Land Labor Capital Entrepreneur Organization

Work Of Production Manager? 

Production planning Production control Inventory control Maintenance Replacement Cost control Work System Design

To utilize effectively the FOP. Work system design. material handling. Capacity planning. Process design and planning. To plan the production activities. Inventory control. . Replacement. inspection and quality control. store keeping. To find out the requirements of various FOP. To arrange for various service such as maintenance. To select and implement a method to produce a product. To carry out the maintenance activities as per schedule. Cost control. Design of layout. Design of material handling system. Production control. To design the new product.Functions of production management                   To identified the new product. To forecast the demand.

Historical development in production management        Industrial revolution Post civil war period Scientific management Human relation and behaviorism Operation research Service revolution Computer revolution .

Main features of Scientific management         Division of work Job analysis Time and work study Method study Functional and foremanship Standardization of work Scientific selection and Training of workers Piece rate and wage rate system .

F. W. Taylor¶s principles of scientific management
Fredrick Winslow Taylor(1856 ± 1915) Replacing rule of thumb with science Harmony not discard Maximum output, not restricted Co ± operation not individual Training and development of workers

1. 2. 3. 4. 5.

Production design is the planning, Analysis and selection of 


Material and input to be used Nature and type of machine to be used Amount and quality of labor to be used Manufacturing operation to be used

Need to design new product
Organization design new product due to following reasons. 

To be in business for a long time. To satisfied the unfulfilled needs of the customers. If the existing product line become saturated. If the sales is on reject stage. If the company decide to enter new prospective business through diversification. If there exists too much competition in the existing product line. Due to continuous change in technology.

Factors influencing product design           Customer¶s requirement Facility to operators Functionality Trade off between functional and form Material requirement Work methods and equipments Cost Product quality Process capability standards .

5. 8. 7. 10. 6.Characteristics of a Good Product Design A good product design must ensure the following 1. 2. Function or performance Appearance or Aesthetics Reliability Maintainability Availability Productivity or manufacturability Simplification Standardization Specification safety . 9. 3. 4.

Stages in new product Development process Step1: Idea Generation Step2: Idea Screening Step3: Concept Development Step4: Concept Testing Step5: Market Strategy Development Step6: Business Analysis Step7: Product Development Step8: Test Marketing Step9: Commercialization .

. Have an exceptional impact. Theory of strict liability. renovate. Prefer to repair a product rather than discard. Affordable product repair.Design Quality and Safety Responsibility      Company¶s public responsibilities.

4.PROCESS DESIGN Process design is a framework in which selection of the work stations and the flow analysis of materials between the various department. Process planning Selection of process Process selection decisions Process planning design . 2. It include: 1. 3.

Process selection decisions       Market condition Capital requirement Labor Management skills Raw materials Technology .

controls and improvement goals .Process planning design       Identify the product or service Identify the Customer Identify the Supplier Identify the Process Mistake ± proof the process Develop measurement.

What is the maximum time to complete the service? 9. How long should it take to perform the service itself? 8. What is the maximum access time? 7. Have these standards been communicated to the public? 4. What service standards are already in place? 2. What products that affect its service performance? . Which of these standards have been clearly communicated to all service personnel? 3.Service process design In designing high quality service process. What is the final result of the service provided? what should it ideally be? 6. Which standards require refinement? 5. At what point does service begin? 10. consider the following question: 1. How many different people must the customer deal? 11. What components of services must be controlled? 12.

8. 2. 2. 4. Selection of proper machinery with allied tooling based on Required machine capability Setup time Practical lot size Quality of parts Cost and types of tooling . 5. 7. Interpretation of Part print analysis Symbols  1. 3. 6.Responsibilities of Process Planning Engineers  1. 4. 5. 2. Gathering the fundamental details of product design Type of rough stock Dimensional balance Type of finish Production rate Production volume Scrap losses Down time Design changes  1. 3.

Time required for manufacturing the products. material. Selection of process Delivery schedule Availability of machine Quantity Quality 2.Steps in process planning  1. 3. 4.     1. machine. Time calculation Process sheet Requirement of men. Selection of material Selection of skip stuff etc. 2. .

Issued bySpeed Feed/ supply Set up time Standard time .No. Description of operation M/C code Tool Code Labor code Part No.Process Sheet Process Sheet Part descriptionDrg. SpecificationLot SizeS . No.Assembly No.Matl.

4 5 7 3.) 250 300 400 360 900 Process sequence 1. 6 8 4 6 2.drilling-welding Cutting-drilling-welding All operations are performed with CNC machine The detail of process time for the components for various operation and their machine hour rates are tabulated below. 2. Operations Machine (min. as shown in the following table to produce a product.) / rate (Rs. . Process sequence Cutting-milling. 3. 12 Cutting milling drilling welding CNC machine Find the most economical sequence of operations to manufacture the product.Example: The process planner of a firm listed down the sequence of operations. Sequence of operation 1.

Solution: (a) Cost of product using process sequence 1 Cutting Milling Drilling Welding The calculation for the cost of the above process sequence are summarized in the table.) Cost (Rs.100 0.100 250 300 400 360 Total 25.067 0. Working for process sequence 1 Operation No. 0.00 127.90 26.133 0.80 36.00 39.70 . 1 2 3 4 Cutting Milling Drilling Welding 6 8 4 6 Hr.) Min . Operations Time Machine Hr. rate (Rs.

rate (Rs.50 33.) Min .083 0.(b) Cost of product using process sequence 2 Cutting Drilling Welding The calculation for the cost of the above process sequence are summarized in the table.20 41.) Cost (Rs.46 .76 91. Operations Time Machine Hr. 1 2 3 Cutting Drilling Welding 4 5 7 Hr. Working for process sequence 2 Operation No.066 0.116 250 400 360 Total 16. 0.

rate (Rs.) Cost (Rs.46) therefore it should be selected for manufacturing the product. 0.0 The process sequence 2 has the least cost (Rs.) Min .200 900 180. Operations Time Machine Hr.(c ) Cost of product using process sequence 3 CNC Operation only The calculation for the cost of the above process sequence are summarized in the table. 1 CNC operation 12 Hr. . Working for process sequence 3 Operation No. 91.

4. they are: Identify and define the Problem Study the existing situation Collect the necessary data Generate possible solution alternative Evaluate the alternative and choose the preferred one Implement the improvement and measure the results 1.Scientific Methods for Process Improvement  The steps are involved in the scientific method of process improvement. 3. . 6. 2. 5.

   Based on time horizon Long term capacity planning Short term capacity planning    Based on amount of resources employed Finite capacity planning Infinite capacity planning .CAPACITY PLANNING? Capacity plans are made of two levels.

market conditions and product life cycles. Type of technology selected. Capacity investment required.The Factors that affects in determining the plant capacity      Market demand for the product. Changes in product design. process design. Level of automation desired. .

To increase the volume of production. 3.The Need Of Capacity Planning Capacity planning is necessary when the organization decided:1. To gain the advantages of economics of scale. To introduce new product. To increase its production. 2. 4. .

) 1200 2400 1500 5100Hrs.Problems in Capacity Planning  A department works on 8 hours shift.0 6. 250 days a year has the usage date.) 4. of a machine given below. Product Annual demand 300 400 500 1200 Units Processing time (in hr.0 Total Processing time needed (Hr. X Y Z .0 3.0 6.0 Determine the number of machine s required? Solution: calculate the processing time needed in hours to produce product X.) 4. Product X Y Z Annual demand 300 400 500 Processing time (in hr. Y and Z in the quantities demanded using the standard time data.0 3.

Total 5100 Hrs.) = 8hr. are required to produce 1200 Units Annual production capacity of one machine is (in standard hrs./days * 250 days = 2000 hrs. Production capacity per machine in hrs.55 § 3 machines . per year Hence Number of Machines required = Workload per year in hrs. = 5100/2000 = 2.

Rated output = utilized hrs * System efficiency = 360 hrs * 0. of machine * machine hrs worked per week = 10*6*8 = 480 hrs. .2 A firm operates 6 days a week on single shift of 8 hours per day basis.75 = 360 hrs. If the machines are utilized for 75% of the time at a system efficiency of 80% .Ex.8 = 288 Standard hrs. * 0. of work possible per week = No. There are 10 machines of the same capacity in the firm. what is the rated output in terms of standard hours per week? Solution: Maximum number of hr. If the utilization is 75% then number of hrs worked = 480 hrs.

the system can generate without bottleneck.Ex. the picture tube and the final inspection. hence it is equal to the least of the sub assembly capacities i.e. System Capacity = bottleneck = 400TV¶s / days Actual Output of TV¶s = 350Per day of one shift Actual output *100 System Efficiency = System capacity = (350/400)*100 = 87.5% . Calculate the system capacity and system efficiency? Sub Assembly Individual Capacity Cabin 550 Picture Tube 400 Speaker 500 Final Assembly 450 Inspection 400 Solution: System capacity is the maximum.3 A TV assembly unit has 5 work stations whose individual capacities per shift are given below. The capacity of the assembly line is 350 TVS per day of single shift .

. The shortage of funds for investment in additional plant and equipment. 3. 2. 5. When the organization carries out value analysis or cost reduction programs. The fluctuating demand for the company¶s products.When to take Make Or Buy Decision The following situations demand for the evaluation of make or buy decisions: 1. Failing quality and delivery commitment of the supplier if presently the item is brought. When the organization introduces new products. 4.

4. 2.Various factors that influence make or buy decision 1. 6. Volume of production Cost analysis Utilization of production capacity Integration of production system Availability of manpower Secrecy or protection of patent. 7. 8. 3. 5. 9. right Fixed cost Availability of competent suppliers or vendors Quality and reliability of vendors .

there are mainly two cost namely. In the business organization. TC B A Loss Profit VC FC C Units of sales per period . fixed cost and variable cost. We have to compare the cost of the manufacturing and the cost of the buying the require quantity of the products. for manufacturing a product.Breakeven analysis Decision on whether to make or buy is mainly affected by the cost factor. The cost of producing is calculated as follows. The sum of these two cost is known as the total cost of the product.

000. Cost to Make Variable cost /unit = material cost + labor cost +overhead cost = Rs.000 . 2.000 Fixed cost = Rs.120 per unit and variable overhead cost of Rs.1. 30 = Rs. Which would be more advantageous. gear production or agricultural equipment production? Solution: (i) In this part. 960.40. It will incur material cost of Rs 90 per unit. we assume that the unused capacity has alternative use. 240 Total variable cost =(4000 units)*(240per unit) = Rs. labor cost of Rs. The annual fixed cost associated with the unused capacity is Rs. 300 each. 240. 30 per unit. 90.Problems in Make or Buy Decisions An automobile company has extra capacity that can be used to produce gears that the company has been buying for Rs.000 Total cost =Rs. if the company makes the gears.200. 120 +Rs. (i) (ii) What it would be profitable for the company to make the gears? Suppose the capacity could be used by another department for the production of some agricultural equipment that would cover its fixed cost and variable cost and contribute Rs.000 to profit. demand over the next year is estimated at 4000 units. 90 +Rs.

240.000 From the above table it is clear that the net cost of the second alternative is less than that of the first alternative.200.000 Fixed cost (Rs. Hence it is advisable to produce agricultural equipment using the existing capacity of the company and buy the gears from a supplier.000 0 Total cost (Rs.000 1.000 Therefore cost of making the gears is less than that of buying the gears from outside.000 Contribution to profit 0 90.) 960.) 240.000 Fixed cost =Rs.=(4000 unit)*(Rs.200.440.000 Net relevant cost 1.000 Total cost =1.200.110. 1. Hence making the gears is advantageous. Cost to Buy Purchase cost (ii) In this section the company has the following alternatives a) Making the gears within the company b) Buy the gears from an outside suppliers and utilize the existing capacity of the company to manufacture agricultural equipment The cost calculation for each of the above alternatives is summarized in the following table: Make Gears Purchase Gears and make agricultural Equipments Total Variable cost (Rs.200.200.) 1.300per unit) = Rs. .000 1.000 1.

5. 8. 2.PLANT LOCATION Various factors to decide new locations are: 1. 3. 6. 7. Demand Availability of materials Availability of transports Supply of materials Market position Government policies Cost and supply of labor Policy of industries . 4.

Stages in facility Location Decisions  There are four stages in facility location decisions: Stage 1: Selection of a country Stage 2: Selection of a general territory or region Stage 3: Selection of a community Stage 4: Selection of a particular site .

7. 3. 8. 5. 4. The political situation of the country Government trade polity Government industrial policy The economical conditions of the country Infrastructure facilities Availability of labor and cost of labor Market conditions Availability of competitions Natural calamities .Various factors in selection of a country 1. 9. 2. 6.

7. Local government Industrial policy Availability of labor Market Cost of labor Sources of raw materials Basic infrastructure facilities Climatic conditions Taxation and laws . 6. 8.Various factors in selection of a region 1. 3. 9. 2. 5. 4.

3. . 4.Various factors in selection of a community 1. Availability of labor Community attitude Social structure Services facilities 2.

Note: These factors also influence the selection of the site selection. Cost of the land Availability of the land Suitability of the land 2.Various factors in selection of a particular site 1. . 3.

training institute and trainers Unavailability of service consultants. recreational and medical facilities are available Adequate storage facilities like warehouse Inadequate storage facilities like warehouse Availability of service consultants.Comparison between Urban and Rural Location Urban Location Rural Location Good transport facilities Poor transport facilities Availability of skilled and Trained manpower Unavailability of skilled and Trained manpower Less distribution and transportation cost Distribution cost and transportation cost is high Availability of good communication network Poor communication network facilities Good educational. recreational and medical facilities are available Poor educational. training institute and trainers Excellent sub contracting facilities Less sub contracting facilities Availability of more suppliers in and around by Less number of suppliers will be are found Cost of land is very high Cost of land is very cheap Sufficient land may not be available for future expansion Sufficient land may be available for future expansion Cost of living is very high Cost of living is very less Cost of labor is high Cost of labor is cheap Difficult to get skilled labor due to more demand Easy to get more unskilled labors Industrial interest due to trade union activities No any Industrial interest due to less trade union activities High labor tern over due to batter opportunities Less labor tern over due to less opportunities Municipal and other authority restrictions on buildings Municipal and other authority are not restrictions on buildings Polluted environment Free from Environment pollution                       .

Select the site M. .ROI Method to select the best site This method is based on the economics of various sites or Rate of return ROI = Total revenues ± Total expenses Total investment OR If the value of Merit of M Merit of N > 1 . Select the site N otherwise if < 1 .

An ABC company intends to select one of the three locations ± both tangible and intangible factors collected by the expert is given below Particulars A Total investment in land building. plant and Machinery (Rs.) Revenues Expenses on raw material Distribution cost Expenses on utilities Wages & Salary Community facilities Community attitude 250 410 89 40 50 25 Indifferent Indifferent Sites B 325 515 100 60 40 30 Good Good C 270 360 98 25 25 28 Bad Indifferent Using ROI method select the best site? .Ex.

29% .4% 230 87.) Revenues Expenses on raw material Distribution cost Expenses on utilities Wages & Salary Total Expenses ROI in % 250 Sites B 325 C 270 410 89 40 50 25 515 100 60 40 30 360 98 25 25 28 204 82.Solution: Calculation of ROI for the three alternatives Particulars A Total investment in land building. plant and Machinery (Rs.6% 181 66.

Comparison of Service and Manufacturing Considerations  MANUFACTURING Customer access Traffic volume Building Competition Labor cost Population Energy availability Costs Transportation modes Revenue focus SERVICES Parking Patterns Leasing costs Competition Availability/skills Drawing area Demographics: age.income.etc Costs Cost Focus         .

Global Locations      Reasons for globalization Benefits Disadvantages Risks Global operations issues .

Globalization  Facilitating Factors ± ± Trade agreements Technology Markets Cost savings Legal and regulatory Financial  Benefits ± ± ± ± .

Globalization  Disadvantages ± ± ± ± ± Transportation costs Security Unskilled labor Import restrictions Criticism .

Globalization  Risks ± ± ± ± Political Terrorism Legal Cultural .

Location Cost-Volume Analysis  Assumptions ± ± ± ± Fixed costs are constant Variable costs are linear Output can be closely estimated Only one product involved .

Evaluating Locations  Transportation Model ± Decision based on movement costs of raw materials or finished goods Decision based on quantitative and qualitative inputs Decision based on minimum distribution costs  Factor Rating ±  Center of Gravity Method ± .

Layout Types     ± Product layout or line layout ± Group layout or combination layout ± Fixed layout ± Process layout or functional layout .

Power house 14. 12. Workshop 6. Process Site 4.The Plant Layout KEYWORDS 1. Site for Expansion Project. Canteen & Change house 7. Fire Brigade 8. Effluent treatment plant 13. Raw material Storage 2. Laboratories 5. Emergency water storage 15. Administrative Building 11. Product Storage 3. Security office 10. Plant utilities . Central Control Room 9.

Facility Layout ‡ Developing a facilities layout is a critical step in the facilities planning process. ‡ Facilities Planner must be CREATIVE and COMPREHENSIVE in generating layout alternatives. .

Layout is effected by:      Centralized vs. Variable Path Handling Unit Load Size Degree of Automation Type and Level of Inventory and Control of Materials . & Supplies Fixed Path vs. Tooling. Decentralized Storage of WIP.

vertical space and overhead space. Principle of cubic space utilization: the good layout is one that utilize all the three dimension i. The layout should be highly flexible in enough in order to overcome the changes that takes place in future.PRINCIPLES OF PLANT LAYOUT     Principle of integration: a good layout is one that integrate men. theft etc. machines and materials and supporting services in order to make optimum utilization of resources. materials and material handling equipments. Principle of minimum distance: this principle is concern with the minimum movement of men. as far as possible straight line movement should be preferred. Principle of flow: A good layout is one such that material should flow or move in a forward direction and there should not be any back tracking. security and satisfaction: a good layout is one that gives due consideration to workers safety and satisfaction and safeguards the plant and machinery against fire.e. horizontal space (floor space).  Principle of maximum flexibility: a good layout is one that can be altered without much cost and time. .  Principle of safety.

CAM. CAD. MRP. RTIC.Handling and Storing ³Work-In-Process´ Issues ± Centralized versus decentralized storage ± Shop floor control and material tracking ± Reduced WIP inventory levels ± Controlled material movement to production areas ± Reduced damage due to handling and storage ± Automatic encoding of production data ± "Just-in-time" production ± Increasing levels of automation: CAE. CAPP ± Rapid tool changing for minimizing setups and reducing lot sizes  .

Handling and Storing ³Work-In-Process ‡ In-process handling includes movement of material. applies to material in a semi finished state of production. tooling. and supplies needed to support production. Raw Materials Work-in-process Finished Goods . and supplies to and from production units. as well as handling at the workstation. Typically. ‡ In-process storage includes the storage of material. tooling.

combine. ± Pre-position material ‡ Design requirements for WIP handling system ± Establish control requirements ± Determine process flow methods ± Establish inventory points and levels ± Consider workplace layout ± Determine load increment and container design ± Evaluate WIP storage methods ± Determine distribution method ± Design control system . and simplify ± Moving and/or storing material incurs costs.Handling and Storing ³Work-In-Process ‡ Rules of Thumb ± Handling less is best ± Maintain physical control of materials ± Eliminate.

To minimize distance through which materials is to be moved. To reduce damage in materials. Secondary objectives:         To enhance the performance of machines. To save materials. To enhance the morale of the personnel.Objectives of material handling Material handling have to focus on the following primary and secondary objectives:Primary objectives:    To save and assist personnel by making material handling safer and easier through better method and equipment. To reduce work in process. To improve the working conditions. To save time by speeding up operations. To efficiently use the storage of space. . To increase the turnover of the material by accelerating its flow.

the material handling System or the facilities layout? .Which comes FIRST.

Layout or MHS First ? BOTH BECAUSE: Sequential approach that considers a number of alternative handling systems and the corresponding layout alternatives. .


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