INTERNATIONAL SCHOOL OF BUSINESS AND TECHNOLOGY

COURSE WORK

PRODUCTION AND OPERATIONS MANAGEMENT

SUBJECT CODE: MB0028

NAME : TWAHIRWA TADEO

ROLL NO : 540811570

COURSE : MBA

SEMESTER: 2

SIKKIM MANIPAL UNIVERSITY (INDIA)

UGANDA LEARNING CENTER
QN. 1. EXPLAIN WHAT IS MEANT BY CAPITAL PRODUCTIVITY?

ANS:
Capital productivity involves a set of measures employed to ensure that all resources, like
plant, machinery, buildings as well as working capital are efficiently and effectively
utilized.
Due to uncertainties like demand fluctuations, and other uncertainties in the production
process, strategies are laid to ensure that the funds allotted towards capital yield expected
returns.
In order to achieve this, a set of measures are employed and they include the following:

Outsourcing strategies are one of such strategies. These are adapted when some capacity
requirements need to be hired so that capital and man power requirements can be reduced
in order to reduce the cost of the products and services to the customer.

Methods improvement is yet another measure used to ensure capital productivity.

This usually begins with methods analysis - which involves a process of finding out how
a job is done, breaking it down to elemental tasks so that they are amenable for analysis.
This is done for both running and new jobs. The analysis involves information gathering
based on observation by the analyst, and all stake holders are consulted in the process.
Here the analyst suggests measures of improvement which are closely monitored and
records compared with past records to ascertain their validity of the new set of measures.

The other important aspect is balancing of work stations. This is important because a
product goes through a series of stages before being completed.
As a result various work stations are established which man different activities of the
process. Therefore, capacities need to be adjusted to effectively man these stations. These
need to be well balanced so as to ensure that time spent at each station is equitably
distributed to ensure timely productivity of the employed resources.

Rationalizing of packaging methods also need to be given adequate consideration to

improve capital productivity.
The current production environment is characterized by various logistical problems.
It is there fore pertinent that more economical packaging strategies are adopted especially
those that encourage re use of these packaging materials. So when procuring or
outsourcing this particular activity, the focus should be on those packaging services that
minimize space, they should be able ensure safe transit and also help in proper
monitoring- both for quantities and operations.

Quality circles are the other measures established to ensure capital productivity.
This idea was developed by Kaoru Ishikawa, the originator of fishbone diagrams that
help identify the root cause of any problem. Here the causes of the existence of a problem
are classified as pertaining to the material, processes or method or any factor that goes
into production.
The matter is further pursued till the exact cause is determined. Such information is used
by quality circles to ensure quality solutions to the problem. Since these activities are
done without altering work schedules, little time is spent and teamwork enhanced which
result in continuous improvement in the methods of production and quality. This
minimizes capital spent and therefore, productivity is enhanced.

It is therefore, important for any production manager to clearly establish the above
measures if capital productivity is to be enhanced. There is no such measure that can
work in isolation. Therefore, a clear integration of all the above measures in the
production process will leave no chance of failure in production.
QN 2.WRITE A DETAILED NOTE ON SPLIT CASE ORDER FULLFILLMENT
METHODS AND MECHANISATION.

ANS:
In a split case picking system, individual items are picked from bins or open cartons. This
method is sometimes called each-pick or piece picking operations.
The system ensures that where there are bulk supplies in full cases to one or more
destinations are fulfilled. Fulfillment of orders which need different merchandise in
different quantities requires that cases will have to be split, pieces picked, repacked in
cartons and shipped to the customer.

Mechanization on the other hand helps in improving identification, pick-up and repacking
the materials in addition to relieving monotony of the workers.
Different strategies of achieving the above objectives are discussed below;

Order picking methods. Basic order picking is the way most of us use the grocery store.
We have a shopping list, a cart, and we’re off to the races grabbing the things we need for
our order (and quite probably some things we don’t).In a basic picking system, the
product is stored at a fixed location in racking or shelving (sometimes in flow racking or
other semi-automated equipment) and pickers walk to it in a manner not too different
than the way you buy groceries—items are stocked in a spot and you go get it. Using a
pick ticket, the order picker picks a single order, following his route through the static
storage area.
The accuracy of order fulfillment is ensured by tow basic factors; order extent which
involves the number of orders to be picked by a picker in the assignment, and coverage
extent which involves the physical area to be traversed by the picker in selecting
merchandise for an assignment within the picking system. Either of the strategies is
adopted to meet the constraints or opportunities which maximize employee productivity
and the customer’s needs.

Sorting and routing. Sorting here helps to ease the operation of matching orders,
merchandise and the customers for whom they are done. This activity is always done
when as and when orders are picked. The order may be sorted immediately or a number
of orders merged and batches made to consolidate the priorities for execution.
The strategy used depends on the total area of the zone, the number of orders, and the
type of merchandise and the economics of balancing all the above.
When orders are moved from zone to zone where picks are required then we call this
routing and picks.

Order packing methods. When split case is executed it becomes necessary that the
merchandise is repackaged for shipment to meet the requirements of the customers. In the
first method they are packed as they are picked. This is applicable in cases where the
merchandise is usable by the customer directly and when the tools and packaging
materials are available with the picker and he can pack them throughout the picking area.

Classification schemes. Here different methods of picking and packing are coded.
Different letters uniquely identify the method intended to be used and all personnel in the
process will know disposition status of the merchandise.
For example, for discrete order picking or batch order picking, letter D or B is used, BS
for batch order picking-sort immediate, BM for batch order picking-merge and sort, ZR
for zone picking with routing, ZC for zone picking with chaining, ZP for zone picking in
parallel. With this type of coding 24 ways of representing the type of split order picking
and packing are identifiable.

Choice of optimal fulfillment strategies. This predominantly depends on the

characteristics of the order and the mode of distribution. They are determined by general
order characteristics such as; number of line items and the quality of pieces per line item.
General order categories include; wholesalers, retailers, direct market orders, and
consumer distributors.
The performance measures to be satisfied by the choice of strategy are to minimize the
costs involved and maximize desirable characteristics. Some of these include;
Minimizing the cost of pick and pack for every order, minimize cost of shipping per
order, reduce the time required per cycle, increase the fill rate, improve accuracy of the
process and ensure traceability and accountability of all transactions.

All these processes are aimed at improving efficiency, reduce costs and improve customer
satisfaction.
QN.3. EXPLAIN STRATEGIC MANAGEMENT PROCESS AND STRATEGIC
DECISION MAKING IN DETAIL.
ANS:
“Strategic management is an ongoing process that evaluates and controls the business
and the industries in which the company is involved; assesses its competitors and sets
goals and strategies to meet all existing and potential competitors; and then reassesses
each strategy annually or quarterly [i.e. regularly] to determine how it has been
implemented and whether it has succeeded or needs replacement by a new strategy to
meet changed circumstances, new technology, new competitors, a new economic
environment., or a new social, financial, or political environment.” (Lamb, 1984: ix).

Strategic management is a combination of three main viz; strategy formulation,

implementation and evaluation.

In strategy formulation, the following are involved;

• Performing a situation analysis, self-evaluation and competitor analysis: both

internal and external; both micro-environmental and macro-environmental.
• Concurrent with this assessment, objectives are set. These objectives should be
parallel to a timeline; some are in the short-term and others on the long-term. This
involves crafting vision statements (long term view of a possible future), mission
statements (the role that the organization gives itself in society), overall corporate
objectives (both financial and strategic), strategic business unit objectives (both
financial and strategic), and tactical objectives.
• These objectives should, in the light of the situation analysis, suggest a strategic
plan. The plan provides the details of how to achieve these objectives.

During strategy implementation, the following issues are imperative;

 • Allocation and management of sufficient resources (financial, personnel,
operational support, time, technology support)
• Establishing a chain of command or some alternative structure (such as cross
functional teams)
• Assigning responsibility of specific tasks or processes to specific individuals or
groups
• It also involves managing the process. This includes monitoring results,
comparing to benchmarks and best practices, evaluating the efficacy and
efficiency of the process, controlling for variances, and making adjustments to the
process as necessary.
• When implementing specific programs, this involves acquiring the requisite
resources, developing the process, training, process testing, documentation, and
integration with (and/or conversion from) legacy processes.

The final phase is one of strategy evaluation. This mainly involves;

Measuring the effectiveness of the organizational strategy, it's extremely important to

conduct a SWOT analysis to figure out the strengths, weaknesses, opportunities and
threats (both internal and external) of the entity in question. This may require to take
certain precautionary measures or even to change the entire strategy. The suitability,
acceptability, and feasibility of the strategy must also be established.

Strategic decision making involves establishing and supporting a course of action to

achieve an organization’s long-range objectives or vision after developing alternatives
based on logical assumptions, contextual and systems analysis, available resources,
constraints, and organizational values.

The process involves a series of steps before a final decision is taken up. These include
the following;
Information gathering. Here one Identifies, collects, synthesizes, and aligns information
from a variety of sources required to understand strategic issues .The decision maker also
draws on different analytical frameworks to challenge operating assumptions and social
norms. Actively includes a diverse group of people when seeking input on an idea or
initiative and utilizes this input and feedback in decision making.

Organizing information. Organize information and data to explain major trends,

problems, and causes. Compares and combines information to identify underlying issues,
opportunities, and areas of vulnerability.

Identifying all possible alternative strategies. Generates and considers options for actions
to achieve a long-range goal or vision. Identifies synergies between current
organizational initiatives and new opportunities across the business spectrum, develop
and utilize decision criteria considering factors such as cost, benefits, risks, timing, and
buy-in. Selects the strategy most likely to succeed; define criteria factors (such as cost,
benefits, risks, timing, and buy-in), recognize and evaluate potential threats to
organizational objectives and manage and take risks.

Recommend strategies. Influence, shape and make recommendations regarding the

issues and priorities that the decision will address. Define and review contingency plans
for intermediate and long-range objectives.

Establish implementation plan. Identify the key tasks and resources needed to achieve
objectives.
Execute the plan. Make sure strategies are effectively communicated to stakeholders,
build consensus and ensure implementation. Monitor results and facilitate the
organization’s decision.
QN.4. WHAT IS TQM? EXPLAIN QUALITY APPROACHES OF DEMING WHEEL
AND JURANS QUALITY TRIOLOGY.

ANS:

"TQM is a management approach for an organization, centered on quality, based on the

participation of all its members and aiming at long-term success through customer
satisfaction, and benefits to all members of the organization and to society." ISO
8402:1994

TQM requires that the company maintain this quality standard in all aspects of its
business. This requires ensuring that things are done right the first time and that defects
and waste are eliminated from operations. The following steps are implemented to
achieve total quality;

All measures to satisfy the customer must be ensured, wants must be converted into
design specifications to meet and perhaps exceed customer satisfactions, processes
designed to ensure the right job is done the first time, and keep a record of all
occurrences, procedures followed and their consequences.

Quality approaches of Deming Wheel.

Deming offered fourteen key principles for management for transforming business
effectiveness. The points were first presented in his book Out of the Crisis. Create
constancy of purpose toward improvement of product and service, with the aim to
become competitive and stay in business, and to provide jobs.

1. Adopt the new philosophy. We are in a new economic age. Western management
must awaken to the challenge, must learn their responsibilities, and take on
leadership for change.
2. Cease dependence on inspection to achieve quality. Eliminate the need for
inspection on a mass basis by building quality into the product in the first place.
3. End the practice of awarding business on the basis of price tag. Instead, minimize
total cost. Move towards a single supplier for any one item, on a long-term
relationship of loyalty and trust.
4. Improve constantly and forever the system of production and service, to improve
quality and productivity, and thus constantly decrease costs.
5. Institute training on the job.
6. Institute leadership. The aim of supervision should be to help people and
machines and gadgets to do a better job. Supervision of management is in need of
overhaul, as well as supervision of production workers.
7. Drive out fear, so that everyone may work effectively for the company.
8. Break down barriers between departments. People in research, design, sales, and
production must work as a team, to foresee problems of production and in use that
may be encountered with the product or service.
9. Eliminate slogans, exhortations, and targets for the work force asking for zero
defects and new levels of productivity. Such exhortations only create adversarial
relationships, as the bulk of the causes of low quality and low productivity belong
to the system and thus lie beyond the power of the work force.
10. a. Eliminate work standards (quotas) on the factory floor. Substitute leadership.
b. Eliminate management by objective. Eliminate management by numbers,
numerical goals. Substitute leadership.
11. a. Remove barriers that rob the hourly worker of his right to pride of
workmanship. The responsibility of supervisors must be changed from sheer
numbers to quality.
b. Remove barriers that rob people in management and in engineering of their
right to pride of workmanship.
12. Institute a vigorous program of education and self-improvement.
13. Put everybody in the company to work to accomplish the transformation. The
transformation is everybody's job.
14. Massive training is required to instill the courage to break with tradition. Every
activity and every job is a part of the process.
A summary of Deming’s work was in his cycle which was compartmentalized into four
activities viz; plan-where a problem is identified, processes determined, and relevant
theories checked out, do-where a plan is implemented on a trial basis, check-to ensure
that the trials taken according to the plan are in accordance with the expected results, and
finally act-where regular production is started so that quality outcomes are assured.

Juran’s quality trilogy.

Dr. Juran’s trilogy defined the three management processes required by every
organization to improve: Quality control, quality improvement and quality planning.

This Trilogy shows how an organization can improve every aspect by better
understanding of the relationship between processes that plan, control and improve
quality as well as business results. It was created in the 1950’s and defines managing for
quality as three basic quality-oriented, interrelated processes:

Quality Planning. To determine customer needs and develop processes and products
required to meet and exceed those of the customer needs. The processes are called Design
for Six Sigma or Concurrent Engineering. This can be particularly challenging for a
planning team, because customers are not always consistent with what they say they
want. The challenge for quality planning is to identify the most important needs from all
the needs expressed by the customer.

• Identify who are the customers.

• Determine the needs of those customers.
• Translate those needs into our language.
• Develop a product that can respond to those needs.
• Optimize the product features so as to meet our needs and customer needs.

Quality Control - The purposes of quality control is to ensure the process is running
in optimal effectiveness, or to ensure that any level of chronic waste inherent in the
process does not get worst. Chronic waste, which is a cost of poor quality that can exist
in any process, may exist due to various factors including deficiencies in the original
planning. It could cost a lot of money to the company, from rework time to scrap product
to overdue receivables. If the waste does get worst (sporadic spike), a corrective action
team is brought in to determine the cause or causes of this abnormal variation. Once the
cause or causes has been determined and corrected, the process again falls into the zone
defined by the “quality control” limits.

• Prove that the process can produce the product under operating conditions with
minimal inspection.
• Transfer the process to Operations.

Quality Improvement - Eliminate waste, defects and rework that improves processes
and reduces the cost of poor quality. The processes have to be constantly challenged and
continuously improved. Such an improvement does not happen of its own accord. It
results from purposeful Quality Improvement or “Breakthrough.”

• Develop a process which is able to produce the product.

• Optimize the process.

A summary of Juran’s ten steps to Quality improvement include the following;

Build awareness of the need and opportunity for improvement, Set goals for
improvement, Organize to reach the goals, Provide training, Carry out projects to solve
problems, Report progress, Give recognition, Communicate results, Keep score, Maintain
momentum by making annual improvement part of the regular systems and processes of
the company.
QN 5.COMPARE WORK FLOW WITH BPM. EXPLAIN IN DETAIL THE PROJECT
DEVELOPMENT PROCESS CYCLE?
ANS:
Workflow and BPM:
In one sense, there is no difference at all. Workflow is the basis of business process
management (BPM) as well as business re-engineering. From that perspective, BPM is
simply workflow with a lot of bells and whistles.

From another perspective, those bells and whistles are important enough to make a major
difference for someone trying to make a business run more efficiently. A typical business
process management application has an elaborate set of modeling tools, analytical
functions and other features to handle complex projects that reach across an entire
corporation.

Functionally, the difference between the two terms is that companies that advertise
themselves as being in the BPM business are usually aiming at big, complex projects in
large corporations. Those that call their products "workflow" are aiming at more limited
projects.

But not always. Perhaps the best way to look at it is that the terms overlap so much that
it's virtually impossible to draw any kind of a hard line between them—not that the
various vendors don't try strenuously. In fact, there's so much overlap that the terms are
almost, but not quite, synonymous.

Project development process cycle.

It should be noted that for any project, there a set of non-repetitive activities which create
a unique product or service. In each of these activities, there are resources to be used. The
systematic acquisition and deployment of these resources in a relatively short time is
essential for any project success. Development of a project starts with the acceptance of
the proposal by the customer in all respects – technical and commercial. The following
are stages involved in a development cycle;

Obtaining the specifications; in this phase, the needs and other requirements of the
project are clearly written down basing on the given proposal. It is in this phase that
customer needs are converted into a proposal for action to meet the customer
expectations. Considerations of cost, possibility of a few changes to accommodate the
technical requirements or acquisition of new technology to incorporate improved
performance characteristics will be considered. Time required for the project may
undergo a change in this phase. When all these are agreed upon, a detailed document
covering all aspects will be ready. When specifications are available, the project manager
can proceed further.

Creating a work breakdown structure; once the specifications are ready, the project
manager has the responsibility of showing the work elements in a structure which shows
the sequence in which they are to be performed. Here a manager determines who will be
in charge of which task. Some tasks have to be out sourced, and it is here that the
manager determines the flow of such activities – whether they are to be performed on site
or other wise. It is at this stage that all persons responsible for various activities will be
identified and the sequence of operations settled.

Preparing a PERT chart; The Program Evaluation and Review Technique help in
determining a critical path for various activities of the project. Here we consider the fact
that time allocated for various activities might not be determinable. So we give three time
estimates – optimistic, most likely and pessimistic. Giving a weight of four to the most
likely period, we try to find the variance of the project. As some activities get completed
earlier, there are opportunities to utilize the resources allocated to them for the critical
activities to hasten the project. These are done on a continuous basis as the project is
under progress. Since actual times taken for the activities are changing, reviewing helps
us to meet the deadline by resource smoothing. A chart is prepared and stubs of different
colours are used to indicate the progress of all activities, so that corrections can be
effected.
Forming groups and teams; this phase involves identification of persons who are to
undertake various tasks which include procurement of materials, maintaining equipments,
and stocking of spares. Recruitment of member should focus on team players and those
who are multi skilled so as to possess members in a team who can complement each
other. Members should be allowed to spend some time together after work for team
building activities. This also allows for sharing challenges and work experiences. Where
some members are not well versed with team skills, training programs should be arranged
to ensure team spirit.

Forming a core group consisting of members chosen from as many teams as

possible; these are generally senior members in their teams. They will be sharing
information about the progress and see what activities can be hastened or retarded, what
facilities can be loaned, which person from a team can help another team in solving a
problem. Coordination and cooperation result in solving problems sooner. The members
of this core group will be responsible to bring to the notice any changes they want in their
teams. This team also helps to facilitate conflict resolution among teams.

Fixing the responsibility areas; this is a crucial stage in project development. Every
person in the project team will be what is expected of him. Each team will know as to
what they are expected to complete during what periods. The core member of this team
will be in communication with the other teams as well as the project manager regarding
the progress or any other additional resources the team would need to keep to the
schedule.

Preparing budgets and supplier contracts; after establishing the team, the project
manager prepares the budget for necessities of various teams to execute their work. Often
a time, inputs to be procured must be contracted out to various suppliers through
competitive offers. Quality and delivery schedules are required as well as firm
commitments from suppliers. Clauses about inspection, transport, insurance and payment
will have to be worked out in detail and accepted. Project overruns are common and
costly. Many good projects have floundered on this account. Every care should be taken
to ensure these are attended to at this stage. Many firms, knowing that these are likely to
happen, will add these costs to the project cost.

Setting up communication channels, feed back routes and monitoring mechanisms;

the last step in the development process of a project is to establish a system of reporting
and initiation of action taken upon them. Monitoring and control become meaningful
when timely actions are taken. With the availability of internet and intranet, transfer of
information has become very easy and authentic. Internet chatting, video conferencing
avoids movements of persons, saving on time and money. Nevertheless personal
meetings will be useful to clarify a number of matters, especially financial ones.
QN. 6.WHAT IS JIT? EXPLAIN VALUE ENGINEERING WITH EXAMPLES.

ANS:

Just-in-Time is a philosophy of manufacturing premised on the principle of elimination of

all waste and thereby increases productivity. Also to implement these techniques without
flexible, reliable processes and appropriate organization is impossible. However at this
point it begins to blur with agile manufacturing principles. In order to ensure this
leanness, as a minimum JIT should include the following;

• There should be strategic Capacity Management for example the use of multiple
small machines (rather than "efficient" expensive machines that have to be kept
busy).

• Group Technology, commonly called "Cellular" manufacturing. This is based on

the principle that segmented manufacture is much simpler, with less interference
of material flows, than factories where similar processes are grouped together,
such as heat treatment. This principle has also been applied to other processes
where natural groups are formed to perform a complete process aligned to
customer needs in manufacturing and other industries, and "category
management" in procurement. However we have shown in some circumstances
that the benefits of cellular manufacturing can be gained by creating virtual cells-
without moving the plant.
• Production smoothing, avoids the problems associated with poor demand tracking
and unnecessary interference of the production schedule. However many
companies experience cyclic or seasonal demand, where it is beneficial, and in
some cases vital, to flex or move resources to respond to fluctuating demand, the
alternative being to pre-build stock to a forecast to afford some production
smoothness, at some risk and tying up of capital.
• Leveled schedules bring more stability and regular patterns of production.
 • Labor balancing to ensure line balance from the cycle time of one operation to the
next and indicates the need to balance the manning for each operation (and the
opportunity to improve the slowest to achieve balance). This is the guiding
principle of lean manufacturing where the problem would be permanently solved
as opposed to the traditional approach of buffering the uncertainty with stock.
• Set-up reduction, which is based on the principle that small, is beautiful as far as
batch sizes are concerned and that what is required is made that day without
inflating batch sizes.
• Standard working. Defined by the operator, not the industrial engineer, it is a
prescribed sequence of production steps done by one operator and balanced to the
required rate of demand. It becomes the basis of understanding the job and
therefore what can be improved.
• Visual controls. Characteristic of JIT factories are simple visible controls, held
locally where they are used to monitor key performance indicators and used as a
spur to improvement. This is a deliberate attempt to give eyeball control rather
than the over-sophistication provided by remote computer systems.

JIT can only be achieved by a combination of strategic capacity considerations, strategic

supply chain management and detailed ways to make work flow using pull systems such
as Kanban. This can only be achieved by a holistic view such as is given by Business
Process Reengineering, followed by a focused approach to continuous improvement.

Value Engineering is a systematic method to improve the "Value" of goods and services
by using an examination of function. Value, as defined, is the ratio of Function to Cost.
Value can therefore be increased by either improving the Function or reducing the cost. It
is a primary tenet of Value Engineering that quality not be reduced as a consequence of
pursuing Value improvements.

Examples of Value Engineering

• When a product incorporates a computer, it replaces many parts with software that
fits into a single light-weight, low-power memory part or microcontroller. As
 computers grow faster, digital signal processing software is beginning to replace
many analog electronic circuits for audio and sometimes radio frequency
processing.
All in all, value engineering provides an opportunity at every stage of the manufacturing
and delivery process to find alternatives which will increase the functionality or reduce
cost in terms of material, process and time. The aim of the entire process is not to reduce
cost while sacrificing quality. It is assumed that if value engineering principles are
followed, it will systematically improve quality.