Master of Business Administration - MBA Semester 2

MB 0044 - Production and Operation Management (4 credits)

(Book ID: B1627)

ASSIGNMENT- Set 1(Mark 60)

Note: Assignment Set -1 must be written within 6-8 pages. Answer all questions. Q1. State the important considerations for locating an automobile plant. 10 marks (300-400 words)
Following are factors that influence the plant location are listed as follows: Availability of land Availability of land plays an important role in determining the plant location. On several occasions, our plans, calculations and forecasts suggest a particular area as the best to start an organisation. . Availability of inputs While choosing a plant location, it is very important for the organisation to get the labour at the right time and good quality raw materials. The plant should be located: Near to the raw material source At the market place Close to the market when universally available, so as to minimize the transportation cost.

Closeness to market places Organizations can choose to locate the plant near to the customers market or far from them, depending upon the product they produce. It is advisable to locate the plant near to the market place, when: The projected life of the product is low The transportation cost is high The products are delicate and susceptible to spoilage After sales services have to be prompt Communication facilities Communication facility is also an important factor which influences the location of a plant. Regions with good communication facilities namely postal and telecommunication links should be given priority for the selection of sites. Infrastructure Infrastructure plays a prominent role in deciding the location. The basic infrastructures needed in any organisation are: 1. Power For example, industries which run day and night require continuous power supply. So, they should be located near the power stations and should ensure continuous power supply throughout the year. 2. Water For example, process industries such as, paper, chemical and cement, require continuous water supply in large amount. So, such process industries need to be located near the source of water supply. 3. Waste disposal For example, for process industries such as, paper and sugarcane industries, facility for disposal of waste is the key factor.

Transport Transport facility is a must for facility location and layout of location of the plant. Timely supply of raw materials to the company and supply of finished goods to the customers is an important factor. The basic modes of transportation are by air, road, rail, water, and pipeline. Government support The factors that demand additional attention for plant location are the policies of the state governments and local bodies concerning labour laws, building codes, and safety. Housing and recreation Housing and recreation factors also influence the plant location. Locating a plant with or near to the facilities of good schools, housing and recreation for employees will have a greater impact on the organisation.

Q2. Explain essentials of Project Management Philosophy 10 marks (300-400 words)

Following are essentials of Project Management Philosophy:a) Time: It is an important parameter in framing the right mindset. It is possible to improve the pace of the project by reducing the time frame of the process. The mindset is normally to work out a comfort mode by stretching the time limits. b) Responsiveness: Responsiveness refers to quickness of response of an individual. The vibrancy and liveliness of an individual or an organisation are proportional to its capabilities to respond to evolving processes and structure. c) Information sharing: Information is power. Information is the master key to todays business. Information sharing is an important characteristic of the project mindset today. A seamless flow of information is the key to build a healthy mindset among various stakeholders in a project. d) Processes: Project mindset lays emphasis on flexible processes. The major difference in a process and a system is in its capabilities of providing flexibility to different situational encounters. Flexible processes greater capabilities of adaptability.

e) Structured planning: Structured planning based on project management life cycle enables one to easily and conveniently work according to the plan. It also enables efficient use of project resources and prioritization of the activities based on resource planning.

Q3. Several different strategies have been employed to assist in aggregate planning. Explain these in brief 10 marks (300-400) words
Several different strategies have been employed to assist in aggregate planning. The strategies are divided into two groups namely pure strategies and mixed strategies.

The pure strategies involve taking up only one type of approach and the production is obtained when only one of the decision variables is permitted to vary while all others are held constant. Under the mixed strategies, the production targets are achieved by a combination of approaches which seeks to utilize resources both in-house and as well external to the organisation. Following are the pure strategies: Vary production to match demand by changes in employment (Chase demand strategy): This strategy permits hiring and layoff of workers as required. When the output is to be increased more workers are added and when the output is to be decreased, workers are removed. In this strategy the production output is increased or decreased according the demand. This is possible if workers are added or removed to vary the input capacity. It also means that if the system is dominantly automated then it will be either under- utilized or over-utilized as the situation demands. Produce at a constant rate and use inventories (Level production strategy): This strategy retains a stable work force producing at a constant output rate. Inventory can be accumulated to satisfy peak demands. Promotional programs may also be used to shift demand. However, by producing at a constant rate, it is possible that the entire demand is not met leading to sales loss in some periods while excess production results in inventory build-up in some cases. In this case, the production output is held constant irrespective of the changes in demand from period to period. Usually, the average demand is taken as the constant output. When the demand exceeds the average output, in some months there is shortage and when the output is above the average there is surplus and build-up of inventory. Produce with stable workforce but vary the utilization rate (Stable work-force strategy): This strategy retains a stable work force but permits overtime, part-time, and idle time. Some versions of this strategy lead to a combination of back orders, subcontracting, and use of inventories. This strategy avoids the detrimental effects of layoff and hence is seen as a stable strategy. In this strategy, the work force is maintained at the same level on regular time. Production output is varied either by overtime or by building up inventory. However, if the demand falls then the production output is decreased and some workers may become idle. Thus, using overtime and idle time to meet demand would be a stable work-force strategy. Mixed strategies:In mixed strategies, the aggregate planner has a wide variety of choices by mixing two or more strategies. The number of mixed strategies in alternative production plans is almost limitless. However, based on the realities of the situation, the number of practical solutions is limited. These can be evaluated on a trial-and-error basis to find which plan best satisfies the requirements, taking cost, employment policies, etc. into account.

Q4. Illustrate the different methods by which quality is sought to be achieved using various tools and techniques 10 marks (300-400) words
Quality is a strategy for survival and for improving the position and share in the markets. Quality is a strategy to enter a market or to compete with existing manufacturers. Quality is the foundation for achieving customers satisfaction and brands get created only due to high quality. Following are the important aspects which improve the quality of a product: Performance and services The basis of quality lies in the performance of the product and the perception of service. The ingredients or components which improve the performance of the product have to be built into the design processes and operations. Also, proper care has to be taken while delivering services either independently or as a part of the product. Identifying defects Statistical tools are used to identify sources of defects in the processes. They are eliminated in a systematic method, keeping records of the improvements. Every opportunity to improve the system is used. Identifying the defects at the operating levels even before they occur improves the performance and the quality of the product. This encourages involvement and commitment, which are essential for improving quality on a continuous basis. This helps the organisation to get better feedback from the customers. Efficiency As cost and value for money has become a major dimension of customer satisfaction, efficiency has to be built in all operations. Production, material handling, maintenance, marketing, packaging, supply chain, and after sales service have to become efficient by adopting quality policies. Innovation Innovation has become vital to the development and progress of the organizations. This enables an organisation to aspire to be a leader in its field. This is possible with commitment for quality across all functions and all activities of the organisation. The principles involved and the processes implemented to achieve them, form the part of the study of total quality management. Certification Certification is another aspect of quality as it gives public recognition to the companys attainments. It improves consistency in compliance to the processes and improves performance of the employees. As measurements and observations are made by a competent and neutral body, namely, the certification agency, the implementation of quality systems are seen to be transparent.

Q5. Explain the basic competitive priorities considered while formulating operations strategy by a firm? 10 marks (300-400) words
Operations strategy is formulated to leverage the advantages, absorb the consequences of the variable nature of various functions, and provide a dependable implementation program. Effective and timely communication is a vital factor to involve and coordinate people at various stages and monitor the progress. Formulation of a strategy depends on the following:Assessment of strengths Understanding of the weaknesses

Nature of external environment Resilience of the internal environment Quality Quality is the driving factor for any organisation. When buying a product, a customer will always think about the value of the money he or she is investing. Even if the price of the product is high, the quality of the product will provoke the customer to buy it. Typical examples of companies focusing on quality are Amway, Coco-Cola, Pepsi, Tupperware, Sony, BMW, etc. Many Indian companies coming under Tata group and automotive products manufacturers like Maruti Suzuki, Rane (Madras) have won awards for providing high quality products. Time Time aspect considers that deliveries are made on time to meet the customers expectations. Time taken to develop and market new products is becoming very critical in the global environment. To seek more business, organizations should reduce the time taken for each factor during operations. The organizations mainly focus on reducing the time for the elements. Time is also interpreted as speed of response to any call from the customer, be it for post-sales service or new product development or maintenance. Flexibility Flexibility enables a firm to meet the changing demands of the customers in order to develop new processes and materials and to make the organisation more agile in its manufacture. For example, Photon, Inc, a European computer component manufacturer, produces components which are not fixed to particular configurations. This enables production lines to be reconfigured within hours or days to make new and different products. This flexibility has allowed Photon to expand from manufacturing a few products for a single customer to making hundreds of products for over 50 different companies. Flexibility can be under different categories like operational flexibility, storage flexibility, transportation flexibility, and material flexibility

Q6. Explain briefly the four classification of scheduling strategies? 10 marks (300-400) words
Scheduling strategy differs from organisation to organisation as it depends on the quantum of production, size and type of production, companys policy and priorities, etc. Most of these strategies are concerned with job shop production since the problems encountered is more when more than one product is produced in the same plant. Following are the classifications:Detailed scheduling Cumulative scheduling Cumulative-detailed scheduling Priority decision rules 1. Detailed scheduling All job orders from customers are scheduled to the last details. This may not be practical in case disruptions are there in production line like machine breakdown, absenteeism, etc. (Possible in airlines, hotels, etc) 2. Cumulative scheduling The customer orders are pooled to form a cumulative work load and then matched with the capacity. The work load is then allocated in such a way that immediate periods get allocated to maximum capacity.

3. Cumulative-detailed combination This combines both the earlier strategies of firm and flexible nature of work load. Cumulative work load projections can be used to plan for capacity as needed. As changes happen during the week, the materials and capacity requirements are updated. The actual time allocated to the specified job at each work centre is as per the standard hours needed. This is tuned further with the requirements of the master schedule. 4. Priority decision rules When a set of orders are to be executed, the question of prioritizing arises. These priority decision rules are scheduling guidelines used independently or in conjunction with any one of the above three strategies.