Master of Business Administration- MBA Semester 2 MB0044 Production and Operations Management (Book ID: B1133)

Master of Business Administration- MBA Semester 2

NAME

: Rishikesh Sah SWATI CHOUDHARY

ROLL NO. : 511116481 511227543 LC. CODE : 0965 3337

MB0044 Production and Operations Management SUBJECT : MB0044 Production and Operations Management

Assignment Set - 1 (60 Marks) Note: Each question carries 10 Marks. Answer all the questions. Q1. Explain briefly the Computer Integrated Manufacturing. Ans: Computer-integrated manufacturing (CIM) is the manufacturing approach of using

computers to control the entire production process.[1][2] This integration allows individual processes to exchange information with each other and initiate actions. Through the integration of computers, manufacturing can be faster and less error-prone, although the main advantage is the ability to create automated manufacturing processes. Typically CIM relies on closed-loop control processes, based on real-time input from sensors. It is also known as flexible design and manufacturing. The term "computer-integrated manufacturing" is both a method of manufacturing and the name of a computer-automated system in which individual engineering, production, marketing, and support functions of a manufacturing enterprise are organized. In a CIM system functional areas such as design, analysis, planning, purchasing, cost accounting, inventory control, and distribution are linked through the computer with factory floor functions such as materials handling and management, providing direct control and monitoring of all the operations. As a method of manufacturing, three components distinguish CIM from other manufacturing methodologies:

Means for data storage, retrieval, manipulation and presentation; Mechanisms for sensing state and modifying processes; Algorithms for uniting the data processing component with the sensor/modification component.

CIM is an example of the implementation of information and communication technologies (ICTs) in manufacturing. CIM implies that there are at least two computers exchanging information, e.g. the controller of an arm robot and a micro-controller of a CNC machine. Some factors involved when considering a CIM implementation are the production volume, the experience of the company or personnel to make the integration, the level of the integration into the product itself and the integration of the production processes. CIM is most useful where a high level of ICT is used in the company or facility, such as CAD/CAM systems, the availability of process planning and its data.

Key challenges
There are three major challenges to development of a smoothly operating computer-integrated manufacturing system:

Integration of components from different suppliers: When different machines, such as CNC, conveyors and robots, are using different communications protocols. In the case of AGVs, even differing lengths of time for charging the batteries may cause problems. Data integrity: The higher the degree of automation, the more critical is the integrity of the data used to control the machines. While the CIM system saves on labor of operating the machines, it requires extra human labor in ensuring that there are proper safeguards for the data signals that are used to control the machines. Process control: Computers may be used to assist the human operators of the manufacturing facility, but there must always be a competent engineer on hand to handle circumstances which could not be foreseen by the designers of the control software. computer

Q2. What is automation? What are the kinds of automation? Ans: The dictionary defines automation as the technique of making an apparatus, a process,
or a system operate automatically. We define automation as the creation and application of technology to monitor and control the production and delivery of products and services. Using our definition, the automation profession includes everyone involved in the creation and application of technology to monitor and control the production and delivery of products and services; and the automation professional is any individual involved in the creation and application of technology to monitor and control the production and delivery of products and services.

Automation encompasses many vital elements, systems, and job functions.

Automation provides benefits to virtually all of industry. Here are some examples:

Manufacturing , including food and pharmaceutical, chemical and petroleum, pulp and paper Transportation , including automotive, aerospace, and rail Utilities , including water and wastewater, oil and gas, electric power, and telecommunications Defense Facility operations , including security, environmental control, energy management, safety, and other building automation And many others

Automation crosses all functions within industry from installation, integration, and maintenance to design, procurement, and management. Automation even reaches into the marketing and sales functions of these industries.

Automation involves a very broad range of technologies including robotics and expert systems, telemetry and communications, electro-optics, Cybersecurity, process measurement and control, sensors, wireless applications, systems integration, test measurement, and many, many more. Support Automation Support Automation refers to software packages are focused on supporting the routine work of help desk personnel. Think of it as a kind of script integration in existing Service desk, CRM application or even in Knowledge Base Applications for Automated Self Service. Examples for this category are products like CA SupportBridge or mValent Integrity, which is focused on Change Management Automation. Run-Book-Automation Products belonging to this category are very popular nowadays. They allow to define a set of ITSM-Workflows through a Graphical user interface. Good products offer a multitude of connectors and interfaces to existing ITSM suites like OpenView, Tivoli or Unicenter. Examples for this kind of products are Opalis Integration Server, BMC Realops or HP/Opsware/IConclude Opsforce. Policy-Based Automation Certain Automation solutions such as Enigmatec are elevating the importance of rules to an higher level. By bringing in the term Policy the rules management gets a more of the enterprise-style. Some solutions in the IT Process Automation area are providing a rich set of features for designing and managing policies. IT-Workload Automation These concepts stem from early (mainframe) days of computing, where batch processing or job Scheduling were a big improvement, allowing operator to automate recurring tasks. Though modern products are highly evolutionized through offering multi platform compatibility, eventtriggering, policy-based execution and configured to smart coloured visual GUIs. These products are gaining ground in modern service oriented environments and are represented through products from big vendors like CA/Cybermation and IBM Tivoli or smaller competitors like ASG and UC4 Data Center Automation This is the hottest topic today, as companies have started to deploy myriad of servers into an extremely fast growing number of data centers all over the world, bringing high demand for automated tools to provision, change and manage vast numbers of components. Any of the large vendor offers such a tool or suite and you guessed it here is place, where the bucks go. HP know that story. Products in this category are former Opsware Server Automation System, BMC BladeLogic, IBM Tivoli Provisioning Manager and to bring in some cloudy haze modern and

cool products/players like Elastra or 3Tera/Applogic which allow to mix data center and cloud offerings.

Q3. What are the factors that influence the plant location? Ans: Units concerning both manufacturing as well as the assembling of the products are on a
very large scale affected by the decisions involving the location of the plant. Location of the plant itself becomes a very important factor concerning service facilities, as the plant location decisions are strategic and long-term in nature. Plant location decisions need detailed analysis because: 1. Wrong plant location generally affects cost parameters i.e. poor location can act as a continuous stimulus of higher cost. Marketing, transportation, quality, customer satisfaction are some of the other factors which are greatly influenced by the plant location decisions hence these decisions require in-depth analysis. 2. Once a plant is set up at a location which is not much suitable, it is a very disturbing as well as very expensive process to shift works of a company to some other place, as it would largely affect the cycle of production. 3. The investments involved in the in setting up of the plant premises .buying of the land etc are very large and especially in the case of big multinational companies, the investments can go into millions of rupees, so economic factors of the location should be very minutely and carefully checked and discussed in order to achieve good returns on the money which has been invested. The Need for location decisions These decisions are needed when a new plant is to be set up or when the operations involved in the company at the present location need to be expanded but expansion becomes difficult because of the poor selection of the site for such operations. These decisions are sometimes taken because of the social or the political conditions engulfing the working of a company. The way the works of a company have to be performed, largely depends upon the industrial policies issued by the government. Any change that creeps in the industrial policy of the government which favors decentralization and hence does not permit any change or any expansion of the existing plant requires strictly evaluated location decisions. Factors governing plant location: 1. Regional factors: These factors include proximity of the plant to the market and also to the sources of the raw materials. They also include infrastructural facilities, transportation facilities, and availability of skilled workers, legislation, the taxation and also the work attitude of the workers. Robinson was the one who has very clearly and efficiently justified industrial location concerns using pure materials nearer to the markets or the consumption centers. According to Robinson,

the place of production is likely to be at the place of consumption where the final product is more expensive to carry because it is more bulky, more fragile or more perishable than is raw materials. 2. Community factors: These involve accommodation, education, entertainment and transport facilities. It also includes attitude of the community, supporting industries and services, suitability of the land etc.

Q4. Describe the seven basic quality control tools. Ans: The Old Seven.
The First Seven. The Basic Seven. Quality pros have many names for these seven basic tools of quality, first emphasized by Kaoru Ishikawa, a professor of engineering at Tokyo University and the father of quality circles. Start your quality journey by mastering these tools, and you'll have a name for them too: "indispensable."

Cause-and-effect diagram (also called Ishikawa or fishbone chart): Identifies many possible causes for an effect or problem and sorts ideas into useful categories. Check sheet: A structured, prepared form for collecting and analyzing data; a generic tool that can be adapted for a wide variety of purposes. Control charts: Graphs used to study how a process changes over time. Histogram: The most commonly used graph for showing frequency distributions, or how often each different value in a set of data occurs. Pareto chart: Shows on a bar graph which factors are more significant. Scatter diagram: Graphs pairs of numerical data, one variable on each axis, to look for a relationship. Stratification: A technique that separates data gathered from a variety of sources so that patterns can be seen (some lists replace stratification with flowchart or run chart).

Q5. Define project management. Describe the five dimensions of project management. Ans: roject management is the science (and art) of organizing the components of a project,
whether the project is development of a new product, the launch of a new service, a marketing campaign, or a wedding. A project isn't something that's part of normal business operations. It's typically created once, it's temporary, and it's specific. As one expert notes, "It has a beginning

and an end." A project consumes resources (whether people, cash, materials, or time), and it has funding limits. Project Management Basics No matter what the type of project, project management typically follows the same pattern: 1. 2. 3. 4. 5. Definition Planning Execution Control Closure

Defining the Project In this stage the project manager defines what the project is and what the users hope to achieve by undertaking the project. This phase also includes a list of project deliverables, the outcome of a specific set of activities. The project manager works with the business sponsor or manager who wants to have the project implemented and other stakeholders -- those who have a vested interest in the outcome of the project. Planning the Project Define all project activities. In this stage, the project manager lists all activities or tasks, how the tasks are related, how long each task will take, and how each tasks is tied to a specific deadline. This phase also allows the project manager to define relationships between tasks, so that, for example, if one task is x number of days late, the project tasks related to it will also reflect a comparable delay. Likewise, the project manager can set milestones, dates by which important aspects of the project need to be met. Define requirements for completing the project. In this stage, the project manager identifies how many people (often referred to as "resources") and how much expense ("cost") is involved in the project, as well as any other requirements that are necessary for completing the project. The project manager will also need to manage assumptions and risks related to the project. The project manager will also want to identify project constraints. Constraints typically relate to schedule, resources, budget, and scope. A change in one constraint will typically affect the other constraints. For example, a budget constraint may affect the number of people who can work on the project, thereby imposing a resource constraint. Likewise, if additional features are added as part of project scope, that could affect scheduling, resources, and budget. Executing the Project Build the project team. In this phase, the project manager knows how many resources and how much budget he or she has to work with for the project. The project manager then assigns those resources and allocates budget to various tasks in the project. Now the work of the project begins.

Controlling the Project The project manager is in charge of updating the project plans to reflect actual time elapsed for each task. By keeping up with the details of progress, the project manager is able to understand how well the project is progressing overall. A product such as Microsoft Project facilitates the administrative aspects of project management. Closure of the Project In this stage, the project manager and business owner pull together the project team and those who have an interest in the outcome of the project (stakeholders) to analyze the final outcome of the project. Time, Money, Scope Frequently, people refer to project management as having three components: time, money, and scope. Reducing or increasing any one of the three will probably have an impact on the other two. If a company reduces the amount of time it can spend on a project, that will affect the scope (what can be included in the project) as well as the cost (since additional people or resources may be required to meet the abbreviated schedule). Project Portfolio Management Recent trends in project management include project portfolio management (PPM). PPM is a move by organizations to get control over numerous projects by evaluating how well each project aligns with strategic goals and quantifying its value. An organization will typically be working on multiple projects, each resulting in potentially differing amounts of return or value. The company or agency may decide to eliminate those projects with a lower return in order to dedicate greater resources to the remaining projects or in order to preserve the projects with the highest return or value

Q6. What is meant by Supply Chain Management (SCM)? What are the objectives of SCM? Ans: Supply chain management (SCM) is the oversight of materials, information, and finances
as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer. Supply chain management involves coordinating and integrating these flows both within and among companies. It is said that the ultimate goal of any effective supply chain management system is to reduce inventory (with the assumption that products are available when needed). As a solution for successful supply chain management, sophisticated software systems with Web interfaces are competing with Web-based application service providers (ASP) who promise to provide part or all of the SCM service for companies who rent their service. Supply chain management flows can be divided into three main flows:

The product flow The information flow The finances flow

The product flow includes the movement of goods from a supplier to a customer, as well as any customer returns or service needs. The information flow involves transmitting orders and updating the status of delivery. The financial flow consists of credit terms, payment schedules, and consignment and title ownership arrangements. There are two main types of SCM software: planning applications and execution applications. Planning applications use advanced algorithms to determine the best way to fill an order. Execution applications track the physical status of goods, the management of materials, and financial information involving all parties Some SCM applications are based on open data models that support the sharing of data both inside and outside the enterprise (this is called the extended enterprise, and includes key suppliers, manufacturers, and end customers of a specific company). This shared data may reside in diverse database systems, or data warehouses, at several different sites and companies. Objectives of SCM A well designed SC is expected to support the strategic objectives of:1. Solving suppliers problems and beyond his level.

2. Customer service performance improvement.

3. Reduction of pre & post production inventory.

4. Minimizing variance by means of activities like standardization, variety reduction, etc.

5. Minimum total cost of operation & procurement.

6. Product Quantity control.

7. Achieving maximum efficiency in using labour, capital & plant through the company.

8. Flexible planning and control procedures.

Assignment Set - 2 (60 Marks)

Note: Each question carries 10 Marks. Answer all the questions. Q1. What is productivity? Write a brief note on capital productivity. Ans: The amount of output per unit of input (labor, equipment, and capital). There are many
different ways of measuring productivity. For example, in a factory productivity might be measured based on the number of hours it takes to produce a good, while in the service sector productivity might be measured based on the revenue generated by an employee divided by his/her salary. A producing company can be divided into sub-processes in different ways; yet, the following five are identified as main processes, each with a logic, objectives, theory and key figures of its own. It is important to examine each of them individually, yet, as a part of the whole, in order to be able to measure and understand them. The main processes of a company are as follows:

Description: The working capital productivity measure is similar to the sales to current assets ratio, in that both are used to see if there are sufficient assets available to support a given level of sales activity. The working capital productivity measure tends to be somewhat more accurate, since it subtracts current liabilities from current assets to arrive at a net current asset figure that may be considerably less than the total current assets figure used in the other measurement.

Alternatively, an excessively low working capital productivity measurement reveals that a company is quite inefficient at producing sales, because it has too much invested in accounts receivable and/or inventory to produce a given level of sales. The measure can be compared to the results of competitors to see if the company is using its working capital in the most effective manner.

Formula: To calculate working capital productivity, diivide annual sales by total working capital. It may be useful to also calculate average working capital, in case the ending working capital for the reporting period is unusually high or low. The formula is as: Annual Sales Working Capital

Q2. Describe briefly the automated flow lines. Ans: Automated flow lines : When several automated machines are linked by a transfer
system which moves the parts by using handling machines which are also automated, we have an automated flow line. After completing an operation on a machine, the semi finished parts are moved to the next machine in the sequence determined by the process requirements a flow line is established. The parts at various stages from raw material to ready for fitment or assembly are processed continuously to attain the required shapes or acquire special properties to enable them to perform desired functions. The materials need to be moved, held, rotated, lifted, positioned etc. for completing different operations. Sometimes, a few of the operations can be done on a single machine with a number of attachments. They are moved further to other machines for performing further operations. Human intervention may be needed to verify that the operations are taking place according to standards. When these can be achieved with the help of automation and the processes are conducted with self regulation, we will have automated flow lines established. One important consideration is to balance times that different machines take to complete the operations assigned to them. It is necessary to design the machines in such a way that the operation times are the same throughout the sequence in the flow of the martial. In fixed automation or hard automation, where one component is manufactured using several operations and machines it is possible to achieve this condition or very nearly. We assume that product life cycles are sufficiently stable to invest heavily on the automated flow lines to achieve reduced cost per unit. The global trends are favouring flexibility in the manufacturing systems. The costs involved in changing the set up of automated flow lines are high. So, automated flow lines are considered only when the product is required to be made in high volumes over a relatively long period. Designers now incorporate flexibility in the machines which will take care of small changes in dimensions by making adjustments or minor changes in the existing machine or layout. The change in movements needed can be achieved by programming the machines. Provision for extra pallets or tool holders or conveyors are made in the original design to accommodate anticipated changes. The logic to be followed is to find out whether the reduction in cost per piece justifies the costs of designing, manufacturing and setting up automated flow lines. Group Technology, Cellular Manufacturing along with conventional Product and Process Layouts are still resorted to as they allow flexibility for the production system. With methodologies of JIT and Lean Manufacturing finding importance and relevance in the competitive field of manufacturing, many companies have found that well designed flow lines suit their purpose well. Flow lines compel engineers to put in place equipments that balance their production rates. It is not possible to think of inventories (Work In Process) in a flow line. Bottlenecks cannot be permitted. By necessity, every bottleneck gets

focused upon and solutions found to ease them. Production managers see every bottleneck as an opportunity to hasten the flow and reduce inventories. However, it is important to note that setting up automated flow lines will not be suitable for many industries

Q3. What is meant by Total Quality Management? Mention the 14 points of Demings approach to management. Ans: otal quality management or TQM is an integrative philosophy of management for
continuously improving the quality of products and processes. [1] TQM functions on the premise that the quality of products and processes is the responsibility of everyone who is involved with the creation or consumption of the products or services offered by an organization. In other words, TQM capitalizes on the involvement of management, workforce, suppliers, and even customers, in order to meet or exceed customer expectations. Considering the practices of TQM as discussed in six empirical studies, Cua, McKone, and Schroeder (2001) identified the nine common TQM practices as cross-functional product design, process management, supplier quality management, customer involvement, information and feedback,
committed leadership, strategic planning, cross-functional training, and employee involvement. Point 1: Create constancy of purpose toward improvement of the product and service so as to become competitive, stay in business and provide jobs. Point 2: Adopt the new philosophy. We are in a new economic age. We no longer need live with commonly accepted levels of delay, mistake, defective material and defective workmanship. Point 3: Cease dependence on mass inspection; require, instead, statistical evidence that quality is built in. Point 4: Improve the quality of incoming materials. End the practice of awarding business on the basis of a price alone. Instead, depend on meaningful measures of quality, along with price. Point 5: Find the problems; constantly improve the system of production and service. There should be continual reduction of waste and continual improvement of quality in every activity so as to yield a continual rise in productivity and a decrease in costs. Point 6: Institute modern methods of training and education for all. A modern method of on-the-job training use control charts to determine whether a worker has been properly trained and is able to perform the job correctly. Statistical methods must be used to discover when training is complete. Point 7 : Institute modern methods of supervision. The emphasis of production supervisors must be to help people to do a better job. Improvement of quality will automatically improve productivity. Management must prepare to take immediate action on response from supervisors concerning problems such as inherited defects, lack of maintenance of machines, poor tools or fuzzy operational definitions. Point 8: Fear is a barrier to improvement so drive out fear by encouraging effective two-way communication and other mechanisms that will enable everybody to be part of change, and to belong to it. Fear can often be found at all levels in an organization: fear of change, fear of the fact that it may be necessary to learn a better way of working and fear that their positions might be usurped frequently

affect middle and higher management, whilst on the shop-floor, workers can also fear the effects of change on their jobs. Point 9: Break down barriers between departments and staff areas. People in different areas such as research, design, sales, administration and production must work in teams to tackle problems that may be encountered with products or service. Point 10: Eliminate the use of slogans, posters and exhortations for the workforce, demanding zero defects and new levels of productivity without providing methods. Such exhortations only create adversarial relationships. Point 11: Eliminate work standards that prescribe numerical quotas for the workforce and numerical goals for people in management. Substitute aids and helpful leadership. Point 12: Remove the barriers that rob hourly workers, and people in management, of their right to pride of workmanship. This implies, abolition of the annual merit rating (appraisal of performance) and of management by objectives. Point 13: Institute a vigorous program of education, and encourage self-improvement for everyone. What an organization needs is not just good people; it needs people that are improving with education. Point 14: Top management's permanent commitment to ever-improving quality and productivity must be clearly defined and a management structure created that will continuously take action to follow the preceding 13 points.

Q4. Describe briefly the Project Monitoring and control. Ans: Project management is the discipline of planning, organizing, securing, and managing
resources to achieve specific goals. A project is a temporary endeavor with a defined beginning and end (usually time-constrained, and often constrained by funding or deliverables), undertaken to meet unique goals and objectives, typically to bring about beneficial change or added value. The temporary nature of projects stands in contrast with business as usual (or operations), which are repetitive, permanent, or semi-permanent functional activities to produce products or services. In practice, the management of these two systems is often quite different, and as such requires the development of distinct technical skills and management strategies. The primary challenge of project management is to achieve all of the project goals[4] and objectives while honoring the preconceived constraints. Typical constraints are scope, time, and budget. The secondaryand more ambitiouschallenge is to optimize the allocation and integrate the inputs necessary to meet pre-defined objectives.

Project Communication Tools and Techniques Pulse Meetings

Pulse meetings are short team status meetings where the project management team is able to gather project performance information about the activities that are underway. These meetings

should occur frequently and can either be face-to-face or virtual. Normally they are only a few minutes in duration. During the meeting, the beginning and completion of project activities is reported Variance Reports Variance reports are formal reports generated by the PMIS, by the Earned Value Management System, one of the other business management systems - such as the quality control system, or by a project supplier. Variance reports compare what has actually happened on a project against what was expected to have happened on the project. Program Reviews Program Reviews are meetings with the project team members and sub-project leaders that review the current status of the program as compared to the original program plan. These are most often used on Full-scale and Complex projects. Unlike the Pulse Meetings which focus on day-to-day activities, the Program Reviews focus on the big picture and emphasize the integration between activities and between sub-projects encompassed within the program. The question being asked is whether the program activities and the sub-projects are likely to interfere with each other

Technical Reviews Technical Reviews are formal meetings conducted with subject matter experts who are not members of the proejct team. These are in-depth reviews focused upon a technical aspect of the project. Examples would be Desgin Reviews, Code Reviews, Security Reviews, or Production Readiness Reviews. The reviewers should perform an in-depth analysis of the project deliverables and activities to determine whether the project work has been accomplished completely and correctly. These reviews will normally generate a list of actions that must be completed.

Q5. Write a brief note on Just-In-Time (JIT). Ans: Just in Time (JIT) is a management philosophy aimed at eliminating waste and
continuously improving quality. Credit for developing JIT as a management strategy goes to Toyota. Toyota JIT manufacturing started in the aftermath of World War II. Although the history of JIT traces back to Henry Ford who applied Just in Time principles to manage inventory in the Ford Automobile Company during the early part of the 20th Century, the origins of the JIT as a management strategy traces to Taiichi Onho of the Toyota Manufacturing Company. He developed Just in Time strategy as a means of competitive advantage during the post World War II period in Japan.

The post-World War II Japanese automobile industry faced a crisis of existence, and companies such as Toyota looked to benchmark their thriving American counterparts. The productivity of an American car worker was nine times that of a Japanese car worker at that time, and Taiichi Onho sought ways to reach such levels. Two pressing challenges however prevented Toyota from adopting the American way: 1. American car manufacturers made lots or a batch of a model or a component before switching over to a new model or component. This system was not suited to the Japanese conditions where a small market required manufacturing in small quantities. 2. The car pricing policy of US manufacturers was to charge a mark-up on the cost price. The low demand in Japan led to price resistance. The need of the hour was thus to reduce manufacturing costs to increase profits. To overcome these two challenges, Taiichi Onho identified waste as the primary evil. The categories of waste identified included

overproduction inventory or waste associated with keeping dead stock time spent by workers waiting for materials to appear in the assembly line time spend on transportation or movement workers spending more time than necessary processing an item waste associated with defective items

Taiichi Onho then sought to eliminate waste through the just-in-time philosophy, where items moved through the production system only as and when needed.

Q6. What is value engineering? Explain its significance. Ans: Value Engineering (VE), also known as Value Analysis, is a systematic and functionbased approach to improving the value of products, projects, or processes.VE involves a team of people following a structured process. The process helps team members communicate across boundaries, understand different perspectives, innovate, and analyze.When to use itUse Value Analysis to analyze and understand the detail of specific situations. Use it to find a focus on key areas for innovation. Use it in reverse (called Value Engineering) to identify specific solutions to detail problems. It is particularly suited to physical and mechanical problems, but can also be used in other areas. Quick Logical X X Long Psychological

Individual How it works

Group

Value Analysis (and its design partner, Value Engineering) is used to increase the value of products or services to all concerned by considering the function of individual items and the benefit of this function and balancing this against the costs incurred in delivering it. The task then becomes to increase the value or decrease the cost.