ITS Engineering College

BASIC CONCEPTS OF MANAGEMENT

1.1 Management - The Most Important Input Management, always important in all ' spheres of economic activity, has never been of such critical significance as today. The shifts in environment and internal working conditions (in general) in an enterprise in the seventies- all over the world but particularly so in the developing countries like India, Bangladesh, Pakistan, some of the African the Middle and the Far Eastern countries, demand management, as the key input for economic success. It is good to summarise here some of the general and significant influences which have brought about this change :1) Society, which was earlier individualistic, has now become amorphous. Only groups and institutions can perform but they are far from homogeneous or crystallized. 2) As earlier noted, there is a shift toward pluralism, of multiple competing interests, concentrated round power and service centers. This calls for a lot more adjustment, balancing and coordination by each enterprise in the system. 3) The interface between all social and economic units, 'including the government machinery, is now wider, more complex and gossameric. This has brought forth a new demand on the managerial skill. 4) People have come closer to industries and institutions and vice-verse. Whether as tax payers, consumers, beneficiaries or employees, they cannot be taken for- granted. A new vigilance is demanded of the present management to handle such a situation. 5)The economy is much more planned and regulated today in a macrosense. An enterprise management has a defined (and

ITS Engineering College delimited) periphery within which to function. It sets a' severe demand on the management's ingenuity and skill of adjustment. 6) The economic laws and regulations are many and ubiquitous. They often shift and change. An enterprise needs a close vigilance that the best and the safest course is adopted on these regulatory fronts. 7) The, institutional inundation has called for enormous contacts liaison and coordination. Meetings, conferences, consultations and the role of influence have grown enormously over the years. 8)Systems refuse to work on an even keel. A fish plate seems to be torn the rails every kilometer or two. The management at the wheels' must pass watchful nights with its search-light on. 9) The human element in management, at all levels of the team, is more unpredictable than ever. Bending the concerted human energies and motivation to the common enterprise goal needs magical powers of administration. 10) The lines of discipline, well-recognized and respected two decades ago, have now eroded end thinned to nothingness. We seem to be at the crossroads where individual's right and -demands of factions vie and compete, in devastating rivalries, with .the common social interest. 'This influence is discernible where poverty and freedom .rub shoulders in the developing world.. Constant management-action is needed to even out this discordant note in the environment, both external and internal. 11)Social accountability of business has developed as a growing consciousness. Government machineries have been set up to enforce this accountability. This has caused, willy nilly, a conflict situation. A greet deal of management judgment and wisdom, is celled upon to resolve this conflict, consistent with enterprise success. 12) Professional management in farming and the small sector of the economy is either absent or in a rudimentary stage. A vast

ITS Engineering College amount of managerial function is needed as essential input in these two vital sectors. 13) In a developing economy the. basic goals are known but largely. Unfulfilling. The critical constraints are two: (1) Management of the resources and (2) Making full use of vast untapped opportunities. Both these are important management areas. It is a truism that no country is poor, no economy stagnant or industry tardy of growth because of resources constraints. The reel limitation is managenient with all its skills and obligation. _______________________________________________________

Characteristics and importance of Management

characteristics of Management : Following are some of 'the characteristics of good management: 1) To maintain discipline and to keep control over the employers of various sections. 2) To distribute work and machines among the workers in such a way as to secure maximum output. 3) To keep co-ordination among the staff at various levels. 4) To improve efficiency, management keeps sufficient watch and strict inspection. 5) To suggest new ideas and improvements, 6) To arrange for the efficient storing and recording. 7. To make the arrangement of payments and their records etc. 8. To provide good training to Staff for attaining high skill in . all fields. 9. To impart the instructions timely and to provide constant guidance. 10. By adhering to high standards of performance it must be able to provide more facilities and wages-to the workers' and reduce the prices.

ITS Engineering College

Importance of Management :-

A scientific management is most-essential as it fulfils the following necessities 1. It maintains the discipline by keeping proper control over the employees of various departments. 2. It distributes the work and machines among the workers in such a way so as to secure maximum output. 3. It keeps to co-ordinetfon among the staff at various levels. 4. It improves the efficiencies, as it keeps sufficient watch .and strict inspection. 5. It suggests new ideas and improvements. 6. It arranges for the efficient storing and recording. 7. It makes the arrangement for payment on scientific basis and to keep their records properly. 8. It develop means of marketing and publicity. 9. It gives due importance, to labour grievances and study their psychology for the purpose of maintaining the good human relations and for achieving the goals. _______________________________________________________

ITS Engineering College

Management Classification

Management is concerned with direction and control over the various activities and work for the attainment of the objectives laid by the administration. As per W.R. Spriegal management is an executive function, which is mainly concerned with carrying out the policies laid by the administration. of the management some companies have grown, whereas others have stagnated, or even been eliminated. It is very difficult to write detailed description an the development thought, since much work has gone unnoticed and unrecorded. Whereas, writers on management have been very few. Here only the most important pioneers in the development of management thoughts are covered Field of ___________________________________________________ Field of Functional Scientific Human Management Approach Management Behaviour Management =================================================== Pioneers Robert Owen Henry Fayol (1771-1855) (1841 - 1924) F. Y. Taylor (1856- 1915)

Gilbreth (1868- 1925)

G. Eiton Mayo

Henry Gantt Mery Parker Follet (1860 - 1933) _______________________________________________________

ITS Engineering College There pioneers laid. the foundation of modern management. Development of management science can . be studied in 3 categories (1) Functional .Approach, which includes work of Fayol (2) .Scientific Management approach, which includes the work of "fayior, Silbreth and Gantt. (3) C3) Human Relation approach, which includes the work of Mayo,.Owen and Follet.

FUNCTIONAL APPROACH TO MANAGEMENT

Henry Fayol ( 1841 - 1925 ) :Henry Fayol, a trench industrialist, and Manager, was one of The first writers who developed his theory of management. He is regarded as the father of modern management theory, because he was the first who suggested the function of management. These functions have been recognised as the main task of manager in modern management theories. Management Thoughts of Fayol can he classified into following 3 categories.

Functions of Management: -

1) Forecasting ;- As soon as an idea conies in the mind for manufacturing, an attempt is made to assess possible quantities, price etc. Forecasting is concerned with the estimation of quantities the sales forecast, cost, finance problems; capital expenditure, profit' or loss etc. Then one most profitable course is Selected out of several alternatives available and planning is started. 2) Planning :- Planning means "thinking before doing". Before actual work is started, it is decided that:, what is to be produced, how much is -to be produced, how to be produced. When to be produced and who are to produce it etc. The
6

ITS Engineering College planning should aim at eliminating of wastage of material, idleness of men, machinary and capital. 3) Organising: - When complete planning is done next step is to arrange the material, money and men, for actual execution of manufacture. 4) Directing: - It means the system of directing the plan into operation. The person who directs must have dynamic leadership and must guide the 'subordinates. The instructions must be simple, clear, complete and reasonable and as far as possible in writing. 5) Motivating : Suppose a person is a highly capable, physically strong and technically well qualified, but if he is not willing to workhard his output will be much less. So the function of the motivating is to find out the motives of work in a men and then he, should be encouraged to do work by keeping his moral high. 6) Co-ordinating: - In an enterprise, there may be large number of workers all engaged with the object of producing particular product. This is the task of co-ordination to integrate and harmonise them to achieve a common object. 7) Controlling: - This function of the management is to see that other functions are being perfectly alright. Controlling means to watch actual performance with the plan's and to point out defective work, to rectify then and to prevent recurrence. Some of the controls are - Quality Control, Cost Control, Material Control and. Production Control etc. 8) Communication: -This functions transmits-the information and Instructions to all concerned parties i.e. to employees, customers, suppliers, share holders and to general public. Without this there are chances of mistrust, fears etc. and therefore management must stress on better communication system.

ITS Engineering College Communication must include the acceptable of good ideas coming from the persons who are direct in touch with practical use. Therefore, for sound 'communication, joint consultations and works committees must be formed for free exchange of views' 9) Leadership -All the managers are supposed to have the quality of leadership, as they are the leaders of concern. 10) Decision Making :- As managers are reguired to take decisions very frequently, and the efficiency of the concern: loss or profit etc. are effected by these decisions, great amount of attention is required to be paid to this function.

_______________________________________________

Principles Of Organisation: -

Fayol, the founder of the movement for better organisation, in 1916, gave the following principles of organisation :1) Division of work :- It promotes efficiency, because it permits the work to be executed in limited space or area. Division of work permits all the work to be performed more effectively. 2) Authority gc/id Responsibility :- Authority and Responsibility always go'together. Authority means "right to act, decide and command". Hence whenever a task is assigned to a manager, he must be given sufficient powers (i.e. authority) to exercise. control to achieve the task. Responsibility is the obligations of a subordinate for the performance of any job allocated by the superior. 3) Discipline :- It. means obedience, application, energy and respect. There are many examples that poor performance is 'due to the task of these four' mentioned factors or say discipline.

ITS Engineering College 4) Unity .of Command :- A subordinate should take orders from only one. superior-. If not, then.according to Fayol authority is undetermined, discipline is in jeopardy, orders disturbed and stability threatend". 5) Unit of'Direction :- According to Fayol, each management objective should have only one plan. 6) Subordination of Individual Interest to General Interest :This means that the interest of the organisation is much before the interests of individual. 7) Remuneration of Personnel :- Payment to workers should be fair, and some proper method should be adopted. 8) Centrallisation :- According to this principle, there, should be one central point in. the organisation which have power to central overall work. 9) Equity :- Kindness and justice-on the part of'management of create loyalty and devotion among- employees. 10) Stability :- Efficiency can be achieved by having stable workforce . 11) Initiative. :- To have success, plans should be well made before starting the actual work.

Abilities Required from Managers :Concept developed by Fayol in General and Industrial Management are Indentified Into following 6 activities. Managers must have. ability to perform these activities well to give good results.

ITS Engineering College i) Managerial :- Managerial activity means to follow management functions like, planning, organising, commanding, coordinating controlling etc. ii) Technical :- Technical know how production work. iii) Commercial :- Buying,- selling 2nd exchange functions. Iv) Financial :- Utilisation of capital in an oiptimum way. v) Security :-Property and interests of'the organisation must be secured. vi) Accounting :- To keep accounts properly so as to determine financial position of the organisation.

_____________________________________________________ _ SCIENTIFIC MANAGEMENT APPROACH

1) Frederick Winds low Taylor (1856 - 1915) : F.W. Taylor is a most significant figure in the history of management thoughts. He is ' known as founder of "Scientific Management". He reformed the management 'through a thoughtful and systematic approach to its problems. Taylor found that touch of waste (man, long time, energy efficiency etc.) is due to the lack of order and system in the management. He emphasized that usually management was ignorant about the amount of work performed by a .worker in-a day, and also about the best way of doing the job, Hence if remained at the mercy of the workers. Taylor, therefore, suggested that management should adopt scientific methods for achieving higher efficiency.

10

ITS Engineering College

Some significant achievements of Taylor are listed below :

i) Work Study :- This is a work measurement and work improvement technique. Taylor scientifically conducted Time and Motion Studies, Method Study and Fatigue Studies. Work study is used to determine the standard time, that a qualified worker should take to perform the operation when working at a normal pace work study also determine the best method of performing each operation and to eliminate wastage so that production increases with less fatigue. ii) Standardisation of tools and equipment or workmens and working condition :- Taylor carried out Several experiments, out of which following is the famous shovelling experiment of Taylor. In 1898, at the works of the Bethlehem steel corporation, Taylor gave his attention to the "best size of shovel for different types, of materials. After several experiments he selected 21l/2 as being the optimum shovel load end then he designed shovel of such a size sufficient to hold this quantity of material. He designed small shovel for heavier material and larger shovel for lighter materials so that each man can lift 21 1b of material so as to achieve output iii) Incentive Scheme :- The Taylor Differential Piece Rate scheme provides and incentive for a worker to achieve high level of optimum output. iv)- Principles of Management : Tayior introduced the idea of functional management. He recommended that greater productivity and improved efficiency is possible through the use of specialised knowledge and skill

11

ITS Engineering College v) Application of Scientific Methods :- Taylor Introduced the scientific method in management of solve various problems. He observed, recorded the facts, applied knowledge and avoid mistakes and thus was able to solve best methods. Thus he was able to apply this thought to improve the efficiency of workers and increased productivity higher wages were also possible for workers.

2. Frank B. 'Gilbreth" and Lilian M. Gilbreth :

Frank Bunker Gilbreth (1868 -1924) did work with his wife Lilian regarding modern management. Frank B. Gilbreth started his carrier from the apprenticeship as a bricklayer and rose to the position of having his own contracting business. His wife Lilian was a trained psychologist. She helped Mr. Gilbreth in the matters related to the fatigue and monotony.

Some of the important works of Gilbreth. are :

i)Development of Motion Study :- Gilbreth did. development of motion study part of the work study. His thought was to find "one best work of doing a work". ii) Invention of new Techniques :- They invented several techniques, out of which following are important. a] Micromotion Study : Motions are taken on picture films, with the help of picture camera, which helps in measing the time of motion up to 0.0005 min. This procedure of motion study is known as Micromotion Study. b] Therbligs :- For the purpose of recording motions, he split up different motions of a process into fundamental events made by various member of human body and each event was allotted a symbol and letter abbrevation. These, 17 therbligs are . Search, Hold, Select, Crash, Release, Load, Transport loaded. Transport empty. Position, -Preposition, Assemble, Disassemble Uses, Inspect, Avoidable, unavoidable delay. Rest
12

ITS Engineering College to overcome fatigue. Plan.

C] Chronocyds graph : This is an improvement over cyclegraph. Cycle graph and cronocylegraphs both invented -by Gilbreth are explained as under. A small electric bulb is attached to the' finger, hand or other part of the body of the operator and it is photographed to record the path of motion. With a still camera, the path of light so photographed is called cyclograph. If an interrupter is placed in the electric circuit with bulb and the-light is flashed quickly and of slowly, then the path of bulbs shall appear as a. dotted line with pear shaped dots indicating the direction of motions. The space between the dots will be according to the speed of the. hand or finger. The number-of dots will give the time taken by that motion such a record is celled chrono-cyclegraph. d] Study of Fatigue : Gilbreth suggested that fatigue can be reduced by allowing rest periods, planning seating arrangements and working conditions.

3. Henry Grantt :Gantt Made many improvements in production planning .and control. He is mainly remembered for the production central chart, known as Gentt chart or Bar chart. Gantt also suggested an Incentive scheme.

13

ITS Engineering College

Aims of 'Scientific Management .

Following are the specific alms of scientific management.

a) To find out the waste, and its causes. b) To eliminate the waste after having ascertained the reasons for it. c) To unify the larger interests of labour management, and ownership d) To lower- the cost of production. e) To unite higher wages with reduced labour cost f) To increase the purchasing power of the consumer. g) To steady the level of employment of labour and capital,

Advantages of Scientific Management Following are the main advantages of scientific management. i) It provides trained minds for attaining a higher degree of excellence in all branches of shop menagement. ii) It improves and holds to standardize such things as equipment tools, materials working conditions, and mathods of working.

14

ITS Engineering College iii) It more or less completely revolutionizes and improves layout, routing, scheduling, nomenclature, purchasing, store keeping and accounting.

iv) A greater correlation between agencies of control makes for accidents and neglect dependable operation which products against delays mistakes, v) Its promptness provides timely instruction, constant guidance, immmediate goaIs, and prompt rewards. vi) Its search for fact and principle tends to eliminate. arbitrative rule. vii) Its closely interlocking personnel of specialists lessens the area of individual dictation. viii) Immediate and full records provide publicity, and constitute a sort of court of reason. ix) In so far as exact knowledge displaces custom, guess work and arbitrary ejection, it defends the worker against soldiering and sloth (shirking work -or lazying away) or. over speeding and fatigue. x) The high task standards characteristic of it automatically sorts workers to the levels of their best occupations, while all are educated and energized. xi) By adherence to high standards of performance throughout, for management a nil men alike^ it becomes a possible agency for raising wages, shortening hours, increasing profits, and 'lessening prices to consumers

Scope of Application of Scientific Management

15

ITS Engineering College The principles of scientific management apply, with. equal force to both. the smaller and larger undertakings and also to those concerns which are not primarily industrial or commercial. But engineering enterprises 'offer a much bigger scope for this application. According to Taylor, scientific management can be applied with profit to the management of our homes, the management of the business of our tradesmen, large and small, of our churches, our philanthropic institutions, .our universities ' and our governmental departments.

0pposition to Scientific Management -

In the beginning Taylor's scientific management -was . considered as something very unique, but after some time it was subjected to severe critrcism. The principal objections against Taylorism may be summarised below . i) People objected against the use of word 'scientific' before management, what is actually meant by scientific management is nothing but a scientific approach to management. ii) One of the foremost critictsim Of Taylorism was that the principles of scientific management -as advocated by Mr. F.W. Taylor were confined mostly to production management. Certain very important aspects of management (e.g.. financial administration, sales administration, management accounting, were entirely Ignored by him. Again Taylor was excessively utilitarian and impersonal, paying human attention towards the human element In production. iii) Taylor was also criticised for designing too much specialization of personnel into his system. iv) Complaints were also voiced that the wages of labourers were not increased in direct proportion to productivity increases which resulted from improved methods and
16

ITS Engineering College procedures. Trade unions mostly discarded the principles of scientific management and regarded them as the means to exploit labour. v) The devices of work. analysis, time, motion and fatigue studies standardisation of pay rates etc can not be scientifically measured vi) Controls pertaining to materials, 'machines and processes may be understandable in theory but in practice it is difficult 'to execute them.

_____________________________________________________ _

PLANNING: Planning is the most basic Of all management functions. Planning means thinking before doing. In other, words, planning Is the preparation for action. Every manager plans no matter at what level he operates. It is a function to decide about what, where, when, who, why and how a particular activity 'should be done. It sets. the objectives of the business, determines the different course of action to achieve these objectives, evaluates each-course of action and decides about the best course of action under the given conditions. It thus provides direction to the-enterprise. Planning defines the goals sets the policies, procedures, programmers develops strategies so that the objectives of-the enterprise can be attained most efficiently. It analyses all the difficulties that are likely to occur in running the business and decide in advance how these difficulties can be overcome. Planning is a rational, economic, systematic way of making decisions today which will affect the future. Planning helps to have a optimum utilisation of the available resources. Without planning the activities of an -enterprise may become confused, haphazard and ineffective For example, if a company making
17

ITS Engineering College refrigerators does not plan in advance as to how many refrigerators and of what capacity are to be made before summer starts and if it does not procure necessary materials, tools, supplies and personnel in time, it cannot approach the production target and hence may not run profitability. Planning includes forecasting, formulation of objective, policies programmers, schedules, procedures and budgets. General long range planning is undertaken by top management personnel.

Steps in Planning :-

The -details of planning may differ depending upon the specific requirements of a particular business. However in all the types of business planning process involves certain necessary steps, summarised as follows; 1) Determination of Objectives :- Planning is not possible without definite objectives. If the objectives of the business are clearly defined then only it is possible to plan for future. After determining the overall objectives of the business. It is necessary to fix up departmental objectives, and then objectives for sub-departments and sections. These objectives are in harmoney with overall objectives of the business. 2) forecasting to assist Planning :- Planning foresees future. It depends upon accurate business forecasting. Demand-for the product to be manufactured can be planned from prior knowledge and market research, prices can be forecast, wage rates can be forecast. Qualitative and qualitative methods are used to make these forecasts. 3) Collection, classification and Processing of Information :- All relevant information pertaining to factors that affect planning is collected. Information must be classified, analysed and processed. It helps interpretation and the establishment of

18

ITS Engineering College cause and effect relationship. 4) Deciding alternative courses of' action ;- The .objective can be fulfilled by more than one course of action. For example., if we went to increase the profit, we can increase the price, we can increase the sales keeping the price constant .or we can reduce the cost of production by adopting improved techniques, reducing waste and by optimum utilisation of resources. We can raise capital by selling shares or by borrowing from financial Institutions. All such possibilities must be explored during the planning of business. 5. Evaluation- of Alternative :- The advantages and disadvantages of each alternative is then weighted against the other alternatives. Cost benefit analysis is made to evaluate each feasible alternative. 6.Selection of best Plan :After the evaluation of different alternative plans in terms of results; the-best, feasible and economical plan is selected. 7. Subsidiary plans to aid Master Plan :- After deciding the main plan subsidiary plans are constructed to successfully implement the master plan. To implement the master plan each department head prepares a plan of-his department. 8)Controlling Plans :- Plans and subsidiary plans are first tried on a pilot basis to test 'the possibility of their success. The plan is then implemented. It is constantly monitored and results are obtained as feed beck' from time to time. The draw backs or shortcomings are removed as early as possible. Future plans are framed in the light of this experience.

Advantages of Planning: -

1. Maximum utilisation of resources: -Through proper planning it is possible to-have a maximum utilisation of resources. .All efforts are directed towards the desired goals, and an effective sequence of activities is accomplished. Activities
19

ITS Engineering College can be co-ordinated so as to achieve the pre-determined goals or targets.

2. Minimisation of Unproductive work :- As a result of planning unproductive work is minimized. Since the planned activities are subjected to a careful scrutiny and only necessary activities are taken up to accomplish the specified work. 3. Basis for managerial action :- Planning compels, managers to visualise the whole picture of business clearly and completely. This enables the management to see important relationships, gain full understanding of each activity, and plan the managerial actions.

ORGANISINIG
When number of persons are working together tor the achievement. of some common objectives .It is necessary to intergrate, co-ordinate, control and, direct their efforts effectively towards the common objectives. Organisation is a mechanism or a structure through, which management directs, co-ordinates and controlls the activities of ,the business. Industrialisation has created problems which are complex in nature. A factory therefore has to be suitably organised in

20

ITS Engineering College order that production should be smooth and efficient. For the sale of. efficient organisation, factory is divided into different departments. Each departments is entrusted with a particular function for carrying a particular operation. Each departmental head is expected to control and supervise the work in his department . He has the authority over the workers in his department and he is responsible for the smooth end efficient working of his department. This is what is generally meant by "organisation " The following are some general definitions of Organisation

1. According to Louis Alien, Organisation is the process of identifying and grouping the work to be performed, defining and delegating responsibility and authority, and establishing relationships for the purpose of enabling people to work most effectively, together in accomplishing objectives. 2. "Organisation is a mechanism or a structure through which management directs, co-ordinates and controlls the business". 3. Organisation is the division of work to be done into defined tasks and assignment of there tasks to individuals, qualified by training and natural characteristics for the efficient accomplishment. 4. Organisation is a plan by which group of people pools its efforts towards designated objectives through- definition, and division of activities, responsibilities and authority. 5. According to Barnard, "Organisation is a system of cooperative activities of two or more persons. The organisation function of the management basically deals with the establishment of organisation structure. The organization structure -is a skeleton or a frame work that divides the total activities into related groups, develops

21

ITS Engineering College superior and subordinate relationship among the persons by prescribing the authorities.

Steps in Organisation : -

1) Determination of activities : From the objectives, of the company the principle activities are determined. The work load is broken down into component activities that are to be performed by all the employees. The activities are so split to determine the job which can be performed by an individual. 2) Separation and grouping of activities :To attain the benefits of specialization and division of Labour, every company will separate its activities on basis of primary functions - finance, engineering, purchasing, production, sale's, and industrial -relations. All the similar or directly related activities are grouped together in the fore of departments They can be further subdivided into sections For Example, the manufacturing function and. the department handling it may be subdivided according to the products, processes, or type of equipment; and the, selling department may be subdivided according the territory, type of product or class of customers. The subdivision should be definite and avoid overlapping. 3) Delegation of authority :Authority is necessary for the performance of the job and therefore authority is delegated to the subordinates for enabling them to carry out their work smoothly and efficiently The right given to superior for directing and guiding the action of his subordinate's to extract the work from them (smoothly and efficiently without any friction) ' is called "Authority".
22

ITS Engineering College Authority in other words is the right to command and Exercise one's absolute power which Compels others to behave in a desired way. The authority always flows from superior to subordinates For example the works manager, by virtue of his, authority directs a foreman to arrange production of a job in his shop and the foreman in turn exercises his authority over his workers and directs them to produce the same. 4) Delegation of responsibility ;Responsibility must always be accompanied by the authority. Responsibility may be described as the obligation and accountability for the performance of delegated, duties. A superior, .is always accoutable for the acts of his subordinates. Therefore, responsibility always flows from subordinates to superior. A worker has the responsibility to perform a task as directed by foreman. The foreman, in turn is under obligation to manage to do as directed by his superior (the production superintendent). In any organisation, the superior is held responsible for the actions, of-his subordinates and the subordinates are accountable for the work to their superiors. Effective management necessiates a clear flow of formal Authority and responsibility. 5) Determination of Span of control:The number of persons who are directly responsible to the executive is called the span of the control. No single executive should have more people looking to him for controlling and leadership than he can resonably manage. The-number of persons, which can be effectively supervised by a single executive or departmental head should be limited to six in an average firm; however, when the activities are routine or closely related, the executive can direct, and supervise a large number.

Necessity of Organisation :-

23

ITS Engineering College The increasing size of the manufacturing plant,, introduction of most complex methods of production, tough competition between the enterprise and labour problems has necessitated every factory to be well organised, in order to produce required, quantity of the products of the required quality, at the required time with minimum production cost. A well designed organisation structure 'with qualified personnel in all key positions achieves effective execution, co-ordination and control of all policies and functions of the firm. A good organisation is therefore essential for the following Reasons. 1. Complexity of industry: Increasing size of industrial units and introduction of modern machines, methods, and increasing labour problems necessitates every factory to be well organised. 2.Growing competition: The tough competition existing in the market dictates the industrial units to produce the required quality of the product economically. This is possible only if the industry has a sound organisation. 31 3. Optimum utilization of resources: -

It is possible to utilize the production skill of men, material and machine to the utmost if the industry is well organized. The wastage of time, material and energy is checked and production cost is considerably reduced. 4. Fixation of responsibility and authority: Organization fixed responsibilities on the individuals and authorizes them to use their talents in carrying out their duties. With the responsibilities
24

ITS Engineering College

clearly defined the individuals strive hard to achieve result. In case of failure or non-achievements of the production goals it is possible to fix up the responsibility and investigate the cause. 5. Reduced labour problems: A well organized industry is able to maintain good employer employee relation which is essential to avoid strikes and lockouts and increase productivity in the long run. ________________________________________________

functional Organisation
:F.W.Taylor suggested functional organisation, because it was difficult to find all-round persons qualified to work at middlemanagement' levels in the line organisation. Functional organisation divides managerial activities, so that .each head from the works manager down has as few functions to perform as possible and is able to become a specialist in these Authority from top to down is. delegated according to the function Taylor divided the responsibility of shop supervision among severs foremen, each specially qualified and. in charge of certain aspec of work. Each specialist is authorised to given orders to workers, but only in regard.of his field of specialization,

25

ITS Engineering College

GENERAL MANAGER

Fig. Functional organisation 'Fig. illustrates a typical .organisation chart of functional organisation. The general planning and. clerical duties are assigned to four office specialists-route clerk, instruction clerk time and cost clerk and shop disciplinarian. Four shop supervisors (gang boss, speed boss, inspection boss and repair boss) supervise and-help the workers, 'each foreman assisting only in his particular function. The gang

26

ITS Engineering College foreman directs the setting up of tools into The machine and the efficient movement from machine to machine speed foremen instructs workers in proper use of cutting tools and machine operations so that.they may reach specified rate of output. The inspection foreman regulates the quality of the work. The repair foremen supervises machine unkeep and maintainance.

Advantages

1. Separation of work :- In, functional organisation, mental work has been separated from manual work. The specialists has been given the authority and responsibility for supervision and administration of function, 2. Specialization ;- Specialised and skilled supervisory attention is given to the workers. 'The results Is increase in rate of ' production and improved quality. 3. Ease in Selection and. Training :- Functional organisation is based upon expert knowledge. The availability of guidance through experts makes possible the proper training of workers in comparatively short span of time. 4. Scope for Growth and Development of Business :- This type of organisation presents Sample scope for the growth and development of business

Disadvantages

1. Indiscipline ;- Since the workers receive instructions from number of specialists (which may be conflicting) it.leads to confusion to whom they should follow. Therefore, it is difficult to maintain discipline. 2. Shifting of responsibility :- It is difficult for the top

27

ITS Engineering College management to locate responsibility for the unsatisfactory work. Everybody tries to shift responsibilities on others for the faults and failuers 3. kills the initiative of workers :- As the specialized guidance Is available to the workers, the workers will not be using their talents And skill, therefore their initiative can not be utilized. 4. Overlapping of Authority :- The spheres of authority tends to overlap and gives rise to friction between the persons of equal rank. 5'. Lack of Co-ordination between functions,: - Except the function in which he is specialized he is absolutely, indifferent to other .functions. Therefore, there -is a lack of co-ordination of functions and efforts.

Line and Staff organisation

Line and staff organisation is that in which the line heads are assisted by specialist staff, If the firm is of large size, managers can not give careful attention to every aspect of management. They are busy with ordinary task of production and selling. Hence staff is deputed to do the work of investigation, research, regarding and advising to managers. Thus the staff brings specialization by assisting the line officers. The line maintains discipline and stability, staff provides experts information and helps to improve overall efficiency. Thus the staff are thinkers while the line are doors. Usually the staff has no administrative authority. They serve only in advisory capacity in their field of specialization,

28

ITS Engineering College Line heads Staff Chairman -----------------------------Legal Advisor General Manager ------------------Management Adviser Works Manager --------------------personal consultant' Production supdt------------------- Standards specialist Foremen -----------------------------Tools Expert Workers Fig Line and Staff organisation

Communicating
Communicating Is a process by which Instructions, ideas, thoughts or informations are transmitted, received and understood by the persons working in the organisation.

Components of communication :

The basic components of communication are; (Sender) (Message) + Feedback = Communication (Receiver) The sender must appropriately prepare the message to be transmitted to the receiver. The receiver must understand the message clearly. Communication is never complete until the sender knows that the message has been received and understood either through feedback or observation of the receivers behaviour.

Methods of Communication :

1) Verbal/Oral communication. 2) Written communication. 3) Formal or Informal communication. 4) Downward, Upward or Horizontal communication.
29

ITS Engineering College

1) Verbal Communication:- In the case of verbal communication everything oral. The examples of verbal communication are orders and face to face discussions, telephonic talk, lectures, social gatherings, conference, interviews, audio visual aids etc. Verbal communication is quick, simple and comparatively more effective. It is the only way out during periods of emergency, when every activity is to be quickened. 2. Written Communication :- They are always in writing. Written communication is the only way out when both the communicator and the recipient are far off. It also provides a permanent record and whenever necessary it can be referred as evidence. 3. Formal and Informal Communication :- .Formal communications are mostly in written. Formal communications are generally associated with the particular position of the communicator arid the recipient in that structure, e.g. when the general manager instructs his subordinates by virtue of his superior position, it is formal communication. Informal communications on the other hand are free from all sorts of formalities: Informal communications may be conveyed by a simple glance, gesture, smile and or silence, Example, conversation between and among workers about feelings, facts, rumours etc. 4. Downward Communication :- It is the transmission 'of : instructions and information from top executive to the lower grade employee. Horizontal Communication: It is the transmission of information between persons having the same level of authority in the organisation. For. example, production manager informing maintenance manager regarding a breakdown of a machine. Essentials of Communications : (Communication Principles) : For effective communication the following points are important 1. It must 'be clear in purpose and Intention :30

For

good

ITS Engineering College communication the idea to be transmitted must be absolutely clear in the mind of communicator. The academic level of the workers, their power of grasping things, etc. should also be taken into account, otherwise the communication is likely to goin waste. 2. Participation :- Communicator should help the communicatee (recipient) to listen, to participate and cooperate. 3. Transmission :- In this connection the communicator- must plan carefully what to'communicate and how to communicate. 4. .It must be simple, and language must be understandable and specific. 5.Cordial Employer - Employee Relations :- Effective communication requires a quality of leadership between people immediately connected with each other. It requires sound industrial relation, policies and practices, an all-round atmosphere of friendly co-operation and a feeling of trust and confidence throughout the organisation, right from the top management to the workers.

Importance of Communication in Management:

"Communication is the flow of accurate information which people want, need and are- entitled to have for successful completion of the job". It is on established fact that one of the foundation stones upon which organisation rests is a system of communication. Co-ordination is achieved largely through communications. The importance of effective communication in management is described below. 1.Smooth and un-restricted Running of the Enterprise :-In the manufacturing concerns instructions and information, is being passed on continuously from one and to the other from a superior to his -subordinates, from the managing director to his executives. Therefore, the smooth and unrestricted running of

31

ITS Engineering College an enterprise depends on effective-system of communication. 2.Quick Decisions and Implementation : Communication helps the administration in arriving at vital decisions . Without . communication it may not be possible for the top administrators to come in closer contact with each other and discuss the important problems pertaining to the organisation. Through communication., the management conveys targets, issues instructions, allocates jobs and. responsibilities and looks after the efficient performance of all activities. 3. Proper Planning and Co-ordination :- Good communications are essential to co-ordination. They are necessarily upward, downward and sideways though all the levels 'of authority and advice for the transmission, interpretation and adoption of policies for the sharing of knowledge and information and for the more suitable needs of good morale and mutual understanding. 4. Maximum productivity with Minimum Cost :- Through communication the employees can be instructed, clearly what exactly to do and the way in which it is to be done efficiently and economically. The management can sell their ideas, motivate the workers to work with a will and built up a high moral in the company, this helps to increase the productivity. 5. Morale Building and Democratic Management :.- under effective system of communication it is quite convenient for the employees to express their difficulties, grievances if any, bring all their problems to the notice of management. Therefore, it helps to built up a moral and democratic management.

--------------------------------------------------------------------------------------------

32

ITS Engineering College

MOTIVATION

Definitlons of Motivation

Motivation means Inspiring people to Intensity their desire and willingness to perform their duties effectively and to co-operate for . the achievement of common objectives of the business. Motivation is the'mental preparation of an individual to do a specific job. It. is a desire to' do something. According to Michael J. Jucius, "Motivation is the act of stimulating some one or oneself to get a desired course of action, -to push the right button to get desired action". 'As put forth by "Brech" motivation is a general-inspiration on process which puts the member of the tern to do their work ' effectively, to give their loyalty to the group, to carryout properly-the tasks they have accepted and generally to pay an effective part in the job that the group has undertaken. As mentioned by Dalton Emcfarland. "The concept of motivation is mainly psychological. It relates to those forces operating within the individual employee or subordinate which impels .him to act or not active in certain ways".
(i)

Classification of Motivation

(ii)

Internal motivation, External motivation.

1. Internal Motivation:- The inner urge of a man for achieving a goal is called "Internal motive". There is no outside compulsion for doing a work in such cases. Examples of internal motivation are interests, emotional attachments, burning desires, fighting spirit for some noble.cause. . For example a patriot sacrifice his life for the sake of motherland, a scientist may be totally absorbed in. his research work due to his inner desire, mental satisfaction. A person who works with internal motives is a selfmotivated person. He is mentally prepared to do a job and hence internal motive is more effective. The management has to win
33

ITS Engineering College the workers heart and mind. It consists of increasing employees morale and satisfaction. 2. External Motivation :- Some material benefit in the form of. attractive salary, bonus, praise. Incentive, punishment, fear of loss of job will motivate the workers 'to do their jobs more effectively and efficiently.

Functions of Motivation
Motivation performs the following three functions i) It originates action ii) It directs activities in the direction of goal. iii) It helps to continue the activities till the goal is achieved.

Importance of Motivation
Motivation is needed to create interest, initiative, enthusiasm, loyalty and willingness to work. As a result of this, motivation helps to improve the productivity. The importance of motivation could be seen under these heads. ,

1. Arouse desire to Work :- Person may .be capable of doing a work, efficient, possess the necessary skill etc. still he can not do the work allotted to him in right time, in right quantity under right quality unless he is motivated to do so. Workers not properly motivated may not mentally accept the orders or directions with the result the objectives of the company may not be achieved efficiency and effectively.

34

ITS Engineering College 2. Appropriate use of factors of production :- An organisation may have best instruments, equipments, tool's, raw materials in sufficient quantity. But these factors can only be. usedappropriately (effectively) through sound motivation system.

Essentials of Sound Motivation System:

1.Good wages: - It is a psychological fact that workers are primarily concerned with their salary or wages. They need money to fulfill their needs .It is necessary to assess the wages from time to time and make appropriate changes. 2. Good Financial Incentive Scheme : - It includes the workers to produce more and better. 3. Opportunities for achievements, growth and promotion. 4. Human Relations: - The management should maintain good human relations and Offer due praise for good work. 5. Good working conditions: - Good working conditions improves workers morale and create Interest in work. 6. Job satisfaction: - It includes the level of interest, the challenge variety and the opportunities for carrying out the work from beginning to end. The degree to which job uses potential skill and abilities leads to higher degrees of job satisfaction. _______________________________________________________

35

ITS Engineering College

SITE SELECTION AND PLANT LAYOUT

(A) SITE SELECTION
IMPORTANCE Site selection is an important activity which decides the Fete of the business. A good location may, reduce the cost of production and distribution to 'a considerable extent. The reduction of cost of production and distribution helps in elevating either the competitive -strength or the profit margin of the business. . Locating a business involves a large, relatively permanent investment. If the site selection is not proper, all the money spent on factory building, machinery, and their installation will go in waste and the owner has to suffer a great loss. Therefore, site for the factory should be selected very carefully. While selecting a site, it is necessary to consider technical, commercial and financial aspects and then select a- site that may provide maximum advantage. The need for selecting a suitable site or location to house the factory may arise in the following situations.

1. While Starting a new factory. 2. During the expansion of the existing plant. 3. When the existing plant is to be relocated at some other place, to remove the drawbacks of present location or to gain the benefits of the still better location. THE PROBLEM OF LOCATION The problem of site selection of a factory can he solved in
36

ITS Engineering College the following three stages. 1) Selection of the region. 2) Selection of the locality. 3) Selection of actual site. 1. Selection of the region :Generally, the geographical area is divided, on the basis of natural regions or political boundries within the ^nation (for example, Maharashtra State, Gujrath State, U.P. etc.). The suitability of various regions are considered on.the basis of comparative cost advantages available out of the possible regions. 2. 'Selection of the Locality ;After selecting the region, the specific locality within the region is considered. Generally, following alternatives are open in selecting the locality. a) Urban area. b) Rural area. c) Suburban area in the vicinity of the urban area. The comparative advantages of each locality are considered at this Stage. The following factors must be considered while selecting the location of the factory. i) Availability of Raw materials. ii) proximity to markets. iii)Avaialability of labour. iv) Transport facilities. v) Availability of power and fuel. vi) Climatic conditions. vii) Availability of water viii) Ancillary Industries. ix) Financial and -other aids. x) business and commercial facilities. i) Availability of Raw Material ;37

ITS Engineering College (Nearness to supply of raw material) As far as possible the site selected should be near the source of raw materials, so that the cost of transportation can be minimized and the storing cost -can be reduced due to shorter lead time. ii) Proximity to Markets :The cost of transporting finished goods, advertising and distribution etc, will be greatly reduced, if the factory is located near the market. Nearness to market is important factor in the following cases. a) Industries using light raw materials of high value. b) Industries producing perishable, fragile or heavy products c) For the industries providing technical advice and services (such as tool and die companies) this will help in ensuring prompt service, to If the product enjoys scattered market then nearness of the market is not a deciding factor in the selection of .site. iii) Availability of Labour :Availability of right kind of labour force in required numbers at reasonable rates\ is also a deciding factor in selection of site. Unskilled labour is amply available at major industrial centers and rural areas. However, the firms requiring skilled labor should be situated near the urban areas. The glass and bangle industries in Ferozabad, woolen carpets in Mirzapur, Silk sarees at Kanziwaram etc. are mainly due to highly skilled labour for that particular industry being available at that place. iv) Transport Facilities : Transport facilities are needed for transporting raw Materials parts and finished goods. Generally industries have a tendency to locate the industrial units near the railway station, highway or port areas. Railways are cheaper but involve delays. Road transport is quick, it is convenient for door to door
38

ITS Engineering College Service, but it is costlier. So a balance should be achieved between the two according to the need of the unit. Generally Long distances are converted by railway transport and short -distances by road transport. v) Availability of Power and Fuel : Coal electricity oil and natural gas are the important sources of power in the industries The availability of reliable and cheep power Supply is an important factor in the location of electrochemical industries, iron and steel industries, glass pulp and paper industries etc. for example, Tate iron and steel industry in established near the coal mines of Bihar. However, because of the development of long Distance transmission of electric power this factor has not remained a deciding factor for plant location. vi) Climatic conditions Climatic conditions largely affect certain production processes anei also the efficiency of the employees. For example, textile mills requires moist climate, that is why most of the textile mills are situated at Bombay and Ahmedabad. For agro-base industries like tea end coffee or rubber plantations, climatic conditions play a decisive role in the selection of site. However, with the development of airconditioning techniques, it is possible to control the temperature as- well as humidity in the factory according to the requirements, though at the additional costs. vii) Availability of water :Water is used in industries for processing as in paper in chemical industries for generation of power in hydroelectric power plants and is also required for drinking, sanitary purposes etc. Depending upon the nature of plant water should be available in adequate quantity and should be of proper quality (clean, and pure).

39

ITS Engineering College viii) Ancillary Industries :The existence of ancillary industries in the nearby area may avail certain economic advantages. Many Industries such as processing and assembly industries are not producing all the parts of their product but purchase some of the parts from ancillary Industries producing it. The products produced by ancillary industries then forms a raw material .for such industries. ix) Financial and other Aids For the development of backward regions central as well as State Government provide certain incentives and facilities such as cash-subsidy, concessional financial assistance, land, power'and other facilities at cheaper rates, tax concessions etc. x) Business and commercial Facilities : For day-to-day management of finance, and working capital needs, banking services are considered highly desirable. Facilities depositing surplus cash, discounting of bills, sending sioutstatlon cheques for collection and withdrawals, for meeting the cash shortages nearness to banking facilities is essential. 3. Selection of Actual site : The. important factors in this respect are i) Availability of cheap land to build and expand the plant. li) Cost of land, development : The land should be flat and strong enough to sustain heavy machineinstallation. For agro base industries the type of soil should also be considered. iii) Repair facilities : Facilities for upkeep and general maintenance should be available .in nearby area. iv) Facilities for housing the workers and if necessary their transport from the place of residence to the work site. v) Social anh recreational facilities. vi) Post and telegraph facilit,ies.
40

ITS Engineering College vii) Cost of laying the water supply and providing sewage and disposal of waste. viii) Cheap facilities for disposing of trade waste. ix) Any restrictions imposed by the town planning department local byelaws. x) Taxes, fire protection facilities etc.

COMPARISON.BETWEEN URBENAND RURAL AREAS IN CONNECTION WITH THE SELECTION OF SITE

URBAN RURAL 1) Availability of local market Due to large, population the local demand, for the product is fairly -high. l)The market place is far away from the industries therefore cost of distribution of finished products is more 2) Ample availability of diversified labour. 2)It is rather difficult, to get skilled labour in rural areas. 3) Good transport facilities are available. 3) Adequate transport facilities are not available. 4) Proximity to allied industries and services units 4) Absence of allied industries.

41

ITS Engineering College

5) Availability of educational recreational and social 5) There are fewer educational, social and recreational facilities. Facilities. 6) The costs of land is high. Even at high cost sufficient land is not available which puts constraints on the arrangement of plant and machines *6) Sufficient land is. available At cheaper rates. 7) There, are greater restriction on the constructions of factory buildings 7) There are only few restrictions on construction of factory buildings. 8)Certain specific municiple facilities & public utility services such as water supply drainage, fire fighting, police protection etc.are available. 8) Municiple facilities A public utility services are not available. 9) Good anti prompt postal and communication services are available, 9) Prompt postal and communication services are not available. Site Selection 8 Plant Layout 10 The rake of taxes are relatively high. 11. Due to high standard of living the cost of labour is relatively high. 12. Banking facilities, credit facilities & insurance facilities are available. 13. High labour turnover because of large number of industries. 14. The trade union movement is very strong which often results in strikes, lockouts etc. 15. Development of the training facilities for workers and management institutes for executives put the city area in to privilized position, The rate of taxes are quite low. Labour is available at cheapi rates. Absence of banking facilitie. credit facilities & insuranc facilities. Labour force is more stable. Trade union movement is not very strong
42

ITS Engineering College Absence of training facilitii and management institutes. 16. Sufficient passanger transport facilities by toad . & railways are available to employees. The passenger facilities are if the factory is large distance residential areas difficult for the reach at the work transport inadequate located at 17.from there, it become. workers to place. 20. Sufficient storage facilities including warehouses are concentration of many industries in urban areas creates problems of air pollution, water pollution, sanitation etc. Danger of bombardment in war time : industrial city areas become the target of air attacks in war time. To avoid, concentration_of industries. Government imposes restrictions for starting new industries in urban areas. 21.Storing& warehouse facility are not available. problems of air pollution water pollution etc. are les, and the rural environment is conductive to .-good health of workers . Less danger of bombardment I war time.. . Government provides financia. assistance and land at cheap( rates to attract if entrepreneurs to stai industries in rural areas.

____________________________________

Main Objects of Scientific Layout These are

i) To produce better quality of product. ii) Maximum utilisation of floor area. iii) To reduce internal transport from one operation to the ne as much as possible. iv) Lighting and ventilating of areas. v) Lower cost of scrap and waste.

43

ITS Engineering College vi) -Fewer accidents. yii) Minimising production delays. viii) Space for future expansion. ix) Safety of equipment and personnel. x) Better working conditions for both executive and operatic employees. xi) Avoidance of unnecessary change. xii) Saving of cost. xiii) Easy supervision. xiv) Neatness. xv) Proper production control. . xvi) To eliminate waste effort for speeding of production. Principles of Plant Layout According to Muther, there are six basic principles of layout". These are : 1: Principle of over-all integration :- According to principle, the; best layout is .one which integrates the me materials, machinery; supporting activities and any other s factors that results in the best compromise. 2. Principle of minimum distance :- According to this principle other things being 'equal, the-best layout is one in which I and materials have to move the minimum required distance between operations. 3. Principle of Flow :- Muther said that, other things being equal, the best layout is one which arranges the work areas for each operation or Process In the same order or sequence that forms, treats or assembles the materials.

44

ITS Engineering College 4. Principle of Cubic Space :- According to this, the best layout is one in which all the available space both vertical and horizontal is most economically and effectively used. 5. Principle of Satisfaction and Safety:- According to this, other things being equal, the best layout is one which makes work satisfying, pleasant and safer for workers. 6. Principle of Flexibility :- It means, the best layout is one which can be adopted and re-arranged at a minimum cost with least inconvenience.

Symptoms of a. Bad Layout

A poor or badly planned layout will generally show the following symptoms 1. Congestion of machines, materials, parts assemblies and even workers. 2. Excessive amount of -work in process. 3. Poor utilization of available space. 4. Long material flow lines. 5. some machines heavily loaded and some remain idle for long periods. 6. Excessive handling by skilled workers. 7. Long production cycles. 8. Delays in delivery. 9. Excessive mental or physical strain on workers.

45

ITS Engineering College 10. Difficult to supervise and control properly.

Factors Influencing Layout These are

1. Type of Industry :- Industries are. generally classified according to their process of manufacture. The process of manufacture can be classified into four categories. a) Synthetic Process - When two or more materials are mixed. get a product, the process is known as synthetic process. The example of such a process is to produce the cement by mixing lime-stone and clay. b) Analytical Process - This is opposite of synthetic proce It is the breaking up of a material into several parts. refining of petroleum is the example of this case. c) Conditioning Process- - In the conditioning process, the f, of raw material is changed into desired product as in juti industry. d) Extractive Process - In this type, by applying heat, des. product is extracted from the original raw material, e.g., manufacture of Aluminium from Bauxite. 2. Type of products :- Type of product means whether the prodi is heavy or light, large or small liquid or solid. It is- a. consideration in plan layout. 3. volume of Production According to this point, while plan layout is being done it Should be kept in mind that, what volume is required to be produced. In this case, it should be seen that whether (a) Job Production, (b) Batch Production 01 (c) Mass Production is being adopted.

46

ITS Engineering College 4. Influence of Processes :- Last, but not the least factor t consider, is the process through which the material passes in. the concern. Much care. should be given to the material handling problem, position of store room and tool room. Keeping, in view the type of industry and volume of production, there can be following methods of layout.

Methods of Layout
(a) Line or Product Layout. (b) Functional or Process Layout. (c) Fixed.Position layout. (d) Combination.

Suitability :- This is suitable for continuous process indus\ such as car or automobile manufacturing or chemical Industrie:

Advantages: -

1. It lowers the overall manufacturing time as product under . proceeds rapidly from operation to operation without handling. 2. Less space is needed for placing machines. 3. There is minimum of handling and transportation. 4. There is less work-in-process. 5. Better utilisation of machine and labour.
47

ITS Engineering College

6. It minimises couting, inspecting and clerical work etc. 7. There are smooth flow of materials. 8. Promises for supply of products to customers, are more relic 9. Use of gravity and power conveyors for material- handling re the necessity of aisles. 10. Production control is simplified greatly.

Disadvantages: -

1. When the model or type changes, the layout of machinery also requires a change. 2. All machines in the arrangement cannot be used to their max capacity. 3. The manufacturing cost rises with a fall in the volume o production. 4. If one or more lines, are running light, -there is great mach idleness.. 5. Specialised and strict 'supervision is needed. 6. If any of .the .machines in the shop . breaks down the machines have to remain idle till 'that machine becomes again ready to commence operation. 7. For expansion purpose, it is not possible to add more machines. 8. Each worker performs job on a particular machine, so he' is n skilled for other machines or operations.

(b) Functional or Process layout :- under this arrangement each

48

ITS Engineering College department or section is responsible for carrying out a particular process and not a particular product as. underline type layout. There is an assembling of similar operations in each department or section. In a job order production factory, there are no standard products or if any, they repeat orders. Therefore, machines in this type of layout are generally arranged on functional basis. This type is also called analytical layout Thus for example, in a factory manufacturing taps, drills, reamers and cutters mentioned above there may be four departments, the lathe, the milling, the heat treatment and the grinding, each responsible for a specific 'operation. . All the products manufactured in this factory have to pass through these four principle operations, fig.shows this arrangement.

LATHE

DEPARTMENT'

Fig. Process Layout

_______________________________________________________

49

ITS Engineering College

Suitability :- In this, similar equipment and similar machines grouped, together. This is very useful where low volume production is required.

Advantages: -

1. Similar jobs are manufactured on similar machines, hence supervision is simple. 2. Less machines are required. 3. This offers great incentive for each worker to raise the 'Ievel of performance. 4. There will' .be better control on precision or complicate process. 5. The layout is flexible hence it can easily be managed to change in the rate of production, in the design of products in the methods of production or in the row materials used. 6. Any breakdown-of one machine does not effect production as can be done on a stand by machine. 7. Capital layout for machines is minimum. 8. New workers have better training facilities on the, job. Worker know, how to run various machines in the group and also to up work. 9. Foremen become specialised in the performance of the job and know all about the equipments and their operations.

Disadvantages
1. Handling and back-tracking of materials is too much. 2. It makes necessary to plan and supervise the work of each

50

ITS Engineering College department each worker and machine. This makes production control more difficult and more costly. 3. Generally more floor area is required. 4. Specialization creates monotony and there will be difficult and the workers to-find jobs in other industries. 5. Total production cycle time is more due to long distances and waiting.

Layout of a Small Repair Shop INDEX S1,S2 = SmaII Stores WH = Water Hut A = Assembly Bench BD = Bench Drilling RD - Radial Drilling MO = Moulding Shop PM - pattern Waking Shop W - Welding Shop ST - Slotter M = Milling Machine E = Space for expansion F= foreman Office G= Grinder DA= Disassembly Bench S= Shaper M= Melting Shop SM= Smithy Shop C=Carpentry Shop P= Planer B= Boring Machine L = lathe

51

ITS Engineering College The shops like smithly, welding, melting etc. should ha located outside as shown in the layout to reduce the chance of fire accidents end to prevent from smoky'ness. Some space for future, expansion must be kept aside. There should sufficient space left for bringing Inside large, sized parts and machinery. Therefore, from both fAe sides of the entrance space is left for handling end movements. If necessary overhead cranes may also be fitted. IT the repair shop is at a far distance from the main building Men provision of canteen may also be made, where workers can take food during lunch hours end relax. The figure given shows the "simple layout of small repair shop", although the layout differs from factory to factory, as . depends upon the type, size, volume of product and manufacturing process but the figure gives the .general idea. In repair shop, machines are lard according to their functions. Here varieties o. job are performed by different workers every day. Layout of Services The tool rooms, store rooms, water, power, transportation. cafeteria, wash rooms and lavatories, etc. include the service .centers of a plant. The shorter the. distance from the operation to these centers, the less time will be consumed by worker's in using, these services. Generally the service tenters are located where the space is available after planning for manufacturing. exact location is determined by its*nature, number of persons to avail such a service and how much any service is made use of. The factors affecting the layout of, most important servio centers such as store room, transportation. Water, power and fir' protection are as under : 1- Store Room :- Store .room layout as far as possible shi satisfy the following essential requirements : i). It should provide an easy receipt, storage, issue and section of materials etO. ii) It should have enough storage capacity and facilities..

52

ITS Engineering College Hi) It should have proper protection against wastage, damage deterioration and thefts. iv) It should permit easy and clear identification and local. .'of materials. v), It should be. simple and serviceable. vi) It should have bins of proper width for handling the materials. 2. Transportation :- Transportation required in the factory prei is for different'purposes, such as transportation of materia. and equipment, transportation of labourers and other employee, '140 and transportation of products; proper consideration. Is essential so that the layout Is economical and convenient. For more details chapter on materials handling may be consulted. 3. Water .-- The layout of the water service is very necessary' consideration. For this purpose, certain provisions are given in the "FACTORY ACT"), those must strictly be followed. According to Factory Act, in every factory in which more than 250 'workers are employed, water coolers should be installed at. suitable places. The water centers should be marked by the work "DRINKING WATW. Water centers should be located at least 20 ft. from latrines, urinals and wash rooms There should be one , water center for every 150 workers up to 500 workers and one center- for every additional 500 workers. 4. Power :- The electrical energy required for running the plants may be purchased from an outside source or generated itself. . The electric energy is transformed into mechanical power and is Supplied to the machines and equipment in the 'following two ways (a) Group. Drive (b) Individual Drive Today individual drive is generally adopted. So in the layout, it is to be seen that from where electrical cables will
53

ITS Engineering College pass and where protecting devices, switches, starters and control panels are to be fixed. .5.. Fire protection :- For this, suitable places must be alloted in the shop for locating water buckets and buckets and sand fire extinguisher. Inflammable material must be kept in separate store at a safe distance, minimum 50. ft. from the general storage. In the layout provisions to escape, in case of fire must be kept. A factory employing more than 20 persons and storing in flammable materials and explosives must arrange, for training of-spersons in the routine to be 'adopted in- case of fire. Acts Solution ; (a) As the percentage of loss of earning capacity by loss of 01 hand = 60% . (from Schedule'I) Amount of compensation payable to the worker, who is getting Rs.120 as monthly wages, in. case .of permanent total displacement. = Rs. 18, 900' (from Schedule IV) Therefore amount of compensation payable for 60% loss earnings capacity = 60/100 x 18,900 1.1,340. Therefore Rs.11,340 would be paid as compensation. (b) If the worker also lost his index finger then percentage los of earning capacity will be 60% for loss of one hand and 14% for loss of index finger:, Therefore total loss of earning capacity = 74%. and thus amount of 'compensation = 74/100 x 1-8,900 c Rs.1.3,98 Therefore Rs.13,986 would be paid as compensation to tl worker in this case. 6.6 The Payments of Wages Act, 1936 The Act regulates the payment of wages to .certain classes

54

ITS Engineering College persons employed in Industry. Under the Act, the State Governme can extend the provisions of this act to the payment of wages fcc any class of persons in any industrial establishment. Definition -. (1) "Industrial Establishment" means any a) Tramway service or motor transport service. b) Air transport service. c) Dock; wharf or jetty. d) Mine, quarry or oil field. e) Plantation. f) Workshop, where articles are produced with a view to use, transport of sale. Industrial Management & Science g) Establishment, where construction, development or, maintenance of buildings, roads, bridges or canals or of water or where work relating to the generation, transmission and distribution .of electricity is being carried out. (2) "Wages means all remuneration expressed in terms of money payable to persons, while in employment and includes : . i) Basic wages. if) Dearness Allowance. Hi) Bonus. iv) Payments under any award or order of a court. v) Overtime allowance. vi) Leave salary. If will not include : i) The value of any house accommodation, supply of light, water, medical facilities and other amenities of life specified by the State Government. ii) Travelling Allowances. Hi) Employer's contribution to pension or Provident Fund, iv) Gratuity etc. METHODS OF PAYMENT OF WAGES

55

ITS Engineering College 1. Responsibility for Payment of Wages : Every employer shall be responsible for.the payment Co persons employed by him, of all wages required to, be paid under this Act. Provided that, in the case.of persons employed otherwise than by the contractor. a) in factories, if a person has been named as manager of the factory b) in industrial establishments, if there is a person responsible to the employer .for the supervision and control of the industrial establishment ; c) upon railways, railway administration has nominate a person in this behalf for the local area concerned. Industrial Management & Science g) Establishment, where construction, development or, maintenance of buildings, roads, bridges or canals or of water or where work relating to the generation, transmission and distribution .of electricity is being carried out. (2) "Wages means all remuneration expressed in terms of money payable to persons, while in employment and includes : . i) Basic wages. if) Dearness Allowance. Hi) Bonus. iv) Payments under any award or order of a court. v) Overtime allowance. vi) Leave salary. If will not include : i) The value of any house accommodation, supply of light, water, medical facilities and other amenities of life specified by the State Government. ii) Travelling Allowances. Hi) Employer's contribution to pension or Provident Fund, iv) Gratuity etc. METHODS OF PAYMENT OF WAGES
56

ITS Engineering College 1. Responsibility for Payment of Wages : Every employer shall be responsible for.the payment Co persons employed by him, of all wages required to, be paid under this Act. Provided that, in the case.of persons employed otherwise than by the contractor. a) in factories, if a person has been named as manager of the factor b) in industrial establishments, if there is a person responsible to the employer .for the supervision and control of the industrial establishment ; c) upon railways, railway administration has nominate a person in this behalf for the local area concerned. Acts The person so named., the person, so responsible to the employer, shall also be responsible for such payment. 2.' Fixation of Wage Period : Wage period shell be fixed by the person responsible for the payment of wages (as shown above) but y lB this wage period. Will not be more then one month: 3. Time of Payment of Wages :. a) Any railway, factory or industrial establishment employing less than 1000 persons must make payment of wages, before the expiry of the 7th day after the last day of the wage period. b) If there are 1000 or more persons employed, then wages must paid before the expiry or the 10th day after the last day o the wage period. '

57

ITS Engineering College c) Where the employment of any person 'is terminated the wages earned by him .shall be paid before the expiry of the second working day from the day on which his employment is' terminated. d) Wages must be paid in current coin and currency notes and ho in kind. 4. Maintenance of Register and Record : a) Every employer shall maintain such registers and records giving such particular of persons employed, work performed, the wages paid, the deductions made, the receipts given by them'and such other particulars and in such forms may be prescribed. '-' b) Every register, and record required to be preserved for' period o'f 3 years after the date of the entry made therein. DEDUCTIONS Every payment'made by the employed person to the employer or his agent shell be deemed' to be a deduction from wages. 2. - Any loss of wages resulting from the imposition, for good ani sufficient cause, upon a person employed, of the following penalties, shall not be deemed to be deduction -from wages : 186 (a) withholding of increment or promotion (including stop page of increment at an efficiency bar). .
58

ITS Engineering College (b) Reduction to a lower post or to a lower stage. _ (c) Suspension. ' 3. The wages of an employed person shall, be paid to him without deductions of any kind except those authorised by this Act. Following deductions from the wages are permitted by this Act. i) Fines. . ii) Deductions for absence from duty. Hi)' Deductions for damage to or loss of goods expressly entrusted to the employed persons, where such damage or loss is directly attributed to his neglect or default. iv) Deductions for the house accommodation Supplied to him, v) Deductions for which amenities and services not includes the Supply of tools and raw material, required for the, purpose of employment supplied by the employer. vi) Deductions for'recovery of advances of loans (including over payments). vii) Deductions of income tax contribution.of provident funds, payments to co-operative-societies. FINES ' i) No fine shall he imposed on any employed persons on any of the acts and omissions which are liable to fine are got approved previously from the State Government or from the prescribed authority . 2) A notice specifying Such acts end omissions shall be exhibited in the prescribed manner in the premis-es on which the employment is carried on., 3) No fine shall be imposed until he has been given an opportunity of showing cause against the fine. 4) The total amount of fine which may be imposed in any one wage
59

ITS Engineering College period shall not exceed an amount equal to thirty second part of the wages payable to him. ,

Acts 5) No fine shall be imposed on any employed person who is und& the age of fifteen years. b) Every fine shall be deemed to have been imposed on the day the act or omission, and no fine shall be recovered by installments or after the expiry of the sixty days from tl". on which it was imposed. 7) The . recovery of all -fines must be- entered in a prescrit register to. the credit of Fines Fund. The money of the fin fund can be used only for the benefits of the workers subje to the approval of the prescribed authority, VIOLATION OF THE ACT 1) The administration of this act is the responsibility of the State Government and is exercised by factory Inspectors. 2) .State Government may appoint a presiding officer of any Labi Court or Industrial Tribunal, constituted under the industrDisputes Act, 1947 or any commissioner tor workmen 's compensation, or other officer to hear and decide for any specified area all claim arising but of deductions from the wages, or delay in the payment.of wages. 3) Authority hears both the parties on receipt of the applicati and after inquiry may direct to refund to the employed perse of the amount deduced, or payment of the deleted wages, together with the payment of such compensation as the authority may thing fit, not exceeding ten times the amount deducted in the former case end not exceeding 25 rupees in t . letter. 4) If the authority hearing an application is satisfied that th application was either malicious or vexatious, the authority may direct that a penalty not exceeding, Rs. 50 be paid to t employer or other person responsible for the payment of wage by the person presenting the application.

60