production operations management module ii

Production ! Operations Management

12.1 INTRODUCTION L_A project (be it a construction work, or design and development of a prototype, or a turnkey project like a sub-station, power house, factory establishment, etc>) consists of a large number of activities whose scheduling by the conventional methods is generally difficult. Projects that are not properly scheduled generally tend to extend beyond the contract date and thus cause heavy losses to the contracting firms. Delays in completion of projects : Tend to increase investment in work-in-progress. Delay in invoicing and thereby reduce working capital. Penalize the contracting firm when the completion lags behind the agreed date since most of the contracts of the projects contain penalty clauses. Result in unwelcome additions to the fixed manufacturing expenses as men and machines are employed beyond the economic time span.

Timely completion of the projects-projects backed by good scheduling-projects the capability of the contracting firm to meet delivery commitment. Such a firm - a firm known for its delivery commitment - can win an order even in the face of competition from a large number of lower priced competitors. Scientific scheduling of projects, therefore, is important for the firms engaged in work on turn-key-projects. A number of scientific tools are available for scheduling but the scheduling of projects is best performed through a well-known technique called Critical Path Analysis, abbreviated as CPA. 12.2 CRITICAL PATH ANALYSIS ritical path analysis, an important aid to planning, scheduling and coordinating the activities of large scale projects, is a synthesis of two independent techniques: Programme Evaluation and Review Technique (PERT) and Critical Path Method (CPM). PERT was developed by Naval Engineers of USA Navy, in charge of Polaris Sub-marine Missile project in 1958. CPM was developed by Morgan Walker of DU Pont and James Kelly of Remington Rand (USA) in 1957 for the use in planning and scheduling of the construction of a chemical plant. Though the two techniques were developed independently, they are only superficially different. The two methods have many features in common and are now combined into a technique called Critical Path Analysis (CPA) or Network Analysis.

Unit 12

Project Planning & Control : Critical Path Analysis (PfcRT/CPM)

There are three basic differences between a PERT network and CPM network: PERT is event oriented while CPM is activity oriented (i.e. PERT prepares network from events while CPM builds if from activities.) PERT provides for an allowance for uncertainty while CPM does not (i.e. PERT makes three time estimates tor each activity while CPM makes one time estimate). Activity times in CPM technique are related to costs while it is not so in PERT since it is event oriented.

12.3 APPLICATIONS OF CPA CPA technique is a very useful technique for a project manager in his decision making process. Typical areas of application of CPA technique are :Construction Turn key projects Manufacture Maintenance Installation and reorganization Retooling Research & Development Launching Administration Accounting General

New buildings, bridges, plants, extension of existing building. Substation, power house, factory establishment. Special purpose machines, cranes, turbo generators, ships, pressure vessels, locomotives etc. Annual shut down of plants, overhauling of large machines. Installation of new machine/computer, shifting of an old machine or an office to a new site. Modifying a machine or a production process. US Polaris missile, prototype work. A new product. ---------7

I

Strategic and tactical planning^ Budgeting and preparation of annual accounts. Organization of conferences,-functions and seminars.

12.4 ADVANTAGES OF CPA Critical Path Analysis offers several advantages. 1. It forces a thorough pre-planning. Each and every activity comprising the project is identified and recorded. Nothing is left to memory or chance, which prevents crises in scheduling.

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2. 3. 4. 5. 6. 7. 8. 9.

It increases coordination of tasks as technological relationships between the activities suggest which activities can run simultaneously and which should succeed others. It helps computations of different project durations for different level of resources and thereby selects a plan that minimises total project cost. It indicates optimal start and finish times of each activity of the project. It defines areas of responsibility of different departmental heads for timely execution of the project. It facilitates progress reporting and limits unnecessary discussion at the progress meetings to minimum. It identifies troubles spots often in advance and apply remedial measures. 11 enables the plan to be revised in accordance with changes/ changing circumstances. It helps to exercise "control by exception" and prevent cost overruns.

12.5 NETWORK LOGIC A network is a graphical representation of the project and is composed as series of connected arrows and circles to describe the inter-relationship of the activities involved. The netvvi >i k is constructed from the following elements: 1. Activity: An activity represents a task, which has a definite beginning and definite end. An activity is represented by an "arrow" (>). The description of the activity is written above the arrow and the time is consumes is written below the arrow. Design 4 Weeks Words like "design"," cast", "machine", "produce", "develop", "prepare", etc. are used to describe activities.

General conventions concerning activities :* * * Acti vities proceed from left to right. The tail of the arrow represents the start of an activity and head of the arrow represents the completion of the activity. The length of the arrow is not important. That is there is no relationship between the duration of an activity and the length of the arrow. Arrows do not need to be only in the horizontal plane. Vertical plane can also be u'sec .(i.e. arrows mav be straight, vertical or bent but are not broken.)

Unit 12

Project Planning & Control : Critical Path Analysis (PERT/CPM)

Activities are properly identified using any one of the methods given below: Shortened descriptions e.g. design, draft, paint wall, fixes door, etc. Alphabetical codes e.g. A, B, C etc. Pairs of number of the events linked by the activity e.g. 1-2,2-3,2-4 etc.

Durations for the activities are written below their corresponding arrows and they have common unit (i.e. hours, days, weeks etc.) An Event:

2.

An event represents the start or the completion of the task. An event is graphically represented by a circle. A

Starting eventA'

Completion event

Incorrect

BCorrect

12.1 (a)A Correct

B

Merge event

Burst event

Combination of merge and burst event

12.1 (b) Fig 12.1: Method of representing activities and events

Production / Operations Management

Each activity has a definite beginning and a definite end, hence each arrow representing the activity is bounded by two events (circles). Events are described by words like "designed", "started" "computed", "received", "issued", "approved", "tested", "despatched" etc. An event, as mentioned above, represents either the start or the completion of the activity. Such separate start and end events, however, are reduced to a common event which represents the completion of the first activity and the start of the next. (Ref. Fig. 12. l(b)) Sometimes, a single event may, represent the joint start of more than one activity or the joint completion of more than one activity, or both. Such events are respectively called "burst event", "merge event" and combination of "merge & burst event". (Ref. Fig. 12.1 (c) 3. Activity relationships:

A project is made up of various activities which are interrelated. To construct a network, the project is first torn into its activities and then technological relationships between the activities are established. Three possible relationships are: Certain activities can run parallel and they are called "Concurrent" activities. Certain activities depend upon competition of the others. Such activities are called "Succeeding" activities and the activities on which they depend are called "Preceding" activities.

Few illustrations on the graphical representation of the activity relationships are given below (Fig. 12.2) Network Interpretation Activity B can not start until activity 'A' is completed. 'A' is, therefore, a preceding activity and 'B' is a succeeding activity. Activity 'D' as well as activity 'E' can not start until activity 'C' is completed and once activity 'C is completed, both activities D and E can be started simultaneously. Activities D and E, therefore, are though concurrent between themselves but are succeeding to Activity 'C'.

Unit 12

Project Planning & Control: Critical Path Analysis (PERT/CPM)

Activity H can not start until activities 'F' and 'G' are completed Activity M as well as activity N can not start until activities K and L are completed. K and L are, therefore, preceding activities while M and N are succeeding activities. M and N however between themselves are concurrent. Activity R can not start until activities P and Q are completed. And activity 'S' can not start until activity Q is over (i.e. activity P may not be even over.) Activity R, therefore, is succeeding to activity P and Q while activity S is succeeding to activity Q. Fig 12.2: Graphical representation of activity relationships Dummy Activities"X

A fundamenjalj^nvention used in drawing the network is that one_activity must follow another. A "dummy activity" in some situations is used to avoid ambiguities or iUogicalitje^"Us.

A dummy activity, therefore, is an activity which shows only a technological relationship: it neither consumes time nor resources. It is used purely for convemenceln afawtng netw&rks. Dummy activity is indicated by a dotted line. To illustrate the use of dummy activities, let us take two examples: Example 1: A project consists of four activities A, B, C and D. Activities B and C depend on Activity Awhile Activity D depends on B and C. Draw the network for the project.

Solution:The network for the above project in the absence of dummy activities, wi ii be as shown in Fig. 12.3 (a).

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Though the network gives logical representation hut is likely to introduce error or even create confusion since two activities B and C, can not be separated in terms of event numbers. To have clarity in interpretation of activity relationships, a dummy activity as shown in Fig. 12.3 (b) may be made use of.

Fig 12.3 (a) & (b) Example 2 : Another illustration on the use of dummy activities :A simple project consists of eight activities whose activity relationships are given below: Activity 1-2 2-3 2-4 3-5 4-5 5-6 (a) Preceded by None 1-2 1-2 2-3 2-4 3 - 5 & 4-5

Draw the network considering precedence relationships given above.

(b) If activity 3-5 was to depend on activity 2 - 3 (as per existing arrangement) and activity 4 - 5 to depend on the completion of 2 - 3 and 2-4, how was the network to look like?

Unit 12

Project Planning & Control : Critical Path Analysis (PERT/CPM)

Solution:

Network considering the activity precedence relationship is given in Fig. 12.4. (b) To draw a network in which activity 4 - 5 depends on completion of both 2-3 and 2 -4, a dummy activity is required to be used as shown in Fig. 12.5. \ /4

(a)

^ ----------- '

Fig 12.5 ^Activity A: a) List down 10 major activities involved in a project of construction of a building.

b)

Prepare a table for the activities mentioned above showing their interrelationship like succeeding activities and preceding activities.

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c) By using the relationship of activities mentioned above, prepare the network diagram.

12.6 STEPS FOR CRITICAL PATH ANALYSIS 1. Breaking down a project into a set of identifiable activities:A project comprises a series of activities and the identification of the individual activities requires knowledge and experience of the men responsible for the planning of the project. Even the preliminaries-mere listing of the activities-make the operating personnel: Think of details about the project well in advance. Observe critically the way in which various activities interact or compete for scarce resources. Improve upon the original plans even before network is formally drawn and analyzed.

A project, therefore, must be torn into a set of identifiable activities. There are no set rules but general guidelines are as under: Activity should represent the smallest unit of operation or set of operations over which management desires control. An activity should represent an operation or set of operations which can be performed using a particular kind of equipment or a special skill. For example, in a construction project plumbing can be considered as one activity while wiring is another activity since the first activity requires plumbers and the second activity needs electricians. The number of activities should be limited otherwise the network may become too complex to be handled.

10

Unit 12

Project Planning & Control : Critical Path Analysis (PERT/CPM)

2.

JKsjtaftlishing technological relationship between activities :

After the project has been broken into activities, the next logical step is to establish technological relationships. Activities may be classified as i nitial activities, concurrent activities, preceding activities, succeeding activities, and end activities. ^-~?^ -*" Initial acti vities are those which can start at the outset of the project. 3.

Concurrent activities are those which can be performed simultaneously. Succeeding activities are those which depend on others. Preceding activities are those on which succeeding activities depend. End activities are those which are the last ones in the project.Making of an arrow diagram called a network :

;

A network is a graphical representation of the activities comprising the project. The network is formed by a series of connected arrows and circles which give technological relationships to the activities involved. Making of a network requires a clear understanding of the network logic and basic elements of the network discussed earlier.Rules for drawing the network :

A set of rules given below have been specified to ensure logical representations: Every activity must have one preceding (tail) event and one succeeding (head) event. However, more than one activities may share the same tail event (such a tail event is called burst event) or the same head event (such a head event is called burst event). But an activity must not share the same tail event and same head event with any other activity. r (Ref. Fig 12.6) ~~~

(Incorrect)

(Correct)

Fig 12.6

11

Production / Operations Management

The dummy attached to activity B can be avoided by interchanging the position of this path and the middle path as under. (Fig. 12.12)

Fig 12.12 How to draw a network?Drawing of network does not require any special skill. It is just a matter of practice. Different authors have suggested different approaches, the most common approach being to start with the first activity and draw the subsequent activities as per relationships. This, however, proves to be a laborious method since it involves drawing and redrawing of network a number of times until the final network is obtained. A more rational approach developed by this author reduces any complex network to extreme simplicity. The approach suggested consists of following seven steps: 1. Prepare the complete list of activities to complete the project.

Table 12.1 : Table of Technological RelationshipsActivity Activity code description A B A Design gearbox Prepare engineering drawings and bill-of-materials. C Purchase special materials (e.g. forgings for gears and shafts etc.) Purchase bought out parts (e.g. B bearings, oil seals, eirclips etc.) B Depends on Remarks

It is an initial activity. Drawings and bill-of materials is possible alter design is over. Materials procurement can he done only after bill-of-materials are ready. Bought out parts can be procured only on completion of bill-of-materials.

D

Unit 12

Project Planning & Control : Critical Path Analysis (PERT/CPM)

Activity Activity code description

Depends on

Remarks Pattern can be made only after drawings of housing is ready. Casting can be obtained only if pattern is ready. Machining of housing isnncciHJp if fh^r(=> ic a ^nctina

..E

Make pattern for housing

B

F /

Cast housing Machine housing

E F

of the housing. H Turn shafts

C H

Machining of shafts is possible if there is material. Shafts can be heat treated only on completion of their machining. Machining of gear blanks can be done only if material for the gears have been procured. Hobbing or shaping or gear blanks can be undertaken after they have been machined.

Heat treat shaft

IJ

Machine gears

C

Cut gears

Heat treat gears

K

Heat treatment of gears is possible after they have been hobbed/shaped. Assembly of gear box can be done if bought out parts have been procured and works made parts namely housing, shafts and gears are ready. Test run can be conducted after gear box has been assembled.

Assemble gear box

D, G I, L

MN Test run

1 5

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2. Establish technological relationship between the activities. A table consisting of two columns, as shown in Table 12.1 may be constructed for this purpose. All activities in the given sequence are listed in the second column and corresponding activities on which they depend are entered in the first column. 3 . Connect the first activity in the first column to the activity opposite to it in the second column. Locate the activity connected back into in the first column and join this activity to the corresponding activity in the second column. Repeat this process till one sequence is covered which gives one path. 4. Start with next activity from the top in the first column which has not been connected in the first sequence and follow up step (iii) and complete the sequence to obtain next path. 5. 6. 7. Repeat step (iv) over and over again until all activities in the first column have been connected. B uild up network from above paths . Modify network (if necessary) considering "do's and don'ts" explained under ''rules of drawing network".

A Case Illustration on Network Building :Auto-Craft Pvt. Limited is engaged in the manufacture of various precision turned components and small auto-parts assemblies in their well established auto shop. It has received an order for 1 ,000 sets of a small auto-part-assembly called relief valve assembly. The assembly consists of a valve, a plunger, a spring and a lock. The following are the major activities: 1. 2. Prepare bill for material and operation layouts . Valve Body a) Procure material for valve body b) Machine blanks c) Centreless grind d) Roll threads e) Drill cross holes &C'sunk f) Drill 2.4 dia. +0.078 g) Drill and ream 4+0.030 x 25.5 deep.

Unit 12

Project Planning & Control : Critical Path Analysis (PERT/CPM)

Plunger ,