Niaz Sahil

Kabul Universit

y

2015-16

Niaz Sahil • MADE BY • NIAZ SAHIL ZURMATI STUDENT OF: BBA AT KABUL UNIVERSITY• E-MAIL: NIAZ.0077@GMAIL.COM• NIAZ.0077@YAHOO.COM• TWITTER: HTTPS://TWITTER.COM/NIAZSAHIL• FACEBOOK

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Niaz SahilUNIT ONE

Topics in this unit :• The Introduction to POM, Scope, Role, and Objectives

of POM, Operations Mgt. – Concept; Functions• Product Design and its characteristics;• Product Development Process, Product Development

Techniques.• Process Selection – Project Job, Batch Mass

Production types of production Systems;• Product -Product Mix

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introduction to production and operations management

• Production/operations management is the process, which combines and transforms various resources used in the production/operations subsystem of the organization into value added product/services in a controlled manner as per the policies of the organization. Therefore, it is that part of an organization, which is concerned with the transformation of a range of inputs into the required (products/services) having the requisite quality level.

Niaz Sahilintroduction to production and operations management

Production and Operations Management ("POM") is about the transformation of production and operational inputs into "outputs" that, when distributed, meet the needs of customers.

Niaz Sahil • POM incorporates many tasks that are interdependent, but which can be grouped under five

main headings:1: PRODUCT• Marketers in a business must ensure that a business sells products that meet customer needs

and wants. The role of Production and Operations is to ensure that the business actually makes the required products in accordance with the plan. The role of PRODUCT in POM therefore concerns areas such as:

- Performance- Aesthetics- Quality- Reliability- Quantity- Production costs- Delivery dates

2: PLANT• To make PRODUCT, PLANT of some kind is needed. This will comprise the bulk of the fixed

assets of the business. In determining which PLANT to use, management must consider areas such as:

• - Future demand (volume, timing)- Design and layout of factory, equipment, offices- Productivity and reliability of equipment- Need for (and costs of) maintenance- Heath and safety (particularly the operation of equipment)- Environmental issues (e.g. creation of waste products)

Niaz Sahil 3: PROCESSES• There are many different ways of producing a product. Management must

choose the best process, or series of processes. They will consider:• - Available capacity

- Available skills- Type of production- Layout of plant and equipment- Safety- Production costs- Maintenance requirements

4: PROGRAMMES• The production PROGRAMME concerns the dates and times of the

products that are to be produced and supplied to customers. The decisions made about programme will be influenced by factors such as:

• - Purchasing patterns (e.g. lead time)- Cash flow- Need for / availability of storage- Transportation

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5: PEOPLE• Production depends on PEOPLE, whose skills,

experience and motivation vary. Key people-related decisions will consider the following areas:

• - Wages and salaries- Safety and training- Work conditions- Leadership and motivation- Unionization- Communication

Niaz SahilFunctions of POM

• Production/operation management is a component of organization which concerned with the creation of utility in raw materials through conversion process.

• As a part of management, it has following functions:• Planning:• Organizing:• Controlling:• Behavior:• Models

Niaz SahilCONT…PLANNING • Activities that establishes a course of action and guide future

decision- making is called planning. • POM defines the objectives for the POM subsystem of the

organization It defines the policies, and procedures for achieving the objectives.

ORGANIZING • Activities that establishes a structure of tasks and authority is called

organizing. • POM establish a structure of roles and the flow of information within

the POM subsystem. POM determine the activities required to achieve the goals and assign authority and responsibility for carrying them out.

Niaz SahilCONT…

CONTROLLING • Activities that assure the actual performance in accordance

with planned performance is called Controlling. • To ensure that the plans for the POM subsystems are

accomplished, the PO manager must exercise control by measuring actual outputs and comparing them to planned operations management.

BEHAVIOUR • Human aspect on the job is called behaviour. • PO managers are concerned with how their efforts to plan,

organize, and control affect human behaviour. They also want to know how the behaviour of subordinates can affect management’s planning, organizing, and controlling actions.

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MODELS • The techniques which are used for problem

solving is called Models. • As a process of plan, organize, and control the

conversion process, PO manager encounter many problems and must make many decisions

Niaz SahilScope PRODUCTION AND OPERATIONS

MANAGEMENT

• Due to the dynamic change in the business environment, the scope of production and operation management has increased. Following are the activities which are included under production and operations management functions:

Niaz SahilScope of POM• Facility Location - Selecting appropriate location for the

production• Plant layouts and material handling - Deciding upon the

machines, equipment and necessary devices which could lead to effectual and desired production in the most economic way. Preparation of plan layout for the establishment of machines in the required sequence. Storage of material and handling it in most effective way to avoid the wastage and delivery at the work centers as and when required.

• Product design - Designing the product and conceive the idea about its production.

• Process design - Determination of the production process which is most relevant and efficient in the given state of affairs

Niaz SahilCONT..• Production and planning control - Planning the production

and its various aspects how, when and where producing a particular product or its assembly will be done.

• Quality control - Controlling the production and ensuring the quality by setting the check points and taking the periodic measurements of the current performance.

• Materials management - Managing the inventories of raw material, semi-finished and finished goods in a way that neither excessive money may block in this non-productive operation nor the required material.

• Maintenance management - Analysis the deviations and formulating the corrective measures to stay in track with planned quality, time-schedule and predetermined cost schedules.

Niaz SahilObjectives of Production and Operations

Management:

• The main objectives may be one of more of the following:a. Efficiency:• Increased output for a given input.b. Productivity:• Increased production using given resources.c. Economy:• Production is more economical (done at reduced cost).d. Quality:• Good quality products at reduced cost.e. Reduced processing time:• Increased production within a given amount of time.

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Operations Mgt.

•

Niaz SahilOperations Mgt.

Operations management (OM) is the set of activities that creates value in the form of goods and services by transforming inputs into outputs.• OM is one of three major functions (marketing,

finance, and operations) of any organization• We want (and need) to know how goods and services

are produced• We want to understand what operations managers

do• OM is such a costly part of an organization

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•

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Niaz SahilProduct design

• Product design deals with conversion of ideas into reality

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Niaz SahilObjective of service design

• 1: productivity• 2: cost• 3:quility• 4:reliabilty • 5:timing

Niaz SahilCharacteristics of product design 1): function or performance: the function and performance is what the customer expects the product to do to solve his problem or offer certain benefits leading to satisfaction.2): Appearance :this include the style ,color ,look ,feel etc . Which appeals to the human sense and also adds value to the product. 3): Reliability : this refers to the length of time a product can used before it fails.4): maintainability: refers to the restoration of product once it has failed. High degree of maintainability is desired so that the product will can be restored (repaired) to be used within a short time after it breaks down.5): Availability: this refer to the continuity of service to the customer. A product is available for use when it is an operational state. Availability is the combination of reliability and maintainability.

Niaz SahilCharacteristics of product design

6): produciblity : this refer to the ease of manufacture with minimum cost (economic production).7(: standardization: this refer to the design activity that reduce variety among a group of products or parts.8): specification; a specification is a detailed description of a material , part or product including physical measures such as dimension , volums,weight, surface, finish etc.9): safety: the product must be safe to the user and should not cause any accident while using or should not cause any health hazard to the user.

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Niaz SahilProduct design process

Niaz SahilSteps of New Product Development• new product development (NPD) is the

complete process of bringing a new product to market. Developing a new product involves a number of stages which typically center around the following key areas:

Niaz SahilCont…

Idea generation• Every product has to start with an idea. In some

cases, this might be fairly simple, basing the new product on something similar that already exists. In other cases, it may be something revolutionary and unique, which may mean the idea generation part of the process is much more involved. In fact, many of the leading manufacturers will have whole departments that focus solely on the task of coming up with ‘the next big thing’.

Niaz SahilCont..Research/Idea screening:Most companies have a "Idea Committee." This committee studies all the ideas very carefully. They select the good ideas and reject the bad ideas. An organization may have plenty of ideas for a new product, but once it has selected the best of them, the next step is to start researching the market. This enables them to see if there’s likely to be a demand for this type of product, and also what specific features need to be developed in order to best meet the needs of this potential market.

Niaz Sahil ..•

Development /Prototype design, • In this stage the production and operation department advance

design the product and developed the engineering.• Several engineering activities are carried out to analyze

experiment and collect data for product development.• Prototypes may be modified through various design and

manufacturing stages in order to come up with a finished product that consumers will want to buy.

Testing: • Before most products are launched and the manufacturer

spends a large amount of money on production and promotion, most companies will test their new product with a small group of actual consumers. This helps to make sure that they have a viable product that will be profitable, and that there are no changes that need to be made before it’s launched.

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• Analysis: Looking at the feedback from consumer testing enables the manufacturer to make any necessary changes to the product, and also decide how they are going to launch it to the market. With information from real consumers, they will be able to make a number of strategic decisions that will be crucial to the product’s success, including what price to sell at and how the product will be marketed.

• Introduction: Finally, when a product has made it all the way through the new product development stage, the only thing left to do is introduce it to the market. Once this is done, good product life cycle management will ensure the manufacturer makes the most of all their effort and investment.

Niaz SahilProduct design techniques

• Standardization • Simplification• Specialization • Diversification

Niaz SahilThe factors affect a product design are as :

• Requirements of targeted customers.• Availability and access to necessary production facilities.• Type and quality of raw-materials used to produce a

product.• Cost to price ratio.• Policy of quality standards.• Availability of plant and machineries.• Impact of upcoming product on existing products of the

company.• Reputation or goodwill of the company.

Niaz SahilProcess Selection

• It is a strategic decision for organizations , It determines – the quality and quantity of employees– The amount of capital required for the production

• These decisions are generally capital intensive and con not be changed easily, Hence, process selection is a long term decision.

• Therefore the attempt should be made to select a process which has acceptable levels of flexibility and cost

Niaz SahilProcess can be classified in two main categories such as :

– Type of customer order– Production Flow

1: There are two types of customer orders– Made to Stock (MTS): The MTS process has a

standard product line specified by the producer, not by customer

• The products are carried in inventory to fulfill customer demand

• When the customer orders a product, it is delivered if product is available in the inventory,

• If it is not available, a back order is generated

Niaz SahilCont…– Made to order (MTO): In MTO, the cycle of

production and order fulfillment begins with the customer order

• After receiving the order, the design must be completed

• The performance measures of an MTO are: time taken to complete the order (Lead Time) and percentage of orders completed on time

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Intermittent Production System

Production is performed on a start-and-stop basis, such as for the manufacture of made-to-order products. Done to produce small volume and high diversity products.

Niaz Sahiltypes of an intermittent production system include:

Project production flows, Jobbing production flows, Batch production flows.1: Project production flowsHere, in project production flows, company accepts a single, complex order or contract. The order must be completed within a given period of time and at an estimated cost.• Examples of project production flows mainly include,

construction of airports, dams, roads, buildings, shipbuilding, etc.

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The characteristics or features of project production flows are as:

• The requirement of resources is not same (it varies). Generally, the resource requirement at the beginning is low. Then in mid of production, the requirement increases. Finally, it slows down when the project is near its completion phase.

• Many agencies are involved in the project. Each agency performs specialized jobs. Here, coordination between agencies is important because all jobs are interrelated.

• Delays take place in completion of projects due to its complexity and massiveness.

• As routing and scheduling changes with fresh orders, proper inspection is required at each stage of production.

Niaz Sahil2: Jobbing production flows

Here, in jobbing production flows, company accepts a contract to produce either one or few units of a product strictly as per specifications given by the customer. The product is produced within a given period and at a fixed cost. This cost is fixed at the time of signing the contract.• Examples of such jobbing production flows

include, services given by repair shops, tailoring shops, manufacturer of special machine tools, etc.

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The characteristics or features of jobbing production flows are as:

• The production of items takes place in small lots. Sometimes only one product is produced at one time.

• The items are manufactured strictly as per customer's specifications.

• Highly skilled labour is required to perform specialized jobs.

• There is disproportionate manufacturing cycle time. For e.g. the time needed to design the product may be more than the manufacturing time.

Niaz Sahil3: Batch production flows

This process is adopted when batches or lots of item are to be produced using the same set of machines in the same sequence . Here, the production of items takes place in lots or batches. A product is divided into different jobs. All jobs of one batch of production must be completed before starting the next batch of production.• Examples of batch production flows include,

manufacturing of drugs and pharmaceuticals, medium and heavy machineries, Oil Paints, Soft Drinks,bakery

• etc

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The characteristics or features of batch production flows are as :

• The products are made and kept in stock until their demand arises in the market.

• General purpose machines and handling equipment's, which can do many different jobs quickly are installed. This is because large varieties of items are to be produced.

• There is a possibility of large work-in-progress due to many reasons.

• There is a need for detailed production planning and control.

Niaz SahilPlanning and Control Mechanism for Intermittent System :

• -Organization of production planning and control operations in intermittent systems needs estimation of jobs, routing, scheduling, preparation of manufacturing orders, dispatching and production control. Here customer provides the blue print and other specification regarding the product to be manufactured. Then the organization formulates their production strategy to suit the needs of the customer.

• Proper regulation and close inspection is required at different stages of production

• Storage facilities are to be provided at each operational stage.

Niaz Sahil2: CONTINUOUS PRODUCTION .• Continuous means something that operates

constantly without any irregularities or frequent halts.• In the continuous production system, goods are

produced constantly as per demand forecast. Goods are produced on a large scale for stocking and selling. They are not produced on customer's orders. Here, the inputs and outputs are standardized along with the production process and sequence.

• Eg: The production system of a food industry is purely based on the demand forecast. Here, a large-scale production of food takes place. It is a continuous production.

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The characteristics of a continuous production system are as follows:

• The flow of production is continuous. It is not intermittent.

• The products are standardized.• The products are produced on predetermined quality

standards.• The products are produced in anticipation of demand.• Standardized routing sheets and schedules are prepared.The types of continuous production system include:Mass production flows, andProcess production flows.

Niaz Sahil1. Mass production flows

Here, company produces different types of products on a large-scale and stock them in warehouses until they are demanded in the market.• E.g. of mass production is the production of toothpastes, soaps, pens,

etc.The characteristics or features of mass production flows are as follows:• The goods are produced either with the help of a single operation or

uses a series of operations.• There is a continuous flow of production. However, this depends on the

demand in the market.• Here, there is limited work-in-progress.• Supervision is easy because only few instructions are necessary.• The material handling is done mostly by machines, i.e. conveyors and

automatic transfer machines.• The flow of materials is continuous. There is little or no queuing at any

stage of production

Niaz Sahil2. Process production flowsHere, a single product is produced and stocked in warehouses until it is demanded in the market. The flexibility of these plants is almost zero because only one product can be produced.• Examples of these plants include, steel, cement, paper, sugar, etc.The characteristics or features of process production flows are as follows:• There is a highly mechanized system for handling materials. Conveyors

and automatic transfer machines are used to move the materials from one stage to another.

• Low-skilled labour and skilled technicians are required.• There is very less work-in-progress because material flow is continuous.• The production planning and scheduling can be decided well in advance.• The full production system is designed to produce only one specific type

of item.

Niaz SahilProduction Control Mechanism for Continuous manufacturing system:

In this system the control mechanism is not as elaborate and complex as for intermittent system. In continuous system large quantities of standardized products are produced using standardized production process. This system does not involve diverse work, due to which routing standardized route and schedule sheets are prepared.

Niaz SahilService vs Manufacturing Organizations

• There are five main differences between service and manufacturing organization.

• 1. Goods are tangible but services are intangible. Goods are objects, which can be seen, felt, sensed easily. Services are performance which cannot be tasted, felt, touched.

2. The ownership rights of goods are transferable, there is however no ownership involved in services.

• Inventory• Service firms, unlike manufacturers, do not hold inventory;

they create a service when a client requires it.

Niaz Sahilcont,…

3: Customers• Service firms do not produce a service unless a customer requires it,

Manufacturers can produce goods without a customer order or forecast of customer demand.

4:Location• Service firms do not require a physical production site. The people

creating and delivering the service can be located anywhere. Manufacturers must have a physical location for their production and stock holding operations. Production does not necessarily take place on the manufacturer's own site; it can take place at any point in the supply chain.

5: Labor• A service firm recruits people with specific knowledge and skills in the

service disciplines that it offers. Manufacturers can automate many of their production processes to reduce their labor requirements.

Niaz SahilProduct life cycle

• Everything in the world have its own life cycle.• The stages of the life cycle of the product is a factor in

product design.• The Product Life Cycle is concerned with the pattern of

demand of product from its introduction on market to the point where the product has very less or no demand.

• The Product Life Cycle (PLC) is used to map the lifespan of a product. There are generally four stages in the life of a product. These four stages are the Introduction stage, the Growth stage, the Maturity stage and the Decline stage.

Niaz SahilThe four stages of PLC

1: Introduction stage: This is the stage in which the product is initially promoted. It is a trial stage of the product so the success of new product depends on how the introduction stage react?In this stage the product development and design are of considerable importance.Examples:3G Mobiles

Niaz SahilCont

• 2: The Growth stage is where your product starts to grow. In this stage a very large amount of money is spent on advertising.

• Sales revenue is in large in amount, profit is increasing.• The firms are focus on increasing market share by focusing

different marketing strategies.• Due to the increasing in the sales POM has crucial role in

increase quality product in desired time and quantity.• It is more important stage of product life cycle in terms of making

profit form the market.• Examples:• Internet Radios

Niaz SahilCont 3: Maturity stage• During this stage sales grow at a very fast rate and then gradually begin to

stabilize.

• When the sales revenue is increasing, the competitors also introduce same nature product.

• Thus the competition is increasing .• The firm is pressure in price cut due to increasing competition.• Profit is decreasing due to price cut.• It needs additional expenditure in product modification.• None of the new users introduce, so every force focus on retain

the existing customers.• Examples:• Cell Phone, Automobiles

Niaz SahilCont • 4. Decline: This is the stage in which sales of your product

begin to fall. Either everyone that wants to has bought your product or new, more innovative products have been created that replace yours.

• Sales revenue reached to zero level, competition reached pick.• Product modification and searching the new market is

worthless.• Reduction of the different expenditure is only way to exist in

market.• Manufacturing cost control is only weapons to make profit. • The company wants to invest to innovate new product in the

place of the existing productExamples:• B&W Television

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UNIT TWOTopics in this unit:• Facility Location – importance; Factor in

Location Analysis; Location Analysis Techniques

• Facility Layout –Objectives; Advantages; Basic Types of Layouts. Capacity Planning – Concepts; Factors Affective Capacity. Planning Decision

Niaz SahilFacility Location

• A facility (plant)is a place where men, material, money , machinery, and equipment etc are brought together for manufacture product.

• Plant location refers to the choice of region and the selection of a particular site for setting up a business or factory.

• An ideal location is one where the cost of the product is kept to minimum, with a large market share, the least risk and the maximum social gain

Niaz Sahil importance of location planning(plant location)1. Expansion : If the company wants to expand and diversify its activities, it will

have to search for a new-location for setting up its new business unit. In this case, it will need a location planning.

2. Cost advantages : If an existing plant is not near a market place, it will increase the transport cost. This will also increase the cost of the product. So, to avoid this, the company will search for a new plant location which is near the market. production.

3. Discovery of raw-material : Generally, a plant must be located at a place where raw-material is available. For example, if oil and gas are found at some place, then a new petrochemical plant has to be set up there for processing purpose.

4. Additional facilities : Plant location-related decisions will have to be taken if the organization wants additional facilities. New facilities may be necessary to improve the quality of work, to meet rising demands, etc.

Niaz SahilCont…5: Mergers : Mergers, joint-ventures, and Amalgamations may lead to start a new unit at a new-location. It may even require closure of an existing plant unit. In mergers, production is mostly started at a new place as per the new-agreement.6: Political and social changes : Each political party has its own philosophy. Political changes can lead to changes in economic policies of the government. This may make the existing location unattractive for doing business. Social changes may require production of eco-friendly goods. This may require a change in location.7: Increasing product demand : Demand for the company's product may increase at other places, especially in abroad countries. So, the company will have to start a branch in another state or in foreign countries. This would lead to a search for new location of plant.8:Avail tax benefits : Government may announce some tax benefits for starting a business in rural areas. This may motivate entrepreneurs to start their business units in remote areas.

Niaz SahilFactors Affecting Plant Location

1. Law and order situation,2. Availability of infrastructure facilities,3. Good industrial relations,4. Availability of skilled workforce,5. Social infrastructure,6. Investor friendly attitude,7. Nearness to market,8. Nearness to raw-materials' source,9. Nearness to supportive industries and services, and10. Must meet safety requirements

Niaz Sahil 1. Law and order situation.• Plant location must be at that place where law and order situation

is in control. Entrepreneurs give a lot of importance to this factor while locating a business unit in any state or region. If a state has bad law and order situation, then the business must not be located within that state, unless it has other important factors such as availability of heavy or bulky raw materials.

2. Availability of infrastructure facilities• Plant location which is selected must have proper infrastructure

facilities. Without good infrastructure facilities, it will be difficult to do business efficiently. The infrastructure facilities are the backbone of all industries. Without it, business cannot be done.

• Crucial infrastructure facilities that help industries to grow:• Transport and communications,• Banking and insurance services,• Regular fuel supply,• Continuous supply of electricity and water, etc.

Niaz SahilCont •

3. Good industrial relationsPlant location must be at those places where good industrial-relations are maintained. Industrial relations become bad, because of militant and selfish trade unions. Entrepreneurs do not want to locate their business at places where anti-social elements are rampant, although there are other favorable factors such as good infrastructure facilities, cheap labor, etc.

• 4. Availability of skilled workforcePlant location must be convenient and easily accessible to skilled workforce. Most businesses require skilled-labor force such as engineers, management experts, computer programmers, etc. The entrepreneurs must consider the availability of competent and skillful-workforce at a particular place to locate their business.

•5. Social infrastructurePlant location must have good a social infrastructure. There is a need for social-infrastructure not only for employees but also for the development of their families. The availability of social-infrastructure will increase the employees' welfare.

Niaz SahilCont…• 6. Investor friendly attitude

Plant location must be in those states whose governments have an investor-friendly attitude. Government must give attractive incentives and concessions to those who start business units in their states. There must not be any bureaucratic control for starting a business.

• An investor-friendly attitude will not only attract investment, but will also result in the overall development.7. Nearness to marketPlant location must be near a market. Every business unit depends on a market for selling its goods and services. The goods and services must reach the market on time, and it must be available to the consumers at a low price. Therefore, this factor is given importance while selecting location of a plan8. Nearness to supporting industriesPlant location must be near its supporting industries and services. If it purchases spare parts from an outside agency, then these agencies must be located very close to the business. If not, the business will have to spend a lot of extra money on transport.

Niaz SahilCont…9. Nearness to raw-materials' sourcePlant location must be usually near to the source of raw-material. Raw-materials' costs are about 50% of the total cost. So, it is important in the business to get the raw materials in time and at a reasonable price. Therefore, a business must be located close to the source of raw material, especially in the case of “Gross Materials

10. Must meet safety requirementsPlant location must meet all essential safety requirements. Due to air, water and sound pollution, some factories have a bad effect on the health of the people. Therefore, these factories must be located away from residential areas. Safety of environment must also be given priority in this regards.11. Miscellaneous factors: Following miscellaneous factors also affect a plant location:• Availability and cost of land,• Suitability of land - soil and topography,• Climatic conditions,• Location of a similar unit, etc

Niaz SahilLocation Analysis Techniques

1: Location factor rating

2: Center-of-gravity

3: Load-distance

Niaz SahilLocation factor rating

• This method involves qualitative and quantitative inputs, and evaluates alternatives based on comparison after establishing a composite value for each alternative.

• Factor Rating consists of six steps:– Determine relevant and important factors.– Assign a weight to each factor, with all weights totaling 1.00.– Determine common scale for all factors, usually 0 to 100.– Score each alternative.– Adjust score using weights (multiply factor weight by score

factor); add up scores for each alternative.– The alternative with the highest score is considered the best

option.

Niaz SahilLocation Factor Rating

Labor pool and climateProximity to suppliersWage ratesCommunity environmentProximity to customersShipping modesAir service

LOCATION FACTOR

.30

.20

.15

.15

.10

.05

.05

WEIGHT

80100

6075658550

Site 1

65919580909265

Site 2

90757280956590

Site 3

SCORES (0 TO 100)

Weighted Score for “Labor pool and climate” for Site 1 = (0.30)(80) = 24

Niaz SahilLocation Factor Rating

24.0020.00

9.0011.256.504.252.50

77.50

Site 1

19.5018.2014.2512.00

9.004.603.25

80.80

Site 2

27.0015.0010.8012.00

9.503.254.50

82.05

Site 3

WEIGHTED SCORES

Site 3 has the highest factor rating

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Location Factor Rating With Excel

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Center-of-Gravity Technique

• Locate facility at center of movement in geographic area

• Based on weight and distance traveled; establishes grid-map of area

• Identify coordinates and weights shipped for each location

Niaz SahilGrid-Map Coordinates

where,x, y = coordinates of new facility at center of gravityxi, yi = coordinates of existing facility iWi = annual weight shipped from facility i

n

Wi

i = 1

xiWi

i = 1

n

x =

n

Wi

i = 1

yiWi

i = 1

n

y =

x1 x2 x3 x

y2

y

y1

y3

1 (x1, y1), W1

2 (x2, y2), W2

3 (x3, y3), W3

Niaz SahilCenter-of-Gravity Technique

A B C D

x 200 100 250 500y 200 500 600 300W 75 105 135 60

y

700

500

600

400

300

200

100

0 x700500 600400300200100

A

B

C

D

(135)

(105)

(75)

(60)

Miles

Mile

s

Niaz SahilCenter-of-Gravity Technique

x = = = 238n Wi

i = 1

xiWii = 1

n

n

Wii = 1

yiWii = 1

n

y = = = 444(200)(75) + (500)(105) + (600)(135) + (300)(60)

75 + 105 + 135 + 60

(200)(75) + (100)(105) + (250)(135) + (500)(60)

75 + 105 + 135 + 60

Niaz SahilCenter-of-Gravity Technique

A B C D

x 200 100 250 500y 200 500 600 300W 75 105 135 60

y

700

500

600

400

300

200

100

0 x700500 600400300200100

A

B

C

D

(135)

(105)

(75)

(60)

Miles

Mile

s Center of gravity (238, 444)

Niaz SahilLoad-Distance Technique

• Compute (Load x Distance) for each site• Choose site with lowest (Load x Distance)• Distance can be actual or straight-line

Niaz SahilLoad-Distance Calculations

li di

i = 1

n

LD =

LD = load-distance value

li = load expressed as a weight, number of trips or unitsbeing shipped from proposed site and location i

di = distance between proposed site and location i

di = (xi - x)2 + (yi - y)2

(x,y) = coordinates of proposed site

(xi , yi) = coordinates of existing facility

where,

where,

Niaz SahilLoad-Distance

Potential SitesSite X Y1 360 1802 420 4503 250 400

SuppliersA B C D

X 200 100 250 500Y 200 500 600 300Wt 75 105 135 60

Compute distance from each site to each supplier

= (200-360)2 + (200-180)2dA = (xA - x1)2 + (yA - y1)2Site 1 = 161.2

= (100-360)2 + (500-180)2dB = (xB - x1)2 + (yB - y1)2 = 412.3

dC = 434.2 dD = 184.4

Niaz SahilLoad-DistanceSite 2 dA = 333 dC = 226.7dB = 323.9 dD = 170

Site 3 dA = 206.2 dC = 200dB = 180.3 dD = 269.3

Compute load-distance

i = 1

n

li diLD =

Site 1 = (75)(161.2) + (105)(412.3) + (135)(434.2) + (60)(434.4) = 125,063

Site 2 = (75)(333) + (105)(323.9) + (135)(226.7) + (60)(170) = 99,789

Site 3 = (75)(206.2) + (105)(180.3) + (135)(200) + (60)(269.3) = 77,555*

* Choose site 3

Niaz SahilFacility Layout

• After choosing the facility's location, the next stage in operations planning is to design the best physical layout for the facility. The available space needs to be assessed with workstations, equipment, storage, and other amenities need to be arranged.

• Plant )Facility (layout refers to the arrangement of physical facilities such as machines, equipment, tools, furniture etc. in such a manner so as to have quickest flow of material at the lowest cost and with the least amount of handling in processing the product from the receipt of raw material to the delivery of the final product.

Niaz SahilObjectives of Plant Layout:

• Proper and efficient utilization of available floor space· Transportation of work from one point to another point without any delay· Proper utilization of production capacity.· Reduce material handling costs· Utilize labour efficiently· Reduce accidents· Provide for volume and product flexibility· Provide ease of supervision and control· Provide for employee safety and health· Allow easy maintenance of machines and plant.· Improve productivity

Niaz SahilTYPES OF LAYOUT:

There are mainly four types of plant layout:• (a) Product or line layout• (b) Process or functional layout• (c) Fixed position or location layout• (d) Combined, cellular or group layout

Niaz Sahil1:PRODUCT OR LINE LAYOUT:

• In this type of layout the machines and equipment's are arranged in one line depending upon the sequence of operations required for the product. It is also called as line layout. The material moves to another machine sequentially without any backtracking or deviation i.e the output of one machine becomes input of the next machine. It requires a very little material handling.

• It is used for mass production of standardized products.

Niaz Sahil2: PROCESS LAYOUT:• In this type of layout the machines of a similar

type are arranged together at one place. This type of layout is used for batch production. It is preferred when the product is not standardized and the quantity produced is very small.

Disadvantages of Process layout:• Material handling costs are high due to

backtracking. More skilled labour is required resulting in higher cost.

Niaz Sahil3: COMBINED LAYOUT:

• A combination of process & product layout is known as combined layout.

• Manufacturing concerns where several products are produced in repeated numbers with no likelihood of continuous production, combined layout is followed

4: FIXED POSITION OR LOCATION LAYOUT:• Fixed position layout involves the movement of

manpower and machines to the product which remains stationary. The movement of men and machines is advisable as the cost of moving them would be lesser. This type of layout is preferred where the size of the job is bulky and heavy. Example of such type of layout is locomotives, ships, boilers, generators, wagon building, aircraft manufacturing, etc.

Niaz Sahil Advantages of Fixed position layout:• The investment on layout is very small.• The layout is flexible as change in job design and operation

sequence can be easily incorporated.Disadvantages of Fixed position layout:• ·As the production period being very long so the capital

investment is very high.• Very large space is required for storage of material and

equipment near the product.• As several operations are often carried out simultaneously so

there is possibility of confusion and conflicts among different workgroups.

Niaz SahilCapacity Planning • Capacity: amount of goods that a firm is capable of producing

over a specified period of time

• Capacity planning is the process of determining the production capacity needed by an organization to meet changing demand for its products.

• Capacity is the rate of productive capability of a facility. Capacity is usually expressed as volume of output per time period. It is the process of determining the necessary to meet the production objectives.

• Capacity planning is the first step when an organization decided to produce more or a new product. Once capacity is evaluated and a need for a new expanded facility is determined, facility location and process technology activities occur

Niaz SahilThe objectives of capacity planning are:

• To identify and solve capacity problem in a timely manner to meet consumer needs.

• To maintain a balance between required capacity and available capacity.

• The goal of capacity planning is to minimize this discrepancy. Need for CP • Capacity planning is done in order to estimate whether the

demand is higher than capacity or lower than capacity. That is compare demand versus capacity.

• It helps an organization to identify and plan the actions necessary to meet customer’s present and future demand.

Capacity is calculated as: (number of machines or workers) × (number of shifts) × (utilization) × (efficiency).

Niaz SahilFactors Affecting Capacity Planning

• Effective capacity planning is dependent upon factors like production facility (layout, design, and location), product line or matrix, production technology, human capital (job design, compensation), operational structure (scheduling, quality assurance) and external structure ( policy, safety regulations)

OR • Controlled factors – Labour Employed, Machines, tooling's,

overtime work, sub contracting• Less controlled factors – Absenteeism, Labour

performance, Machine breakdown, lockouts, accidents etc

Niaz SahilTypes of Capacity

• Design capacitymaximum output rate or service capacity an operation, process, or facility is designed forEffective capacityDesign capacity minus allowances such as personal time, maintenance, and scrapActual outputrate of output actually achieved--cannot exceed effective capacity.

Niaz Sahil

• Capacity Decision• Major considerations in capacity decisions are:a)What size

of plant? How much capacity to install? b)When capacity is needed ? When to phase-in capacity or phase-out capacity?c)At what cost? How to budget for the cost?

• Decisions of Capacity Planning

Amount of capacity neededTiming of changesNeed to maintain balanceExtent of flexibility of facilities

Niaz Sahil

MATERIALS MANAGEMENT

•

Niaz SahilMaterials Management

It is concerned with planning, organizing and controlling the flow of materials from their initial purchase through internal operations to the service point through distribution. ORMaterial management is a scientific technique, concerned with Planning, Organizing &Control of flow of materials, from their initial purchase to destination.

Niaz SahilAIMS OF MM

To get :

• 1. The Right quality

• 2. Right quantity of supplies

• 3. At the Right time

• 4. At the Right place

• 5. For the Right cost

Niaz Sahilobjectives of material management

A. Main objectives• 1. To purchase quality goods at minimum cost• 2. To exercise control over materials• 3. To maintain the continuity of production & sales by regular

supply of materials• 4. To maintain standards of quality• 5. To establish good relationships with the suppliers• 6. To maintain the efficiency of materials departmentB. Subsidiary objectives• 1. To participate in make or buy decision process• 2. To recommend use of substitute materials• 3. To be helpful in new product development• 4. To be helpful in standardization of products manufactured

Niaz SahilFunctions of MM:

1:Planning and control:• The planning and control functions are inventory

management , production planning and scheduling.2:Purchasing• Purchasing functions are buying, subcontracting, value

analysis and follow ups.3:Distribution• Distribution functions are receiving , packaging, shipping,

transportation and storage, making it the Integrated Materials Management.

4:Physical distribution

Niaz Sahil

Scope of materials management

• 1.Purchasing of materials• 2. Storage (Store keeper)• 3. Inventory control• 4. Clearing & forwarding• 5. Materials handling

Niaz SahilPurchase Management• Purchasing is the first phase of Materials Management.

Purchasing means procurement of goods and services from some external agencies. The object of purchase department is to arrange the supply of materials, spare parts and services or semi-finished goods, required by the organisation to produce the desired product, from some agency or source outside the organisation

• According to Westing, Fine and Zenz “Purchasing is a managerial activity that goes beyond the simple act of buying. It includes research and development for the proper selection of materials and sources, follow-up to ensure timely delivery; inspection to ensure both quantity and quality; to control traffic, receiving, storekeeping and accounting operations related to purchases.”

Niaz Sahilfunction of purchasing management

At first glance, it may seem to be to find and purchase a quantity of material for the best price. But price is not the only concern. Low-priced material may not be a bargain if it is of unacceptable quality or if delivery is not reliable.Clearly, the purchasing function involves more than obtaining the best price. It also involves buying the best value, which means buying:• the right quantity and quality• at the best price• from suppliers who are reliable and provide good service

Niaz Sahil

Objectives of Purchasing:The classical definition of objectives of purchasing is to buy materials and services of the right quality , in the right quantity, at the right place , from the right source and at the right time. However , in general management parlance the objectives of purchasing are:• To support company operations with an uninterrupted flow of

materials and services.• To buy competitively and wisely • To help keep a minimum Inventory• To develop reliable alternate sources of supply• To develop good vendor relationship and a good continuing

supplier relationship• To achieve maximum integration with the other departments of

the firm• To train and develop highly competent personnel

Niaz SahilStore-Keeping

• After the completion of purchase procedure, the next important aspect Of materials management is storekeeping.

• Store Management includes various responsibilities such as receiving the raw material, protecting the raw materials protecting from damage, spoilage and keep the finished goods until the goods are dispatched. Store management also includes distribution of material in right quantity at the right time and at the right place.

Niaz SahilFunction of Store Management:

• 1. Receiving, handling and speedy issue of material. 2. Custodian of gods in stores against damage and pilferage (hefting).3. To ensure regular supply o material.4. Effective utilization of store space.5. To provide services to the organization in most economical way.6. To keep the details of items available in the store update.7. Proper identification and easy location of items.8. Physical checking of stock.

Niaz SahilObjectives Of Store-keeping

The following are the main objectives of store-keeping• * To avoid over and under-stocking of materials.• * To maintain systematic records of materials.• * To protect materials from losses and damages.• * To minimize the storage costs of materials• To ensure proper and continuous control over

materials.• To ensure most effective utilization of available

storage space and workers engaged in the process of storekeeping.

Niaz SahilTypes of storesThere are basically two broad classes :• 1:Functional Stores: It depends on the use to which the

material is put – chemicals, tools, raw materials stores, etc.Functional Stores can be further classified as: Raw materials store: Production Store: Work-in-progress Store: Finished Goods store: Spare parts store: 2: Physical Stores: It depends on the size and location – Central stores, Sub-stores, Transit stores, Site stores etc.

Niaz Sahil1:Functional Stores:• Raw materials store:

This is where raw materials used in the factory are stored.• Production Store: Production also requires a large number of

materials, generally called "consumables", - eye-shields, cutting oils, abrasives, gloves, aprons, jigs, small tools etc.

• Salvage Store: Here materials rejected on the factory floor are stored either with a view to salvage them or to sell them as scrap

• Receipt Store: This is where goods are received from vendors or those cleared from the railway station, airport or the docks. The materials arriving here have to be retained until they are inspected, finally accepted and sent on to the respective places for storage, or directly to where they will be used.

Niaz SahilCONT…

• Finished Goods store: Finished products of the company meant for dispatch to customers or for transfer to another stock point or distribution center are kept here.

• Work-in-progress Store: In many cases a particular shops produce an item in batches, e.g., 1000 units. The other shops might not be able to reach this figure or the actual quantity required might only be 200. Here rest of the 800 units in semi-finished from are kept in the WIP Store for future use. This is neither raw materials nor finished goods. It is in an intermediate state.

Niaz Sahil2: Physical Stores

There can be various types of stores based on the quantity of stocks held or distance from the point of usage, like central stores sub-stores, transit stores, site store etc.• Central store:

There can be a central store serving three or four factories or several shops in a large factory or it can be a central warehouse containing finished goods. The word ‘central’ only denotes that it severs various units each of which may have separate sub-stores or departmental stores. Central stores also exist in multi-plant situations.

Niaz SahilCONT…

• Sub-store: A sub-store is located at the place of usage. It can be even within the shop floor.

• Departmental Store: This serves a particular department of a factory. For example, in a textile mill there can be several departments like spinning, weaving, bleaching, printing, etc. each of which can be served by a separate store. The reason behind this is that each requires sparate kinds of materials.

• Site store: This is usually at a project site containing building or construction materials like cement, steel, tools, etc.Transit store: as its name implies, this is where goods are stored for a temporary period.

Niaz SahilINVENTORY MANAGEMENT

• Scientific method of finding out how much stock should be maintained in order to meet the production demands and be able to provide right type of material at right time, in right quantities and at competitive prices

• inventory is actually money, which is available in the shape of materials (raw materials, in- process and finished products), equipment, storage space, work-time etc.

Niaz SahilOBJECTIVES

• Utilizing of scare resources (capital) and investment judiciously.

• b) Keeping the production on as on-going basis.• c) Preventing idleness of men, machine and morale. 21• d) Avoiding risk of loss of life (moral & social).• e) Reducing administrative workload.• f) Giving satisfaction to customers in terms of quality-

care, competitive price and prompt delivery• . g) Inducing confidence in customers and to create trust

and faith.

Niaz SahilFactors Affecting Inventory

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Niaz SahilMotives for holding inventories

• Transaction motive- to facilitate smooth production and sales operations.• Precautionary motive – to guard against the risk of unpredictable changes in demand and supply / other forces. • Speculative motive – influences the decision to increase or reduce inventory level to take advantage of price fluctuations.

NIAZ SAHIL

Niaz Sahil

Types/Classification of Inventory:

inventory may be classified into two types namely

1. Direct Inventories: (i) Raw materials: (ii) Semi-finished Goods: (iii) Finished Goods: (iv) Spare Parts:

2. Indirect Inventories:• Indirect inventories include those items which are

necessary for manufacturing but do not become component of the finished goods. They normally include petrol, maintenance materials, office materials, grease, oil lubricants etc. NIAZ SAHIL

Niaz SahilInventory Control

The forms of inventories can be classified into three categories:• (i) Raw Materials: These are those goods which have

been purchased and stored for future productions.• (ii) Work-in-Progress: These are the goods which

have been committed to production but the finished goods have not yet been produced.

• (iii) Finished Goods: These are the goods after production process is complete. Say, these are the final products of the production process ready for sale

Niaz Sahil

costs of inventories:

(i) Ordering Costs:• These include costs which are associated with placing of

orders to purchase raw materials and components. Clerical and administrative salaries, rent for the space occupied, postage, telegrams, bills, stationery, etc. are the examples of ordering costs.

(ii) Carrying Costs:• These include costs involved in holding or carrying

inventories like insurance charges for covering risks, rent for the floor space occupied, wages of labourers, wastages, obsolescence, or deterioration, thefts, pilferages, etc. These also include ‘opportunity costs.’ This simply means had the money blocked in inventories been invested elsewhere in the business, it would have earned a certain return.

Niaz SahilModels of Inventory Management:

• All models are classified into two major types:• (i) Deterministic Models, and• (ii) Probabilistic ModelsIn brief, the deterministic models are built on the assumption that there is no uncertainty associated with demand and replenishment of inventories. On the contrary, the probabilistic models take cognizance of the fact that there is always some degree of uncertainty associated with the demand pattern and lead time of inventories.• Usually, the following three deterministic models are in use:• 1. Economic Ordering Quantity (EOQ) Model,• 2. ABC Analysis,• 3. Inventory Turnover Ratio,

Niaz Sahil(EOQ) model

• As the name suggests, Economic order quantity (EOQ) model is the method that provides the company with an order quantity. This order quantity figure is where the record holding costs and ordering costs are minimized. By using this model, the companies can minimize the costs associated with the ordering and inventory holding.

• Definition• The economic order quantity (EOQ) is a model that is

used to calculate the optimal quantity that can be purchased or produced to minimize the cost of both the carrying inventory and the processing of purchase orders or production set-ups.

Niaz Sahilassumption of the EOQ model

• The cost of the ordering remains constant.• The demand rate for the year is known and evenly spread

throughout the year.• The lead time is not fluctuating (lead time is the latency time

it takes a process to initiate and complete).• No cash or settlement discounts are available, and the

purchase price is constant for every item.• The optimal plan is calculated for only one product.• There is no delay in the replenishment of the stock, and the

order is delivered in the quantity that was demanded, i.e. in whole batch.

Niaz SahilFormulaWhere Q = optimal order quantity• D = units of annual demand• S = cost incurred to place a single order or setup• H = carrying cost per unit• This formula is derived from the following cost

function:• Total cost = purchase cost + ordering cost + holding

cost

Niaz Sahil

Reorder Level

• reorder level (or reorder point) is the inventory level at which a company would place a new order or start a new manufacturing run.

• Re-order level is a level of material at which the storekeeper should initiate the purchase requisition for fresh supplies. When the stock-in-hand comes down to the re-ordering level, it is an indication that an action should be taken for replenishment or purchase.

Niaz SahilThe re-order level is calculated as follows:

• Re-order Level= Minimum Level(Safety stock) + (Average lead time x Average consumption)

• ORRe-order Level= Maximum Consumption x Maximum Re-ordering Period

• Illustration

Suppose,Maximum consumption per day = 400 unitsMinimum consumption per day = 200 unitsRe-order period = 8 to 10 daysThen,Re-order Level = Maximum consumption x Maximum re-order period= 400 units x 10 days = 4000 units

Niaz SahilReorder Level = Lead Time in Days × Daily Average Usage

Reorder Level = Lead Time in Days × Daily Average Usage• Lead time is the time it takes the supplier or the

manufacturing process to provide the ordered units.• Daily average usage is the number of units used each

day.• If a business is holding a safety stock to act as buffer

if daily usage accelerates the reorder level would increase by the level of safety stock.

• Reorder Level = Lead Time in Days × Daily Average Usage + Safety Stock.

Niaz SahilCONT..• Examples 1:ABC Ltd. is a retailer of footwear. It sells 500 units of

one of a famous brand daily. Its supplier takes a week to deliver the order.

• The inventory manager should place an order before the inventories drop below 3,500 units (500 units of daily usage multiplied with 7 days of lead time) in order to avoid a stock-out.

• Example 2: ABC Ltd. has decided to hold a safety stock equivalent to average usage of 5 days. Calculate the reorder level.

• Safety stock which ABC Ltd. has decided to hold equals 2,500 units (500 units of daily usage multiplied by 5 days).

• In this scenario reorder level would be 6,000 units (2,500 of safety stock plus 3,500 units based on 7 days of lead time).

Niaz SahilABC analysis

The ABC analysis provides a mechanism for identifying different categories of stock that will require different management and controls.The ABC analysis suggests that inventories of an organization are not of equal value. Thus, the inventory is grouped into three categories (A, B, and C) in order of their estimated importance.• A items are very important for an organization. Because of the

high value of these A items, frequent value analysis is required. In addition to that, an organization needs to choose an appropriate order pattern (e.g., "Just- in- time") to avoid excess capacity.

• B items are important, but of course less important, than A items and more important than C items. Therefore, B items are intergroup items.

• C items are marginally important.

Niaz SahilABC analysis

An analysis of a range of items that have different levels of significance and should be handled or controlled differently.• The ABC analysis is a business term used to define an

inventory categorization technique often used in material management. It is also known as "Selective Inventory Control. " Policies based on ABC analysis:

A: ITEMS: very tight control and accurate records B: ITEMS: less tightly controlled and good records C: ITEMS: simplest controls possible and minimal records

Niaz SahilMaintenance Management

• Modern maintenance management is not to repair broken equipment rapidly. Modern maintenance management is to keep the equipment running at high capacity and produce quality products at lowest cost possible.

• Maintenance is a set of organized activities that are carried out in order to keep the item in its best operational condition with minimum cost required.

Niaz SahilOBJECTIVES

To increase functional reliability of production facilities.

To enable desired quality through correctly adjusted, serviced and operated equipment's.

To maximize the useful life of equipment's. To minimize cost of production. To minimize frequency of interruptions. To enhance the safety of manpower.

Niaz SahilFunctions

????????

Niaz SahilImpact of Poor Maintenance

• Production capacity:• Production costs:• Product and service quality:• Employee or customer safety:• Customer satisfaction:Areas of maintenance managementCivil MaintenanceMechanical maintenanceElectrical Maintenance

Niaz SahilMaintenance

Planned MaintenancePreventive Maintenance

Running maintenance

Shutdown maintenance

Scheduled maintenance

Corrective Maintenance

Breakdown maintenance

Shutdown maintenance

Predictive Maintenance

Unplanned maintenanceEmergence maintenance

•

TYPES OF MAINTANANCE M

Niaz SahilPlanned Maintenance-

In planned maintenance the maintenance action is carried out with some fore thoughts, prior planning , record keeping and control action. These can be further classified as :-

Preventive maintenanceCorrective maintenancePredictive maintenance

Niaz SahilA: Preventive maintenance

It is based upon the principle that ‘prevention is better than cure’. Involves performing maintenance activities before the equipment

fails. It is a set of activities that are performed on plant equipment,

machinery, and systems before the occurrence of a failure in order to protect them and to prevent or eliminate any degradation in their operating conditions.

Or the maintenance carried out at predetermined intervals or according to prescribed criteria and intended to reduce the probability of failure or the degradation of the functioning and the effects limited.

It has three types Running maintenance Scheduled maintenance Shut down maintenance

Niaz SahilB: Corrective maintenanceIn this type, actions such as repair, replacement, or restore will be carried

out after the occurrence of a failure in order to eliminate the source of this failure or reduce the frequency of its occurrence.

It also include the different types of actions like typical adjustment of redesign equipment.

The difference between corrective maintenance and preventive maintenance is that for the corrective maintenance, the failure should occur before any corrective action is taken.

It is of two types1. Breakdown maintenance2. Shutdown maintenance

Niaz SahilCont..

Breakdown maintenanceIt is an emergency based policy in which the plant

or equipment is operated until it fails and then it is brought back into running condition by repair.

The maintenance staff locate any mechanical, electrical or any other fault to correct it immediately.

Shutdown maintenance • That can only be performed when the

equipment, machine, or plant has been put out of service.

Niaz Sahil cont

C: Predictive maintenance:• As the names implies it involves the prediction

of the failure before it occurs, identifying the root cause for those failures symptoms and eliminating those causes before they result in extensive damage of the equipment.

• Type of maintenance performed continuously or at intervals according to the requirements to diagnose and monitor a condition or system.

Niaz Sahil2: Unplanned Maintenance:

• Maintenance action which is carried out without any fore thoughts or prior planning is called unplanned maintenance.

• Emergency maintenance is one of the example of unplanned maintenance.

• In this type of maintenance the maintenance action is executed with the help of all available maintenance resources in least possible time, without any major time lag.

• Examples are gas leakage in chemical plant, fire hazards, breakdown of boiler, turbine etc.

Niaz Sahil

Production Planning & Control

•

Niaz SahilProduction planning and control• For efficient, effective and economical operation in a

manufacturing unit of an organization, it is essential to integrate the production planning and control system. Production planning and subsequent production control follow adaption of product design and finalization of a production process.

• Production planning and control address a fundamental problem of low productivity, inventory management and resource utilization.

• Production planning is required for scheduling, dispatch, inspection, quality management, inventory management, supply management and equipment management. Production control ensures that production team can achieve required production target, optimum utilization of resources, quality management and cost saving

Niaz SahilProduction planning

• “The planning of industrial operations involves four considerations, namely, what work shall be done, how the work shall be done and lastly, when the work shall be done”.

•Production planning is an activity that is performed before the actual production process takes place. It involves determining the schedule of production, sequence of operations, economic batch quantities, and also the dispatching priorities for sequencing of jobs.

Niaz Sahil

Production control •

Production control is mainly involved in implementing production schedules and is the corollary to short-term production planning or scheduling. Production control includes initiating production, dispatching items, progressing and then finally reporting back to production planning.

• In general terms, production planning means planning of the work to be done later and production control refers to working out or the implementation of the plan.

Niaz SahilObjectives of production planning & control

• To make all preparations to manufacture goods within specified time & cost.

• To make available supply of materials, parts & components at the right time.

• To ensure most economical use of plant & equipment by scheduling best machine utilization.

• To provide information for production management & distribution of goods.

• To make available materials, machines, tools, equipment & manpower in the required quality & quantity & at the specified time.

• To ensure production of goods in the required quantities of the specified quality at the pre-determined time.

• To keep the plant free from production bottleneck.• To maintain spare capacity to deal with rush orders.

Niaz SahilSome of the important elements involved in the process

of production planning and control

Niaz SahilCont…A)Production planning• Planning refers to deciding in advance what is to be done in

future. A separate planning department is established in the organisation which is responsible for the preparation of policies and plans with regard to production to be undertaken in due course.

(b) Routing:• Production routing is a process concerned with determining

exact route or path, a product has to follow right from raw material till its transformation into finished product.

• routing is concerned with the selection of the most economical and appropriate path for the product in the process of final completion from raw material to finished product.

Niaz SahilCONT..(c) Scheduling:• Scheduling in simple words means fixation of time and date

when each operation is to be commenced and completed.• “The determination of the time that should be required to

perform each operation and also the time necessary to perform the entire series as routed, making allowance for all factors concerned.”

(d) Dispatching:• Dispatching relates to the process of initiating production in

accordance with pre-conceived production plan. It is concerned with giving practical shape to the production plan. This includes issuing necessary orders and instructions and other important guidelines and information pertaining to work.

Niaz SahilCONT

E}Follow up:• Every production program involves

determination of the progress of work, removing bottlenecks in the flow of work and ensuring that the productive operations are taking place in accordance with the plans.

• All problems or deviations are investigated and remedial measurer are undertaken to ensure the completion of work by the planned date

Niaz SahilCONT…

F)inspection• The function of inspection is primarily carried to ensure

whether desired quality of products has been achieved or not. “Inspection is the art of comparing materials, product or performance with established standards.”

G)Corrective measures:• Corrective action may involve any of those activities

of adjusting the route, rescheduling of work changing the workloads, repairs and maintenance of machinery or equipment, control over inventories of the cause of deviation is the poor performance of the employees.