PRODUCTION

&
OPERATIONS
MANAGEMENT

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Manufacturing sector bounced back with strong
contribution to up lift the economic power of the country.

In 90’s Made in India tag was not exactly sought after .

In last 15 years, 16 manufacturing companies have won

Deming award from JIPM & 92 companies have awarded
TPM certificates by JIPM . India & Japan have largest
number of Deming prize winners .

World renowned TQM expert Mr Nasutoshi Washio

predicts that Indian manufacturing sector will take over
Japan by 2018 in terms of Quality Mangement .

2
Mr Baba Kalyani Chairman “ BHarat Forge ranked world’s
largest forging company . It derives its 70% of the business
from overseas market having buyers like Daimler Chrysler,
Ford GM , Volks wagen , Toyota Caterpillar etc .

The four countries which are being watched by the world

economist are BRIC ( Brazil, Russia , India China) .These
countries are going to play a bigger role in the coming
decades. India is the only country that has global
manufacturing competitiveness.
( Dr .V Krishnamurthy Chairman -National manufacturing competitiveness. )

We expect India’s competence in manufacturing to increase

dramatically in the coming years through flexible & Lean
manufacturing practices that match global standards.
( A. Zutushi President Frost & Sullivn )
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Mr Suresh krishna - Chairman Sundram Fastners says”
Touching export of auto part a 2 Bn $ business by 2006 is
not any more an unlikely target. Sundram Fasteners
Have won GM’s best supplier's award for three years .

Indian Auto ancillaries – Global suppliers of components

to GM , Ford, Skoda etc.

Sona Koyo Steering System is a key supplier of steering

wheels & rods to Suzuki.

India is set to become the hub for global market in

automobile sector. Nissan of Japan is using Maruti’s
manufacturing facility to make cars.

Many more ……………………..

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 Outlook for manufacturing Sector in India

Global Acceptance issue

of Made in India WCM
Global
Image & quality competitiveness
Issue.
Market

Domestic Manufacturing
Process
Mass scale Excellence
Local production

Local Global

Competition 5
 Conventional Operation system of an organization.

Production system OUT

INPUT PUT
Demand Location & plant Layout
RM Forecast
Labor
Machinery Product design & analysis Work study
Capital Production planning & Control

Aggregate Capacity Flow shop

Planning planning & scheduling ,
BOM & production MRP Job scheduling
Scheduling line balancing

Maintenance management,
Quality Control ,Inventory control
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 Traditional Manufacturing Process.
Causal Diagram.

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 Theory of Constraints
Eli Goldratt is the creator of the Theory of Constraints (TOC)
Theory of Constraints (TOC) is an overall
management philosophy that aims to continually
achieve more of the goal of a system. If that system
is for-profit business, then the goal is to make more
money, both now and in future.
TOC consists of two primary collections of work:

1) The five focusing steps and their application to

operations;

2) The Thinking Processes and their application to

project management and human behavior .

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According to TOC, every organization has one key
constraint which limits the system's performance
relative to its goal .
These constraints can be broadly classified as either an
internal constraint or a market constraint. In order to
manage the performance of the system, the constraint
must be identified and managed correctly.

Theory of Constraints is based on the premise that the

rate of revenue generation is limited by at least one
constraining process (i.e. a bottleneck).

Only by increasing throughput (flow) at the bottleneck

process or elminating the bottleneck , can overall
throughput be increased.
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The key steps in implementing an effective TOC
approach are:

1. Articulate the goal of the organization.

2. Identify the constraint (the thing that prevents the

organization from obtaining more of the goal.

3. Decide how to exploit the constraint (make sure the

constraint is doing things that the constraint uniquely
does, and not doing things that it should not do)
Subordinate all other processes to above decision
(align all other processes to the decision made
above)

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Within manufacturing operations , the solution to TOC
seeks to pull materials through the system, rather than push
them into the system. The primary methodology in use is
Drum-Buffer-Rope (DBR).

Drum-Buffer-Rope is a manufacturing execution

methodology, named for its three components.

1. The drum is the physical constraint of the plant: the work

center or machine or operation that limits the ability of the
entire system to produce more. The rest of the plant follows
the beat of the drum.

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2.The buffer protects the drum, so that it always has work
flowing to it. Buffers in DBR have time as their unit of
measure, rather than quantity of material. This makes the
priority system operate strictly based on the time .

3. The rope is the work release mechanism for the plant.

( Trigger ). It Pulls work into the system just when required
rather than earlier than a buffer time which creates high
work-in-process and slows down the entire system.

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Marching to the Drum Beat of the Drummer S-DBR

Traditional DBR usually calls for buffers at several points in

the system: the constraint, synchronization points and at
shipping. S-DBR requires only a single buffer at shipping.

Drum - The constraints, linked to market demand, is the

drumbeat for the entire plant.

Buffer - Time/inventory that ensures that the constraint is

protected from disturbances occurring in the system.

Rope - Material release is "tied" to the rate of the constraint.

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The Simplified- Drum, Buffer Rope ( S-DBR)
provide the basis for building a production
schedule that is highly immune to disruption,
avoids creating excess inventory, and uses
small batches to minimize overall lead time.
Thus S-DBR is used to mitigate and often
prevent those disruption which happens in
Production process.

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If the operational system suffers from

3. Poor on-time performance

4. Long production lead-times
5. High WIP and/or finished goods inventory
6. High overtime
7. Lots of expediting and rescheduling
8. Wandering or stationary bottlenecks
9. Reluctance to take on new business

. . . then it implies that your organization's

production process has constraints.

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16
 Manufacturing Less than Customer Required
Objective : time Lead Time

Efficiency, Effectiveness, Cycle time reduction

in manufacturing operation

Key Drivers Minimal Faster High Reduced

Inventory Response Quality over head
Time

Low Faster High No waste , sustained High

Outcome cost delivery flexibility quality morale

Exceed customer
expectation

Increase market share & profitability

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In today’s business world, competitiveness
defines an industry leader. The drive
toward maximum efficiency is constantly at
the forefront of all organization. Global
competitiveness is key success factor .

Organizations across the country are striving

to adopt lean manufacturing practices to
help address worries about their bottom line.
Cellular Manufacturing is one staple of lean
manufacturing.
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•In a lean manufacturing processes all non
value adding processes are squeezed out.

•In a lean manufacturing process a cell consists

of close arrangements of people, machines , or
workstation in a processing sequence.

•A one piece flow of product or service through

various operations with a least amount of delay
& waste.

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WCM Mantra : Best quality , lowest cost of
manufacturing , Shortest Lead Time , Highest Safety ,
High Morale.

Lean manufacturing Model ( TPS House )

Integrated SCM People & Team Work Self triggered stops
Just In Time Common Goal , Cross Process driven
Continuous flow Trained high morale Error proofing
Pull system In station quality
Quick change Continuous Improvement Control
over
Waste reduction
Problem solving
5 Why;s

Leveled production
Standard manufacturing process
Visual Management

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Toyota, the foremost lean manufacturer in business
today (Toyota Production System –TPS ) views value
as a combination of cost; quality, and time. Cost is the
total expense involved in the delivery of the product.
Quality is any deviation from standard. Time is best
captured as the total elapsed process time from the
start of a part, or transaction, to its delivery.

(If this process is the order fulfillment process or cash-

to-cash process then executives have a complete
picture of where time is being effectively spent, or
wasted, in the organization) .

It is the key fundamental differentiator between lean

and traditional practices.

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 Waste Reduction Process.
Value
Value Value
Added
added added
time
Waiting time time
time
Transport
Staging
Staging Set up machining
Assembly

Casting Inspection

RM FG

Value added time is only a small % of the total time .

Lean thinking focuses on the value stream to eliminate non
value adding items.
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 Waste caused in Manufacturing Process.

According to Toyota ‘s production system , seven important

causes of waste in manufacturing are :

1. The Process : Wrong process create high quantity of scrap

. Wrong type or size of the machines are used or if the
process is not being operated correctly it causes waste.

2. Methods : Unnecessary motions of operator, machine &

tool or material creates in efficiency & leads to waste .

3. Movement. Poorly planned production plan layout creates

back tracking of the process looses efficiency.

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4. Re work due to product defect , sorting process due to
scrap not being identified, leads to interruption in the
smooth flow of work leading to waste.

5. Waiting Time: Operator waiting & material waiting time

in the shop floor / work center on account of no material ,
no work etc is a waste.

6. Over Production : It increases the cost of carrying

inventory , locks the capital creates quality problem.

7. Inventory : Excess stocking of RM & WIP inventory

brings down cost efficiency of the organization thereby
reducing its competitive bargaining power . Puts the
organization in stress to liquidate the inventory at lower
price .
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 7 Essential principles of Lean manufacturing

1. Pull Inventory Control. Work moves based on

the needs of the downstream operation starting
from the customer need.

3. Automation: Equipment intelligently recognizes

& eliminates process variation with human like
intervention. Technology support from ERP,
CAD/CAM etc

5. JIT Inventory : WIP & supplies arrive at the

process location as they are needed.

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1. Visual control. : Management by sight of
equipment & process Variation.

3. Standardized work process & procedures. All

activities are defined in advance &
characterizes by process consistency.

5. Pursuit of perfection. There is no end to the

process of reducing , waste , time cost &
mistake.
6. Continuous work flow : Alignment of
machines are such that it drives continuous
work flow without interruption.
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Queue set-up versus Cellular layout.

In the traditional ‘queue' set-up , similar equipment are

put in the same area. Thus RM that need to undergo
processing under a certain equipment need to be
transported to the area where the equipment are
located. There they are queued for processing in
batches. Such a system results in transport and
batching delays.

In a single process flow set-up, the products simply

transfer from one equipment to the next along the same
production line in a free-flowing manner, avoiding
transport and batching delays.

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Cellular Manufacturing (CM) for Lean manufacturing system

It refers to a manufacturing system wherein the equipment

and workstations are arranged in an efficient sequence that
allows a continuous and smooth movement of inventories
and materials to produce products from start to finish in a
single process flow, while incurring minimal transport or
waiting time, or any delay for that matter.

In order to set up a single process flow (or single product

flow) line, it is necessary to locate all the different equipment
needed to manufacture the product together in the same
production area. This calls for a improved production layout.

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 Benefits of Cellular manufacturing system

1. CM helps eliminate overproduction and reduce

waste.
2. Cellular manufacturing helps reduce waste by
reducing defects that result from processing and
product changeovers. Since products or
components move through a cell one piece at a time,
operators can quickly identify and address defects.

3. Allowing operators to stop production when

defects occur (known as automation or jidoka in
lean circles) prevents wasted material and time.
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4. In a conventional queue process, it is difficult to
identify and respond to defects until the entire batch is
produced or numerous pieces are processed.

5.Reducing defects has several benefits such as :

•Fewer defects decreases the number of products that

must be scrapped.
•Fewer defects also means that the raw materials,
energy, and resulting waste associated with the scrap
are eliminated.
•Fewer defects decreases the amount of energy, raw
material, and waste used or generated to fix defective
products that can be re-worked.

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6.C M layouts typically require less floor space for
equal levels of production. Reductions in square
footage can reduce energy use for heating, air
conditioning and lighting. It can also reduce the
resource consumption and waste associated with
maintaining the unneeded space (e.g., fluorescent
bulbs, cleaning supplies).

7.Cellular manufacturing layouts and automation can

free workers to focus more closely on equipment
maintenance and pollution prevention, reducing the
likelihood of spills and accidents.

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A work cell is defined as a collection of
equipment and workstations arranged in a
single area that allows a product or group of
similar products to be processed completely
from start to finish.
It is, in essence, a self-contained mini-
production line that caters to a group of
products that undergo the same production
process. Cellular manufacturing involves the
use of work 'cells.

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Since differently-processed products need different
work cells, a large company with diversified products
needs to build several, different work cells .

Having enough volume of products to work with, work

cells have been proven by experience to be faster and
more efficient in manufacturing than 'queue' systems.

Because of the free flow of materials in CM, it has the

ability to produce products just in time.

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 Production Process.

Standardization Variation

Mass Batch Job Project/ Turn

Production production production key production

MTS ATO MTO/ BTO ETO

Plant Layout

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Managing Manufacturing Lead time ( MLT ) is an essential
task in any organization to deliver the goods as per the
customer order lead time.
MLT depends on the nature of manufacturing process. The
four types of manufacturing process are :

ETO ( Engineer to Order)

MTO ( Manufacture to Order )

ATO ( Assemble to Order )

MTS (Made to Stock )

Design Procure Manufacture Assemble Ship ETO

Lead Time
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36
 Plant layout
Plant layout is a floor plan of the physical facilities
used for ease in production system. It is an spatial
arrangement of physical facilities to increase the
productivity in the shop floor.

Key objectives are : Minimize investment in

equipment .
Maximize effective production time
High space utility
Build safety & comfort
Create flexibility in the operation
Minimize Material handling cost
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Classification of layout are :

Product layout : Machines & auxiliary service

are located according to the processing
sequence of the product .

Process Layout ( Machines performing similar

operations & service are grouped & positioned
at one place.

Group layout : A combination of product &

process layout. It provides the benefits of both
layout to the business.
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Advantages of layout : Product layout : Simple
production Planning & control

For high volume standard outputs, machine &

work force utilization is high.
Operator skill can be relatively low as he is trained
for one kind of operation.

6. Limitation : Breakdown of one machine will cause

stoppage of work in down /up stream level.
7. Last minute change in product design will require
major alteration in layout .
8. Heavy investment is required in material handling
equipments , machinery etc.
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1. A high degree of flexibility in terms of task
allocation to machines exists.
2. Relatively low investment in machines .
3. Operators are multi skilled.
4. Handles diversity in task better.

Limitation

8. High care in PP&C required.

9. WIP inventory will be large.
10.High grades of skilled work force will be
required.
11.Material handling cost will be high
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Group layout will provide standardization &
rationalization of products , good estimates ,
effective machine operation , high productivity
, reduce set up time, less down time , better
through put etc.

Group layout will not be feasible for all kinds

of operations. When the product mix
manufactured is very dissimilar it will not be
advisable to have group layout.

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 Plant types
There are four primary types of plants in the TOC lexicon.
They specify the general flow of materials through a
system, and they provide hints about where to look for
typical problems. The four types can be combined in
many ways in larger facilities.
3. I-Plant: Material flows in a sequence, such as in an
assembly line. The primary work is done in a straight
sequence of events (one-to-one). The constraint is the
slowest operation.
4. A-Plant: The general flow of material is many-to-one,
such as in a plant where many sub-assemblies converge
for a final assembly. The primary problem in A-plants is
in synchronizing the converging lines so that each
supplies the final assembly point at the right time.
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V-Plant: The general flow of material is one-to-many, such as
a plant that takes one raw material and can make many final
products. Classic examples are meat rendering plants or a
steel manufacturer. The primary problem in V-plants is
"robbing" where one operation (A) immediately after a
diverging point "steals" materials meant for the other
operation (B). Once the material has been processed by A, it
cannot come back and be run through B without significant
rework.
T-Plant: The general flow is that of an I-Plant (or has multiple
lines), which then splits into many assemblies (many-to-
many). Most manufactured parts are used in multiple
assemblies and nearly all assemblies use multiple parts.

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Customized devices, such as computers, are good
examples. T-plants suffer from both synchronization
problems of A-plants (parts aren't all available for an
assembly) and the robbing problems of V-plants (one
assembly steals parts that could have been used in
another).

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Layout Design Procedures.

1) Manual Method : 1.Travel chart

2. Systematic Layout planning

2) Computerized Method. ( Using algorithms )

7. Automated Layout Design Algorithm ( ALDEP)

9. Computerized Relationship Layout Planning

(CORELAP)

3 Computerized Relative Allocation of Facilities

Technique.( CRAFT)

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 Plant layout variables

1.Flow of material 2.Process flow

Relationship of 1&2

Space Space
Requirement Available

Practical Constraints

Develop layout alternatives

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 Structure of Manufacturing Function

Product Production Production QC

Design / planning Scheduling
ERC
Maintenance
& Parts.

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 Production Planning & Control
Production planning function is responsible for planning of
resources like Material , Machine , Manpower , Method &
Money for production activity. Production planning
function deals with two levels of planning :

Prior Planning : All activities such as product development

& design , production cost estimation , vendor
identification , sourcing mechanism , Material planning ,
creating BOM , Order writing etc.

Active planning includes Process planning , & routing,

work force allocation , machine allocation, Tool planning
Material handling & movement etc.
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PP&C function is responsible for managing the overall
cycle time during production process since
Cycle time is directly related o production rate .

CT ( Cycle Time ) = Productive time / Demand per

period
If the demand per day from a manufacturing shop is 24
cylinders , then in a shift of 8 hrs , the CT = 8 X60/24
= 20 Min
Since the actual time available would be less than the
ideal time ie 8hrs on account of set up time for
machine, operator efficiency , break etc , the effective
cycle time would be less than 20 min .
As demand increases & lead time need to be minimized
to be competitive in the market , PP&C has to manage
Effective cycle time.
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PP&C function in a manufacturing organization directly
supervises the following activities :

1.Material Planning
Estimating individual requirements of parts ( BOM )
•Preparing material budget
•Forecasting inventory
•Raising material indent
•Make or buy decision analysis

•2.Inventory Control
•ABC analysis
•Lead time analysis
•Fix Economic Order Quantity
•Building safety stock & re-order level.
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3.Subcontract Activity
•Vendor evaluation ( value engineering )
•Monitor out source activity
•Outsource to subcontractors
•Make vendor inspection schedules

4. Store management
•Maintenance of store record
•Handling & movement of materials
•Disposal of scrap inventory

5.Maintenance Planning & Scheduling

•Preventive & corrective maintenance schedule
•Spares planning

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6.Machine scheduling
•Job Scheduling
•Productivity study

7.Quality Control.

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 Production Control

Work Scheduling ( Loading )

Progress reporting

Corrective action

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Demand estimation

Aggregate planning

Material Requirement Planning

Creating BOM Sourcing &

Confirmation of
Lead time
MPS

Production Production Final

Lead time As per production Inspection
Confirmation Schedule & dispatch
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Cost trade off.
When orders are placed more frequently, the
ordering cost is high but carrying cost lost is low
, on the other hand if less frequent orders are
placed ordering cost will be low but carrying cost
will be high.
Total cost
Cost
Carrying cost
Total
cost

Ordering cost

Order
Qty 55
 Assumption : Demand Constant & No lead time

Q
Q/2

Time
Annual Demand = D
Average Inventory = Q/2
Cc = Carrying cost
Co = Ordering cost
P= Price per unit.

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Total cost = Carrying cost + Ordering cost + demand
per unit/ yr per order
TC= Cc x Q/2 + Co x D/Q + DxP
For optimum quantity at minimum cost
differentiate TC w.r.t Q
d (TC) & satisfy the minimum condition
dq
Cc/2 – CoxD/q2 =0

Q= 2CoxD/Cc

Q is Economic Order Quantity

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 Economic Order Quantity with quantity discount

When material is bought in bulk firm enjoy the benefit of

volume discount at slab level .

The procedure to compute optimal order

size in such situation can be :

Q= 2CoxD/iPn

Q is Economic Order Quantity,

is nth price for a volume ,
is inventory carrying cost of purchase price /unit/year
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Annual demand of an item is 4800 units. Ordering cost is
Rs 500 per order. Inventory carrying cost is 2.4% of the
purchase price /unit /year . Price slab is as follows:
Find optimal order size. ?
Quantity ( units) Price( Rs)

0 to 1200 10
1200 to2000 9
> 2000 8

I = 24/1000 x 10 = .24
At price = Rs 8,
Q3 = 2x500x4800/ .24 x8 = 1581 units
Q2 = 1491 units
TC = 9 x 4800 + 500X4800/1491 + . 24 x 9 x 1491/ 2 59
Purchase Inventory review system :
Review process is administered on the basis of Fixed
order quantity ( Q system ) and fixed period quantity
system . ( P system )
In Q system , whenever the stock level reaches the RoL
, order is placed for a fixed quantity of material .
RoL is calculated as a sum of demand during the lead
time & variation in demand during lead time ( safety
stock ) and average demand during delivery delays.
( reserve stock )
In p system , stock position is reviewed after every fixed
period & order is placed according to stock position .

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 Inventory Control Techniques
Inventory control techniques are used to prevent :
1. financial leakage due o excessive stock & poor
demand ,
2.shortage of inventory
3. Inventory Obsolescence
Plan safety stock for critical & essential items
Build selective control on fast & slow moving
inventory .

Various Inventory control technique used are :

ABC : Always Better Control
VED : Vital Essential & Desirable
SDE : Scarce Difficulty & Easy
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FNSD Fast moving , Normal , Slow moving , Dead
 ABC Classification

100
CLASS C
90 Low annual consumption value

CLASS B
Usage %
Moderate annual Consumption value

70
(Inventory
Value )
CLASS A
High annual consumption value items

0 10 30 100
% items
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VED analysis : Vital : Without which production process
will come to halt.
Essential : Non availability of such item will affect
the efficiency .
Desirable : It is good if it is available , however
alternate option can be done.

SDE : Scarce ( Short supply )

Difficult ( Imported components )
easily ( Short lead time )

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 V E D

The building safety stocks & re order level decision

can be formed Considering the above situations.

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The goal of JIT in manufacturing organization is to
continuously reduce the cost associated with requirement
material resource. Its objective is to achieve zero ( minimal )
inventory through out the supply chain, hence implement
good material control. The goal of JIT process is to reduce
excess working capital held-up on account of material ,
minimal inventory at WIP .

The constraints for implementing JIT are :

•Unpredictable quality of supply of material

•Inability to hold tolerances.
•Shortcoming in lead time. ( Erratic delivery )
•Short supply of quantity of material
•Inaccurate forecasting
•Non standard materials being used ( Increased variety )
•Last minute product changes. 65
 Steps for implementing JIT in an organization.
1.Symptoms
Situation leading to overstocking ( Poor demand forecast
2.Causes
(Excess stock of RM inventory in anticipation of demand )
3.Remedy
Implement process to overcome the constraints ( Produce
on Demand Pull production system ) Build pull inventory
mechanism .
•Do detailed analysis of inventory requirement of all types
at every stage of production process.
•Estimate the market fluctuations on account of price,
supply , quality demand etc.
•Identify reliable source of suppliers who are capable of
supplying material as when required.
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•Take supplier in to confidence & sensitize them the
importance of JIT & build healthy business
relationship with suppliers to have high commitment
& ownership .
•Conduct periodic vendor appraisal & follow vendor
rating system of evaluation .
•Give instant feed back on the supply & suggest
improvement steps.
•Sign rate contract , Blanket order .
• Leverage on IT (Web ordering system , ERP ) end
to end.

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 Value Engineering or Value Analysis

It is a technique of cost reduction and cost

prevention. It focuses on building necessary
functions at minimum cost with out
compromising on quality, reliability ,performance
& appearance. It helps in identifying unnecessary
costs associated with any material , part
components or service by analysis of function
and efficiently eliminating them with out
impairing the quality functional reliability or its
capacity to provide service. It is a preventive
process.
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When to apply VE
• Raw material cost increases suddenly .

• Vendors are unreliable & organization is highly

dependent on a few select vendor .

• Cost of manufacturing is disproportionate to

volume of production .
Value analysis is done w.r.t cost associated at:

• Cost Value (Labour , Material & overhead).

• Use Value
• Esteem Value ( Look & finish )
• Performance Value ( Reliability , Safety , Service &
Maintenance ) 69
 Value = Performance ( Utility)
Cost

Vendor analysis is done to minimize the cost incurred due

to a supplier Inefficiency or inability .

Vendor cost to be considered are :

•Opportunity loss due to poor quality ( High rejection cost )

•leading to machine & labour idle time.
•High re-work cost
•Inconsistent lead time
•Inability to meet the demand of the manufacturer
•Poor Credit terms

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 Value engineering procedure:
Constantly evaluate the costs associated with VE &
benchmark against the best in practice.

As & when the cost of manufacturing increases

disproportionately, identify an alternate source for contract
manufacturing & monitor the quality & standards.

Use more standard parts which can be sourced easily

Develop more suppliers ( atleast 4 to5 for one part.) &

minimize dependency on one supplier.

Audit the supplier’s work premise & rate them on the

performance .
Conduct quarterly vendor meet & share the highlights &
concerns .
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Material requirement Planning : MRP is a technique for
determining the quantity & timing for procuring of dependent
items needed to satisfy MPS .
The inputs for MRP are :
Product structure or BOM
Final Assembly details
EOQ
Stock in hand.
On the basis of the above inputs MRP calculation is carried
out.
The calculations are :
Projected requirement
Planned order release
EOQ
Scheduled Receipts
Safety stock.
Material waste on account of machining allowance
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 Production Control . It involves work scheduling
Reporting & corrective action.
Work order - Production Planning  Scheduling

Corrective Action Reporting

Objective : Manufacture & deliver the work order within the
committed time within the resource constraints provided.
•Effective utilization of time .
•Eliminate stress during the production activity
•Cent percent plant capacity utilization
•Minimize cost on waste like overtime, scrap , down time etc.
•Proactive reporting of issues at shop floor , like absenteeism
of workers , non availability of material on account of
rejection , unplanned breakdown , daily reporting of
production status as per the target plan.
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Machine scheduling : A process created for effective
utilization of machine in the shop floor on the basis of
actual available time for processing .
It involves Set up time required
Startup time
Routine maintenance time ( Cooling time, Tool
trail )
Operator efficiency
Total Machine Hr – Delay = Actual Hrs

Process scheduling : A method of establishing most

economic & shortest path for production .
Process scheduling requires an understanding the flow of
the work process & create a process sheet or route sheet
to optimize the time.
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Process sheet gives the optimum method to do
a job , thereby fixing the sequence of the
operation , link the ancillary or parallel process
to be accomplished . It gives the details &
specification of the machines tools , operator to
be deployed for the job. Delays on account of
set up maintenance etc is communicated to the
operator.

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Process sheet includes the following details of a process.

• Part name to be machined & its engineering drawing

& specification .
•Sequence of the operation to be performed .
•Specify the the machine & tools to be used. ( cutting
tools ,jigs, fixtures )
•Operating machine details like Speed , ,load , cooling
time set up time )
•Operating skill required
•Productivity norm
•Maintenance schedule of the machine
•Subsequent operations

76
Process scheduling differs depending upon the nature of
production .

Continuous or mass production : It is done by industrial

engineers at the plant layout stage. It is difficult to alter the
plan & incurs heavy expenditure.

Batch production : In this case a master process sheet is

created & is communicated to the shop floor . As & when the
product line changes it is altered.

Job order. In this case the process sheet is created more

often as the nature of operation varies .

Process schedule acts as a standard operating manual for

process engineers to refer incase of any emergency or
77
accidents.
Reporting of the production progress in the plant.
It is done using the following reports :
•Job Schedule

•Load chart

•Gannt Chart

•M.S project software

•Pending , backlog order status

78
Managing large & complex project work.

A large complex project comprising of

multiple activities to be performed while
manufacturing to delivery viz ship building ,
commissioning of power plant , installation &
commissioning of turn key projects involves
coordination & monitoring of activities from
start to end for timely completion of work to
avoid monetary loss & high customer
satisfaction.

79
 Projects of such nature is planned & executed for time
efficiency & optimum cost . Project management
techniques like: critical path method ( CPM ) & Project
Evaluation & Review Technique ( PERT ) .

In CPM activities timings are deterministic in nature .

However in case of PERT the activity time are estimated
from three time estimates like ( a = Pessimistic time , m=
Most likely time & b = Optimistic Time. )

5. Optimistic time is the time when the execution goes

extremely good.
6. Pessimistic time is when the execution goes very badly.
7. Most likely time is when execution is with in normal
expectation.
µ = Mean time ( a+ 4m+b) / 6
80
 ² ²
(Variance ) = [(b-a)/6]
Guide lines for network construction.

3. Start & end of an activity is represented with a node .

4. Activities are represented by forward moving arrows &
consumes time.
5. Dummy activities are shown for logical relationship in the
network diagram & do not consume time.
6. All activities of the network should be tied to the network.

5 Relationship between activities should be decided like

preceding , concurrent , succeeding to establish the
network.
81
Critical Path of a Project : Critical path of a project
network is the longest path in the network . It is identified
by listing all possible path of the network & selecting the
path having maximum sum of the activity time.

Total Floats of the project: Total time that a project

completion time of an activity can be delayed without
affecting the actual project completion time.

Free Floats : Total time that an activity can be delayed with

out affecting earliest start time. Of immediate successor
activity .

82
Maintenance Planning
&
Control

83
 Continuous use of machinery causes wear & tear
leading to disruption production process.

• Maintenance function’s objective is to keep the

machines in best operating conditions with economical
cost.
• Maintenance function has to take a timely decision to
repair or replace the equipment to avoid the excessive
cost incurred in the maintenance. (Maintenance Plan &
cost control )

• Overcome accidents & unsafe work conditions in the

shop floor.

• Enhance machine utilization & productivity .

• Maxim mum availability of machines ( UP TIME) for 84

production.
Impact of poor maintenance function in a manufacturing
organization.

3. High down time cost. Incurred loss due to the inability of

the machine to produce the goods.
4. Down time cost = cost /unit X no. of units X total idle Hrs

6. If the manufacturing processes are interdependent

activities , the financial loss goes exponential as all
other dependent activities come to a halt.

8. Idle wage : Wages to be paid to the work force & loss of

productivity , leading to the in efficiencies of the machine
shop .

10. High wastage & scrap due to poor performance of the

machine leading to high input material cost. 85
1. High cost of rework due to inferior quality of finish .
Loss of customer confidence.

7 Expediting cost to meet the dead line in the form of

overtime, hiring of equipment , shifting of work to
another plant. etc.

8 Accident cost incurred due to partial disability or or

loss of life.

9 Opportunity cost of the business

86
 Performance measure of machines for maintenance
decision
Overall Equipment Efficiency ( OEE) : It is the
combination of uptime ( availability of the machine for
production ) , cycle time efficiency ( production
efficiency ) & quality of the equipment.

OEE% = Uptime % X Speed % X Quality %

( MTBF – MTTR )
MTBF= Meantime between
Where Uptime % = ______________
X 100 Failure
MTBF
MTTR = Mean time to repair

MTBF = Total Running Time

Number of Failure
Actual Cycle Time
X 100
Speed % ( Efficiency) = Design Cycle Time
87
 Good Parts Produced
Quality ( %) efficiency = __________________ X 100
Total parts produced

88
 Reliability of Machines .

Reliability is the probability that an equipment will

satisfactorily perform the function for which it is
designed when operated under a specified condition for
a given period.

5. Reliability is a function of time .

7. It is function of condition of use .

λ = Failure rate is defined as the number of times a part

fails in a given interval of time.
No of Failures
λ =
Total units of Operating Hours
89
 Reliability of Machines.

Weibull Distribution Graph

It helps to decide an appropriate maintenance

strategy for high productivity in the shop floor.

Rate
Of
Failure

Infant EOL Zone

Morality Zone Reliability Zone ( Aging out of Machinery)

Time Reliability

90
Reliability of the equipments depends on the design
parameters , operating conditions , Probability of
performance ( Mean time between failure MTBF & MTTR
( Mean time to repair )

Infant mortality : failure rate at the beginning is high &

reduces with passage of time exponentially .

Reliability zone : Failure rate reduces drastically &

predictable to some extend

EOL : Failure rate increases due to aging of the equipments

& increases un predictability .

91
Maintenance required at infant mortality stage is high due
to poor set-up of the machine , idea ling of the machine,
non trained users etc even tough the machine is new.

During the reliability stage, the failure rate is minimum as

the workers are now trained to operate it efficiently,
machine set up issues & idea ling problems have been
handled by the maintenance team.

As the machine starts aging , the failure rate increases due

to high failure rate of the parts & components. At this
stage, the reliability of the machine is low.

92
Reliability of an equipment under infant mortality stage
means that the product will last for a period of time “T”
with out break down . Since the curve at this stage
follow a exponential distribution : Reliability is
represented as
_ T/ MTBF
R = e

Where T = Length of service before failure

, e = Natural log value ( 2.71 )
MTBF = Mean time between failure

-T λ
λ = 1/ MTBF Hence R= e

93
 Types of Maintenance followed in a shop
floor
1. Preventive maintenance( PM) : It involves
cleaning , inspection, oiling & retightening of
parts after equal interval of time in anticipation of
the condition of the machine , irrespective of the
problem. Hence PM is further classified in to
Predictive( Condition based ) & periodic ( Time
based ) maintenance.

2 Corrective Maintenance (CM) . Two types of

corrective maintenance are : Design in
maintenance , where Equipment with design
weakness are redesigned to improve reliability &
94
maintainability .
Design out maintenance to install new equipments of
superior technology or scrapping of aged out machines,
replacing manual to fully automatic machines.

3 . Break Down Maintenance : Repair of machines due to

sudden or unforeseen breakdown.

4. Total Productive Maintenance( TPM ) : Systematic

equipment maintenance process in the shop floor for high
productivity , High employee morale & high job satisfaction.
It is belied on the premise that maintenance is not just the
responsibility of a single department but a collective
responsibility of top management to lower level operators.

95
Objective of TPM : Make the plant operation
maintenance- free , working on maintainability
& improvement .

Preventive Maintenance
Maint Prevention Maintenance
& Free
TPM
Maintainability Service
Predictive
Maint Improvement

96
Objective of TPM :
1. Build a collective culture of maintenance to attain
maximum efficiency through out the production process.

2. Create Zero accident, Zero defect & Zero Breakdown

manufacturing process.

3. Make Problems visible

Benefits : Increased equipment productivity

• Lower Maintenance cost

• Reduced accident & waste

• High employee commitments

97
 Pillars of TPM to enhance the success are :
5 S strategy of maintenance :
Seri ( Sort )
Seiton ( Systematic )
Seiso ( Sweep. Keep the place clean )
Seiketsu ( Standardize )
Shitsuke ( Self Discipline )

Kaizan [ Plan, Do Check , Act ] ( PDCA )

Autonomous Maintenance : Prepare operators for routine
maintenance so that core maintenance team can focus on
High end maintenance activities. It aims to achieve OEE &
OPE ( Overall production efficiency ) .
Planned & Quality maintenance

Training , Safety & Environment

98
 Cost analysis for maintenance planning
Total maint
Cost curve.
Average operating
& maintenance
Maint Cost.
Cost Capital
Recovery cost

Economic life

0 1 2 3 4 5 6
Life of the machine

Scheduled maintenance is carried out periodically ( after fixed interval

of time )irrespective of the failure. This increases the cost

Break down maintenance is carried out as & when there is a sudden

failure of the machine or part. If PM is planned regularly , the break
down cost can be controlled. 99
Optimum cost decision needs to be achieved if the maintenance
function has to be profitable to the organization. In other words it is
an optimum mix of planed & un planned maintenance decision .
Beyond the optimum cost a machine replacement decisions have to
be taken.

Replacement decisions are to be taken when the parts are

deteriorating at the faster rate leading to poor efficiency , high
frequency of failure , high maintenance cost etc.

Deteriorating efficiency of the machine can be either gradual

( mechanical parts) or abrupt ( Electrical & electronic parts.)

Economic replacement policy decision: when equipment

deteriorate with time & fail suddenly.

100
Let C = Capital cost of equipment , n = No of years equipment is in use.
S= Scrap value f(t) = Maint cost function
A(n) = Average total annual cost

When time is a continuous variable ,

Total cost = Cap cost – Scrap value + Maintenance cost

Prob;1
A firm is considering of replacement of machine whose
cost is Rs 1750& the scrap value is negligible. The running
maint cost is as follow:
Yr - 1 2 3 4 5 6 7 8
R cost 0 100 200 300 400 500 600 700 800

When should the equipment be replaced ?

If the scrap value is Rs 200, & straight line depreciation
allowed is 20% PA , what should be the replacement policy
. 101
Yr Maint Cost Cumm Av Maint Av M/c Av Total
maint Cost cost cost cost
1 o 0 0 1750 1750

2 100 100 50 875 925

3 200 300 100 583 683

4 300 600 150 438 588

5 400 1000 200 350 550

6 500 1500 250 292 542

7 600 2100 300 250 550

8 700 2800 350 219 569

9 800 3600 400 194

10 900 4500 450 175 102

In case of probabilistic model replacement policy used are :
Individual replacement Policy & Group replacement policy

103
 Spares Management

Spares management has to be done by the organization to

ensure that maintenance job can be conducted smoothly
with out any down time on the machine on account of
spares non availability.

However the challenge is to ensure that the maintenance

department keeps minimum level of spares so that the
holding cost, obsolesce cost etc can be reduced .
In order to decide the spares requirement planning ,
organization should know the reliability factor of the
installed machine( failure rate of the components of the
machine. )

104
Classification of Spares Parts

1. Maintenance & breakdown spares ( Critical

spares parts )

2. Insurance Spares

3. Capital investment spares ( High value spares)

4. Rotable spares ( Reusable & standard parts )

5 Consumable spares

105
Quality Management

106
 Quality Management

Quality is a measure of how closely a goods or service

confirms to specified standards. The standards can be a
combinations of one or more attributes or variables of
product or service being manufacture delivered .

Variable data are continuous in nature are measured on a

sliding scale , ie deviation from standard. The data can have
range in terms of upper & lower limit within which the
samples of acceptance are supposed to be lying.

Attributes : Attributes are the data discrete in nature are

binary . Attribute data samples are accepted or rejected.

107
 Strategic Areas of Quality Control in manufacturing

Area Quality Control

Material
Planning SUPPLIER

Procurement

Incoming Incoming RM
Material Inspection

Manufacturing Process
Process Control

Final Assembly , Testing Final

& dispatch Inspection
108
Quality Assurance : Design optimum quality standards,
which a manufacturing function at design stage , incoming
material stage production stage ,FG dispatch stage after
sales are to be followed in a manufacturing firm.
Quality Control: The process of measuring defects ( quality )
in the product & process beyond acceptable level of defined
standard.
Quality control technique.
1 Acceptance sampling for variables & attributes

2 Control charts for variables & attributes .

Variables

Mean Chart & Range Chart

109
Mean chart gives the idea of the central tendency of the
observations . I gives the Variation between the sample
observations.

Range Chart : It gives the spread ( dispersion ) of

observation . It shows variation within the samples.

Attributes

Percent Defective
Defective Chart per sample area
P- Chart C - Chart

To identify the average proportion of non confirming

part submitted for inspection
Over a period of time. ( P Chart ) 110
 It identifies the number of non confirming parts in a given
sample of constant size. C – Chart
It is used to control the final defects in a final assembly .
Acceptance sampling is used for taking decision to accept
or reject a lot on the basis of a lot’s sample characteristics.
Identify the supplier’s risk or customer’s risk in acceptance
sampling & decide the mutually acceptable level .

Sampling technique can be single sampling , double

sampling.

111
Acceptance Sampling: Objective of Acceptance sampling is
to accept or reject a lot on the basis of sample
characteristics.

Accurate method is 100% inspection. However in large

manufacturing firms this approach could lead to time
consumption, delay, money ( Destructive testing methods ) ,
manpower etc. Hence it is necessary to take decision based
on the characteristics of a sample size picked from a given
lot of material . This is known as acceptance sampling .
In this process there are chances of two types of error.

Type 1 Error( α) . ( Supplier or producer risk) : If the lot

sample picked is bad ,but the lot size is good , it get
rejected.
112
 Type II Error ( β) or manufacturer’s/ buyer’s risk : If the lot
sample picked is good , but the lot size is bad , when such
lot is accepted , then manufacturer incurs great loss .
Hence both parties are expected to jointly agree at a level
where the risk level is minimal .
This is explained using Operating Characteristic Curve .

α
Probability of
Acceptance
Of a lot for a given
percent defective .

The value for percent defective

Indicates the quality level of the lot β
inspected .
AQL = Accepted Quality Level.
AQL
LTPD: Quality level of the lot submitted LTPD 113
for inspection Lot Tolerance Percent Defective