UNIT – 1
1A. PRODUCTION AND OPERATION
1A.1 INTRODUCTION
Management is an exciting subject because it deals with setting,
seeking, and reaching objectives.
We are all managers of our own lives, and the practice of
management is found in every facet of human
activity: schools, businesses, churches, government, unions, armed
forces, and families. Establishing and
achieving objectives are challenging and rewarding missions for
nay enterprise, and we will discover that
the managerial hurdles to be overcome for success are surprisingly
similar for all organizations.
A manager’s role is to set goals and amass and mobilize the re
sources of men and women,
materials, machines, methods, money, and markets to accomplish the
desired results within
predetermined constraints of time, effort and cost.
1A.2 MANAGEMENT: DEFINED
There are numbers definitions of management. Probably the most
popular are often quoted is
“getting things done through other people.” This and most other
definitions have merit and highlight
important aspects of management. For the purpose of this book, the
following definitions will be used.
Management is a distinct process consisting of activities of
planning, organizing, actuating, and
controlling, performed to determine and accomplish stated
objectives with the use of human beings and
other resources.
1A.3 KEY CHARACTERISTICS TO UNDERSTANDING MANAGEMENT
The following list will be beneficial to the beginning student of
management. Although portions of
the following were implied in the above discussion, this orderly
list may prove helpful in systematizing
your thoughts for this chapter.
a. Management is purposeful. Management deals with the achievement
of something specific,
expressed as an objectives or goal. Managerial success is commonly
measured by the extent to
which objectives are achieved. Management exists because it is an
effective means of getting
needed work accomplished. The fact that some executives have
subordinates reporting to them
does not ipso facto make them managers.
b. Management makes things happen. Managers focus their attention
and efforts on bringing about
successful action. They know where to start, what to do to keep things
moving, and how to follow
through. Successful managers have an urge for accomplishment. This
means that in some cases
the person practicing management may find that she or he is not
winning a popularity contest, but
members of the group still respect the managers. The management
member gets along with
people by not only liking them but also being firm and helpful and
expecting the best.
c. Management is an activity, not a person or group of per sons.
The word managing is more precise
and descriptive than management. Popular usage, however has made
management the widely
accepted term Management is not people; it is an activity like
walking, reading, swimming, or
running. People who perform management can be designated as
managers, members of
management, or executive leaders. In addition, management is a
distinct activity. It can be studied,
knowledge about it obtained, and skill in its application acquired
PRODUCTION AND OPERATIONS MANAGEMENT
d. Management is accomplished by with, and through the efforts of
others. To participate in
management necessitates relinquishing the normal tendency to
perform all things yourself and get
tasks accomplished by, with, and through the efforts of group
members. This is far more difficult
than it sound. Normally a person acquires ability in a specialized
type of work and wins promotions
through easing knowledge and skill in this field of
specialization. How ever, the time comes when
further promotion requires shifting from the role of a specialist
to that of a management member.
The prime measures of success becomes setting or securing
agreement on the proper goals and
getting others to accomplish these goals. How successfully this
deliberate shift is made determines
the potential of the new manager. This characteristic merit
recognition by the ambitious specialist.
All too frequently the best salesperson who is promoted to
district sales manager remains a
salesperson because he or she fails to comprehend the managerial
difference between getting
salespeople to sell and knowing how to sell. Likewise, the
employee training expert who is
advanced to assistant personnel manager may continue to be a
training, expert, thus not
succeeding in the new managerial post.
e. Management is usually associated with the efforts of a group.
It is common to associate
management with a group. How ever, management is also applicable
to an individual’s efforts. For
example, a person manages many personal affairs. The group
emphasis steam from the fact that
an enterprise comes into existence to attain goals, and these are
achieved more readily by a group
than by one person alone. People become members of an enterprise
to satisfy their needs and
because they feel their giants will outweigh their losses or
burdens as members of a group.
f. Management is intangible. It has been called the unseen force,
its presence evidenced by the
results of its efforts – orderliness, enthusiastic employees,
buoyant spirit, and adequate work
output. Strange as it may seem, in some instances the identity of
management is brought into
focus by its absence or by the presence of its direct opposite,
mismanagement. The result of
mismanagement is clear.
g. Management is aided, not replaced by the computer. The computer
is an extremely powerful tool
of management. It can widen a manager’s vision and sharpen insight
by supplying more and faster
information for making key decisions. The computer has enabled the
manager to conduct analysis
far beyond the normal human’s analytical capacities. It has forced
managers to reexamine their
analytical processes and judgment in view of the almost
unbelievable data processing and feedback
facilities of the modern computer.
However, a manger must supply judgment and imagination as well as
interpret and evaluate what
the data meant in each individual case. It is doubtful that
General George Washington would have
crossed the Delaware River if he had relied on a computer to help
him decide. The data of using
leaky boats at night during a snowstorm to face a numerically
superior enemy would have indicated
a low probability of success. However, ‘despite such rationale,
Washington believed he could
succeed, seized the initiative, assumed the large risk, and won
his objectives.
h. Management is an outstanding means for exerting real impact on
human life. A manager can do
much to improve the work environment, to stimulate people to
better things, and to make
favorable actions take place. Frustrations and disappointments
need not be accepted and passively
viewed as inevitable. A manager can achieve progress, bring hope,
and help groups members
acquire the better things in life.
1A.4 MEANING OF MANAGEMENT
PRODUCTION AND OPERATIONS MANAGEMENT
The chief characteristic of management is the integration and
application of the knowledge and
analytical approaches developed by numerous disciplines. The
manager’s problem is to seek a balance
among these special approaches and to apply the pertinent concepts
in specific situations which require
action. The manager must be oriented to solving problems with
techniques tailored to the situations; yet
he must develop a unified framework of thought that encompasses
the total and integrated aspects of the
entire organization.
What, then, is management, and what does it do? In general usage,
the word “management”
identifies a special group of people whose job it is to direct the
effort and activities of other people toward
common objectives. Simply stated, management “gets things done
through other people.” For the purpose
of this book, management is defined as the process by which a
cooperative group directs actions toward
common goals. This process involves techniques by which a
distinguishable group of people (managers)
coordinates activities of other people, managers seldom actually
perform the activities them selves. This
process consists of certain basic functions which provide an
analytical approach for studying management.
The concept of management has broadened in scope with the
introduction of new perspective by
different fields of study.
1A.5 HISTORY OF PRODUCTION AND OPERATIONS MANAGEMNET
The traditional view of production management began in the
eighteenth century. Upto 1900, the
traditional view prevailed and Frederick W. Taylor brought in the
concept of scientific management. The
important events in this field and the contributors are detailed
in Table 1.1. below:
TABLE 1.1
Year Contribution Contributor
1776 Specialization of labour in manufacturing Adam Smith
1832 Division of labour by skill, assignment of jobs by skill,
basics
of time study
Charless Babbage
1900 Scientific management, time study and work study developed
Frederick W.
Taylor
1900 Motion of job Frank B. Gilbreth
1901 Scheduling techniques for employees, machines and jobs in
manufacturing
Henry L. Gantt
1915 Economic lot size for inventory control F.W. Harris
1931 Statistical inference applied to product quality, quality
control
charts
Walter A
Shewhart.
1947 Linear programming George B.
Dantzing
1955 Digital computer, large scale computations made easy IBM
PRODUCTION AND OPERATIONS MANAGEMENT
1A.6 FUNCTIONS OF PRODUCTION AND OPERATIONS MANAGEMENT
Production and operations management concerns not only with the
production of goods and
services but also all the activities connected with the
production. When the word ‘production’ is mentioned,
it brings in the things like factories, machines, equipments,
assembly lines. This is nothing but things
related to manufacturing. In the past, emphasis was on
manufacturing management , which subsequently
got changed into production management. Production concepts and
techniques are being applied to a
wide range of activities and situations which have little or
noting to do with factories or manufacturing.
These activities resulted not in the realization of goods but in
services like banking, hotel management,
health services, educations, transportation, recreating,
government operations. Due to the widening of the
scope, the name was changed from production management into
operations management, where the
concepts, tools and techniques are applied on diverse nature of
activities.
First let us define production. This is a process or a set of
procedures to be executed in order to
convert or transform a set of inputs into a pre-determined set of
outputs in accordance with the objectives
assigned to the production system. Generally, a system consists of
a transformation or conversion process
for a given input to be converted into the required output with a
feedback mechanism, so that any
deviation or irregularities can be identified and corrected,
In the production environment the input may be labour, energy,
capital, information and
technology, the transformation process is the production processes
and the output may take the form of
products or services or processed information.
Operations management, with its widened scope, is responsible for
the management of productive
systems, that is, it is responsible for systems which either
create goods or private service or both.
The operations management personnel have the ultimate
responsibility for the creating of goods or
services. The variety of jobs which the operations group will
oversee will differ form one organization to
another. But the basic task of coordinating the use of resources
through the management process, which
involves planning, organizing, staffing, directing and
controlling.
Planning involved determining a future course of action. The
planning process begins by deciding
what is desired and then designing the way for accomplishing that
objective.
Organizing refers to the administrative structure of the organization.
It involves putting the parts
of the system together in such a way that desired results can be
achieved.
Staffing involves selection and training of personnel who will
operate the system.
Directing refers to the release of commands or orders’, making
suggestions or otherwise
motivating subordinates to perform their assigned duties in a
timely and efficient manner.
Controlling involves to the release of commands or orders’ making
suggestions or otherwise
motivating subordinates to perform their assigned duties in a
timely and efficient manner.
Controlling involves measuring the results of operations, deciding
if they are acceptable and
instituting corrective action if need be.
1A.7 RELATIONSHIP BETWEEN “POM AND OTHER FUNCTIONS
PRODUCTION AND OPERATIONS MANAGEMENT
There are three primary functions, which exist in most of the
organizations and hey are Operations,
Marketing and Finance. These three cannot be mutually exclusive
and the functional overlap is unavoidable.
The level of overlapping varies from one organisation to another.
In addition to these three major functions of business
organizations, the operation management
function has to interact with many supporting functions. The
supporting functions are research and
development, product design, industrial engineering, maintenance,
personnel, accounting, costing,
materials, etc. The level of interaction and presence of some
departments may be Exchange of information
on current and future decided based on the size of the
organization, product line and type of management.
Finance Production /
Operations
Marketing
1
2 3
4
6 5
1. Accounting
2. Personnel
3. Research
4. Engineering
5. Purchase
6. distribution
FIGURE : 1.1 SYSTEMS VIEW OF A BUSINESS
PRODUCTION AND OPERATIONS MANAGEMENT
The operations management personnel and the other major of support
functional personnel have to
necessarily interact with each other in the activities identified
below:
Finance:
Economic analysis of investment products
Budgeting and timing of funds
Provision and release of funds
Marketing
Developing and maintaining the market
Advertisement and sales promotion
Sales forecast
Production improvement / new product development.
Research and Development:
Idea generation
Product formulations
Prototype Development
Test Marketing
Product Design:
Preliminary and final design
Detailed Drawings
Assembly and parts manufacturing drawings
Quality standards
Exchange of information on current and future capabilities
Maintenance:
Evolution of maintenance policy
Implementation for general unkeep of equipment
Industrial Engineering:
Scheduling
PRODUCTION AND OPERATIONS MANAGEMENT
Setting up of standards
Work methods: time study
Quality audit and contact
Material handling
Materials
Procurement of materials and equipment
Inventory control
Economic order quantity and timing of purchase
Inspection and clearance
Vendor evaluation and rating
Personnel:
Recruitment and training
Labour relations
Wage and Salary administration
Manpower Projections
Accounting and Costing:
Preparation of financial statements
Cost data on labour, materials and overhead
Report on scrap, downtime and inventories
Payables, receivables management
Insurance
1A.8 EFFECT OF TIME ELEMENT ON POM
In detail we have already seen the effect of production operations
management (POM) in the
management process. The decision of POM has to be there for short
duration activities as well as for long
duration ones like the jobs of corporate planning. The detailed
task list and the time horizon on which its
effect will be there are given in Table 1.2 below:
TABLE 1.2
Long Term Horizon Intermediate Time Horizon Short Time Horizon
PRODUCTION AND OPERATIONS MANAGEMENT
Product Design Product variation Transport and delivery
arrangement
Quality policy Methods selection Preventive maintenance
scheduling
Technology to be
employed
Quality implementation,
inspection and control
methods
Process, Site selection Implementation of safety
decisions
Selection of plant and
Machinery
Machinery and plant
loading decisions
Industrial relations
Manpower training and
development – phased
programme
Forecasting Checking / setting up
work standards and
incentive rates
Long – gestation period
raw material supply
projects – phased
development
Deployment of
man-power
Product scheduling
Warehousing Overtime decision Available materials
allocation and handling
Insurance policy Shift – working decisions Manpower scheduling
Design of jobs Temporary hiring or
lay-off of man-power
Breakdown Maintenance
Setting up of work
standards
Purchasing policy Progress check and
change in priorities in
production scheduling
Effluent and waste
disposal systems
Purchasing policy Temporary Manpower
Safety and maintenance
systems
Purchasing source
selection developer and
evaluation
Supervision and
immediate attention to
problem areas in labour,
materials, machines, and
Make or buy decision other resources.
Inventory policy for new
material, work – in –
progress and finished
goods
PRODUCTION AND OPERATIONS MANAGEMENT
1A.9 PRIORITY
One of the primary responsibilities of the production and
operations management is the productive
use of resources. Productivity is a measure of the relative amount
of input needed to secure a given
amount of ailed and Feederick W. Taylor brought in the concept
output. It is commonly expressed as the
ratio of quantity of scientific management. The important events
in this of output to quantity of input
Productivity = Output / Input
The enhancement of productivity is the need of the organisation
and it can be made possible by
either increasing the output and keeping the input at the same
level or reducing the input and maintaining
the output. The rate of increase in productivity will be very high
if output is increased with simultaneous
reduction of inputs.
1A.10 MANUFACTURING OPERATIONS VERSUS SERVICE OPERATIONS:
Manufacturing implies production of a tangible out put, such as an
automobile, a refrigerator, or
something similar that we can see or touch and feel. Service on
the other hand, generally implies an act
rather than a physical product. A doctor’s examination, TV and
audio repair, entertainment like film shows
are examples of services. The difference between manufacturing and
service are in Table 1.3 below:
Table 1.3
Characteristic Manufacturing Service
Output Tangible Intangible
Customer contact Low High
Labour content Low High
Uniformity of output High Low
Measurement of productivity Easy difficult
1A.11 EXAMPLE OF MANUFACTURING SYSTEMS
JOB PRODUCTION
In job production the whole product is looked as one job which is
to be completed before going on
to next. The most common examples are building a ship or a large
civil construction job. Job production is
not confined to large projects, it could be the making of a
special piece of equipment or a tool.
BATCH PRODUCTION
PRODUCTION AND OPERATIONS MANAGEMENT
If qualities of more than one are being made, it is sometimes
convenient to spit the production into
a series of manufacturing stages or operations. Each operation is
completed as one of the single items
being made, before the next operation is started. In this way a
group of identical products, or a batch are
made, which move through the production process together.
If more than one types of product is being made, then hatches of
different products may be
moving around the shop floor some times requiring operations from
the same machine. This leads to
problems of how long a machine should be processing a batch of one
tope of product before going on to
the next process, a different one,. Or which batch should be
worked on first. This type of problem tends to
make the planning and control of batch production a difficult
task.
FLOW PRODUCTION
When there is a continuous demand for a product, it is some time
worthwhile setting-up facilities
to make that product and no other product. In these circumstances
flow production may be the best way
of operating. Here the manufacturing is broken down into
operations, but each unit moves, or flows, from
one operation to the next individually, and not as one of a batch
examples are motor manufacturing,
fertilizer, pharmaceutical and urea manufacturing. Since only one
product is being made there are no
problem about priorities, but it is necessary to balance the work
load at all stages of manufacture.
Examples are motor car manufacturing.
INTERMITTENT PRODUCTION
The intermittent production system examples are machine shop
production, building contractor.
The continuous production examples are chemical plants automobile
industry etc. most of the companies
cannot be classified straight as intermittent or continuous
production, rather in one department of the
company continuous production is there while in other departments
intermittent production exists. The
time required for a continuous production system is always less
than the intermittent production systems.
The assembly line production of cars or scooters where the product
is coming off every few minutes is
considered as continuous production. On the other hand in
intermittent production systems the products
are in a state of partial completion for several weeks or days.
CONTINUOUS PRODUCTION
In continuous production system, the most common material handling
equipments are belt
conveyors, roller conveyors, chutes, rails etc. It is because in
continuous production systems one or a few
standard products are manufactured with pre-determined sequence of
operations with inflexible material
handling devices. In intermittent production system portable
material handling equipments are used and
various products are produced with greater flexibility in the
systems.
Continuous production system require a larger investment than
intermittent production system
because of fixed path material handling equipments, costly control
mechanism and special purpose
machines for various operations. Even the marketing techniques
also differ for continuous production
system and intermittent production system.
Intermittent production system the marketing efforts are directed
towards meeting the individual
orders for various products while in continuous productions the
marketing efforts are directed to wards
developing distribution channels for the large volume of out put.
The design of a production system starts
PRODUCTION AND OPERATIONS MANAGEMENT
with the firm and re-occurs intermittently when redesign is
necessary. The major decision in the design of
production system is the location of plant. Once the location, has
been decided the next decision relates to
layout of facilities. Another problem which concerns the decision
of production system is how products are
designed and manufactured.
*****
PRODUCTION AND OPERATIONS MANAGEMENT
1B. PRODUCT DESIGN
1B.1 PRODUCT DESIGN
From the production manager’s point of view, the key output of the
product design activity is the
product specification. These specifications provide the basis for
a host of decisions he must make,
including the purchase of materials, selection of equipment,
assignment of workers, and often even the
size and layout of the productive facility. Product
specifications, while commonly thought of a blueprint or
engineering drawings, may take a variety of other forms ranging
from highly precise quantitative
statements to rather fluid guidelines.
At the outset, it should be understand that this is an idealized
case, synthesized from a number of
approaches to product design. It should also be mentioned that
product design and development rarely
follow the discrete sequence suggested by the diagram. Typically,
there are frequently looped to the prior
steps, and certain activities are often performed concurrently.
Further, the extent to which these phase are
formalized and specified varies from industry to industry.
Generally, firms which require a good deal of
research and tooling or heavily dependent on innovation to
complete in the marketplace, adhere to a more
formalized program than those that do not.
1B. 2 NEED FOR DESIGN
In the discussion of product selection noted that the product
definition derived from the selection
process varies in completeness and is often intervened with the
product design decision. For a steel
producer, for example, the decision to add a new alloy would
constitute both the product decision and the
product design. On the other hand, it is probably more typical for
the product selection phase to yield just
the ‘bare bones’ of the final product. A refrigerator manufacturer
may decide to add a panatela to his line.
In both instances, however, this decision would not require a
detailed investigation of design factors ate
the selection phase since these companies presumably have mastered
the general skill required to produce
these products.
PRELIMINARY DESIGN
Whether or not it is a separate phase in the sequence of design
activities, preliminary design is
usually devoted to developing several alternative design that meet
the conceptual features of the selected
product. If the refrigerator manufacturer decides that he will
produce freezers, questions of style, storage
capacity, size of motor etc. will likely be encountered here.
During preliminary design it also is common to
specify the key product attributes of reliability,
maintainability, and service life.
Customer
Marketing
Product design
Sales
Process design
Purchasing
Operations
Suppliers
Time
Product
PRODUCTION AND OPERATIONS MANAGEMENT
FIGURE : 1.2 PRODUCT DEVELOPMENT STAGES
FIGURE: 1.3 PRODUCT – PROCESS RELATIONSHIP
During the final design phase, prototype are developed and ‘bugs’
are worked out of the design so that
the product is sound from an engineering standpoint. Thus ultimate
output of the final design includes the
complete specification of the product, its component, and, in the
case of manufactured item, the assembly
drawings, which provide the basis for its full scale production.
Again, the degree of design specificity
varies according to the type of product being considered. To
produce an automobile required precise
quantitative statements regarding the tensile strengths of steel
for the chassis, tolerances for the engine
components, the composition and thickness of brake lining, and so
on. In contrast, the final design of
treatment given a hospital patient would be unspecified since the exact
nature of medial care must of
necessity by determined during the “production’ stage.
At this point too, the effectiveness of alternative designs must
be balanced with cost consideration,
and –inevitably-compromises must be made.
This especially true in selecting the configuration and material
for manufactured items. The complexity of
this tradeoff can be seen when we consider that even such a
relatively unsophisticated product as a home
freezer has roughly 500 component, each of which could conceivable
be subjected to an alternative cost
analysis. Typical consideration that must enter the analysis are
component compatibility and simplification.
1B. 3 FACTORS TO BE CONSIDERED
Products
innovations
Process innovations
Need
undulated
Output rate
stimulated
Technology
stimulated
Cost
stimulated
FINAL DESIGN
Uncoordinated
Pperrofocremssaensce
maximization
Integrated
pCroosctess
maximization
PRODUCTION AND OPERATIONS MANAGEMENT
1. Materials
Should be cheap
Should be able to withstand design requirements
Minimum wastage during production
Easily workable and machineable
2. Manufacturing Facility
Product design should be commensurate with resources available
like equipments,
Labour and layout
3. Ergonomics
Should be easy to operate
Look up position for overhead
Should cause minimum fatigue to the workers and provide comfort to
them
4. Maintenance
Ease of maintenance and service
5. Standardization
6. Tolerance
7. Valve engineering
8. Inter-changeability
9. Simplification
Origin of the product idea and selection from among alternatives:
The product decision involves
two major activities prior to final product design. The first is
gathering ideas for alternatives product, and
the second is selecting from among the alternatives the product or
products that are to be produced. We
will consider these activities in order.
Before we consider where the product idea comes from, it is useful
to defined just we mean by the
term product. For our purposes, a product is the output from a
productive system offered for sale (in the
case of a business) or otherwise made available) in the case of a
governmental or philanthropic
organization), to some consumer. It should be noted that his is a
production definition as opposed to a
marketing definition. A marketing definition required that the
concept of a product include reference to
such intangible as satisfaction and symbolism in order to convey
the fact that, for promotional purpose, a
product that meet certain psychological demands for the consumer.
Production, on the other hand, need
only meet prescribed product specification; it is not required to
determine how the product is perceived in
the marketplace.
PRODUCTION AND OPERATIONS MANAGEMENT
Product ideas may originate from any number of sources, some of
which are not obvious.
Marketing textbooks and journals frequently cite unusual examples
of sources of new-product ideas to
emphasize that business must be keenly attuned to all possible
sources to ensure that the “golden idea” is
not missed or passed over without adequate consideration. A meat
packing company once got the idea of
developing an onion soup from a suggestion of one of its
executive’s wives. An appliance manufacturer
developed a foot warmer on the basis of a customer inquiry. A
maker of pottery designed a new vase after
seeing a similar one at a museum exhibit. A producer of plastic
products designed a film slide viewer after
reading a list of needed invention published by a bank. While such
examples constitute the exceptional
rather than the more common sources of ideas for new products,
they indicate that ideas are to be found
almost anywhere and that aggressive firms cannot afford to
discount an idea simply because it originates
from an unusual source.
Nevertheless, one authoritative report of source for new producxt
ideas indicates that the great
majority of ideas are generated within the firm rather than by
external sources.
Choosing among alternative products. The idea-gathering process,
of properly carried out, will
often lead to more ideas that can be translated into producible
product. Thus a screening procedure
designed to eliminate those ideas which clearly are infeasible
must be instituted. The screening procedure
seeks to determine if the product is generally compatible with the
company’s objectives and resources.
Regarding objectives, a product may be dropped if it is deficient
in profit potential or in prospective
growth or stability of sales, or if its is deleterious to the
company image. In terms of resource, a product
may be dropped if its exceeds the company’s capital availability
or is incompatible with the company’s
managerial and technical skills or physical facilities.
Of the several techniques available to aid in the screening
process, perhaps the most commonly
used are rating check sheets. In one such sheet, a number of
important consideration are enumerated – for
example, sales volume, patent protection, competition – and the
product is categorized from “very good”
in “very poor” for each of these considerations. The product
selected will show a rating pattern that meets
the company’s standard, from favourable to unfavorable ratings.
More refined rating devices apply
numerical weights to the important consideration and quantify the
‘goodness’ categories.
“Compatibility” refers to the fitting together and proper
articulation of parts during operation.
Problems of compatibility arise not only with parts that must,
mesh, such as freezer door latches, but also
with parts that must respond similarly to conditions of stress.
Drawbridge components must of course fit
together, but they must also have similar tensile strength so as
to accommodate high winds and similar
expansion coefficients as to adjust equally to variations in heat
and cold. “Simplification” refers to the
exclusion of those features that raise production costs. Problems
of simplification arise mainly in
manufacturing, where such seemingly innocuous requirements as
rounded edges or nonstandard hole
sizes may create productions bottlenecks and subsequent repair
problems when the items is in use. Where
the product is a service, simplification arise in regard to such
things as form design ) Employment
agencies) or customer routings (baggage pickup at an airline
terminal).
In addition to the above activities, which are more or less
universal, some organizations engage in
rather formalized product testing programs and redesign activities
during the final design stage. Product
testing may take the form of test marketing in the case of
consumer products or test firing of a weapons
system in the case of military. In both instances a good deal of
planning would necessarily precede the
tests. Product redesign generally takes place after the prototype
has been tested, and may be major or
minor in scope. If the design in major, the product may be
recycled through the preliminary design phase,
if the change is minor, the product will probably be carried
through to production. It should be noted,
PRODUCTION AND OPERATIONS MANAGEMENT
however, that there are ‘minor changes and minor changes’. In some
instances an apparently slight
modification to some component may greatly alter the integrity of
the entire product.
1B.4 PRODUCT LIFE CYCLE
Every product has it’s life as human beings to have. The life span
of a product is decided by many
factors, viz., the product itself, the substitutes competitor’s
strategy, company’s own position in the
market.
This concept is widely used in marketing to describe the sales
performance of a product over time.
The basic idea is that product go through five stages, viz.,
Introduction
Growth
Maturity
Saturation
Decline
Start-up Rigid growth Maturation Commodit
Stages y of
FIGURE : 1.4 PRODUCT LIFE CYCLE
Sales volume
PRODUCTION AND OPERATIONS MANAGEMENT
1B.5 CONSIDERATIONS DURING PLC
Introduction: The product is put on the market and awareness and
acceptance are minimal
Growth: The product begins to make rapid sales gains because of
the cumulative effects of
introductory promotion, distribution, and word-of-mouth influence.
Maturity: Sales growth continues but at a declining rate, because
of the diminishing number of
potential customer who remain unaware of the product or who have
taken no action.
Saturation: Sales reach and remain on a plateau (market by the
level of replacement demand)
Decline: sales begin to diminish absolutely, as the product is
gradually edged out by better
products or substitutes.
During the introduction stage, sales volume is yet to pick up due
to the factor that the product is
yet to be fully positioned by the company. In this stage the
supply outstrips the demand.
The growth stage sees an increasing sales volume, which outstrips
the supply. The company
derives the maximum benefit from this stage. Efforts are made to
stretch this phase, as this is highly
beneficial to the very existence of the organisation itself.
The difference between output and sales represents inventory,
which is built up became output
exceeds demand. During steady state operations at the product
maturity stage. Supply and demand for the
product have reached equilibrium, so that a replacement is available
for each item sold. When the product
begins to decline in sales, some excess inventory is again built
up, but then is eliminated as the system
cuts back production. During the final stage residual demand for
the product at last exceeds production.
During the final stage, residual demand for the product at last
exceeds production. Theoretically, the
amount of this demand is equal to the amount of the previous
inventory build-up, since management
would plan to stop production at that point in time when existing
inventory stocks would satisfy all
remaining demand. If we assume that the system is shut down at
this stage, the resources are sold off,
and the work force sent home – we would label this an example of
permanent termination.
1B.6 MODULAR DESIGN
Modular design and component standardization are two aspects of
product design with special
significant to operations management because they directly affect
the complexity and cost of the
conversion process.
Modular design is creation of products from some combination of
basic, preexisting subsystems. In
selecting a personal computer system, for example, you may have
your choice of three video monitors,
two keyboards, two computers, and three printers, all of which are
compatible. All possible combinations
make a total of 36 (3X 2 X 2 X 3) different computer systems from
which to choose. The modular design
concept gives consumes a range of product options and, at the same
time, offers considerable advantages
in manufacturing and product design. Stabilizing the designs of
the modules makes them easier to build.
Problems are easier to diagnose, and the modules are easier to
service. Production proficiency increases as
personnel make refinements to and gain experience with the
manufacturing processes for standardized
PRODUCTION AND OPERATIONS MANAGEMENT
sets of modules. Similarly, materials planning and inventory
control can be simplified, especially in
finished goods inventories. Now, rather than storing inventories
of all 36 finished computer systems, only
some of which will be needed, we instead store just the subsystems
or modules. Then, when a particular
computer system is demanded, the producer can focus on quickly
retrieving and assembling the
appropriate modules into the desired configurations and avoid the
high costs of idle finished goods
inventories.
1B.7 STANDARDIZATION
In reality, numerous variety of components are used in various
equipments. Some product will be
sold by different companies (like two wheelers, washing machines,
cycles, mixies, refrigerators, electric
motors, etc.). if we closely examine the components used in each
of the above products supplied by
different vendors, we find exact similarity in terms of shape and
size among the components like bearings,
nuts, bolts, springs, screws, axle, etc.
Bearings, tyres, etc, which are manufactured by third parties can
be used in any two brands of
products manufactured by two different companies. under this
situation, one should establish a common
standard so that the parts / components can be interchangeably
used in both products.
Standardization is the base of all mass production systems. When
one purchases a new V-Belt for a
scooter, he knows that it will fit into the V-groove. This is
mainly because V – belt are standardized.
Standards convey the sense that only certain specific sizes are
made and sold. One can provide numerous
components/parts in numerous sizes/shapes. But maintaining a
proper stock of all the items will be a
problem for the retailers. Moreover, it is not possible to take
advantage of mass production, because some
parts need to be manufactured in small batches. So,
standardization solves all these problems because
standardization is the process of establishing standards or units
of measure by which quality, quantity,
value, performance, etc. may be compared and measured.
1B. 8 STANDARDIZATION PROCEDURE
The steps involved in standardization are as follows:
With the help of market research, sales statistics, etc determine
what is to be sold in future.
Define a range of products
From range of products, select the minimum variety of components
matching the range for
manufacturing. Introduce new materials, components, etc., if
necessary.
An approach to standardization necessitates the classification of
materials and component parts.
1B. 9 CLASSIFICATION
Classification will be of great value in material and component
standardization. Classification aims
at systematically grouping together items, based on their common
features and subdividing them by their
special features. A system of classification and codification is
necessary for the design of new products
within the defined range. Such systems should readily.
PRODUCTION AND OPERATIONS MANAGEMENT
Identify and locate identical items
Facilitate the use of standard items in new designs
Identify substitutes in case of stock out.
Help to develop group technology which will be of more use in
designing layout and facilities.
Aid to improve parts location in the store.
1B. 10 ADVANTAGE OF STANDARDIZATION
The advantages gained from standardization procedure are as listed
below:
Fewer specifications, drawings and part lists have to he prepared
and issued
Better quality products
Lower unit costs
Increased margin of profit
Easy availability of spares
Minimum inventory cost.
Quantity discounts are possible because of purchase or raw
materials in large volume.
1B. 11 APPLICATION OF STANDARDIZATION
Standardization can be applied to a major extent in the following
fields:
Finished products, e.g. cars and televisions
Sub-assemblies and components, e.g. automobile gearboxes and
auto-electric bulbs
Materials, e.g. both direct materials (plan carbon and alloy
steels, welding electrode, core wire, etc.)
and indirect materials such as oils and greases.
Production equipments, e.g. that of machine tools, press, welding
equipments, etc.
1B .12 RELIABILITY AND MAINTAINABILITY
“Maintainability” refers to the ability of the user to keep the
product or system in operating
condition with a reasonable amount of effort. This ability to
maintain operation may entail the availability
of some required service from the manufacturer or authorized
repair facility, provision of a stock of
replacement parts available to the user, and written maintenance
and repair procedures. Good product
design for maintainability usually implies ease of product
disassembly and case of access to within the
product to facilitate routine service or replacement. Switches,
valves, motors with brushes, oil fills, etc.
should be located for ready across, with removable covers placed
at convenient locations. The alternative
to providing maintaining is to “overdesign”. This approach reduces
the need for repair but raises
production costs.
PRODUCTION AND OPERATIONS MANAGEMENT
Maintainability consideration, to the consumer’s charging, often
come after the fact. Although good
product planning dictates that maintainability be considered at
the design stage, it is frequently built into
subsequent models of the product in response to consumer
complaints. Clearly, this procedure may also
have an adverse effect on production because it may entail
retooling added inspections, and other changes
to remedy maintainability faults.
“Reliability” may be defined as the probability, or degree of
confidence that a product will perform a
specified number of times under prescribed conditions. For
example, the reliability of an electrical relay
may be defined as 0.9999. This may hold true only when it is
operated with an input voltage of 24 volts
DC, in an environmental temperature range of 0 to 80 degrees C,
with humidity less than 90 percent, if its
housing has never been opened, if it has been operated less than 1
million times, and if its is less than five
years old. Even if any one of these conditions is violated, then
the reliability concepts goes off. When parts
are interdependent, and especially when there is a large number of
them, achieving a high degree of
reliability for a product presents and real challenge.
1B. 13 REVERSE ENGINEERING
There is yet another way of designing a product. So far, we have
seen the procedure and details
about designing a product form the scratch. The product idea goes
through the stages and get converted
into a product, which finally reaches the customer.
In the reverse engineering process, it is done exactly in the
reverse way. The product is available
with the product designer. The job of the designer is to go
through the details of the existing product and
the system specification for that product. The job also includes
the preparation of detailed assembly,
sub-assembly, component drawings. This apart, the designer has to
develop the material requirement,
material specification, quantity of material required to produce
the item.
Initial
use
failure
s
Useful performance line Wear
out
failure
Failure rate
FIGURE: 1.5 PRODUCT FAILURE CURVE
PRODUCTION AND OPERATIONS MANAGEMENT
After identifying the details, detailed design drawings and
subsequently the engineering drawings
are developed. Using these, the normal production techniques are
adopted to product the product.
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