MS - 53 Management Programme

ASSIGNMENT
FIRST SEMESTER
2011

MS-53: PRODUCTION/OPERATIONS MANAGEMENT

School of Management Studies

INDIRA GANDHI NATIONAL OPEN UNIVERSITY
MAIDAN GARHI, NEW DELHI – 110 068

ASSIGNMENT
Course Code : MS - 53
Course Title : Production/Operations Management
Assignment Code : MS-53/SEM - I /2011
Coverage : All Blocks

Note: Answer all the questions and send them to the Coordinator of the Study Centre you are attached with.

Q1. Discuss how time horizon of forecast is related to level of decision. Give examples.

Q2. Explain the relationship between lay out decisions, capacity decision and scheduling.

Q3. Evaluate the need of information system for planning, organizing and controlling in operations management.

Q4. What is aggregate planning and its methods? Explain the assumptions for LDR model.

Q5. Distinguish between independent and dependent demand. Explain Pull and Push system.

Q6. What are the objectives of total productive maintenance? What are the six big losses and how these can be eliminated?

Q1. Discuss how time horizon of forecast is related to level of decision. Give examples.
BUSINESS DECISIONS ARE MADE ON THE BASIS
OF THE STRATEGIC BASIS.

The STRATEGIC DATA BASE is THE SEED that

FUNCTIONALLY, provides

-opportunity to determine the environmental impact on the

organization / business.

-opportunity to assess the organization's strengths/ weaknesses.

-opportunity to determine the business opportunities/ threats
to business.

-opportunity to develop strategic plans for the company.

-opportunity to develop long term/short term plans.

-opportunity to develop a vision for the organization.

-opportunity to develop a mission statement for the organization.

-opportunity to develop business objectives for the organization.

-opportunity to develop business strategies for the organization.

-opportunity to develop the action/ implementation planning

guidelines, which provides the platform for

*helps to set up and develop organization and staffing.

*helps to set direction for the organization approach.

*helps to select the right leadership

*helps to select / set the most appropriate control.

--------------------------------------------------------------------------------------------------
MAKING INFORMATION AVAILABLE
The availability of information is fundamental to the decision making
process. Decisions are made within the organization at
-STRATEGIC [ LONG TERM ---2 TO 5 YEARS]
-OPERATIONAL [ 1 TO 2 YEARS]
-PROGRAMMES [ 12 MONTHS]
-ACTIVITY LEVEL.[ CURRENT]

The information needs and decision making activities of the

various levels of management

SENIOR MANAGEMENT
Strategic business direction

-information for strategically positioning the organization

-competitive analysis and performance evaluation,
-strategic planning and policy,
-external factors that influence the direction
etc

MID LEVEL MANAGEMENT

Organizational and operational functions

-information for coordination of work units

-information for delivery programmes
-evaluation of resources usage
-budget control
-problem solving
-operational planning
etc

MID LEVEL MANAGEMENT

Programme management within units

-information for implementing programmes

-information for managing programmes
-management of resources usage
-project scheduling
-problem solving
-operational planning
etc
LINE MANAGEMENT
Activity management

-information for routine decision making

-information for problem solving
-information for service delivery
etc.

MANAGEMENT SUPPORT SYSTEMS

The management oriented support systems provide support

to various levels of management.

Executive Information Systems allow executives to see where a

problem or opportunity exists.

Decision Support Systems are used by mid-level management

to support the solution of problems that require judgement
by the problem solver.

Line Managers use Management Reporting Systems for

routine operational information.

FUNCTIONAL INFORMATION SYSTEMS

These include

-Accounting Information Systems

-Marketing Information Systems

-Enterprise Information Systems

-Decision Support Information Systems

-Executive Information Systems

-Quality Management Information Systems

-Manufacturing Information Systems

-Financial Information Systems

-Human resource Information Systems

#################################################

Q2. Explain the relationship between lay out decisions, capacity decision and scheduling.
ALL THE 3 FACTORS ARE INTERLINKED.
ANY CHANGE IN ONE AFFECTS THE OTHER TWO.

10 OM Strategy Decisions: --DECISION AREAS

•Design of Goods & Services-- service & product design

•Managing Quality--quality management
•Process Strategy---process & capacity design
•Location Strategies---location
•Layout Strategies ---layout design
•Human Resources ---human resources & job desig
•Supply Chain Management ---supply chain management
•Inventory Management ---inventory, MRP, and J-I-T
•Scheduling--- intermediate, short-term, and project scheduling
•Maintenance---maintenance

Scope of Operations Management

SYSTEM DESIGN–involves decisions

relating to the system capacity, geographic
locations of facilities, arrangement of
departments, layout of equipment, product or
service planning, and acquisition of
equipment.

SYSTEM OPERATION–involves
management of personnel, inventory planning
& control, scheduling, project management,
and quality assurance

Capacity Decisions

Most fundamental of all design decisions that operations managers must make
-With long-term consequences for the organization
-Affect a large portion of fixed cost
-Determine if demand will be met or if facilities will be idle
-Answer basic capacity planning questions on
*What kind of capacity is needed?
*How much is needed?
*When is it needed?
*Made regularly or infrequently (governed by)
*Products/services design
*Stability of demand
*Rate of technological change in equipment
*Competitive factors

Importance of Capacity Decisions

-Real input on the ability of the organization to meet
future demands for products and services
-Effect on operating costs (attempt to balance the
costs of over- and under capacity)
-Major determinant of initial cost
-Long-term commitment of resources
-Effect on competitiveness (barrier to entry by
competition, delivery speed)
-Effect on ease of managemen

Determinants of Effective Capacity

I. FACILITIES
1. Design (size and provision for expansion) 3. Layout (smooth work flow)
2. Location (labor supply, energy sources)
4. Environment (ventilation)

II. PRODUCTS or SERVICES

1. Design (more uniform output≈ std. mat’ls & methods≈ greater capacity)
2. Product or Service Mix (different items≈ different output rates)

III. PROCESSES(Quantity Capabilities : obvious determinant of capacity)

(Quality Capabilities : quality↓ = output rate↓ due to inspection)

IV.HUMAN FACTORS (job content, job design, training & experience,

motivation, compensation, learning rates, absenteeism & turnover)

V.OPERATIONAL FACTORS (scheduling, materials management, QA, maintenance policies and equipment breakdowns)

VI.EXTERNAL FACTORS
1. Product standards
2. Unions
3. Safety Regulations
4. Pollution control standards

INADEQUATE PLANNING = major limiting determinant of effective capacity

Determining Capacity Requirements

-Capacity Planning Decisions involve
Long-term considerations (relate to overall level of capacity, e.g.
size)

-Short-term considerations (relate to probable variations in capacity

requirements due to demand fluctuations)

-Link between Marketing and Operations is crucial to a realistic

determination of capacity requirements

-Long-Term Capacity : more on cycles and trends

-Short-Term Capacity : concerned more with seasonal variations or

variations from an average (yearly, monthly, weekly, daily
fluctuations)

Forecasting Capacity Requirements

1st phase : future demand is forecast with traditional methods
2nd phase : forecast is used to determine capacity requirements

Countless operations decisions that have both long-term and short-term impacts on the organization's ability to produce goods and services
that provide added value to customers must be made. If the organization has made mostly good operations decisions in designing and
executing its transformation system to meet the needs of customers, its prospects for long-term survival are greatly enhanced. Major
operations decisions areas include inventory, capacity, quality, scheduling, process type, technology, location, layout, and supply chain
management. Each of these nine decision areas

1 Inventory decisions
The key question that must be answered for inventory is _How much?_ Understanding the best inventory
levels to carry is critical to the organization because too much inventory and too little inventory are both
costly to the organization. Inventory that exceeds what is needed to satisfy customer demand imposes
unnecessary costs such as storage, deterioration, obsolescence, theft, and money tied up in inventory that
cannot be used for other purposes. Too little inventory means the organization cannot meet 100 per cent of
its customer demand and sales revenues are delayed or lost.
For example, a restaurant that specializes in serving fresh needs to make careful purchasing decisions
so it has enough fresh _ each day to serve its customers, but not so much that unsold _must be severely
discounted or discarded at the end of the day. Computer companies such as Dell must carefully manage its
computer chip inventory so it can meet current customer orders, but not be stuck with too much inventory
if a new computer chip comes out or if vendors reduce prices.

2 Capacity decisions
The question managers must answer for the capacity decision area is the same as the question for inventory:
_How much?_ Determining the organization's capacity to produce goods and services involves both long-term
and short-term decisions. Long-term capacity decisions involve facilities and major equipment investments.

Capacity decisions also involve short-term situations. In a grocery store, the number of customers that
need to pay for their groceries at any one point during the day will vary signifcantly. To provide good
customer service, managers must make sure that sufficient cash registers and employees are on hand to meet
check-out demand. Similarly, hotels must make sure that they have enough employees to register arriving
guests, to clean hotel rooms, and to provide food and beverages to customers. These decisions must be made
carefully to avoid excessive labor costs from having too many employees for the number of customers being
served.

3 Quality decisions
The decision relating to quality is not _how much_ quality to have. If asked whether they support high quality
in their organization, virtually all managers will respond enthusiastically that they fully support high quality!
Rather, the quality of goods and services is determined by numerous decisions throughout the organization
that have both long-term and short-term consequences for the organization's quality performance.
For example, while all managers may say they support quality, how many will support the capital
expenditure to purchase new equipment that can meet tighter tolerance requirements more consistently?
How many managers will spend money to send their engineers out into the field to talk to customers
to better understand necessary product performance standards? How many managers will send teams of
quality engineers to supplier facilities to assist suppliers with their quality programs? How much attention
and resources does management give to employee skill development and training in the use of quality tools
and in the philosophy of defect prevention? The outcome of these decisions will most certainly a_ect an
organization's ability to produce outstanding quality in products and services.

Quality improvement efforts require a great deal of analysis and teamwork, as well as a determined
effort to make quality a top priority in the organization. Improving quality requires everyone to adopt a
_continuous improvement_ philosophy, where everyone approaches their work with the view that there are
always opportunities to improve on the organization's key performance measures. Continuous improvement
e_orts are complex, multidimensional, and require partnerships among workers, management, suppliers, and
customers.

4 Scheduling decisions
Scheduling is an operations decision that strives to provide the right mix of labor and machines to produce
goods and services at the right time to achieve both effciency and customer service goals. For example,
a hotel must anticipate the peaks and valleys in demand that may occur during a day, during the week,
and at different times of the year. Labor (front desk clerks, room service personnel, housekeepers, bellhops,
etc.) must be scheduled carefully to meet customer demand at any given time, without scheduling excess
employees that would impose unnecessary costs on the hotel. In a hospital setting, scheduling surgeries
is a very important activity. Surgeons, nurses, support sta_, equipment, supplies, and operating rooms
must be scheduled carefully so patient surgeries can be conducted effectively and effciently. At colleges
and universities, scheduling the right courses with the right number of classroom seats at the right times is
critical to allowing students to graduate on time.

5 Process decisions
Managers must decide how to organize equipment and labor to achieve the competitive goals of the or-
ganization. There are two basic choices for organizing the workplace to produce goods and services: (1)
intermittent processes, and (2) repetitive processes.
Intermittent processes organize labor and equipment into departments by similarity of function to serve
a wide variety of production requirements. For example, a health care clinic must cater to the individual needs
of every patient who enters the clinic for treatment. One patient may have a broken ankle, while another
patient may be a pregnant woman who needs a prenatal care checkup. One patient may be a baby with a
fever, while another patient may be getting a prescription medication relied. The primary organizational
goal for a health clinic is effectiveness in treating the individual needs of each patient, and an intermittent
process is often the most suitable way to organize labor and equipment to provide customized treatment
for each individual patient. X-ray equipment and technicians are organized into an _X-ray Department_.
Other departments are created for pediatrics, lab, gynecology, pharmacy, physical therapy, and many more.
Patients are routed only to the departments that are needed for their particular treatment requirements.
This production process is called an _intermittent_ process, because the activity of each department happens
intermittently at irregular intervals, depending on the particular needs of different patients (customers) at
different points in time.
Intermittent processes are also used in manufacturing operations where a wide variety of products are
manufactured, or where products are made to customer specifications. Equipment and labor can be organized
into departments such as drilling, punch press, lathe, machining, painting, heat treating, molding, etc. Raw
materials and components are routed through the facility according to the type and order of manufacturing
activities necessary to produce the finished items.

Repetitive processes are used to produce identical or very similar products in high volumes. Equipment
and labor are organized in a line row arrangement to meet very specifc customer or product processing
requirements. Examples include assembly lines that produce products such as computers, cars, hamburgers,
automatic car washes, and cafeteria lines. In all of these cases, the products or customers follow the same
production steps to produce a standardized outcome. Since the production requirements to produce each
unit of output are so well understood, there are many opportunities to achieve high levels of efficiency in
repetitive process environments. Efficiency is a key goal in repetitive process environments. Investments in
automation and technology are financially justified because the high volume of production spreads out the
investment cost over more items/customers.
A paper mill is a good example of a repetitive process. The manufacturing requirements are well-
understood, capital investment in automation is high, and production volume is extremely high to keep unit
production costs as low as possible.

The two main differences between the intermittent and repetitive processes are product variety and
product volume.
Intermittent processes are very flexible in meeting the individual requirements of different products or
customers, but they tend to be very inefficient, with high amounts of waiting time, work in process inventories,
and space requirements. Repetitive processes are very efficient at reducing unit production costs, waiting
time, and inventories, but they are not very flexible in accommodating high product/customer variety. A
compromise solution is the cellular process layout that captures the advantages of both intermittent and
repetitive processes.

A cellular process arranges dissimilar machines and equipment together in a line that is dedicated to
producing a specific family of products that have similar processing requirements. By setting up multiple
dedicated cells, the facility can efficiently produce a wide variety of products . Since the products
within a family have similar production requirements, equipment setup times, inventories, and lot sizes can be
kept to a minimum. The cellular approach allows each product to be sent through the manufacturing process
one piece at a time, according to the immediate set of customer orders. It provides workers the _flexibility
to change a product or customize it in some way in response to specific customer requirements. The cells
are usually arranged in a U shape. This enables one worker to view multiple machines simultaneously and
puts all machines within easy reaching distance. Cellular processes minimize cycle times and enable the
organization to maintain higher levels of product volumes, variety, and customization.

There are many benefits that technology can bring to an operations environment. Automated machinery,
programmable equipment, and management information systems can provide speed, low unit processing
costs, labor cost savings, increased accuracy and consistency, and sophisticated tracking and decision support
systems to increase operations efficiency and effectiveness for both manufacturing and service environments.
The main drawback in many technology decisions is the high fixed cost of purchasing and implementing
the new systems. If mistakes are made in technology purchases, it can severely impact the fortunes of the
company.

Managers are often biased in favor of adopting leading edge technology, especially if they see their
competitors adopting it. Financial justifications for purchasing new technology are often overly optimistic
in estimations of payback periods, the costs of implementation, and the actual gains in overall productivity
the firm will enjoy.

The challenge for managers in technology is selecting the right technology for the right application. For
example, if a manufacturing company believes that automation will increase the firm's flexibility to adapt
to a changing competitive environment, questions should be asked, such as:
_ What type of flexibility does the company need to thrive?
_ Does it need to quickly switch production across a wide variety of products (product mix flexibility)?
_ Does it need to quickly produce new products for a rapidly changing marketplace (product development
flexibility)?
_ Does it need to be able to quickly ramp up production during times of high demand, and quickly scale
down production when cyclical or seasonal demand hits downturns (volume flexibility)?

7 Location decisions
There are many factors that can determine where an organization will locate its facilities. For any given
situation, some factors become more important than others in how facility location affects an organization's
effciency and effctiveness.

_ Proximity to sources of supply: Firms that process bulk raw materials usually locate close to the
source of supply to reduce transportation costs. Paper mills locate close to forests, canneries are built
close to farming areas, and _fresh processing plants are located close to the harbors where the fishing
vessels dock.
_ Proximity to customers: There are several reasons why an organization would locate close to end
customers. Service _rooms need to be close to customers to be convenient, as is the case for grocery stores,
gas stations, fast food restaurants, and hospitals. Transportation costs can also require proximity to
customers, as in the case of concrete manufacturing. Perishable products often require that they be
produced close to the _final market, as is the case for bakeries and fresh flowers.
_ Community factors: Communities may o_er a number of incentives to entice companies, including
waiving or reducing taxes, and providing access roads, water and sewer connections, and utilities.
Community attitudes can also play a role in an organization's location decision. Some communities
may actively discourage companies that might bring more pollution, noise, and traffic to the area.
Some communities may not want a prison to be located in their community. Other communities may
welcome such norms because of the jobs, tax revenues, and economic diversity they promise.
_ Labor factors: Research shows that the majority of location decisions are largely based on labor
factors, since labor is a critical variable for many norms. Labor factors include the prevailing wage rate
in a community for similar jobs, the supply of qualified workers, and the average education level of
the local population (percentage of high school graduates, etc.). Other labor factors can include the
degree of union organizing and the general work ethic of a community, as well as other measures of
absenteeism and worker longevity in a job can play strong roles when a _rm makes a location decision.
_ Other factors: Many other factors can play a role in the location decision, including quality of life
(crime rates, good schools, climate, and recreation options), access to major transportation arteries,
construction costs, proximity of the competition, and opportunities for future expansion. As mentioned
earlier, the importance of any location factor can vary greatly, depending on the circumstances of the
decision.
###################################

Q3. Evaluate the need of information system for planning, organizing and controlling in
operations management.
Operations management (OM) is the business function that plans, organizes, coordinates, and controls the resources needed to produce a
company’s goods and services. Operations management is a management function. It involves managing people, equipment, technology,
information, and many other resources.

Operations management is the central core function of every company. This is true whether the company is large or small, provides a
physical good or a service, is for profit or not for profit. Every company has an operations management function. Actually, all the other
organizational functions are there primarily to support the operations function. Without operations, there would be no goods or services to
sell. Consider a retailer such as Gap that sells casual apparel. The marketing function provides promotions for the merchandise, and the
finance function provides the needed capital. It is the operations function, however, that plans and coordinates all the resources needed to
design, produce, and deliver the merchandise to the various retail locations. Without operations, there would be no goods or services to sell
to customers.

The role of operations management is to transform a company’s inputs into the finished goods or services. Inputs include human resources
(such as workers and man- agers), facilities and processes (such as buildings and equipment), as well as materials, technology, and
information. Outputs are the goods and services a company produces.

At a factory the transformation is the

physical change of raw materials into products, such as transforming leather and rubber into sneakers, denim into jeans, or plastic into
toys. At an airline it is the effi- cient movement of passengers and their luggage from one location to another. At a hospital it is organizing
resources such as doctors, medical procedures, and medica- tions to transform sick people into healthy ones.

Operations management is responsible for orchestrating all the resources needed to produce the final product. This includes designing the
product; deciding what resources are needed; arranging schedules, equipment, and facilities; managing inventory; controlling quality;
designing the jobs to make the product; and designing work methods. Basically, operations management is responsible for all aspects of
the process of transforming inputs into outputs. Customer feedback and performance information are used to continually adjust the inputs,
the transformation process, and characteristics of the outputs.

This trans- formation process is dynamic in order to adapt to changes in the environment.

At the strategic level (long term), operations managers are responsible for or associated with making decisions about product development
(what shall we make?), process and layout decisions (how shall we make it?), site location (where will we make it?), and capacity (how
much do we need?).
At the tactical level (intermediate term), operations management addresses the issues relevant to efficiently scheduling material and labor
within the constraints of the firm's strategy and making aggregate planning decisions. Operations managers have a hand in deciding
employee levels (how many workers do we need and when do we need them?), inventory levels (when should we have materials delivered
and should we use a chase strategy or a level strategy?), and capacity (how many shifts do we need? Do we need to work overtime or
subcontract some work?).
At the operational level, operations management is concerned with lower-level (daily/weekly/monthly) planning and control. Operations
managers and their subordinates must make decisions regarding scheduling (what should we process and when should we process it?),
sequencing (in what order should we process the orders?), loading (what order to we put on what machine?), and work assignments (to
whom do we assign individual machines or processes?).
Today's operations manager must have knowledge of advanced operations technology and technical knowledge relevant to his/her industry,
as well as interpersonal skills and knowledge of other functional areas within the firm. Operations managers must also have the ability to
communicate effectively, to motivate other people, manage projects, and work on multidisciplinary teams.
the scope of operations management as encompassing these multi-disciplinary areas:
• Supply Chains—management of all aspects of providing goods to a consumer from extraction of raw materials to end-of-life disposal.
• Operations Management/Marketing Interface—determining what customers' value prior to product development.
• Operations Management/Finance Interface—Capital equipment and inventories comprise a sizable portion of many firms' assets.
• Service Operations—Coping with inherent service characteristics such as simultaneous delivery/consumption, performance
measurements, etc.
• Operations Strategy—Consistent and aligned with firm's other functional strategies.
• Process Design and Improvements—Managing the innovation process.
the major issues for operations management today are:
• reducing the development and manufacturing time for new goods and services
• achieving and sustaining high quality while controlling cost
• integrating new technologies and control systems into existing processes
• obtaining, training, and keeping qualified workers and managers
• working effectively with other functions of the business to accomplish the goals of the firm
• integrating production and service activities at multiple sites in decentralized organizations
• working effectively with suppliers at being user-friendly for customers
• working effectively with new partners formed by strategic alliances
As one can see, all these are critical issues to any firm. No longer is operations management considered subservient to marketing and
finance; rather, it is a legitimate functional area within most organizations. Also, operations management can no longer focus on isolated
tasks and processes but must be one of the architects of the firm's overall business model.

Planning is the ongoing process of developing the business' mission and objectives and determining how they will be accomplished.
Planning includes both the broadest view of the organization, e.g., its mission, and the narrowest, e.g., a tactic for accomplishing a specific
goal.

Planning is the first tool of the four functions in the management process. The difference between a successful and unsuccessful manager
lies within the planning procedure. Planning is the logical thinking through goals and making the decision as to what needs to be
accomplished in order to reach the organizations’ objectives. Managers use this process to plan for the future, like a blueprint to foresee
problems, decide on the actions to evade difficult issues and to beat the competition. Planning is the first step in management and is
essential as it facilitates control, valuable in decision making and in the avoidance of business ruin.
Quality in the results that are achieved and how the results are reached doing what is right, respect for others, value those that lead and
take pride in all they do, and the value of teamwork to reach common goals.
INFORMATION FOR PLANNING
1. Establishment of objectives
a. Planning requires a systematic approach.
b. Planning starts with the setting of goals and objectives to be achieved.
c. Objectives provide a rationale for undertaking various activities as well as indicate direction of efforts.
d. Moreover objectives focus the attention of managers on the end results to be achieved.
e. As a matter of fact, objectives provide nucleus to the planning process. Therefore, objectives should be stated in a clear, precise and
unambiguous language. Otherwise the activities undertaken are bound to be ineffective.
f. As far as possible, objectives should be stated in quantitative terms. For example, Number of men working, wages given, units
produced, etc. But such an objective cannot be stated in quantitative terms like performance of quality control manager, effectiveness of
personnel manager.
g. Such goals should be specified in qualitative terms.
h. Hence objectives should be practical, acceptable, workable and achievable.
2. Establishment of Planning Premises
a. Planning premises are the assumptions about the lively shape of events in future.
b. They serve as a basis of planning.
c. Establishment of planning premises is concerned with determining where one tends to deviate from the actual plans and causes of such
deviations.
d. It is to find out what obstacles are there in the way of business during the course of operations.
e. Establishment of planning premises is concerned to take such steps that avoids these obstacles to a great extent.
f. Planning premises may be internal or external. Internal includes capital investment policy, management labour relations, philosophy of
management, etc. Whereas external includes socio- economic, political and economical changes.
g. Internal premises are controllable whereas external are non- controllable.
3. Choice of alternative course of action
a. When forecast are available and premises are established, a number of alternative course of actions have to be considered.
b. For this purpose, each and every alternative will be evaluated by weighing its pros and cons in the light of resources available and
requirements of the organization.
c. The merits, demerits as well as the consequences of each alternative must be examined before the choice is being made.
d. After objective and scientific evaluation, the best alternative is chosen.
e. The planners should take help of various quantitative techniques to judge the stability of an alternative.
4. Formulation of derivative plans
a. Derivative plans are the sub plans or secondary plans which help in the achievement of main plan.
b. Secondary plans will flow from the basic plan. These are meant to support and expediate the achievement of basic plans.
c. These detail plans include policies, procedures, rules, programmes, budgets, schedules, etc. For example, if profit maximization is the
main aim of the enterprise, derivative plans will include sales maximization, production maximization, and cost minimization.
d. Derivative plans indicate time schedule and sequence of accomplishing various tasks.
5. Securing Co-operation
a. After the plans have been determined, it is necessary rather advisable to take subordinates or those who have to implement these
plans into confidence.
b. The purposes behind taking them into confidence are :-
a. Subordinates may feel motivated since they are involved in decision making process.
b. The organization may be able to get valuable suggestions and improvement in formulation as well as implementation of plans.
c. Also the employees will be more interested in the execution of these plans.
6. Follow up/Appraisal of plans
a. After choosing a particular course of action, it is put into action.
b. After the selected plan is implemented, it is important to appraise its effectiveness.
c. This is done on the basis of feedback or information received from departments or persons concerned.
d. This enables the management to correct deviations or modify the plan.
e. This step establishes a link between planning and controlling function.
f. The follow up must go side by side the implementation of plans so that in the light of observations made, future plans can be made
more realistic.

Organizing
Organizing is establishing the internal organizational structure of the organization. The focus is on division, coordination, and control of
tasks and the flow of information within the organization. It is in this function that managers distribute authority to job holders.
Staffing is filling and keeping filled with qualified people all positions in the business. Recruiting, hiring, training, evaluating and
compensating are the specific activities included in the function. In the family business, staffing includes all paid and unpaid positions held
by family members including the owner/operators.

In order to reach the objective outlined in the planning process, structuring the work of the organization is a vital concern. Organization is a
matter of appointing individuals to assignments or responsibilities that blend together to develop one purpose, to accomplish the goals.
These goals will be reached in accordance with the company’s values and procedures. A manager must know their subordinates and what
they are capable of in order to organize the most valuable resources a company has, its employees . This is achieved through management
staffing the work division, setting up the training for the employees, acquiring resources, and organizing the work group into a productive
team. The manager must then go over the plans with the team, break the assignments into units that one person can complete, link related
jobs together in an understandable well-organized style and appoint the jobs to individuals. .

Leading
Directing is influencing people's behavior through motivation, communication, group dynamics, leadership and discipline. The purpose of
directing is to channel the behavior of all personnel to accomplish the organization's mission and objectives while simultaneously helping
them accomplish their own career objectives.

Organizational success is determined by the quality of leadership that is exhibited. "A leader can be a manager, but a manager is not
necessarily a leader," . Leadership is the power of persuasion of one person over others to inspire actions towards achieving the goals of
the company. Those in the leadership role must be able to influence/motivate workers to an elevated goal and direct themselves to the
duties or responsibilities assigned during the planning process.. Leadership involves the interpersonal characteristic of a manager's position
that includes communication and close contact with team members.

INFORMATION FOR ORGANIZING

managers who define and delegate clear responsibility for tasks or projects to individuals or groups. It provides:
i. A logical management control structure that can be independent of formal organisation structures;
ii. A staged lifecycle for all tasks or projects to progress through:
iii. A powerful rule-building capability (D-M Rules) that automates decision making at each stage;
iv. Special purpose software (WorkoutII) that maintains the control and reporting structures and includes a comprehensive
reporting facility.
Directing-Mind benefits include:
• Work delegation with clear accountability;
• Focus on results;
• Consistency in decision making;
• Risk and opportunity identification;
• Low costs of control.
==============================================

Controlling
Controlling is a four-step process of establishing performance standards based on the firm's objectives, measuring and reporting actual
performance, comparing the two, and taking corrective or preventive action as necessary.

The process that guarantees plans are being implemented properly is the controlling process. ‘Controlling is the final link in the functional
chain of management activities and brings the functions of management cycle full circle.’ This allows for the performance standard within
the group to be set and communicated. Control allows for ease of delegating tasks to team members and as managers may be held
accountable for the performance of subordinates, they may be wise to extend timely feedback of employee accomplishments.
Importance of Management Planning
The four functions of management planning, organizing, leading and controlling, assume a great worth in the success of any business every
day. In all organizations, each employee’s individual contribution to the success of the company is of enormous importance as the
company’s goals would not be met and success would not be reached.

INFORMATION FOR CONTROLLING.

Components of the Control Activity

1.Internal controls rely on the principle of checks and balances in the workplace. The following components focus on the control activity:
2.Personnel need to be competent and trustworthy, with clearly established lines of authority and responsibility documented in written job
descriptions and procedures manuals. Organizational charts provide a visual presentation of lines of authority and periodic updates of job
descriptions ensures that employees are aware of the duties they are expected to perform.
3.Authorization Procedures need to include a thorough review of supporting information to verify the propriety and validity of transactions.
Approval authority is to be commensurate with the nature and significance of the transactions and in compliance with COMPANY policy.
4.Segregation of Duties reduce the likelihood of errors and irregularities. An individual is not to have responsibility for more than one of the
three transaction components: authorization, custody, and record keeping. When the work of one employee is checked by another, and
when the responsibility for custody for assets is separate from the responsibility for maintaining the records relating to those assets, there
is appropriate segregation of duties. This helps detect errors in a timely manner and deter improper activities; and at the same time, it
should be devised to prompt operational efficiency and allow for effective communications.
5.Physical Restrictions are the most important type of protective measures for safeguarding COMPANY assets, processes and data.
6.Documentation and Record Retention is to provide reasonable assurance that all information and transactions of value are accurately
recorded and retained. Records are to be maintained and controlled in accordance with the established retention period and properly
disposed of in accordance with established procedures.
7.Monitoring Operations is essential to verify that controls are operating properly. Reconciliations, confirmations, and exception reports can
provide this type of information.
=========================================================
###############################################

Q6

Total Productive Maintenance (TPM) which is one of the key concepts of Lean Manufacturing, challenges the view that maintenance is no more than a function that
operates in the background and only appears when needed. The objective of TPM is to engender a sense of joint responsibility between supervision, operators and
maintenance workers, not simply to keep machines running smoothly, but also to extend and optimise their performance overall. The results are proving to be remarkable.
The goals of TPM are measured using an Overall Equipment Effectiveness (OEE) ratio.
OEE = availability x performance x Quality rate.
Availability = Available time - downtime x 100
Available time
 Downtime can be calculated by adding together the amounts of time lost due to equipment failures, set-up and adjustment, and idling and minor stoppages.
Performance rate = Ideal cycle time x Processed Quantity x 100
Operating time
Speed losses are calculated by combining time lost due to idling and minor stoppages and time lost due to reductions in speed.
Quality rate = Processed Quantity - defective quantity x 100
Processed quantity
Defective quantity is calculated by combining defects in process start-up and reduced yield.
Typical calculations for OEE prior to the implementation of Just in Time related strategies usually range between 40% and 50% with the former being the more normal.
Experience indicates that it is possible to raise this to between 80% and 90% in a period of some two to three years from start up. However, the improvement will usually
follow an almost exponential upward curve with the bulk of the gains being in the latter part of the period.
Total Productive Maintenance was developed in Japan in 1971 by the Japanese Institute of Plant Maintenance (JIPM). TPM involves everyone in the company.
The JIPM also identified what they refer to as the six big losses. These are as follows:-
The Six Big Losses.
“The goal of TPM is to increase the productivity of Plant and Equipment. Consequently, maximised output will be achieved through the effort of minimising input -
improving and maintaining equipment at optimum levels to reduce its life cycle cost. Cost-effectiveness is a result of an organisation’s ability to eliminate the causes of the
‘six big losses’ that reduce equipment effectiveness:
Reduced yield (from start up to start-up to stable production).
Process defects.
Reduced speed.
Idling and minor stoppages.
Set-up and adjustment.
Equipment failure.
The JIPM also states that “Both operations and maintenance departments should accept the responsibility of keeping equipment in good condition. To eliminate the waste
and losses hidden in a typical factory environment, we must acknowledge the central role of workers in managing the production process. No matter how thoroughly plants
are automated or how many robots are installed, people are ultimately responsible for equipment operation and maintenance. Every aspect of a machines performance,
whether good or bad, can be traced back to a human act or omission. Therefore, no matter how advanced the technology is, people play a key role in maintaining the
optimum performance of the equipment.”
Whilst in the early stages, the workforce involvement will usually be limited to membership of multi layer teams, in the longer term, usually in around two to three years, the
operator involvement will have developed into fully autonomous self managing maintenance group activities.
Typically, in the early stages, a pioneer team of managers, technical specialists including maintenance department personnel and operators work on one problem
production line. Using the project by project disciplines the team select specific problems from amongst the so called ‘Six Big Losses’ that they believe can be solved
quickly and easily but which produce tangible and measurable improvements.
At this stage, the programme is then given a high profile and extended to include every one in the plant. The initial teams of workers will be trained in the problem solving
tools and taught how to select process related problems as projects. Managers and specialists will act as consultants to the newly formed teams and guide them in the
best use of problem solving methods.