Operations Management - BOM 505

Operations Management Assignment - BOM 505

BALAMURUGAN CHINNIAH, K09610972/4/2011

Contents

1. Introduction.........................................................................................................................4

2. Material handling................................................................................................................4

3. Transformation Process......................................................................................................6

3.1 Manufacturing..................................................................................................................73.1.1 Blow-Room..............................................................................................................73.1.2 Carding.....................................................................................................................73.1.3 Drawing...................................................................................................................83.1.4 Ring Frames.............................................................................................................83.1.5 Winding/Spinning....................................................................................................9

4. The 4 V’s Analysis.............................................................................................................9

5. Operations Performance Objectives.................................................................................10

6. Design Process..................................................................................................................12

7. Need for Technology........................................................................................................13

8. Quality..............................................................................................................................14

9. Benchmarking...................................................................................................................16

10. Logistics............................................................................................................................17

11. Recommendations.............................................................................................................17

References................................................................................................................................19

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Executive Summary

It is very important for an organization to have operations management internally,

which helps the company to increase its performance, growth and to compete with the

competitors in the market. This assignment in operations management explains about one

such company ‘Shri Vishnu Perumaal Spin Yarn Ltd’ in India, where the author worked.

Company’s production and material handling techniques are explained in brief and places for

improvement has been found.

Initially the methods used in inventory handling inside the firm is explained. Then the

transformation process from a raw material to a finished good through various stages named

blow-room, carding, drawing, ring frames and winding/spinning is discussed in brief. The

next is the 4Vs analysis i.e. the variations in volume of goods, visibility of production to the

customers, variation in demand in the market and variety of the products manufactured are

analyzed with respect to production and the market, industry in which the company operates.

The operations performance objectives of the firm is analyzed from production and market

perspective of the firm. The analysis is carried out for production costs, customer

dependability, flexibility of the firm in production, quality of product and speed of the

production process.

The degree of overlap of process and product design is discussed with the mass

production perspective. The need for technology is inevitable for a company which operates

in manufacturing sector, an overview of this is given. The most important factor that the

production has its concern is quality, the quality measurements and the specification along

with quality management system followed and the method of determining total cost of quality

is discussed. Next is the performance benchmarking, the way in which the company bench

marks its performance is discussed. The transportation of unfinished and finished goods in

the company is explained in the logistics section.

Finally the recommendations, such as installing latest technology machines for

producing different types(varieties) in the same product, using wireless communication

devices, electronic labeling with bar codes, installation of automated material handling

machines and knowledge transfer with a foreign firm are suggested. These recommendations

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will enhance the overall performance of the company. This assignment will take you through

all the above mentioned.

1. Introduction

Operations Management involves all activities of goods production and services in a

company. The processes involved in goods production are developing, designing,

manufacturing and delivery of goods. In simple words it is the management of conversion

process of input into output. This explains the way in which the businesses produce goods

and services effectively and efficiently (Slack N 2010, p.7)

Inputs Manufacturing Process (Operations) Output

In today’s competitive environment operations management plays vital role for the

success of a firm. This assignment will discuss about the operations with respect to

manufacturing in a Spinning Mill based on the author’s previous work experience. The term

spinning is the process of converting fibres into a continuous long yarn or thread. The

operations involved in a spinning mill are customer management, employee management,

administration management, power (electricity) management, material handling, and

production process (spinning process). The two main operations among the above mentioned

are the material handling and production (manufacturing) process. Operational management

issues mostly arise in material handling and production process in a spinning mill, which are

the important ones in the context of operations in this industry.

2. Material handling

This mainly deals with the movement and storage of raw materials, unfinished, finished

(input and output) products, wastes, slivers, rovings, laps and maintenance tools in and

around the company. The industry receives natural or artificial fibres in trucks in the form of

bales. The weight of the bale varies with respect to type of raw materials. Each synthetic fibre

bale weighs around 290 to 310 kg and each cotton bales weighs 165 to 180 kg on average

scale. These bales are transported manually to the storage with the help of bale trolleys and

forklift trucks. Figure 1 and Figure 2 shows the bale trolley and forklift truck.

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Figure 1: Bale Trolley

Figure 2: Fork Lift Truck

The bales are transported to bale openers, where the bales packs are removed and the fibres

are moved to the mixing process and then to blowroom. After this process, the fibres in the

form of laps are transported to carding and drawing process using conveyor belts. The K0961097 BOM 505 of 19

unfinished product from this process is untwisted rope like structure, which are stored in

sliver cans. These cans with the unfinished product are then transported manually to the

roving process, where the thickness of the rope is reduced. The thin ropes are then fed to the

spinners through the inlet available in the spinner machine. The output from the spinners is

taken to the winding, where the finished product ‘yarn’ is winded on a bobbin or cone. The

winded cones are then transported to store for dispatch/delivery purpose. The company uses

equipments which are operated manually with the help of man power, to transport the

resources. The equipments are chosen based on the factors such as storage capacity, store

facility, medium of arrival and delivery of the products, amount, shape and type of the

resources which should be transported.

3. Transformation Process

Manufacturing is the processes involved to transform the input into output with the

help of the resources present in spinning industry. The input for the spinning mill is raw

materials such as cotton/artificial fibre. The inputs are transformed into outputs through a set

of processes. Properties such as shape, weight, strength of the input are changed (Slack N

2010, p.11). The resource helps in transforming process. The resources which help in the

transformation are manpower, machinery, power (Electrical Energy) and tools. The output

which is obtained after the transformation process is the Yarn (output). At the end the product

is stored in the storage for delivery or dispatch purpose. This changes the possession of the

product, it is moved to a different place for sales purpose. The Figure 3 is a diagrammatic

representation of the transformation process of a spinning mill.

Figure 3: Transformation Process in the Spinning Mill

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The entire process of manufacturing from blow-room to spinning is explained in detail in the

following segment.

3.1 Manufacturing

There are different stages to transform raw material into finished goods. Figure 4

shows the diagrammatic presentation of the processes involved in the spinning mill. The fibre

bales which are opened with the help of bale opener and mixed manually in a mixer, provided

with temperature of 25 Degree Celsius. This temperature is maintained to avoid excess

moisture content in the fibre. The mixed fibre is then transported to Blowroom. This mixing

process is done only in occasional circumstances as per the customer’s requirement.

3.1.1 Blow-Room

The fibre in the opened bale is fed into the Blow-room manually by a worker. The

fibre fed into this machine is broke using a ‘breaker’ to remove the dirt. By considering the

quality of the raw material the output from different breakers are mixed and moved to the

scutcher, this scutcher is manually operated in-order to maintain even texture in the output. In

this scutcher the fibre is further cleaned, to get rid of the impurities, dirt in it. The fibre output

is in the form of a thin ‘blanket’ which is also known as ‘lap’ which has an even texture. Thus

the blow-room process ends with the fibre output in the form of ‘blanket’. Thus the output is

transformed to next level of processing called carding.

3.1.2 Carding

This process is done by a machine called ‘card’, where the fibres are separated and the

texture is reduced to its maximum. The output is unlike to the output of blowroom, it

resembles an untwisted rope structure. Thus the blanket like structure is converted to

untwisted rope in this process. Then the output is taken to drawing process.

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Figure 4: Process Involved in Spinning Mill - Source Designed by Author

3.1.3 Drawing

This process is carried out using a machine named ‘draw frames’. The frame in this

machine further straightens the fibre. The output from various cards are combined here in-

order to obtain a more uniform product. The combining the outputs of cards is known as

‘doubling the rope’. A process called combing is done before drawing in-order to get a high

quality output by removing the short length fibres. The output of this drawing is a loose rope

with untwisted structured.

3.1.4 Ring Frames

Here the untwisted rope is attenuated in three stages. The attenuation is done to

reduce weight per unit length. The weight is reduced in all three stages gradually. The output

from the first attenuation of is known as the ‘slubbing’, the output from the second

attenuation is known as ‘inter-mediate’ and the output from the last stage of attenuation is

known as ‘roving’.

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3.1.5 Winding/Spinning

Winding or Spinning is the last process in the production of yarn. The spinning

methodology followed in the firm was ring spinning. The attenuated rope of fibre is given a

thread’s strength by twisting it. The twisted yarn is the finished product of a spinning mill.

This finished product is further twisted with another finished product of same kind to produce

a thicker yarn. The thickness of the yarn changes with respect to the customer’s requirement.

This process of increasing the thickness of the product is known as ‘doubling’. Thus the

manufacturing process in a spinning mill is explained in detail.

4. The 4 V’s Analysis

The 4V’s analysis is done with respect to the production process and textile industry in

which the company operates. The V’s are Volume, Variety, Variation in Demand and

Visibility (Slack N 2010, p.19).

Figure 3: 4V's Analysis of Mass Production (Operation) and Demand in the market.

High Volume: The company produces high volume of goods (yarn), which is mainly due to

the mass production process and customer requirements. This denotes the repeatability of the

same process and a systemised procedure. Systemisation is nothing but setting rules by

specifying how each part of the process/job should be done. This contributes to low unit

costs.

Medium Variety: Medium variety of product is found because the company deals only with

the textile industry. The product from the company is yarn, the thickness (evenness), weight K0961097 BOM 505 of 19

and length of the yarn alone varies where the product is the same yarn. The production is

systemised as per the variety of the products. Hence it is known that the system is flexible to

limited extent for the thickness.

Minimum Variation in Demand: The product from company is mainly used for stitching

purpose in garments. The industry mainly depends on the textile market demand, where the

demand varies with respect to the summer and winter season. However the overall demand is

almost same throughout the year The variation in demand is medium as it is a predictable

market and product is also manufactured in large volumes. The manufacturing is scheduled

and routine work is done with the help demand forecast. This shows that the resources are

highly utilized and the unit’s cost is low.

Minimum Visibility: The visibility of production process is medium, as the company mainly

deals with the manufacturing process. Minimum contact with the customers after the order is

placed, most of the customers are industries which produce garments. They knew about the

product they get from the company, however the methods and technique of producing the

product with low production costs are not revealed. Because they could manufacture their

own yarn by setting up a manufacturing unit in a long run.

5. Operations Performance Objectives

The performance objectives of the firm is analysed with the help of Slack at al model.

This model gives the internal and external effects of the firm with respect to factors such as

speed, cost, dependability, quality and flexibility. All the factors above mentioned are related

to the mass production process carried out in the company. The company has made a lot of

internal changes in recent years, to be in-line with the competitors and textile market for yarn.

This internal changes has an positive impact on the company’s overall performance. The

quality (thickness, weight and length) of yarn has met the customer’s expectation. There are

different thickness, lengths and weight levels for the types of yarn which are manufactured,

this will be discussed in the Quality section later. The internal effects are low wastes, reduced

costs, effective and efficient manufacturing techniques and also reduced rework on the

product. This good quality also makes the customers to depend on the company for the goods

manufactured. Thus it has a good external effect. The process of converting a fibre into yarn

is one of the difficult to deal with. Yarn is produced by processing a raw fibre through

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various stages, all the stages are carried out in-phase (same speed), which ensures reduced

inventories from one stage to another. Output of one process acts as input to another process

in manufacturing yarn. Speed also reduces risk, as the company operates with the forecast of

demand in the market. The company mostly tries to get raw materials (fibre) at a very low

price, when available in the market and then coverts it into yarn in bulk. High total

productivity and low cost raw material ensures that the company incurs profit (high margin).

Figure 4: Five Performances Objectives Frame work of Slack et al for Mass Production Process.

Above given figure 4 is a diagrammatic representation of Slack et al’s frame work (Slack

N 2010, p.52) for the mass production process of the company. The firm manufactures

limited variety of yarn, this is followed in-order to have the flexibility to change between the

product varieties as and when required. Having limited variety ensures manufacturing large

volume of goods and delivering them in time to the customers. The customers depend on the

company, as the company delivers good quality product without defaulting the delivery time

through reliable process. Thus is has obtained a long term contracts with many customers.

This on the whole ensures that the company has loyal customers and makes profit.

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6. Design Process

Design is done to conceive the looks, arrangements and working of anything before it is

created. In simple words design happens before any creation. Designing activity involves the

understanding of the objectives. When the objectives are clear enough, the designing process

is done (Slack N 2010, p.86).

Figure 5: Product and Process Design

From the Figure 5 it is clear that process designing and product designing are

interrelated to each other. The product design has impact on the process design and the vice-

versa in any sector. This helps in determining, whether a good quality product is obtained

from the process. The process design is done to make sure that the performance of the

process leads to good quality in products. Product with bad quality is obtained when

designing of a particular product is done without the consideration of process involved in it.

Designing is done order to achieve quality in the product and cost controlling, reduced waste,

dependability, flexibility, and speed in the process. Spinning mills are designed in such a way

that the resources utilised to its maximum order to obtain good quality of products. The types

of process are project process, jobbing process, batch process and mass process. Both product

and process design overlap with each other to a great extent, as the product (outcome) mainly

depends on the arrangement of the machines in the production bay. Moreover the unfinished

product is fed into various machines for further processing to obtain the product (yarn). From

the above given it is clear that both these designs are bonded together in a production. When

the process design is altered, will have an negative impact in the quality of the product and

would damage the performance of the firm.

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Mass Production Process: The goods are produced in high volume with low variety when

compared to the intermittent production process. However the volume is relatively low and

variety is relatively high, when compared to continuous production process. The

machinery/equipments used may vary with respect to the production standards and

requirements. The sequential use of all the machines leads to the output. This process is

inflexible with highly predictable flow of the product.

Figure 6: Mass Production In between Intermittent and Continuous Process.

The Figure 6 shows the variations in variety and volume with respect to mass production

process. Low variety and high volume of products of produced in such type of process.

7. Need for Technology

Technology is inevitable in the manufacturing process of the company. The application of

technology to the manufacturing department is in practice for centuries. With the industrial

revolution, the technology has improved a lot and transformed the processes in an

organisation. In today’s competitive world, technology plays a vital role in each and every

individual or organisation enhancement (Slack N 2010, p.208). The spinning mill uses

conveyor belts to transport the sliver-cans which contains the unfinished goods, from one

machine to another for further processing. This conveyor belt is constantly monitored by a

worker for proper functioning. When there is a malfunction in the conveyor belt the entire

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production rate goes down, which in turn affects the efficiency of the production process.

Automated machines can be used transport the sliver-cans which is a combination of

computing control and machine technology. They are flexible and more productive in nature.

Similarly in yarn storage, the products are labelled manually by the workers. In the case of

wrong labelling, the goods are stored in different storage unit and leads to delivery issues. An

automated labelling device which uses bar codes for identification and tracking can be used

in-order to enhance the handling process. This tracking facility helps in locating a particular

good inside the store. All the communications among the workers in the production bay is

through intercoms. This can be converted to wireless network which operates in a minimum

range, improves the communication standards and efficiency of the workers. Technology

gives benefits such as consistency in the manufacturing process, cleaner environment to work

and opportunity to engage customers in manufacturing for their feedback.

8. Quality

As said by Slack, N. quality is ‘consistent conformance to customer’s expectations’

(Slack N 2010, p.498). The word ‘conformance’ insists that there is a need to meet product

specification which satisfies the customers. It is visible from the current situation, that the

high-quality goods of a company increases the competitive edge of the company. It also

reduces the rework and waste as mentioned earlier. This implies that it uses specific standard

which satisfies the customer expectation level. The thickness of the yarn is in micrometers,

which is 0.001 millimeters. A thread or strand of yarn is known as ends and the number of

ends that make an yarn is called the ply. There are different plies in yarn. The yarn produced

by the company are 2 ply, 4 ply, 8 ply and 12ply. The length of the yarn varies with respect to

the customer requirement (type of ply among the above mentioned). Normally the length of 2

ply yarn varies from 550 meter to 750 meter per 100grams, where as the length of 4 ply is

between 270 m to 400 m per 100gms, 8 ply yarn’s length varies from 250m to 300m per

100gms and the length of 12 ply yarn is between 110m to 140m per 100gms. The weight and

the length of the yarn is measured with respect to the ply of it. Whilst the evenness of the

yarn of the yarn is also checked for quality purpose. This in particular it favours the survival

of the company in the market and in seeking a better organizational structure (Russell, p.80).

This is a never ending process in a manufacturing company like spinning mill. The product is

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often selected periodically from every scheduled jobs and cross checked for quality. this is

done with the help of thickness, length measuring device and weighing device.

Quality Management

This is a set of processes which focuses on the quality. The processes involved are

inspection, quality control, quality assurance and Total Quality Management. The inspection

of the product is done by randomly selection/grading/sorting process. The results of the

inspection in then compared with the product specification documents and control charts. The

next step is the quality assurance where the factors such as costs of quality, process control

and query methodology are considered. Costs of quality depends on the appraisal and

prevention method. The prevention method considers the audit done for quality, training, data

acquisition – report and analysis, the cost spend on the quality.

Figure 7: Point of Zero Defect – Source Report from the Company

Initially when the company started its production process, the products manufactured

didn’t meet the customer needs and the company was forced to rectify the defects. The

rectifying costs were found to be higher than the production costs. Hence the company

decided to train its employees on using the machines efficiently and effectively. Employee

wages, electricity (power) charges consumed by the machines, raw material costs were

included in the training and production costs. The point of intersection of rectifying and

training-production costs in Figure 7 was used to determine the quality cost with respect to

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production. The zero defect costs was not same throughout, because of the hike in the

electricity charges made by the Government and the varied training costs and raw material

costs. Hence the quality cost with zero defect is found to be slightly higher than the point of

intersection in the Figure 7. This method in Figure 7 was used by the firm to find its total cost

of quality. The last process is the total quality management (Russell, p.86), this is done by the

company to obtain ISO 9001:2000 certification. This TQM is a continuous and repeated

process by which the company can hold its certification. Normally the certification process

involves the inspection by the authorities from ISO. This is done periodically 3 years or years

which varies with respect to the industry.

9. Benchmarking

The process of comparing one’s own performance against other company’s performance

is known as bench marking. This also includes investigating other company’s practices in

achieving the targets, which could contribute to the performance improvement of the

company. The types of bench marking are Internal, External, Competitive and Non-

competitive (Slack N 2010, p.395).

Internal Benchmarking

This is nothing but the comparison between operations at different level with in the

same organisation. In the spinning mill, the production rate of different machines in the bay is

compared in order to maintain the same level production rate. The storage capacities of

different stores of same size are compared, for maintaining the same number of product lots

in two different stores.

External Benchmarking

The operations at same level or different levels are compared, this is done in-order to

obtain equal performance level. The spinning mill compares its production rate per employee

with another company’s production rate per employee provided with same number of

employees. When found less, it investigated the practices followed and adopted them to

increase the production rate per employee.

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Competitive Benchmarking

It is a comparison between the competitors in the same market. The mill compared its

quality management with the competitor in the same market. This competitor produced goods

for the same customer for whom we manufactured goods

Non-Competitive Benchmarking

This type of benchmarking is done between companies in different market and which

don’t compete with each other. This type of benchmarking is not seen in the spinning mill in

which I worked.

10. Logistics

It is nothing but changing the possession of the product. This mainly deals with the

material handling in the spinning mill. Raw materials, unfinished goods and finished are

transported in and around the company for various processes. The raw materials are brought

in bales with the help of the trucks. These bales are unloaded from the truck and stored for

processing purpose. They are unloaded with the help of bale trolleys and forklift trucks which

are operated manually. When scheduled for manufacturing, the bales are removed and

manually fed into the blowroom for processing. The output from the blowroom is transported

to the carding process with the help of the automated machines. The outputs from various

carding machines are transported with the help of conveyor belts and at times manually (by

workers). The unfinished product is then routed to drawing process and winding process

through the automated machines. The produced yarn is winded over a bobbin or cone which

is measured in terms of kilograms and packed for dispatch process. The packed product is

moved to the storage/ware house until it is delivered to the customer.

11. Recommendations

The company mainly operates with mass production process in three different shifts every

day, it can implement new automated machines to transport the unfinished goods to the next

machine for further processing. This increases the efficiency and saves time in inventory

handling. The company manufactures limited variety of yarn and may lead to have less

contracts for making yarn in the future. This can be avoided by fitting latest technology

machines which helps in shifting between the varieties of yarn and also increases the K0961097 BOM 505 of 19

production performance. Shifting between varieties in the product also helps them to operate

for just in time demands. As said earlier the labelling for the finished goods is done manually,

which uses more labour force and some mistakes in this leads to wrong delivery. This can be

rectified by having electronic labelling system with bar codes, which also helps us in tracking

the inventory location in the dispatch store or ware house. They forecast the future demand of

product for short term of 1 year, this should be changed to minimum of 3 years in-order to

compete in the future market. Quality management is at its best in the company, however the

devices used have old technology in them. Instead they can use latest technology in quality

measurement, which gives more accurate results. The company must reduce the labour force

used in manufacturing process, by having a fully automated system which enhances the

production performance. For this the company’s higher official must visit a foreign firm

which operates in the same field and involve in knowledge transfer process. The company

can fix new machines by getting funds from the government, subsidy is given in-order to

improve the company internally. Which in turn brings benefits for the it, when maximum

utilised. The installation of such machines will reduce the production costs further and will

increase the profit margin. As said earlier in need for technology, the company can

implement the use of wireless system for communication between the workers, which

improves the performance and communication skills. It can follow non-competitive

benchmarking which enhances the company to develop in all the processes like employee

management and a lot more. The above given are some of the recommendations which

enhances the survival scope of the company in future.

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References

1. Slack, N., Chambers, S., Johnston, R. (2010) Operations Management. 6th ed. England, Pitman Publishing.

2. Russell, Roberta S. and Taylor III, Bernard W. (2006) Operations Management – Quality and Competitiveness In A Global Environment. 5th ed. John Wiley & Sons.

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Operations Management - BOM 505

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