensifying competition: Signs of intensifying competition include 1) global competition 2) decreasing cost of information 3) growth in communication technologies 4) pressure to reduce time to time 5) shorter product lives and 6) increasing pressures on costs and profits.

2) Cooperative business relationships: There is more cooperation occurring among corporation in the United States. The cooperation takes many forms, including1) Increasing inter enterprise cooperation 2) increased outsourcing 3) global sourcing 4) improved labour management relationships and 5) the formation of virtual enterprises among companies. one might view the increased rate of corporate merging that are occurring at time of writing as an extension of these cooperative relationships.

3) Increasing societal pressures: Modern companies are expected to be responsive to social issues, including workforce training and education, legal pressures, environmental impact issues, gender issues and civil rights issues. Modern firms are dealing with these market forces by becoming agile. Agility is a strategy for profiting from rapidly changing and continually fragmenting global markets for customized products and services. Becoming agile is certainly not the only objective of the firm. There are important other objectives such as making a profit and surviving into the future. However, becoming more agile compatible with these other objectives. Indeed, becoming agile represents a working strategy fir company survival and future profitability.

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4) Changing customer expectations: Markets demands are changing customers are becoming more sophisticated and individualistic in their purchases. Rapid delivery of the product, support throughout the product life and high quality are attributes expected by the customer of the product and of the company that manufactured the product. Quality is no longer the basis of competition that it was in the 1970s and 1980s .Today’s products are likely to have increased information content.

5) Fragmentation of mass markets: Mass production was justified by the existence of very large markets for mass produced products. The signs of the trend toward fragmented markets include 1) emergence of niche markets, for example, different sneakers for different sports and nonsports applications 2) high rate of model changes 3) declining barriers to market entry from global competition and 4) shrinking windows of market opportunity. Producers must develop new product styles in shorter development periods.

How does a company become more agile?Two important approaches are 1) To reorganize the company’s productions systems to make them more agile and 2) To manage relationships differently and value and value the knowledge that exists in the organization. Let us examine each of these approaches in accompany operations as it seeks to become an agile manufacturing firm.

Comparison of lean and agile: Lean production and agile manufacturing are sometimes compared and in this final section we at such a comparison. Are lean and agile really different? They certainly use different statements of principles .the four principles of lean production are compared with the four principles of agility. The emphasis to be more on technical and operational issues, whereas agility emphasis organization and people issues. Lean applies mainly to the factory. Agility is broader in scope, applicable to the enterprise level and even beyond to the formation of virtual enterprise. One might argue that agility represents an evolutionary next phase of lean production. Certainly the two systems do not compete. If anything, agility complements lean. It extends lean thinking to the entire organization. Agility

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is to lean as manufacturing resource planning is to material requirements planning.

Four principles of lean production and agile manufacturing:

Lean production Agile manufacturingMinimize waste Enrich the customerPerfect first time quality Cooperate to enhance competivenessFlexible production lines Organize to master changeContinuous improvement Leverage the impact of people and

information

Comparison of lean production and agile manufacturing attributes:

Lean production Agile manufacturingEnhancement of mass production Break with mass production,

emphasis on mass customization.Flexible production for product variety

Greater flexibility for customized products.

Focus on factory operations Scope is enterprise wide.Emphasis on supplier management Formation of virtual enterprises.Relies on smooth production schedule

Acknowledges and attempts to be responsive to change.

E-Manufacturing: Collaborative manufacturing involves sharing real-time data with trading partners and customers and making collaborative decisions about production based on that data. In order to collaborate, information must be converted into electronic form, protocols for communication must be established and an infrastructure must be in place for connectivity with customers, suppliers and partners. Rather than making huge volumes of standard products in anticipation of demand, e-manufacturing uses real-time information on customer orders and productive capacity across the supply chain to speed customized products directly to the customer.

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E-Manufacturing includes electronic management of products, processes and manufacture. Information technology provides the needed linkages between customers, workers, machines, databases and decisions. CAS can physically link different components together to create new or modified designs and communicate electronically to other systems. Group technology (GT) classifies existing into families and stores them so that nee designs can incorporate the expertise of earlier designs. CAE (computer aided engineering) links the functional design of the product to the CA generated form design. CAD, CAE and CPC software make collaborative design with suppliers possible. Product data management (PDM) keeps track pf all the design specifications, drawings, bills of material and design revisions for the life of the product. Product life cycle management also includes recycling and disposal at the end of the products life. Product definers or configurations allow the customer to create build to order products by choosing among product options. STEP (Standard for the exchange of product model data) sets standards for communication between pieces of automated equipment produced by different vendors. It allows different CAD systems to exchange data and converts CAD requirements into quality standards for computerized inspection equipment. STEP can represent all critical product specifications, consider the entire product life cycle and specify process sequences for specific production systems. CAPP (computer aided process planning) converts design specifications from CAD into instructions for manufacture for CAM, CAD/CAM describes the direct physical link between design and manufacturing, and an occur within one manufacturing facility or across facilities and companies. Sourcing decisions determine which items will be made in our factories and which will be produced by suppliers. NC machines, FMS, robots and automated material handling systems and process control are part of the collection of technologies referred to as computer aided manufacturing (CAM).within the manufacturing function, CAM technologies facilitate remote control and integration of operations. Different operations may be physically linked with automated material handling systems. Automated machines communicate directly with each other, work together and are centrally controlled.

The integration of machines and technologies is made possible by the development of shared databases, standards and networking within manufacturing function. Manufacturing can be controlled in machine

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cells and centers within a factory as well as across multiple factory sites, both inside and outside the company.

Virtual manufacturing: The vision of virtual manufacturing is to provide a capability to manufacture in the computer .In essence, VM will ultimately provide a modeling and simulation environment so powerful that the fabrication/assembly of any product, including the associated manufacturing processes can be simulated in the computer. This powerful capability would take into account all of the variables in the production environment from shop floor processes to enterprise transactions. In other words, VM will accommodate the visualization of iteracting production processes, process planning scheduling, assembly planning, and logistics from the line to the enterprise and related impacting processes such as accounting, purchasing and management. Virtual reality allows a user to navigate and interact with a three dimensional and dynamic simulation of a real or fictitious world. Virtual manufacturing is the name given to an evolving area of a common umbrella, using VR technology. The scope can range from integration of the design sub functions such as drafting, finite element analysis and prototyping to integration of all the functions within a manufacturing enterprise. Technologies for VR include the hardware for input –output and computation, the electronics for integration the hardware systems and the software. Each technology is made up of numerous sub technologies. These technologies are still in their evolving and developmental stage and further advances are required. VM can be used for concurrently simulating all the activities and functions involved throughout the life cycle of a product.

Collaborative manufacturing: In collaborative manufacturing, designated individuals and organizations- both internal to a manufacturing enterprise and extended to its suppliers, customers and partners-work together for mutual gain. The objectives of collaborative manufacturing are to streamline end to end business and supply chain processes and provide a more comprehensive and accurate information base from which to make decisions.

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Collaborative manufacturing allows multiple allows groups to at together as they set plans and policy, agree to actions and execute operations. Collaborative manufacturing can boost responsive, agility and centricity. It also fosters the most cost effective methods to design, source, make deliver and service standard, mass customize or to order products. An effective collaborative manufacturing strategy requires business processes to include more inputs and interactions than most traditional processes. To support collaborative manufacturing, information systems must integrate and aggregate information from across the manufacturing business and from its suppliers, trading partners and customers. It must also provide the means to intelligently distribute that information across various business entities. To maintain competitive edge manufacturers must make a major shift in strategy to effectively synchronize activities among functionally and geographically dispersed groups. That with whom they need to collaborate includes:

1) Customers and in some cases, their customers customers.2) Distributors and channel partners.3) Materials and sub product suppliers.4) Outsourced and contract manufacturers.5) Logistics partners for distribution, warehousing and transportation.6) Providers of services such as legal and regulatory advice.7) Multiple departments and divisions within their own company and with any of those entities described above.

A collaborative manufacturing strategy can help a company maximize the effectiveness of its value chain in order to better control profits and address changing market demands. Collaborative manufacturing strategies will play a crucial role in helping world class companies increase business value in the emerging global economy. To successfully meet market place requirements, manufacturers must create business processes that leverage shared information. Fortunately, the internet provides a relatively low cost and widely available communication

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UNIT VI

Facility location: Facility location or plant location is the process of determining a geographical site for firms operations achieving maximum operating economy and effectiveness.

The need for location decisions: Location decisions represent an integral part of the strategic planning process of every organization .Even though it may appear to be the one time problem of new organizations; even existing organizations often face the problem of choosing a proper location for their new units or for relocating the existing plants. The reasons for making location decisions are:

i) When business is newly started.ii) When a business firm wants to expand its markets by adding new locations to the existing systems.iii) When an organization experiences growth in demand for its products or services and the existing facility or plant is not able to expand in the existing location to meet the demand.iv) Some firms need to replace due to rising costs o inputs or distribution of outputs or due to depletion of basic inputs such as raw materials, fuel or crude oil resource for oil refineries.V) Shift in markets may cause firms to relocate.Vi) Other social and economic reasons such as shortage of labour supply, shortage of electric power, change in life style of customers etc.

Objectives of decisions:i) Profit oriented organizations have the objectives of maximizing the

potential profits.ii) Non profit organizations strive to achieve a balance between cost and level of customer series they provide.iii) To identify the best location for a firm or to find a number of acceptable locations from which to choose one.

Characteristics of a good layout:1) Smooth flow of production 2) Maximum utilization of available space.3) Minimum, material handling.

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4) Smooth movement of men, materials and machinery from place to place.

5) Good working conditions-lighting, ventilation, temperature, humidity etc, are as per requirements.

6) Flexibility for change of layout, expansion, changes in product design and process.

7) Proper location of storage areas.8) Facilities supervision and control.9) Effective coordination and integration among men, materials and

machinery to maximize utilization and output. 10) Provision of safety and reaction of accidents.

Types of layout:

Fixed position layout: Layout by fixed position of the product is inherent in ship building, aircraft manufacture and big pressure vessels fabrication.In other types of layouts, the product moves past stationary production equipment, whereas in this case the reverse applies, men and equipment are moved to the material, which remains at one place and the product is completed at that place where the material lies. Also called static layout, this type is followed in the manufacture of bulky and heavy products, such as locomotives, ships, boilers, air crafts and generator. The construction of a building requires a fixed location layout because men, cement, sand bricks, steel, wood and others are taken to the site of the construction.

Advantages of layout:1) It is possible to assign one or more killed workers to a project from start to finish in order ensuring continuity of work.2) It involves least movement of materials.3) There is maximum flexibility for all sorts of changes I product and process.4) A number of quite different projects can be taken with the same layout.

Disadvantages of layout:1) It usually involves a low content of work in progress.2) There appears to be low utilization of labour and equipment.3) It involves huge equipment handling costs.

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Production or line layout: In this type of layout only one product or one type of product is produced in an operating area. Product layout means the arrangement of machines in a line in order in which they would be used in the process of manufacture of product .The raw material arrives at one end of the line and goes from one operation to the next with a minimum of work in process storage and materials handling . This form of layout is suitable for the continuous mass production of goods as it makes it possible to the raw material to be fed into the plant and taken out finished product on the other end.

Advantages of product layout:

i) Layout by product corresponds to the sequence of operation, this will result in smooth flow of materials.ii) Less floor area is occupied by the material in transit and for temporary storages.iii) Reduced material handling.iv) Better utilization of men and machine.

Disadvantages of product layout

i) It is difficult to obtain balance in loading the machines and therefore, more idle time is available on machineries and equipments.ii) No flexibility which is generally required is obtained in the plant.iii) Specialized and strict supervision is needed.iv) Break down of one machine may lead to complete storage of production line.

Process layout: It is also known as functional layout and characterized by keeping similar machine or similar operations at one location. In other words, all lathes will be one place, all milling machines at another and so on, that is machines have been arranged according to their functions. This type of layout is generally employed for industries engaged I job order production and non repetitive kind of maintenance of manufacturing activities. A quantity of raw material is issued to machine which performs the first operations. This machine may be situated anywhere in the

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factory. For the next operation, a different machine may be required, which may be situated in another part of the factory. The material should be transported to the other machine for the operation. Thus, material would move long distances and long crisscrossing paths at one stage. The material maybe taken to a separate building say, for heat treatment and then brought back for grinding. If machines in one department are engaged, the partly finished product awaiting operations may be taken to the store and later reissued for production. Partly finished product goods waiting for processing in every department, like commuters waiting for buses in a city.

Advantages of process layout:1) Wide flexibility exists as regards allotment of work to equipment and

workers.2) Better utilization of the available equipment.3) Comparatively less number of machines are needed, thus involving

reduced capital investment.4) Better product quality, because the supervisors and workers attend to

one type of machines and operations.5) Varieties of jobs coming as different job orders make the work

interesting for the workers.6) Workers in one section are not affected by the rays nature of the

operations carried out in another section. For example, a lathe operator is not affected by the rays of the welding as the two sections are quite separate.

Disadvantages of process layout:1) For the same amount of production, process layout needs more space.2) Automatic material handling is extremely difficult.3) More material in process remains in queue for further operations.4) Completion of same product takes more time.5) Work in process inventory is large.6) Production control becomes difficult.7) Raw material has to travel larger distance for being processed to

finished goods. This increases material handling and the associated costs.

8) It needs more inspections and efficient co-ordination.

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Computerized relative allocation of facilities technique (CRAFT) CRAFT algorithm was originally developed by Armour and Buffa. CRAFT is more widely used than ALDEP and CORELAP. It is an improvement algorithm. It starts with an initial layout and improves the layout by interchanging the department’s pair wise so that the transportation cost is minimized. The algorithm continues until no further interchanges are possible to rescue the transportation cost. The result given by CRAFT is not optimum in terms of minimum cost of transportation. But the result will be good and close to optimum in majority of applications. Hence, CRAFT is mainly a heuristic algorithm. Unfortunately, plant layout problem comes under combinatorial category. So usage of efficient heuristic like CRAFT is inevitable for such problem

CRAFT REQUIREMENTS:i) Initial layoutii) Flow dataiii) Cost per unit distanceiv) Total number of departmentsv) Fixed departmentsvi) Number of such departmentsvii) Location of those departmentsviii) Area of departments.ix) CRAFT procedure

The steps of CRAFT algorithm are summarized below.

Step 1: Input 1.Number of departments2) Number of interchangeable departments3) Initial layout4) Cost matrix5) Flow matrix6) Area of departments

Step 2: Compute centroids of departments in the present layout.

Step 3: Form distance matrix using the centroids.

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Step 4: Given data on flow, distance and cost, compute the total handling cost of the present layout.

Step 5: Find all the possible pair wise interchanges of departments o based on common border or equal area criterion. For each possibility, interchange the corresponding centroids and compute approximate costs.

Step 6: Find the pair of departments corresponding to the minimum handling cost from among all the possible pairs of interchanges.

Step 7: Is the cost in the previous step less than the total cost of the present layout? If yes. Go to Step 8 .If not, go to step 11.

Step 8: Interchange the selected pair of departments. Can this as the NEW LAYOUT .compute centroids , distance matrix and total cost.

Step 9: Is the cost of new layout less than the cost of the present layout?If yes ,go step 10.if not ,go to step 11.

Automated layout design program (ALDEP): ALDEP is a construction type algorithm. This algorithm uses basic data on facilities and builds a design by successively placing the departments in the layout. After placing all the departments in the layout, a score is computed. This is nothing but the sum of the closeness rating values of different neighbouring departments in the layout. This algorithm is repeated for a prespecified number of times and the best layout is selected based o the maximum layout score.

The basic data required for this algorithm are listed below.1) Total number of departments.2) Area of each department.3) Length and width of layout.4) Closeness ratings of various pairs of departments in the form of relationship chart.5) Minimum department preference (MDP) value.6) Sweep width.7) Number of iterations to be performed.8) Location and size of each restricted area I the layout if present.

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STEPS OF ALDEP:

Step 0.Input:i) Number of departments in the layout.ii) Area of each department.iii) Length and width of the layout.iv) REL-CHART(Relationship chart)v) MDP value.vi) Sweep width.vii) Number of iterations to be carried(N)viii) Current iteration number (I).ix) Locations and sizes of fixed departments if present.x) Score of the current layout (it is assumed as a very high negative

value before performing the first iteration.)

Step 1: Selection a department randomly and place it in the layout.

Step 2: Scan the relationship (REL) chart and classify the unselected departments into two lists, namely List A and List B.List A contains the unselected departments whose relationship values in relation to the lastly selected department are less than the MDP value.List B contains the unselected departments whose relationship values in relation to the lastly selected departments are greater than or equal to the MDP value.

Step 3: Is the List B empty? If so, go to step 4; otherwise, go to step 5.

Step 4: Select a department randomly from List A and place it in the layout .Go to step 6.

Step 5: Select a department from List B which has the maximum REL value in relation to the lastly selected department and place it in the layout.

Step 6: whether all the departments are placed in the layout? if not go to step 2;if yes ,go to step 7.

Step 7: Compute the score of the layout.

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Step 8: Is the score of the layout more than the score of the current best layout? If yes, update the new layout as the current best layout and store the corresponding score. Otherwise, drop the new layout.

Step 9: Is the current iteration number I= N? yes, go to step 10.otherwise,increment the iteration number by one(I=I+1)go to step 1.

Step 10: Print the current best layout nd the corresponding score.

Importance of location decisions:i) Involve a long term commitment.ii) Often have an impact on investment required, operating costs and

revenues at well as operations.iii) A wrong choice of location might result in excessive

transportation costs, shortage of qualified labour, loss of competitive advantage, inadequate supplies of raw materials etc.

iv) For services, a poor location could result in lack of customers and/or high operating costs.

General procedure for making location decisions: An organizations approach to location decision often depends o its size and the nature or scope of its operation. Large established organizations adopt a formal approach to location decisions.

The general procedure fro making location decisions consists of the following steps:

i) Decide on criteria to use for evaluating location alternative such as increased revenue or community service.ii) Identify crucial factors such as location of source of raw materials or location of markets.iii) Develop location alternatives.a) Identify the general region for a location,b) Identify a small number of community alternatives,c) Identify sites among the community alternativesd) Evaluate each alternative and make choice.

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Factors affecting location decisions:1) Deciding on domestic or international location2) First the management must decide whether the facility will be located

internationally or domestically. Now a days, with the globalization of business this choice is significant because location in any country in the world will be considered to have competitive advantages derived from location. If the decision is to choose an international location, the next logical step is to decide about the country for location. The choice of a particular country for location depends on such factors as:

i) Political stabilityii) Export and import quotas iii Exchange rtesiv) Cultural and economic considerationsv) Availability of natural resources, eliminate, cost of labour etc.

3) Location decision: The selection of a particular region may involve choosing among many national regions or among several regions within a much smaller geographical area.

The factors affecting the selection of a particular region are:

i) Availability of raw materials and nearness to the source of raw materials: This will reduce the cost of transportation of raw materials from its source to the place where the plant is located. For example, steel sugar, paper and cement industries which use bulky raw materials should be located near the sources of raw materials,

ii) Nearness to the market: For many firms producing consumer non durable items such as bread , ice-cream, packed foods etc, it is necessary to be located near the market to reduce the transportation costs as well s reduce the time required of transportation.

iii) Promity to suppliers: Firms are located near their suppliers be cause of pershability, transportation costs, or bulkiness of materials.

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iv) Availability of power: Power is essential for any manufacturing firm. Coal, oil and natural gas are sources of electric power in addition to generation of power through hydro electric power stations. Some industries such as Aluminum extraction plants consume heavy amount of electricity and hence require adequate supply of electricity at a cheep rate.

v) Transport facility: Transport facilities are essential for transportation of raw materials and supplies and employees to the plant as well as for carrying finished goods from the plant to the market place. The location of the plant must be ell connected by rail, road and sea. For example, petroleum refineries and fertilizer plants are located near the ports because they need shipping facility either to bring raw materials to other destinations.

vi) Suitability of climate: Certain industries require particular climate conditions because of the nature of heir production. For example, humid climate is required for cotton textile and jute industries. Also, dust free climate conditions are favourable for electronic industries. Even though the desired climatic conditions can be provided artificially, it would be quite costly to do so and hence natural climatic conditions are preferred.

vii) Government policy: Some states in backward regions of our country, have encouraged industrialists to locate their industries in the backward regions .The central government may influence plant location in backward states by their licensing policy, freight rate policy, institutional finance and subsidies etc.

viii) Competition between states: M any states compete among themselves to attract new industries by offering investment subsidies, cheap poor and land, sales tax exemption, longer loan repayment period and low interest rates etc, small and medium sized plants are attracted by these incentives.

3) Selection of community: The selection of a locality or a community in a region is influenced

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i) Availability of labour: L abour having the appropriate level of skills needed for the industry is an important consideration. The skilled labour influences the plant location. This factor may not be very important the skilled labours are mobile i.e, willing to move. The attitude of labour, union activities and industrial disputes play a major role in attracting an industry to be located in a community.

ii) Civic amenities for employees: Employees need facilities such as housing, medical facilities, sports and recreational facilities, educational facilities. Such facilities will attract skilled labour and other employees to the plants which are located in places where all employees amenities area available.

iii) Existence of complementary, ancillary and competing industries: Complementary and ancillary industries can accept job orders which are subcontracted by major industries, also the big industries can get raw materials, tools and supplies from the small scale industries located in the vicinity or in the same community. Competing industries which encourage certain problems regarding raw materials, labour, wastage, disposal, pollution control etc., and also collectively negotiate with labour unions or government agencies.

iv) Finance and research facilities: A vailability of banks, financial institutions, and research and development laboratories is also factor which attracts new industries to a location.

v) Availability of water: Some industries such as chemical and paper industries require plenty of water for industrial use and hence must be located were water is available in abundance. Regularity of supply, cost and purity are considered regarding water supply to the plant. vi) Availability of fire fighting facilities: Since industrial units are prone to fire hazards, adequate fire fighting facilities must be available.

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vii) Local taxes and restrictions: The municipality or local administration has its own tax structure for industries and regulations regarding waste disposal, effluents and smoke emanated from the industries.

4) Selection of exact site: The selection of exact site for a plant is influenced by the following considerations:i) Area of land available, soil, topography and cost of land for certain industries such as agro industries, fertile soil is necessary, for industries requiring large area of land, availability of land and cost of land are important considerations .Topography is also considered because a hilly, rocky and rough terrain is unsuitable and involves expenditures level the site.

ii) Disposal of waste: Some industries such as chemical plants, leather industries, breweries, steel plant etc, have the problem of disposal of effluents and he site selected should have provision for this.

iii) Community attitude: The people living in the nearby areas surrounding the proposed site for the industry should not oppose the location of the plant. The reasons for negative attitude could be pollution, health hazards dangerous fumes emanating from the industries etc.

Plant layout: Plant layout also known as facilities layout refers to the configuration of departments, work centers and equipment and machinery with focus on the flow of materials or work through the production system. Pant layout of facility layout means planning for location of all machines, equipments, utilities ,work stations, customer service areas, material storage areas, tool servicing areas, tool cribs, rest rooms, lunch rooms, coffee/tea bays, offices and computer rooms and also planning for the patterns of flow of materials and people around into and with in the buildings.

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Need for layout decisions: The need for layout planning arises both in the process of designing new plants and the redesigning exiting plants or facilities.Most common reasons for design of new layouts are:

i) Layout is one of the key decisions that determine the long run efficiency in operations.

ii) Layout has many strategic implications because it establish n organizations competitive priorities in regard to capacity, processes, flexibility and cost as well as quality of work life, customer contact and image.

iii) An effective layout can help an organization to achieve a strategic advantage that supports differentiation, low, cost, fast response or flexibility.

iv) A well designed layout arises because of the following reasons:v) Inefficient operationsvi) Accidents, health hazards and low safety.vii) Changes in product design/service design.viii) Introduction of new product/services.ix) Changes in volume of output or product –mix changes.x) Changes in processes, methods or equipment.xi) Changes I environmental or legal requirements.xii) Low employee morale.

Objectives of good plant layout:1) Higher utilization of pace, equipment and people.2) Improved flow of materials, information and people.3) Improved employee morale and safe working conditions.4) Higher flexibility.5) Improved production capacity.6) Reduced material handling costs.7) Reduced congestion or reduced bottleneck centers.8) Reduced health hazards and accidents.9) Efficient utilization of labour, reduced idle time of labour and

equipments.10) To provide product flexibility and volume flexibility.11) To provide ease of supervision.12) To facilitate better coordination and face to face communication where needed to allow ease of maintenance.

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13) To utilize available space efficiently and effectively.14) To improve productivity.

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UNIT VII

Work study: Work study deals with the techniques of method study and work measurement, which are employed to ensure the best possible use of human, machine and material resource in carrying out a specified activity.

Definition of work study: Work study is defined as that body of knowledge concerned with the analysis of the work methods and the equipments used in performing a job, the design of an optimum work method and the standardization of proposed work methods. Work has contributed immeasurably to the search for better methods, and the effective utilization of this management tool has helped in the accomplishment of higher productivity. Work study is a management tool to achieve higher productivity in any organization whether manufacturing tangible products or offering services to its customers. Work study is also understood s a systematic, objective and critical examination of the factors effecting productivity for the purpose of improvement. It makes use of techniques of method study and work measurement to ensure the best possible use of human and material resources in carrying out a specific activity. Work study is defined by British Standard Institution as follows “a generic term for those technique, 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 factor which affect the efficiency and economy of the situation being revived in order to effect improvement.”

Objectives of work study: Work study is concerned with finding better ways of doing work and avoiding waste in all its forms. As such the objective of work study is to assist management to obtain the optimum use of the human, machine and material resources available to the organization for the accomplishment of the work upon which it is engaged.

The objectives of work study as time study are as follows:

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i) The main objective of work study is to improve productivity of current jobs and maximize productivity of jobs designed or the future, subject to constraints.

ii) To reduce waste through standardization work elements of a job.

iii) To increase industrial productivity through job standardization.

To analysis the present method of doing a job systematically, in order to develop a new and better method.To measure the work content of a job by measuring the time required to do the ob for a qualified worker and hence to establish the standard time for the job elements as well as the whole job.To improve labour To enable optimal utilization of plant and equipments.To ensure most effective utilization f human efforts.To determine efficient work methods.To evaluate human effort.To establish standards of performance for employees.To standardize the method, material and equipment used in the production process and also a establish an optimum sequence of operations and the plant layout that minimizes the materials handling time ad costTo increase productivity by ensuring the best possible use of all resources to achieve best quality product/service at minimum possible cost.

Advantages of work study: The advantages of work study as time study are as follows:

1) Uniform and improved production flow. 2) Higher productive efficiency.

3) Reduced manufacturing costs.4) Faster and accurate delivery dates.5) Better service to customers.6) Job security and job satisfaction to workers.7) Better working and other conditions.

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Work study is concerned with finding the facts about a situation and after a critical examination of theses facts, developing a new and better method of doing that work. It is defined as the existing and proposed ways of doing work and the development and application of easier and more productive method. Time study is concerned with the established of time standards for a qualified worker to platform a specified job at a defined level of performance. Method study must precede time study before any attempt is made to ensure and set standard for the various jobs concerned.

Work study procedure: There are eight basic steps involved in a work study procedure .some of them are common to both method study and work measurement these steps are:

1) Select the job or the process or the operation to be studied.2) Record all relevant facts about the job or processor operation using suitable charting techniques such as operation process chart, flow process chart, flow diagram, SIMO chart (simultaneous motion chart) and man-machine chart.3) Examine critically all the recorded facts, questioning the purpose, place, sequence, person and the means of doing the job /process/operation.4) Develop the new method for the job/process/operation.5) Measure the work content and establish the standard time using an appropriate work measurement technique, viz, time study using stop watch, synthesis method, analytical estimating method, pre-determined motion time system and work sampling.6) Define the new method for the job/process/operation.7) Install the new method as standard practice.8) Maintain the new method for the job/operation/process.

Motion study: Motion study is the science of eliminating wastefulness resulting from using unnecessary, ill directed and inefficient motion. The aim of motion study is to find and perpetuate the scheme of least waste methods of labour. Micro motion study provides a valuable technique for making minute analysis of those operations that are short in cycle, contain rapid

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movements and involve high production over a long period of time. For example, sewing of garments and assembling small parts. Micro motion study may be used for the following purposes in addition to its primary use for job analysis work:

i) To study the inter relationship among the members of a work group.

ii) To study the relationship between an operator and the machine which he operators.

iii) To obtain the time for an operation.iv) To establish a permanent record of the method of doing a job.

The usual procedure of performing micro motion study is to take motion picture of the operations, analyze the film and to prepare a SIMO chart from the results of the film analysis. In analyzing the film, very small time values may be obtained by reading a clock that appears in each of the motion pictures. The film is analyzed by breaking the job cycle into micro motion or therblings which indicates the basic body motion of the worker.

Therblings indicate the basic motions consisting of here parts, viz,

i) When the notion begins.ii) The nature of the motion.iii) When the motion ends.

The examples of therblings are:

1) Search: That part of the cycle during which, the eyes or the hands are hunting or groping for the object. Search begins when the eyes or hands begin to hunt for the object and ends when the objects have been found.

2) Select: The choice of one object from among several. Select refers to the hunting and locating of one object from among several.

Example: Locating a particular pencil in a box containing pencils, pens and miscellaneous articles.

3) Grasp: Taking hold of an object, closing the fingers around it, preparatory to picking it up, holding it or manipulating it.

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Example: closing the fingers around a pen on the desk.

4) Transport empty: Moving the empty hand in reaching for an object.Transport loaded: moving an object from one place to another.

5) Transport loaded: Moving an object from one place to another.

6) Hold: Retention of an object after it has been grasped, no movement of the object taking place.

7) Release load: Letting go of the object. Release load begins when the object starts to leave the hand, and ends when the object has been completely separated from the hand or finger.

8) Position: Turning or locating an object in such a way that it will be properly oriented to first in to the location for which it is intended.

Example: Lining up a door key preparatory to inserting it in the key hole.

9) Pre-position: locating an object in a pre –determined place or locating it in the correct position for same subsequent motion.

10) Inspect: Examining an object to determine whether or not it complies with standard size, shape, colour or other qualities previously determined.

11) Assemble: Placing one object into or no another object with which it becomes an integral part.

12) Disassemble: Separating one object from another object of which it is an integral part.

13) Use: Manipulating a tool, device or piece of apparatus for the purpose for which it was intended.

14) Unavoidable delay: A delay beyond the control of the operator.

15) Avoidable delay: Any delay of the operator for which he responsible and over which he has control.

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16) Plan: A mental reaction which precedes the physical movement, i.e, deciding how to proceed with job.

17) Rest for overcoming fatigue: A fatigue or delay factor or allowance provided to permit the worker to recover from fatigue incurrence by his work.

18) Find: Mental reaction at the end of search.

Method study: (Motion study) It is the systematic recording, analysis and critical examination of existing and proposed ways of doing work and the development and application of easier and new production methods.

Areas of application of method study: It can be applied to any field of work, but the most important areas where it plays a major role in improving productivity are as follows:

Improved layout of office, working areas of factories.Improved design of plant and equipment.Improved use of materials, plant, equipment and manpower.Most effective handling of materials.Improved flow of work.Standardized of methods and procedures.Improved safety standards.Better work in standards.

Objectives of method study: 1) To eliminate waste of time and labour.

2) To reduce Fatigue and boredom of work by avoiding unnecessary movements.3) To find the best way of doing a job.4) To have more effective utilization of materials, machines and workers.5) To improve the design or work place layout.6) To standardize the method, obtained after conducting the motion study.7) To train the individual worker in this practice as per standardized method.

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Steps in method study: Methods improvements involve systematic, orderly and scientific approach to problems. One should have an open mind, maintain a questioning attitude, collect all relevant facts, consult others including workers list reasons/causes for various effects.Decision must be taken after listing out all alternatives and evaluating them critically.

Method study procedure: 5 (BQDIM)The steps involved are as follows:

Step 1: Break up the operation of the job: The first step is to prepare list of all operations in the present method of manufacturing the job. All details such as materials handling, machine work hand work are included in this list. This may be done with the help of a process chart or diagrams, or motion and film analysis or models etc.

Step 2: Question each detail of the job: Questions are asked to yourself about the operations to be performed and the tools and equipment needed to perform them.Questions are asked on the following five points:

1) PURPOSE: What is the purpose of the operation? Does the operation fulfill the requirement? Whether the operation can be eliminated?

2) PLACE: Where is the best place to do this operation?

3) SEQUENCE: When is the best time to do this operation and whether it can be done at the same time as before or at any other better time?When will it be more suitable and economical?

4) PERSON: Who will do this operation? Who can do it in a better way?

5) MEANS: How this operation can be performed i.e, which machine and tool is to be used? Can the work be made safe and easier for both the equipment and the worker?

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Step 3: Develop a new method: After considering the above questions, a new better method is developed .the following facts should be thought over during motion study.

a) Eleminate: Think whether an operation can be eliminated without causing any harm.

b) Rearrange: Try to rearrange the sequence in order to save time.

c) Simplify: If the operation is possible with any other easy, safe and economical method that should be adopted. The work can be simplified by:Using jigs and fixtures.Using material handling equipment.Placing the materials, tools and equipment at proper working area.

Step 4: Installing the new method: For installing the new method developed, the following procedure is followed:Get approved the method by the supervisor’s workers and management Train the workers to work according to the new method.Observe the installed method until it runs satisfactorily.

Step 5: Maintaining the new method: After the implementation of the new method, care should be taken to maintain it to avoid unauthorized change in the method. The steps for proper maintenance are as follows:

a) A job instruction sheet should be given to the worker.b) Schedule checks should be done to compare what is actually being done against the job instruction sheet.c) Selection and training of persons must be done according to the job specifications for this new method.

Time study: This was originally proposed by Frederick Taylor and was later modified to include a performance rating (PK) adjustment. The time study is concerned to be one of the most widely used means of work measurement. Basically by using time study, an analyst will be taking a small sample of a

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

The steps of time study are as follows: 5 (FODDD)

Step 1: First the job to be studied. Break down the work content of the job into smallest possible elements then inform the worker and define the best method.

Step 2: Observe the time for appropriate number of cycles.

Step 3: Determine the average cycle time (CT)

Step 4: Determine the normal time (NT)

NT=CT (PR)

Where , PR is he performance rating

Step 5: Determine the standard time using the following formula.

ST=NT(AF)

Where AF=1/1-%AllowanceAF being the allowance factor.

Work measurement: Work measurement is done to determine how much time a job should take for completion.

Definition: Work measurement is defined as the application of techniques designed to establish the work content of a specified task by determining the time required for carrying out the task at a defined standard of performance by a qualified worker. The term qualified worker is defined as a representative average of those workers who are fully trained and are able to satisfactory perform the work involved in accordance with the requirements of the ob under considerations.

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The term normal pace is defined as the effective rate of performance of a qualified worker when working neither fast nor slow and giving due consideration to the requirements of the specific job. The term specific job is defined as the best possible method of a job under consideration.

Objectives of work measurement:

1) To determine how long it should take to do a job.2) Improved planning and control of activities or operations.3) To compare alternative methods developed by method study in order to establish the work content of each method and thereby select the most economical method.4) More efficient manning of the plant i.e, determining the number of employees needed for doing various kids of jobs in a plant based on the knowledge of the amount of time needed to do each job. The analysis of the idle time and efficient time inherent in the performance of each job allows effective allotment of work and also to determine the manpower required.5) Reliable indices for evaluating labour performance and to determine labour efficiency.6) Reliable basis for labour cost control.7) To provide a sound basis for designing incentive schemes.8) To provide inputs to scheduling and budgeting

Benefits of work measurement:

Work measurement helps:

1) To de develop a basis for comparing alternate methods developed in method study by establishing the work content in each method of doing the job.2) To prepare realistic work schedule buy accurate assessment of human work.3) To set standards of performances for labour utilization by establishing the labour standards for an element of work, operation or product under ordinary working condition.4) To compare actual time taken by the worker with the allowed time for proper control of labour.5) To assist in labour cost estimation.

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6) To provide information related to estimation of tenders, fixation of selling price and assessment of delivery schedule.

Steps in work measurement: 7 (BREAADA)

The various steps are:1) Break the job into element.2) Record the observed time for each element by means of either time

study, synthesis or analytical estimating method.3) Establish elemental time values by extending observed time into

normal time for each element by applying a rating factor.4) Assess relaxation allowance for personal needs and physical and

mental fatigue involved in carrying our each element.5) Add the relaxation allowance time to the normal time for each

element to arrive at the work content.6) Determine the frequency of occurrences of each element in the job,

multiply the work content of each element by its frequency and add up the times to arrive at the work content for the job.

7) Add contingency allowance if any to arrive at the standard time to do the job.

Uses of work measurements:1) To determine time standards to be used for providing a basis for

wage-incentive plans.2) To determine time standards to be used as a basis for labour cost

control.3) To establish supervisory objectives and to provide a basis for

measuring supervisory efficiency.4) It is used as an aid in preparing budgets.5) It is used to determine standard costs.6) It is used in planning work and in drawing out schedules.7) It is used in balancing production lines for new products/models.8) It is used in determining machine effectiveness.9) It is used in balancing crew activities of those jobs requiring several

workers.

The organization receives several inputs as indicated on the left hand side and converts them into useful products and services using its facilities. In the process of conversion, there will be some deviations into the products

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attributes like quality size, shape and number of units produced. Just to cope up with the predetermined plans and policies, it is highly essential to communicate these deviations to the input stage in the form of feedback for making necessary corrections.

A sample list of corrections is presented below:Tight quality check on the incoming raw materials.Adjustment of machine settings.Change of tools.Proper allocation of operations to machines with matching skills.Change in the production plans like increase or decrease or decrease in volume of production.Rigid in process quality programme to void rework.

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