Master of Business Administration - MBA Semester II MB0044 Production & Operations Management - 4 Credits Set - A

Q1.

Q.1 Explain in brief the origins of Just In Time. Explain how JIT is implemented.
Ans. Origins of Just In Work Just in Work (JIT) is a management philosophy aimed at eliminating waste and continuously improving quality. Credit for developing JIT as a management strategy goes to Toyota. Toyota JIT manufacturing started in the aftermath of World War II. Although the history of JIT traces back to Henry Ford who applied Just in Work principles to manage inventory in the Ford Automobile Company during the early part of the 20th Century, the origins of the JIT as a management strategy traces to Taiichi Onho of the Toyota Manufacturing Company. He developed Just in Work strategy as a means of competitive advantage during the post World War II period in Japan. The post-World War II Japanese automobile industry faced a crisis of existence, and companies such as Toyota looked to benchmark their thriving American counterparts. The productivity of an American car worker was nine times that of a Japanese car worker at that time, and Taiichi Onho sought ways to reach such levels. STEPS IN IMPLEMENTING J.I.T. MANUFACTURING 1. Obtain commitment from the top management. 2. Gain Co-operation of the Work-force. Begin cross training of the work-force. 3. Start with the Final Assembly. Reduce set-up time, level production, achieve mixed model production. 4. Working backward from Final Assembly, reduce set-up times and lot sizes in fabrication areas. 5. Balance fabrication rates with the final assembly production rates. This may require correction of capacity shortfalls. 6. Remove WIP inventories from the storage rooms and put it on the shop-floor (Point of use storage). 7. Extend JIT to the vendors. First stabilize their delivery schedule & ask for frequent deliveries. Help vendors with quality assurance, negotiate long term contracts. 8. Remove purchased inventory from the store rooms & put it o the shop-floor (Point of use storage).

Q.2 Bring out the historical background of Value Engineering. Elucidate three companies which have incorporated VE with brief explanation.
Ans. Historical background Value engineering began at General Electric Co. during World War II. Because of the war, there were shortages of skilled labour, raw materials, and component parts. Lawrence Miles, Jerry Leftow, and Harry Erlicher at G.E. looked for acceptable substitutes. They noticed that these substitutions often reduced costs, improved product, or both. What started out as an accident of necessity was turned into a systematic process. They called their technique value analysis. Value engineering (VE) is a systematic method to improve the "value" of goods or products and services by using an examination of function. Value, as defined, is the ratio of function to cost. Value can therefore be increased by either improving the function or reducing the cost. It is a primary tenet of value engineering that basic functions be preserved and not be reduced as a consequence of pursuing value improvements.[1] In the United States, value engineering is specifically spelled out in Public Law 104-106, which states Each executive agency shall establish and maintain cost-effective value engineering procedures and processes." Q.3 Explain the key elements of Quantitative modelling.What is work study and motion study. Ans. The key elements of Quantitative modelling are: a) Quantitative approach Solving a problem using the quantitative approach involves three steps: defining the problem, constructing a mathematical model, and testing the model and its solutions.

Figure 15.1: Quantitative approach processes 1. Defining the problem: When a problem arises, we have to: Determine the purpose of studying the problem Consider the various factors such as Resources, Constraints, Uncertainties involving them, Costs involved, Work available, and Issues that have utmost importance. After considering these, we have to determine which problem needs our attention, the factors that affect it, and the interrelationships between them. 2. Constructing a mathematical model: For constructing a mathematical model for the problem, we follow certain steps. We: a. Reformulate the physical problem into a form which can be analysed. b. Convert it into a model. The models play a vital role in engineering, science, and business. c. Make models of dams, steel structure, chemical reactions, organisation structure, graphs showing variation of share prices and others. Many of these are capable of being expressed in terms of mathematical equations. d. Solve the mathematical equations for solving the problem. Equations can be solved, if the values of some variables are known or presumed. 3. Testing the model and its solution: In business we do not have complete or reliable data most of the times. We have formulated the equations with presumptions. So, we can verify whether the solution we have obtained is acceptable by testing the solutions with the help of some known outcomes for known variables. This tests the model, as well as the presumptions we might have made. We may have to change the model or the presumptions if, the results obtained are not right. Types of quantitative models There are different quantitative models 1. Linear Programming: Linear programming technique is often used for optimising a given objective like: profit or revenue maximisation, or cost outgo minimisation. Distribution of the resources is the critical issue, when there are limited resources and they have to meet competing demands. 2. Transportation Model: Transportation model is concerned with goods from manufacturing centres or warehouses which have to be supplied to depots or retail outlets. The demand and supply position of the places where they are required or produced and the cost of transportation are considered in the model. We use this model to economise. 3. Assignment Model: Allocating jobs or persons to machines, awarding different projects to contractors is done so that maximum returns occur or less expense are incurred. Hence, calls for the use of this model. 4. Inventory Control Model: Inventory control model considers the: - Frequency of placing orders - Quantities per order considering the cost of placing an order -Number of pieces that are to be kept in reserve - Rate of consumption - Lead work required for the supplier - Costs involved in storage We have different models which give solutions to optimisation depending upon the probabilities of patterns of consumption and supply. 5. Waiting Line Models: Queues are formed when the rate of service is at a variance with the rate of

arrival. They are formed when the rate of production is less at particular points compared to the previous ones. Sometimes we see multiple service points and a single queue are formed for feeding them. Number of items which includes the following is studied with some special techniques. - People to be serviced - Rate of service - Type of queue discipline that is intended to be followed - Policy of priority - Tolerable amounts of waiting - Others 6. Simulation Models: Simulation models are used when we will not be able to formulate mathematical models. So, we develop a model which resembles a real life situation. Based on this pattern, we predict and plan our procurement, production, delivery and other actions. 7. PERT (Project Evaluation and Review Technique) and CPM (Critical Path Method) Models: When projects are undertaken with a number of activities, some happens in sequence, with gaps of weeks or months and some happens simultaneously. It is important to estimate the work required for completion of the project. A lot of coordination is needed while supplying the resources. It is also equally important to identify the bottlenecks and smoothen resources so that work schedules are maintained. Delayed completion may entail penalties. In this model, we adopt special methods to make the system efficient. work and motion study (or time-motion study) is a business efficiency technique combining the Work Study work of Frederick Winslow Taylor with the Motion Study work of Frank and Lillian Gilbreth (not to be confused with their son, best known through the biographical 1950 film and book Cheaper by the Dozen). It is a major part of scientific management (Taylorism). After its first introduction, work study developed in the direction of establishing standard times, while motion study evolved into a technique for improving work methods. The two techniques became integrated and refined into a widely accepted method applicable to the improvement and upgrading of work systems. This integrated approach to work system improvement is known as methods engineering and it is applied today to industrial as well as service organizations, including banks, schools and hospitals. Work and motion study have to be used together in order to achieve rational and reasonable results. It is particularly important that effort be applied in motion study to ensure equitable results when work study is used. In fact, much of the difficulty with work study is a result of applying it without a thorough study of the motion pattern of the job. Motion study can be considered the foundation for work study. The work atudy measures the work required to perform a given task in accordance with a specified method and is valid only so long as the method is continued. Once a new work method is developed, the work atudy must be changed to agree with the new method. Q.4 What is Rapid Prototyping? Explain the difference between Automated flow line and Automated assembly line with examples. Ans. Rapid prototyping Rapid Prototyping: Prototyping is a process by which a new product is developed in small numbers so as to determine the suitability of the materials, study the various methods of manufacture, type of machinery required and to develop techniques to overcome problems that may be encountered when full scale manufacture is undertaken. Prototypes do meet the specifications of the components that enter a product and performance can be measured on those. It helps in confirming the design and any shortcomings can be rectified at low cost. If serious defects or problems arise during the manufacture, a thorough change in design or even its replacement may be considered. To arrive at decisions to make use of the advantages stated above, it is important that the prototypes are made within the shortest possible time. Rapid prototyping facilitates this. It uses virtual designs from Computer Aided Design CAD or animation modelling which transforms dimensional data to 3dimensional views. The physical space of the product is amenable to have cross sections made. Cross sections taken at very close positions gives thin layers which enable the generation of a solid model of the designed product. The data that is thus created helps build a solid model exactly as per the drawings. Any shape can be generated in this method. Advanced technologies like SLS (Selective Laser Sintering), FDM (Fused Deposition Modeling), LOM (Laminated Object Manufacture), EBM (Electronic Beam Melting) are some of Rapid Prototype Modeling Processes. Automated flow lines : When several automated machines are linked by a transfer system which

moves the parts by using handling machines which are also automated, we have an automated flow line. After completing an operation on a machine, the semi finished parts are moved to the next machine in the sequence determined by the process requirements a flow line is established. The parts at various stages from raw material to ready for fitment or assembly are processed continuously to attain the required shapes or acquire special properties to enable them to perform desired functions. The materials need to be moved, held, rotated, lifted, positioned etc. for completing different operations. Sometimes, a few of the operations can be done on a single machine with a number of attachments. They are moved further to other machines for performing further operations. Human intervention may be needed to verify that the operations are taking place according to standards. When these can be achieved with the help of automation and the processes are conducted with self regulation, we will have automated flow lines established. One important consideration is to balance times that different machines take to complete the operations assigned to them. It is necessary to design the machines in such a way that the operation times are the same throughout the sequence in the flow of the martial. In fixed automation or hard automation, where one component is manufactured using several operations and machines it is possible to achieve this condition or very nearly. We assume that product life cycles are sufficiently stable to invest heavily on the automated flow lines to achieve reduced cost per unit. The global trends are favouring flexibility in the manufacturing systems. The costs involved in changing the set up of automated flow lines are high. So, automated flow lines are considered only when the product is required to be made in high volumes over a relatively long period. Designers now incorporate flexibility in the machines which will take care of small changes in dimensions by making adjustments or minor changes in the existing machine or layout. The change in movements needed can be achieved by programming the machines. Provision for extra pallets or tool holders or conveyors are made in the original design to accommodate anticipated changes. The logic to be followed is to find out whether the reduction in cost per piece justifies the costs of designing, manufacturing and setting up automated flow lines. Group Technology, Cellular Manufacturing along with conventional Product and Process Layouts are still resorted to as they allow flexibility for the production system. With methodologies of JIT and Lean Manufacturing finding importance and relevance in the competitive field of manufacturing, many companies have found that well designed flow lines suit their purpose well. Flow lines compel engineers to put in place equipments that balance their production rates. It is not possible to think of inventories (Work In Process) in a flow line. Bottlenecks cannot be permitted. By necessity, every bottleneck gets focused upon and solutions found to ease them. Production managers see every bottleneck as an opportunity to hasten the flow and reduce inventories. However, it is important to note that setting up automated flow lines will not be suitable for many industries Automated Assembly Lines : All equipments needed to make a finished product are laid out in such a way as to follow the sequence in which the parts or subassemblies are put together and fitted. Usually, a frame, body, base will be the starting point of an assembly. The frame itself consists of a construction made up of several components and would have been assembled or fabricated in a separate bay or plant and brought to the assembly line. All parts or subassemblies are fitted to enable the product to be in readiness to perform the function it was designed to. This process is called assembly. Methodologies of achieving the final result may vary, but the basic principle is to fit all parts together and ensure linkages so that their functions are integrated and give out the desired output. Product Layouts are designed so that the assembly tasks are performed in the sequence they are designed. You will note that the same task gets repeated at each station continuously. The finished item comes out at the end of the line. The material goes from station 1 to 5 sequentially. Operation 2 takes longer time, say twice as long. To see that the flow is kept at the same pace we provide two locations 2a and 2b so that operations 3, 4 an 5 need not wait. At 5, we may provide more personnel to complete operations. The work taken at any of the locations should be the same. Otherwise the flow is interrupted. In automated assembly lines the moving pallets move the materials from station to station and moving arms pick up parts, place them at specified places and fasten them by pressing, riveting, screwing or even welding. Sensors will keep track of these activities and move the assemblies to the next stage. An operator will oversee that the assemblies are happening and there are no stoppages. The main consideration for using automated assembly lines is that the volumes justify the huge expenses involved in setting Up the system.

Q.5 List different methods for selecting a suitable plant location and explain any two. Ans. Following are the analytical methods that can be used in facility location Decision: 1) Factor Rating Method 2) Cost-Profit-Volume analysis / Break Even Analysis 3) Center of Gravity Method, and 4) Transportation and Simulation Models. i)Method of Factor Rating - In factor rating method, first we must identify the Most Important Factors in evaluating alternative sites for the new facility.Then we should assign a weightbetween 0 and 100 to each of thesefactors. Each alternative location will then be ratedbased on these factor weights.The most weighted alternative is selectedas the best alternative. Example Samson Ltd. is considering three alternativesites for its new facility. After evaluating the firms Needs, the Managers have Narrowed the list of Important Selection Criteria down into three major Factors. - Availability of skilled labor - Availability of Raw materials, and - Proximity to the firms markets. Weights reflecting the relative importance of each factor have been assigned as Follows: Factors Weight Availability of skilled labour 0.50 Availability of skilled labour 0.30 Proximity to the firms market 0.20 Total Weight = 1.0 Based on these criteria, the three Alternative sites were scored between 0 and 100 points: Factors Site A Site B Site C Availability of skilled labour 70 70 50 Availability of skilled labour 60 40 90 Proximity to the firms market 70 95 60 Now we will multiply each score by its corresponding factor weight: Factors Site A Weight Availability of skilled labour 70 35 Availability of skilled labour 60 18 Proximity to the firms market 70 14 Total Weighted Score 67 Site B Weight 70 35 40 12 95 19 66 Site C 50 90 60 Weight 25 27 12 S 64

Weighted scores are calculated as: (Site Score)x(Factor Weight) From these results, the largest total weight is for Site A. It appears to be the best location. ii) Cost-Profit-VolumeAnalysis When the fixed and variable costs for each site differ, Cost-profit-volume analysis can be used to identify the location with the lowest cost. Example Foster Paper Ltd. is considering three alternative sites for its new production facility. The Annual Production Cost associated with each alternative is a linear function of the production volume. That is: Total Production Cost = (Fixed Cost) +(variable unit cost) x (annual production volume) Assume that The expected annual production volume is 250.000 units. And further assume that: (x: production volume = 250.000) For Site A: Prod. Cost = 10.000.000 + 250 x For Site B: Prod. Cost = 25.000.000 + 150 x For Site C: Prod. Cost = 60.000.000 + 50 x

Based on these information, Which site hasthe lowest cost? At a production volume of 250.000 units, site B has the lowest cost, because For Site A: Prod. Cost = 10.000.000 + 250 (250.000) = 72.500.000 For Site B: Prod. Cost = 25.000.000 + 150 (250.000) = 62.500.000 For Site C: Prod. Cost = 60.000.000 + 50 (250.000) = 72.500.000 This above mention example shows that annual production cost changes with different production volumes. -If the expected annual production volume is below 150.000 units, then choose site A. -If the expected annual production volume is between 150.000 and 350.000 units, then choose site B. -If the expected annual production volume is over 350.000 units, then choose site C.

Ans 6: Jurans Quality triology Juran uses his famous Universal Break through Sequence to implement quality programmes. The Universal break through sequences are:

Q6. Explain Jurans Quality Trilogy and Crosbys absolutes of quality. List out Demings 14 points.

Jurans quality trology -Proof of need: There should be a compelling need to make changes. -Project identification: Here what is to be changed is identified, Specific projects with time frames and the resource allocation are decided Top Management Commitment : Commitment of the top management is to assign people and fix responsibilities to complete the project -Diagnostic journey : Each team will determine whether the problems result from systemic causes or are random or are deliberately caused. Root causes are ascertained with utmost certainty. -Remedial action : This is the stage when changes are introduced, inspection, testing, and validation are also included at this point -Holding on to the gains: The above steps result in beneficiary results. having records or all actions and consequences will help in further improvements. The actions that result in the benefits derived should be the norm for establishing standards. Crosbys abosolutes of quality Like diming, Crosby also lays emphasis on top management commitment and responsibility for designing the system so that defects are not inevitable.He urged that there be no restriction on spending for achieving quality. In the long run, maintaining quality is more economical than compromising on its achievement. His absolutes can be listed as under: -Quality is conformance to requirements, not goodness -Prevention, not appraisal, is the path to quality -Quality is measured as the price paid for non-conformance and as indices -Quality originates in all factions, there are no quality problems, It is the people, designs, and processes that create problems Deming 14 points: 01.Constancy of purpose for continuous improvement 02.Adopt the TQM philosophy for economic purposes 03.Do not depend on inspection to deliver quality 04.Do not award any business based on price alone 05.Improve the system of production and service constantly 06.Conduct meaningful training on the job 07.Adopt modern methods of supervision and leadership 08.Remove fear from the minds of everyone connected with the organization 09.Remove barriers between departments and peple 10.Do not exhort, repeat slogans, and put up posters

11.Do not set-up numerical quotas and work standards 12.Give pride of workmanship to the workmen 13.Education and training to be given vigorously 14.State and exhibit top managements commitment for quality and productivity