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Lectures notes
On
Production and Operation
Management
Prepared by
Dr
...
Swagatika Mishra

Assistant Professor
Department of Mechanical Engineering
VSSUT Burla

...


2
...

4
...
I
...

Production System Models of production system, Product Vs
...

Forecasting : Methods — moving average, exponential smoothing,
Regression analysis, coefficient of co-relation, Delphi, Market survey
...


Motion study — principles of motion — economy, Time study-standard time
...
Sequencing, Line
balancing, Flow control, Dispatching, expediting, Gantt chart, line of
balance, learing curve
...

Project Management — Network scheduling, PERT
...

8
...
Modern Trends in Manufacturing :Basic concepts of CAD,CAM,FMS, CIM,
ISO 9000, Quality circle, Kaizen, Kanbans, Poke Yoke' supply chain
management
...

Production Systems : Planning, Analysis & Control : By — Riggs, J
...
(4th
Edn
...

Modern Production/Operation management : By — Buffa, E
...
& Sarin,
=,
...
(8`" Edn
...

3
...
(2' 1 Edn
...

Production & Operations Managem ent : By Chary, S
...
(TMH)
5
...


VEER SURENDRA SAI UNIVERSITY OF TECHNOLOGY BURLAHA
DEPARTMENT OF MECHANICAL
LESSON PLAN FOR Production and Operation Management
SUBJECT CODE: 8th Semester
Lecture

Topics to be covered

Lecture 1

Productivity: Importance, productivity ratio, productivity
measurement, productivity index

Lecture 2

Awareness – improvement – maintenance (A
...
M) process,
Production System, Models of production system

Lecture 3

Product Vs
...

Lecture 12 Problems on single facility location using median method
Lecture 13 Problems on single facility location using minimax method and
gravity method
Lecture 14 Problems on single facility location using Euclidean-distance
location
Lecture 15 Motion study, Principles of motion- economy, method study
Lecture 16 Rules concerning human body, workplace layout and materials
handling,
Lecture 17 Rules concerning tools and equipments design, time conservation
Lecture 18 Time study and work measurement techniques

Remark

Lecture 19 Performance rating and different types of allowances
Lecture 20 Production planning and control- Aggregate planning
Lecture 21 Sequencing and line balancing
Lecture 22 Flow control
Lecture 23 Dispatching, centralized and decentralized dispatching
Lecture 24 Expediting and Gantt chart
Lecture 25 Line of balance and learning curve
Lecture 26 Project management, network scheduling
Lecture 27 PERT with problems
Lecture 28 Problems
Lecture 29 Critical path method with problems
Lecture 30 Problems
Lecture 31 Resource levelling
Lecture 32 Basic concepts of CAD, CAM, FMS
Lecture 33 CIM, JIT, ISO 9000
Lecture 34 Quality circle, Kaizen, Kanbans
Lecture 35 Poke Yoke, Supply chain management
Lecture 36 Revision of problems
Lecture 37 Revision of problems
Lecture 38 Revision of problems
Lecture 39 Revision of problems
Lecture 40 Revision of problems

CHAPTER-I
PRODUCTIVITY
1
...

Resources used in
production/ operation
subsystem

Value added products/services
Transform
(In controlled manner as
per the policies of the organization)

Production/Operation function:
Range of inputs

Required output (product/service)
(Having the requisite quality level)

The set of interrelated management activities which are involved in manufacturing certain
products is called production management and for service management, then corresponding set
of management activities is called as operation management
...

Examples: (Services)
Medical facilities,
Travel booking services
...

The management decisions are Strategic, tactical and operational
...

Adjustment of machine settings
...

Proper allocation of operations to machines with matching skills
...


1
...
The ratio of aggregate output to the
aggregate input is called productivity
...
If it is more
than 1, the organization is in a comfortable position
...

1
...

 Gains from productivity can be transferred to the consumers in form of lower priced
Products or better quality products
...

 A more productive entrepreneur can have better chances to exploit expert opportunities
...

 Overall productivity reflects the efficiency of production system
...

 The same output is produced with lesser input
...

 The proportional increase in output being more than the proportional increase in input
...
4 Productivity Measurement:
Productivity may be measured either on aggregate basis or on individual basis, which are called
total and partial measure
...


2

Labour productivity Index/Measure = Output in unit
Man hours worked
Management productivity Index/Measure =
Output
Total cost of management
Machine productivity Index/Measure

=

Total output
Machine hours worked

Land productivity Index/Measure

=

Partial Measure = Output
Labour

Output or Output
or Output
Capital
Materials
Energy

or

Total output
Area of Land used

PROBLEMS:
Example-1
The input and output data for an industry given in the table
...

Output and Input production data in dollar ($)
Output
1
...

3
...

5
...
Human
3,000
2
...
Capital
10,000
4
...
Other Expenses
1,500
Solution:
Total measure = Total Output = 13,500 = 0
...
28
Human+Material 3,153
Multi factor measure = Finished units = 10,000 = 3
...
52
Energy
540
3

Note: For multifactor and partial measures it is not necessary to use total output as numerator
...

Other fields for the measurement of partial measures of productivity are:
Business
Restaurant
Retail Store
Utility plant
Paper mill

Productivity Measure
Customers (Meals) per labour hour
Sales per square foot
Kilowatts per ton of coal
Tons of paper per cord of wood

Example-2
A furniture manufacturing company has provided the following data
...

Output: Sales value of production in dollar ($)
22,000 (in 1996) and 35,000 (in 1997)
1996
Inputs: Labour
10,000
Raw materials and Supplies
8,000
Capital equipment depreciation
700
Other
2,200

1997
15,000
12,500
1,200
4,800

Solution:
a
...
Total Productivity

1996

1997

2
...
75
1
...
33
2
...
04

1
...
That the total overall performance is captured in this ratio, becomes apparent, if we
examine the relationship between this ratio and the age-old performance measure of profit
...
(1)

From the definition of profit, we have;
Profit= π = G-C

By dividing eqn (2) by C,
So from (1),

…………………
...
The profit to cost ratio will determine the increase in productivity
...
However it suffers from a number of drawbacks
...
Thus
aggregate output should be equal to gross sales suitably inflated or deflated with respect
to a base year
...

Possibility of inventory, material manufactured for own use, etc
...

c) Equating aggregate input to cost raises a host of problems and involves several restrictive
assumptions
...
are some of the problems
...

1
...
The methods contribute to the improvement of productivity are
method study and work measurement by reducing work content and Ineffective time
...
Except in some cases like in processing industries, actual
operation times are far in excess of the theoretical minimum
...


6

CHAPTER-II
PRODUCTION SYSTEM
2
...
The definition of a production
system is thus based on four main elements: the input, the resources, the production process and
the output
...
These organizations transform (or convert) a set of inputs (such as materials, labour,
equipment, energy etc
...
The outputs of a production system are
normally called products
...
) (Teaching,health care etc
...
)

INPUT
•
•
•
•
•

Material
Machines
Labor
Management
Capital

TRANSFORMATION
PROCESS

OUTPUT
• Goods
• Services

Feedback & Requirements

Fig 2
...
So this system produces goods
and/or services on a continuous and/or batch basis with or without profit as a primary objective
...
The output of production is the creation of goods and services which satisfy
the needs of the customers
...
For
example, refrigerators, motor cars, television, toothpaste etc
...
The production system has the following characteristics:



Production is an organized activity, so every production system has an objective
...

 Production system doesn’t oppose in isolation from the other organization system such as
marketing, finance etc
...

The transformation process involves many activities and operation necessary to change
inputs to output
...

2
...
Three types of models are there such as physical, schematic and
mathematical
...


II
...

a
...
solar system)
b
...
Atomic model)
Schematic model: These are 2-D models which represents
• Price fluctuations with year
...

• Maps of routings
• Networks of timed events
...


III
...
One can
represent the important aspect of a system/problem in mathematical form using variables,
parameters and functions
...
by analyzing and
manipulating the mathematical model, we can learn how the real system will behave
under various conditions
...
3 Product

vs
...

2- Output can be inventoried
...

4-low costumer’s involvement
...

6-available at regional, national and
international market
...

8-Capital intensive
...

10-Demand variable on weekly, monthly,
seasonally
...

2- Output can’t be inventoried
...

4- High costumer’s involvement
...

6-local market
...

8-Labour intensive
...

10- Demand variable on hourly, daily, weekly
basis
...
) Other inputs such as labour skills,
management skills, capitals are used as well
...
etc) to transfer their
raw material into tangible products
...
(ex: mail service, library service,
restaurant etc
...

The service of service providing organization is intangible
...
durable goods can be kept for longer time these goods
can be stored for longer time and can be transported in anticipation in future demand
...
Whereas service can’t be pre produced
...

A 3rd distinction is based on consumption/use of output
...
V
...
can be used at least for 10
years
...
e
...
Ex
...

A 4th distinction is based on customer contact
...
Whereas, in many service providing organization
9

consumers/customers are directly involved
...

The 5th distinction is based on lead time/response time to customers demand
...
e
...
Whereas the services are offered within few minutes of customers arrival
...

The 6th distinction is on availability
...
Thus service organization requiring direct customer
contact must locate very near to the customers
...
Manufacturing unit/organization producing
products generally require larger facilities, more automation and greater capital investment than
service providing organization
...
Generally manufacturing firm producing
goods/products require more capital than a service provider
...
An automobile firm requires
more capital than a post office/Nursing home
...

2
...
)
and services of the plant within the area of site located
...

Bottlenecks and points of congestions are eliminated (by line balancing) so that the rawmaterial and semi-finished goods move fast from one workstation to other
...

Suitable spaces are allocated to production centers and service centers
...


Layout can be classified into the following four categories:
a
...

c
...


process layout
product layout
Group layout(combination layout)
Fixed position layout

10

a
...

• Here similar machines and services located together Ex
...

• This type of layout generally employed for industries engaged in job-shop
production and non-repetitive kind of production
...

• Ex
...


Fig 2
...
Product layout
• It is also known as line (type) layout
...

• When the machines and auxiliary services are located according to the processing
sequence we prefer this layout
...

• The product layout is selected when the volume of production of a product is high
such that separate production line to manufacture it can be justified
...
Ex
...


Fig 2
...
Group layout:
• It is the combination of both process and product layout
...
These machines grouped in to
cells
...


Milling

shaping

Drilling

Welding

Grinding

Slotting

Boring

Fitting

Turning

Welding

Fig 2
...
Fixed position layout
 It is also called static product layoutin which the physical characterstics of the
product dictate as to which type of machine and men are brought to the product
...

 In other type layout the product moves past stationary production equipment
where as in this case men and equipment are moved to the material at one place
and the product is completed at the place where the material lies
...
5 Fixed position layout
12

2
...

Comparison of process oriented layout and product oriented layout
Sl No
...


11

Flexibility of
design change
Effect of
breakdown

12

Process oriented

Product oriented

Diversified products using
operations, varying rate of
output or small batches of many
different products
Variable flow depending on
nature of job

Standardized
product,
large volume,stable rate
of output

high
Break down of any machine
doesn’t effect much on the final
output

13

Identical flow and same
sequence of operations
for each unit
...

In process inventory high
Less space is occupied by
work in transit and for
temporary storage
...

low
Seriously affected; as all
are interrelated system
...
6 Product life cycle
A product life cycle consist of 5 stages through which a product passes that is *introduction
*growth*maturity*decline
...

1
...
In this stage ,the demand is low

...
The organization has to invest
heavily in advertisement to make the product familiar to the costumers
...

2
...
Early in this stage (due to acceptability of the
product by the costumer) there is drastic jump in sales and profit rise
...
During this stage the mandate for operation is somehow to keep up with
demand; efficiency is less of concern
...
Maturity
During this stage, sales level off and profit begins to decline
...
Now operation must stress on efficiency, although
marketing can ease the pressure by intensifying to differentiate the product
...
Decline
At last the existing product enters to a declining stage and becomes obsolete
...

Life cycle suggest when to eliminate the existing product and introduce a new one
...
For example it took 15 years for “Xerox” to
introduce electrostatic copy m/c
...


14

Fig 2
...
product life cycle
2
...
6 of production function a enterprise
15

The core area of the diagram represents the organization’s policy making group
...
The overlapping portions of the circle denote the cooperation needed from the two groups in order to establish overall policy
...

(i)Manufacturing
A fundamental function of much production system is to produce a physical output
...
A plant service section handles
shipping receiving, storing and transporting raw material parts and tools
...

(ii) personnel
The recruitment and training of the personnel needed to operate the production system are
the traditional responsibilities of the personnel function
...
Labour relation and employee services and
benefits are increasingly important
...
The product must
be customized
...

(iv)Marketing
Many ideas of product development comes through the marketing function
...
Sales forecasts and estimate of the nature of future demands is
also performed by this department
...

(v) Finance and accounting
Internal financing includes reviewing the budgets for operating sections, evaluating of
proposed investments for production facilities and preparing balance sheet
...

In this business game analogy the accounting functions are collection of cost data for
materials direct labour and overhead
...

16

(vi) Purchasing
In a narrow sense, purchasing is limited to accounting materials from outside sources
...
The purchasing function serves the other functional areas,
overlap sometimes with inventory control, material inspection, shipping and receiving, subcontracting and internal transportation
...

the sequential arrangement is shown in the following

Customer

Distribution

Sales

Quality Control

Finance

Manufacturing

Engineering

Production
Planning Control

Procurement

Inventory Cntrol

Fig 2
...
8 Types of production system:
The production system of a company mainly uses facilities, equipments and operating
methods(called the production system) to produce goods that satisfy customers’ demand
...
The classification of production
system is explained in the table
...
6 Classification of production systems
Job shop production


Job shop is appropriate for manufactures of small batches of many different products,
each of which is custom designed and requires its own unique set of processing steps or
routing through production process
...
Ex
...




Much time is spent waiting for access to equipment
...




A process technology suitable for a variety of custom designed products in some volume
...


Batch production


A process technology suitable for variety of products in varying volumes
...
Ex
...

18



Within the wide range of products in the facility, several are demanded repeatedly and in
large volume
...


Assembly line (mass) Production


A process technology suitable for a narrow range of standardized products in high
volumes
...




The product variety is fixed here
...
Assembly of television sets, assembly of auto,
assembly of computer keyboard, cold drinks factory etc
...




The product is highly standardized
...




Continuous flow technology affords high volume, around-the clock operation with
capital intensive, specialized automation
...
9 Dimensions of Product Strategies:
•

Product-Positioning
...


•

Product-Overlap
...


•

Product-Design
...


•

New Product
...


•

Value-Marketing
...
Analyze product attributes that are salient to Customers
...
Examine the distribution of these attributes among different segments
...
Determine the optimal position for the product in regard to each attribute, taking into
consideration the position occupied by existing brands
...
Choose an overall position for the product (based on overall match between product
attributes and their distribution in the population and the position of existing brands)
Product Positioning Strategy
•

Definition: Placing a brand in that part of the market where it will have a favorable
reception compared with competing brands
...
The marketers of “Colgate” want the consumers to think “Colgate” when they think
toothpaste etc
...
(b) To position the product so that it tells customers what you stand for,
what you are, and how you would like customers to evaluate you
...


•
•

(b) To avoid competitive threats to a single brand

Requirements: Use of marketing mix variables, especially design and communication
efforts
...


– Successful management of multiple brands requires careful positioning in the
market so that multiple brands do not compete with nor cannibalize each other
...

– Expected Results:
– Short term success
– Meet as much as possible the needs of specific segments of the market
20

– Limit sudden changes in sales
...

Product Re-positioning Strategy
•

Definition: Reviewing the current positioning of the product and its marketing mix and
seeking a new position for it that seems more appropriate
...
(b) To correct an original positioning
mistake
...

– If the business unit wants to reach new users, this strategy requires that the
product be presented with a different twist to the people who have not been
favorably inclined toward it
...

–

If this strategy aims at presenting new uses of the product, it requires searching
for latent uses of the product, if any
...


•

Expected Results:
– Among existing customers: increase in sales growth and profitability
...

– New product uses: increased sales, market share, and profitability
...


•

Objectives: Product overlap strategies can include selling similar goods in different
markets, regions or international countries
...
However, the company may sell
widgets in the United States and cogs in Canada
...

– (b) To work at full capacity and spread overhead
...

•

Requirements:
– (a) Each competing product must have its own marketing organization to compete
in the market
...

– (c) Each brand should find its special niche in the market
...

– (d) In the long run, one of the brands may be withdrawn, yielding its position to
the other brand

•

Expected Results:
– Increased market share
...


Product Scope Strategy
•

Definition: The product-scope strategy deals with the perspectives of the product mix of
a company
...
The company may adopt a single-product strategy, a
multiple-product strategy, or a system-of-products strategy
...

– Multiple products: to cover the risk of potential obsolescence of the single product
by adding additional products
...


•

Requirements:
– (a) Single product: company must stay up-to-date on the product and even
become the technology leader to avoid obsolescence
...

22

– (c) System of products: company must have a close understanding of customer
needs and uses of the products
...

With system-of-products strategy, the company achieves monopolistic control over the
market, which may lead to some problems with the Justice Department, and enlarges the
concept of its product/market opportunities
...
The company has a choice among the following strategic options: standard
product, customized product, and standard product with modifications
...

– Customized product: to compete against mass producers of standardized products
through product-design flexibility
...

– Requirements:
– Close analysis of product/market perspectives and environmental
– Changes, especially technological changes
...
In addition, the
– third strategy allows the company to keep close contacts with the market and
– Gain experience in developing new standard products
...


•

Objectives:
– To eliminate undesirable products because their contribution to fixed cost and
profit is too low,

23

– Eliminate Products that its future performance looks grim, or because they do not
fit in the business’s overall strategy
...

– Requirements:
– No special resources are required to eliminate a product or a division
...

– An in-depth analysis must be done to determine
•

(a) the causes of current problems;

•

(b) The possible alternatives, other than elimination, that may solve
problems (e
...
, Are any improvements in the marketing mix possible?);

•

(c) The repercussions that elimination may have on remaining products or
units
...
In the long run, the sales of the remaining products may increase
because more efforts are now concentrated on them
...


Three

alternatives

emerge

from

the

above:

product

improvement/modification, product imitation, and product innovation
...
In the first case, the new-product strategy is an offensive one; in the second
case, it is a defensive one
...
Five components of this system
should be assessed:
24

– Corporate aspirations toward new products,
– Organizational openness to creativity
...
Five components of this system
should be assessed:
– Environmental favor toward creativity
– Screening method for new ideas, and Evaluation process

•

Expected Results: Increased market share and profitability
...


Diversification Strategy
•

Definition: Developing unfamiliar products and markets through:
– Concentric diversification (products introduced are related to existing ones in
terms of marketing or technology),
– Horizontal diversification (new products are unrelated to existing ones but are
sold to the same customers)
–

•

Conglomerate diversification (products are entirely new)
...

•

Requirements: In order to reduce the risks inherent in a diversification strategy, a
business unit should:
–

Diversify its activities only if current product/market opportunities are limited
...

–

Provide the products introduced with adequate support
...

– Expected Results:
– Increase in sales
...
These promises involve product quality, customer service, and
meeting time commitments
...
It means striving for excellence to meet customer expectations
...


–

(b) Design programs to meet customer quality, service, and time requirements
...

– Expected Results: This strategy enhances customer satisfaction, which leads to
customer loyalty, and, hence, to higher market share
...


26

CHAPTER-III
FORECASTING
Casting data forward is called forecasting
...

Need of forecasting:
 When there is a time lag between awareness of an impending event or need and
occurrence of that event
...

 Planning is the fundamental activity of management
...

 It is essential for the organization to know for what level of activities one is planning
before investments in input
...
Ex
...

Long Term Forecasting is the forecasting that made for that made for long term objectives
covering more than five years
...
Product diversification, sales and advertisement
...

a) Internal factors
b) External factors
i
...

Non-Controllable (Organizing with national economy,governments,customers and
Competitors)
Basic categories of forecasting methods:
Forecasting methods can be divided in to three main categories
...
Extrapolative or Time-series Methods
B
...
Qualitative or judgmental methods
Time-series Methods and explanatory methods are quantitative methods and judgmental
methods are qualitative methods
...


27

A
...

Relate the forecast to only one factor – time
...

 Stable demand with no pronounced behavioral patterns
...


Moving Average: Naïve Approach
Example: Forecast the order for the month of November by Naïve approach
...


SMAt =

D t -(n -1) + D t -(n -2) +
...
3
88
...
0
78
...
3
85
...
0
110
...
0
85
...
0
88
...
0
91
...
1 Classification of production systems
Note:  It gives equal weight to the demand in each of the most n periods
...

Weighted Moving Average
While the moving average formula implies an equal weight being placed on each value that is
being averaged, the weighted moving average permits an unequal weighting on prior time
periods
WMA =
t

n

Wi Di
i 1

n

w

i

=1

i =1

w = weight given to time period “t” occurrence (weights must add to one)
t

th

Question: Given the weekly demand and weights, what is the forecast for the 4 period or Week
4?
Week
1
2
3
4

Weights:
t-1
t-2
t-3

Demand
650
678
720

Note that the weights place more emphasis on the most recent data, that is time period “t-1”
30

Week

Demand

1

650

2

678

3

720

Forecast

4

INPUT
•
•
•
•

693
...
0  a  1
...
20, then Ft +1 = 0
...
80 Ft
If a = 0, then Ft +1 = 0 Dt + 1 Ft = Ft
Forecast does not reflect recent data
If a = 1, then Ft +1 = 1 Dt + 0 Ft = Dt
Forecast based only on most recent data
Question: Given the weekly demand data, what are the exponential smoothing forecasts for
periods 10th using a=0
...
60?
Assume F =D
1

1

31

Week
1
2
3
4
5
6
7
8
9
10

Demand
820
775
680
655
750
802
798
689
775

Solution: The respective alphas columns denote the forecast values
...


Week
1
2
3
4
5
6
7
8
9
10

Demand
820
775
680
655
750
802
798
689
775

0
...
00
820
...
50
801
...
26
783
...
38
786
...
88
776
...
6
820
...
00
793
...
20
683
...
23
770
...
00
728
...
28

Note how that the smaller alpha results in a smoother line in this example

Demand

900
800

Demand

700

0
...
6

500
1

2

3

4

5

6

7

8

Week

Fig 3
...
they need
a good forecast of demand for their computers so that they will know how many parts to
purchase and stock
...
There is an upward
trend in the demand
...
5
and trend parameter β= 0
...

Period
1
2
3
4
5
6

Month
January
February
March
April
May
June

Demand
37
40
41
37
45
50

Period
7
8
9
10
11
12

Month
July
August
September
October
November
December

Solution:
For Period 2,
we have F2 = A1 + T1, so to get the process started, let A0 = 37 and T0 = 0
...
5(37) + (1 − 0
...
3(37 − 37) + (1 − 0
...
5(40)+(1−0
...
5, and
T2 = β(A2 −A1)+(1−β)T1 =0
...
5− 37)+ (1 − 0
...
45
...
5+ 0
...
95
...

May
Jun
...

Aug
...

Oct
...

Dec
...

Smooth
...

Smooth
...
5, β = 0
...
5
37
...
00
38
...
75
38
...
69
45
...
42
45
...
86
51
...
21
53
...
00
38
...
98
38
...
03
46
...
84
47
...
15
53
...
15
55
...
Casual or explanatory methods
Simple Linear Regression Model
y = a + bx
where
a = intercept
b = slope of the line
x = time period
y = forecast for

demand for period x

Nov = WMA 0
...
3(678)+0
...
4
4

3

34

Tt
0
...
45
0
...
20
1
...
12
1
...
25
2
...
02
1
...
51

Ft
37
...
00
38
...
73
39
...
12
48
...
11
48
...
56
55
...
13
57
...

Week Week*Week
Sales Week*Sales
1
1
150
150
2
4
157
314
3
9
162
486
4
16
166
664
5
25
177
885
3
55
162
...
4)(3)  63 = 6
...
4 - (6
...
5

The resulting regression model is:

Yt = 143
...
3x
Correlation Coefficient, r
 The quantity r, called the linear correlation coefficient, measures the strength and the
direction of a linear relationship between two variables
...

 The value of r is such that -1 < r < +1
...

 Positive correlation: If x and y have a strong positive linear correlation, r is close
35








to +1
...
Positive values
indicate a relationship between x and y variables such that as values for x increases,
values for y also increase
...
An r value of exactly -1 indicates a perfect negative fit
...

No correlation: If there is no linear correlation or a weak linear correlation, r is
Close to 0
...

A perfect correlation of ± 1 occurs only when the data points all lie exactly on a
straight line
...
If r = -1, the slope of this
line is negative
...
If this were a perfect positive correlation all of the points would fall on a straight line
...

Negative Correlation

36

Notice that in this example as the number of parasites increases, the harvest of unblemished
apples decreases
...
The more linear the data points, the more negatively correlated are the
two variables
...

Perhaps pillbugs and clover do not interact with one another
...

37

A correlation greater than
...
5 is generally described as weak
...
It is a
measure that allows us to determine how certain one can be in making predictions from a
certain model/graph
...

 The coefficient of determination is such that 0 < r 2 < 1, and denotes the strength of the
linear association between x and y
...
For example, if r = 0
...
850, which means that 85% of
the total variation in y can be explained by the linear relationship between x and y (as
described by the regression equation)
...

 The coefficient of determination is a measure of how well the regression line represents
the data
...
The further the line is away from the points,
the less it is able to explain
...
Qualitative or judgmental methods
 Delphi Method
 Market Research
Delphi Method






The Delphi method is a process of gaining consensus from a group of experts
While maintaining their anonymity
...

It is useful when there is no historical data from which to develop statistical
models and when managers inside the firm have no experience
...

A coordinator sends questions to each member of the panel of outside experts,
and they are unknown to each other
...
The members tend to respond to the questions and support their
responses freely
...
If the variation
38

among the opinions too much the report is sent to the same group for another
round and the participants may choose to modify their previous responses
...
So Delphi method is a
iterative process
...

It includes all research activities in marketing problem:
o Gathering, recording and analyzing the utility and marketability of the
product
o The nature of the demand
o The nature of competition
o The methods of marketing
o Other aspects of movements of product from the stage of to the point where
they get consumed
...

Market Research procedure
Define the problem clearly
Develop a clear set of research objectives
...

Extract meaningful information from the collected data
...

It may be used to forecast demand for the short, medium and long-term
...


Forecast Error:
Forecast error
Difference between forecast and actual demand
...
3 Forms of Forecast Movement

41

CHAPTER-IV
FACILITY PLANNING
To produce products or services business systems utilize various facilities like plant and
machineries, ware houses etc
...

The facility must be properly managed to achieve its stated purpose while satisfying several
objectives
...

4
...
This is an
extremely important issue and must be addressed before products are produced or
services are rendered
...

4
...
It is a complex and a broad subject
...

Additionally,
• architects,
• consultants,
• general contractors,
• managers,
• real estate brokers, and
• urban planners are involved in FP
...
3 Applications of Facilities Planning (FP)
Facilities Planning (FP) can be applied to planning of:
• a new hospital,
• an assembly department,
42

• an existing warehouse,
• the baggage department in an airport,
• department building of IE in EMU,
• a production plant, • a retail store,
• a dormitory,
• a bank,
• an office,
• a cinema,
• a parking lot,
• or any portion of these activities etc
...
4 Factors affecting Facility Layout
Facility layout designing and implementation is influenced by various factors
...
These factors are as follows:





The design of the facility layout should consider overall objectives set by the
organization
...

A proper safety measure as to avoid mishaps
...


4
...
1 Break-Even Analysis
The objective is to maximize profit
...

The steps for locational break-even analysis are :





Determine all relevant costs for each location
...

Plot the total costs associated with each location on a single chart of annual cost versus
annual volume
...


Question:
Potential locations A,B and C have the cost structures shown below for manufacturing a
product expected to sell for Rs 2700 per unit
...

Site
A
B
C

Fixed Cost/year
6,000,000
7,000,000
5,000,000

Variable Cost/Unit
1500
500
4000
43

Solution:
For each plant find the total cost using the formula
TC=Fixed cost+ Variable cost/unit (volume)
= FC+VC(v)
Site
A
B
C

Total Cost
6,000,000+1500*2000=9,000,000
7,000,000+500*2000=8,000,000
5,000,000+4000*2000+13,000,000

From the above table, the cost of for the location B, is minimum
...

Production Volume
500
1000
1500
2000
2500
3000

Site A
6750000
7500000
8250000
9000000
9750000
10500 000

Site B
7250000
7500000
7750000
8000000
8250000
8500000

Site C
7000000
9000000
11000000
13000000
15000000
17000000

160
140

total cost

120
100
80
60
40
20
0
0

500

1000

1500

production volume

400
SITE A

SITE B

Fig 3
...

Range of production volume
0≤Q≤400
400≤Q≤1000
1000≤Q

Best plant selected
A
B
C

The same details can be worked out using a graph
From the graph one can visualize that the site c is desirable for lower volume of production
...
In the increasing order of production volume the switch over from one site to another
takes place as per the order below
Site C to site A to site B
Let Q be the volume at which we switch the site C to site A
Total cost of site C ≥ Total cost site A
5000000+4000Q ≥ 6000000+1500*Q
2500Q ≥1000000
Q ≥400 Units
Similarly the switch from site A to site B
Total cost of site A ≥ total cost of site B
6000000+1500Q ≥7000000+500Q
1000Q ≥1000000
Q ≥ 1000 Units
The cutoff production volume for different ranges of production may be obtained by using
similar procedure
...
5
...
This is the quantum of materials moved
between the new facility and existing facilities I per unit period
m= total no of existing facilities
the formula for the sum of the weighted squared Euclidian distance is given as:
(

)

∑

[(

)

(

) ]

The objective is to minimize f(x,y)
This is quadratic in nature the optimal values for the x and y may be obtained by equating partial
derivatives to zero
(

∑
∑

)

,
,

(

)

∑
∑

Optimal location (x*,y*)=(

∑
∑

,

∑
∑

)

These are weighted averages of the x-coordinate and y-co ordinates of the existing facilities
...
5

4
...
3 SINGLE FACILITY LOCATION PROBLEM
Objective – To determine the optimal location for the new facility by using the given set of
existing facilities co-ordinates on X-Y plane and movement of materials from a new facility to
all existing facilities
...
The rectilinear distance between any
two points whose co-ordinates are (X1,Y1)and(X2,Y2) is given by the following formula
d12=|

|

|

|

some properties of an optimum solution to the rectilinear distance location problems are as
follows:
1
...
Similarly the Y co-ordinate of the new facility will coincide with the Y
coordinate of some existing facility
...
The optimum X or Y-co-ordinate location for new facility is a median location
...

EXAMPLE
Consider the location of a new plant which will supply raw materials to a set of existing
plants in a group of companies, let there are 5 existing plants which have a materials movement
47

relationship with the new plant
...
Furthermore suppose that the number
of tons of materials transported per year from the new plant to various existing plants are
450,1200,300,800 and 1500, respectively the objective is to determine optimum location for the
new plant such that the distance moved(cost)is minimized
SOLUTION
Let (X,Y) be the coordinate of the new plant
The optimum X-coordinate for the new plant is determined as follows
Existing plant
4
1
2
3
5

X coordinate
200
400
800
1100
1300

weight
800
450
1200
300
1500
Total

Cumulative
Weight
800
1250
2450
2750
4250
4250 tons

Thus the median location corresponds to a cumulative weight of 4250/2=2125 from above the
table, the corresponding X-coordinate value is 800, since the cumulative weight first exceeds
2125 at X=800
Similarly, the determination of Y coordinate is shown below
Existing plant

Y coordinate

weight

Cumulative
Weight
1
200
450
450
5
300
1500
1950
2
500
1200
3150
3
800
300
3450
4
900
800
4250
Total
4250 tons
Thus the median location corresponds to a cumulative weight of 4250/2=2125 from above the
table, the corresponding Y-coordinate value is 500, since the cumulative weight first exceeds
2125 at X=500
The optimal (X*,Y*)=(800,500)

48

4
...
4 MINIMAX LOCATION PROBLEM
Objective- To locate the new emergency facility (X,Y) such that the maximum distance from the
new emergency facility to any of the existing facilities is minimized
Fi(X,Y)= Distance between the new facilities and the existing facilities
Fi(X,Y)=|X-ai|+|Y-bi|
Fmax (X,Y)=maximum of the distance between the new facility and various existing facilities
Fmax(X,Y)= ⏟ {|X- |+|Y- |}
The distance between new facility and existing facility may be rectilinear or Euclidean
m=different shops in an industry
in the event of fire in any one of these shops a costly firefighting equipment showed reach the
spot as soon as possible from its base location
...
Our objective is to locate the new fire fighting equipment within the industry such that
maximum distance it has to travel from its base location to any of the existing shops is
minimized
...
The
company is interested in locating a new costly fire fighting equipment in the foundry determine
the minimax location of the new equipment
SL NO

EXISTING FACILITIES

1
2
3
4
5
6
7

Sand plant
Molding shop
Pattern shop
Melting shop
Felting shop
Fabrication shop
Annealing shop

CO-ORDINATE
CENTROID
10,20
30,40
10,120
10,60
30,100
30,140
20,190

OF

SOLUTION
The movement of new equipment is constrained within in the foundry the assumption of
rectilinear distance more appropriate
The co ordinate of the centroid of the existing shops are
(a1,b1)=(10,20)
(a2,b2)=(30,40)
(a6,b6)=(30,140) (a7,b7)=(20,140)

(a3,b3)=(10,120)

50

(a4,b4)=(10,60)

(a5,b5)=(30,100)

Step 1
=⏟(

) = min [(10+20),(30+40),(10+120),(10+60),(30+100),(30+140),(20+190)]
=min[30,70,130,70,130,170,210]=30

⏟ (

) = max[30,70,130,70,130,170,210]=210

⏟ (

)=min[(-10+20),(-30+40),(-10+120),(-10+60),(-30+100),(-30+140),
(-20+190)]=min[10,10,110,50,70,110,170]=10

⏟ (

) =max[10,10,110,50,70,110,170]=170

=⏟ (

)=max[(210-30),(170-10)]=max[180,160]=180

P1=[1/2(

), ½(

)]=[1/2(30-10),1/2(30+10+180)]=(10,110)

P2=[1/2(

), ½(

)]= [1/2(210-170),1/2(210+170-180)]=(20,100)

Any point X*,Y* on the line segment joining pts (10,110),(20,100) is a minimax location for the
firefighting equipment
...
6 Layout Design Procedure
Layout design procedures can be classified into manual methods and computerized methods
...
Under this category, there are some conventional methods like travel chart
and Systematic Layout Planning (SLP)
...

Construction type algorithms
Automated Layout Design program (ALDEP)
Computerized Relationship Layout Planning (CORELAP)
Improvement type Algorithm
Computerized Relative Allocation of Facilities Technique (CRAFT)
51

4
...
1 Computerized Relative Allocation of Facilities Technique (CRAFT)
CRAFT algorithm was originally developed by Armour and Buffa
...
It is an improvement algorithim
...

CRAFT requirements
1
...

3
...

5
...
Area of departments
4
...

4
...
1 Rank Order Clustering Algorithm (ROC)
This algorithm was developed by J
...
This algorithm considers the following data
...
The
rows of the machine-component incidence matrix represent the machines which are required to
processes the components
...

STEPS IN ROC LOGARITHM
Step 0 : Input : Total no of components and component sequences
Step 1
...
Compute binary equivalent of each row
...
Re arrange the rows of the matrix in rank wise (high to low from top to bottom)
Step 4
...
Rearrange the columns of the matrix rank wise and compute the binary equivalent of each
row
Step 6
...
Print the final machine component incidence matrix
...


53

Chapter 5: Motion Study


Work study is a technique which is employed to ensure the best possible use of men,
machine, materials and energy in carrying out a specific activity
...


Method study
(Motion study)



Work measurement
(Time study)

Work study is based on the principle that for every job, there is:
a) One best way of doing it
...

c) The time taken for doing the job by the best way can be measured and set as Time study
standards
...
1 Motion study:
 It is defined as a systematic and critical study of existing method of doing a task with a
view to evolve the most efficient and economic method of doing it
...

 The sequence of movements taken by the employee in performing those steps is
carefully observed to detect and eliminate wasteful motion
...

From these measurements, production and delivery times and prices are computed and
incentive schemes are devised
...
Time and
motion studies were pioneered by the US industrial engineer Frederick Winslow Taylor (18561915) and developed by the husband and wife team of Frank Gilbreth (1868-1924) and Dr
...


Objectives of motion study
The objectives of motion study are:
 To improve the procedure of doing a work
...

 To minimize the human motion for minimum fatigue of operators
...

 To improve the overall working environment
...
2 Principles of motion economy
 Analysis of an operation when carried out in terms of individual motion of a worker is known
as Motion analysis
...
In doing so, the Principle of
motion economy is very much helpful
...

(i) It is classified into following 04 categories: Rules concerning human body, workplace
layout and material handling, Tools and Equipment Design and time conservation
...

2
...

4
...

6
...

8
...

Both hands should start and finish their motion at the same time
...

Motion of both the hands and arms are symmetrical, simultaneous and opposite to each
other
...
(The purpose-shortest
duration and minimum fatigue)
Motion should be smooth and continuous
...

It is desirable for a worker to employ momentum to assist him
...


(iii) Rules concerning workplace layout and material handling
1
...

2
...

3
...

4
...

5
...

6
...

7
...
This necessitates a relationship between his chair, height of table or
workpiece
...
In order to reduce fatigue, the sitting arrangement of the worker should be comfortable
and adjustable
...
All heavy parts should be lifted by mechanical devices
...
Jigs, fixtures and foot operated devices should be employed to reduce the work load on
hand
...
Tools should be multipurpose and easy to handle
...
Foot-operated switches and controls should be designed as far as possible to reduce the
workload on the hands
...
Tools and materials should be properly arranged and located near the workpiece
...
Tools and materials should be located in the order of their use
...
There should be maximum surface contact between the tool handle and hand
...

7
...

8
...

9
...

10
...

11
...

(v) Rules concerning time conservation
1
...

2
...

3
...

4
...

5
...

6 Procedure in Motion Analysis
The steps in motion analysis are as follows:
a) Select: Select the work to be studied
...

c) Examine: Examine the facts critically in sequence, using special critical examination
sheet
...
e
...

e) Install: install that method as standard practice
...


Recording
The recording may trace the movements of men, material or details of various processes
...

The different recording techniques are charts, diagrams, models and photographic aids
...
1
...
2
...
1 Recording Techniques
Recording Technique
(a) Charts
1
...
Flow process chart

3
...
Multiple activity chart
5
...
Flow diagram

Principle operations and inspection of the
processes
...
, operation,
transport, inspection, delay and storage
...

Simultaneous/interrelated activities of operators
and/or machines on a common time scale
...


Path of men, materials and equipments on a scale
model
...


2
...
Cyclegraph

Movement of hand obtained by exposing a
photographic plate to the light emitted from
small bulbs attached to the operator’s fingers
...


2
...
2 Symbols used in Process Chart
Symbol

Activity
Operation
Transport
Inspection
Temporary
storage or delay
Storage

Purpose for which it is used
Indicates the main steps in a process, method of procedure,
usually the part, material or product concerned which is
modified or changed during the operation
...

Indicates any type of inspection, check, measurement, visual
scrutiny for quality and/or quantity
...

Indicates a controlled storage in which material is received into
or issued from stores under some form of authorization or an
item is retained for reference purposes
...
3 Time study
 It was proposed by Frederick Taylor and later modified to include a performance rating
(PR) adjustment
...

This aspect of work study is called Time study (or Work measurement)
...

2) To estimate the cost of product accurately
...

4) To determine the number of machines an operator can run
...

6) To provide information for planning and scheduling
...

8) To compare the work efficiency of different workers/operators
...

2
...

4
...

Predetermined motion time system (PMTS)
...

Analytical estimating
...

Technique
Time study using stop watch
PMTS
Work sampling
Analytical estimating

Application
Short cycle repetitive jobs

Unit of measurement
Centiminute
(0
...
006 min)
Long
cycle
jobs/ Minute
Heterogeneous operation
Short cycle non-repetitive job Minute

Time study using stop watch is the most popular technique for determining standard time
...
The steps of time study are as follows:
Step 1: First select the job to be studied
...
Then, inform the worker and define the best method
...

Step 3: Determine the average cycle time (CT)
∑ Times
CT =
No
...

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


5
...

for which method change has taken place recently
...


5
...

have sufficient experience with the given method on the job (that is, he should have
crossed the learning stage)
...

be temperamentally suited to the study (those who can't work in normal fashion when
watched, are not suitable for the study)
...


5
...

•
•
•
•

Timing device
Time study observation sheet
Time study observation board
Other equipment

Timing Device
...
The two perform the same function with the
difference that electronic timer can measure time to the second or third decimal of a second
and can keep a large volume of time data in memory
...
It is a printed form with spaces provided for noting down the
necessary information about the operation being studied, like name of operation, drawing
number, and name of the worker, name of time study person, and the date and place of study
...
Fig
...
1 shows a typical time study observation sheet
...
It is a light -weight board used for holding the observation sheet and
stopwatch in position
...
Generally,
the watch is mounted at the center of the top edge or as shown in Figure near the upper righthand corner of the board
...
During the time
study, the board is held against the body and the upper left arm by the time study person in
such a way that the watch could be operated by the thumb/index finger of the left hand
...


60

Other Equipment
...

5
...

 To improve accuracy in rating
...
He may perform some elements faster and
some slower
...

 To identify elements causing high fatigue
...

 To have detailed job specifications
...

 To prepare standard data for repeatedly occurring elements
...

(1) The elements should be of as short duration as can be accurately timed
...
Generally, with the stop watch, elements of duration less than 0
...
05
minute are difficult to time accurately
...
40
min
...

(Time for machine paced elements can be determined by calculation)
...
This rule also helps in recognition of delays
...

(Constant elements are those elements which are independent of the size, weight,
length, or shape of the workpiece
...

(4) The beginnings and endings of elements should be easily distinguishable
...

(5) Irregular elements, those not repeated in every cycle, should be separated from regular
elements
...

(6) Unnecessary motions and activities should be separated from those considered essential
...
Such elements are generally of
non-repetitive type
...
8 Number of cycles to be timed
...

(1) Greater the accuracy desired in the results, larger should be the number of cycles observed
...

(3) Where more than one operator is doing the same job, short study (say 10 to 15 cycles)
should be conducted on each of the several operators than one long study on a single operator
...


5
...

(i) Use of Tables: On the consideration of the cost of obtaining the data and the desired
accuracy in results, most companies have prepared their own tables for the use of time study,
which indicate the number of cycles to be timed as a function of the cycle time and the
frequency of occurrence of the job in the company
...
A preliminary study is conducted in which some
(say N) cycles are timed
...
10 Performance Rating
It is a process of comparing the performance rate of a worker against standard performance
...
Te rating factor is used to convert the
observed time into normal time
...
11 Allowances
Allowances are added to normal time in order to arrive at standard time
...
Process allowance: This is an allowance provided to compensate for enforced
idleness during a process
...

2
...
The amount of personal time required by operator varies with the individual
more than with the kind of work, though it is seen that workers need more personal
time when the work is heavy and done under unfavorable conditions
...
Mostly, a 5 % allowance for personal time (nearly 24 minutes in 8 hours) is
considered appropriate
...
Excessive fatigue badly affects the performance of worker
...

3
...

Some of these allowances and the conditions under which they are given are:
Policy Allowance: Some companies, as a policy, give an allowance to provide a
satisfactory level of earnings for a specified level of performance under exceptional
circumstance
...
The value of the allowance is typically decided by management
...
When an operator
completes several small-lot jobs on different setups during the day, an allowance as
high as 15 percent may be given to allow the operator to make normal earnings
...
It may be a sliding allowance, which progressively
decreases to zero over certain length of time
...

Rework Allowance: This allowance is provided on certain operation when it is known
that some percent of parts made are spoiled due to factors beyond the operator's
control
...

4
...

Problem 1: In a welding shop, a direct time study was done on a welding operation
...
They agreed precisely on cycle time but their opinion on rating the worker
differed
...
They used a 10% allowance
...

(b) Find the standard time using the worker rating of inexperienced industrial engineer
...
10) = 27
...
10) = 33
...
1 Production:
It is an organized activity of converting raw materials into useful products
...
Since only planning of production is not sufficient,
hence management takes all possible steps to see that plans chalked out by planning
department are properly adhered to and the standard set are attained
...
The ultimate aim of production planning and control
(PPC) is to produce the products of right quality in right quantity at the right time by using the
best and least expensive methods
...

 Setting the exact route of each item
...

 To give production orders to different shops
...

The various functions of PPC department can also be systematically written as:

Forecasting
Order writing

Prior planning

Product design
1
...
Action phase

Dispatching

Data processing

Progress reporting
3
...
Forecasting: Estimation of type, quantity and quality of future work
...
Order writing: Giving authority to one or more persons to undertake a particular job
...
Product design: Collection of information regarding specification, bill of materials,
drawing, etc
...
Process planning and routing: Finding the most economical process of doing work and then
deciding how and where the work will be done
...
Material control: It involves determining the material requirement and control of materials
...
Tool control: It involves determining the requirement and control of tools used
...
Loading: Assignment of work to man power and machining etc
...
Scheduling: It determines when and in what sequence the work will be carried out
...

9
...
In this phase the worker is
ordered to start the actual work
...
Progress reporting: Data regarding the job progress is collected
...

11
...
(ii) Replanning of the whole affair becomes
essential, in case expediting fails to bring the deviation plan to its right path
...
To determine the sequence of operations to continue production
...
To issue co-ordinated work schedule of production to the supervisor/foreman of various
shops
...
To plan out the plant capacity to provide sufficient facilities for future production
programme
...
To maintain sufficient raw materials for continuous production
...
To follow up production schedule to ensure delivery promises
...
To evaluate the performance of various shops and individuals
...
To give authority to right person to do right job
...
6
...


66

Engineering &
Maintenance planning
Manpower
planning

PPC
Financial &
Investment planning
Materials &
Procurement planning

Marketing
planning

Quality
planning

Distribution
planning

Fig
...
1 Relation of PPC with other functional departments
6
...

Explanation of AP
The aggregate planning concentrates on scheduling production, personnel and inventory levels
during intermediate term planning horizon such as 3-12 months
...
Aggregate
planning typically focuses on manipulating several aspects of operations-aggregate production,
inventory and personnel levels to minimize costs over some planning horizon while satisfying

67

demand and policy requirements
...

Aggregate planning
Aggregate Production Planning

Aggregate Capacity Planning

Aggregate Production Planning indicates the level of output
...

6
...

(ii) Modification of supply of a product
...
Some examples are: reducing off season fan/woollen item rate,
reducing the hotel rate in off season
...

Advertising is generally so timed as to increase demand during off period and to shift
demand from peak period to he off period
...

(d) Development of complementary products: Producer, who produces products which are
highly seasonal in nature, applies this technique
...

(ii) Modification of supply
There are various methods of modification of supply
...
The man
power/work force varies from peak period to slack/off period
...

(b) Overtime and undertime: Overtime and undertime are common options used in cases
of temporary change of demand
...

(d) Subcontracting: The subcontractor may supply the entire product/some of the
components needed for the product
...


68

Aggregate planning strategies

Pure strategy

Mixed strategy

Pure strategy:
If the demand and supply is regulated by any one of the following strategy, i
...

(a) Utilizing inventory through constant work force
...

(c) Subcontracting
...

Mixed strategy:
If the demand and supply is regulated by mixture of the strategies as mentioned, it is called
mixed strategy
...
4 Sequencing
The order in which jobs pass through the machines or work stations is called sequencing
...
First Come, First Served (FCFS) rule: This is a fair approach particularly applicable to
people
...
That means
the 1st piece of inventory at a storage area is the 1st one to be used
...
The shortest processing time (SPT) rule: SPT rule sequences jobs in increasing order
of their processing times (including set up)
...
The Earliest Due Date (EDD) rule: Sequences jobs in order of their due dates, earliest
first
...
The critical ratio (CR) rule: Sequences jobs in increasing order of their critical ratio
...

If CR<1 The job is behind schedule
...

5
...

Slack = (Due date – Today’s date) – Remaining processing time
6
...
1
...
1 Job sequencing for n jobs
1
t11
t12
2
t21
t22
3
t31
t32
4
t11
t42

...


...


...

i
ti1
ti2

...


...

Step 2(a): If the minimum processing time requires m/c-1, place the associated job in the 1st
available position in sequence
...

Step 3: Remove the assigned job from the table and return to Step 1 until all positions in
sequence are filled
...

Ex
...
Using Johnson’s
algorithm, obtain the optimal sequence which will minimize the makespan
...

Stage

Unscheduled job

Min

Assignment

1
2
3
4
5
6

123456
12356
1356
356
36
3

t42
t21
t12
t51
t62
t31

Job 4-[6]
Job 2-[1]
Job 1-[5]
Job 5-[2]
Job 6-[4]
Job 3-[3]

Partial sequence/
Full sequence
×××××4
2××××4
2×××14
25××14
25×614
253614

Now the optimal sequence is 2-5-3-6-1-4
...

Job

M/C-1
Time in
Time out
2
0
2
5
2
10
3
10
23
6
23
35
1
35
40
4
40
50
The makespan for this schedule is 53
...
6 Line balancing
Plants having continuous flow process and producing large volume of standardized
components prefer conveyor assembly line
...
This requires careful preplanning to balance the timing
between each work centres so that idle/waiting time is minimized
...

Line balancing is defined as the procedure for creating work stations and assigning tasks to
them according to a predetermined technological sequence such that the idle time at each work
station is minimized
...
Such a perfect balancing is
difficult to achieve
...

Balancing may be achieved by
Rearrangement of work stations
Adding m/c and or workers at some work stations
...

Some terminologies used in line balancing:
1
...

2
...
of products/output
3
...

4
...

5
...


71

A typical example will clarify the procedure of line balancing
...
The
information regarding work elements in terms of times and intermediate predecessors are given
below:
Work
element
A
B
C
D
E
F
G
H
I
J
Total

1
...

3
...


Time (Sec)

Immediate
predecessor
None
A
D,E,F
B
B
B
A
G
H
C,I

40
80
30
25
20
15
120
145
130
115
720

What is the desired cycle time?
What are the theoretical numbers of stations?
Use largest work element time rule to work out a solution on a precedence diagram
...

(b) Sum of the time of all work elements = 720 secs
So, minimum number of work station = 720/150 = 4
...


72

(c) Assignment of work element to stations:
Station/
stations
S1

S2
S3
S4
S5

Elements Work element time
(Sec)
A
40
B
80
D
25
G
120
E
20
H
145
I
130
F
15
C
30
J
115

Cumulative time (Sec)

Idle time for
station (Sec)
05

40
120
145
120
140
145
130
145
30
145

10
05
05
05

(d) Efficiency: ∑t×100/n×CT = 720×100/5×150 = 96%
...

6
...

The function of flow control is to match up the rates of flow of parts, subassemblies and final
assemblies
...

Flow control can be performed through the following:
(a) Operation time: It amounts the time required to manufacture each part, to make one
subassembly and to execute one assembly
...

(b) Line balancing: the assembly line should be balanced
...

(c) Routing and scheduling: A combination route and schedule chart showing the
fabrication of parts, subassemblies and final assembly is shown below
...
5th day and all the subassembly
become ready on 9th day for final assembly
...

(d) Control of parts subassemblies and Assembly: A supervisory function coupled with
an appropriate information feedback system keeps a check whether the small parts
arriving in lots and big parts coming continuously are available at right time, in proper
quantities for making subassemblies as per scheduled plan
...

Functions of Dispatching
(i)
(ii)
(iii)
(iv)

Assignment of work to individual man, m/c or work place
...

Authorize for issue of materials, tools, jigs, fixtures, gauges, dies for various jobs
...

(v) Issue m/c loading and schedule chart, route sheet, etc
...

(vii) To issue inspection order
...

Dispatch procedure
The product is broken into different components
...

Route sheet for component C
MaterialOperation 1Operation 2The various steps of dispatch procedure for each operation are listed below:
(a) Store issue order: Authorise store department to deliver required material
...
The tools can be
collected by the tool room attendant
...

(d) Time tickets: It records the beginning and ending time of the operation and forms the
basis for workers pay
...

(f) Move order: Authorise the movement of materials and components for one facility to
another for further operation
...

(2) Various order cards and drawing with specification should be ready
...

(4) Progress of various orders should be recorded
...


74

Centralized and decentralized dispatching
(a) Centralized Dispatching:
In centralized dispatching system, a central dispatching department orders directly
to the work stations
...
The orders are given to the shop
supervisor who runs his machine accordingly
...
A centralized
system has the following advantages:
1
...

2
...

3
...

4
...

5
...

6
...


(b) Decentralized Dispatching:
In decentralized dispatching system, the shop supervisor performs the dispatch
function
...
He/she
dispatches the orders and materials to each equipment and worker, and is required
to complete the work within the prescribed duration
...
A centralized dispatching
system has the following advantages:
(i) Much of red tape (excessive adherence to official rules) is minimized
...

(iii) Communication gap is reduced
...

Levels of Dispatch office: At plant manager’s level
...

At shop supervisor’s level
...

6
...
An expeditor follows the development of an order from the raw
material stage to the finished product
...

6
...
But it does not show the interrelationship among
the tasks
...
Each activity is represented by a bar; the position and length of the bar reflects the start
date, duration and end date of the activity
...
8 Line of balance (LOB)
LOB is a graphical technique used to find out the state of completion of various processes at a
given time for a product
...

For drawing the LOB, the following information are required:
 Contracted schedule of delivery
 Key operations in making the product
...

 The expected/observed lead time w
...
t
...

Based on above information, a diagram is drawn which compares pictorically the planned
verses actual progress
...

6
...
But the next time if we perform the same job,
we can perform it not only at faster rate but also with higher quality
...
This improvement in productivity
and quality of work as a job is repeated is called quality of work, as a job is repeated is called
learning effect
...

(ii) Improvement in production methods and tooling takes place
...

While designing jobs, estimating work standards, scheduling production and planning
capacity, it is important to know at what rate workers productivity will increase through
learning
...
Otherwise we will
underestimate our production capacity and overstaff our operations
...

The rate of learning and learning curve
The labour content (in person-hrs per unit) requires to make a product, expressed as a function
of the cumulative number of units made is called Learning Curve
...


76

Labour content
(person-hrs/unit)

90% learning

0

5

10

20

15

25

30

35

Cumulative nos of unit produced

We normally express the rate of leraning in terms of how quickly the labour requirement
decrease as we double the cumulative amount of output
...
More generally, the amount of
time required to make the nth unit of the product will be
Tn = T1×na
where Tn = Time to make the nth unit
...

a = (ln x/ln 2)
x = learning rate (expressed as decimal)
This learning data can also be represented in tabular form
...
That means projects are not repetitive
...
Constructing a bridge, dam, highway or building
...
Producing an airplane, missile or large machine
...
Introducing a new product
...
Installing a large computer system
...
Redesigning the layout of plant or office
...
Construction of a ship
...
Fabrication of a steam boiler
...
Maintenance of major equipments/Plants
...
Commissioning of a power plant/factory
...
Conducting National Election
...
Typically, all projects involve the following steps:
1
...

2
...

3
...

4
...

5
...

6
...

Network: A network is the graphical representation of the project activities arranged in a
logical sequence and depicting all the interrelationships among them
...
Activity: An activity means work/job
...
It is represented
by an arrow in the network diagram (AOA system)
...
Event: An event is a specific instant of time marks the start and end of an activity
...
Critical path: It is the sequence of activities which decides the total project duration
...
Duration (d): Duration is the estimated or actual time required to complete a task or an
activity
...
Total project time: Time to complete the project
...

6
...
It is
calculated by moving from 1st to last event in the network diagram
...
Latest start time (Li): It is the latest possible time by which an activity can start
...
Earliest finish time (Ej): It is the last event time of the head event
...

9
...
It is calculated by
moving backward in the network diagram
...
Float/Slack: Slack is with reference to an event and Float is with reference to an
activity
...
Free float: (Latest Finish Time – Earliest Start Time) – Activity duration
...

1
...

2
...
(tail event)
3
...
(head event)
4
...

5
...

6
...

Duration of dummy activity is zero
...
The length of the arrow bears no relationship to the activity time
...
The arrow in a network identifies the logical condition of dependence
...
The direction of arrow indicates the direction of workflow
...
All networks are constructed logically or based on the principle of dependency
...
No event can be reached in a project before the completion of precedence activity
...
Every activity in the network should be completed to reach the objective
...
No set of activities should form a circular loop
...
e
...

tp = Pessimistic time (maximum time duration an activity can take)
...
During this period, two new scheduling techniques were
developed
...
The popularity of network based scheduling can be attributed to its many benefits,
especially its ease use
...

1
...
This assists communication and cooperation among task teams because each team can see how its work affects other team
...
It provides a relatively accurate estimate of the time required to complete the project at the
proposed resource level
...
It identified and highlights the tasks that are critical to keep the project on schedule
...
It provides a method for evaluating the time-cost tradeoffs resulting from reallocating
resources among tasks
...
It provides a method for monitoring the project throughout its life cycle
...

6
...

Difference between PERT and CPM
Sl
...

1
PERT is a probabilistic model with
uncertainty in activity duration
...

2
It is an event oriented approach
...

4
The use of dummy activity is required for
representing the proper sequencing
...

6
PERT is applied in projects where
resources are always made available
...

Steps in using network techniques
1
...

It is an activity oriented approach
...

No dummy activity required
...

CPM is applied to projects where minimum
overall cost is the prime importance
...
where activity
duration is known
...

(b) A planned sequence of these activities are shown on a network (a graph where arrow
and circles represent the relationship among project activities)
2
...

(b) In order to locate the critical path, calculation is performed (the longest time chain of
sequential activities which determines the duration of project)
...

(c) The above information are used to develop a more economical and efficient schedule
...
Project monitoring
(a) The plan and schedule started above are used to monitor the progress
...

(c) PERT, Critical path, Most likely time estimates
...

Ex: 1 A project consists of the following activities and time estimates
...
Determine the expected task time and the critical path
...


81

Activity
1-2
1-3
1-4
2-5
2-6
3-6
4-7
5-7
6-7

te value
7
6
14
5
11
7
11
4
5

5
2

7
1

5

4

11
7

6

3

14

6

4

5

7

11

From the above figure, 1-4-7 is the critical path
...

Resource levelling
There are two types of resource problem
(i) Resource smoothing
(ii) Resource levelling
(i) Resource smoothing:
There may be a ceiling on the availability of resources in a particular period of time
...
The resource analysis used for this type of case is called
Resource smoothing
...
For instance, in the present day
labour situation one cannt have 100 labourers yesterday, 30 today and 80 tomorrow
...
The rate of usage of labour has to be uniform
...


Example: Consider the following problem of project scheduling
...


Activity
1-2
1-3
1-4
2-3
2-4
3-5
4-5

Duration in Weeks
6
10
6
10
4
6
6

Manpower requirements
8
4
9
7
6
17
6

82

4
1

8

17

7

1

3

2

5

6
9

6

1

4

0

2

4

6

8

10

12

16

14

18

20

22

Time (Weeks)

The corresponding manpower requirement histogram is shown below
...
The activities which are scheduled during the period are: (1-2), (1-3) and (1-4)
...
So it should not be disturbed
...

Hence, it can be started at the end of 6 weeks
...


83

Total manpower

Activities
(1-2), (1-4)

Activiti
es
(2-3),
(1-3),
(2-4)

6

Activities
(2-3), (1-3)
& (4-5)

10

Activity
(3-5)

16

Time (Weeks)

The manpower requirement is now smooth throughout the project duration
...
The various
phases of CAD section are presented in the following form:

Geometric
model

Design and
Analysis

Design
optimizatio
n

Drafting and
Documentatio
n

As per the above figure, there are four phases of CAD process
...
It is analyzed for the desired design conditions and is optimized before
finally getting documented and drafted
...

(i) Computer modelling and computer graphics
Geometric modelling and computer graphics help to generate and visualize
models on which the analysis is done subsequently
...
The kind of analysis
which can be done on a model is controlled by the type of model used
...
Eg
...

(ii) Analysis and optimization tools
These are the algorithms and programs for exclusive application which are
applied on to the virtual product already modelled
...
The analysis process is iterated
number of times with varying attributes to optimize the results
...


85

(iii) Drafting and documentation
The model already created, analysed and optimized guarantees a safe model
under the real conditions
...
The tool used for this
application is called Computer Aided Drafting orcalled Computer Aided
Design and Drafting (CADD)
...
Their
differences are presented in the following:
Sl
...
Computer Aided
Modelling/Designing
1
...

2
...

3
...


This is 2D drawing/3D model
This model is used for design
analysis

Computer Aided Drafting
This is done after analysis is
performed on the geometric
model
...

This is generally 2D drawing
...


Basic concepts of CAM (Computer Aided Manufacturing)
CAM is defined as a process of use of computers in planning, manufacturing,
inspecting and controlling the manufacturing operation directly or indirectly
...
The various phases of CAM section are
shown below
...
Interface algorithm extract that necessary geometrical information from
the CAD model and feed it for process planning, part programming, machining,
inspection and packaging
...
From the
model necessary information regarding the shape, contour and sizes is
extracted so as to implement in the manufacturing tool
...
It describes the method in which the
product can be manufactured
...

(iii) Networking tools: The knowledge of networking and interfaces is required for
communication capability between various machines and computers
...
g
...
a communication or networking
tool is a must for CAM to be operational effectively
...
The major applications include in
this category are: controlling machines and robots
...
Such applications include numeric
part programming, CAPP, generating computer aided schedules and all
other kinds of planning
...
FMS has
born in the latter half of 1960’s as a means to improve productivity of
small and medium volume production
...

(b) Work transportation device: These devices are used to carry parts between
loading area and machining station
...

(c) Material handling device: These devices transport work in process or tolls to
assigned positions
...

(e) Tool room and storage: All the tools used in this system are stored in the tool
room and transported to machining centers when required
...

(g) System controller: The system controller oversees the operation of entire
FMS
...


88

Advantages of FMS
1
...

2
...

3
...

4
...
In this case, utilization is 85%
compared to 50% in conventional method
...
It provides a better management control by integration of computers
...
It provides better and more consistent products
...

CIM includes Management Information System (MIS), sales marketing,
finance, database management system, design, manufacturing, monitor and
control and bar code software etc
...
CAD, CAM and CIM basically involve
fundamental principles of these underlying branches with hardware and
software to operate and utilize them effectively
...
The JIT concept has the following objectives:
Receive supplies just in time to be used
...

Produce subassemblies just in time to be assembled into finished
products
...


89

In order to achieve these objectives, every point in the organization where buffer
stocks normally occur is identified
...
A set of possible reasons for maintaining high stock is listed below:

Unreliable/unpredictable deliveries

Poor qualities from supplier

Increased variety of materials

Machine break down

Labourabsentism

Frequent machine setting

Variations in operators capabilities

Schedule charges

Changing product priorities

Product modification
In traditional manufacturing, the parts are made in batches, placed in inventory and
used whenever necessary
...
That means the rate at which the
products come out at the end of final assembly matches with the order quantity for that
product
...
It is also called zero
inventory, stockless production, demand scheduling
...
This process of inspection takes a very short
period
...
This JIT
system ensures quality products
...

Advantages of JIT
1
...

3
...


Exact delivery schedule is possible with JIT practices
...

Lower defect rates i
...
lower inspection cost
...

5
...

6
...

7
...

8
...

9
...

10
...

ISO 9000
ISO stands for International organization for standardization
...
The national standard bodies
of these countries are the member of this organization
...

ISO9000 series has 5 numbers of international standards on quality management which
are listed below with different objectives
...

ISO 9001: This is applicable for industries doing their own design and development,
production, installation and servicing
...

ISO 9002: It has 18 elements
...
e
...

ISO 9003: It has 12 elements covering final inspection and testing for laboratories and
warehouses
...
It also has suggestions which are not mandatory
...

2
...

4
...

6
...

8
...


This gives competitive advantage in the global market
...

Documentation of quality procedure adds clarity to quality system
...

It helps in customers to have cost effective purchase procedure
...
This will reduce quality cost and
lead time
...

The level of job satisfaction will be more
...


Steps in ISO 9000 Registration
1
...

3
...

5
...

Preparation of quality manual to cover all the elements in the selected
model
...
Also document these items
...

Selection of a registrar (an independent body with knowledge and
experience to evaluate any one of the three quality systems i
...
ISO 9001/ 9002/
9003) and the application is to be submitted to obtain certificate for the selected
quality system/ model
...
No
...

This group presents the solution to the management and wherever possible implement
the solution themselves
...
The
basic cycle of a quality circle starts from identification of problem
...


A belief that people will take pride and interest in their work if they get
autonomy and take part in decision making
...

It develops a sense of belongingness in the employees towards a
particular organization
...

A belief that each employee desires to participate in making the
organization a better place
...

It is a mean/method for the development of human resources through the
process of training, work experience and participation in problem solving
...


A willingness to allow people to volunteer their time and effort for
improvement of performance of organization
...

The importance of each member’s role in meeting organizational goal
...
QCs are small primary groups of employees/workers whose lower limit is 3 and
upper limit is 12
...
Membership is voluntary
...

3
...

4
...

5
...

6
...

7
...

8
...


93

9
...

10
...

11
...

12
...

Objectives of QC
1
...


To improve the quality and productivity
...

3
...

4
...

5
...

6
...

7
...

8
...

9
...

10
...

Kaizan
Kaizen means change (Kai) to become good (Zen)
...
In fact, continuous improvement is required in all activities
of the organization such as:







Productivity improvement
New product development
Labor management relation
Total productive maintenance
Just in time production & delivery system
Customer orientation etc
...
This continuous improvement in all areas are
taken through small step by step process
...


94



---