Production & Operation ManagementProf. G.PurandaranB.E. (Mechanical), M.Tech ( Maintenance Engineering & Management)- I.I.T-Madras: P.G.D.M ( Marketing & International Business) -I.I.M-Bangalore

Production & Operation ManagementProduction & Operations ManagementObjectivesTo familiarize the concepts of production & operations management systemsAnd to appraise customer expectations of quality and relationships And update and technologies to meet global competition And to understand functions of interrelations departments And decisions involved therein for effective operations management

POM1.Operations ManagementPlant Location Criteria, Plant Layout Types: Product, Process, Cell layout, Fixed station, Merit & Demerits: Volume Variety relationship, Modern practices of Production management, Line Balancing, Desired Output, Limited Resources, Product Design Criteria, Work Study, Method Study, Work Measurement, Various Techniques of Method Study and work measurement + Problems.

2.Quality ManagementInspection Vs Quality, Seven Stages of Quality, ISO 9000 & ISO 14000, Seven Tools of Quality Circles, Pareto Chart, Causes and Effect Diagram, Histogram, Stratification, Scatter Diagram, Control Charts, Check Sheets, Concept of Total Quality Management + Problems, Excellence in all sub-system Leading to Organizational Excellence, Introduction to Six Sigma, QFD and FMEA & POKAYOKE, Vender Development and Vendor Quality Rating Cases- How to improve Quality

POM3.Maintenance ManagementDifferent Types of maintenance: Breakdown, Preventive, Predictive, Condition maintaining, Total Productive Maintenance ( TPM), Concept of OEE ( Overall Equipment Effectiveness) + Problem, Concept of 5S House Keeping

POM4.PlanningMaterial Requirement Planning ( MRP), Enterprise Resource Planning ( ERP), Production planning & Control, Master Production Schedule, Yearly Planning- to Quarterly to Monthly to weekly-to daily, Capacity planning and Assessment, Line Balance, Cost Control Vs Cost Reduction, Concept of value Engineering

POM5.Material managementInventory management; RMC Inventory, ABC Analysis, JIT, Lead-time management, Pareto Principles,, WIP: Lean manufacturing, Line balancing, SPC,FGS: Push Vs Pull System, Advantages of Pull System, Spares: EOQ & Breakeven analysis to reduce total inventory cost, supply chain management & Logistics management- Introduction

POM6.Manufacturing TechnologyCIM/CAD Introduction, Automation, concept of special purpose m/c, (SPMs), Designing Production Systems at Shop Floor, Work Instructions, Standard Operating Procedure, Monitoring Productivity Measurement, Productivity, Quality, Breakdowns & etc.,Books:POM: SN Chary/ Upendra Kachru / Chunawalla & Patel / Martin K Starr/ Mahadevan/ Kansikha Bedi/ : OM: William Stevenson/ Norman Gaither & Greg Fraizer

POM-OverviewProducing Products demanded by Customers is a Challenging Job todayProduction managers are involved in:PlanningOrganizingCoordinatingExecutingControlling

Production Vs ManufacturingProduction implies the creation of Goods and services to satisfy Human needs

A process of creating goods ( Tangibles) as well as services ( Intangibles)

Manufacturing is the process of producing only tangible goods

Manufactured Products ServicesTangible outputsIntangible outputsProducts can be inventoriedOutputs cannot be inventoriedLittle customer contactExtensive customer contactLong lead timesShort lead timesCapital intensiveLabour intensiveProduct quality easily Service quality determined determined with difficultyDistinction between products and services

Difference between Goods and Services

Value-Added-ProcessThe difference between the cost of inputs and the value or price of outputs.

Conversion Process Used in Production System

Production SystemInputsConversion ProcessOutputsSteel PlantIron Ore, Coal/Coke, limestone, labor, M/cSmelting, RollingSteel sections, SheetsRestaurantsHungry Customers, Chefs, Services, EquipmentsCooking & serving foodsSatisfied CustomerAutomobileRaw materials & components, machinery, laborFabrication of parts & assembly of automobilesAutomobiles

Conversion Process Used in Production System

Production SystemInputsConversion ProcessOutputsOil RefineryCrude Oil, Equipments, laborChemical processes (Fractional distillation)Petroleum ProductsSupermarketsCustomer with needs, sales personSelling / RetailingSatisfied CustomersCollege or universityHigh School / Students, TeacherTeaching ( Imparting Knowledge + Skills)Graduated Person

Different brands of cars

AcuraLamborghiniAston martinLand RoverAudiLexusBentleyLincolnBMWLotusBugattiMazdaBuickMercedes'-BenzCadillacMercuryChevroletMitsubishiChryslerNissanDodgePorscheFerrariRolls-RoyceFordSaabGMCSaturnHondaScionHummerSmartHyundaiSubaruInfinitiSuzukiJaguarTeslaJeepToyotaKiaVolvo

Acura.

Aston Martin.

Audi.

Model with Hyundai car.

Toyota car with Models

Honda car.

Nissan Car.

Lamborghini.

Automobile Assembly line.

Toyota plant location

Nuclear Power plant in France78.8% powerSelective screeningLand/water availabilitySeismotectonic areasHydrology, geologyLand use, meteorologyTransmission linesDemography topographyecology

Underground Storage of LPG

Channel Tunnel: London to Paris

Plant Location

CriterionWeightingPossible Factory LocationABCDEPROXIMITY TO:Skilled labour72143210017428A pool of unskilled labour 854021600432216A motorway732121417321428An airport4143124162828The sea / a river02050502010Housing542031500315420Amenities531521000210315Potential for expansion721417535321214Availability of grants/incentives81821654018324Safety236245102424Planning constraints5210315525420210Environmental impact4312284161428TOTAL164138149150175

Facility Location

Facility Layout

Layout GoalsUse space efficientlyEfficient personnel movementMaximum equipment utilizationConvenient / safe work environmentSimplify repair / maintenanceSmooth flow of work*

Products, Processes, and Layouts*Make-to-stock standardized commoditiesContinuous process industries repetitive mfgProduct LayoutAssemble-to-order modularHybrid, FMS, CAM, CIMCellular LayoutJob-Shop(intermittent)Process LayoutEngineer-to-order one-of-kindSpecial ProjectFixed PositionPRODUCTSPROCESSESLAYOUTS Make-to-order customlow volume,low varietylow volume,high varietylow volume,medium varietyhigh volume,low variety

Fixed Position Layout*The product or project remains stationary, and workers, materials, and equipment are moved as needed.

Examples: Home building, ship and aircraft buiding, drilling for oil

Manufacturing Method-project form.

Building a Hospital :project

Process Layout*Similar processes (or processes with similar needs) are located togetherBy grouping similar processes utilization of resources is improved Customers, products, patients move through the processes according to their needsDifferent products = different needs = different routesComplex flow pattern in the operationExamples: Supermarkets, job-shops, hospitals

Process Layouts6-*

Product Layout*Sometimes called line layout, flow line or assembly lineParts follow a specified route the sequence of workstations matches with the sequence of required operationsWork Flow is clear, predictable, easy to controlExamples: Car assembly, paper manufacture, self-service canteen

Product Layout6-*Raw materialsor customerFinished itemStation 2 Station 3Station 4 Material and/or laborStation 1Material and/or laborMaterial and/or laborMaterial and/or laborUsed for Repetitive or Continuous Processing

Cellular Layoutsmachines are grouped into a cell that can process items that have similar processing requirementsBased on Group technology which involves grouping items with similar design or manufacturing characteristics into part families

Could be considered as mini product layoutsCan improve and simplify a functional/process layoutFlexibleDuplicates some resources6-*

WorkersInventory

Storage spaceMaterial handlingAislesSchedulingLayout decisionGoal

AdvantageLimited skillsLow in-process, high finished goodsSmallFixed path (conveyor)NarrowLine balancing (Easier)In-line, U-typeEqualize work at each stationEfficiencyProcessComparison of Product and Process LayoutsHigh skillsHigh in-process, low finished goodsLargeVariable path (forklift)WideDynamic (More difficult)FunctionalMinimize material handling costFlexibilityProduct

Product Volume and Variety*ProductLayoutsFixedPositionLayoutsMixed LayoutsProcess LayoutsQuantityNumber of Different ProductsCellular

Product Flow Control*Batch Processing (Process Layout)From a couple to several thousands identical partsA batch for each different part typeMove together through the production systemMay split for material handling or to reduce processing time Examples are clothing, furniture productionRepetitive or Flow processing (Product Layout)Continuous chemicals, foods, pharmaceuticalsDiscrete car, refrigerator production

Setup Costs Affect The Batch SizeCost and time to set up production facilities to manufacture a specific product affect the batch size.When changeover time (setup time) and cost are large, the size of batch is kept large.Large batch sizes result in high inventory cost.*

Production Choices*Make-to-stockNumber of units of each product are kept on hand at all timesQuick delivery to customers upon receipt of an orderWhen delivery response time is a key competitive factorLimited number of products manufactured repeatedlyAn idea what customers will wantAllows to schedule production in advanceMake-to-orderOnly produce items after they have been orderedProduction system must respond quicklyProducts have high degree of customizationShelf life of products is shortAssemble-to-orderCustomers have influence on the designThey can select various options from predesigned subassemblies

Modern Practices of Production Operations ManagementMNCs are financially sound and they spend money on R & D to gain competitive advantage. MNCs take advantage of location economies.

Strategic IssuesIn operations management, an MNC needs to made decisions on several strategic issues. The following are the important issues:Sourcing and vertical integration.Facilities locationStandardization of production facilitiesContract manufacturingSupply chain managementManaging service operationsInternational quality standardsInternationalisation of R&D, andManaging technology transfers.

Outsourcing Outsourcing is the act of moving some of a firms internal activities and decision responsibility to external providers.Country, technology, product, government policies and Organisational factors need to consider facility locations in global market.Resource availability infrastructure, and host community are the country factors.Value to weight ratio and universal need are the two product-factors.Incentives, subsidies, trade barriers, local product standard are the prime government factors.

Modern TrendsGrowth in Service Sector:70 to 80% in the near futureManaging service quality and productivity offers is a great challengeProductivity ChangesOutput/input ?Material cost/labor cost/energy cost increasingUtilization of resources like machinery/material/improving quality of output and reduce wastages

Modern trendGlobal competition :The worldwide customers evaluate quality of products on:PerformanceFeaturesReliabilityServiceabilityDurabilityAppearanceCustomer Service safety

Modern trendCompetition based on Quality, Time and TechnologyConformance to qualityProduct ReliabilityDelivery DependabilityPerformance QualityLow PriceSpeedy New Product IntroductionJIT/TQM/Factory AutomationAdvances in Computer technology/Robotics/Automated Manufacturing System (CAD,CAM,CIM,FMS System)

Modern trendEnvironmental, Ethical, Work force DiversityResponsibility that go beyond producing goods and services for profitsHelp solve social problemsRespond to the needs of the customers, society and public rather than shareholders aloneHave impact beyond simple marketplace transactionServe a range of human values

Line BalancingLine Balancing:

Arranging a production line so that there is an even flow of production from one work station to the next, so that there are no delays at any work station that will leave the next work station with idle time.

Line balancing

Product Design

Product DesignTwo different movementThree dial shapeTwo dial sizeThree diff colors=36 variety

Product Design, Process Design and Production DesignProduct Design: Concerned with form and function of a product. It refers to the arrangement of elements or parts that collectively form a product.Process Design: Concerned with the overall sequence of operations required to achieve the design specification of the product.Production Design: Concept of designing products from the point of view of producibility.

Importance of Product DesignA good product design can improve the marketability of a product by making it easier to operate or use, upgrading its quality, improving its appearance, and/or reducing manufacturing costs.An excellent design provides competitive advantage to the manufacturer, by ensuring appropriate quality, reasonable cost and the expected product features.

Objectives of Product Design(i)The overall objective is profit generation in the long run.(ii)To achieve the desired product quality.(iii)To reduce the development time and cost to the minimum.(iv)To reduce the cost of the product.(v)To ensure producibility or manufacturability (design for manufacturing and assembly).

What does product design do?Translating customer needs and wants into product and services requirements ( marketing)Refining existing products ( marketing)Developing new products ( marketing, product design, production )Formulating quality goals ( quality assurance, production )Formulating cost structures (Accounting )Constructing and testing prototype ( marketing, production )

Steps Involved in Work Study

Work Study.

Work Measurement and ProductivityPresented by:Prof.G.PurandaranM.Tech (I.I.T-M),PGDM (I.I.M-Bangalore)

Work MeasurementWork Measurement: establish a measurable work standard upon which to evaluate, compare and improve labor productivity.Work (labor) Standard: Determine on average-how many labor-hour are required to produce one unit of desired output for a well-trained worker under normal operating conditions

Work Measurement ContinueLevel of standard: * Operations/Department/Plant standards * Element/Operations/Product standardsUse of work standard: * Work and personnel planning * Cost estimation for labor and machineTechniques to set work standard: * Time study * Work sampling * Elemental timing * Predetermined motion-time study

Three Levels of StandardsProduction and operations standards: individuals job standardsDepartment standards: sum of performance of the individual and team in a departmentPlant standards: quantity and labor standards of the plant are the goals management strives to meet

Evaluation PerformanceEvaluating individual performance: subsequent compensationEvaluating department performance: subsequent supervisor compensationEvaluating process design, layout, and work methodsEstimating expense and revenue streams in equipment evaluation as alternative are comparedFormulating standards costs

How to Determine Average Worker Standard ? Example from Distribution of 100 Workers Sample

Number of Workers SampledPerformance in UnitsPer HourMean510-1412*5%=0.62015-1917*20%=3.44520-2422*45%=9.92525-2927*25%=6.75530-3432*5%=1.6100Total =22.5

Work Measurement Time StudyStandards time=

Normal time= (average cycle time)* (rating factor)

Average cycle time=

Allowance fraction= fraction of time for personal needs, unavoidable work delays, fatigueNormal time(1-allowance)Time recorded to perform an elementNumber of cycles observed

Work Measurement- Work SamplingPurpose: To estimate what proportion of a workers time is devoted to work activitiesMain Issues: What level of statistical confidence is desired in the results?How many observations are necessaryPrimary Applications:Time standards: to obtain the standards time for a task

Work Measurement- Work Sampling FormulasNormal Time= Total Study Time *Proportion of Time EmployeeObserved Working *PerformanceRating FactorNumber of Units ProducedProportional ofTime EmployeeObserved Working=Number of observations in which working occurredNumber of ObservationsOrP =xn

Work Measurement- Work Sampling FormulasExample:N= 100 (observations)X= 83 (sampled worker is working)P= 83/100 = 0.83

Given:Total Study Time = 37.5 (hours)Rating Factor = 1.05Number of Units Produced = 100

Normal Time:= (37.5*0.83*1.05)/100 = 1/3 (hours) = 20 (min)

Labour ProductivityOne resource input single-factor productivityProductivity Calculation

Example

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