MB0044

Production & operations

Management

Course: Master of Business Administration (MBA)

1. What are the components of systems productivity? Explain how
CAD and CIM help in improving productivity.
Production management encompasses all activities which go into conversion of a
sate of inputs into outputs which are useful to meet human needs. It involves the
identification of the perquisite materials, knowledge of the processes, and installation of
equipments necessary to convert or transform the materials to products. System productivity
is generally expressed as the ratio of outputs to inputs. Productivity can be calculated for a
single operation, a functional unit, a department division or a plant. It is a measure of the
efficiency of the system and looks at the economies achieved during the processes. Every
process will have number of contributors-people machines, facilitating goods, ancillary
equipments, technology, etc. Which help in achieving maximum productivity - each element
attempting to enhance the contribution of other elements? Enhancement of productivity is
achieved by either reducing the inputs for the same output or increasing the output by using
the same input.
Opportunities exist at all stages of the workflow.
The entire system of introduce measures for increasing productivity. However in actual
manufacturing situations, the inefficiencies will have cascading effect in hampering
productivity.
Communication, effective review processes and innovative methods will ensure optimization
of resources. Capital productivity: Capital deployed in plant, machinery, buildings and the
distribution system as well as working capital are components of the oust of manufacture
and need to be productive. Demand fluctuations, uncertainties of production owing to
breakdowns and inventories being crated drag the productivity down. Therefore, strategies
are needed to maximize the utilization of the funds allotted towards capital. Adapting to new
technologies, outsourcing and balancing of the workstations to reduce the proportion of idle
times on equipments are the focus of this section.

Computers in design and manufacturing applications make it possible to remove much of the
tedium and manual labor involved. For example, the many design specifications, blueprints,
material lists, and other documents needed to build complex machines can require
thousands of highly technical and accurate drawings and charts. If the engineers decide
structural components need to be changed, all of these plans and drawings must be
changed. Prior to CAD/CAM, human designers and draftspersons had to change them
manually, a time consuming and error-prone process. When a CAD system is used, the
computer can automatically evaluate and change all corresponding documents instantly. In
addition, by using interactive graphics workstations, designers, engineers, and architects can
create models or drawings, increase or decrease sizes, rotate or change them at will, and
see results instantly on screen.

CAD is particularly valuable in space programs, where many unknown design variables are
involved. Previously, engineers depended upon trial-and-error testing and modification, a
time consuming and possibly life-threatening process. However, when aided by computer
simulation and testing, a great deal of time, money, and possibly lives can be saved.
Besides its use in the military, CAD is also used in civil aeronautics, automotive, and data
processing industries.

CAM, commonly utilized in conjunction with CAD, uses computers to communicate

instructions to automated machinery. CAM techniques are especially suited for
manufacturing plants, where tasks are repetitive, tedious, or dangerous for human workers.
Computer integrated manufacturing (CIM), a term popularized by Joseph Harrington in 1975,
is also known as Autofacturing. CIM is a programmablemanufacturing method designed to
link CAD, CAM, industrial robotics, and machine manufacturing using unattended processing
workstations. CIM offers uninterrupted operation from raw materials to finished product, with
the added
benefits of quality assurance and automated assembly.
2. What do you understand by ‘industry best practice’? Briefly
explain different types of Benchmarking.
Industry best practice:
Each industry would have developed over years or decades. Materials would
have changed, processes would have changed. As all products or services are
meant to serve needs of the customers, they undergo continuous changes – both
in shapes and features. Because of research that is conducted, materials and
methods go on improve necessarily. The companies that were at the force
innovate to stay in business as new entrants would be adopting the latest
techniques that the pioneers had taken decades to establish. So the practices
adopted by various firms in any industry would end up adopting almost similar
methods of getting an output required. Such practices would get refined to great
extent giving rise what we call industry best practices. These tend to get
stabilized or changed owning to the development of new equipments which are
designed and manufacturers of those with an eye on growing markets which
demand higher quality and reduced prices. Competition benefits those who can
use all these to their advantage. Industry best practices open up the field for
benchmarking by companies which need to improve their performance.

Bench Marking:
It is a method of measuring a company’s processes, methods, procedures and in
a way all functions in great detail. Benchmarking is used to understand how
these got into the system and what circumstances brought them about. It is a
learning process with a few to find out whether some of the reasons have
changed and bring in new processes for improvement.. The metrics that could be
used are – number of pieces per hour, cost per unit, number of breakdowns per
week, customer alienation during a week, return on investment, number of
returns from customers in a month, inventory turnover, and many others. As can
be seen the figures as found above determine the efficiency of the organization.
To keep focused, many organizations, especially the large ones, select a few
processes for purposes of benchmarking. This helps in ensuring constant and
deep attention to those aspects which are to be dealt with. The following are the
types of benchmarking firms consider.

Types of Benchmarking:
• Process benchmarking - the initiating firm focuses its observation and
investigation of business processes with a goal of identifying and observing the
best practices from one or more benchmark firms. Activity analysis will be
required where the objective is to benchmark cost and efficiency; increasingly
applied to back-office processes where outsourcing may be a consideration.
• Financial benchmarking - performing a financial analysis and comparing the
results in an effort to assess your overall competitiveness and productivity.
• Benchmarking from an investor perspective- extending the benchmarking
universe to also compare to peer companies that can be considered alternative
investment opportunities from the perspective of an investor.
• Performance benchmarking - allows the initiator firm to assess their
competitive position by comparing products and services with those of target
firms.
• Product benchmarking - the process of designing new products or upgrades to
current ones. This process can sometimes involve reverse engineering which is
taking apart competitors products to find strengths and weaknesses.
• Strategic benchmarking - involves observing how others compete. This type is
usually not industry specific, meaning it is best to look at other industries.
• Functional benchmarking - a company will focus its benchmarking on a single
function to improve the operation of that particular function. Complex functions
such as Human Resources, Finance and Accounting and Information and
Communication Technology are unlikely to be directly comparable in cost and
efficiency terms and may need to be disaggregated into processes to make valid
comparison.
• Best-in-class benchmarking - involves studying the leading competitor or the
company that best carries out a specific function.
• Operational benchmarking - embraces everything from staffing and
productivity to office flow and analysis of procedures performed.

3. List out the various automated systems for transfer of materials

in the production plant. What do you understand by Line
Balancing? Explain with an example.
About the automated flow lines we can say it is a machine which is linked by a
transfer system which moves the parts by using handling machines which are
also automated, we have an automated flow line.
Human intervention ma is needed to verify that the operations ate taking place
according to standards. When these can be achieved with the help of automation
and the processes are conducted with self regulation, we will have automated
flow lines established.
In fixed automation or hard automation, where one component is manufactured
using services operations and machines it is possible to achieve this condition.
We assume that product life cycles are sufficiently stable to interest heavily on
the automate flow lines to achieve reduces cast per unit. Product layouts ate
designed so that the assembly tasks are performed in the sequence they are
designed at each station continuously. The finished item came out at the end of
the line.
In automated assembly lines the moving pallets move the materials from station
to station and moving arms pick up parts, place them at specified place and
system them by perusing, riveting, & crewing or even welding. Sensors will keep
track of their activities and move the assembles to the next stage. The machines
are arranged in a sequence to perform operations according to the technical
requirements.
The tools are loaded, movements are effected, speeds controlled automatically
without the need for worker’s involvement. The flexibility leads to better
utilization of the equipments. It reduces the numbers of systems and rids in
reduction of investment as well as a space needed to install them. One of the
major cancers of modern manufacturing systems is to be able to respond to
market demands which have uncertainties.
Prototyping is a process by which a new product is developed in small number so
as to determine the suitability of the materials, study the various methods of
manufactured, type of machinery required and develop techniques to over come
problems that my be encountered when full scale manufacture is undertaken.
Prototypes do meet the specification of the component that enters a product
and performance can be measured on these. It helps in con be reforming the
design and any shortcomings can be rectified at low cost.
Flexibility has three dimensions in the manufacturing field. They are variety,
volume and time. There demands will have to be satisfied. In that sense they
become constraints which restrict the maximization of productivity. Every
business will have to meet the market demands of its various products in variety
volumes of different time. Flexibility is also needed to be able to develop new
products or make improvements in the products fast enough to cater to shifting
marker needs. Manufacturing systems have flexibility built into them to enable
organization meet global demand. You have understood how the latest trends in
manufacturing when implemented help firms to stay a head in business.

4. Explain the different types of Quality Control Tools with

examples? How do Crosby’s absolutes of quality differ from
Deming’s principles?
Quality Control (QC) is a system of routine technical activities, to measure and
control the quality of the inventory as it is being developed. The QC system is
designed to:
Provide routine and consistent checks to ensure data integrity,
correctness, and completeness;
Identify and address errors and omissions;
Document and archive inventory material and record all QC activities.
The following seven are considered basic tools for achieving quality.
I. Flow Chart
II. Check sheet
III. Histogram
IV. Pareto Analysis
V. Scatter Diagram
VI. Control Chart
VII. Cause and Effect Diagram
Flow Chart
It is a visual representation of process showing the various steps. It helps in
locating the points at which a problem exists or an improvement is possible.
Detailed data can be collected, analyzed and methods for correction can be
developed. A sample is shown below lists out the various steps or activities in a
particular job. It classifies them as a procedure or a decision. Each decision point
generates alternatives. Criteria and Consequences that go with decision are
amenable to evaluation for purposes of assessing quality. The flow chart helps in
pin-pointing the exact at which errors have crept in. A simple chart is shown
below.

Check Sheet
These are used to record the number of defects, types of defects, locations at
which they are occurring, times at which they are occurring, workmen by whom
they are occurring. It keeps a record of the frequencies of occurrence with
reference to possible defect causing parameter. It helps to implement a
corrective procedure at the point where the frequencies are more, so that the
benefit of correct will be maximum. A sample sheet is shown below.

Histogram
Histograms are graphical representations of distribution of data. They are
generally used to record huge volumes of data about a process. They reveal
whether the pattern of distribution – whether there is a single peak, or many
peak and also the extent of variation around the peak value. This helps in
identifying whether the problem is serious. When used in conjunction with
comparable parameters, the visual patterns help us to identify the problem
which should be attended to.
Pareto Analysis
This is a tool for classifying problem areas according to the degree of importance
and attending to the most important. Pareto principle, also called 80-20 rule,
states that 80 percent of the problems that we encounter arise out of 20 percent
of items. If we find that, in a day, we have 184 assemblies have given problems
and there are 11 possible causes, it is observed that 80 per cent of them i.e. 147
of them have been caused by just 2 or 3 of them. It will be easy to focus on these
2 or three and reduce the number of defects to a great extent. When the cause
of these defects have been attended, we will observe that some other defect

Scatter Diagram
These are used when we have two variables and want to know the degree of
relationship between them. We can determine if there is cause and effect
relationship between and its extent over a range of values. Sometimes, we can
observe that there is no relationship, in which we can change one parameter
being sure that it has no effect on the other parameter.

Control Charts
These are used to verify whether a process is under control. Variables when they
remain within a range will render the product maintain the specifications. This is
the quality of conformance. The range of permitted deviations is determined by
design parameters. Samples are taken and the mean and range of the variable of
each sample (subgroup) is recorded. The mean of the means of the samples gives
the control lines. Assuming normal distribution, we expect 99.97 per cent of all
values to lie within the UCL when we take 3 standard deviations – Upper Control
Limit – and LCL – Lower Control Limit. The graphical representation of data helps
in changing settings to bring back the process closer to the target.

Cause and Effect Diagram

This is a diagram in which all possible causes are classified on quality
characteristics which lead to a defect. These are arranged in such a way that
different branches — the causes are – leading the stem in the direction of the
discovery of the problem. When each of them is investigated thoroughly we will
be able to pinpoint some factors which cause the problem. We will also observe
that a few of them will have cumulative effect or even a cascading effect.

Deming Wheel
Deming’s approach is summarized in his 14 points.
Constancy of purpose for continuous improvement
Adopt the TQM philosophy for economic purposes
Do not depend on inspection to deliver quality
Do not award any business based on price alone
Improve the system of production and service constantly
Conduct meaningful training on the job
Adopt modern methods of supervision and leadership
Remove fear from the minds of everyone connected with the organisation
Remove barriers between departments and people
Do not exhort, repeat slogans and put up posters.
Do not set up numerical quotas and work standards
Give pride of workmanship to the workmen
Education and training to be given vigorously
State and exhibit top management’s commitment for quality and productivity

Using the above principles, Deming gave a four step approach to ensure a
purposeful journey of TQM. The slope is shown to indicate that if efforts are let
up the program will roll back
Plan – means that a problem is identified, processes are determined and relevant
theories are checked out.
Do – means that the plan is implemented on a trial basis. All inputs are correctly
measured and recorded.
Check/Study/Analyze – means that the trials taken according to the plan are in
accordance with the expected results.
Act – When all the above steps are satisfactory regular production is started so
that quality outcomes are assured
Crosby’s Absolutes of Quality
Like Deming, he also lays emphasis on top management commitment and
responsibility for designing the system so that defects are not inevitable. He
urged that there be no restriction on spending for achieving quality. In the long
run, maintaining quality is more economical rather than compromising on its
achievement.
His absolutes can be listed as under.
Quality is conformance to requirements – not ‘goodness’.
Prevention, not appraisal, is the path to quality.
Quality is measured as the price paid for non-conformance and as indexes.
Quality originates in all factions – not quality department. There are no quality
problems people, design, process create problems.
Crosby also has given 14 points similar to those of Deming. His approach
emphasizes on measurement of quality, increasing awareness, corrective action,
error cause removal and continuously reinforcing the system, so that advantages
derived are not lost over time. He desires that the quality management regimen
should improve the overall health of the organization and prescribed a vaccine.
The ingredients are:
Integrity – honesty and commitment to produce everything right first time, every
time.
Communication – Flow of information between departments, suppliers,
customers – helps in identifying opportunities.
Systems and operations – These should bring in a quality environment – so that
nobody is comfortable with anything less than the best.
5. Define project cycle, project management, and scope of project. List the various
project management knowledge areas? What are the reasons for failure of a project?
Project Cycle – A project cycle basically consists of the various activities of
operations, resources and the limitations imposed on them.
Definition of “Project Management”:
It is the practice of controlling the use of resources, such as cost, time,
manpower, hardware and software involved in a project, that start with a
problem statement and end with delivery of a complete product. Project
management involves understanding its scope and various processes in the
project cycle.
Project Management Definition
As per PMBOK (Project Management — Body of Knowledge, defined by
PMI – Project Management Institute) :
“Project management is the application of knowledge, skills, tools and
techniques to project activities to meet project requirements.
As per DIN 69901 (German Organization for Standardization):
“Project management is the complete set of tasks, techniques, tools applied
during project execution”
Scope – It refers to the various parameters that affect the project in its planning,
formulation and executions,
Like:-
The range of one's perceptions, thoughts, or actions.
Breadth or opportunity to function. See Synonyms at room.
The area covered by a given activity or subject. See Synonyms at range.
The length or sweep of a mooring cable.
Informal A viewing instrument such as a periscope, microscope, or telescope.
Before knowing the reasons of failure we have to know about project.
Project is a set of activities which are networked in order and aimed towards
achieving goal of a project.
Now, the reasons are project failure:
Incidence of Project failure
Projects being initiated of random at all levels
Project objective not in line with business objective
Project management not observed
Project manager with no prior experience in the related project
Non- dedicated team
Lack of complete support from clients
Factors contributing to project success not emphasized:
Project objective in alignment with business objective
Working within the framework of project management methodology
Effective scoping planning, estimation, execution, controls and reviews, project
bottlenecks
Communication and managing expectations effectively with clients, team merits
and stake holders
Prior expectance of PM in a similar project
Overview of information and communication Technologies (ICT) project:
Involve information and communication technologies such as the word wide
web, e-mail, fiber-optics satellites.
ii) Enable societies to produce, access, adapt and apply information in greater
amount, more rapidly and at reduce casts.
iii) Offer enormous opportunities for enhancing business and economic viability.
iv) Common problems encountered during projects.
v) No prioritization of project activity from an organizational position.
vi) One or more of the stages in the project mishandled.
vii) Less qualified non-dedicated manpower.
viii) Absence of smooth flow of communication between the involved parties.
These basic reasons lead a project to failures. In the project failures business
management and project management is directly involved. From the
management point of view it is basic things to care above topics to success of a
project. Project is the core business of a company.

6. Explain the various phases in project management life cycle.

Explain the necessity and objectives of SCM.
This is the initial phase of any project. In this phase information is collected from
the customer pertaining to the project and the requirements are analyzed. The
entire project has to be planned and it should be done in a strategic manner. The
project manager conducts the analysis of the problem and submits a detailed
report to the top project justification, details on what the problem is a method of
solving the problem, list of the objectives to be achieved, project budget and the
success rate of completing the project.
The report must also contain information and the project feasibility, and the risks
involved in the project. Project management life cycle is the integrated part of
management. It is attach with project responsibility or failure of a project.
The important tasks of this phase are as follows:
o Specification Requirements Analysis (SRA): It has to be conducted to
determine the essential requirements of a project in order to achieve
the target.
o Feasibility study: To analyze whether the project is technically,
economically and practically feasible to be undertaken.
o Trade off analysis: To understand and examine the various
alternatives which could be considered.
o Estimation: To estimate the project cost, effort requires for the
project and functionality of various process in the project.
o System design: Choose a general design that can fusil the
requirements.
o Project evolution: Evaluate the project in terms of expected profit,
cost and risks involved marketing phase. A project proposal is
prepared by a group of people including the project manager. This
proposal has to contain the strategies adopted to market the product
to the customers.
o Design phase: This phase involves the study of inputs and outputs of
the various project stages.
o Execution phase: In this phase the project manager and the teams
members work on the project objectives as per the plan. At every
stage during the execution reports are prepared.
o Control: Inspecting, Testing and Delivery phase during this phase. The
project team works under the guidance of the project manager. The
project manager has to ensure that the team working under his,
implements the project designs accurately, the project manager has
to ensure ways of managing the customer, perform quality control
work.
Closure and post completion analysis phase upon satisfactory completion and
delivery of the intended product or service the staff performance has to be
evaluated. Document the lessons from the project. Prepare the reports on
project feedback analysis followed by the project execution report.
The phase which involve in the above are:
The preparation stage involves the preparation and approval of project outline,
project plan and project budget.
The next stage involves selecting and briefing the project team about the
proposals followed by discussions on the roles and responsibility of the project
member and the organization.
The project management life cycle:
A Life cycle of a project consists of the following:
Understanding the scope of the project
Establishing objectives of the project
Formulating and planning various activities
Project execution and Monitor and control the project resources.
Risk Management:
Risk is defined in ISO 31000 as the effect of uncertainty on objectives (whether
positive or negative). Risk management can therefore be considered the
identification, assessment, and prioritization of risks followed by coordinated and
economical application of resources to minimize, monitor, and control the
probability and/or impact of unfortunate events or to maximize the realization of
opportunities. Risks can come from uncertainty in financial markets, project
failures, legal liabilities, credit risk, accidents, natural causes and disasters as well
as deliberate attacks from an adversary. Several risk management standards
have been developed including the Project Management Institute, the National
Institute of Science and Technology, actuarial societies, and ISO standards.
Methods, definitions and goals vary widely according to whether the risk
management method is in the context of project management, security,
engineering, industrial processes, financial portfolios, actuarial assessments, or
public health and safety.
The strategies to manage risk include transferring the risk to another party,
avoiding the risk, reducing the negative effect of the risk, and accepting some or
all of the consequences of a particular risk.
Certain aspects of many of the risk management standards have come under
criticism for having no measurable improvement on risk even though the
confidence in estimates and decisions increase.
Necessity and objectives of SCM:
SCM is the abbreviation of supply chain Management. It is considered by many
express worldwide as the ultimate solution towards efficient enterprise
management.
SCM is required by and enterprise as a tow to enhance management
effectiveness with a following organizational objective:
Reduction of inventory:-Enactment in functional effectiveness of existing systems
like ERP, Accounting. Software and Documentation like financial reports
statements ISO 9000 Documents etc.
Enhancement of participation level and empowerment level:
Effective integration of multiple systems like ERP, communication systems,
documentation system and secure, Design R&D systems etc.
Better utilization of resources- men, material, equipment and money.
Optimization of money flow cycle within the organization as well as to and from
external agencies.
Enhancement of value of products, operations and services
and consequently, enhancements of profitability.
Enhancement of satisfaction level of customer and clients,
supporting institutions, statutory control agencies,
supporting institutions, statutory control agencies,
suppliers and vendors, employees and executives .
Enhancement of flexibility in the organization to help in
easy implementation of schemes involving modernization,
expansion and divestment, merges and acquisitions
Enhancement of coverage and accuracy of management
information systems. With the objectives of SCM its
implementation are required. Implementation is in the
form of various functional blocks of an organization
interpenetrated through which a smooth flow of the
product development is possible.
A relatively new SCM option involves web based software with a browser
interface. Several electronic marketplaces for buying and selling goods and
materials.
Steps involved in the implementation of SCM:
There is many steps which involved in SCM implementation are- Business
Process, sales and marketing. Logistics, costing, demand planning, trade- off
analysis, environmental requirement, process stability, integrated supply,
supplier management, product design, suppliers, customers, material
specifications, etc.
Some important aspect of SCM:
The level of competition existing in the market and the impact of competitive
forces on the product development. Designing and working on a strategic logic
for better growth through value invention. Working out new value curve in the
product development along with necessary break point. Using it to analyze
markets and the economies in product design. Time, customer, quality of
product and the concept of survival of fittest.

Steps of SCM principals:

Group customer by need: Effective SCM groups, customer by tie tinct service
meets those particular segment.
Customize the logistics networks: In designing their logistics network, companies
need to focus on the service requirement and profit potential of the customer
segments identified. Listen to signals of market demand and plan accordingly sales
and operations planners must monitor the entire supply chain to detect
early warning signals of changing customer demand and needs.
Differentiate the product closer to the customer: companies today no longer can
afford to stock pile inventory to compensate for possible forecasting errors,
instead, they need to postpone product differentiation in the manufacturing.
Process closer to actual customer demand.
Strategically manage the source of supply: by working closely with their key
suppliers to reduce the overall casts of owning materials and services; SCM
maximizes profit margins both for themselves, and their supplies.
Develop a supply chain wide technology strategy: as one of the cornerstones of
successful SCM information technology must be able to support multiple levels
of decision making.
Adopt channel spanning performance measures- Excellent supply performance
measurement systems do more than just monitor internal functions. They apply
performance criteria that embrace bathe service and financial metrics, including
as such as each accounts true profitability.