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SEMESTER-II OPERATIONS MANAGEMENT
The objective of the course is to enable students to understand the production Planning and
Controlling aspects of a typical production and operations organization. Study understands
the concepts of work study and Quality management.
3. Scheduling: Scheduling In Job, Shop Type Production, Shop- Loading, Assignment and
Sequencing, Scheduling In Mass, Line of Balance, Methods Production Control, World Class
Production.
4. Work Study and Quality Management: Method Study, Work Measurement, Work
Design, Job Design, Work Sampling, Industrial Engineering Techniques. Economics of
Quality Assurance Inspection and Quality Control, Acceptance Sampling, Theory of Control
Charts, Control Charts for Variables and Control Charts for attributes.
Text Books:
Production and Operations Management, Aswathappa K - Himalaya Publishing
House
"Production and Operations Management" - Dr. K.Sai Kumar, Kalyani Publishers
References:
Operations Management and Control, Biswajit Banarjee - S.Chand
Production and Operations Management - Dr.K.C.Arora, 2nd Edition - University
Science Press
Production and Operations Management, R.Panneerselvam: PHI Learning Private
Ltd.
Production Management, Martand T Telsang - S Chand
Modern Production/Operations Management, Elwood S.Buffa and Rakesh K Sarin,
Wiley ...
Production and Operations Management, SN Chary, Tata McGraw Hill, New Delhi
Operations Management, Mahadevan, Pearson Education, New Delhi
Production and Operations Management - Text and Cases, Upendra Kachru, Excel
Books
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To have separate production facilities for each product and to vary the
production rate in response to the demand pattern. But this would require
a high investment in various facilities that would seldom be fully utilized.
To run one large facility on a product for a while and then change to
another product for a while. In this case, the rescheduling and
coordinating problems could be significant.
To stabilize the product mix and the production rate for an extended
period so that many of the advantages of just in time production can be
achieved.
The major problem in flow shop production control flow chart is to attain the
desired production rate with maximum possible efficiency i.e. max possible
utilization of resources. For this it is necessary to determine the techniques
process steps sequence of operations the required capacity of assembly lines the
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number of personal and the amount of work per person working on the
assembly line.
The speed of the assembly line is controlled by the required output rate the
distance between successive work stations. The technique used in such a
production situation where it is necessary to nearly equally divide the work to
be done among the workers so that the total number of employees required on
the assembly line is minimized is known as line of balancing technique.
LOB technique can be regarded as a slightly more sophisticated form the Gantt
chart the objective being to study the progress of jobs at regular integrals, to
compare progress on each operation with the progress necessary to satisfy the
eventual delivery requirements and to identify those operations in which
progress in unsatisfactory.
LOB technique consists of five main stages all utilizing graphic aids.
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1. OBJECTIVE CHART
The objective chart shows the expected schedule of production i.e.
scheduled deliveries and the actual completion rate i.e. actual deliveries
made by a date.
A dip in the actual deliveries line below the scheduled delivery line is an
obvious cause for alarm.
2. PROGRAM PLAN: a chart of the operations required to complete one
unit of the finished product is called the program plan. In program plan
various operations involved in the production process are reviewed and
listed along with lead times. A specimen of program plan is shown in the
below figure.
3. PROGRESS CHART: Progress chart shows the number of items finished
at each of the critical or important operations at a given time. Let us assume
that the review data is week no. of figure by which according to objective
chart so items must have passed the last operation-2 figure of the program
plan. The number of items that have completed this and each of the other
operations can be obtained simple by checking inventory levels.
4. LINE OF BALANCE: the line of balance can be constructed analytically or
graphically. The LOB shows the total number of items which should have
been completed at each operations.
Project networks can be used to plan record and document a schedule and to
track actual result against the schedule. By analysis a network which planning
scheduling and control of a project becomes much easier network provides a
comprehensive study of the entire project in terms of precedence and succession
of various activities as well as the resource available to perform the activities
with an object to evolve some better and quicker plan to complete the work.
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1. OPTIMISTIC TIME (a): this is the shortest time the activity can take to
complete. There is more than one chance in a hundred of completing the
activity in this amount of time it represents an ideal estimate.
2. MOST LIKELY TIME (m): This refers to be expected to occur most
often if the activity were frequently repeated under exactly the same
conditions. It is the model time.
3. PESSIMISTIC TIME (b): This is the longest time the activity could
take to finish. It is the worst time estimate and represents the time the
activity would take if bad luck was faced it occurs with a profanity of less
than one percent.
FEATURES OF PERT:
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Critical path and slack time are computed. The sequence of activities
which has maximum expected time for the completion of the project
determines the critical path.
The three time estimates are provided by a person who is in charge of the
operation and the values are generally based on the judgment and
experience.
The time estimates are assumed to follow a beta distribution.
STEPS IN PERT
1. DRAWING THE PERT NETWORK: once the activities have all been
specified and management has decided which activities must precede
others the networks can be drawn.
There are two common techniques for drawing PERT networks.
The first is called activity on node (AON) because the nodes represent the
activities.
The second is called activity on are (AOA) because the arcs are used to
represent the activities.
The AON techniques are easier and are often used in commercial software.
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through the network that lead from the initial node of the network to its
terminal node. The critical path is the longest time path route through the
network.
4. PROBABILITY OF COMPLETING THE PROJECT WITH IN
GIVEN TIME: In order to calculate the probability of completing the
project within given time the standard deviation of each activity is known
with the help of below equation.
Ts – Te
Z=
ASSUMPTIONS OF CPM
FEATURES OF CPM
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2. CRITICAL PATH: The critical path that gives CPM is name refers to
the potential path to completion of a project that the CPM diagrams
shows would take the longest. In other words a critical path for a project
is the series of activities that determines the earliest time by which the
project can be completed and the longest path through the network
diagram which has the least amount of slack time.
3. ADJUSTMENTS: Project managers using CPM can updates the diagram
for the project as individual activities occur allowing managers to swiftly
note the impact of the projects progress or lack of progress and to
calculate accordingly this is a way of recognize the ripple effect that the
delay in one activity can create and to work to keep the project on
schedule and at the expected cost. It is also possible that the diagram will
evolve as each activity is completed and a new critical path emerges
alerting decisions on sequence and other areas.
To find the critical path, we need to determine the following quantities for
each activity in the network.
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ADVANTAGES OF CPM
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7. PRODUCTION CONTROL:
Production control involves implementation of production plans or schedules by
coordinating different activities. It seeks to ensure that production operations
and actual performance occur according to planned operations and performance
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1. ROUTING: Routing is the first but the most important and difficult task
of the production control. Routing means determination of path route
which manufacturing operations will travel establishing the sequence of
operations to be followed in manufacturing a particular product. This
route path is determined in advance. Routing information is provided by
product or process engineering function and it is useful to prepare
machine loading charts and schedules.
2. SCHEDULING: It involves fixing priorities for each job and
determining the starting time and finishing time for each operation the
starting dates and finishing dates for each part sub assembly and final
assembly scheduling lays down a time table for production indicating the
total time required for the manufacture at a product and also the time
required for carrying out the operations for each part on each machine or
equipment.
3. DISPATCHING: The functions of routing and scheduling as discussed
above are paper work only. No actual production has yet been started
dispatching is the part of production control that translate the paper work
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into actual production in accordance with the detail worked out under
routing and scheduling functions.
FUNCTIONS OF DISPATCHING
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JIT Manufacturing
Total Quality
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While the JIT concept is natural in flow industries, it can work in discrete goods
manufacturing also. A WCM percept is to produce some of every type
everyday and in the quantities sold that day. Making more than that can be sold
costly and wasteful, and the cost and waste is magnified manifold as the
resulting Iumpiness in the demand pattern ripples back through all prior stages
of manufacture, including on bid supplier, In Schonberger’s opinion, if a WCM
effort fails to make it easier for cellular manufacturing, deviations reduction and
variability reduction.
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Management Resource
IntegratedService
Manufacturing T C J
Q I I
Global Markets Customers
C M T
This frame work starts with a business unit’s strategic visionC at the top, which
embodies the overall business objectives of the unit. This visionM is based upon
two different ferames of reference:
Q
The next level in the framework is integrated manufacturing. This has one
dimension of the entire range of activities , consisting of product
C and process
design, to manufacturing planning and control , to the production process itself,
to distribution, and to after- sales service and support , and the other dimensions
consisting of customers and suppliers. The framework also shows that the main
interface from integrated manufacturing has been through the distribution
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IMPORTANT QUESTIONS:
PREPARED BY;
V SREERAM YASHASVEE B.COM., L.L.B., M.B.A., (C.A.)
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SYLLUBUS
(17E00206) OPERATIONS MANAGEMENT
The objective of the course is to enable students to understand the production Planning and
Controlling aspects of a typical production and operations organization. Study understands
the concepts of work study and Quality management.
3. Scheduling: Scheduling In Job, Shop Type Production, Shop- Loading, Assignment and
Sequencing, Scheduling In Mass, Line of Balance, Methods Production Control, World Class
Production.
4. Work Study and Quality Management: Method Study, Work Measurement, Work
Design, Job Design, Work Sampling, Industrial Engineering Techniques. Economics of
Quality Assurance Inspection and Quality Control, Acceptance Sampling, Theory of Control
Charts, Control Charts for Variables and Control Charts for attributes.
Text Books:
Production and Operations Management, Aswathappa K - Himalaya Publishing
House
"Production and Operations Management" - Dr. K.Sai Kumar, Kalyani Publishers
References:
Operations Management and Control, Biswajit Banarjee - S.Chand
Production and Operations Management - Dr.K.C.Arora, 2nd Edition - University
Science Press
Production and Operations Management, R.Panneerselvam: PHI Learning Private
Ltd.
Production Management, Martand T Telsang - S Chand
Modern Production/Operations Management, Elwood S.Buffa and Rakesh K Sarin,
Wiley ...
Production and Operations Management, SN Chary, Tata McGraw Hill, New Delhi
Operations Management, Mahadevan, Pearson Education, New Delhi
Production and Operations Management - Text and Cases, Upendra Kachru, Excel
Books
UNIT - 4 Work Study & Quality Management | BALAJI INST OF IT AND MANAGEMENT Page 1
SEMESTER - II OPERATIONS MANAGEMENT
UNIT - 4
1.1 DEFINITION:
According to a British standard (BS 3138) work study refers to the method study and work
measurement which are used to examine human work in all its contexts by systematically
investigating into all factors affecting its effectiveness efficiency and economy to bring forth
the desired improvement.
1.2 OBJECTIVES:
1.4 BENEFITS/ADVANTAGES:
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1.5 DISADVANTAGES:
1. Unnecessary managerial dictation and discipline.
2. Tending to transfer to the management all the traditional knowledge the judgment and
skills of workers.
Work study
Method study
PROCEDURE
SELECT the test to be studied
RECORD all related facts about current or
proposed methods
EXAMINE the facts critically considering the
purpose, sequence place and resources
DEVELOP the best possible method
DEFINE the best method so developed
INSTALL the new method
MAINTAIN the installed method
RESULTS
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1. Improvement in use of all the inputs i.e. men, machines materials, money, time and
information.
2. Improvement in design of plant and equipment.
3. Improvement in safety standards and procedures.
4. Developing better working environment.
2.3.2. DIAGRAMS:
A. FLOW DIAGRAM:
It is a diagram drawn to scale, intended to show the relative position of the production
machinery and marks the route followed by the machines materials and men.
B. STRING DIAGRAMS:
These are similar to flow diagrams. Here movements between activities are recorded by
means of string thread or connecting pins inserted into all the activity points on the diagram.
This diagram enables paths of all the movements and records with clarity. These diagrams
highlight the shortcuts.
C. CYCLE GRAPHS:
In this method a small electric bulb is attached to each part of the body which makes the
movement for carrying out an operation. The path of movement is photo graphed by a high
speed camera.
D. TRAVEL CHARTS:
A Travel Chart is a tabular record for presenting quantitative data about the movement of
worker, materials or equipment's between any number of places over a given period of time.
The travel chart is always in a square shape. Within this shape, the square has many smaller
squares which depict a workstation.
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E. CHRONOCYCLE GRAPH:
The light source is interrupted for depicting the path as a pear shaped diagram. This type of
graph shows both the direction as well as the speed of actions.
Therbligs are basic unit of work activity used in micro motion studies which are detailed
studies of repetitive work. Here simultaneous motion cycle charts are used which record on a
time scale, the simultaneous minute movements performed by the two hands of an operator.
3. WORK MEASUREMENT:
Work measurement is also called as time study. It establishes the time taken by a qualified
worker to complete specified job at a defined level of performance.
3.1 OBJECTIVES:
1. DESCRIBE:
The essential prerequisite to carryout work measurement is to describe the method underlying
the job and focus on proposing a new method.
2. BREAK:
Break the job into elements which can be identified as distinct parts of an operation capable
of being observed measured and analyzed.
3. MEASURE:
Measure time than to perform each element using a stop watch (ideally each element should
not take more than 30 seconds)
4. DETERMINE:
Add the time taken to do all the elements and arrive at eh basic time (normal time) required to
do the entire job.
3.3. TECHNIQUES OF WORK MEASUREMENT:
A number of work measurement techniques have been developed to suit different types of
work. They are as follows:
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The different techniques for the different types of work are represented as follows:
Time study is concerned with the determination of amount of time required to perform a unit
of work. It records the time required to perform each element.
Work measurement
PROCEDURE
RESULT
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The ideal worker would be the qualified worker. Since the ideal worker or qualified worker
may not be available in the organization the best available worker is chosen and his rating is
determined as compared with the qualified worker.
1. Obtain and record all information available about the job operation and working
conditions.
2. Record the method of doing the job and break down into elements (like repetitive
element, constant element)
3. Examine the various elements to ensure that the most effective motions are used in the
elements of job performed.
4. WORK DESIGN:
Work design is the study and design of a work system in an organizational context.
Technologically work is viewed as tools. Techniques and methods used for production of
finished goods. The economic concept of work is associated with wages and employment.
Work design seeks to increase productivity by seeking better and less expensive ways to
perform the functions tasks. The man material machine combination is the focus of any work
problem. This is the part of the entire organization work system work design is a systematic
investigation of desired and present work systems to get the ideal work systems and methods.
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Work design
Job design is defined as the process of deciding on the content of a job in terms of its duties
and responsibilities. It answers the questions of how the job is to be performed that perform it
and where it is to be performed.
Thus in a way job design greatly affects how an employee feels about the job. How much
authority an employee has over the work? How much decision making the employee has on the
job?
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1. ORGANISATIONAL FACTORS:
A. CHARACTERISTICS OF TASK:
Job design requires the assembly of a number of tasks into a job or a group of jobs. An
individual may carry out one of main task which consists of a number of interrelated
elements of functions.
B. WORK FLOW:
The flow of work in an organization is strongly influenced by the nature of the product or
service the product or service usually suggest the sequence and balance between jobs.
C. ERGONOMICS:
This is concerned with designing and shaping jobs to fit the physical abilities and
characteristics of individual also.
D. WORK PRACTICES:
These are set ways of performing works. These methods may arise from tradition are the
collective wishes of employees failure to consider work practices can have unwanted
outcomes.
2. ENVIRONMENTAL FACTORS:
3. BEHAVIOURAL ELEMENTS:
A. FEEDBACK:
Individuals must receive meaningful feedback about their performance. This implies that they
should ideally work on a complete product or a significant part of it.
B. AUTONOMY:
This is being responsible for what one does. It is the freedom to control ones responds to the
environment. The absence of autonomy can cause employees boredom or poor performance.
C. USE OF ABILITIES:
The job must be perceived by individuals as requiring them to use abilities they value in order
to perform the job effectively.
D. VARIETY:
Lack of variety may cause boredom. In turn boredom leads to fixedness which causes
mistakes. By injecting variety into jobs personnel specialists can reduce errors caused by
fatigue.
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6. INDUSTRIAL ENGINEERING:
Industrial engineering is concerned with the design improvement and installation of
integration system of men materials and equipment. It draws upon specialized knowledge and
skill in the mathematical physical and social sciences together with the principal and methods
of engineering analyses and design to specify predict and evaluate the results to be obtained
from such system.
4.2.4.6.1. TECHNIQUES OF INDUSTRIAL ENGINEERING:
The main aim of tools and techniques of industrial engineering is to improve the productivity
of the organization by optimum utilization of organizations resource like men materials and
machines. The major tools and techniques used in industrial engineering are described below:
1. METHOD STUDY:
Method study is used to established standard method of performing a job after thorough
analysis of the job and to establish the facilities layout at a defined level.
2. WORK MEASUREMENTS:
The application of techniques designed to establish time for a qualified worker to carry out a
specified job at a defined of performance.
3. PRINCIPAL OF MOTION ECONOMY:
These rules and principles can be applied to improve the efficiency and reduce tidiness in
performing manual work.
4. JOB ANALYSIS AND INCENTIVES LIKE FINANCIAL OR NON-FINANCIAL:
Job analysis helps to evolve a rational compensation for the efforts of the workers.
5. VALUE ANALYSIS:
It ensures that necessary costs are built into the product and it tries to provide the required
function of the minimum cost. Hence helps to enhance the worth of the product.
6. PRODUCTION PLANNING AND CONTROL:
It includes the planning for the resources, proper scheduling and controlling production
activities.
7. INVENTORY CONTROL:
It is used to determine the economic lot size and the recorder levels for the items so that it is
available to the production center at the right time, in proper qualify to avoid stock out.
8. JOB EVALUATION:
Techniques used to determine the relative worth of jobs of the organization to aid in matching
jobs and personal and to evolve sound wage policy.
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5. WORK SAMPLING
Work sampling also called ‘Activity Sampling’ or ‘Ratio Delay Study’, is based on the
statistical method first devised by L.H.S Tippet in 1934. He used this technique firstly in the
British textile industry. Later Morrow carried out several investigations.
Work sampling is a fact finding tool and has the following two main objectives:
1. To measure activities and delays while a man is working and percentage of that he is
not working. It means a fair day’s work.
2. Under certain circumstances, to measure manual tasks that is to establish time
standards for an operation.
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This study is for one operator for 8 hours a day indicates that the operator was idle for 10% or
48 minutes of the day while working for 90 % or 432 minutes of the day.
1. Confidence Level :
It is important to decide as to what level of confidence is desired in the final “Work
Sampling” results. The most common confidence level is 95%. The area under the curve at 2
sigma or two standard deviations is 95.45%, which is rounded off to 95%. This means that
the probability is that 95% of the time the random observations will represent the facts and
5% of the time they will not.
For many cases, an accuracy of + 5% is considered satisfactory. This is sometimes referred as
the standard error in percentage.
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2. Obtain the approval of the incharge of the department in which study is to be made.
Obtain the co-operation of the operators to be studied and they should also understand
the purpose of the study.
3. Determine the desired accuracy of the final results in the form of standard error or
percentage.
4. State the Confidence level.
5. Make a preliminary estimate of the percentage occurrence of the activity or delay to
be measured for one day or two days. This may be estimated on the basis of past
experience.
6. Design the study,
(a) Determine the number of:
a. Observations to be made
b. Observations needed. Select and instruct them
c. Days or shifts needed for the study
(b) Make plans for taking the observations such as time for taking and the route to be
followed by the observer.
(c) Design the observations form.
7. Make the observations and record the data
8. Summarize the data at the end of each day
9. Check the accuracy or precision of the data at the end of the study
10. Prepare the report and state results. If required make recommendations.
With Work Sampling, it is possible to determine the percentage of the day a worker is idle
and the percentage of the day he is working. The average performance index or the speed at
which he worked during the working portion of the day can also be determined.
Standard Time:
1. Work Sampling can be applied for the estimation of the percentage utilization of
machine tools, cranes, fork trucks etc.
2. Work Sampling can also be used to estimate the unavoidable delay times for deciding
the delay allowances.
3. To estimate the percentage of the time consumed by various job activities, i.e.,
supervision, repair, inspection etc.,
4. Work Sampling is also used to find out time standards, specially where the job is not
repetitive and where time study by stop-watch method is not possible,
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TQM principles can be used by senior management as a form work to guide their
organization towards improved performance. The principles are derived from the collective
experience and knowledge of the international experts which is responsible for developing
and maintaining the ISO 9000 standards. The eight quality management principles are as
follows:
1. CUSTOMER FOCUS:
Organizations depend on their customers and therefore should understand current and future
customer needs and strive to exceed customer expectations. The organization must be
customer focus.
2. LEADERSHIP:
Leaders establish unity of purpose and direction of the organization. They should create and
maintain the internal environment in which people can become fully involved in achieving
the organizations objectives.
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4. PROCESS APPROACH:
A desired result is achieved more efficiently when activities and related resources are
managed as a process.
6. CONTINUAL IMPROVEMENT:
Continual improvement of the organizations overall performance should be a permanent
objectives of the organization.
Quality management is focused not only on product quality but also the means to achieve it.
Quality management can be considered to have three main components quality control
quality assurance and quality improvement.
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Quality assurance refers to the assurance to customers that the product parts, components,
tools etc. contain specified characteristics and are fit for the intended use. Assurance of
quality is not a responsibility of a single person or department only. Inspection department or
its personnel cannot be held responsible for assurance of quality. It is the responsibility of
everybody connected with the production directly or indirectly.
2. QUALITY SURVEYS:
Quality audits are however not sufficient to provide full assurance to upper management. The
broader review is often called a quality survey. These quality surveys are used to give
information and challenges to top management regarding product development and design
engineering with regard.
3. PRODUCT AUDIT:
Product audit it an independent evaluation of product quality to determine its fitness for use
and conformance to specification product auditing takes place after inspection have been
completed.
9. QUALITY CONTROL:
Quality control is a technique where the management tries to confirm the quality of the
product in accordance with the pre-determined standards and specifications. It is a systematic
control of those variables that affect the excellence of the ultimate product.
OR
Quality control may be defined as that industrial management techniques or group of
techniques by means of which products of uniform acceptable quality are manufactured.
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4. INCREASE IN SALES:
Increase in sale of the product is the main objective of the quality control system by this
product is made available to the consumers at lower rates this in turn increase the product
demand.
5. CUSTOMER SATISFACTION:
Consumer/customers always get satisfaction if standard products with specifications are
available at cheaper rates.
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mind that under a quality control system every out of tolerance dimension is considered non-
conforming decide just exactly which dimensions are critical to the vessel operation and be
more selective in assigning tolerances.
11. INSPECTION
11.1. MEANING
11.2. DEFINITION:
According to Springel and Lansburg, “Inspection is the process of measuring the qualities of
a product or services in terms of established standards”.
The main objective of inspection is to identify quality problems or deviation from standards
that have been set on the production of an output. The objectives of inspection are as follows:
1. MAINTAINANCE OF QUALITY:
The fundamental purpose of inspection is to maintain the quality of the product. This function
is performance by comparing materials semi-finished or finished products, men and machines
and tools with the established standards. Items which conform to the specification are within
the acceptable limits are accepted and other items are rejected.
2. IMPROVING THE PRODUCT QUALITY:
By comparing the quality of the products against the set standards, the defective items are
located and probable reasons for the defects are established. Necessary adjustments are done
for future by removing the reasons for defects and thus the quality of the product is improved
steadily and regularly. It helps in safeguarding the prestige and confidence of the organization
in the eyes of the customers.
3. REDUCTION IN COSTS:
As raw materials are inspected to see whether they are as per standards or not the defective
raw materials are thus not allowed to be used in production. Thus it saves the organization
from loss if any and reduces the costs of production.
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This risks involved in cent percent inspection arises from human errors of failing to delete
defective articles due to the boredom and fatigue of repetitive inspection operations.
Controlled experiments on 100% inspection have shown that the percentage error is by no
means negligible.
Another serious criticism leveled against 100% inspection is that it appears to divert the
responsibility for the quality from the producer to inspector. Once a product has been
accepted after 100% inspection the producer tends to think that his responsibility regarding
its quality is over and if any defects are found in the product later on the inspector should be
answerable. It hardly needs to be said that it is the manufacturer who builds the quality or
lack of it into the product. The inspector may fail to delete a defective (assuming it is
detectable) but he certainly cannot add a defect in the product.
2. SAMPLE INSPECTION:
Any inspection procedure involving 100% inspection needs huge expenditure of time money
and labor expenditure on inspection is always considered as dead weight cost. Moreover due
to boredom and fatigue involved in the resistive inspection process there is always a
possibility to overlook some defective item even by most competent and efferent inspectors.
Also the nature of items may be such that these may be completely destroyed during the
process of inspection.
Example, life of a candle evidently in such cases 100% inspection cannot be planned.
The alternative is statistical sampling inspection methods. Here from the whole lot some
items are selected for inspection and decision regarding the quality of the whole lot is taken
on the basic of the sampled items. The items can be selected by various sampling methods.
Here the whole lot is accepted if the sample items conform to the specifications otherwise it
is rejected. Thus the sample items are considered to be the representatives of the whole lot.
The method of rejecting on accepting a lot on the basis of a sample is known as accepted
sampling or sampling inspection.
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Sample Selected
Decide on disposition
Send to Production
of the lot
or Customer
Acceptance sampling is a statistical method that enables us to make accept or reject decision
based on a sample of items from the lot. After a lot is received a sample is selected for
inspection. The results of the inspection are compared to specified quality characteristics. If
the quality is satisfactory the lot is accepted and sent to production or shipped to customers. If
the quality is not satisfactory the lot is rejected mangers must then decide on the disposition
of the lot. In some cases the decision may be to keep the lot and remove the unacceptable or
non conforming items. In other cases the lot may be returned to the supplier at the suppliers
expenses the extra work and cost placed on the supplier can motivate the supplier to provide
high quality lots. Finally if rejected lots. Finally if the rejected lot consists of finished goods
the goods must be scrapped or reworked to meet acceptable quality standards.
The statistical procedure of acceptance sampling is based on the hypothesis testing
methodology. The null and alternative hypotheses are stated as follows.
Ho: good – quality lot
Ha: poor – quality lot
The figure shows the outcomes of the hypothesis testing procedure. The correct decisions
correspond to accepting a good quality lot and rejecting a poor quality lot.
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However as with other hypothesis testing procedures we need to be aware of the possibilities
of making a type error (rejecting a good quality lot) or a type error (accepting a poor quality
lot).
Many different sampling plans are used in practice. The difference among them is primarily
in the number of sample taken to evaluate a batch of items.
1. SIMPLE SAMPLING:
A sampling plan for a single sample is specified by two numbers N and C. The number of
items that should be included in a single random sample from a lot being inspected is the
sample size ‘n’. The acceptance number ‘c’ specifies the maximum number of defectives that
may be permitted in the sample if the lot is to be accepted. If the number of defectives found
in the sample is more than ‘c’ the entire lot will be rejected or inspected 100%.
If the number of defects does not exceed a specified acceptance number the consumer accepts
the entire lot. Any defects found in the sample are either repaired or returned to the producer.
If the number of defects in the sample is greater than c the consumer subject the entire lot to
100% inspection on rejects the entire lot and returns it to the producer. The single sampling
plan is easy to use but usually results in a large average of items in specter ANI than the other
plans.
2. DOUBLE SAMPLING:
The double sampling procedure consists of taking first a sample of size n, and inspecting it
for defectives. If the number of defectives is less than or equal to cut off number c, and then
accept the lot if they are more than C2, reject the lot. If the numbers of defectives are in b/w
C1 and C2 then take another sample of a different size n2. If the number of defectives in the
combined sample of n1+n2, is less than or equal to c2 accept the lot otherwise reject it.
3. SEQUENTIAL/MULITPLE SAMPLING PLAN:
A natural extension of the doubling sampling procedure is sequential sampling. A sample of
size ‘n’ is taken and based on cut off points. The decisions alternative is
1. To reject
2. To accept the lot and
3. To continue with one more sample. The samples are accumulate at each subsequent stage
and based on different cut of points at each stage a choice among the three decision
alternatives is made. The procedure is continued till a decision to either accept or reject the
lot is reached.
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If the quality characteristics are capable of quantitative measurement the control charts is
known as control chart for variables and if the quality characteristic Q cannot be measured
quantitatively. The control chart is known as control chart for attributes. The items can only
be classified as defective or non defective etc., Control charts are of two types.
Control charts for variables
Control charts for attributes
Control charts based upon measurements of quality characteristics are called as control charts
for variables control charts for variables are often found to be a more economical means of
controlling quality than control charts based on attributes. The variables control charts that
are most commonly used are average or X-charts, range or R-charts and O-or standards
deviation charts.
The following situations can be encountered in practice.
The process may be in control
The mean of the characteristic is out of control but standard deviation is not for this
purpose control chart for means are prepared.
The standard deviation is out of control and not the mean. This is stupid by control
chart for range there range is the measure of variability because it can be easily
determined.
Both mean and standard deviations are out of control. This is studied by X and R
charts simultaneously.
Where the nature of product is such that the quality characteristic cannot be measured
quantitatively the items are classified on only defective and non defectives at the time of final
inspection. There can be a number of factors responsible for defining any item to be defective
and the separate record for each cause may be out of question.
The defects can be measured in any of the following two ways.
Number of defective items is taken in different samples here; P-chart on np-chart is
used.
Number of defects in one item in this case C-chart is use
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CASE STUDY
Case Study 1:
The Orange bus company manufacture buses for different purposes. The Orange bus
objective is to provide expert, bespoke minibus conversions for Individual customers,
companies and charities. The corporate ethos of 'driving quality' focuses the company to
continuously look for improving the quality and effectiveness of its products and services.
This is demonstrated through high staff morale, increased sales and most importantly
satisfied customers. Although the Orange bus was already successfully measuring the quality
of its builds and processes informally, the company wanted to put in place a more formal
structure to improve operational efficiency and drive market share. The Orange bus decided
that a quality certificate would provide the ideal framework to achieve this.
Successful certification may enable the orange bus to gain national recognition as a quality
company which consistently builds a high quality product. The majority of motor
manufacturers insist on certification to this standard and the Orange bus has, subsequently
achieved national accreditation and approval from these manufacturers due to its outstanding
quality.
Auditing is performed monthly and continues to highlight opportunities for process
improvements. Non-conformities and corrective actions are religiously logged, enabling The
Orange bus to learn from mistakes and put in place initiatives to prevent recurrences of
problems. Now that the company monitors each stage of the vehicle build, preventive action
means that warranty costs have subsequently reduced. The management system also helps the
monitoring of customer feedback. As a result of this feedback, the company now offer a 36
month warranty which demonstrates firstly that they do listen to our customers, and secondly,
that they have confidence in the build quality of the product. The only other obstacle they
faced was helping staff understanding why they were implementing certification.
Questions:
a. Explain the quality tool that can be applied in the above case?
b. How will the employees access their role in quality management?
Possible Solutions:
a. Orange Bus should use ISO 9001 would provide the ideal framework to achieve.
Successful certification to ISO 9001 will enable Orange Bus to gain national recognition as a
quality company which consistently builds a high quality product. Since the majority of
motor manufacturers insist on certification to this standard, Orange Bus is now well prepared
for impending legislation within its subsidiary.
b. The employees should access the role in quality management by the following ways:
(i) Employees should act as a Facilitator:
It is the duty to assist employees in implementing quality management. As a employees, it is
the responsibility to select and appoint right individuals who can work as line managers and
take charge of the entire project. The employees, selected should ought to be reliable and
diligent and should be capable enough to handle a crucial project like total quality
management. It is the manager's responsibility to assign resources for total quality
management, allocate time for various training programs and appreciate employees who
come up with various improvement ideas and strategies which would help the organisation
deliver superior quality products.
(ii) Communication:
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The employees should communicate the benefits of total quality management to all other
members of the Organization. Call employees on a common platform and address the benefits
and importance of total quality management. Make them understand how successful
implementation of total quality management programs would yield high quality products
which would not only benefit the organization but also the employees associated with the
same.
IMPORTANT QUESTIONS
PREPARED BY;
V SREERAM YASHASVEE B.COM., L.L.B., M.B.A., (C.A.)
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SEMESTER - II OPERATIONS MANAGEMENT
SYLLUBUS
(17E00206) OPERATIONS MANAGEMENT
The objective of the course is to enable students to understand the production Planning and
Controlling aspects of a typical production and operations organization. Study understands the
concepts of work study and Quality management.
3. Scheduling: Scheduling In Job, Shop Type Production, Shop- Loading, Assignment and
Sequencing, Scheduling In Mass, Line of Balance, Methods Production Control, World Class
Production.
4. Work Study and Quality Management: Method Study, Work Measurement, Work
Design, Job Design, Work Sampling, Industrial Engineering Techniques. Economics of
Quality Assurance Inspection and Quality Control, Acceptance Sampling, Theory of Control
Charts, Control Charts for Variables and Control Charts for attributes.
Text Books:
Production and Operations Management, Aswathappa K - Himalaya Publishing House
"Production and Operations Management" - Dr. K.Sai Kumar, Kalyani Publishers
References:
Operations Management and Control, Biswajit Banarjee - S.Chand
Production and Operations Management - Dr.K.C.Arora, 2nd Edition - University
Science Press
Production and Operations Management, R.Panneerselvam: PHI Learning Private Ltd.
Production Management, Martand T Telsang - S Chand
Modern Production/Operations Management, Elwood S.Buffa and Rakesh K Sarin,
Wiley ...
Production and Operations Management, SN Chary, Tata McGraw Hill, New Delhi
Operations Management, Mahadevan, Pearson Education, New Delhi
Production and Operations Management - Text and Cases, Upendra Kachru, Excel
Books
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UNIT - 5 Materials Management BALAJI INSTITUTE OF IT AND MANAGEMENT
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UNIT-5
MATERIAL MANAGEMENT
1. INTRODUCTION:
1.1. MEANING OF MATERIAL MANAGEMENT:-
Hence, Material Management is a term that includes all material related items,
(e.g., supply, procurement etc.,) that are virtual for manufacturing a particular
product. The forecasting and purchasing of raw material and manifesting
equipment with designs and valuation, together with planned procurement of all
materials that may include capital goods; packing materials; stock and storage
control; material handling and statistical analysis of all supplies.
2. OBJECTIVES:
OBJECTIVES OF MATERIAL MANAGEMENT:-
The objective of material management can be divided in two parts:
I. PRIMARY OBJECTIVES:-
The following can be seen as primary purposes of material management:
a. To procure raw materials at the best available price by adhering to
predetermined purchases policies.
b. To ensure optimum availability of raw materials so that the organism does
not run out of them or end up locking too many funds in storing them.
c. To minimum administration costs and other related activities while
procuring materials; and maintain enough stock required to fulfill demand.
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8. Changes in Schedule
9. Inclement weather
10. Lack of Coordination among laborers and site personnel
11. Lack of space to store materials at site
12. Shortage of materials during work
13. Increase in material cost
14. Delay in removal of debris causing inflation
15. Lack of funds for payment
16. Improper design specifications, drawings
17. Lack of space for movement of vehicles for unloading materials
18. Storing materials at wrong places
19. Damage of materials
20. Delay in payment for materials.
Following are the major functions and activities of the material management:
1. MATERIAL PLANNING:
It is one of the basic functions of the material management to predict the
future requirement of the materials as per the requirement in the
manufacturing department. In order to ensure effective control, a material
budget is prepared for various departments and the standard performances
are compared with the actual and the deviations are further corrected.
Following are some of the issues that are tackled by material planning
a. The sales forecast of the translated for long term requirement of the
materials.
b. Considering the sales figures, a production plan is prepared and the
material is ascertained.
c. Arrangement is made for the facilities that are required for managing
the materials.
2. MATERIALS BUDGETING:
In finalizing material budget, there is notable contribution of the
personnel from the material management department. They provide the
relevant inputs that are required to frame the budget in a profitable manner.
The material budget is influenced by the strategic of the management
towards inventory control, policies affecting material quantities, change in
the cost structure etc. these functions are universal in nature and exist in
almost all type of organizations. On the other hand, certain relationship
exists in only specified organizations.
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3. PRODUCTION CONTROL:
It can be achieved by;
a. Ascertaining the requirement of the material and the components to
be procured or manufactured.
b. Preparing schedule for the purchasing and the production process of
materials.
c. Placing order with the purchasing department and issue work advice
to the manufacturing department.
d. Dispatching the materials to productive department.
4. MATERIAL PURCHASING:
They are also responsible for procuring the material of the requisite quality
in order to satisfy the specification of the product at the minimum cost.
Following are the main activities under purchasing
a. Selecting a supplier and issuing purchase order.
b. To ensure that the delivery meets the requirement of materials.
c. To search for the alternatives to increases the profitability of the
company.
6. MATERIAL STOCKING:
It comprises of the following major functions;
a. Accepted the delivery of the materials that are ordered. Verification
of the material with purchase order and inspecting the ‘good
received note’. After all the compliances are done, forwarding the
same to the store department.
b. Proper storage of the material to ensure easy and faster retrieval.
c. Physical verification of the material at periodic interval and
correcting the deviations.
7. MATERIAL DISTRIBUTION:
It refers to distributing of material out of the department i.e. finished goods
and verifying the quantity
a. Receiving finished goods from production department. Verifying the
same and storing the same till the time they are distributed properly.
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b. Packing and labeling of the finished goods and making them ready
for the delivery.
c. Preparation of shipping documents like bill of material, packing slip,
lorry receipt, railway receipt which are required to be forwarded
along with the shipment.
d. Reporting the shipment to the accounts department so that the bill
can be issued to the customer and copy can be forwarded to the sales
department and the order can be closed.
8. MATERIAL HANDLING:
It includes
a. Handling the material through adequate pallets, trucking, containers
etc.
b. Arranging various material handling equipment and other allied
items.
9. TRAFFIC:
It is basically related with managing the inflow and the outflow of the
materials. It initialize with receiving material and after that dispatching the
same. In case, the company intends to maintain its own network of the
traffic fleet or in case the services are hired as part of routine, there can be
altogether a distinct function. It covers:
a. Carrying raw material from the supplier’s destination, railway
offices and other destinations.
b. Carrying finished goods towards the customers, railway offices and
other destinations.
c. Administration of the transport route and fares.
d. Maintaining fleet of the delivery vehicles, if the ownership of the
same lies with the company.
6. SELECTION OF MATERIAL:-
For the selection of material for the product, production manager must
have sound knowledge of material and their properties, so that he can select
appropriate materials for his product. Research on materials is necessary to find
alternatives to satisfy the changing needs of the design in the product and
availability of material resumes.
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Following steps should be taken in the selection of materials for the product:
Evaluation of Alternative
solution
Decision on the Selection
of Optimum Solution
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1. AVAILABILITY: -
The material should be readily available in market in large enough quantities to
meet the requirement.
2. COST:-
For every application, there is limiting cost beyond which the designer cannot go.
When the limit exceeded the designer has to consider an alternative material. In
cost analysis, there are two factors namely cost of material and the cost of
processing the material into finished goods. It is likely that the cost of material
might be low but the processing may involve costly machining operations.
3. MECHNICAL PROPERTIES:-
The important mechanical properties of material from the consideration design
are strength, rigidity, toughness, resilience, shock resistance, wear resistance,
creep characteristic, corrosion resistance, frictional properties and hardness.
These properties are further explained as
a. Strength: the ability of material to withstand stress without fracture is
called its strength.
b. Ductility: the property of a material to undergo deformation under tension
without fracture is called ductility.
c. Hardness: the ability of a material to withstanding scratching, wear and
abrasion or indentation (penetration) by harder bodies is known as
hardness.
d. Toughness: toughness is the amount of energy that a material can absorb
before it fractures.
e. Resilience: it is the capacity of a material to absorb or store energy up to
elastic limit, and to resist shock and impact.
f. Creep: The slow and progressive deformation of a material with time at
constant stress is called creep.
g. Corrosion Resistance: it is the deterioration of a material by chemical
reaction with it environment.
h. Brittleness: The property of a material by virtue of which it will be
fractured without appreciable deformation is called brittleness.
i. Weldability: It is defined as the ease with which a material can be welded
under a given set of conditions.
IMPORTANT QUESTIONS
PREPARED BY;
V SREERAM YASHASVEE B.COM., L.L.B., M.B.A., (C.A.)
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