Production Management

PRODUCTION MANAGEMENT
Edition-2006
1
QUANTATITIVE MODELS IN PRODUCTION MANAGEMENT
INDEX
Sr. No. Topics Page No.

1 Introduction 3 to 4
2 Production Planning & Control 5 to 9
3 Factory Location 10 to 21
4 Types of Production 22 to 32
5 Factory Layout 33 to 48
6 Productivity 49 to 52
7 Materials Management 53 to 54
8 Inventory Control 55 to 68
9 Material Handling 69 to 81
10 Job Sequencing 82 to 86
11 Method Study 87 to 91
12 Quality Control & Inspection 92 to 101
13 Safety 102 to 108
2
INTRODUCTION
3
INTRODUCTION
The management of transformation process of input into output is production

management.
Functions of Production Management

• Design and development of production process.
• Production planning and control.
• Implementation of the plan and related activities to produce the desired
output.
• Administration and co-ordination of activities of various components and
department’s responsibilities for producing the necessary goods and
services.
• Control labour cost and maintain quality.
• Manufacture equipment on time on a consistent basis.
4
PRODUCTION PLANNING
& CONTROL
5
PRODUCTION PLANNING & CONTROL
Production planning implies formulation, co-ordination and determination of activities

for a manufacturing system necessary for the accomplishment of desired objectives,
whereas production control is the process of maintaining a balance between various
activities evolved during production planning providing most effective and efficient
utilization of resources.
Objectives of production planning and control

• Determining the nature and magnitude of various input factors to manufacture the
desired output.
• To co-ordinate labour, machines and equipment in the most effective and economic
manner.
• Establishing targets and checking these against performance.
• Ensuring smooth flow of material by eliminating bottlenecks, if any, in production.
• Utilisation of under-employed resources.
• To manufacture the desired output of right quality and quantity at right time.
6
Factors determining the nature of production planning and control operations

in a manufacturing system
• The interdependence of various activities/operations involved in the

transformation process. Mutual dependence of process makes a
system more complex.
• The number of operations, parts and sub-assemblies required to get
the final product.
• The nature and magnitude of variation in the capacity of different
kinds of machines and equipment.
• The size of orders and the production run, e.g., a large number of
orders in smaller lots make the system more complex.
• The nature of the manufacturing system.
7
Importance of production planning and control
• Reduces cost of production by minimizing wastage of material and

economic utilization of resources.
• Leads to lower investment by means of efficient and balanced
utilization of resources.
• Promotes employee morale by avoiding all sorts of bottlenecks.
• Enhances customer satisfaction and confidence.
8
Scope of production planning and control

• Liaison with purchase department for efficient and effective procurement
of inputs.
• Liaison with marketing department to determine the nature and
magnitude of the output.
• To plan the layout of the operations indicating in detail the places/points in
the system where various production activities/operations are to be
performed.
• Establishment of time schedules for various stages/levels of production by
setting up necessary standards.
• Ensuring continuous inspection over the quality of goods manufactured.
• Instituting necessary controls to complete the work according to schedule.
9
FACTORY LOCATION
10
FACTORY LOCATION
Introduction
The prime criterion for a preferred location is the least total cost, the minimum
delivered-to-customer cost of the product or service. The location of factory may well
have a substantial effect upon the operation of the unit and on the factories within a
geographical region. No set of rules can be laid down whereby the solution to the
problem of location can be solved or programmed. There are, however, a number of
factors, such as raw material availability, labour costs, and so on, which should be
considered and these factors will be discussed in detail later.
A plant location problem is not encountered everyday, but the factors that can create
a problem are constantly developing. Technological improvements make existing
products non-competitive. New products replace established lines. A requirement for
different materials or a change in the source of materials alters supply costs, power,
water or other resource needs are subject to production levels which in turn are a
function of demand. Any or all of these factors can force a firm to question whether
its plant should be altered at the present location or moved to another locality.
11
FACTORY LOCATION
It is worth differentiating between the problem of location and of site. The location is
the general area and the site is the place chosen within the location. The decision on
siting thus probably proceeds in two stages: in the first stage the general area is
chosen and then a detailed survey of that area is carried out to find possible sites.
Thus, a study to identify the best location typically starts with an evaluation of
regional factors and progresses to particular communities within the favoured
region. Information of a general nature suffices to rate regions. They are compared
with respect to market proximity, raw material, tax rates, and other characteristics
of special interest to the organisation seeking the site. The factors affecting the choice
of a community and a particular site within the community involve specific details.
The models given here for factory location can be used for both the selection of a
location and also for the selection of a site in a particular location. The selection of a
site decision is probably made by taking into account the more detailed factors than
considered for selection of a location (……. is the view pleasant? ……. is there a good
restaurant nearby?…….).
12
FACTORY LOCATION
Factors affecting location

The following are some of the factors which will influence the choice of location –
either for a new construction site or for an available building shed.
1. Integration with other group companies
If the new factory is one of a number of factories owned or operated by a single
group of companies, the new factory should be situated such that its work can be
integrated with the work of associated factories or warehouses. This will require that
the group should be considered as an entity, not as a number of independent units.
(There is a high possibility of using the linear programming model for such factory
locations.)
2. Availability of transport
In some cases, where products or purchased parts are heavy and bulky, it is
important that goods transport facilities shall be readily available. Goods intended
largely for export indicate a location near a seaport or a large airfield.
Years ago industrial growth began in seaports because of reliance on inexpensive
ocean traffic. As the railroad network grew, the relationship of raw materials to
manufacturing to markets became more flexible. Air and trucking transportation
13 encouraged further versatility and industrial centers spread throughout the land. The
FACTORY LOCATION
3. Availability of materials
While it is true that good transport facilities will enable goods to be obtained and
delivered readily, a location near main suppliers will help to reduce cost and permit
staff to go readily to see suppliers to discuss technical or delivery problems. Any
buyer who has tried to improve deliveries from an inaccessible supplier will bear
witness to the considerable difficulties involved.
4. Availability of services
There are six main services that need to be considered, namely –
a) Gas d) Drainage
b) Electricity e) Disposal of waste
c) Water f) Telephone
Certain industries use considerable quantities of water for food preparation,
laundries, metal plating, etc. Others use a great deal of electricity for chemical
processing and so on. An assessment must be made of the requirements of the factory
for as far ahead as possible. Underestimating the needs of any of the services can
prove to be extremely costly and inconvenient.
14
FACTORY LOCATION
5. Suitability of land and climate

Here, not merely must the genealogy of the area be considered, that is, whether the subsoil
can support the loads likely to be placed on it, but also whether the climatic conditions
(humidity, temperature and atmosphere) will adversely affect the manufacture. Modern
building techniques are such that almost all disadvantages of terrain and climate can be
overcome, but the cost of so doing may be high and a different locality could avoid an
inflated first cost. For example, cultivating mushrooms in Mumbai rather than in
Kashmir.
6. Site cost
As a first cost, the site cost is important, although it is important not to let immediate gain
jeopardize long term plans.
7. Availability of amenities
A location which provides good amenities outside the factory – shore, theatres, cinemas,
restaurants – is often much more attractive to staff than one which is more remote. This is
particularly so where a large proportion of married women are employed who find it
convenient to shop for the family during the lunch-break and on the way home. One
important amenity in this connection is good personnel transport buses and trains; and
some companies find this so vital that they provide special company buses. Other
amenities such as good canteen, co-operative stores, child-care are also important.
15
FACTORY LOCATION
8. Availability of labour
Labour may be more readily available in some cases than in others. The Department
of Trade & Industry can provide information on this point. Certain areas, however,
have traditional skills. For example, woollen products in Punjab and coir products in
Kerala. It is very rate today that a location can be found which has appropriate
skilled labour both readily available. (Big cities, however, could be excluded from this
generalization.) The choice has to be made between a location where skilled men
exist but are not readily available and where there is a supply of unskilled labour. It
must be remembered that new skills can be taught, processes simplified and made
less exacting and key personnel moved.
The importance of labour depends, of course, on the particular firm, its policies and
its products. If the firm is science-oriented, it should anticipate going to an area
where engineers and scientists congregate because it is unlikely that many can be
lured to remote sections.
16
FACTORY LOCATION
9. Labour stability
Thorough precautions to assure low production costs are of no avail unless the
proposed new polant can operate with continuity and tranquil labour-management
relations. More than one company has been forced out of business because of
unreasonable or prohibitive labour demands. Wage increases and jurisdictional
disputes continue to be important points of conflict.
The question of labour stability must be approached from a positive standpoint.
There are certain strong points of community attitude that should influence its
selection. Perhaps, the most crucial question that can be asked about a community is
“What is its past history?”
10. Availability of housing
Where staff has to be recruited other than locally, housing will need to be available.
It is general experience that the offer of good housing can be of greater assistance in
attracting staff than almost any other factor.
17
FACTORY LOCATION
11. Local building and planning regulations

It is important to check at an early stage that the proposed location does not infringe
any local regulations. A discussion with the surveyor’s department of the local
authority is most desirable. Compliance with pollution standards is a recent location
constraint for heavy users of air and motor resources. Reliable fuel and raw material
supplies may become critical factors in the future.
12. Room for expansion
It is most unwise to build a factory to the limit of any site. Adequate room for genuine
expansion should be allowed. It is dangerous to assume that at a later date the car
park can be built on or that the canteen can be used as a productive area.
13. Safety requirements
Some factories may present, or may be believed to present, potential dangers to the
surrounding neighbourhood; for example, nuclear power stations and explosive
factories are often considered dangerous. Location of such plants in remote areas
may be desirable or locating at a safe distance from such factories would be
advisable.
18
FACTORY LOCATION
14. Adequacy of circulation

The movement of goods, visitors and staff to and from a factory presents a problem
not only of easy access but also easy control. There is also a need for emergency
access – fire fighting equipment or ambulances – which if impeded could endanger
life and seriously affect the company.
15. Political situation

The political situation in potential locations should be considered.
16. Special grants

Government and local authorities often offer special grants, low interest loans, low
rentals and other inducements in the hope of attracting industry to particular
locations. As these are often areas with large reservoirs of labour, these offers can be
most attractive. Every State in India has got different bodies that advise on product
selection and plant location. In Maharashtra, these are: SICOM, MIDC, MSSIDC
and SISI.
19

FACTORY LOCATION
17. Taxation
Few industries have relocated their plants solely because of unfavourable State taxes.
It is rather the cumulative effect of this factor and other high cost factors that may
prompt a manufacturer to consider relocation.
18. Availability of car space

There is no doubt that the use of cars as a means of transport to and from work will
increase, whatever public transport facilities are provided. If open space is not
available for car parking, special car-park structures may be necessary.
It is difficult to satisfy all the above factors for plant location. However, a
compromise between what is wanted and what can obtained may be the only solution.

20
FACTORY LOCATION
1. Integration with other group companies

2. Availability of transport
3. Availability of materials.
4. Availability of services.
5. Suitability of land and climate.
6. Site cost.
7. Availability of amenities.
8. Availability of labour.
9. Labour stability.
10. Availability of housing.
11. Local building and planning regulations.
12. Room for expansion.
13. Safety requirements.
14. Adequacy of circulation.
15. Political situation.
16. Special grants.
17. Taxation.
18. Availability of car space.
21
TYPES OF PRODUCTION
22
TYPES OF PRODUCTION
It is usually accepted that there are three main types of production, namely: job,
batch and flow production. It is important to realize at the outset that these types of
production are not necessarily associated with any particular volume of production
and that depending upon the circumstances the same task can be undertaken by any
of the above methods.
These three different types of production all exhibit distinct characteristics and
require different conditions for their effective inception and working. The
circumstances in any factory at any time must be carefully considered before a
decision is taken as to the method of production to be used. Frequently, the type of
production employed depends on the development of the company concerned. Many
factories start on a job production basis, proceed as volume increases to batch
production methods, in part at least, and finally manage to flow-produce all or some
of the products concerned.
23
TYPES OF PRODUCTION
JOB PRODUCTION: Job or “make complete” production is the manufacture of a

single complete unit by an operator or group of operators, and a number of identical
units can proceed in parallel under job production conditions. Bridge-building, dam-
construction and ship-building are common examples of the job production
industries. Job production is characterized by the fact that the whole project is
considered as one operation and work is completed on each product before passing
on to the next. Labour tends to be versatile and highly skilled, capital investment is
high, while control is relatively simple, being largely exerted by the operator or
group. In the case of production of a single specialized equipment, it is inevitable that
job production should be used, but in the case of quantity manufacture it is
conceivable though unlikely that job production could also be used.

BATCH PRODUCTION: As quantity increases, work may be carried on under batch
production methods. Such methods require that the work on any product is divided
into parts or operations, and that each operation is completed throughout the whole
batch before the next operation is undertaken.
24
TYPES OF PRODUCTION
By its use some degree of specialization of labour is possible, and capital investment is
kept low, although the organisation and planning required to ensure freedom from
idle and waste time is considerable. It is in batch production that the production
control department can produce most benefits, and these can often be spectacular,
but it is also in batch production that it will be found most difficult to organize the
effective working of a production control department.
In order to clarify the difference between job and batch production, consider a small
quantity of units, say five, being made by a number of operators. Under job
production conditions the operators would be divided into five groups and each
group would be responsible for the complete manufacture of one unit. Under batch
conditions, however, the work content of each unit would be broken into a number of
operations not necessarily of equal work content, and the operators would again
divide into groups. The first group would then complete the first operation on all five
units, passing the batch as a whole on to the next group and so on until the
manufacture was complete. In general, the batch is not passed on from one operator
or group to the next until all the work is completed on that operation. Transferring
part batches can often lead to considerable organizational difficulties. It should be
noted that during the batch manufacture of the five units mentioned above, four units
25are always at rest, no work being carried out on them. In fact, the rest periods of any
TYPES OF PRODUCTION
one unit from a batch of a total = (n-1)/n x 100 percent, of the total batch production
time. This is characteristic of batch production, where the work content of the
material increases irregularly and results in a substantial work-in-progress. In
addition to the rest period indicated above, the organizational difficulties of batch
production may well generate other rest times, where numbers of batches are passing
through the same production stages, and competing for resources, it is usual to move
a batch from an operator or machine into a “buffer” or “work-in-progress” stores, to
wait there for the next operator or machine to become available. The sequencing of
batches from different jobs to reduce this source of “rest” is one of the most difficult
problems encountered in the management of a production unit, and however
successfully it is solved, there will inevitably be some element of rest time brought
about by this competition for resources. Thus in batch production, there is a rest
period for each unit in the batch, whist work is proceeding on other members of the
batch, and another rest period whilst the whole batch is in buffer store. This often
results in the time between the origination of work on a batch and its eventual
completion being much greater than the simple manufacturing time for the batch.

26
TYPES OF PRODUCTION
The effect of the considerable time lag between an initial investment in material and
its subsequent translation into cash upon the sale of the finished product can be very
serious in terms of the investment in capital which is tied up in the work in progress.
On the other hand, the presence of buffer stores permits the production unit to
absorb shocks and changes, thus building in some element of flexibility, and it assists
in making more effective use of the various limited manufacturing resources. This
balancing of investment in material against investment in resources is a continually
recurring task, and one to which there is rarely a simple unique answer.
FLOW PRODUCTION: Batch production is characterized by the irregularity in the

increase of work added to the basic material. Batch production turns into flow
production when the rest period mentioned above vanishes. In other words, flow
production can be defined as production during which work content of the product
continually increases. Flow production then means that as the work on each
operation is complete, the unit is passed to the next work stage without waiting for
the work to be completed on the total batch. In order that this can flow smoothly, the
times of each operation must be of equal length, and there must be no movement off
the production line. For example, inspection must be physically located within the
flow production line and the inspection function must not occupy more than the unit
27operation time. Furthermore, since the whole system is balanced, any fault affects not
TYPES OF PRODUCTION
only the stage at which the fault occurs, but also all the stages in the production line.
Thus, a fault occurring at one stage of a flow production line which cannot be cleared
within the time cycle of the line, will result in that stage being held up. This, in turn,
causes all stages previous to it to be held up and all stages subsequently to run out of
work. The line as a whole, therefore, must be considered as a single entity and not
allowed to break down at any point at all.
In order that flow production can function satisfactorily, the following requirements
must be met:
1. There must be continuity of demand. Should demand be spasmodic, there will be
a build-up of finished work which can give rise to storage difficulties.
Alternatively, if production is caused to fluctuate along with demand, then the
setting up and balancing of the flow line will need to be carried out frequently,
giving an excessively high total cost. In industries with widely varying demands,
a leveling out is achieved by making for stock during the “flat” periods, the stock
supplementing the current production during “peak” periods.
28
TYPES OF PRODUCTION
2. The product must be standardized. A low line is inherently inflexible and cannot
accommodate variations in the product. A quasi variety is achieved by varying
finished, decorations and other externals.
3. Material must be to specification and delivered on time. Due to the inflexibility
mentioned above, the flow line cannot accept the variations in material which
can be incorporated in a batch or job production process. Furthermore, if
material is not available when it is required the effect is very serious, since the
whole line will be frozen.
4. All stages must be balanced. If the requirement that the material does not “rest”
is to be fulfilled, then the time taken at each stage must be the same. This can
lead to inefficiency due to inability to balance stages. For example, assume a
product with a work content of 10 hours has to be made at a rate of 400 a week,
and the normal working week is 40 hours, then –
The total weekly work content = 400 x 10 hours.
Hence the number of operations required = (400 x 10)/40 = 100
And the time for each operation = (100 / 600) hours
29 = 6 minutes.
TYPES OF PRODUCTION
To meet the required production, then, a flow line with 100 stages needs to be set
up, the work content of each stage being 6 minutes. It may be found, however,
that one stage has a work content of only 3 minutes and that it cannot be
compounded with any other stage. Under these circumstances, this stage must
have an idle time content of 3 minutes. This is known as “synchronizing loss”
and the only way of avoiding this would be to increase the rate of production so
that, in fact, all stage times could be reduced to 3 minutes. In the situation where
an element cannot be reduced to the required stage time – for example, a
machine-controlled operation is 10 minutes – then resources must be increased
so that the effective operation time becomes less than the stage time. This can
lead to an under-utilisation of resources.
5. All operations must be defined. In order that the line will maintain its balance, all
operations must remain constant. This can only be done if the operations are
recorded in detail.
30
TYPES OF PRODUCTION
6. Work must conform to quality standards. In job or batch production, variation

in quality at one stage can be compensated for by extra work elsewhere. In flow
production this cannot happen, since each stage has a defined operation.
7. The correct Plant and Equipment must be provided. Lack of correct apparatus
will unbalance a line, causing weaknesses throughout the whole sequence.
8. Maintenance must be by anticipation not default. If equipment breaks down at
any one stage, the whole line is halted. To avoid this, a programme of preventive
maintenance must be in force.
9. Inspection must be “in line” with production. Unless the inspection stage is
balanced with the rest of the production, a dislocation to the flow will inevitably
take place.
The achievement of the above requires considerable pre-production planning,

particularly in assuring that the correct material is delivered on time, and that
the operations are of equal length of time. Common examples of flow production
are the manufacture of motor-cars, watches, domestic radio receivers, etc.
31
TYPES OF PRODUCTION
It must be noted that flow-production is not necessarily large-scale production.

The following advantages can be derived from the effective institution of flow
production techniques –
(a) The direct labour content will be reduced, since the comprehensive pre-
production planning which is necessary will often produce economies in
time.
(b) Assuming the product is initially designed correctly, then reproducibility, and
hence the accuracy, is high.
(c) Since inspection is “in line”, deviations from standard are rapidly picked up.
(d) Since there is no rest period between operations, work in process is at a
minimum.
(e) Again, since there is no waiting period, the provision of work-in-process
stores is unnecessary, and the total storage space required is minimized.
32
FACTORY LAYOUT
33
FACTORY LAYOUT
Introduction
The disposition of the various parts of a plant, along with all the equipment used
therein, is known as the Plant Layout, which should be designed to enable the plant to
function most effectively. Plant Layout is a companion problem to Plant Location. A
decision to relocate provides an opportunity to improve total facilities and services. A
decision not to relocate is often accompanied by plans to revise the current plant
arrangement. The re-layout must be designed to reduce increasing production costs
that gradually evolve from piecemeal expansion or to introduce an entirely new
process. In either case, the re-layout strives to maximize production flow and labour
effectiveness.

In this section, we shall explore the relationship of production departments –

grouping of production activities – rather than individual machines or architectural
features. A facility layout of a hospital would concern emergency rooms, operating
theatres, patient rooms and even the parking lot, but it would not initially involve the
location of an x-ray machine or a cash register. However, the detailed equipment or
facilities layout would follow the same methodology as the overall departmental
layout.
34
FACTORY LAYOUT
Objectives of Plant Layout

The chief objectives are likely to be improved operations, increased output, reduced costs, better
services to customers, and convenience and satisfaction for company personnel.

Types of Plant Layout

There is a layout by fixed position or by fixed material location. This is a layout where the
material or major component remains in a fixed place. All tools, machinery, men and other
pieces of material are brought to the major component. The complete job is done or the product
is made with the major component staying in one location. Ship-building and heavy construction
of dams, bridges and buildings are typical examples. Advantages are:
1. Handling of major assembly unit is reduced.
2. Highly skilled operators are allowed to complete their work at one point and responsibility
for quality is fixed on one person or assembly crew.
3. Frequent changes in products or product design and in sequence of operations are possible.
4. The arrangement is adapted to a variety of products and intermittent demands. It is more
flexible in that it does not require highly organized or expensive layout engineering,
production planning or provisions against breaks in work continuity.
The disadvantage is that the required movement of materials and machines may be
35 cumbersome and costly.
FACTORY LAYOUT
Product, Flow, Sequential or Line Layout

Here the Plant is laid out according to the requirements of the product. This is typical of flow
production. One product or one type of product is produced in one area. But unlike layout by
fixed position the material moves. This layout places one operation immediately adjacent to the
next. It means that any equipment used to make the product, regardless of the process it
performs, is arranged according to the sequence operations.
Diametrically, this is illustrated in Figure 1, where Product 1 goes first to machine-A, then to
machine-B, then to machine-C, these machines being used exclusively.
for Product 1, Product 2 and Product 3 have their own line of machines (K,L,M, and R,S,T) and,
even though machines A,K,R are identical and interchangeable, work is not transferred from
36 one product line to another.
FACTORY LAYOUT
Advantages are:
1. Reduced handling of material.
2. Reduced amounts of material-in-process, allowing reduced production time and lower
investment in materials.
3. More effective use of labour (a) through greater job specialization and (b) through ease
of training.
4. Easier control of production allowing less paperwork and effective supervision.
5. Reduced congestion of floor space otherwise allotted to aisles and storage.
Disadvantages are:
1. Unless volume is very high, machine utilization may be low, with a subsequent high
capital investment.
2. One machine breakdown may immobilize a complete production line.
3. The system is inflexible, being unable to accommodate changes.
4. Unless the production is true flow production and all operations balanced, buffer stock
(work-in-process) will be inevitable.
5. The pace of the line is set by the slowest operation.
6. Any changes in product design, volume, etc., in the line will normally require a major
investment.
37
FACTORY LAYOUT
Process of Functional Layout

In this type of layout, plant is grouped according to its function. Thus, all drilling machines will
be together, as will all milling machines, presses, lathes and so on. This is most commonly met
with in jobbing product. This is illustrated in figure, where products 1, 2 and 3 all go to
machine-A, then after processing, product 1 goes to machine-B and thence to machine-C, while
products 2 and 3 go to machine-L. Product 2 then goes to machine-C, while product 3 goes to
machine-T. To allow all machines to be fully loaded, work-in-progress stores are necessary
between each machine.
38
FACTORY LAYOUT
Advantages are:
1. Better machine utilization allows lower machine investment.
2. It is adapted to a variety of products and to frequent changes in sequence of operations.
3. It is adapted to intermittent demand (varying production schedules).
4. The incentive for individual workers to raise the level of their performance is greater.
5. It is easier to maintain continuity of production in the event of –
(a) machine or equipment breakdown;
(b) shortages of material;
(c) absent workers.
Disadvantages are:
1. Substantial pre-production planning is required if machine loading is to be high.
2. Control is difficult.
3. Buffer stocks are essential; hence, relatively high investment in raw materials and work-
in-progress.
4. It increases handling, space requirements and production time.
5. Close supervision is essential.
39
FACTORY LAYOUT
Which type of layout to use?

Use layout by fixed position or fixed material location when –
1. Material forming or treating operations require only hand tools or simple machines.
2. Making only one or a few pieces of an item.
3. The cost of moving the major piece of material is high.
4. The skill of workmanship lies in the abilities of the workers or it is desired to fix
responsibility for product quality on one worker or crew.
Use layout by product when –

1. There is a large quantity of pieces or products to make.
2. The design of the product is more or less standardized.
3. The demand for it is fairly steady.
4. Balanced operations and continuity of material flow can be maintained without difficulty.
40
FACTORY LAYOUT
Use layout by process when –

1. Machinery is highly expensive and not easily moved.
2. Making a variety of products.
3. There are wise variations in times required for different operations.
4. There is a small or intermittent demand for the product.
In actual practice, most layouts are a combination of the basic layouts discussed above.
They are made to utilize the advantage of all three types of layout.
Criteria for a good layout -
While the techniques employed in making a layout are normal work-study techniques, the
process is a creative one which cannot be set down with any finality, and one in which
experience plays a very great part. Furthermore, it is not possible to define a good layout
with any precision. However, there are certain criteria which will be satisfied by a good
layout, and these are discussed below:
41
FACTORY LAYOUT
1. Maximum Flexibility
A good layout will be one which can be rapidly modified to meet changing circumstances. In
this context, particular attention should be paid to supply points, which should be ample and of
easy access. These can be simply and cheaply provided at the outset of a layout, and failure to
do so can often present very necessary modifications to unsatisfactory, outdated or inadequate
layouts.

2. Maximum Coordination
Entry into, and disposal from, any department should be in such a manner that it is most
convenient to the issuing or receiving departments. Layout requires to be considered as a
whole and not parochially.
3. Maximum use of Volume

A factory must be considered as a cubic device, as there is airspace above the floor area.
Maximum use should be made of the volume available. Conveyors can be run above lead height
and used as moving work-in-progress stores, or tools and equipment can be suspended from the
ceiling. This principle is particularly true in stores, where goods can be stacked at considerable
heights without inconvenience, especially if modern lift trucks are used.
42
FACTORY LAYOUT
4. Maximum Visibility
All men and materials should be readily observable at all times; there should be no
“hiding places” into which goods can get mislaid. This criterion is sometimes difficult to
fulfill, particularly when an existing plant is taken over. Every piece of partitioning or
screening should be scrutinized most carefully while introducing undesirable segregation
and reducing effective floor space.
5. Maximum Accessibility
All servicing and maintenance points should be readily accessible. For example, a
machine should not be placed against a wall in such a manner that a grease-gun cannot
reach the grease nipples. The maintenance under these circumstances is likely to be
skimped at best and will occupy excessive time. Similarly, a piece of plant in front of a
fuse box will impede the work of the electricians and may cause unnecessary stoppage of
the machine when the fuse box is opened. If it is impossible to avoid obscuring a serviced
point, then the equipment concerned should be capable of being moved. It should not be a
permanent installation.
43
FACTORY LAYOUT
6. Minimum Distance
All movements should be both necessary and direct. Handling material adds to the cost of the
product but does not increase its value. Consequently, any unnecessary or circuitous
movements should be avoided. It is a common failing for material to be moved off a work-
bench to a temporary storage point. This intermediate rest place is often unnecessary and
unplanned, being used only because an empty space appears convenient. The providing of
‘extra’ shelves, benches and tables should be questioned very thoroughly and avoided if
possible.
7. Minimum Handling
The best handling is no handling, but where handling is unavoidable it should be reduced to a
minimum by the use of conveyors, lifts, chutes, hoists and trucks. Material being worked on
should be kept at working height and never placed on the floor if it is to be lifted later.
8. Minimum Discomfort
Poor lighting, excessive sunlight, heat, noise, vibrations and odour should be minimized and if
possible counteracted. Apparently, trivial discomforts often generate troubles greatly out of
proportion to the discomfort itself. Attention paid to the lighting and general decoration and
furniture can be rewarding without being costly. Recommendations on the intensity of lighting
for various tasks are published and most manufacturers of lighting equipment will provide
useful advise on the subject.
44
FACTORY LAYOUT
9.Inherent Safety
All layouts should be inherently safe, and no person should be exposed to danger. Care must be
taken not only of the persons operating the equipment but also of the passers-by, who may be
required to go behind a machine, the back of which is unguarded. Adequate medical facilities
and services must be provided, and these must satisfy the Chief Inspector of Factories.
Experience shows that the factory inspector is not only most competent to advise on these
matters, he is always ready to be of assistance.

10.Maximum Security
Safeguards against fire, moisture, theft and general deterioration should be provided, as far as
possible, in the original layout.

11.Unidirectional Flow
Work lanes and transport lanes must not cross. At every point in a factory, material must flow
in one direction only, and a layout which does not conform to this will result in considerable
difficulties, if not downright chaos, and should be avoided.
45
FACTORY LAYOUT
12.Visible Routes:
Definite lines of travel should be provided and, if possible, clearly marked. No gangways should
ever be used for storage purposes, even temporarily.
The co-existence of a large number of criteria makes the definition of an “optimum” schedule
virtually impossible. Furthermore, the writing of a computer programme for plant layout
becomes a task of considerable difficulty unless some very drastic simplifications are made.
` 1. Maximum Flexibility 2. Maximum Coordination

3. Maximum Use of Volume 4. Maximum Visibility
5. Maximum Accessibility 6. Minimum Distance
7. Minimum Handling 8. Minimum Discomfort
9. Inherent Safety 10. Maximum Security
11. Unidirectional Flow 12. Visible Routes
Principles satisfied by a good Layout.
46
FACTORY LAYOUT
Advantages of a good Layout

A layout satisfying the above conditions will have the following advantages over one which
does not:
1. The overall process time and cost will be minimized by reducing unnecessary handling
and by generally increasing the effectiveness of all work.
2. Labour supervision and production control will be simplified by the elimination of hidden
corners in which both men and materials can be misplaced.
3. Changes in programme will be most readily accommodated.
4. Total output from a given plant will be as high as possible by making the maximum
effective use of available space.
5. A feeling of unity amongst employees will be encouraged by avoiding unnecessary
segregation.
6. Quality of products will be sustained by safer and better methods of production.
47
FACTORY LAYOUT
Symptoms of a poor Layout

The main symptoms of a poor layout are:
1. Lack of control.
2. Congestion of men and materials.
3. Excessive re-handling.
4. Long transportation lines.
5. Frequent accidents.
6. Low worker performance.
48
PRODUCTIVITY
49
PRODUCTIVITY
Productivity is a measure of how much input is required to produce a given output, i.e.,
it is the ratio of output to input.
Factors affecting productivity

 Technology employed.
 Tools and raw materials used.
 Organisation structure.
 Planning and scheduling of work.
 Plant layout.
 Innovations.
 Personnel policies.
 Work environment.
 Materials management.
 Skills of the workforce.
 Health, attitude towards management.
 Training to the workers.
 Discipline.
50  Transport facilities.
PRODUCTIVITY
Techniques to improve productivity

 Better planning and training of employees.
 Use of time and motion studies to study and
improve work performance.
 Better transportation and material handling
system.
 Providing work incentives and other benefits to
workers.
 Involvement of workers in decision-making.
 Improvement in technology of production process.
 Simplification, standardization and specialization
techniques like PERT, CPM.
 Better and efficient utilization of resources.
 Use of linear programming and other quantitative
techniques.
 ABC analysis to identify more important items and
then apply inventory control to reduce capital
investments.
51
PRODUCTIVITY
Measurement of productivity

1) Labour productivity = amount of output
amount of labour

2) Capital productivity = sales turnover
capital employed

3) Profit productivity = profit
investment
52
MATERIALS MANAGEMENT
53
MATERIALS MANAGEMENT
Materials Management is the planning, directing, controlling and coordinating those activities
which are concerned with materials and inventory requirements, from the point of their
inception to their introduction into the manufacturing process. It begins with the determination
of materials, quality and quantity and ends with its issuance to production to meet customer’s
demand as per schedule and at the lowest cost.

Objectives of Materials Management

 Regular uninterrupted supply of raw materials to ensure continuity of production.
 Provide economy in purchasing and minimizing waste.
 Minimise storage and stock control cost.
 Minimise cost of production.
 Purchase items of best quality at the most competitive price.
Stages of Materials Management
 Decision stage.
 Sourcing stage.
 Production planning stage.
 Ordering stage.
 Receiving stage.
54  Inventory control.
INVENTORY CONTROL
55
INVENTORY CONTROL
Inventory control
Inventory is referred to accumulation of items or goods required by the
company for its products or as an aid to production. A manufacturing firm
generally carries the following 7 major classification of items with
inventories:
• Major raw materials.

• Finished components as work-in-progress.
• Finished goods.
• Tools and fixtures.
• Supplies, e.g., welding rods, oil and grease, electrical supplies, office
supplies, consumables, etc.
• Machinery spares such as bearings, bolts, oil seals, springs, etc.
56
INVENTORY CONTROL
Purpose of carrying inventory

• To gain economy in buying.
• To keep pace with changing market conditions.
• To satisfy demand during the period of replenishment.
• To carry reserve stocks to avoid stock-outs.
• To stabilize production.
• To prevent loss of sales.
• To satisfy other business constraints.
Objectives of Scientific Inventory Control

• Service to customers.
• Effective use of capital.
• Economy in buying.
• Reduction of administrative workload.
• Minimisation of risk obsolescence and deterioration.
• Stability of production activity.
• Space to install scientific inventory control system.
57
INVENTORY CONTROL
STEPS TO INSTALL A
SCIENTIFIC INVENTORY CONTROL SYSTEM
58
INVENTORY CONTROL
EOQ MODEL
Assumptions:
• The demand of the item occurs uniformly over the period at the
known rate.
• The replenishment of stock is instantaneous.
• The price per unit is fixed and is independent of the order size.
• The cost to place an order and process the delivery is fixed and does
not vary with the lot size.
• The inventory carrying charges vary directly and linearly with the
size of the inventory and are expressed as a percentage of average
inventory investment.
• The item can be procured in the quantities desired, there being no
restriction of any kind.
• The item has fairly long shelf life, there being no fear of deterioration
or spoilage.
59
INVENTORY CONTROL
Mathematical Treatment of the model:

The symbols used
Annual consumption of the item (units) : S
Unit price (Rs.) : Cu
Order quantity (units) : q
Procurement cost per order (Rs.) : Cp
Inventory carrying cost expressed as a : I
Percentage of average investment .
Preparation of model
Two costs are involved for the inventory decisions :
Procurement cost and Inventory carrying cost.
60
INVENTORY CONTROL
Annual No. of orders per Procurement cost

= x
Procurement Cost year per order
= Annual Consumption x Procurement cost

Order quantity per order
= S x Cp
q
61
INVENTORY CONTROL
Annual Inventory Average inventory Inventory carrying

= x
Carrying Cost investment cost
1 Order Inventory
Annual Inventory = Price per
x x carrying
Carrying Cost 2 Quantity Unit
cost
= q x Cu x i
2
Annual Inventory = S q x Cu x i
x Cp +
Carrying Cost q 2
62
INVENTORY CONTROL
To determine economic order quantity (qo) – the quantity that minimises

the total cost – we must differentiate ATC with respect to decision
variables q and set the first derivative to zero.
Therefore -
d(TAC) = S . Cp + Cu x i = 0
dq q2 2
q 2o = 2 . S . Cp (When order quantity equal EOQ)
Cu . i then q = qo
qo =
√ C .i
2 . S . Cp
u
63
INVENTORY CONTROL
Therefore -
Economic order Quantity =
√
2 x [ Annual Consumption (units)] x [ Procurement cost/order ]
Price /unit x Inventory carrying cost
64
INVENTORY CONTROL - ILLUSTRATIONS
• A company uses 75 numbers of an item per month. Each unit cost the company Rs.25/-.The
cost of ordering is Rs.36 and inventory carrying charges is 1.5% of average inventory
investment per month respectively.
In what economic lots should the item be purchased to minimize total cost? It minimizes
waste by identifying the causes of excessive variability in the quality of product.
• Impellers are procured by the water pump manufacturer from a local firm and are
consumed at an average rate of 500 numbers per month. If the procurement cost is Rs.36 per
order and the cost of holding it in stock is Rs.1.20 per unit per year, determine the quantity
that should be procured at a time to optimize the cost involved.
If the consumption of the above item increases to 40 numbers per day and its actual
inventory carrying cost is Rs.0.2 per unit per day, what shall be its revised EOQ quantity?
• A manufacturer of control panels spends Rs.3400 per annum on its purchasing activities.
Rs.67200 is spent each year in maintaining inventory of Rs.4.21 lacs (expenses referred above
are only the variable portion of the total expense).Around 850 orders are placed every year
to replenish stocks of the various items. One of the items whose annual consumption is 9600
numbers is bought by the company at the rate of Rs.30 each. How frequently should the
company receive the staggered deliveries and in what quantities?
65
• The requirements of a particular size of oil seal at an automobile firm is estimated at 40,000
numbers next year. The oil seal is available locally with a lead time of two weeks and it cost
Rs.10 each.
The cost of order writing, follow up, primary inspection and inward stores is computed at
Rs.50 per order. The holding cost is estimated at Rs.2 per unit for storage plus 20% per unit
per year on account of opportunity cost of the capital.
a) How many units should the firm order at a time to optimize the inventory cost?
b) What is the annual inventory cost?
• ABC Pump Company uses 60,000 valves per year and the usage is fairly constant at 5000
valves per month. Each valve cost the company Rs.1.50. The carrying cost for the company
has been estimated at 15% of the average inventory investment. The cost to place an order
and process the delivery is Rs.30.
a) Calculate economic order quantity.
b) What is stock turnover rate ignoring safety stocks if EOQ is ordered frequently?
c) What will be the effect on total cost if stock turnover rate is reduced to one third by
infrequent ordering?
66
• A manufacturer of a hand grinder requires a special roller bearing at the rate of 300
numbers per year. Each bearing cost the company Rs.36. The procurement cost and the
inventory carrying cost have been calculated at Rs.30 and 20% respectively.
If the supplier offers discount of Rs.2 per bearing on an order of 200 or above, should higher
quantity be purchased?
• A chemical firm buys 2500 units of a particular item annually from a vendor at a cost of Rs.3
per unit. It has now received a revised price schedule from the vendor which is as follows:
Order quantity Price per unit
Less than 500 units Rs. 3
Between 500 and 1250 units Rs.2.90
1250 units and above Rs.2.85
The total of placing an order and executing the delivery once is Rs.25 and inventory carrying
cost as a percentage of average inventory investment is 20%. Determine the economic order
quantity of the item.
67
• Monthly consumption of an item having unit price of Re.1 has been estimated at 300 units.
The inventory carrying cost and the procurement cost for the company have been computed
at 18% and Rs.36 per order respectively. Stock records show that this item can normally be
procured within a period of one month. If the company adheres to the policy of one month
safety stock for all ‘A’ and ‘B’ category of items.
Calculate –
 re-order quantity
 minimum level
 re-order level
 maximum level
 average inventory

assuming re-order level system of replenishment.
68
MATERIAL HANDLING
69
MATERIAL HANDLING
Material handling may be broadly defined as the movements of materials from one place
to another. It may be picking up or putting down, moving horizontally or vertically or in
any inclined plans of materials, of any kind in their raw, semi-finished or finished state.
OBJECTIVE
Material handling often does not add anything to the value of the product but only
increases the cost. Handling costs constitute a substantial portion of the total cost of
production. Besides, material handling is also found to be responsible for a large
percentage of product damage. 80 to 90% of industrial accidents and other disadvantages.
In spite of this, material handling is an essential feature of industrial activity. Materials
have to be moved from one place to another without which all the activities would come to
a standstill. Material handling often accounts for improved utilization of men and
machines, and provides for specialization of skills and the related advantages.
Since material handling cannot be eliminated completely in any organisation, the objective
of material handling may be stated as instituting an efficient system of handling.
Eliminating unnecessary and wasteful handling system saves money and time, reduces
damage to materials and makes the work safer.
70
MATERIAL HANDLING
Some Principles
Some of the major principles in the design of an efficient system of material handling are:
a) Reduce handling to a minimum: As far as possible, materials should always move
towards completion, over the shortest distance without back-tracking. A large amount of
handling can be eliminated by planning the location of operations so that one operation
finishes right where the next begins. The flow of product should receive top priority in
planning of layout.

b) Avoid re-handling: It may not be possible to eliminate re-handling completely.

Nevertheless, re-handling is a wasteful and costly operation. Re-handling can be reduced
by (i) not keeping anything on floor, (ii) avoiding transfers from floor to container or vice
versa or from container to container, and (iii) avoiding making of materials.
c) Combine handling with other operations: Many times, handling may be made a
productive activity by combining with other operations, such as production, inspection
and storage. In process industries, materials undergo physical and chemical changes while
in movement, handling devices may be used as live storage of materials may be sorted and
inspected while they are being handled.
71
MATERIAL HANDLING
d) Ensure safety in handling: Safety is a key word in handling. A large percentage of

industrial accidents are attributed to poor handling practices. Even costlier in terms of
money is the damage to equipment and products due to improper handling methods. A
good handling system should ensure safety to workers and materials. Manual handling of
heavy objects, materials scattered on the floor or projecting into aisles are but a few
causes of accidents. Keeping gangways and aisles clear is one of the primary precautions
against accidents in handling.
e) Handle materials in unit loads: It is easier and quicker to move a number of materials
at a unit rather than piece by piece. Modern material handling devices are designed to
take advantage of unutilized loads.
f) Use gravity where possible and mechanical means, if necessary: The simplest and
cheapest way to handle materials is by using gravity. Often chutes and inclined boards can
be conveniently used to transport materials quickly to the point of use without much
investment on costly handling equipment. Where it is not possible to use gravity for
various practical reasons, some mechanical means should be considered. Lifting and
carrying of heavy materials mechanically saves time and reduces fatigue of workers.
72
MATERIAL HANDLING
g) Select proper handling equipment: There are as many types of handling equipment
available today as the number of materials to be handled. And any single equipment may
not solve all handling problems. It is therefore necessary to choose the equipment suitable
for the job under consideration. The equipment selection needs to be done carefully so
that there is an efficient coordination of all handling, resulting in overall economy. Use of
standardized equipment facilitates maintenance and repair.
Another important factor in the selection of equipment is flexibility. Industrial activity is
subject to constant changes and handling equipment should provide for this change. In
other words, the equipment selected should be capable of a variety of uses and
applications.
h) Reduce terminal time of equipment: The advantage of mechanical and power

equipment would be lost of they are made to wait during loading and unloading which
may take considerable amount of time. By reducing this waiting time the handling
equipment would be released for more productive work. There are various mechanical
devices like trailers, tipping arrangements, cranes and hoist arrangements, to quicker
loading and unloading operations.
73
MATERIAL HANDLING
i) Buy equipment for overall savings: In selecting equipment, savings in overall handling
cost must be the guiding principle rather than the first cost of equipment. Arriving at the
handling cost is a difficult problem but a fairly accurate estimate can be obtained by
determining the handling elements and applying work measurement.
In India, labour is still comparatively less costly and a longer period may have to be
allowed for amortizing the handling equipment. All direct and indirect savings are to be
taken into consideration while deciding on handling equipment.
j) Use labour consistent with handling jobs: Manual handling could be done by unskilled
labour, whereas mechanical handling may require semi-skilled or skilled workers. Proper
allocation of skills helps in overall economy. As far as possible, direct production
operators should not be used for handling operations. It is preferable to have a separate
gang of material handlers to ensure proper utilization of production workers.
k) Train workers and maintain equipment: Careful operation and proper upkeep are
essential for getting the maximum out of the handling equipment. Careful selection and
training of employees in principles, operation and safety rules and planned maintenance of
equipment are worthwhile investments in the long run.
74
MATERIAL HANDLING
Material Handling Equipment:

A pre-requisite to the design of a material handling system is a knowledge of the different
kinds and types of material handling equipment that are available. Although there are
hundreds of different handling equipment, all can be placed in three major categories.
Conveyors: The first major class of material handling equipment consists of conveyors. A
conveyor is any device which moves material in either a vertical or horizontal directions
between two fixed points, and this movement can take place either continuously or
intermittently.
One of the distinct characteristics of conveyors is that they create a relatively fixed route.
Consequently, they are employed primarily in continuous manufacturing in which
materials leaving one work station invariably go to some other specific work station in the
production line. Therefore, it is possible to connect two such work stations by material
handling equipment which is capable of moving materials only between two fixed points.
In intermittent manufacturing, however, materials leaving one work station may go to any
number of other work stations. Obviously, it would not be feasible to set up a network of
conveyors which would provide all the possible route which materials may have to follow.
75
MATERIAL HANDLING
A second characteristic of conveyors is that, unless they are of the portable type, they
occupy space continuously. As a result, they must be installed in locations in which they
will not interfere with the flow of other traffic. For example, if two work stations are
located on opposite sides of an aisle which is used as a path of travel by men and trucks, a
floor mounted conveyor could not be used to link these two work stations. Therefore,
unless cross traffic can be bypassed, no serious consideration would be given to the use of
conveyors.
In so far as listing of different types of conveyors is concerned, the ones most frequently
encountered are the following:
Gravity Conveyor: As the name implies, gravity conveyors rely on nature for their driving
force. Roller, wheel and chute conveyors call in this category. They are used primarily to
move materials and are a relatively inexpensive type of conveyor as a rule, although for
some applications, such as in moving grain, they can be quite expensive. Compared with
other types, gravity conveyors are highly flexible and transportable and are well suited to
variable paths. Movement is restricted, however, to route that involves some degree of
vertical fall.
76
MATERIAL HANDLING
Endless chain conveyors: These conveyors are usually driven by an electric motor and, as
a consequence, are usually more expensive than gravity conveyors. They have several
important advantages, however. These conveyors can move materials up as well as down,
and the progress of the materials can be closely controlled. In addition, special carrying
devices and containers can be attached to the chain. Frequently, production tasks such as
dip painting, cleaning and washing may be performed as the conveyor moves. Finally, by
varying the speed of the conveyor at different points, or by building loops into it, work-in-
process inventory may be stored between operating stages.
Belt conveyors: Belt conveyors are also driven by electric motors. These belts are usually
made of some flexible material such as rubber. However, special belts are used in many
industries. In the baking industry, for example, Teflon-coated metal is utilized to prevent
sticking. The belt passes over rollers, which normally create a trough in the centre of the
belt where the materials are concentrated. Conveyors of this sort are used mainly for
transporting bulky material. Baggage is moved from the ground to the baggage
compartments of airplanes and shipped by conveyor belts. They are also used to move
ores from the min face to work areas. Stock brokerage firms and insurance companies
even use them to route papers to various parts of their buildings. When work is to be
performed, however, the materials must be taken from the belt and later replaced when
the work is completed.
77
MATERIAL HANDLING
Other conveyor equipment: Pipelines are often employed for moving liquids and gases
such as gasoline and natural gas. Pneumatic tubes are used in some firms for rapid
dissemination of internal communications.
Screw conveyors have been successfully used to lift materials in both grain elevators and
food-processing industry to move delicate foods in steady streams without damage.
Industrial trucks: Industrial trucks which represent the second category of material
handling equipment, are vehicles powered by hand, fuel or electricity, which are capable
of transporting materials horizontally between any two points. As opposed to a conveyor,
a truck is able to more from one location to any other location so long as suitable traveling
surface is available and its path of travel is not obstructed. For this reason, the prevalent
method of handling material in a firm engaged in intermittent manufacturing is by means
of trucks. The variable path of travel they are able to follow permits them to transport
materials from one work station to any of a number of other work stations at which a
subsequent operation is scheduled to be performed.
A second desirable feature of trucks is that they occupy a given amount of space
intermittently. This means that a certain amount of space in a given location is required to
house a truck for only as long as the truck is in that location. As soon as the vehicle is
moved, the space is free for other uses.
78
MATERIAL HANDLING
As in the case of conveyors, there are many types of trucks, and each of these can be
equipped with a variety of attachments. But the most important ones are as follows:
Hand operated vehicles, tractors, platform trucks, forklift trucks, straddle carriers.
When the loads are not too heavy and the hauls are short, manual equipment may be
used. However, when the load size and weight and the distances to be traveled are great,
powered equipment is used. Today, most industrial trucks are powered. They are
generally equipped with forks or platforms that can be raised or lowered to facilitate the
movement and storage of materials, and for this reason the loads are generally placed on
pallets or skids.
Cranes and hoists:
The third classification of material handling equipment consists of cranes and hoists. This
equipment is able to move materials vertically and laterally in any area of limited length,
width and height. It is used primarily when material must be lifted prior to being moved
from one point to another. These points may represent different work stations or different
locations at a single work station. For example, if a part is large or heavy, the operator
may find it necessary to use a hoist to aid him in loading or unloading the machine.
Subsequently, a crane may be used to move the part to another work-station.
79
MATERIAL HANDLING
One of the advantages of cranes and hoists is that they are able to transport objects through
the overhead space in the plant. Consequently, space is utilized, which would otherwise be
unused, and floor space is freed for other uses. To illustrate, it might be possible to move a
large heavy casting by means of a truck from one work-station to another. However, this
would create a need for wide aisles at appropriate locations in the plant. If a floor space is at a
premium, a more desirable alternative would be to transport the item through the air by
means of a crane which would either eliminate the need for certain aisles or, at least, permit
the use of aisles which may be required for the movement of smaller objects. But there are
cases in which cranes and hoists are used, not because they free floor space but because they
are the best available means of positioning material in a particular location.
However, when considering cranes and hoists, it is important to keep in mind that any one
unit of this equipment is capable of serving on a limited area.The size and shape of this area
will vary with the kind of crane or hoist being used. Nevertheless, the equipment is somewhat
more flexible in this respect than are conveyors, but not a flexible as are industrial trucks.
Also, it will be found that cranes and hoists are as likely to be used intermittently as in
continuous production.
Again, there are many types of equipment which are placed in the crane and hoist category.
However, the most common ones are the following: overhead bridge cranes, gantry cranes,
jib cranes, elevators, lifts, chain hoists, air hoists, electric hoists.
80
MATERIAL HANDLING
Overhead bridge crane are commonly employed in factories where large, heavy pieces of
equipment such as electrical transformers, generators and power regulators are
manufactured. These cranes ride on parallel overhead rails and are usually designed so
that they can service any place in the work area of the plant.
Another common type of crane, which is designed for outside work, is the gantry crane. It
moves in limited areas on wheels, providing its own superstructure, and is chiefly used for
such tasks on moving lumber and loading and unloading in railroad freight yards. Large
cranes of this sort must be disassembled if they are to be moved from one location to
another. This is their main limitation.
Elevators and lifts are used to raise everything from materials to workers. Since moving
materials on this type of equipment is quite costly, the modern trend is to construct one
storey plants, thus eliminating the need to raise and lower material between floors.
81
JOB SEQUENCING
82
JOB SEQUENCING - ILLUSTRATIONS
Job sequencing is concerned with appropriate selection of a sequence of jobs to be done on

a finite number of service facilities (like machines) in some well-defined technological
order so as to optimize total elapsed time or overall cost.
• Determine the optimum sequence to process the various types of fan blades each day from
the following information so as to minimize the total elapsed time.
Type of fan Number to be Machine A Machine B

blades processed each day (minutes) (minutes)
1 4 4 8
2 6 12 6
3 5 14 16
4 2 20 22
5 4 8 10
6 3 18 2
Also work out the total elapsed time for an optimism sequence. What is the total machine
time on machine-A and machine-B?
83
• In a machine shop 8 different products are being manufactured, each requiring time on the
two machines ‘A’ and ‘B’ as given below:
Product Time in minutes Time in minutes

on machine-A on machine-B
1 35 20
2 45 30
3 15 50
4 20 35
Determine the optimum sequence to minimize the total manufacturing time for all the
products.
84
• We have five jobs each of which must go through three machines A, B and C in the order
ABC. Processing time in hours is as given below:
Job A B C
1 16 10 8
2 20 12 18
3 12 4 16
4 14 6 12
5 22 8 10
Determine a sequence for the five jobs that will minimize the total elapsed time. Find also
the idle time of the machines A, B and C.
85
• Find an optimum sequence for the following sequencing problem of four jobs and five
machines. The processing time in hours is given below:
Job A B C D E
1 7 5 2 3 9
2 6 6 4 5 10
3 5 4 5 6 8
4 8 3 3 2 6
Also find total elapsed time.
86
METHOD STUDY
87
METHOD STUDY
Method Study and Work Measurement are the two basic techniques of work study. While
Method Study aims to improve the existing methods of operations and procedures, work
measurement helps to assess the human effectiveness. Though these two are distinctly
separate techniques, they are very much interdependent. The application of both these
techniques in adequate proportions based on the nature and type of problems would result
in maximum benefits to the organisation.
Method Study is essentially concerned with finding better ways of doing work. It is a
technique of cost reduction. The philosophy of Method Study is, “there is always a better
way” and the tools of Method Study are designed to systematically arrive at this “better
way of doing a job”. Method Study can be applied to almost all types of work, whether it
be a factory, electrical or any other type of activity. The scope of Method Study is not
restricted to manufacturing industries alone, but extends to all other spheres. Methods
improvement has been very successfully adopted in banks, hospitals, offices and retailing,
in addition to defence, agriculture and all types of industries. There are various techniques
which are suitable for tackling Method Study problems on all scales and for all types of
work. There is no limit to the types of work which can be profitably studied. Another
important aspect of Method Study is that often, with limited capital expenditure, it would
be possible to obtain considerable economies in the use of resources and achieve large
monetary savings.
88
METHOD STUDY
Method Study is the systematic recording and critical examination of existing and proposed
ways of doing work, as a means of developing and applying easier and more effective
methods and reducing costs. (Definition adopted in the B.S.Glossary of terms in Work
Study.)
OBJECTIVES
The objectives of Method Study are –
i) Improve basic processes.
ii) Improve the design of plant and equipment.
iii) Improve factory, office and work place layouts and handling of materials.
iv) Improve the use of material, plant, equipment and power.
v) Improve the working procedures.
vi) Improve the working environment.
vii) Improve quality.
89
METHOD STUDY
METHOD STUDY PROCEDURE

The analysis of problems for Method Study consists of an ordered and systematic
procedure. This procedure involves six basic steps as follows:
SELECT the work to be studied
RECORD all relevant facts
EXAMINE these facts critically
DEVELOP the most effective, economical and practical method
INSTALL the method as standard practice
MAINTAIN the standard practice by regular checks
The above procedure is a logical one and is easy to follow in any type of work. Each of the
steps is equally important and clearly defined. Faithful adherence to the basic procedure
would result in achieving maximum results.
90
METHOD STUDY
Selection of work for Method Study is the first step. The field of choice for Method Study
is quite wide and every job is amenable to improvement. But the selection of the job
should be based on scope and need for improvement, resulting economy, priority,
objective and similar other considerations. Once the job has been selected, the next step is
to record all the pertinent facts relating to the present or proposed method. There are a
variety of recording techniques suitable for different types of situations. A proper
recording is necessary since it forms the basis for further investigation. Critical
examination is the crux of Method Study. All these recorded facts are subjected to a
thorough examination. Nothing is taken for granted and each activity is challenged with a
view to get as many alternatives and improved methods as possible. All the alternative
proposals thus obtained are evaluated and the most practical and economical method is
developed. Considerable planning and preparation is necessary before the proposed
method is installed. Full cooperation and participation from the Management, Supervisors
and workers is essential for the implementation of the new method. A number of
difficulties may crop up when the proposed method is under operation. There is also a
tendency on the people to get back to the old methods with the slightest of excuses. Proper
maintenance through routine and regular checks is an important factor in the Method
Study procedure.
91
QUALITY CONTROL
& INSPECTION
92
QUALITY CONTROL & INSPECTION
It is important that production process meets the quantity goals established in the
production schedule, but it is of equal importance that the output meets the quality
specifications as well. To manufacture products of desired quality, control over their
quality must be exercised throughout the production and associated functions, including
production planning, procurement and distribution. Quality considerations are present in
every aspect of the production cycle – from the purchase of raw material to the customer.
Monitoring all the quality level is usually assigned to a staff group that reports to the top
management. Organisationally, this group is commonly referred to as Quality Control.
The authority that quality control exercises varies according to the relative defect of
controlling quality and to management assessment of the consequences of circulating the
defective products.
Since quality assurance enters into so many linkages within the production system, more
support is needed from all levels of management than for most of the functions. No single
department or staff can assure quality by itself. It takes cooperation of line workers, the
supervisors and related staff organisation.
Quality assurance is a skill. Like other skills, if it is not continuously exercised, it will
deteriorate. Also, it has been said that “quality is everybody’s concern.” But a job that
belongs to everybody can easily become a job that nobody does.
93
The overall value of the quality organisation should be judged by the ratio of cost incurred
to cost saved, and not by the glamour of its own advertisements.
Cost of vigilance versus cost of error: In most production situations, the cost of vigilance
and error varies inversely. Greater vigilance may take the form of extra time taken by
individual worker, close supervision, additional test for products and inspection of all or
portion of the output. The cost of error includes re-work, rejects and customer
dissatisfaction. Somewhere between the extremes of no vigilance and extra vigilance is a
point where control over the magnitude of errors produces a minimum total cost.
Inspection versus quality control: Inspection is an act of comparing a product with
accepted specifications or other recognized standards. The purpose of this inspection is to
know where the product conforms to or does not conform to the specified quality limits
expressed in the specifications. Units of the product found to conform are accepted;
others are rejected.
Inspection is essentially a post-mortem operation performed on the product after it has
been completely processed. As a screen operation, the purpose of inspection is to separate
products into two classes: accepted and not accepted.
Inspection operation itself adds nothing to the value of the product. Hence, the inspection
operation itself does not improve product quality and neither does it reduce rejections,
since it involves no corrective action on the operation.
94
The problem is, how to guarantee a product of high quality to the customer and not
burden the manufacturer with the loss of high percentage of rejections entailed by the
inspection screening operation. The answer to this lies in quality control.
Quality control is a system of inspection, analysis and action applied to a manufacturing
process so that by inspecting a small portion of the product currently produced, an
analysis of its quality can be made to determine what action is required on the operation
to achieve and maintain the desired level of quality. In its broader application, quality
control is a preventive tool and is used to minimize rejections to the end that all products
and processes will meet the specified quality limits.
When and where and how to inspect: Where to inspect depends largely on when the
inspection is scheduled. The location of most inspection stations is at the site of production
– the receiving dock for incoming shipments, the assembly area, the construction site,
distribution points, etc. In a fixed-position layout, inspectors must come to the product to
check quality at various stages of development. In product layouts, particularly
mechanized production lines, products come to the inspectors at special stations built into
the line. Receiving “floor inspectors” examine output from the individual work stations
associated with a process layout.
95
Deciding where to inspect during a production process is simply a matter of common sense
– when it will do the most good. Logical choices are the beginning and end of the
production process. Raw material and component inputs should be inspected to see
whether they meet expected standards. Acceptance of substandard inputs obviously
jeopardizes outgoing quality and may damage equipment or disturb process continuity.
Outgoing products are examined to protect the producer from customer discontent or
buyer rejection.
During the production process, inspection is scheduled in front of operations that are
costly, irreversible or masking. Considerable expense is avoided by eliminating defective
units before they undergo a costly phase of their development or before they pass through
a process that cannot be undone, such as welding, pouring concrete, or mixing. Chemical
operations such as painting and encapsulating may hide defects easily detectable before
the masking operation.
From the foregoing, it may appear that products are continually under inspection.
Actually, workers continually check the quality of their own or a machine’s output, but
there are just a few distinct inspection stations. Constant formal surveillance would not
only increase cost, it would also create an uncomfortable atmosphere for workers. The
timing and location of inspection points are key features in the design of any testing
programme.
96
How to inspect: The two basic types of inspection are called “variables” and “attribute”.
When precise measurements are made of dimensions, weight or other critical
characteristics capable of expression on a continuous scale, the products are being
subjected to variables inspection. The alternative to exact measurements is to set limits
within which the product is judged acceptable or defective. A go-no-go rating results from
an attribute inspection. Since a good or bad grading normally requires less time and skill
to make and uses lower-cost equipment than exact measurements, attribute inspection is
usually less expensive than variables inspection. It is generally assumed that the variables
measured have a normal distribution.
Precise measurements require closely calibrated devices, rulers, micrometers, scales,
meters, etc., capable of measuring the product’s fineness standard. Devices to check
attributes are designed to provide a quick verdict of acceptability – go-no-go gauges, snap
gauges, templates, etc.
Statistical sampling techniques frequently reduce inspection cost. The use of samples to
replace 100% inspection is usually appropriate for machine output where units are not so
likely to vary as are hand-crafted products. High production quantities and expensive
inspections also suggest sampling. Then there is destructive testing (the performance test
destroys the unit tested) which absolutely rules out 100% inspection.
97
Acceptance sampling: The purpose of acceptance sampling is to recommend a specific

action; it is not an attempt to estimate quality or to control quality directly. The basic
action recommended is to accept or reject the items represented by the sample. The
sampling plan specifies the sample size and the associated number of defectives that
cannot be accepted without rejecting the lot from which the sample was taken. In its
simplest form, the quality of a certain number of products of the same type is measured by
drawing a random sample from the lot. The sample is tested, on which basis the entire lot
is either accepted or rejected on the basis of the quality of the sample. The rejected lots
may then be inspected 100%.
In sampling, accepting a bad lot is termed as consumer’s risk whereas rejecting a lot with
fewer defectives than the standard, is termed as producer’s risk.
Limitations of acceptance sampling:

 Since the conclusion is based on a sample, there is always some likelihood / risk of
making a wrong inference about the quality of the lot.
 The success of the scheme depends on the randomness of the samples, quality
characteristics to be tested, lot size, acceptance criteria, etc.
98
Various sampling plans:

 Single sampling plan.
 Double sampling plan.
 Sequential sampling plan.
Statistical Quality Control

Statistical Quality Control is applied by taking samples and drawing conclusions by means
of some mathematical analysis. It has already been explained in a previous section that
variation in the quality of the product is an inherent characteristic of a manufacturing
system. Irrespective of all possible precautions and quality measures there are always a
large number of random disturbances responsible for deviations in the quality of the
product from the set standards. The sources of these disturbances are known as chance
causes. For example, movement of the machine due to passing traffic, sudden changes in
temperature etc. The presence of these causes in the system is due to a multitude of
reasons which are difficult to identify and uneconomical to eliminate. These can neither be
discerned or removed. There is very little that we can do about these.
99
There may be other sources of variations in a system which further cause the product to
deviate from set standards. These individual causes can be identified and eliminated
economically. The magnitude of variability due to these causes varies with the conditions
of the production process, nature of the raw material, behaviour of operations etc. These
causes are known as assignable causes. The reasons for the presence of assignable causes
can be (i) differences among workers performance (ii) differences among machines (iii)
variation in material and (iv) variation due to the interaction of any two or all the three
factors e.g. tool wear, errors in setting poor machine maintenance etc.
The chance and assignable causes combine together to lower the quality of the product.
Any item which is not in accordance with the quality specifications is known as defective
item and is liable to be rejected by producer and consumer. The object of quality control
is to minimize the proportion of defectives in the given lot.
Inspection is the method of locating defective items by examining these against
specifications and statistical quality control is to ascertain whether the variation in the
quality of the product is due to chance causes or due to assignable causes. If the process is
found to be in statistical control then it indicates that the variation in the quality is due to
chance causes only; otherwise presence of assignable causes is detected and some
corrective action is planned to improve the quality of the product. Control charts are the
basis of Statistical Quality Control technique.
100
Benefits of Statistical Quality Control:

• The use of statistical quality control ensures rapid and efficient inspection at a
minimum cost.
• It minimizes waste by identifying the causes of excessive variability in the quality of
product.
• SQC exerts more effective pressure for quality improvement than 100% inspection.
Control Charts :

A Control Chart is a graphical aid for depiction of quality variation in output from a
production process. As opposed to the aim of acceptance sampling (to reject or accept
products already produced), control charts aid in the production of a better product. The
charts have three main applications:
• To determine the actual capability of production processes.

• To guide modification to improve the output of the processes.
• To monitor the output – wherein the current status of the output quality provides an
early warning of deviations from the quality goals.
101
SAFETY
102
SAFETY
Safety should be there for workers – Humanitarian.

Safety should not affect productivity. Safety should be there for machines and for the operation
of the machines.
Take the example of a press operated by an operator, putting the material with hands, with the
operating buttons at the bottom (operated by the leg). If the synchronism between the hand and
leg misses, there could be an accident.
Types of accidents that could occur:

• Fatal accident: This is the most expensive accident for the factory and the worker. The
factory loses a skilled worker as well as the money for compensation.
• Major accident: Any part of the body is lost, whether the person is hospitalized or not.
The victim of the accident may become permanently disabled, necessitating his absence
from work over a period of time. This is known as “lost time accident”.
• Minor accident: No part of the body is lost but injured.
• No injury accident: Accident has occurred but the worker is not injured.
• Dangerous occurrence: For example, gas leakage which has not caused accident but is
potentially dangerous if timely collective remedial action is not taken.
103
SAFETY
How does an accident occur?

• Unsafe conditions
• Unsure act
Whenever any or all of the following four factors come into play, an accident can occur:
1) Personnel factor – person/s should be present.

2) Material factor – equipment should be present.
3) Unsafe action factor – this act would have been forced by the process employed or by
the machine design.
4) Proximate casual factor –

2) + 3) + 4) without 1) will lead to dangerous occurrence.

For example, stepping on the defective step of a ladder. First, the three will be met and
after they combine with 4), the accident will occur.
104
SAFETY
Accident Prevention Principles
There are 12 principles:

• Planning:
Examples– plant layout less material handling. The following factors can prevent
accidents:
 A scientific plant layout.
 Process sheet planning.
 Safe access to machine or job
 Adequate space around the machine and jobs.
 Broad walkways, no cross-hauling of material handling equipment
Isolate the dangerous areas. Example: Forging, smelting furnaces, paint booths.
Accident preventors are –
 Mask
 Water-curtain
 Air-curtain
105
SAFETY
• Design:
Design has to incorporate safety devices. For example, machine guard. Machine guard
should be such that it should –
 hinder the work;
 be able to prevent the work;
 be able to withstand wear and tear;
 allow for easy maintenance and lubrication of machine. A scientific
plant layout.
Another example of accident prevention: Safety clutch in gun.
• Training and Education:

The operator and supervisor should be given proper training and they should be taught
about the need or the necessity of safeguards. If the supervisor is not educated, the
worker may invariably complain of unsafe working condition.
106
SAFETY
• Fire protection:
You must have means for fire protection. Some areas may be “non-smoking” areas.
Fire-prevention and fire-fighting equipment like fire alarms should be kept.
• Good house-keeping:
You must have means for fire protection. Some areas may be “non-smoking” areas.
Fire-prevention and fire-fighting equipment like fire alarms should be kept.
• Working clothes:
Clothes should not be loose fitting and there should be no loose ends, e.g., ties etc. Long
beards should not be allowed.
• Colour code to identify accident-prone areas:

 Orange/yellow: Area with many moving parts/objects.
 Red: Out-of-bounds area where the risk of an accident is very high.
 Green: No problem area.
 Yellow & black stripes: e.g., railway crossings, road crossings, etc., where
accidents can be avoided by being alert. hinder the work;
107
SAFETY
• Notice boards / sign boards, with instructions:

While colour code is meant for a fair general area, for a particular machine a notice
board should be prominently displayed highlighting the nature of the potential danger
and the preventive safety measures.
• Labels: Same as above.
• Lighting: should be adequate and uniform.
• Control of noise – volume, sub-sonic and ultrasonic frequencies - temperature and

proper ventilation.
• Others:
1. First-aid.
2. Proper escape routes in the event of an accident.
108

Production Management

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What are the objectives of production planning and control?

What are the objectives of production planning and control?

What are the principles of accident prevention?

What are the principles of accident prevention?

PRODUCTION MANAGEMENT

Sr. No. Topics Page No.

The management of transformation process of input into output is production

Functions of Production Management

Production planning implies formulation, co-ordination and determination of activities

Objectives of production planning and control

Factors determining the nature of production planning and control operations

• The interdependence of various activities/operations involved in the

Importance of production planning and control

• Reduces cost of production by minimizing wastage of material and

Scope of production planning and control

Factors affecting location

5. Suitability of land and climate

11. Local building and planning regulations

14. Adequacy of circulation

15. Political situation

16. Special grants

18. Availability of car space

1. Integration with other group companies

JOB PRODUCTION: Job or “make complete” production is the manufacture of a

FLOW PRODUCTION: Batch production is characterized by the irregularity in the

6. Work must conform to quality standards. In job or batch production, variation

The achievement of the above requires considerable pre-production planning,

It must be noted that flow-production is not necessarily large-scale production.

In this section, we shall explore the relationship of production departments –

Objectives of Plant Layout

Types of Plant Layout

Product, Flow, Sequential or Line Layout

Process of Functional Layout

Which type of layout to use?

Use layout by product when –

Use layout by process when –

3. Maximum use of Volume

` 1. Maximum Flexibility 2. Maximum Coordination

Principles satisfied by a good Layout.

Advantages of a good Layout

Symptoms of a poor Layout

Factors affecting productivity

Techniques to improve productivity

Objectives of Materials Management

• Major raw materials.

Purpose of carrying inventory

Objectives of Scientific Inventory Control

Mathematical Treatment of the model:

Annual No. of orders per Procurement cost

= Annual Consumption x Procurement cost

Annual Inventory Average inventory Inventory carrying

To determine economic order quantity (qo) – the quantity that minimises

b) Avoid re-handling: It may not be possible to eliminate re-handling completely.

d) Ensure safety in handling: Safety is a key word in handling. A large percentage of

h) Reduce terminal time of equipment: The advantage of mechanical and power

Material Handling Equipment:

Job sequencing is concerned with appropriate selection of a sequence of jobs to be done on

Type of fan Number to be Machine A Machine B

Product Time in minutes Time in minutes