MB0028 Set 1 and Set 2 completed

8/14/2019 MB0028 Set 1 and Set 2 completed

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Name: Falguni Pandit Registration No.: 520966021MBA II SEM

PRODUCTION & OPERATIONS MANAGEMENT - MB0028

MB0028

Registration No.: 520966021

Page No: 1 Name: Falguni Pandit |Registration No.:520966021


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PRODUCTION & OPERATIONS MANAGEMENT - MB0028

Set 1

Question 1: Explain what is meant by capital productivity?Ans 1:Capital ProductivityCapital deployed in plant, machinery, buildings and the distribution systems aswell as working capital are components of the cost of manufacture and need tobe productive. Demand fluctuations, uncertainties of production owing tobreakdowns and inventories being created drag the productivity down.

Therefore, strategies are needed to maximize the utilization of the funds allottedtowards capital. Adapting to new technologies, outsourcing and balancing of theworkstations to reduce the proportion of idle times on equipments are the focusof this section.

1 Outsourcing StrategiesWhen capacity requirements are determined it will be easy to determine whethersome goods or services can be outsourced so that the capital and manpowerrequirements can be reduced and the available capacities are used to augmentcore competencies thus reducing the cost of the product or service to thecustomer. However, the following factors may restrict outsourcing(a) Lack of expertise the outsourced firm may not have the requisite expertiseto do the job required(b) Quality considerations Loss of control over operations may result in lowerquality. This is a risk that the firm gets exposed to.(c) Nature of demand When the load is uniform and steady, it may not beworthwhile to outsourcing. Absence of supervision and control may be ahindrance to meet any urgent requirements of the customer. This affects thebusiness especially if no production facilities are built in the organization(d) Cost when the fixed costs those go along with making the product does notget reduced considerably 2 Methods ImprovementMethods Improvement starts with Methods analysis focus of this process is how a

job is done breaking it down to elemental tasks so that they are amenable foranalysis.. This is done for both running jobs and new jobs. For a new job, thedescription becomes the input for analysis. For current jobs, the analyst dependson observations, records and suggestions of the persons involved in the job.When improved methods are suggested, they are implemented and recordscreated for assessing the consequences of the methods improvementprocedures. The analyst should involve all concerned persons in the process sothat acceptance becomes possible and opportunities open up for furtherimprovements. Moreover, the people actually involved would be interested inimproving their productivity and will help the analyst in the process.3 Balancing of WorkstationsAssembly lines necessitate out stringing together workstations which carry outoperations in a sequence so that the product gets completed in stages. Since theworkflow has to be uniform and operations may require different periods forcompletion the necessity of Line Balancing is felt. Capacities at workstations andthe workforce to man are so adjusted that a product in the process of assemblyalmost approximately the same amount of time.

4 Rationalization of Packaging Methods



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PRODUCTION & OPERATIONS MANAGEMENT - MB0028With logistics becoming an important function of the supply chain andoutsourcing becoming thenorm, packaging has become an important aspect, packaging has becomeimportant . Space is at a premium and therefore stacking and storing have tomore scientific. Movements inside thepremises from one location to another location are being done with automatedsystems and they need that the packaging systems are designed for safe transit,continuous monitoring both for quantities and operations. In case of outsourcedproducts the materials used and their design should facilitate reuse of the samewhich brings in economy.5 Quality CirclesKaoru Ishikawa is generally considered to have promoted the concept of QualityCircles. It is well known that he is the originator of fishbone diagrams to identifythe root cause of any problem. The causes for the existence of a problem areclassified as pertaining to the material, processes or method or any factor thatgoes into production. The matter is further investigated and pursued till theexact cause is determined. Quality circles use these principles in solvingproblems. The teams select projects selected on the above basis and implementactions to achieve improvement in the processes with a view to improve quality.Since these activities are carried out without affecting the regular day to daywork and involve little involvement of the managers, team work gets reinforcedand results in continuous improvement in methods and quality. The capitaldeployed is minimal, if at all, and therefore productivity is enhanced.

Question 2: Write a detailed note on Split case order fulfillmentmethods and mechanization.Ans 2:

Split-case Order Fulfillment Methods and Mechanization This system looks at situations when bulk supplies in full cases to one or moredestinations are not done. Fulfillment of orders which need differentmerchandise in different quantities requires that cases will have to be split, andpieces picked, repacked in cartons and ship to the customer. . Mechanizationhelps in improving identification, pickup and repacking the materials in additionto relieving monotony of the workers. A few strategies of achieving this objectiveoptimally are discussed here.1 Order Picking MethodsItems as per customer requirements have to be picked and packed in a logicalmanner and assigned to personnel so that their productivity is maximized.Accuracy of fulfillment of order is ensured by two basic factorsa) Order Extent it is defined as the number of order to be picked simultaneouslyby a picker in an assignment. This is categorized as discrete order picking inwhich case a single order is selected at a time and Batch order Picking in whichcase the merchandise requirements of many orders are put together andselected for pick up in the geographical area which is covered in a single pass.b) Coverage Extent it is the physical area to be traversed by the picker inselecting merchandise for an assignment within the picking system. Thepersonnel pick up the merchandise from a zone the zone being a contiguousarea with different picking locations. The boundaries may be fixed or dynamicallyadjusted to accommodate either personnel or customers. This zone is identifiedwithin the picking area. In the other method called tour picking the entire picking

area is considered for picking merchandise. Either of the strategies is adopted to



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PRODUCTION & OPERATIONS MANAGEMENT - MB0028meet the constraints or opportunities which maximize employee productivity andthe customers needs.2 Sorting and RoutingSorting is done for the purpose of easing the operation of matching orders,merchandise and the customers for whom they are done. This activity can bedone as and when orders are picked Sort Immediate or by merging a number of order and batches are made to consolidate the priorities for execution. Thismethod is called Merge and Sort . The strategy used depends on the total area of the zone, the number of orders, and the type of merchandise and the economicsof balancing all the above.When orders are routed among those zones where picks are required we callthem routing the picks. When orders are routed from zone to zone, in a particularorder, whether any picks are there or not, we call them chaining. When multiplezones are covered simultaneously in differentZones we call them parallel routing . As can be discerned, no one single methodis suitable for actual situations on site. They are formulated as a strategy foroptimization of resources in view of the constraints.3 Order Packing MethodsOrder fulfilling methodology covers one more aspect i.e. the order packingmethods. When split-case is executed it becomes necessary that themerchandise is repackaged for shipment to meet the requirements of thecustomers. In the first method they are packed as they are picked. This isapplicable in cases where the merchandise is usable by the customer directlyand when the tools and packaging materials are available with the picker and hecan pack them throughout the picking area.4 Classification SchemesIn this section you will come to know about the coding of various methods of split

picking and packing. The letters will uniquely identify the method intended to beused and all personnel in the process will know disposition status of themerchandise.D iscrete Order Picking or B atch Order Picking LetterD or B is usedZ one Picking or Tour PickingPack Immediate or Assemble and PackBS Batch Order Picking -Sort ImmediateBM Batch Order Picking Merge & SortZR Zone Picking with RoutingZC Zone Picking with ChainingZP Zone Picking in ParallelFor example, BSDZCA means Batch Order Picking Sort Immediate DiscreteOrder Packing Zone Picking with Chaining and Assemble.With this type of coding 24 ways of representing the type of split order pickingand packing are identifiable.5 Choice of Optimal Fulfillment Strategies

The choice of order fulfillment strategy depends upon the predominant ordercharacteristics and category of distribution. They are determined by Generalorder characteristics such asa) Number of line items;b) Quality of pieces per line itemGeneral order categories are

a) Wholesale Distribution usually large number of pieces of a few items;b) Retail Distribution orders for large quantities for a large number of items;



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PRODUCTION & OPERATIONS MANAGEMENT - MB0028c) Direct Marketing orders for a small quantity;d) Consumer Distribution small quantities of different items for purposes of evaluation, promotion and consumption

The performance measures to be satisfied by the choice of strategy are tominimize the costs involved and maximize desirable characteristics..

They area) Minimize the cost of pick and pack for every order;b) Minimize the cost of shipping per order,c) Reduce the time required per cycle;d) To increase the fill ratee) Improve Accuracy of the elements of the processf) Traceability and accountability of all transactions.Advanced technology involving Bar Coding, feeding on line data, high speedprocessing and distribution of information across all nodes of the supply chainhelp in improving efficiency, reduce costs and improve customer satisfaction.

Question 3: Explain strategic management process and strategicdecision making in detail.Ans 3:

Strategic Management ProcessMost of organizational processes depend upon the structure of the organisation,the hierarchical levels, decision arrival mechanisms, communication systems,authorization processes, implementation procedures, feedback and monitoringdevices to formulate and implement strategies. It is necessary to ensure that theprocess is effective and efficient and avoid loss of control. In essence, thepurpose of strategies is to leverage the companys advantages, prepare for the

eventualities of uncertain external happenings and maximize the chances of success in its endeavors. Organizational goals necessitate the adoption of certainstrategies, which are converted to functional goals in the areas of finance,marketing and operations. These goals are achieved by adopting strategiesarrived at using organizational processes mentioned above. When these longterm strategies are being implemented tactics may have to be employed tomeet short term challenges depending upon situations. The actual activitieswhich result in outcomes are called operations.A business strategy is the result of a decision taken at the highest level. They arespecific programme of action which outlines how the resources are deployed toachieve goals in an environment. A general framework to guide and activatethink tanks in the organisation to come up with proposals. Action plans with timeframes, authority hierarchies and feedback mechanisms are formulated anddesigned. At this stage detailed scenarios as to the likely consequences areconsidered and contingency plans worked out for implementation, if situationscall for the same.Being in readiness with alternatives is a good way of assuring the success of anyplan. For example the production of a model of motor cycle is to be increased by25% and possibly reduce the price by 10%. This decision would have been takenas a strategy to meet the increasing demands which are real to enter a nichemarket of the competitor to augment marketing departments claim after avigorous sales campaign or any other reason. The strategy for the marketingfunction would be many like promising freebies, make the commission attractive

for the dealer, to open more service outlets. The operations strategy would



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PRODUCTION & OPERATIONS MANAGEMENT - MB0028consider the following additional machinery or subcontracting methods toimprove productivity revampingassembly lines measures to improve motivation promoting existing employees orhire new onesidentifying and developing new suppliers look for opportunities to reduce costsas scaling up provides scope. The above measures will be under consideration atall times. When a change is considered, identification of areas of cooperation andcollaboration become visible. Opportunities arise for understanding andresolution of problems. Setting up visible targets to meet deadlines encouragesapplication of constancy of purpose as Deming. This in itself would be astrategy for improving quality and productivity.2 Strategic Decision Making Decision making is the most crucial managementfunction. Decisions commit the organisation and its members to activities whichhave financial repercussions and affect the functioning of others who areconnected with those. Therefore decisions are taken after lot of deliberationswhich involve data gathering, analysis and predicting outcomes. Accuracy of data, their relevance for the matter under consideration are matters which affectthe quality of decisions. In addition, the following factors also form the basis of decision making:a) Environmental Scanning The business environment in which the firm existsand has to compete continually exhibits potential for opportunities and threats.Becoming aware of those and their impact on the firm by a process of analysis iscalled environmental scanning. The environment includes the industry, themarketplace, the governmental agencies, society, ecology, technology, etc.Competitors may be gaining edge by diversification, making forays into thefirms niche market by making new and better products; Suppliers could beforming cartels and preparing to drive hard bargains; The Government could be

passing laws and issuing orders which could affect the supply of materials orrestrictions on import and export or even employment conditions. Adaptation tothese dynamic factors by environment scanning and basic strategic decisions isvital.b) Core Competencies Each organization is started by an entrepreneur or a smallgroup of themwho believed in some unique strengths which would give them a place in themarket. Utilizing those strengths the venture would have succeeded anddevelopment and expansion take place either laterally or vertically or in bothways. However, additional strengths or competences would have been acquiredto augment the existing business built on the core competencies with which theorganization had started. Market knowhow, the learning of the workforce andadditional facilities created, would be continuously demanding and satisfyingnew needs. Investors and suppliers would be willing to back an enterprise, who,they have, seen grow in strength. The developments and improvements both inknowledge and skills make the core strengths better. This tends to make thesean advantage over the competitors who would have to grapple with thesecompetencies. Using these advantages would form a part of the decisionstrategy of the firm. Core processes of an organization are determined by thecore competencies. Four main core processes are customer relationship, newproduct/service development, supplier relationship and order fulfillment. Theemphasis on these processes depends on the type of industry, the length of itsexistence and the consequent strengths built up in certain areas, the way earlier

successes have been achieved and the reinforcement they have given to theorganization. One should remember that the environment is always dynamic and



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PRODUCTION & OPERATIONS MANAGEMENT - MB0028the strategy formulation needs to be constantly updated for makingimplementation effective. Ultimately every organization depends on the corecompete cities which gives it an advantage over the competitors.

Question 4: What is TQM? Explain Quality approaches of Deming Wheeland Jurans Quality Triology.Ans 4:TQM (Total Quality Management):

TQM is viewed from many angles as a philosophy, as an approach and journeytowards excellence. The main thrust is to achieve customer satisfaction byinvolving everybody in the organisation across all functions with continuousimprovement driving all activities. TQM systems are designed to prevent poorquality from occurring. The following steps are implemented to achieve TotalQuality.a) Take all measures to know what the customer wants voice of the customer.Develop methods that generate facts which can be used for decision making. Donot ignore the internal customer the next person in the process.b) Convert the wants into design specifications that meet or exceed customerexpectations.c) Processes are to be designed so that they facilitate doing the job right the firsttime. Incorporate elements that make it impossible to make mistakes. It is calledfail saving or fool proofing. The Japanese call it Pokayoke.d) Keeping record of all occurrences, procedures followed and consequences.

They help in validating the processes so that continuous improvement becomespossible. More importantly any gaps can be seen and rectified immediately. Oneof the basic tenets of TQM is justbbecause something is working wellimprovement is not necessary. The search must be continuous to find ways and

means to improve every aspect of the business process finance, operations andmanagement. Complacency should never be allowed to creep in at any time. Inthis aspect, culture plays an important role. All these require top managementcommitment.Approaches to TQM:

Being practiced worldwide by different organisations, TQM has differentapproaches towards its achievement. The basic thrust of each of these isrealizing excellence. All the approaches have a lot in common, but the emphasisshifts from one other. Needless to say, each organisation will use any of these oreven a combination to suit its structure, culture and need. Some emphasise onthe philosophy of TQM and the role of management and employees in beingaware, committed and act. Some expect us to use statistics more intensely.Some give us an integrated approach.1 Deming Wheel: Demings approach is summarised in his 14 points.1. Constancy of purpose for continuous improvement2. Adopt the TQM philosophy for economic purposes3. Do not depend on inspection to deliver quality4. Do not award any business based on price alone5. Improve the system of production and service constantly6. Conduct meaningful training on the job7. Adopt modern methods of supervision and leadership8. Remove fear from the minds of everyone connected with the organisation

9. Remove barriers between departments and people10. Do not exhort, repeat slogans and put up posters.



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PRODUCTION & OPERATIONS MANAGEMENT - MB002811. Do not set up numerical quotas and work standards12. Give pride of workmanship to the workmen13. Education and training to be given vigorously14. State and exhibit top managements commitment for quality and productivityUsing the above principles, Deming gave a four step approach to ensure apurposeful journey of TQM. The slope is shown to indicate that if efforts are letup the programme will roll back.

Plan means that a problem is identified, processes are determined and relevanttheories are checked out .Do means that the plan is implemented on a trial basis. All inputs are correctlymeasured and recorded.

Check means that the trials taken according to the plan are in accordance withthe expected results.Act When all the above steps are satisfactory regular production is started sothat quality outcomes are assured2 Jurans Quality Triology :

Juran uses his famous Universal Breakthrough Sequence to implement qualityprogrammes. They areA Proof of need there should be a compelling need to make changesB Project Identification Here what is to be changed is identified Specific projectswith time frames and the resource allocation are decided.C Organisation with top managements commitment is made in terms of assignment of persons, responsibilities fixedD Diagnostic journey Each team will determine the problems result fromsystemic causes or random or deliberately caused. Root causes are ascertainedwith utmost certainty.E Remedial Action This is the stage when changes are introduced. Inspection,testing and validation are also included at this point.F Holding on to the gains The above steps result in beneficiary results. Havingrecords or all actions and consequences will help in further improvements. Theactions that resulted in the benefits derived should be the norm for establishingstandards.

Juran has categorized cost of quality into four categories(a) Failure costs Internal These are costs of rejections, repairs etc in terms of

materials, labour, machine time and loss of morale;



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PRODUCTION & OPERATIONS MANAGEMENT - MB0028(b) Failure costs External These are costs of replacement, onsite reworkincluding spare parts and expenses of the personnel, warranty costs and loss of goodwill;(c) Appraisal Costs costs of inspection, including maintenance of records,certification, segregation costs, etc.(d) Prevention costs: The sequences of three sets of activities Quality Planning,Quality Control and Quality Improvement form the trio logy to achieve TotalQuality Management. His arguments are that1. Quality is the result of good planning considering the needs of both internaland external customers and develops processes to meet them. The processesare also planned to meet them.2. Quality is built into the system of manufacture inputs and processes that areon stream like raw material, spare parts, labour, machine maintenance, training,warehousing, inspection procedures, packaging, etc. They have to be made tofollow standards and control exercised to make sure that mistakes do not occuroften and if they are they are corrected at the source.3. Quality Improvement measures are essential to keep the quality culture alive.Newer methodswill be found, some operations can be eliminated, improved technology availableIn short, as experience is gained things can always be done better. It is for themanagement to take the initiative and encourage the employees to be on thelook out for opportunities for improvement.

Question 5: Compare Workflow with BPM. Explain in detail the ProjectDevelopment process Cycle?Ans 5:

Workflow and BPM:Workflow contains a number of entities in a unidirectional path with nodes. Eachof these nodes may contain a number of elements material, data, attributes,value. They come together for integration or even for division and will havetransformation going on. The activities that make these transformations are thesub-processes. So, there are changes taking place along the path and at the endwe have a completed process. Every detail has been worked out, the outcomesverified and corrected brought into the flow so that nothing untoward occurs.

The only thing lacking is flexibility that business situations demand all the timeand because the enterprise has to perform and excel in conditions of uncertainty, improvement and competition. Fortunately these are exceptions.While majority of the humdrum goes on smoothly, we need to manageexceptions. Notably, exceptions create new processes, opportunities and help usget new insights into the processes. It has been found that 80% of process costsarise out of managing exceptions. These happen at many points in the valuechain. Managing these is Business Process Management. Workflow does not offeroptions in the way processes are conducted. They have fixed routes, activitiesand schedules. Actually, there is not much management. BPM goes ahead noton a fixed track, but on bumpy roads, swerving sharply to avoid collisions andovertaking the vehicles that are ahead. It calls for all management skills.The Project Management Life CycleA life cycle of a project consists of the followinga) Understanding the scope of the project,

b) Establishing objectives of the project,c) Formulating and planning various activities,



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PRODUCTION & OPERATIONS MANAGEMENT - MB0028d) Project execution ande) Monitor and control the project resources.Phases of Project Management Life Cycle:

1 Analysis and Evaluation Phase This is the initial phase of any project. In this phase information is collected fromthe customer pertaining to the project and the requirements are analyzed. Theentire project has to be planned and it should be done in a strategic manner. Theproject manager conducts the analysis of the problem and submits a detailedreport to the top management. The report should consist of project justification,details on what the problem is, methods of solving the problem, list of theobjectives to be achieved, project budget and the success rate of completing theproject. The report must also contain information on the project feasibility, andthe risks involved in the project.

The important tasks of this phase are as follows: Specification Requirements Analysis (SRA ) : It has to be conducted todetermine the essential requirements of a project in order to achieve the target. Feasibility study : To analyze whether the project is technically, economicallyand practically feasible to be undertaken. Tradeoff analysis : To understand and examine the various alternatives whichcould be considered Estimation : To estimate the project cost, effort required for the project andfunctionality of various processes in the project S ystem design : choose a general design that can fulfill the requirements Project evaluation : evaluate the project in terms of expected profit, cost andrisks involved2 Marketing Phase

A project proposal is prepared by a group of people including the projectmanager. This proposal has to contain the strategies adopted to market theproduct to the customers.3 Design Phase

This phase involves the study of inputs and outputs of the various project stages.Inputs received, consists of project feasibility study, preliminary projectevaluation details, project proposal and customer interviews. Outputs produced,consists of system design specifications, functional specifications of the project,design specifications of the project and project plan.4 Execution PhaseIn this phase the project manager and the teams members work on the projectobjectives as per the plan. At every stage during the execution reports areprepared.5. Control Inspecting,Testing and Delivery PhaseDuring this phase, the project team works under the guidance of the projectmanager. The project manager has to ensure that the team working under him,implements the project designs accurately. The project has to be tracked ormonitored through its cost, manpower and schedule. The project manager has toensure ways of managing the customer, marketing the future work and ways toperform quality control work6. Closure and Post Completion Analysis PhaseUpon satisfactory completion and delivery of the intended product or service the

staff performance has to be evaluated. Document the lessons from the project.



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PRODUCTION & OPERATIONS MANAGEMENT - MB0028Prepare the reports on project feedback analysis followed by the projectexecution report.What is involved in the above phases?

The preparation stage involves the preparation and approval of project outline,project plan and project budget. The next stage involves selecting and briefingthe project team about the proposals followed by discussions on the roles andresponsibility of the project member and the organization. The feasibility orresearch stage will establish whether the project is feasible or not andestablishes the risk factors likely to be faced during the course of the projectexecution and the related key factors to overcome the problems.A detailed definition and plan for the project and its execution is prepared by theteam and coordinated by the project manager. The implementation stageinvolves the execution of the project as per the plan. This also involves carefulmonitoring of the project progress and managing the changes if any within thescope of the project framework.

The final stage involves satisfactory delivery of the product/service to thecustomers. Upon completion a project review is to be conducted by the projectmanager along with team members, sponsors and customers as the case may beto discuss about the progress, performance, hurdles that were overcome andproblems faced so that such instances could be avoided in future projects.

Question 6: What is JIT? Explain Value engineering with examples.Ans 6:

JIT : JIT can be considered to be a philosophy of manufacturing founded on theprinciples of elimination of all waste and thereby increasing productivity. Whenthe philosophy is applied at workplace, the approach results in providing parts in

just right quantities at the right time. This results in economy of material andtime thus lowering the costs and increasing productivity. Since no extra parts are

available, production of only good parts is forced on the system. JIT has beenextended to mean continuous improvement. These principles are being appliedto engineering, purchasing, accounting and data proc essing also. We will seehow JIT helps in implementing Lean Production systems. In these days whentechnology is able to provide us with highly accurate equipments which havehigh capacities and the business has become global meaning that both suppliersand customers are widely accessible. To remain competitive, cost efficiencieshave become compulsory. JIT helps in this process. It is extended to the shopfloor and inventory systems of the vendors also. One of the main challenges for

JIT is frequent changes in production schedules owing to the changes in demand. This causes the procurements plans to change. In the present day scenariowhere most manufacturing concerns depend upon a number of suppliers, who inturn may outsource parts and services, disruptions have a cascading effect.However, there is a limit to the agility that a company can build into the system.Communication right through the supply chain helps in reducing inventories andkeep the flow lines smooth. Success of JIT depends upon a lot of preparation andcommitted implementation .Value Engineering / Value Analysis:Basically it is a methodology by which we try to find substitutes for a product oran operation. It can be conducted both internally and externally. The concepttook shape during the Second World War. The thinking process calls for a deepstudy of a product the purpose for which it is used, the raw materials used, theprocesses of transformation, the equipment needed etc. and question whether

what is being used is the most appropriate and economical. This applies to allaspects of the product. For example, let us consider a component needs a round



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PRODUCTION & OPERATIONS MANAGEMENT - MB0028brass rod as raw material in size 21.5 mm. Diameter. It has seven operations cutting, drilling, chamfering boring. milling, plating and polishing. Value analysisconsiders all aspects of each of these and investigates whether any of them cansubstituted by another material, a different size, a different tool, a differentmachine, a different cot sequence, a different tool for an operation, a differentchemical, a different concentration, a different voltage, shorter time orprocessing. Studies can be conducted to verify whether any operation can beeliminated.Simplification of processes reduces the cost of manufacture. Every piece of material and the process should add value to the product so as to render thebest performance. Thus there is an opportunity at every stage of themanufacturing and delivery process to find alternatives which will increase thefunctionality or reduce cost in terms of material, process and time. It should beremembered that we are not seeking a cost reduction sacrificing quality. It hasbeen found that there will be an improvement in quality when systematic valueengineering principles are employed.

Set 2

Question 1: What is meant by System Productivity? Give examples.Ans 1:System Productivity:Productivity is generally expressed as the ratio of outputs to inputs. Productivitycan be calculated for a single operation, a functional unit, a department divisionor a plant. It is a measure of the efficiency of the system and looks at theeconomies achieved during the processes. Every process will have number of contributors people, machines, facilitating goods, ancillary equipments,

technology, etc. which help in achieving maximum productivity each elementattempting to enhance the contribution of other elements. Enhancement of



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PRODUCTION & OPERATIONS MANAGEMENT - MB0028productivity is achieved by either reducing the inputs for the same output orincreasing the output by using the same input. Opportunities exist at all stagesof the workflow. the entire system to introduce measures for increasingproductivity. However in actual manufacturing situations, the inefficiencies willhave cascading effect in hampering productivity. Communication, effectivereview processes and innovative methods will ensure optimization of resources.Building up reliability into the equipments, managing the supply chain toeconomize on the cost factors improves productivity. Quality circles are veryefficient in incorporating low cost and nonintrusive methods of improvingproductivity and quality throughout the organisation. They seek to involve allpersons who are actually involved in the production system and the informationthey elicit and bring about improvements highly cost effective. They unveilcreativity and encourage team work and bring about improvements almost on aday to day basis. They do not bring about dramatic changes, but continuousincremental changes in a harmonious way. They also tend to encourageidentification of possible failures and seek methods of preventing things goingwrong..

Question 2: Explain capital costs for online storage in detail.Ans 2:Capital costs for online Storage: Storage economics are mainly concerned with the capital cost for on linestorage when rationalised with annual item cube movement. Capital costs arethose for the space, building, material handling equipments, bins, pallets, palletloading systems, computer hardware and software for identifying and processinginformation about the storage cost . The main concern is the provision forpicking, retrieval and packing . The supporting and efficiency enhancing fixtures

needed for the efficient use of space and heavy equipments should beaddressed. The extent of mechanization depends on the expected returns inthem. Many times mechanization will not solve some fundamental problems of basic design of the system, inadequate forecasting or inappropriatemethodologies. It will be found that capital costs which are quite huge fail toresult in increased productivity and will be a drain on the economics of theoperation,1 Mechanization Costs for Assembly and Packing: Failure of the split-caseorder Assembly and Packaging systems occurs mainly due to two reasons a) ToteSorting b) Item Sorting. Totes containing the picked merchandise area movedfrom the selected zone. These are received for sorting where the sorterautomatically transfers all totes of a given order on a conveyor which suppliesthem to the packing station. The stations which perform this activity will havetheir workload assigned dynamically. The Item Sorting System received the

Totes with picked merchandise are transported to one more induction stationswhere individual items are removed. These items area inducted into an itemsorter. The sorter will be in the form of tilt tray or a cross belt. Individual itemsget sorted and sent to chutes which carry the items for assembly and packing.

The discharge takes place at the Pack stations. Sometimes belt conveyors areused for Sorting and transporting. In such cases chutes may become redundant.It is to be noted that type of merchandise, their quantities determine the methodfor the intended operations. The capital costs in adopting one system to anotherwill vary and utilization and productivity are factors which determine the choice.

However, it is advisable that provision for alternates may be planned so thatmodifications do not become very costly.



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PRODUCTION & OPERATIONS MANAGEMENT - MB00282 Picking and Packing Costs: These activities require a good deal of humanintervention, thus needing a number of people. Distribution centers wherepicking and packing activities take place will measure performances on the basisof pieces per man-hour or order lines per man-hour. Inevitably, these get linkedto orders. There is a large variation in the quantities per order, variety of merchandise, waiting lines and other characteristics of the orders being filled.

The orders might be wholesale, retail, direct or consumer. Productivity measuresthough dependent on pieces per hour or lines per hour will have to be adjustedto suit the peculiarities of the situation. The extent of mechanization also has tobe considered. Costs involved both in terms of capital and labor intensiveactivities should get suitable representation of the cost structure.3 Order Assembly and Packing System Costs: Assembly is done manuallyand hence needs a well trained workforce. The variety of merchandise that arrivefrom totes either via the chute or trays or cross belt have to be accuratelyidentified and placed for Assembly. Though every care would have been takengaps in the information flow would still hold up the operations. Reducinginventory at this level is critical to productivity. Feedback systems should b every efficient to rectify errors as and when they occur. Main costs involved at thisstage are the manpower and capital costs would not be heavy. Packing systemsmay be semiautomatic ormanual. Fully automatic systems may not be advisable for Order Assemblysituation unless quantities are large and requirements are for longer periods.

Question 3: Explain automated assembly lines and automated flowlines?Ans 3:Automated Assembly Lines

All equipments needed to make a finished product are laid out in such a way asto follow the sequence in which the parts or subassemblies are put together andfitted. Usually, a frame, body, base will be the starting point of an assembly. Theframe itself consists of a construction made up of several components and wouldhave been assembled or fabricated in a separate bay or plant and brought tothe assembly line. All parts or subassemblies are fitted to enable the product tobe in readiness to perform the function it was designed to. This process is calledassembly. Methodologies of achieving the final result may vary, but the basicprinciple is to fit all parts together and ensure linkages so that their functions areintegrated and give out the desired output. Product Layouts are designed so thatthe assembly tasks are performed in the sequence they are designed. You willnote that the same task gets repeated at each station continuously. The finisheditem comes out at the end of the line

The material goes from station 1 to 5 sequentially. Operation 2 takes longer

time, say twice as long. To see that the flow is kept at the same pace we providetwo locations 2a and 2b so that operations 3, 4 and 5 need not wait. At 5, we



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PRODUCTION & OPERATIONS MANAGEMENT - MB0028may provide more personnel to complete operations. The time taken at any of the locations should be the same. Otherwise the flow is interrupted. Inautomated assembly lines the moving pallets move the materials from station tostation and moving arms pick up parts, place them at specified places and fastenthem by pressing, riveting, screwing or even welding. Sensors will keep track of these activities and move the assemblies to the next stage. An operator willoversee that the assemblies are happening and there are no stoppages. Themain consideration for using automated assembly lines is that the volumes

justify the huge expenses involved in setting up the system.

Automated flow linesWhen several automated machines are linked by a transfer system which movesthe parts by using handling machines which are also automated, we have anautomated flow line. After completing an operation on a machine, the semi-finished parts are moved to the next machine in the sequence determined by theprocess requirements a flow line is established. The parts at various stages fromraw material to ready for fitment or assembly are processed continuously toattain the required shapes or acquire special properties to enable them toperform desired functions. The materials need to be moved, held, rotated, lifted,positioned etc. for completing different operations. Sometimes, a few of theoperations can be done on a single machine with a number of attachments. Theyare moved further to other machines for performing further operations. Humanintervention may be needed to verify that the operations are taking placeaccording to standards. When these can be achieved with the help of automationand the processes are conducted with self regulation, we will have automatedflow lines established. One important consideration is to balance times thatdifferent machines take to complete the operations assigned to them. It is

necessary to design the machines in such a way that the operation times are thesame throughout the sequence in the flow of the martial. In fixed automation orhard automation, where one component is manufactured using severaloperations and machines it is possible to achieve this condition or very nearly.We assume that product life cycles are sufficiently stable to invest heavily on theautomated flow lines to achieve reduced cost per unit. The global trends arefavoring flexibility in the manufacturing systems. The costs involved in changingthe set up of automated flow lines are high. So, automated flow lines areconsidered only when the product is required to be made in high volumes over arelatively long period. Designers now incorporate flexibility in the machineswhich will take care of small changes in dimensions by making adjustments orminor changes in the existing machine or layout. The change in movementsneeded can be achieved by programming the machines. Provision for extrapallets or tool holders or conveyors are made in the original design toaccommodate anticipated changes. The logic to be followed is to find outwhether the reduction in cost per piece justifies the costs of designing,manufacturing and setting up automated flow lines. Group Technology, CellularManufacturing along with conventional Product and Process Layouts are stillresorted to as they allow flexibility for the production system. Withmethodologies of JIT and Lean Manufacturing finding importance and relevancein the competitive field of manufacturing, many companies have found that welldesigned flow lines suit their purpose well. Flow lines compel engineers to put inplace equipments that balance their production rates. It is not possible to think

of inventories (Work In Process) in a flow line. Bottlenecks cannot be permitted.By necessity, every bottleneck gets focused upon and solutions found to ease



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PRODUCTION & OPERATIONS MANAGEMENT - MB0028them. Production managers see every bottleneck as an opportunity to hasten theflow and reduce inventories. However, it is important to note that setting upautomated flow lines will not be suitable for many industries

Question 4: Write a detailed note on Crosbys Absolutes of Quality andTaguchis Quality Loss Function.

Ans 4:Crosbys absolutes of QualityLike Deming, he also lays emphasis on top management commitment andresponsibility for designing the system so that defects are not inevitable. Heurged that there be no restriction on spending for achieving quality. In the longrun, maintaining quality is more economical rather than compromising on itsachievement.His absolutes can be listed as under.(i) Quality is conformance to requirements not goodness .(ii) Prevention, not appraisal, is the path to quality.(iii) Quality is measured as the price paid for nonconformance and as indexes.(iv) Quality originates in all factions. There are no quality problems. It is thepeople, design, process, who create problems.Crosby also has given 14 points similar to those of Deming. His approachemphasizes on measurement of quality, increasing awareness, corrective action,error cause removal and continuously reinforcing the system, so that advantagesderived are not lost over time. He desires that the quality management regimenshould improve the overall health of the organisation and prescribed a vaccine.

The ingredients are:1. Integrity honesty and commitment to produce everything right first time,

every time.2. Communication Flow of information between departments, suppliers,customers helps in identifying opportunities.3. Systems and operations: These should bring in a quality environment so thatnobody is comfortable with anything less than the best.6.5.3.4 Taguchis Quality Loss Function His contention is that quality comesfrom design. He advocated a wide use of Design of Experiments forexperimentation on variables and obtain specifications which will result in highquality of the product. It helps in bringing cost effective improvements in quality.He believed that designers should make robust designs so that product canwithstand the variabilities which tend to be persistent and give quality for longerperiods. His objective in giving the loss function is to make manufacturers realizethat it is the target value of the specification that should be sought to beachieved and not the permissible deviations. The loss caused is the square of thedeviation multiplied by a cost constant.L = C (X-T) 2

L = Total LossC= Cost constantX = average value of the quality characteristic

T = target value of the characteristic. Taguchi also talks about losses to society because of a dent in quality both themanufacturers and users in society who will have to endure the consequences of

reduced performance as long as the product is used.



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PRODUCTION & OPERATIONS MANAGEMENT - MB0028Question 5: Read the following case and answer the question.

Shane O'Leary, chief operating officer of the UK-Canadian group, will take overthe reins from Mr [Richard Anderson]. High hopes over the gas explorer'sintentions to develop a field in Algeria caused its share price to peak in 2005 butits failure to exploit the prospect has since caused its share price to slump.In spite of Mr [Khelil]'s views, FCP yesterday announced that Mr [MichaelKroupeev]'s proposed slate of directors would now be recommended bymanagement, making their election virtually guaranteed, although two of hisnominees would step down and make way for compromise board members.Mr Kroupeev, who controls nearly 10 per cent of FCP through an investmentvehicle, also sounded a conciliatory tone. "The minister has no grounds to beconcerned. There has been no change in control of the board. We are fullycommitted to developing this project." [Source : Proquest : STANLEY PIGNAL.Financial Times. London (UK): Apr 15, 2008. pg. 20]

Question: Identify the major process of operations as applicable to thiscontext and explain it in detail?

Ans:Initiating Processes because this process is initiated by management groupdecision which results in the next phase of the project.

The two word phrase initiating process refers specifically to a particular group orprocesses, the purpose of which is for the sole and express authorization bythose who have the power to make the determination as to when it may befeasible and or appropriate to resume work on any particular work scheduleactivity that has been halted previously for one reason or another. This

authorization is traditionally coming on the heels of a redefinition of scope forthe particular activity phase or project which may then allow the particularactivity to be restarted. The initiating processes are quite typically performed bygroups and individuals that are actually outside of the actual scope of controlwithin the project and rather, represent interested but not directly controllingmembers of the organization, program, and or portfolio processes. Theseindividuals typically will weigh in and provide insight as to the initiating processfor this particular activity and or event.


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