Unit 1 Transformational Process Model

The Transformational Process Model

This section introduces the transformation model for analysing operations. This is shown in Figure 1, which represents
the three components of operations: inputs, transformation processes and outputs. Operations management involves
the systematic direction and control of the processes that transform resources (inputs) into finished goods or
services for customers or clients (outputs). This basic transformation model applies equally in manufacturing and
service organisations and in both the private and not-for-profit sectors.
Inputs

Some inputs are used up in the process of creating goods or services; others play a part in the creation process but
are not used up. To distinguish between these, input resources are usually classified as:

Transformed resources – those that are transformed in some way by the operation to produce the goods or services
that are its outputs

Transforming resources – those that are used to perform the transformation process.

Inputs include different types of both transformed and transforming resources.

Three types of resource that may be transformed in operations are:

materials – the physical inputs to the process

information that is being processed or used in the process

customers – the people who are transformed in some way.

Many people think of operations as being mainly about the transformation of materials or components into finished
products, as when limestone and sand are transformed into glass or an automobile is assembled from its various
parts. But all organisations that produce goods or services transform resources: many are concerned mainly with the
transformation of information (for example, consultancy firms or accountants) or the transformation of customers
(for example, hairdressing or hospitals).

The two types of transforming resource are:

staff – the people involved directly in the transformation process or supporting it

facilities – land, buildings, machines and equipment.

The staff involved in the transformation process may include both people who are directly employed by the
organisation and those contracted to supply services to it. They are sometimes described as ‘labour’. The facilities of
an organisation – including buildings, machinery and equipment – are sometimes referred to as ‘capital’. Operations
vary greatly in the mix of labour and capital that make up their inputs. Highly automated operations depend largely on
capital; others rely mainly on labour.

Transformation processes

A transformation process is any activity or group of activities that takes one or more inputs, transforms and adds
value to them, and provides outputs for customers or clients. Where the inputs are raw materials, it is relatively easy
to identify the transformation involved, as when milk is transformed into cheese and butter. Where the inputs are
information or people, the nature of the transformation may be less obvious. For example, a hospital transforms ill
patients (the input) into healthy patients (the output).

Transformation processes include:

changes in the physical characteristics of materials or customers

changes in the location of materials, information or customers

changes in the ownership of materials or information

storage or accommodation of materials, information or customers

 changes in the purpose or form of information

changes in the physiological or psychological state of customers.

Often all three types of input – materials, information and customers – are transformed by the same organisation. For
example, withdrawing money from a bank account involves information about the customer's account, materials such
as cheques and currency, and the customer. Treating a patient in hospital involves not only the ‘customer's’ state of
health, but also any materials used in treatment and information about the patient.

Outputs

The principal outputs of a doctor's surgery are cured patients; the outputs of a nuclear reprocessing plant include
reprocessed fuel and nuclear waste. Many transformation processes produce both goods and services. For example, a
restaurant provides a service, but also produces goods such as food and drinks.

Transformation processes may result in some undesirable outputs (such as nuclear waste in the example above) as
well as the goods and services they are designed to deliver. An important aspect of operations management in some
organisations is minimising the environmental impact of waste over the entire life cycle of their products, up to the
point of final disposal. Protecting the health and safety of employees and of the local community is thus also the
responsibility of operations management. In addition, the operations function may be responsible for ethical behaviour
in relation to the social impact of transformation processes, both locally and globally. For example, in the United
States, manufacturers of sports footwear have come under fire for employing child labour and paying low wages to
workers employed in their overseas factories.

Operations

Operations transform resource or data inputs into desired goods, services, or results, and create and deliver value to
the customers. Two or more connected operations constitute a process, and are generally divided into four basic
categories:

1. Processing,
2. Inspection,
3. Transport, and
4. Storage.

Types of Operation

1. Job Shops
2. Batch Processing
3. Repetitive/Assembly
4. Continuous Processing
5. Projects

Operations management is concerned with the design, management, and improvement of the systems that create the
organisation's goods or services. The majority of most organisations’ financial and human resources are invested in
the activities involved in making products or delivering services. Operations management is therefore critical to
organisational success.

Job Shops:
Small lots, low volume, general equipment, skilled workers, high-variety.
Ex: tool and die shop, veterinarian’s office
 Batch Processing:
Moderate volume and variety, but variety among batches.
Ex: paint production, BA3352 sections
Repetitive/Assembly:
Semi continuous, high volume of standardized items, limited variety.
Ex: auto plants, cafeteria
Continuous Processing:
Very high volume an no variety.
Ex: steel mill, chemical plants
Projects:
Non-routine jobs.
Ex: preparing BA3352 midterm

Operations managers

Operations managers play a leading role in managing both raw materials and personnel. Oversight of inventory,
purchasing and supplies is central to the job. Human resources tasks include determining needs, hiring employees,
overseeing assignment of employees and planning staff development.

Responsibilities and Duties

1. Manage and direct operations team to achieve business targets.

2. Assist in developing or updating standard operating procedures for all business operational activities.
3. Build strong relationship by addressing customer issues and complaints in a timely manner.
4. Assist in employee appraisals, promotions, compensation and termination based on the performance review.
5. Provide operational support and guidance to staff.
6. Assist in developing operating and capital budgets.
7. Monitor and control expense according to allotted budget.
8. Assist in interviewing, recruiting and training candidates.
9. Manage work assignment and allocation for staff.
10. Conduct performance review and provide performance feedback to staff.
11. Maintain accurate and clear documentation for operational procedures and activities.
12. Work in compliance with company policies and procedures.
13. Ensure team follows standard operating procedures for all operational functions.
14. Conduct regular meetings with team to discuss about issues, concerns, updates etc.
New Product development

New Product development is a journey. It’s the road which leads to the actual product and then the actual product to
the market. Every product goes through a number of stages before being introduced in the market.

Idea Generation

The first stage of the New Product Development is the idea generation. Ideas come from everywhere, can be of any
form, and can be numerous. This stage involves creating a large pool of ideas from various sources, which include

Internal sources – many companies give incentives to their employees to come up with workable ideas.

SWOT analysis – Company may review its strength, weakness, opportunities and threats and come up with a
good feasible idea.

Market research – Companies constantly reviews the changing needs, wants, and trends in the market.

Customers – Sometimes reviews and feedbacks from the customers or even their ideas can help companies
generate new product ideas.

Competition – Competitors SWOT analysis can help the company generate ideas.

Idea Screening

Ideas can be many, but good ideas are few. This second step of new product development involves finding those good
and feasible ideas and discarding those which aren’t. Many factors play a part here, these include –

Company’s strength,

Company’s weakness,

Customer needs,

Ongoing trends,

Expected ROI,

Affordability, etc.
Concept Development & Testing

The third step of the new product development includes concept development and testing. A concept is a detailed
strategy or blueprint version of the idea. Basically, when an idea is developed in every aspect so as to make it
presentable, it is called a concept.

All the ideas that pass the screening stage are turned into concepts for testing purpose. You wouldn’t want to launch a
product without its concept being tested.

The concept is now brought to the target market. Some selected customers from the target group are chosen to test
the concept. Information is provided to them to help them visualize the product. It is followed by questions from both
sides. Business tries to know what the customer feels about the concept. Does the product fulfil customer’s need or
want? Will they buy it when it’s actually launched?

Their feedback helps the business to develop the concept further.

Business Strategy Analysis & Development

The testing results help the business in coming up with the final concept to be developed into a product.

Now that the business has a finalized concept, it’s time for it to analyse and decide the marketing, branding, and other
business strategies that will be used. Estimated product profitability, marketing mix, and other product strategies are
decided for the product.

Other important analytics includes

Competition of the product

Costs involved

Pricing strategies

Breakeven point, etc.

Product Development

Once all the strategies are approved, the product concept is transformed into an actual tangible product. This
development stage of new product development results in building up of a prototype or a limited production model. All
the branding and other strategies decided previously are tested and applied in this stage.

Test Marketing

Unlike concept testing, the prototype is introduced for research and feedback in the test marketing phase. Customers
feedback are taken and further changes, if required, are made to the product. This process is of utmost importance as
it validates the whole concept and makes the company ready for the launch.

Commercialization

The product is ready, so should be the marketing strategies. The marketing mix is now put to use. The final decisions
are to be made. Markets are decided for the product to launch in. This stage involves briefing different departments
about the duties and targets. Every minor and major decision is made before the final introduction stage of the new
product development.
Product design

- the process of defining all of the companies product characteristics

- product design must support product manufacturability (the ease with which a product can be made)

- product design defines a product’s characteristics of

appearance,
materials,
dimensions,
tolerances, and
performance standards

Product Design Process

Step 1 - Idea Development - Someone thinks of a need and a product/service design to satisfy it: customers,
marketing, engineering, competitors, benchmarking, reverse engineering

Step 2 - Product Screening - Every business needs a formal/structured evaluation process: fit with facility and labor
skills, size of market, contribution margin, break-even analysis, return on sales

Step 3 – Preliminary Design and Testing - Technical specifications are developed, prototypes built, testing starts

Step 4 – Final Design - Final design based on test results, facility, equipment, material, & labor skills defined, suppliers
identified

Process selection is based on five principal considerations

1. Product-Process Grid
2. Degree of vertical integration
3. Flexibility of resources
4. Mix between capital & human resources
5. Degree of customer contact
Design of Services

Service design is unique in that the service and entire service concept are being designed must define both the service
and concept

- Physical elements, aesthetic & psychological benefits

e.g. promptness, friendliness, ambiance

Product and service design must match the needs and preferences of the targeted customer group

Services are different from manufacturing as they;

Produce intangible products

Involve a high degree of customer contact

Type of service is classified according to degree of customer contact

 Service Characteristics
o Pure services
o Quasi-Manufacturing
o Mixed services
 Service Package
o The physical goods
o The sensual benefits
o The psychological benefits
 Differing designs
o Substitute technology for people
o Get customer involved
o High customer attention
 Unit 2 Process Types in Manufacturing

Processes are the essence of operations management. They transform inputs into outputs. More than products or
technologies, the ability to do things well--processes--constitutes a firm's competitive advantage.

Process strategy is an organization's overall approach for physically producing goods and services. Process decisions
should reflect how the firm has chosen to compete in the marketplace, reinforce product decisions, and facilitate the
achievement of corporate goals. A firm's process strategy defines its:

Capital intensity: The mix of capital (i.e., equipment, automation) and labor resources used in the productive
process,

Process flexibility: The ease with which resources can be adjusted in response to changes in demand,
technology, products or services, and resource availability,

Vertical integration: The extent to which the firm will produce the inputs and control the outputs of each
stage of the productive process, and

Customer involvement: The role of the customer in the productive process.

Nature of product:

In intermittent production system, goods are produced based on customer orders and not for stocking.

In continuous production system, goods are produced based on demand forecast and for stocking.

Flexibility of process:

In intermittent production system, production process is flexible. The product design goes on changing.

In continuous production system, production process is not flexible. It is standardized. The same product is
manufactured continuously.

Scale of production:

In intermittent production system, goods are produced on a small scale, so there is no economies of scale.

In continuous Production System, goods are produced on a large scale, so there are economies of large-scale
production.

Per unit cost:

In intermittent production system, cost per unit may be higher because production is done on a small-scale.

In continuous production system, cost per unit may be lower because production is done on large-scale.

Range of products:

In intermittent production system, wide ranges of products are manufactured.

In continuous production system, normally one particular type of product is manufactured.

Staff:

Intermittent production system requires staff with high technical skills and abilities.

Continuous production system requires more managerial skills and less technical skills.

Instructions:

In an intermittent production system, many detailed instructions must be provided depending upon the customer's
specification.

In continuous production system, single set of instructions is sufficient for operation. Here, there is no need to repeat
the instructions.

Storage of final products:

In an intermittent production system, there is no need to store and stock the final products, because items are
produced as per customer's orders.

In a continuous production system, there is a need to store and stock the final products until they are demanded in the
market.

Location change:
In an intermittent production system, change in location is easy.

In a continuous production system, change in location is difficult.

Capital invested:

In an Intermittent production system, capital invested is small.

In a continuous production system, capital invested is very huge.

Job-Shop Production

Job-shop production are characterized by manufacturing one or few quantity of products designed and produced as
per the specification of customers within prefixed time and cost. The distinguishing feature of this is low volume and
high variety of products.

A job-shop comprises of general-purpose machines arranged into different departments. Each job demands unique
technological requirements, demands processing on machines in a certain sequence.

Job-shop Production is characterized by:

1. High variety of products and low volume.

2. Use of general purpose machines and facilities.

3. Highly skilled operators who can take up each job as a challenge because of uniqueness.

4. Large inventory of materials, tools, parts.

5. Detailed planning is essential for sequencing the requirements of each product, capacities for each work centre and
order priorities.

Advantages

Following are the advantages of Job-shop Production:

1. Because of general purpose machines and facilities variety of products can be produced.

2. Operators will become more skilled and competent, as each job gives them learning opportunities.

3. Full potential of operators can be utilized.

4. Opportunity exists for Creative methods and innovative ideas.

Limitations

Following are the limitations of Job-shop Production:

1. Higher cost due to frequent set up changes.

2. Higher level of inventory at all levels and hence higher inventory cost.

3. Production planning is complicated.

4. Larger space requirements.

Batch Production

Batch Production as a form of manufacturing in which the job pass through the functional departments in lots or
batches and each lot may have a different routing.

It is characterized by the manufacture of limited number of products produced at regular intervals and stocked
awaiting sales.

Batch Production is characterized by

1. Shorter production runs.

2. Plant and machinery are flexible.

3. Plant and machinery set up is used for the production of item in a batch and change of set up is required for
processing the next batch.

4. Manufacturing lead-time and cost are lower as compared to job order production.

Advantages

Following are the advantages of Batch Production:

1. Better utilization of plant and machinery.

2. Promotes functional specialization.

3. Cost per unit is lower as compared to job order production.

4. Lower investment in plant and machinery.

5. Flexibility to accommodate and process number of products.

6. Job satisfaction exists for operators.

Limitations

Following are the limitations of Batch Production:

1. Material handling is complex because of irregular and longer flows.

2. Production planning and control is complex.

3. Work in process inventory is higher compared to continuous production.

4. Higher set up costs due to frequent changes in set up.

Mass Production

This production system is justified by very large volume of production. The machines are arranged in a line or product
layout. Product and process standardization exists and all outputs follow the same path.

Mass Production is characterized by

1. Standardization of product and process sequence.

2. Dedicated special purpose machines having higher production capacities and output rates.

3. Large volume of products.

4. Shorter cycle time of production.

5. Lower in process inventory.

6. Perfectly balanced production lines.

7. Flow of materials, components and parts is continuous and without any back tracking.

8. Production planning and control is easy.

9. Material handling can be completely automatic.

Advantages

Following are the advantages of Mass Production:

1. Higher rate of production with reduced cycle time.

2. Higher capacity utilization due to line balancing.

3. Less skilled operators are required.

4. Low process inventory.

5. Manufacturing cost per unit is low.

Limitations

Following are the limitations of Mass Production:

1. Breakdown of one machine will stop an entire production line.

2. Line layout needs major change with the changes in the product design.

3. High investment in production facilities.

4. The cycle time is determined by the slowest operation.

Continuous Production

Production facilities are arranged as per the sequence of production operations from the first operations to the
finished product. The items are made to flow through the sequence of operations through material handling devices
such as conveyors, transfer devices, etc.

1. Dedicated plant and equipment with zero flexibility.

2. Material handling is fully automated.

3. Process follows a predetermined sequence of operations.

4. Component materials cannot be readily identified with final product.

5. Planning and scheduling is a routine action.

Advantages

Following are the advantages of Continuous Production:

1. Standardization of product and process sequence.

2. Higher rate of production with reduced cycle time.

3. Higher capacity utilization due to line balancing.

4. Manpower is not required for material handling as it is completely automatic.

5. Person with limited skills can be used on the production line.

6. Unit cost is lower due to high volume of production.

Limitations

Following are the limitations of Continuous Production:

1. Flexibility to accommodate and process number of products does not exist.

2. Very high investment for setting flow lines.

3. Product differentiation is limited.

Classification of Services

Services can classified based on

1. Nature of service act and the recipient of service

2. Customization required by customer and the judgment of customer contact personnel
3. The nature of demand for the service relative to supply
4. Common problems across service industries in terms of degree of labor intensity and degree of interaction
and customization.

The Service-Process matrix

Service Process matrix proposed by Roger Schmenner, 1986 is based on degree of labor intensity and degree of
interaction and customization as shown in figure.

Degree of labour intensity

-Ratio of labor cost to capital cost

Degree of Interaction and customization

-Ability of customer to affect personally the nature of the service being delivered

Mostly used classification is represented by Service Process matrix

The classification as per service process matrix is shown in Figure is based on following

Degree of labor intensity

-Low

-High

Degree of Interaction and Customization

-Low

-High

In the service process matrix, service sectors pertaining to each quadrant faces managerial challenges as shown in
Figure.

Low interaction/low customization: Service Factory

-Marketing; Attention to physical surroundings

High interaction/high customization: Professional Service

-Cost control; Quality; Advancement of employees; Flat hierarchy; Employee loyalty

Low labor intensity:

-Capital decisions; Technology advances; Peak/Off-peak management; Scheduling service delivery

poses challenges for service organizations belongs to Service factory and service shop.

High labor intensity:

 -Hiring and training; Development of methods and Workforce scheduling poses challenges in mass
services and professional services

Plant location

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

1. General locational factors, which include controllable and uncontrollable factors for all type of organisations.

2. Specific locational factors specifically required for manufacturing and service organisations.

Following are the general factors required for location of plant in case of all types of organisations.

CONTROLLABLE FACTORS

1. Proximity to markets

2. Supply of materials

3. Transportation facilities
4. Infrastructure availability

5. Labour and wages

6. External economies

7. Capital

UNCONTROLLABLE FACTORS

8. Government policy

9. Climate conditions

10. Supporting industries and services

11. Community and labour attitudes

12. Community Infrastructure

1. Proximity to markets: Every company is expected to serve its customers by providing goods and services at the time
needed and at reasonable price organizations may choose to locate facilities close to the market or away from the
market depending upon the product. When the buyers for the product are concentrated, it is advisable to locate the
facilities close to the market.

Locating nearer to the market is preferred if

• The products are delicate and susceptible to spoilage.
• After sales services are promptly required very often.
• Transportation cost is high and increase the cost significantly.
• Shelf life of the product is low.
Nearness to the market ensures a consistent supply of goods to customers and reduces the cost of transportation.

2. Supply of raw material: It is essential for the organization to get raw material in right qualities and time in order to
have an uninterrupted production. This factor becomes very important if the materials are perishable and cost of
transportation is very high.

General guidelines suggested by Yaseen regarding effects of raw materials on plant location are:

• When a single raw material is used without loss of weight, locate the plant at the raw material source, at
the market or at any point in between.

• When weight loosing raw material is demanded, locate the plant at the raw material source.

• When raw material is universally available, locate close to the market area.

• If the raw materials are processed from variety of locations, the plant may be situated

3. Transportation facilities: Speedy transport facilities ensure timely supply of raw materials to the company and
finished goods to the customers. The transport facility is a prerequisite for the location of the plant. There are five
basic modes of physical transportation, air, road, rail, water and pipeline. Goods that are mainly intended for exports
demand a location near to the port or large airport. The choice of transport method and hence the location will depend
on relative costs, convenience, and suitability. Thus transportation cost to value added is one of the criteria for plant
location.

4. Infrastructure availability: The basic infrastructure facilities like power, water and waste disposal, etc., become the
prominent factors in deciding the location. Certain types of industries are power hungry e.g., aluminum and steel and
they should be located close to the power station or location where uninterrupted power supply is assured throughout
the year. The non-availability of power may become a survival problem for such industries. Process industries like
paper, chemical, cement, etc., require continuous. Supply of water in large amount and good quality, and mineral
content of water becomes an important factor. A waste disposal facility for process industries is an important factor,
which influences the plant location.

5. Labour and wages: The problem of securing adequate number of labour and with skills specific is a factor to be
considered both at territorial as well as at community level during plant location. Importing labour is usually costly and
involve administrative problem. The history of labour relations in a prospective community is to be studied.
Prospective community is to be studied. Productivity of labour is also an important factor to be considered. Prevailing
wage pattern, cost of living and industrial relation and bargaining power of the unions’ forms in important
considerations.

6. External economies of scale: External economies of scale can be described as urbanization and locational economies
of scale. It refers to advantages of a company by setting up operations in a large city while the second one refers to
the “settling down” among other companies of related Industries. In the case of urbanization economies, firms derive
from locating in larger cities rather than in smaller ones in a search of having access to a large pool of labour,
transport facilities, and as well to increase their markets for selling their products and have access to a much wider
range of business services.

7. Capital: By looking at capital as a location condition, it is important to distinguish the physiology of fixed capital in
buildings and equipment from financial capital. Fixed capital costs as building and construction costs vary from region
to region. But on the other hand buildings can also be rented and existing plants can be expanded. Financial capital is
highly mobile and does not very much influence decisions. For example, large Multinational Corporations such as Coca-
Cola operate in many different countries and can raise capital where interest rates are lowest and conditions are most
suitable. Capital becomes a main factor when it comes to venture capital. In that case young, fast growing (or not) high
tech firms are concerned which usually have not many fixed assets. These firms particularly need access to financial
capital and also skilled educated employees.

UNCONTROLLABLE FACTORS

8. Government policy: The policies of the state governments and local bodies concerning labour laws, building codes,
safety, etc., are the factors that demand attention. In order to have a balanced regional growth of industries, both
central and state governments in our country offer the package of incentives to entrepreneurs in particular locations.
The incentive package may be in the form of exemption from a safes tax and excise duties for a specific period, soft
loan from financial institutions, subsidy in electricity charges and investment subsidy. Some of these incentives may
tempt to locate the plant to avail these facilities offered.
9. Climatic conditions: The geology of the area needs to be considered together with climatic conditions (humidity,
temperature). Climates greatly influence human efficiency and behaviour. Some industries require specific climatic
conditions e.g., textile mill will require humidity.

10. Supporting industries and services: Now a day the manufacturing organisation will not make all the components and
parts by itself and it subcontracts the work to vendors. So, the source of supply of component parts will be the one of
the factors that influences the location. The various services like communications, banking services professional
consultancy services and other civil amenities services will play a vital role in selection of a location.

11. Community and labour attitudes: Community attitude towards their work and towards the prospective industries can
make or mar the industry. Community attitudes towards supporting trade union activities are important criteria.
Facility location in specific location is not desirable even though all factors are favouring because of labour attitude
towards management, which brings very often the strikes and lockouts.

12. Community infrastructure and amenity: All manufacturing activities require access to a community infrastructure,
most notably economic overhead capital, such as roads, railways, port facilities, power lines and service facilities and
social overhead capital like schools, universities and hospitals. These factors are also needed to be considered by
location decisions as infrastructure is enormously expensive to build and for most manufacturing activities the
existing stock of infrastructure provides physical restrictions on location possibilities.

PLANT LAYOUT

Plant layout refers to the physical arrangement of production facilities. It is the configuration of departments, work
centres and equipment in the conversion process. It is a floor plan of the physical facilities, which are used in
production. According to Moore “Plant layout is a plan of an optimum arrangement of facilities including personnel,
operating equipment, storage space, material handling equipment and all other supporting services along with the
design of best structure to contain all these facilities”.

The objectives of plant layout are:

1. Streamline the flow of materials through the plant.

2. Facilitate the manufacturing process.

3. Maintain high turnover of in-process inventory.

4. Minimise materials handling and cost.

5. Effective utilisation of men, equipment and space.

6. Make effective utilisation of cubic space.

7. Flexibility of manufacturing operations and arrangements.

8. Provide for employee convenience, safety and comfort.

9. Minimize investment in equipment.

10. Minimize overall production time.

11. Maintain flexibility of arrangement and operation.

12. Facilitate the organizational structure.

Layouts can be classified into the following five categories:

1. Process layout

2. Product layout

3. Combination layout

4. Fixed position layout

5. Group layout

Process layout is recommended for batch production. All machines performing similar type of operations are grouped
at one location in the process layout e.g., all lathes, milling machines, etc. are grouped in the shop will be clustered in
like groups. Thus, in process layout the arrangement of facilities are grouped together according to their functions. A
typical process layout is shown in Fig. The flow paths of material through the facilities from one functional area to
another vary from product to product. Usually the paths are long and there will be possibility of backtracking.

Process layout is normally used when the production volume is not sufficient to justify a product layout. Typically, job
shops employ process layouts due to the variety of products manufactured and their low production volumes.

Advantages

1. In process layout machines are better utilized and fewer machines are required.

2. Flexibility of equipment and personnel is possible in process layout.

3. Lower investment on account of comparatively less number of machines and lower cost

of general purpose machines.

4. Higher utilisation of production facilities.

5. A high degree of flexibility with regards to work distribution to machineries and workers.

6. The diversity of tasks and variety of job makes the job challenging and interesting.

7. Supervisors will become highly knowledgeable about the functions under their department.

Limitations

1. Backtracking and long movements may occur in the handling of materials thus, reducing material handling efficiency.

2. Material handling cannot be mechanised which adds to cost.

3. Process time is prolonged which reduce the inventory turnover and increases the in process inventory.
4. Lowered productivity due to number of set-ups.

5. Throughput (time gap between in and out in the process) time is longer.

6. Space and capital are tied up by work-in-process.

Product Layout

In this type of layout, machines and auxiliary services are located according to the processing sequence of the
product. If the volume of production of one or more products is large, the facilities can be arranged to achieve
efficient flow of materials and lower cost per unit. Special purpose machines are used which perform the required
function quickly and reliably.

The product layout is selected when the volume of production of a product is high such that a separate production line
to manufacture it can be justified. In a strict product layout, machines are not shared by different products. Therefore,
the production volume must be sufficient to achieve satisfactory utilisation of the equipment. A typical product layout
is shown in Fig.

Advantages

1. The flow of product will be smooth and logical in flow lines.

2. In-process inventory is less.

3. Throughput time is less.

4. Minimum material handling cost.

5. Simplified production, planning and control systems are possible.

6. Less space is occupied by work transit and for temporary storage.

7. Reduced material handling cost due to mechanised handling systems and straight flow.

8. Perfect line balancing which eliminates bottlenecks and idle capacity.

9. Manufacturing cycle is short due to uninterrupted flow of materials.

10. Small amount of work-in-process inventory.

11. Unskilled workers can learn and manage the production.

Limitations

1. A breakdown of one machine in a product line may cause stoppages of machines in the downstream of the line.

2. A change in product design may require major alterations in the layout.

3. The line output is decided by the bottleneck machine.

4. Comparatively high investment in equipments is required.

5. Lack of flexibility. A change in product may require the facility modification.

Combination Layout

A combination of process and product layouts combines the advantages of both types of layouts. A combination layout
is possible where an item is being made in different types and sizes. Here machinery is arranged in a process layout
but the process grouping is then arranged in a sequence to manufacture various types and sizes of products. It is to
be noted that the sequence of operations remains same with the variety of products and sizes. Figure shows a
combination type of layout for manufacturing different sized gears.

Fixed Position Layout

This is also called the project type of layout. In this type of layout, the material, or major components remain in a fixed
location and tools, machinery, men and other materials are brought to this location. This type of layout is suitable when
one or a few pieces of identical heavy products are to be manufactured and when the assembly consists of large
number of heavy parts, the cost of transportation of these parts is very high.

Advantages

The major advantages of this type of layout are:

1. Helps in job enlargement and upgrades the skills of the operators.

2. The workers identify themselves with a product in which they take interest and pride in doing the job.

3. Greater flexibility with this type of layout.

4. Layout capital investment is lower.

Group Layout (or Cellular Layout)

There is a trend now to bring an element of flexibility into manufacturing system as regards to variation in batch sizes
and sequence of operations. A grouping of equipment for performing a sequence of operations on family of similar
components or products has become all the important.

Group technology (GT) is the analysis and comparisons of items to group them into families with similar
characteristics. GT can be used to develop a hybrid between pure process layout and pure flow line (product) layout.
This technique is very useful for companies that produce variety of parts in small batches to enable them to take
advantage and economics of flow line layout.

The application of group technology involves two basic steps; first step is to determine component families or groups.
The second step in applying group technology is to arrange the plants equipment used to process a particular family of
components. This represents small plants within the plants. The group technology reduces production planning time for
jobs. It reduces the set-up time.

Thus group layout is a combination of the product layout and process layout. It combines the advantages of both layout
systems. If there are m-machines and n-components, in a group layout (Group-Technology Layout), the m-machines
and n-components will be divided into distinct number of machine-component cells (group) such that all the
components assigned to a cell are almost processed within that cell itself. Here, the objective is to minimize the
intercell movements. The basic aim of a group technology layout is to identify families of components that require
similar of satisfying all the requirements of the machines are grouped into cells. Each cell is capable of satisfying all
the requirements of the component family assigned to it. The layout design process considers mostly a single objective
while designing layouts. In process layout, the objective is to minimize the total cost of materials handling. Because of
the nature of the layout, the cost of equipments will be the minimum in this type of layout. In product layout, the cost of
materials handling will be at the absolute minimum. But the cost of equipments would not be at the minimum if the
equipments are not fully utilized.

In-group technology layout, the objective is to minimize the sum of the cost of transportation and the cost of
equipments. So, this is called as multi-objective layout. A typical process layout is shown in Fig.

Advantages of Group Technology Layout

Group Technology layout can increase—

1. Component standardization and rationalization.

2. Reliability of estimates.

3. Effective machine operation and productivity.

4. Customer service.

It can decrease the—

1. Paper work and overall production time.

2. Work-in-progress and work movement.

3. Overall cost.

Limitations of Group Technology Layout

This type of layout may not be feasible for all situations. If the product mix is completely dissimilar, then we may not
have meaningful cell formation.

Process layout
 Product layout

Combination layout

Fixed position layout

Group layout
 Unit 3 Production Planning & Control

Production planning and control is the organization and planning of the manufacturing process. It co-ordinates supply
and movement of materials and labor, ensures economic and balanced utilization of machines and equipment as well as
other activities related with production to achieve the desired manufacturing results in terms of quantity, quality, time
and place.

Planning:

The choice from several alternatives of the best utilizing the available resources to achieve the desired objective

Operations:

Performance in accordance with details set out in production plan.

Control:

The monitoring of performance through a feedback by comparing the results achieved with planned targets so that
performance can be improved.

Objective of PPC

To deliver goods in required quantities to customers in required delivery schedule

To ensure maximum utilization of all resources

To ensure production quality products

To minimize the product throughput time

To maintain optimum level inventory

To maintain flexibility in manufacturing operations

Coordinate between labour and machines and various supporting departments

Functions of PPC

1. Routing
2. Estimating
3. Scheduling
4. Loading
5. Dispatching
6. Expediting
7. Evaluating
8. Inventory Control
Levels of PPC

Strategic Planning (Long range): It is process of thinking though the organizations current mission and environment
and setting a guide for future decisions and results. e.g. Technology forecasting and choice of appropriate technology
for the long range time horizon.

Tactical Planning (Intermediate Range): It is done over an intermediate term or medium range time horizon by middle
level management. These plans focus on aggregate products rather than individual products.

Operational Planning (Short Range): It is done over a short range time span developed by junior level management. It is
concern with utilization of existing facilities rather than creation of new facilities.

Benefits of PPC

1. PPC coordinates all the phases of production / Operating system

2. An efficient plan results in higher quality, better utilization of resources, reduced inventories, better
customer services.

3. An efficient plan enables the firm to improve its sales turnover, market share and profitability.

Limitations of PPC

1. PPC function is based on certain assumptions or forecasts of customer’s demand, Plant capacity, availability
of materials etc

2. Employee may resist change in production levels set as per production plans.

3. This process is time consuming when we need to carry out routing and scheduling function for large
products.

4. This function becomes difficult when environmental factors changes rapidly.

Techniques of Production Control | Production Management

Some of the major techniques used for production control in an organisation are: programming, ordering, dispatching,
progressing and inventory control:

Production control ensures regular and smooth flow of material and co-ordinates different manufacturing operations
through the methods of programming, ordering, dispatching, progressing and inventory control.

i. Programming:

Production programming regulates the supply of finished product in desired amount at the due date in accordance with
the production plan. Programming ensures most efficient use of labour, equipment and capital.

(a) Nature of the product to be manufactured:

Here the affect of different ranges of product on the utilisation of facilities should be considered at the
market appreciation stage and the decision made at this stage should not be altered later.
 (b) Amount of Quantities to be produced:

This is normally determined from the sales programme.

(c) When to produce:

This is to decide that when or in which periods the desired output is to be manufactured.

Objectives of Production Programming:

(i) Reliable delivery to the customer:

This depends on achievement of output target as per production programme and on quoting the customer
achievable delivery dates. When delivery times are long, the annual production programme must be used,
otherwise short term programme is to be used. To achieve reliable delivery it is essential that delivery
promises should only be given if the production programme still contains unallocated products for the period
concerned.

(ii) Even loading of plant by ensuring production at an even rate throughout the year.

(iii) Even loading of labour in total man-hours per week,

(iv) Efficient use of capital; The production programmes are arranged such that minimum capital is tied up in
stocks. It is observed that if any manufacturing system lacks in efficient production programming then it
often results in late delivery to customers.

The production of any product is said to be complete

(i) when the last operation in the sequence is over,

(ii) the product has passed through final inspection and

(iii) it has been dispatched.

Thus, production programme is some sort of Gantt Chart involving three main factors viz. limits of products
listed vertically. The units of time shown horizontally and the units of quantities to be produced shown at the
appropriate intersection of rows and columns.

ii. Ordering:

It breakdown the requirements for products to be completed at specific times into orders for materials and processed
parts and attempts to do so in such a way that they ate available when needed. It takes into consideration the targets
prescribed in a programme by planning the output of the desired components from some external supplier and the
processing department of the organisation. It contains the quantities to be produced by the supplier and by different
departments as well as the time by which the work should be completed.

In other words it is process of placing orders to the supplier and the processing department for the material and other
parts needed to manufacture the product and to arrange the ordering quantity and delivery schedule in such a way
that all items are delivered in time to meet the production programme. The order authorising production is what has
come to be known as works order. Works orders are derived from the master schedule and operation sheets. The
following information is required for each order.

(i) Requirement Quantity:

 This information can be gathered from master schedule. An allowance has to be made for scrap which may
be derived from historical records.

(ii) Order Quantity:

Generally it is same as requirement quantity but for some regular usage item one may have bigger lot. In
ordering, the order date is of great significance. If an order is released too early, it would entail storage
costs and if it is too late then the service would be poorer.

Rules to be observed in an ordering system:

(i) No work can be carried out without an order.

(ii) All orders authorising the manufacture, purchase or any other expenditure should be issued in writing on
a standard form.

(iii) All orders should be issued by an authorised authority.

Following are the main decisions in ordering:

(i) The desired total quantity of various compounds,

(ii) The delivery date,

(iii) How much to order?

(iv) When to issue the order?

(v) In what quantities the parts are to be procured and the purchases are to be delivered?

(vi) Nature of the components namely products, spares and scrap.

iii. Dispatching:

Dispatching is the routine of setting production activities in motion through the release of order and instructions in
accordance with previously planned times and sequence embodied in route sheets and schedule charts. It considers
each processing department one by one and plans the output from machines, tools and other work centres so as to
complete the orders by due date.

After ordering, next step is to bring together the inputs, i.e., plant, labour, special tools and material required for each
production operation on each part and assembly. The concerned operators are issued necessary instructions.

In other words, once a job is in an area where an operation is to be performed, someone must determine that when
and by whom the job will be performed and also the sequence in which the waiting orders are to be processed. The
complexity of the system depends on the nature of the system, e. g, barber shop, aircraft, hospitals etc.

The decision of assigning various jobs to different machines is known as Dispatching, it is one of the limited areas
where the foreman still exercises his discretion within the context of a well developed production control system. A
schedule usually sets general priorities on jobs and the date by which each job should leave an area but the foreman
takes. The final dispatching decisions hopefully within the constraints setup by the schedule.

Functions of Dispatching:

(i) To check the immediate availability of materials.

 (ii) Ensuring that all production and inspection aids are available for use. {Hi) to obtain the appropriate
drawing, specification or material list.

(iii) To collate jobs, operation layouts, routine etc. with the design.

(v) processing information or inspection schedule.

(vi) Assign the work to definite machine, work place and men.

(vii) To issue necessary materials, tools etc. to correct points for use.

(viii) To issue production order note stating the start and finish times.

(ix) To inform the progress section about the start of the work.

(x) Instruction to start the production.

(xi) To return the acquired material and other aids to the correct location.

(xii) Maintain all production records viz. time lost in production and the causes for delay; incidence of
machine breakdown; change in capacity etc.

iv. Progressing or Follow-up:

Follow-up or expediting is checking production activities systematically so that production may be carried out
according to plan. It is the measurement of output against plan, analysis of performance for shortfalls and following up
the line management to apply corrective action for excessive short-fall. Progressing is the function by which one can
give an early warning when actual production deviates from planned production and thus makes it possible to take
corrective action.

Follow-up is a most important step of production control. This step is to ascertain from time-to- time that the
production operations are progressing according to the plan. The chaser is responsible for observing that any detail
which is overlooked or not properly executed is set right.

This ensures proper coordination of production plan and to take corrective measures if necessary. Follow-up can be
done at three stages, for materials, work-in-progress and stage during assembly and execution. It discovers causes of
delay which may be uneconomic lot sizes; schedule beyond the capacity of the machine, underestimation of material,
tools and manpower, errors in processing and inspection etc.

Progressing is the function by which one can give an early warning when actual production deviates from planned
production and thus makes it possible to take corrective action.

The necessity of progressing arises due to:

(i) Failure to deliver materials on time.

(ii) Machines/power breaks down.

(iii) Employees absentism.

(iv) Errors of design, planning or human activity,

(v) Unnecessary delays/bottlenecks.

Aggregate planning

Aggregate planning is the process of developing, analyzing, and maintaining a preliminary, approximate schedule of the
overall operations of an organization. The aggregate plan generally contains targeted sales forecasts, production
levels, inventory levels, and customer backlogs. This schedule is intended to satisfy the demand forecast at a minimum
cost. Properly done, aggregate planning should minimize the effects of short sighted, day-to-day scheduling, in which
small amounts of material may be ordered one week, with an accompanying layoff of workers, followed by ordering
larger amounts and rehiring workers the next week. This longer-term perspective on resource use can help minimize
short-term requirements changes with a resulting cost savings

Aggregate Planning Strategies

There are two pure planning strategies available to the aggregate planner: a level strategy and a chase strategy. Firms
may choose to utilize one of the pure strategies in isolation, or they may opt for a strategy that combines the two.

Level strategy

A level strategy seeks to produce an aggregate plan that maintains a steady production rate and/or a steady
employment level. In order to satisfy changes in customer demand, the firm must raise or lower inventory levels in
anticipation of increased or decreased levels of forecast demand. The firm maintains a level workforce and a steady
rate of output when demand is somewhat low. This allows the firm to establish higher inventory levels than are
currently needed. As demand increases, the firm is able to continue a steady production rate/steady employment
level, while allowing the inventory surplus to absorb the increased demand.

A second alternative would be to use a backlog or backorder. A backorder is simply a promise to deliver the product at
a later date when it is more readily available, usually when capacity begins to catch up with diminishing demand. In
essence, the backorder is a device for moving demand from one period to another, preferably one in which demand is
lower, thereby smoothing demand requirements over time.

A level strategy allows a firm to maintain a constant level of output and still meet demand. This is desirable from an
employee relations standpoint. Negative results of the level strategy would include the cost of excess inventory,
subcontracting or overtime costs, and backorder costs, which typically are the cost of expediting orders and the loss
of customer goodwill.

Chase strategy

A chase strategy implies matching demand and capacity period by period. This could result in a considerable amount of
hiring, firing or laying off of employees; insecure and unhappy employees; increased inventory carrying costs;
problems with labor unions; and erratic utilization of plant and equipment. It also implies a great deal of flexibility on
the firm's part. The major advantage of a chase strategy is that it allows inventory to be held to the lowest level
possible, and for some firms this is a considerable savings. Most firms embracing the just-in-time production concept
utilize a chase strategy approach to aggregate planning.

Most firms find it advantageous to utilize a combination of the level and chase strategy. A combination strategy
(sometimes called a hybrid or mixed strategy) can be found to better meet organizational goals and policies and
achieve lower costs than either of the pure strategies used independently.

Techniques for Aggregate Planning

Techniques for aggregate planning range from informal trial-and-error approaches, which usually utilize simple tables
or graphs, to more formalized and advanced mathematical techniques.
Procedure for aggregate planning

Step 1 Determine demand for each period.

Step 2 Determine capacity for each period. This capacity should match demand, which means it may require the
inclusion of overtime or subcontracting.
Step 3 Identify company, departmental, or union policies that are pertinent. For example, maintaining a certain
safety stock level, maintaining a reasonably stable workforce, backorder policies, overtime policies,
inventory level policies, and other less explicit rules such as the nature of employment with the individual
industry, the possibility of a bad image, and the loss of goodwill.
Step 4 Determine unit costs for units produced. These costs typically include the basic production costs (fixed
and variable costs as well as direct and indirect labor costs). Also included are the costs associated with
making changes in capacity. Inventory holding costs must also be considered, as should storage,
insurance, taxes, spoilage, and obsolescence costs. Finally, backorder costs must be computed. While
difficult to measure, this generally includes expediting costs, loss of customer goodwill, and revenue loss
from cancelled orders.
Step 5 Develop alternative plans and compute the cost for each.
Step 6 If satisfactory plans emerge, select the one that best satisfies objectives. Frequently, this is the plan with
the least cost. Otherwise, return to step 5.

Mathematical Approaches to Aggregate Planning

Linear Programming

Linear programming is an optimization technique that allows the user to find a maximum profit or revenue or a
minimum cost based on the availability of limited resources and certain limitations known as constraints. A special
type of linear programming known as the Transportation Model can be used to obtain aggregate plans that would allow
balanced capacity and demand and the minimization of costs. However, few real-world aggregate planning decisions
are compatible with the linear assumptions of linear programming. Supply Chain Management: Strategy, Planning and
Operation, by Sunil Chopra and Peter Meindl, provides an excellent example of the use of linear programming in
aggregate planning.

Mixed-integer programming

For aggregate plans that are prepared on a product family basis, where the plan is essentially the summation of the
plans for individual product lines, mixed-integer programming may prove to be useful. Mixed-integer programming can
provide a method for determining the number of units to be produced in each product family.

Linear Decision Rule

Linear decision rule is another optimizing technique. It seeks to minimize total production costs (labor, overtime,
hiring/lay off, inventory carrying cost) using a set of cost-approximating functions (three of which are quadratic) to
obtain a single quadratic equation. Then, by using calculus, two linear equations can be derived from the quadratic
equation, one to be used to plan the output for each period and the other for planning the workforce for each period.

Management Coefficients Model

The management coefficients model, formulated by E.H. Bowman, is based on the suggestion that the production rate
for any period would be set by this general decision rule:
P t = aW t-1 − bI t -1 + cF t+1 + K,

Where,

P t = the production rate set for period t

W t - 1 = the workforce in the previous period

I t-1 = the ending inventory for the previous period

F t+1 = the forecast of demand for the next period

a, b, c, and K are constants

It then uses regression analysis to estimate the values of a, b, c, and K. The end result is a decision rule based on past
managerial behavior without any explicit cost functions, the assumption being that managers know what is important,
even if they cannot readily state explicit costs. Essentially, this method supplements the application of experienced
judgment.

Search Decision Rule

The search decision rule methodology overcomes some of the limitations of the linear cost assumptions of linear
programming. The search decision rule allows the user to state cost data inputs in very general terms. It requires that
a computer program be constructed that will unambiguously evaluate any production plan's cost. It then searches
among alternative plans for the one with the minimum cost. However, unlike linear programming, there is no assurance
of optimality.

Simulation

A number of simulation models can be used for aggregate planning. By developing an aggregate plan within the
environment of a simulation model, it can be tested under a variety of conditions to find acceptable plans for
consideration. These models can also be incorporated into a decision support system, which can aid in planning and
evaluating alternative control policies. These models can integrate the multiple conflicting objectives inherent in
manufacturing strategy by using different quantitative measures of productivity, customer service, and flexibility.

Functional Objective Search Approach

The functional objective search (FOS) system is a computerized aggregate planning system that incorporates a broad
range of actual planning conditions. It is capable of realistic, low-cost operating schedules that provide options for
attaining different planning goals. The system works by comparing the planning load with available capacity. After
management has chosen its desired actions and associated planning objectives for specific load conditions, the system
weights each planning goal to reflect the functional emphasis behind its achievement at a certain load condition. The
computer then uses a computer search to output a plan that minimizes costs and meets delivery deadlines.
 Unit 4 Quality Management: Introduction

Quality is a perceptual, conditional, and somewhat subjective attribute and may be understood differently by different
people. Consumers may focus on the specification quality of a product/service, or how it compares to competitors in
the marketplace.

Characteristics

Performance: Performance refers to a product's primary operating characteristics. This dimension of quality
involves measurable attributes; brands can usually be ranked objectively on individual aspects of
performance.

Features: Features are additional characteristics that enhance the appeal of the product or service to the
user.

Reliability: Reliability is the likelihood that a product will not fail within a specific time period. This is a key
element for users who need the product to work without fail.

Conformance: Conformance is the precision with which the product or service meets the specified standards.

Durability: Durability measures the length of a product’s life. When the product can be repaired, estimating
durability is more complicated. The item will be used until it is no longer economical to operate it. This
happens when the repair rate and the associated costs increase significantly.

Serviceability: Serviceability is the speed with which the product can be put into service when it breaks down,
as well as the competence and the behavior of the service person.

Aesthetics: Aesthetics is the subjective dimension indicating the kind of response a user has to a product. It
represents the individual’s personal preference.

Perceived Quality: Perceived Quality is the quality attributed to a good or service based on indirect measures.

Seven Basic Quality Tools

There are seven basic quality tools, which can assist an organization for problem solving and process improvements.
The first guru who proposed seven basic tools was Dr. Kaoru Ishikawa in 1968, by publishing a book entitled “Gemba no
QC Shuho” that was concerned managing quality through techniques and practices for Japanese firms.

These seven basic quality control tools, which introduced by Dr. Ishikawa, are

1) Check sheets;

2) Graphs (Trend Analysis);

3) Histograms;

4) Pareto charts;

5) Cause-and-effect diagrams;

6) Scatter diagrams;

7) Control charts.
Figure 1 indicates the relationships among these seven tools and their utilizations for the identification and analysis of
improvement of quality (Kerzner, 2009).

Figure 1: The seven quality control tools (Kerzner, 2009).

Check Sheet

Check sheets are simple forms with certain formats that can aid the user to record data in an firm systematically.
Data are “collected and tabulated” on the check sheet to record the frequency of specific events during a data
collection period. They prepare a “consistent, effective, and economical approach” that can be applied in the auditing of
quality assurance for reviwing and to follow the steps in a particular process. Also, they help the user to arrange the
data for the utilization later (Montgomery, 2009; Omachonu and Ross, 2004). The main advantages of check sheets are
to be very easily to apply and understand, and it can make a clear picture of the situation and condition of the
organization. They are efficient and powerful tools to identify frequently problems, but they dont have effective ability
to analyze the quality problem into the workplace. The chech sheets are in several, three major types are such as
Defect-location check sheets; tally check sheets, and; defect-cause check sheets (Kerzner, 2009). Figure 2 is depicted
a tally check sheet that cn be used for collecting data during production process.

Figure 2: Check sheet (Tally) for telephone interruptions

Histogram

Histogram is very useful tool to describe a sense of the frequency distribution of observed values of a variable. It is a
type of bar chart that visualizes both attribute and variable data of a product or process, also assists users to show
the distribution of data and the amount of variation within a process. It displays the different measures of central
tendency (mean, mode, and average). It should be designed properly for those working into the operation process can
easily utilize and understand them. Also, a histogram can be applied to investigate and identify the underlying
distribution of the variable being explored (Omachonu and Ross, 2004; Forbes and Ahmed, 2011). Figure 3 illustrates a
histogram of the frequency of defects in a manufacturing process.
 Figure 3: Histogram for variables

Pareto Analysis

It introduced by an Italian economist, named Vilfredo Pareto, who worked with income and other unequal distributions
in 19th century, he noticed that 80% of the wealth was owned by only 20% of the population. later, Pareto principle
was developed by Juran in 1950. A Pareto chart is a special type of histogram that can easily be apply to find and
prioritize quality problems, conditions, or their causes of in the organization (Juran and Godfrey, 1998).. On the other
hand, it is a type of bar chart that shows the relative importance of variables, prioritized in descending order from left
to right side of the chart. The aim of Pareto chart is to figure out the different kind of “nonconformity” from data
figures, maintenance data, repair data, parts scrap rates, or other sources. Also, Pareto chart can generate a mean
for investigating concerning quality improvement, and improving efficiency, “material waste, energy conservation,
safety issues, cost reductions”, etc., as Figure 4 demonstrated concerning Pareto chart, it can able to improve the
production before and after changes (Montgomery, 2009; Kerzner, 2009; Omachonu and Ross, 2004).

Figure 4: Pareto Charts

Fishbone Diagram

Kaoru Ishikawa is considered by many researchers to be the founder and first promoter of the ‘Fishbone’ diagram (or
Cause-and-Effect Diagram) for root cause analysis and the concept of Quality Control (QC) circles . Cause and effect
diagram was developed by Dr. Kaoru Ishikawa in 1943. It has also two other names that are Ishikawa diagram and
fishbone because the shape of the diagram looks like the skeleton of a fish to identify quality problems based on their
degree of importance (Neyestani, 2017). The cause and effect diagram is a problem-solving tool that investigates and
analyzes systematically all the potential or real causes that result in a single effect. On the other hand, it is an efficient
tool that equips the organization's management to explore for the possible causes of a problem (Juran and Godfrey,
1998). This diagram can provide the problem-solving efforts by “gathering and organizing the possible causes,
reaching a common understanding of the problem, exposing gaps in existing knowledge, ranking the most probable
causes, and studying each cause” (Omachonu and Ross, 2004). The generic categories of the cause and effect diagram
are usually six elements (causes) such as environment, materials, machine, measurement, man, and method, as
indicated in Figure 5. Furthermore, “potential causes” can be indicated by arrows entering the main cause arrow
(Neyestani, 2017).

Figure 5: The cause and effect diagram (Fishbone Diagram)

Scatter Diagram

Scatter diagram is a powerful tool to draw the distribution of information in two dimensions, which helps to detect and
analyze a pattern relationships between two quality and compliance variables (as an independent variable and a
dependent variable), and understanding if there is a relationship between them, so what kind of the relationship is
(Weak or strong and positive or negative). The shape of the scatter diagram often shows the degree and direction of
relationship between two variables, and the correlation may reveal the causes of a problem. Scatter diagrams are
very useful in regression modeling (Montgomery, 2009; Oakland, 2003). The scatter diagram can indicate that there is
which one of these following correlations between two variables: a) Positive correlation; b) Negative correlation, and c)
No correlation, as demonstrated in Figure 6.

Figure 6: Scatter Diagrams

Flowchart

Flowchart presents a diagrammatic picture that indicates a series of symbols to describe the sequence of steps exist
in an operation or process. On the other hand, a flowchart visualize a picture including the inputs, activities, decision
points, and outputs for using and understanding easily concerning the overall objective through process. This chart as
a problem solving tool can apply methodically to detect and analyze the areas or points of process may have had
potential problems by “documenting” and explaining an operation, so it is very useful to find and improve quality into
process (Forbes and Ahmed, 2011), as shown in Figure 7.

Figure 7: Flow chart of review process

Control Chart

Control chart or Shewhart control chart was introduced and developed by Walter A. Shewhart in the 1920s at the Bell
Telephone Laboratories, and is likely the most “technically sophisticated” for quality management (Montgomery, 2009).
Control chart is a special form of “run chart that it illustrates the amount and nature of variation in the process over
time”. Also, it can draw and describe what has been happning in the process. Therefore, it is very important to apply
control chart, becaust it can observe and moniter process to study process that is in “statistical control” (No problem
with quality) accordant to the samplings or samplings are betwwen UCL and LCL (upper control limit (UCL) and the
lower control limit (LCL)). “statistical control” is not between UCL and LCL, so it means the process is out of control,
then control can be applied to find causes of quality problem, shown in Figure 8 that A point is in control and B point is
out of control. In addition, this chart can be utilized for estimating “the parameters” and “ reducing the variability” in a
process (Omachonu and Ross, 2004). The main aim of control chart is to prevent the defects in process. It is very
essentially for different businesses and industries, the reason is that unsatisfactory products or services are more
costed than spending expenses of prevention by some tools like control charts (Juran and Godfrey, 1998). A Control
Chart is presented in the following Figure 8.

Figure 8: The Shewhart control chart

Quality assurance (QA)

Quality assurance (QA) is any systematic process of determining whether a product or service meets specified
requirements.

QA establishes and maintains set requirements for developing or manufacturing reliable products. A quality assurance
system is meant to increase customer confidence and a company's credibility, while also improving work processes
and efficiency, and it enables a company to better compete with others.

Quality Assurance (QA) Quality Control (QC)

 It is a procedure that focuses on providing  It is a procedure that focuses on fulfilling the

assurance that quality requested will be quality requested.
achieved

 QA aims to prevent the defect  QC aims to identify and fix defects

 It is a method to manage the quality-  It is a method to verify the quality-Validation

Verification

 It does not involve executing the program  It always involves executing a program

 It's a Preventive technique  It's a Corrective technique

 It's a Proactive measure  It's a Reactive measure

 It is the procedure to create the deliverables  It is the procedure to verify that deliverables
 QA involves in full software development life  QC involves in full software testing life cycle
cycle

 In order to meet the customer requirements  QC confirms that the standards are followed while
QA defines standards and methodologies working on the product

 It is performed before Quality Control  It is performed only after QA activity is done

 It is a Low Level Activity, it can identify an  It is a High-Level Activity, it can identify an error
error and mistakes which QC cannot that QA cannot

 Its main motive is to prevent defects in the  Its main motive is to identify defects or bugs in
system. It is less time-consuming activity the system. It is more time-consuming activity

 QA ensures that everything is executed in the  QC ensures that whatever we have done is as per
right way, and that is why it falls under the requirement, and that is why it falls under
verification activity validation activity

 It requires involvement of the whole team  It requires involvement of Testing team

 Statistical technique applied on QA is known as  Statistical technique applied on QC is known as

SPC or Statistical Process Control (SPC) SQC or Statistical Quality Control
Total Quality Management Model

Total Quality Management is a combined effort of both top level management as well as employees of an organization to
formulate effective strategies and policies to deliver high quality products which not only meet but also exceed
customer satisfaction.

Credits for the process of total quality management go to many philosophers and their teachings. Drucker, Juran,
Deming, Ishikawa, Crosby, Feigenbaum and many other individuals who have in due course of time studied
organizational management have contributed effectively to the process of total quality management.

There are many models of total quality management and it is really not necessary that every organization should select
and implement the same model.
Introduction to Six Sigma

In today’s information age, news spreads faster than ever. When an event happens halfway around the world it can
become common knowledge within hours or even minutes. Companies must guard their reputation for producing
quality products. A single, significant quality incident could result in irreparable damage to brand equity and
consumers trust. While there are many quality systems in use today, one methodology has gained tremendous
momentum and acceptance throughout industry. The foundational elements of this system can be traced back to the
19th century. In the 1920s, Walter Shewert, a renowned statistician, and sometimes referred to as “the father of
statistical quality control”, demonstrated that when process variation reaches three sigma from the mean or average
value, the process requires correction. An engineer working for Motorola named Bill Smith later coined the term Six
Sigma. Bill Smith, along with Mikel Harry and Bob Galvin, the then CEO of Motorola, developed a new Quality Management
System (QMS) that emphasized the relationship between product performance and the corrections required during
manufacture. Their four phase system became the basis on which the current Six Sigma methodology was built. The
four phases were Measure, Analyze, Improve and Control.

What is Six Sigma

Six Sigma is a system of statistical tools and techniques focused on eliminating defects and reducing process
variability. The Six Sigma process includes measurement, improvement and validation activities. The designation, or
title, Six Sigma, relates to the connection between the number of defects per million opportunities and the number of
standard deviations found within a process specification. Within statistics, sigma is a reference to the intervals under
a normal or “Gaussian” curve. Each interval is equal to one standard deviation or sigma. Therefore, Six Sigma refers to
the plus or minus three sigma from the mean of the data under the curve. In the case of a normal distribution, 68.26%
of the data points are within plus or minus one sigma from the mean, 95.46% are within two sigma and 99.73% are
within three sigma. A process variation exceeding ± 3 sigma should be improved. With a Six Sigma capable process,
only a very small number of possible failures could fall outside specification limits.

Highly skilled personnel trained in the use of the statistical tools and the techniques of Six Sigma implement the Six
Sigma methodologies. The Six Sigma training and certification levels are borrowed from the martial arts. The
certification or belt levels include white, yellow, green, black and master black belt designations.

Master Black Belt

A Master Black Belt is classically trained in statistical tools, Six Sigma methodology and management processes.
Master Black Belts mentor and direct groups of Black Belts and Six Sigma teams through various problems that need
to be reviewed. Additionally, Master Black Belts are responsible for the strategy and training of Black Belt level
practitioners and below.

Black Belt

A Black Belt receives the highest level of training in the statistical tools of Six Sigma. Black Belts, as a rule, develop the
plans for Six Sigma project implementation. Their responsibilities include creating project plans, leading cross-
functional projects and directing team members, including Green and Yellow Belts. Black Belts usually train other team
members on the proper use of Six Sigma tools and techniques, such as control charts, histograms and Root Cause
Analysis (RCA).
Green Belt

Green Belts report to a Black Belt and lead process improvement teams part time. Approximately 25- 50% of their
time should be devoted to working on Six Sigma projects, usually within their own functional areas. Green Belts
receive training on DMAIC methodology, statistical tools, proper data collection and analysis of the data collected.

Yellow Belt

A Yellow Belt should have a basic understanding of Six Sigma, statistical tools and DMAIC methodology. Yellow Belts are
often members of the workforce recognized for their skill, knowledge and experience with the process in question.
They often fulfill the role of Subject Matter Expert (SME) for the process. They are valuable during the measure phase
of a project, gathering data, measurements and metrics. However, Yellow Belts are not typically involved in the data
analysis process.

Why Implement Six Sigma

With rising material cost and ever-increasing competition, organizations must seek out methods to increase efficiency.
By implementing Six Sigma methodology, an organization can improve efficiency through identification and resolution
of product or part defects and minimize the variation within a process. Each Six Sigma project follows a defined
sequence of steps and includes specific improvement targets. Some examples could include:

Reduction in process cycle time

Reduction of scrap generated by a process

Increasing customer satisfaction

Reduction in the number of factory defects

Reduction or elimination of costly reworks

Every one of the examples listed would have a positive effect on the bottom line of any organization. Six Sigma is not
limited to the manufacturing industry. The tools and techniques are currently being used to improve processes in all
type of businesses and organizations. The tools can improve manufacturing processes, office or business processes
and customer service processes.

How to Implement Six Sigma

A typical Six Sigma project measures the current state and increases the performance of the business process to a
new and statistically significant improved state using statistical tools. Standard Six Sigma capability refers to a very
small number of possible failures that can exist outside the specification.

The method most frequently associated with Six Sigma is DMAIC, which stands for Define, Measure, Analyze, Improve
and Control. Before beginning any Six Sigma improvement project, it is necessary to select a process that, if improved,
would result in reduced cost, superior quality or increased efficiency. The process also must possess measurable data
because what you cannot measure you cannot improve. The process selected may currently be experiencing quality
problems or generating a large amount of scrap.

A Black Belt or Master Black Belt will usually initiate Six Sigma projects through the creation of a charter. The charter
typically includes details of the proposed improvement project, a business case and information regarding how the
project fits into the company’s goals or business strategy. The following is a list of the project phases, along with a
brief description of each:
Define

During the Define phase, the team should complete the following activities:

Develop a problem statement: The problem statement should contain a clear and concise description of the issue or
issues that the project will address. In addition, the statement should include information concerning Critical to
Customer Quality (CTQ) requirements (both internal and external), goals and benefits expected through completion of
the project.

Define the Project Scope: The project scope sets the project boundaries. It is essential that the beginning and ending
process steps are clearly identified and agreed upon prior to moving forward. Defining the scope will help keep the
team focused on the issues at hand and tends to prevent or reduce “scope-creep”.

Identify Project Resources: Identify the champion, process owner and members of the team along with other
resources that may be required on a part-time basis. Management must agree to support the project by committing
the resources required for success.

Develop a Project Plan: The project plan should include a brief statement of how and when the project tasks are to be
completed and by whom. In addition, designate the proper lines of communication and intervals of project status
updates.

Develop a High Level Process Map: The high level map of the process is often developed in the SIPOC format which
stands for Suppliers, Inputs, Process, Outputs and Customers. Upon completion of the high-level map, the team may
select an area for development of a more detailed map.

Measure

During the Measure phase of the project, the team assembles a complete picture of the current state of the process
and establishes a baseline through measurement of the existing system. Other activities may include:

Develop Detailed Process Maps: Develop detailed process maps for high-risk areas of the process, or areas where
additional information is required. A detailed process map may reveal process inefficiencies such as long or incorrect
cycle times, bottlenecks or non-value added process steps. The process map can also identify where data may be
collected.

Develop Data Collection Plan: Define the methods and objectives of the data collection process. Identify what will be
measured, the tools or equipment required, how to measure, how many and how often. In addition, determine the forms
that will be used to document the data.

Validate the Measurement System: A Measurement System Analysis (MSA) may be required to assure that the data
collected is accurate. If your data is not accurate you could make decisions based on incorrect information. If Gage
Repeatability & Reproducibility (GR&R) is greater than 30%, you may need to make improvements to the measurement
system prior to proceeding with data collection.

Collect the Data: The emphasis during data collection should be gathering data that aids in further defining the
problem. In addition, the data should provide information regarding possible causal factors that provide indications of
how, when or where the problems occur. In many cases it will be necessary to gather data on process performance
over a period of time. One of the key tools for collecting that data is the control chart. The control chart can help
identify any trends or outlying measurements.

Analyze

The focus of the Analyze phase is to identify all possible causal factors and determine the root cause of the problem.
Analyze the Data: The methods used to analyze the data depend on the type of data collected. The data can be analyzed
graphically using scatterplots or frequency plots. Statistical analysis should also be performed. In most Six Sigma
projects, an Analysis of Variance (ANOVA) is often performed. Other options include Correlation Analysis and Chi-
Square testing.

Identify Causal Factors: This is accomplished using various tools and techniques. One widely used method for gathering
and organizing possible causal factors is the Fishbone or Ishikawa diagram. The diagram is often used during
brainstorming sessions. The diagram resembles the skeleton of a fish. The main branches of the diagram are usually
labeled with the 6Ms: Man, Material, Method, Machine, Measurement and Mother Nature (Environment). The possible
causal factors are then listed under each category. The top possible causes derived from the exercise are circled on
the diagram and may then be investigated further.

Determine the Root Cause(s): Often we identify possible causes and implement countermeasures and the problem goes
away but eventually returns. This is because we have only treated a symptom of the problem and not the actual root
cause. One popular and effective method for determining the root cause is 5 Why and 5 How. The 5 Why method is
simply asking the question “Why” enough times until you get past all the symptoms of a problem and down to the root
cause. The 5 Hows are used to determine a permanent solution to the root cause(s) of the problem.

Improve

At this point in the project, the team has identified possible root causes of the problem. The Improve phase should
identify, implement and validate corrective actions to resolve any process issues and improve performance.

Identify Potential Solutions: The team should identify possible process improvements that would increase process
efficiency, improve quality and operator safety. Brainstorming is commonly used to generate a list of potential
solutions. This can be done with a 5 How exercise or close examination of the process maps and statistical analysis
results.

Analyze Failure Modes of Proposed Solutions: Consider reviewing potential improvements for their risk and possible
impact on other processes. A Failure Modes and Effects Analysis (FMEA) is often completed prior to implementation of
any changes. The FMEA helps the team identify and address potential problems that may arise due to the improvements
to the process. If an FMEA already exists for the current process, use it as a baseline and review for changes. The
FMEA identifies potential risks along with their severity and likelihood of occurrence. The most critical issues are
identified, allowing the team to develop a plan to minimize risk.

Validate Improvements: Prior to implementation, any process improvement should be validated using statistical
methods. The team must verify that the improvement resolved the issue. Validation may be achieved through pilot
builds, data collection and analysis and / or creation of a future state process map. The updated map can then be used
by the team to perform a Gemba walk of the process and ensure the improvements are completed and implemented
correctly.

Control

The objective of the Control phase is to support and maintain the gains realized during the Improve phase. Proper
action must be taken to assure the process does not regress back to its previous state. In order to achieve this goal
the team will need to take the following steps:
Update Process Documentation: The team must ensure that all process documentation is updated with the changes to
the process due to the improvements implemented. The documents that should be updated include Standard Work,
Process Maps, Work Instructions, Control Plans, Visual Aids, etc.

Associate Training: Assure that all associates are trained on the process and understand the improvements that were
introduced and how it affects their responsibilities. The associates should be informed of the purpose of the changes
and the benefits of making these changes.

Implement Statistical Process Control (SPC): SPC will monitor the performance of key steps in the process that relate
to the CTQs identified during the Define phase. The control chart should be updated on a regular basis. The associates
or process owner should review the charts for any evidence of shifts or trends in the process.

Create a Process Monitoring Plan: This is one key area where Six Sigma sets itself apart from basic project
management The purpose of the monitoring plan is to document how the performance of the process will be monitored
over time. The plan should include the metrics that will be monitored, the method of documentation, frequency of
measurement and sample size. In addition, the plan should specify who will be notified if there is an issue, the method
and timing of the communication, what response is required and who is responsible for executing the response.

Celebrate: The team should celebrate the successful completion of the project. Management should acknowledge the
effort put forth in completing the project and the benefits realized from the project.

Once the Control phase tasks have been completed, it’s time to transfer ownership of the new process to the original
process owner. The team should discuss with the champion or Black Belt facilitator any opportunities to carry over the
improvements made to other similar processes.

Six Sigma and the DMAIC process work. Many organizations have realized enormous benefits over time. Be careful not
to attempt to solve every problem right away, try not to go outside the boundaries of your project scope and do not
skip any steps in the process. Trust the process and it will work for you.
 Unit 5 Productivity Improvement Techniques

Work study

“Work study is a generic term for those techniques, method study and work measurement which are used in the
examination of human work in all its contexts. And which lead systematically to the investigation of all the factors
which affect the efficiency and economy of the situation being reviewed, in order to effect improvement.”

Work study is a means of enhancing the production efficiency (productivity) of the firm by elimination of waste and
unnecessary operations. It is a technique to identify non-value adding operations by investigation of all the factors
affecting the job. It is the only accurate and systematic procedure oriented technique to establish time standards. It is
going to contribute to the profit as the savings will start immediately and continue throughout the life of the product.

Method study and work measurement is part of work study. Part of method study is motion study, work measurement
is also called by the name ‘Time study’

Advantages of Work Study

Following are the advantages of work study:

1. It helps to achieve the smooth production flow with minimum interruptions.

2. It helps to reduce the cost of the product by eliminating waste and unnecessary operations.

3. Better worker-management relations.

4. Meets the delivery commitment.

5. Reduction in rejections and scrap and higher utilisation of resources of the organization.

6. Helps to achieve better working conditions.

7. Better workplace layout.

8. Improves upon the existing process or methods and helps in standardisation and simplification.

9. Helps to establish the standard time for an operation or job which has got application in manpower planning,
production planning.

Method study

Method study enables the industrial engineer to subject each operation to systematic analysis. The main purpose of
method study is to eliminate the unnecessary operations and to achieve the best method of performing the operation.
Method study is also called methods engineering or work design. Method engineering is used to describe collection of
analysis techniques which focus on improving the effectiveness of men and machines.

According to British Standards Institution (BS 3138): “Method study is the systematic recording and critical
examination or existing and proposed ways or doing work as a means or developing and applying easier and more
effective methods and reducing cost.”

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

1. The desire and determination to produce results.

2. Ability to achieve results.

3. An understanding of the human factors involved.

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

1. Manufacturing operations and their sequence.

2. Workmen.

3. Materials, tools and gauges.

4. Layout of physical facilities and work station design.

5. Movement of men and material handling.

6. Work environment.

Steps or Procedure Involved in Methods Study

The basic approach to method study consists of the following eight steps. The detailed procedure for conducting the
method study is shown in Fig. 7.3.

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

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

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

4. DEVELOP the most practical, economic and effective method, drawing on the contributions of those concerned.
5. EVALUATE different alternatives to developing a new improved method comparing the cost-effectiveness of the
selected new method with the current method with the current method of performance.

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

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

8. MAINTAIN the new method and introduce control procedures to prevent a drifting back to the previous method of
work.
Symbols Used in Method Study

Graphical method of recording was originated by Gilberth, in order to make the presentation of the facts clearly
without any ambiguity and to enable to grasp them quickly and clearly. It is useful to use symbols instead of written
description.

Method Study Symbols

Ο OPERATION

O INSPECTION

→ TRANSPORTATION

D DELAY

∇ STORAGE

Operation

An operation occurs when an object is intentionally changed in one or more of its characteristics (physical or
chemical). This indicates the main steps in a process, method or procedure. An operation always takes the object one
stage ahead towards completion. Examples of operation are:

Turning, drilling, milling, etc.

A chemical reaction.

Welding, brazing and riveting.

Lifting, loading, unloading.

Getting instructions from supervisor.

Taking dictation.

Inspection

An inspection occurs when an object is examined and compared with standard for quality and quantity. The inspection
examples are:

Visual observations for finish.

Count of quantity of incoming material.

Checking the dimensions.

Transportation

A transport indicates the movement of workers, materials or equipment from one place to another.

Example: Movement of materials from one work station to another.

Workers travelling to bring tools.

Delay Temporary Storage)

A delay occurs when the immediate performance of the next planned thing does not take place.

Example: Work waiting between consecutive operations.

Workers waiting at tool cribs.

Operators waiting for instructions from supervisor.

Storage

Storage occurs when the object is kept in an authorised custody and is protected against unauthorised removal. For
example, materials kept in stores to be distributed to various work.

Work Measurement

Work measurement is also called by the name ‘time study’. Work measurement is absolutely essential for both the
planning and control of operations. Without measurement data, we cannot determine the capacity of facilities or it is
not possible to quote delivery dates or costs. We are not in a position to determine the rate of production and also
labour utilisation and efficiency. It may not be possible to introduce incentive schemes and standard costs for budget
control.

Objectives of Work Measurement

1. Comparing alternative methods.

2. Assessing the correct initial manning (manpower requirement planning).

3. Planning and control.

4. Realistic costing.

5. Financial incentive schemes.

6. Delivery date of goods.

7. Cost reduction and cost control.

8. Identifying substandard workers.

9. Training new employees.

Techniques of Work Measurement

1. Repetitive work: The type of work in which the main operation or group of operations repeat continuously during the
time spent at the job. These apply to work cycles of extremely short duration.

2. Non-repetitive work: It includes some type of maintenance and construction work, where the work cycle itself is
hardly ever repeated identically.

Various techniques of work measurement are:

1. Time study (stop watch technique),

2. Synthesis,

3. Work sampling,

4. Predetermined motion and time study,

5. Analytical estimating.

Time study and work sampling involve direct observation and the remaining are data based and analytical in nature.

1. Time study: A work measurement technique for recording the times and rates of working for the elements of a
specified job carried out under specified conditions and for analysing the data so as to determine the time necessary
for carrying out the job at the defined level of performance. In other words measuring the time through stop watch is
called time study.

2. Synthetic data: A work measurement technique for building up the time for a job or pans of the job at a defined level
of performance by totalling element times obtained previously from time studies on other jobs containing the elements
concerned or from synthetic data.

3. Work sampling: A technique in which a large number of observations are made over a period of time of one or group
of machines, processes or workers. Each observation records what is happening at that instant and the percentage of
observations recorded for a particular activity, or delay, is a measure of the percentage of time during which that
activities delay occurs.

4. Predetermined motion time study (PMTS): A work measurement technique whereby times established for basic
human motions (classified according to the nature of the motion and conditions under which it is made) are used to
build up the time for a job at the defined level of performance. The most commonly used PMTS is known as Methods
Time Measurement (MTM).

5. Analytical estimating: A work measurement technique, being a development of estimating, whereby the time required
to carry out elements of a job at a defined level of performance is estimated partly from knowledge and practical
experience of the elements concerned and partly from synthetic data.

The work measurement techniques and their applications are shown in Table

Time Study

Time study is also called work measurement. It is essential for both planning and control of operations.

According to British Standard Institute time study has been defined as “The application of techniques designed to
establish the time for a qualified worker to carry out a specified job at a defined level of performance.”
Steps in Making Time Study

Stop watch time is the basic technique for determining accurate time standards. They are economical for repetitive
type of work. Steps in taking the time study are:

1. Select the work to be studied.

2. Obtain and record all the information available about the job, the operator and the working conditions likely to affect
the time study work.

3. Breakdown the operation into elements. An element is a instinct part of a specified activity composed of one or more
fundamental motions selected for convenience of observation and timing.

4. Measure the time by means of a stop watch taken by the operator to perform each element of the operation. Either
continuous method or snap back method of timing could be used.

5. At the same time, assess the operators effective speed of work relative to the observer’s concept of ‘normal’ speed.
This is called performance rating.

6. Adjust the observed time by rating factor to obtain normal time for each element

7. Add the suitable allowances to compensate for fatigue, personal needs, contingencies. etc. to give standard time for
each element.

8. Compute allowed time for the entire job by adding elemental standard times considering frequency of occurrence of
each element.

9. Make a detailed job description describing the method for which the standard time is established.

10. Test and review standards wherever necessary. The basic steps in time study are represented by a block diagram
in Fig.

Standard time is the time allowed to an operator to carry out the specified task under specified conditions and defined
level of performance. The various allowances are added to the normal time as applicable to get the standard time as
shown in Fig.

Standard time may be defined as the, amount of time required to complete a unit of work:

(a) under existing working conditions, (b) using the specified method and machinery, (c) by an operator, able to the
work in a proper manner, and (d) at a standard pace.

Thus basic constituents of standard time are:

1. Elemental (observed time).

2. Performance rating to compensate for difference in pace of working.

3. Relaxation allowance.

4. Interference and contingency allowance.

 5. Policy allowance.

OT – Observed Time
PRF – Performance Rating Factor
NT – Normal Time
PA – Process Allowances
RPA – Rest and Personal Allowances
SA – Special Allowances
PoA – Policy Allowances
Maintenance

Maintenance activities are related with repair, replacement and service of components or some identifiable group of
components in a manufacturing plant so that it may continue to operate at a specified ‘availability’ for a specified
period.

Thus maintenance management is associated with the direction and organisation of various resources so as to control
the availability and performance of the industrial unit to some specified level.

Thus maintenance management may be treated as a restorative function of production management which is entrusted
with the task of keeping equipment/machines and plant services ever available in proper operating condition.

The minimization of machine breakdowns and down time has been the main objective of maintenance but the strategies
adopted by maintenance management to achieve this aim have undergone great changes in the past.

Maintenance has been considered just to repair the faulty equipment and put them back in order in minimum possible
time.

Importance of Maintenance Management:

Maintenance management is responsible for the smooth and efficient working of the industrial plant and helps in
improving the productivity.

It also helps to keep the machines/equipment in their optimum operating conditions. Thus plant maintenance is an
important and inevitable service function of an efficient production system.

It also helps in maintaining and improving the operational efficiency of the plant facilities and hence contributes
towards revenue by decreasing the operating cost and improving the quality and quantity of the product being
manufactured.

As a service function it is related with the incurrence of certain costs. The important component of such costs are —
employment of maintenance staff, other minor administrative expenses, investment in maintenance equipment and
inventory of repair components/ parts and maintenance materials.

Absence of plant maintenance may lead to frequent machine breakdown and failure of certain productive
centres/services which in turn would result in stoppages of production activities, idle man and machine time,
dislocation of the subsequent operations, poor quality of production, failure to meet delivery dates of product supply,
industrial accidents endangering the life of workers/ operators and allied costs etc.

However, the importance of plant maintenance varies with the type of plant and its production but it plays a prominent
role in production management because plant breakdown creates problems such as:

(i) Loss of production.

(ii) Rescheduling of production.

(iii) Materials wastage (due to sudden stoppage of process damages in process materials).

(iv) Need for overtimes,

(v) Need for work subcontracting.

(vi) For maximum manpower utilization workers may need alternative work due to temporary work shortages.
Hence, the absence of planned maintenance service proves costlier. So it should be provided in the light of cost benefit
analysis. Since plant maintenance is a service function, it should be provided at the least possible cost but it is very
important as discussed above.

Objectives of Maintenance Management:

The purpose of maintenance management is to optimize the performance of productive facilities of an organization by
ensuring that these facilities function regularly and efficiently. This can be achieved by preventing the failures or
breakdowns if any, as far as possible and by minimizing the production loss due to failures.

The main objectives of maintenance management are as follows:

(1) Minimizing the loss of productive time because of equipment failure to maximize the availability of plant, equipment
and machinery for productive utilization through planned maintenance.

(2) To extend the useful life of the plant, machinery and other facilities by minimizing their wear and tear.

(3) Minimizing the loss due to production stoppages.

(4) To ensure operational readiness of all equipment’s needed for emergency purposes at all times such as fire-
fighting equipment.

(5) Efficient use of maintenance equipment’s and personnel.

(6) To ensure safety of personnel through regular inspection and maintenance of facilities such as boilers,
compressors and material handling equipment etc.

(7) To maximize efficiency and economy in production through optimum utilization of available facilities.

(8) To improve the quality of products and to improve the productivity of the plant.

(9) To minimize the total maintenance cost which may consist of cost of repairs, cost of preventive maintenance and
inventory costs associated with spare parts/materials required for maintenance.

(10) To improve reliability, availability and maintainability.

Functions of Maintenance Management:

The important functions of maintenance can be summarized as follows:

(1) To develop maintenance policies, procedures and standards for the plant maintenance system.

(2) To schedule the maintenance work after due consultation with the concerned production departments.

(3) To carry out repairs and rectify or overhaul planned equipment/facilities for achieving the required level of
availability and optimum operational efficiency.

(4) To ensure scheduled inspection, lubrication oil checking, and adjustment of plant machinery and equipment.

(5) To document and maintain record of each maintenance activity (i.e., repairs, replacement, overhauls, modifications
and lubrication etc.).

(6) To maintain and carry out repairs of buildings, utilities, material handling equipment’s and other service facilities
such as electrical installations, sewers, central stores and roadways etc.
(7) To carry out and facilitate periodic inspections of equipment and facilities to know their conditions related to their
failure and stoppage of production.

(8) To prepare inventory list of spare parts and materials required for maintenance.

(9) To ensure cost effective maintenance.

(10) To forecast the maintenance expenditure and prepare a budget and to ensure that maintenance expenditure is as
per planned budget.

(11) To recruit and train personnel to prepare the maintenance workforce for effective and efficient plant maintenance.

(12) To implement safety standards as required for the use of specific equipment or certain categories of equipment
such as boilers, overhead cranes and chemical plants etc.

(13) To develop management information systems, to provide information to top management regarding the
maintenance activities.

(14) To monitor the equipment condition at regular intervals.

(15) To ensure proper inventory control of spare parts and other materials required.

In terms of plants operations the functions of maintenance are:

(a) The plant must be available as and when required.

(b) The plant must not breakdown during actual operation state.

(c) The plant must operate in an efficient manner at required level of plant operation.

(d) The down time must not interfere with production runs.

(e) The down time due to breakdown should be a minimum.

Corrective maintenance: The set of tasks is destined to correct the defects to be found in the different equipment and
that are communicated to the maintenance department by users of the same equipment.

Preventive Maintenance: Its mission is to maintain a level of certain service on equipment, programming the
interventions of their vulnerabilities in the most opportune time. It is used to be a systematic character, that is, the
equipment is inspected even if it has not given any symptoms of having a problem.

Predictive Maintenance: It pursues constantly know and report the status and operational capacity of the installations
by knowing the values of certain variables, which represent such state and operational ability. To apply this
maintenance, it is necessary to identify physical variables (temperature, vibration, power consumption, etc.). Which
variation is indicative of problems that may be appearing on the equipment. This maintenance it is the most technical,
since it requires advanced technical resources, and at times of strong mathematical, physical and / or technical
knowledge.

Zero Hours Maintenance (Overhaul): The set of tasks whose goal is to review the equipment at scheduled intervals
before appearing any failure, either when the reliability of the equipment has decreased considerably so it is risky to
make forecasts of production capacity . This review is based on leaving the equipment to zero hours of operation, that
is, as if the equipment were new. These reviews will replace or repair all items subject to wear. The aim is to ensure,
with high probability, a good working time fixed in advance.
Periodic maintenance (Time Based Maintenance TBM): the basic maintenance of equipment made by the users of it. It
consists of a series of elementary tasks (data collections, visual inspections, cleaning, lubrication, retightening
screws,…) for which no extensive training is necessary, but perhaps only a brief training. This type of maintenance is
the based on TPM (Total Productive Maintenance).

Break Down Maintenance

In this method the machines are allowed to run without carrying out any maintenance activities. Only when it becomes
out of order (Stops working) it is repaired and set right. Next maintenance is done only when it breaks down again.

This type of maintenance is applicable to machines which are not important i.e Breakdown of these machines will not
affect the production process.

Causes of Breakdown

i) Failure to replace the wornout parts

ii) Non application of lubricants
iii) Neglected cooling system
iv) Carelessness towards minor repairs

Disadvantages of Break down maintenance

i) Production is affected (Delayed or Stoped)

ii) Leads to hurried maintenance -which in turn leads to poor quality maintenance
iii) The plant depreciates very fast
iv) Plant life is very much reduced.
v) Increase cost due to overtime payment
vi) Cost of maintenance is high – as down time cost and replacement cost will be high
vii) Leads to direct loss of profit
viii) Leads to increased accidents
ix) More wastage of material
x) Not suitable for equipments like cranes, boilers, lifts, hoists etc

However this type of maintenance is used for ordinary equipments like bench grinders etc.

Preventive Maintenance

It is a method of maintenance aimed at avoiding or preventing breakdowns. The principle of preventive maintenance is
‘Prevention is better than cure’ Here some components are identified as weak spots in all machineries and equipments.
These parts are inspected regularly. Minor repairs are carried out immediately as soon as there is necessity. This
reduces the unanticipated breakdowns.

Objectives

1. To minimize the possibility of unanticipated break downs

2. To make plant and machines always available for ready use.
3. To retain the value of the equipment
4. To maintain optimum productivity
5. To maintain the accuracy of the machineries
6. To reduce work content during maintenance
7. To ensure safety to workmen
Procedure

1) Maintaining machine Records

To carry out the preventive maintenance effectively all the details about the machines should be kept in records. These
are

a) Type of equipment and description

b) Name of the manufacturer
c) Cost and date of the purchase
d) Cost and date of planned repairs
e) Breakdowns if any and their dates and reasons
f) List of spare parts and their code numbers

2) Preparing Inspection checklist

Here the components to be inspected on regular intervals are listed. i.e What are to be inspected daily/ weekly/
monthly are listed. General items which are to be inspected regularly are :

a) Material handling equipments like crane, hoists lifts conveyors trucks etc.
b) Safety equipments like relief valves, fire extinguishers, safety alarms etc.
c) Process equipments like furnaces , compressor, pumps, motors etc
d) Water, air and fuel lines
e) Key equipments and machineries
Frequency of inspection depends upon
a) Severity of work carried out on the machine – whether one shift, two shift or for 24 hrs daily.
b) Age, condition and value of the equipment
c) Safety and health environment
d) Amount of exposure to dirt, fumes, friction , fatigue , stress , corrosion, wear etc.

3. Inspection as per check list and corrective action

Inspection and corrective action can be done as follows

a) Routine up-keep adjustment of guide plates, lubrication and cleaning

b) Periodic inspection – Visual inspection – Overhauls, scheduled replacements etc.
These maintenance works are done without disturbance to the production activities. In preventive maintenance, the
cost of maintenance will be high. Because many people are involved in inspection, record keeping and maintenance
work. More number of spare parts. The parts are replaced before the end of their life.

Advantages of Preventive maintenance

1. Reduced break downs and down time

2. Lesser overtime to maintenance people
3. Grater safety to workers
4. Low maintenance and repair cost
5. Less stand –by equipment needed.
6. Reduced production cost
7. Increased equipment life
8. Increase workers morale – as no stoppage of work.
9. Better product Quality
10. Less material wastages.
TPM (Total Productive Maintenance)

TPM (Total Productive Maintenance) is a holistic approach to equipment maintenance that strives to achieve perfect
production:

No Breakdowns

No Small Stops or Slow Running

No Defects

In addition it values a safe working environment:

No Accidents

TPM emphasizes proactive and preventative maintenance to maximize the operational efficiency of equipment. It blurs
the distinction between the roles of production and maintenance by placing a strong emphasis on empowering
operators to help maintain their equipment.

The implementation of a TPM program creates a shared responsibility for equipment that encourages greater
involvement by plant floor workers. In the right environment this can be very effective in improving productivity
(increasing up time, reducing cycle times, and eliminating defects).

The eight pillars of TPM are mostly focused on proactive and preventative techniques for improving equipment
reliability.

Pillar What Is It? How Does It Help?

Autonomous Places responsibility for routine  Gives operators greater “ownership” of their equipment.
Maintenance maintenance, such as cleaning,  Increases operators’ knowledge of their equipment.
lubricating, and inspection, in the  Ensures equipment is well-cleaned and lubricated.
hands of operators.  Identifies emergent issues before they become failures.
 Frees maintenance personnel for higher-level tasks.

Planned Schedules maintenance tasks  Significantly reduces instances of unplanned stop time.
Maintenance based on predicted and/or  Enables most maintenance to be planned for times when
measured failure rates. equipment is not scheduled for production.
 Reduces inventory through better control of wear-prone
and failure-prone parts.

Quality Design error detection and  Specifically targets quality issues with improvement
Maintenance prevention into production projects focused on removing root sources of defects.
processes. Apply Root Cause  Reduces number of defects.
Analysis to eliminate recurring  Reduces cost by catching defects early (it is expensive and
sources of quality defects. unreliable to find defects through inspection).

Focused Have small groups of employees  Recurring problems are identified and resolved by cross-
Improvement work together proactively to functional teams.
achieve regular, incremental  Combines the collective talents of a company to create an
Pillar What Is It? How Does It Help?
improvements in equipment engine for continuous improvement.
operation.

Early Equipment Directs practical knowledge and  New equipment reaches planned performance levels much
Management understanding of manufacturing faster due to fewer startup issues.
equipment gained through TPM  Maintenance is simpler and more robust due to practical
towards improving the design of review and employee involvement prior to installation.
new equipment.

Training and Fill in knowledge gaps necessary  Operators develop skills to routinely maintain equipment
Education to achieve TPM goals. Applies to and identify emerging problems.
operators, maintenance  Maintenance personnel learn techniques for proactive and
personnel and managers. preventative maintenance.
 Managers are trained on TPM principles as well as on
employee coaching and development.

Safety, Health, Maintain a safe and healthy  Eliminates potential health and safety risks, resulting in a
Environment working environment. safer workplace.
 Specifically targets the goal of an accident-free workplace.

TPM in Apply TPM techniques to  Extends TPM benefits beyond the plant floor by addressing
Administration administrative functions. waste in administrative functions.
 Supports production through improved administrative
operations (e.g. order processing, procurement, and
scheduling).