Production Planning Control and Quality Management Assignment

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Question Paper – May 2018

Q.1 What do you understand by TQM? Discuss the role of TQM in developing
quality, vision, mission and policy statement for an organization.
Ans. Total quality management (TQM) is the continual process of detecting and
reducing or eliminating errors in manufacturing, streamlining supply chain
management, improving the customer experience, and ensuring that employees
are up to speed with training. Total quality management aims to hold all parties
involved in the production process accountable for the overall quality of the
final product or service.
TQM was developed by William Deming, a management consultant whose
work had a great impact on Japanese manufacturing. While TQM shares much
in common with the Six Sigma improvement process, it is not the same as Six
Sigma. TQM focuses on ensuring that internal guidelines and process standards
reduce errors, while Six Sigma looks to reduce defects.
Total quality management (TQM) is a structured approach to overall
organizational management. The focus of the process is to improve the quality
of an organization's outputs, including goods and services, through continual
improvement of internal practices. The standards set as part of the TQM
approach can reflect both internal priorities and any industry standards currently
in place.
TQM is considered a customer-focused process and aims for continual
improvement of business operations. It strives to ensure all associated
employees work toward the common goals of improving product or service
quality, as well as improving the procedures that are in place for production.
Quality statements are part of strategic planning process and once developed,
are occasionally reviewed and updated.
There are three types of quality statements:
1. Vision statement2.  Mission statement3.  Quality policy statement

The utilization of these statements varies from organization to organization.

Small organization may use only the quality policy statement

1. Vision Statement: The vision statement is a short declaration what an

organization aspires to be tomorrow. A vision statement, on the other
hand, describes how the future will look if the organization achieves its
mission.
Successful visions are timeless, inspirational, and become deeply shared
within the organization, such as:
 IBM’s Service
  Apple’s Computing for the masses
 Disney theme park’s the happiest place on the earth, and
 Polaroid’s instant photography

2. Mission Statement: A mission statement concerns what an organization

is all about. The statement answers the questions such as: who we are,
who are our customers, what do we do and how do we do it. This
statement is usually one paragraph or less in length, easy to understand,
and describes the function of the organization. It provides clear statement
of purpose for employees, customers, and suppliers.
An example of mission statement is:
Ford Motor Company is a worldwide leader in automatic and automotive
related products and services as well as the newer industries such as
aerospace, communications, and financial services. Our mission is to
improve continually our products and services to meet our customers’
needs, allowing us to prosper as a business and to provide a reasonable
return on to our shareholders, the owners of our business.

3. Quality Policy Statement:  The quality policy is a guide for everyone in

the organization as to how they should provide products and services to
the customers. It should be written by the CEO with feedback from the
workforce and be approved by the quality council. A quality policy is a
requirement of ISO 9000.
A simple quality policy is:
Xerox is a quality company. Quality is the basic business principle for
Xerox. Quality means providing our external and internal customers with
innovative products and services that fully satisfy their requirements.
Quality is the job of every employee.

Q.2 Discuss the various quality systems and certifications. Also discuss the
methods and implementation procedures for each certification.
Ans. A quality management system (QMS) is a set of policies, processes and
procedures required for planning and execution
(production/development/service) in the core business area of an organization
(i.e., areas that can impact the organization’s ability to meet customer
requirements). ISO 9001 is an example of a Quality Management System.
A QMS integrates the various internal processes within the organization and
intends to provide a process approach for project execution. A process based
QMS enables the organizations to identify, measure, control and improve the
various core business processes that will ultimately lead to improved business
performance.
A complete ISO 9001 Quality Management System must address all
the requirements of ISO 9001, including the ISO 9001 documentation
requirements.
The ISO 9000 family of quality management systems (QMS) is a set of
standards that helps organizations ensure they meet customers and other
stakeholder needs within statutory and regulatory requirements related to a
product or service. ISO 9000 deals with the fundamentals of quality
management systems, including the seven quality management principles that
underlie the family of standards. ISO 9001 deals with the requirements that
organizations wishing to meet the standard must fulfil.
Third-party certification bodies provide independent confirmation that
organizations meet the requirements of ISO 9001.
The ISO 9000 series are based on seven quality management principles (QMP)

The seven quality management principles are:

 QMP 1 – Customer focus
 QMP 2 – Leadership
 QMP 3 – Engagement of people
 QMP 4 – Process approach
 QMP 5 – Improvement
 QMP 6 – Evidence-based decision making
 QMP 7 – Relationship management

- Principle 1 – Customer focus

Organizations depend on their customers and therefore should understand
current and future customer needs, should meet customer requirements
and strive to exceed customer expectations.

- Principle 2 – Leadership
Leaders establish unity of purpose and direction of the organization. They
should create and maintain the internal environment in which people can
become fully involved in achieving the organization's objectives.

- Principle 3 – Engagement of people

People at all levels are the essence of an organization and their full
involvement enables their abilities to be used for the organization's
benefit.

- Principle 4 – Process approach

A desired result is achieved more efficiently when activities and related
resources are managed as a process.

- Principle 5 – Improvement
Improvement of the organization's overall performance should be a
 permanent objective of the organization.

- Principle 6 – Evidence-based decision making

Effective decisions are based on the analysis of data and information.

- Principle 7 – Relationship management

An organization and its external providers (suppliers, contractors, service
providers) are interdependent and a mutually beneficial relationship
enhances the ability of both to create value.

Certification:
The International Organization for Standardization (ISO) does not certify
organisations itself. Numerous certification bodies exist, which audit
organisations and upon success, issue ISO 9001 compliance certificates.
Although commonly referred to as "ISO 9000" certification, the actual standard
to which an organization's quality management system can be certified is ISO
9001:2015 (ISO 9001:2008 expired around September 2018). Many countries
have formed accreditation bodies to authorize ("accredit") the certification
bodies. Both the accreditation bodies and the certification bodies charge fees for
their services. The various accreditation bodies have mutual agreements with
each other to ensure that certificates issued by one of the accredited certification
bodies (CB) are accepted worldwide.
An organization applying for ISO 9001 certification is audited based on an
extensive sample of its sites, functions, products, services, and processes. The
auditor presents a list of problems (defined as "nonconformities",
"observations", or "opportunities for improvement") to management. If there are
no major nonconformities, the certification body issues a certificate. Where
major nonconformities are identified, the organization presents an improvement
plan to the certification body (e.g., corrective action reports showing how the
problems will be resolved); once the certification body is satisfied that the
organization has carried out sufficient corrective action, it issues a certificate.
An ISO 9001 certificate is not a once-and-for-all award but must be renewed, in
accordance with ISO 17021, at regular intervals recommended by the
certification body, usually once every three years.
Quality Certifications for individuals are available through several organizations
around the world, such as the American Society for Quality (ASQ).
Certifications are granted to show that individuals have demonstrated and
maintain knowledge in an aspect of quality management, such as: Certified
Quality Engineer (CQE), Certified Quality Inspector (CQI), and many more.
- ISO 9001: The most commonly used set of requirements for designing a
QMS. QMS certification against ISO 9001 is recognized worldwide.
- AS9100: This is a standard that is based on ISO 9001 and has additions
designed for use in the Aerospace Industry. A QMS can be certified by a
 third party to comply with this standard. 
- ISO 13485: This is a standard published by the ISO organization for use
by companies that want to design a QMS for medical devices, and the
requirements for regulatory purposes surrounding them.
- Lean: The core idea is to maximize value by eliminating waste. The main
idea is that anything that adds cost to a product, but not value, is waste
and should be controlled or eliminated. This supports a QMS, but cannot
be used to design or certify a QMS.
- MBNQA: The Malcolm Baldridge National Quality Award recognizes
US organizations for performance excellence. The award has a set of
requirements against which a company could design and assess a QMS,
but apart from the award there is no ongoing certification against these
requirements.
- Six Sigma: This is a set of tools and techniques used for process
improvement. It is used in many organizations to support the QMS by
helping to improve processes, but Six Sigma does not define a QMS, and
the QMS cannot be certified to Six Sigma.
- TQM: Total Quality Management consists of practices designed to
improve the process performance of a company. The techniques help
improve efficiency, problem solving and standardization of processes.
These techniques are used to aid in quality management, but do not
provide a framework for a Quality Management System, and cannot be
certified to.
- ISO/TS 16949: This document includes requirements for the application
of ISO 9001 for automotive production and service part organizations. A
QMS designed using these requirements can also be certified against
them.

Q.3 Explain the term “Production Planning and Control.” Discuss the
advantages and limitations of PPC.
Ans. For efficient, effective and economical operation in a manufacturing unit
of an organization, it is essential to integrate the production planning and
control system. Production planning and subsequent production control follow
adaption of product design and finalization of a production process.
Production planning and control address a fundamental problem of low
productivity, inventory management and resource utilization.
Production planning is required for scheduling, dispatch, inspection, quality
management, inventory management, supply management and equipment
management. Production control ensures that production team can achieve
required production target, optimum utilization of resources, quality
management and cost savings.
Planning and control are an essential ingredient for success of an operation unit.
The benefits of production planning and control are as follows:
 It ensures that optimum utilization of production capacity is achieved, by
proper scheduling of the machine items which reduces the idle time as
well as over use.
 It ensures that inventory level are maintained at optimum levels at all
time, i.e. there is no over-stocking or under-stocking.
 It also ensures that production time is kept at optimum level and thereby
increasing the turnover time.
 Since it overlooks all aspects of production, quality of final product is
always maintained.

Production Planning
Production planning is one part of production planning and control dealing with
basic concepts of what to produce, when to produce, how much to produce, etc.
It involves taking a long-term view at overall production planning. Therefore,
objectives of production planning are as follows:
 To ensure right quantity and quality of raw material, equipment, etc. are
available during times of production.
 To ensure capacity utilization is in tune with forecast demand at all the
time.

A well thought production planning ensures that overall production process is

streamlined providing following benefits:
 Organization can deliver a product in a timely and regular manner.
 Supplier are informed will in advance for the requirement of raw
materials.
 It reduces investment in inventory.
 It reduces overall production cost by driving in efficiency.

Production planning takes care of two basic strategies’ product planning and
process planning. Production planning is done at three different time dependent
levels i.e. long-range planning dealing with facility planning, capital
investment, location planning, etc.; medium-range planning deals with demand
forecast and capacity planning and lastly short term planning dealing with day
to day operations.

Production Control
Production control looks to utilize different type of control techniques to
achieve optimum performance out of the production system as to achieve
overall production planning targets. Therefore, objectives of production control
are as follows:
 Regulate inventory management
  Organize the production schedules
 Optimum utilization of resources and production process

The advantages of robust production control are as follows:

 Ensure a smooth flow of all production processes
 Ensure production cost savings thereby improving the bottom line
 Control wastage of resources
 It maintains standard of quality through the production life cycle.

Production control cannot be same across all the organization. Production

control is dependent upon the following factors:
 Nature of production (job oriented, service oriented, etc.)
 Nature of operation
 Size of operation

Production planning and control are essential for customer delight and overall
success of an organization.

Q.4 What do you understand by Routing Procedure? Explain the factors

affecting routing procedure.
Ans. Routing means determination of the route to be followed by each
part/component being transformed from input/raw material into final product.
Obviously where one single part/product is produced by fixed set of machines
the job of routing becomes automatic or mechanized. In continuous production
systems with line type or product type layout, no managerial effort is required
for routing though different sets of machines may be utilized in manufacturing
the products in such systems.
For different types of products to be manufactured like in intermittent
production system, routing becomes a complex task.
Routing of a production order contains complete information of the product to
be manufactured, complete details of each operation to be performed, the set up
time and the standard time needed for completing the job/product.

Procedures for Routing in Production:

Routing is the purpose of the pathway of movement of raw materials through
various machines and operations from the beginning of the manufacturing
process to the completion of product in its finished form. It is laying out the
sequence of machines, process, and operations that are the most desirable and
efficient. It is determining the exact route or path a product has to follow right
from raw material till its completion.
Routing is a systematic process. The routing procedure for a new product or part
may consist of the following steps:
1. Determination of what to make and what to buy:
An analysis of the product is made to determine whether to manufacture a
component in the factory or to purchase it from outside. This is done to
find out what parts (goods) should be manufactured and what parts
should be purchased. This depends mainly on the relative cost. It also
depends on other factors such as technical consideration, purchase
policies, availability of personnel, availability of equipment, etc.
Generally, during less-busy periods; most of the parts are manufactured
in the factory. However, during the busy period, many parts are
purchased from outside.
2. Determination of material requirements:
Each item in the product line is divided into its components and parts
required for its manufacturing. Routing section prepares a parts list which
includes the drawings, specifications, standards of quality, and
identification symbols of parts. Its combined with a bill of materials. This
will show each part name, quantity required and the kind and amount of
material required for each part. From this list, the inventory control
section can determine the adequacy of the materials in stock or on order.
To determine the material requirements, the “ parts short list”  is also
prepared. It lists only those parts which are short and hence must be
obtained to complete the product.
3. Determination of manufacturing operations and their sequence:
Routing section now analyses the production standards and estimates
together with data on machine capacities and characteristics. From these
facts, it establishes the operations necessary to manufacture the article
and lists them in their proper sequence on the route sheet. The route sheet
indicates for each operation its standard process time, the type of a
number of machines used, materials and tools required.
4. Determination of lot sizes:
Routing section also determines the number of units to be produced in
any one lot. If products are made to customer's order, the lot size is
generally equal to it. Where production is done to stock replacing
depleted inventories, the lot size to be manufactured will usually be based
on the principle of “economic lot quantities”. Where production is done
on a weekly or monthly schedule, the quantity to be manufactured for the
period will be based on the influx or backlog of sales orders subject to
any limitations in the manufacturing capacity.
5. Determination of scrap factors:
In most production processes, it is reasonable to expect some scrap. This
happens because of manufacturing defects or wastage these defective
pieces are called scraps. Routing section should take this scrap factor into
account when determining lot size of various components parts of the
final assembly, it is important to know where scrap is most likely to
 occur- whether it occurs progressively or all at once after a certain
operation. Hence, it is necessary to establish a standard scrap factor at
every stage of production. The scrap factors can be estimated on the basis
of experience or scrap history.
6. Determination of the cost of the article:
The routing section may also contribute to cost estimating, although it is
the prime responsibility of the cost mange accounting department. Cost of
the component parts and final product largely depend on the materials
and manpower required for manufacturing. Direct material and labor
costs are computed, and specific and general indirect expenses are
allocated to the product to arrive at the cost estimate
7. Organization of production control forms:
The types of production have much influence upon the forms required by
the plant departments. production control is organized around schedule
from in case of mass manufacturing. Job order manufacturing requires the
use of a number of control forms such as job cards, shop orders, labor
cards, for performing the operations. It should be remembered that
production control forms in themselves are costly to use. Hence, these
should be reduced to minimum consistent with the degree of control
desired.
8. Prepare route sheet:
Route sheet is prepared on a production control form. It shows the part
number, description of the part and the materials required. It is prepared
by a route clerk. Separate route-sheet is required for each part of a
customer's order.

Advantages of Routing:
I. Effective utilization of available resources.
II. Reduction in production costs.
III. Quality improvement occurs,
IV. Productivity of the system improves and
V. Provides a basis for loading & scheduling.

Factors affecting Routing Procedure:

 Type of Manufacturing Process/Technique Employed:
It is the case of use of line type of layout where the production process is
serialized according to the sequence of operations thus making routing
automatic. Automobile industries adopt this type of layout. The set up
requires change only when new models are introduced. The same type of
routing may be adopted in batch production also.
 Plant Equipment Characteristics:
The same product may be possible to manufacture on two or many
machines available in the plant. In such cases the cheapest one should be
 selected, whether small, heavy and automatic or mechanised machine for
routing purpose.
In order to simplify the process, the routing division should prepare and
place on file a machine data card for each and every machine giving
characteristics of machine, special attachments (Jigs, fixtures and special
tools) and the job range. Records of other facilities like material handling
equipment available in the shop may also be useful.
 Availability of Plant and Equipment etc:
Recommended actions have to be taken in order to select that equipment
or machines, which will help in production of parts at cheapest rate. But
sometimes the services of such machines or processes may not be
available due to machine load conditions, breakdowns or absenteeism of
workers.
In such conditions, the routing division must have alternatives available
to keep the materials moving for manufacturing of the product. This
alternative may be in the form of detours around the breakdown
machines/operations or by changing the sequence of operations.
 Difficulties in Routing due to Non-Availability of Requisite Skilled
Manpower:
Manpower required in the plant may be highly skilled, semiskilled, or
unskilled. On certain particular machines, where high precision work is
done, only services of experienced highly skilled workers can be utilized.
Routine work may affect the routing procedure in context to manpower
are job incentives, lot size, light, heavy or medium sized work etc.

Q.5 Discuss any two of the following:

a) Learning from Quality Gurus
b) Master Production Schedule
c) Methods of Sales Forecasting
Ans. a) Learning from Quality Gurus:
Philip Crosby:

 The Four Absolutes of Quality Management:

 Quality is conformance to requirements
 Quality prevention is preferable to quality inspection
 Zero defects is the quality performance standard
 Quality is measured in monetary terms – the price of non-conformance

14 Steps to Quality Improvement:

 Management is committed to quality – and this is clear to all
 Create quality improvement teams – with (senior) representatives from all
departments.
  Measure processes to determine current and potential quality issues.
 Calculate the cost of (poor) quality
 Raise quality awareness of all employees
 Take action to correct quality issues
 Monitor progress of quality improvement – establish a zero defects
committee.
 Train employees in quality improvement
 Hold “zero defects” days
 Encourage employees to create their own quality improvement goals
 Encourage employee communication with management about obstacles
to quality
 Recognize participants’ effort
 Create quality councils
 Do it all over again – quality improvement does not end

Dr. Edwards Deming

Deming’s Fourteen Obligations of Top Management

 Create constancy of purpose for improvement of product and service.
Allocate resources to provide for long range needs rather than only short
term profitability
 Adopt the new philosophy. We can no longer live with commonly
accepted levels of delays, mistakes, defective materials, and defective
workmanship.
 Cease dependency on mass inspection to achieve quality. Quality is
achieved by building quality into the product in the first place.
 End the practice of awarding business on the basis of price tag
alone. The aim is to minimize total cost, not merely initial cost. Establish
long term relationship with suppliers to develop loyalty and trust.
 Improve constantly and forever every process for planning, production,
and service. It is management’s job to work continually on improving
total system.
 Institute training on the job for all, including management, to make
better use of every employee. New skills are required to keep up with
changes in products and processes.
 Adopt and institute leadership aimed at helping people do a better job.
Management must ensure that immediate action taken on issues that are
detrimental to quality.
 Drive out fear so that everybody may work effectively and more
productively for the company.
 Break down barriers between departments and staff areas. Everyone
 must work together to tackle problems that may be encountered with
products or service.
 Eliminate slogans and exhortations for the work force as they create
adversarial relationships. Also, bulk of the causes of low quality &
productivity belong to the system and lie beyond the power of the work
force.
 Eliminate arbitrary numerical targets for the workforce and
management. Substitute aids and helpful leadership in order to achieve
continual improvement.
 Remove barriers that rob people of pride of workmanship. This
includes the annual appraisal of performance and Management by
Objective.
 Encourage education. Institute a vigorous program of education and
self-improvement for everyone
 Clearly define top management’s permanent commitment to ever
improving quality and productivity. Put everybody in the company to
work to accomplish the transformation. Support is not enough, action is
required.

 Dr. Armand Feigenbaum
 Developed Total Quality Control (TQC) philosophy
 Quote: “Quality is everybody’s job, but because it is everybody’s job, it
can become nobody’s job without the proper leadership and
organization.”

Steps to quality:
 Quality leadership
 Modern quality technology
 Organizational commitment

Dr. Kaoru Ishikawa

 Known as father of Japanese quality control effort
 Established concept of Company Wide Quality Control (CWQC) –
participation from the top to the bottom of an organization and from the
start to the finish of the product life cycle
 Started Quality Circles – bottom up approach – members from within the
department and solve problems on a continuous basis
 The fishbone diagram is also called Ishikawa diagram in his honor
 Introduced concept that the next process is your customer

Dr. Joseph Juran

Juran’s Quality Trilogy (compared to financial management):
• Quality planning (financial budgeting) – create process that will enable
one to meet the desired goals
• Quality control (cost control) – monitor and adjust the process
• Quality improvement (profit improvement) – move the process to a
better and improved state of control through projects

Key points of Juran’s approach to quality improvement:

• Create awareness of the need for quality improvement
• Make quality improvement everyone’s job
• Create infrastructure for quality improvement
• Train the organization in quality improvement techniques
• Review progress towards quality improvement regularly
• Recognize winning teams
• Institutionalize quality improvement by including quality
• Concentration on both external and internal customers

Dr. Walter Shewhart
• Shewhart’s control charts are widely used to monitor processes. Problems
are framed in terms of special cause (assignable cause) and common
cause (chance-cause).
• The Shewhart Cycle – PDCA Problem Solving Process:
• Plan – what changes are desirable? What data is needed?
• Do – carry out the change or test decided upon
• Check – observe the effects of the change or the test
• Act – what we learned from the change should lead to improvement or
activity
• Referred to as the “Father of Statistical Quality Control”

Dr. Genichi Taguchi

• The lack of quality should be measured as function of deviation from the
nominal value of the quality characteristic. Thus, quality is best achieved
by minimizing the deviation from target (minimizing variation).
• Quality should be designed into the product and not inspected into it. The
product should be so designed that it is immune to causes of variation.

Taguchi recommends a three-stage design process:

System Design (Stage 1):

• Development of a basic functional prototype design
• Determination of materials, parts and assembly system
 • Determination of the manufacturing process involved

Parameter Design (Stage 2):

• selecting the nominals of the system by running statistically planned
experiments (DFSS/DOE)

Tolerance Design (Stage 3):

• Deals with tightening tolerances and upgrading materials

b) Master Production Schedule:

A master production schedule (MPS) is a plan for individual commodities to be
produced in each time period such as production, staffing, inventory, etc. It is
usually linked to manufacturing where the plan indicates when and how much
of each product will be demanded. This plan quantifies significant processes,
parts, and other resources in order to optimize production, to identify
bottlenecks, and to anticipate needs and completed goods. Since a MPS drives
much factory activity, its accuracy and viability dramatically affect profitability.
As the name implies, the MPS decides what products are manufactured and
when. The required raw materials are then identified by the finished goods
BOM, the data from which is then integrated with current inventory data to
create the MRP for raw materials procurement.
The Master Production Schedule forms the basis of communication between
sales and manufacturing. Using the MPS as a contract between sales and
production means that sales can make valid order promises. the MPS is not a
rigid plan. MPS is a dynamic plan and can be changed when there are changes
in demand or capacity.
The Master Production Schedule (MPS) is a plan for the production of
individual final items. The MPS breaks down the production plan to show, in
each period, the quantity to produce of each final article.
Each final article is also called Stock Keeping Unit, usually using its acronym
SKU. The Master Production Program, which is developed over a period of
time, is called the planning horizon. The planning horizon generally extends
between 3 and 18 months, depending on the manufacturing cycles of the item in
question.

The information or input data feeding the MPS is the following:

• Aggregate production plan, in product units
• The forecast of each final article, in product units
• The current order portfolio
• The stock inventory level
• The available production capacity

By using many variables as inputs the MPS will generate a set of outputs used
for decision making. Inputs may include forecast demand, production
costs, inventory money, customer needs, inventory progress, supply, lot size,
production lead time, and capacity. Inputs may be automatically generated by
an ERP system that links a sales department with a production department. For
instance, when the sales department records a sale, the forecast demand may be
automatically shifted to meet the new demand. Inputs may also be inputted
manually from forecasts that have also been calculated manually. Outputs may
include amounts to be produced, staffing levels, quantity available to promise,
and projected available balance. Outputs may be used to create a Material
Requirements Planning (MRP) schedule.
A master production schedule may be necessary for organizations to
synchronize their operations and become more efficient. An effective MPS
ultimately will:
• Give production, planning, purchasing, and management the information
to plan and control manufacturing
• Tie overall business planning and forecasting to detail operations
• Enable marketing to make legitimate delivery commitments to
warehouses and customers
• Increase the efficiency and accuracy of a company's manufacturing
• Rough cut capacity planning

The master production schedule is compatible with different production

workflows:  
- Make-to-Stock (MTS); 
- Make-to-Order (MTO); and  
- Assemble-to-Order (ATO).  

Master production scheduling focuses on the production of finished goods, or

components (if you have an ATO workflow). The goods that are the most
profitable for your business are likely to make up most of the resources needed
for production. 
The other master production schedule objectives are:  
 Makes your demand flow smoother; 
 Keeps your lead-time low; 
 Standardizes communication across your business;  
 Helps you to prioritize requirement;  
 Helps keep production stable;  
 Generates workable plans for your manufacturing orders; and 
 Assists in making accurate purchase and transfer orders. 

Benefits of working with the MPS

There are multiple benefits when a manufacturing business introduces an MPS.
They are described below:
 It provides a solid base to build, improve and track the sales forecast.
 It provides a solid base to determine the desired inventory levels.
 It provides a solid base to calculate the quantities of parts, subcomponents
or raw materials to buy or produce, as part of the MRP next stage.
 It provides a solid base for calculating the required amount of labor and
shifts, as part of the MRP next stage.
 It allows optimizing the installed capacity and balancing the load of the
plant.
 Manufacturing can estimate the production and maintenance costs
associated with the work centers.
 The financial department of the company can get income and expenses,
derived from the MPS and generate a forecast of the cash flow in the
company. It will help to build other financial statements, such as the
Balance sheets, Profit and Loss statements, and the investment plans.
 The Department of Human Resources can take advantage of the MPS to
anticipate the requirements of hiring labor.

The MPS should reflect the business plan as closely as possible. This requires a
constant update by all departments of the company. If the Marketing department
plans a sales promotion, the increase in demand must be reflected in the MPS
and the forecast. If the sales team discourages the sale of a product line in favor
of another new created line, the MPS and the forecast will be adjusted.
The MPS helps the Marketing and Sales departments when they embark on a
promotional campaign. Thanks to this resource, it’s possible to discuss and
confirm the actual plan with the Planning department.
The fact of achieving a high level of collaboration between the different
departments of the company is, in itself, a great benefit. The MPS sets the basis
for creating the Material Requirements Plan (MRP). The MRP operates at a
higher level of detail, both in time and in item breakdown.
Remember that the MRP breaks down each item into its components or parts.
Purchasing and Production departments may find possible to meet additional
demand for products. They will be able to find enough quantities of the
components and sub-assemblies needed for the product manufacturing.

Methods of Sales Forecasting:

Various methods of sales forecasting:

Qualitative Methods:
The Delphi Method:
This is an improvement over the executive opinion method. This method tries to
determine the forecasts on the likely time period of occurrence of certain future
events and the probability of their occurrence. In this method, a group of experts
and a Delphi coordinator will be selected.
The experts give their written opinions/forecasts individually to the coordinator.
The coordinator processes, compiles, and refers them back to the panel
members for revision, if any. This to-and-fro process continues for several
rounds (usually three).
Generally, this process will stop when a consensus has been obtained or when
explanations for deviant opinions have been given. Now, the coordinator will
carry out statistical analysis of the responses deriving average answers,
variability, prediction intervals, etc. Only the coordinator will know all the
members of the team and only he/she will have access to all the responses.
The process aims at gradual reduction of the variability in forecasts. The Delphi
forecasts will be primarily median forecasts. This is the original sales
forecasting method and is still the most widely used, regardless of company
size. More sophisticated methods, such as the time series projections and
regression analysis gain new converts every day as forecasters learn how to use
them, aided by data processing facilities.

Survey of consumer’s opinion method

In this direct method of sales forecasting, the marketing manager takes the
opinion of the users of a product. In it, buyers are asked about their future
buying intentions of the product, their brand preferences, increase in the prices
of products, change in the product’s features, quantities of purchases, etc. Thus,
the total sales forecasts of the products are estimated by combining the
responses of consumers.
Merits:
 Useful when the number of buyers is very limited.
 Suitable for short-term decisions regarding product and promotion.
 The results obtained are realistic, as they are based on direct opinions of
buyers.
 Simple to administer and comprehend.
Demerits:
 The necessity of consumers like tastes, preferences, fashion, etc, may
change in long run. Hence this method is unsuitable for long-term
forecasting.
 Some of the consumers do not want to give their exact requirements and
thus, these forecasts may be wrong.
 Often, surveying is an expensive method both in terms of resources and
time.
 Not suitable when buyers group is large.

Executive’s judgment or jury of executives opinion method

In this method, experts in the particular field are requested to give their views
on the likely demand for the product in future. Here, a seminar is organized and
all the executives of the enterprise participate in this seminar. The opinions of
all the executives regarding demand of the product of the enterprise are
collected and forecasts are determined on the basis of such opinion. This
method is also called the hunch method since the experts give their opinion after
weighing pros & cons of all factors affecting the product demand and arrive at
an estimate. Thus, on the basis of knowledge and experience of marketing
executives, the sales forecasting of the enterprise takes place.
Merits:
 As this method is based on the knowledge and experience of top
executives of the enterprise, the forecasts made under this method are
expected to be very close to the reality.
 This method is very economical because the firm need not spend time and
resources in collection of data by survey.
 No need of buyers’ investigation.
 Very useful when the product is absolutely new to all markets.
Demerits:
 Such forecasts are based upon opinions and experiences and not upon
facts.
 As the liability of making sales forecasts may be on many executives, it
may be lack of responsibility determination.
 It is not always necessary that the executives of the enterprise are expert
in forecasting the sales.

Experts Opinion Method

In this method, the opinions of experts in the field of marketing are collected
and forecasts for the sales of the enterprise are made on the basis of such
opinion. The opinions to be collected under this method may be from
wholesaler, retailers, distributors, newspapers, journals and professional experts.
This method is also known as the Delphi technique, in it the experts who offer
their opinions do not have face-to-face interactions and they are free to express
their opinions.
Merits:
• Very useful when the product is absolutely new to all markets.
• The enterprise is not required to spare its time on sales forecasts.
• This method is also economical because collection of opinions of experts
is cheaper than actual survey.
• As sales forecasts are based upon the knowledge and experiences of sales
experts, its is considered to be reliable.
Demerits:
• Not suitable to forecast the sales for different market segments and
 territories.
• Not suitable for sales forecasts on the basis of different goods & services,
different areas and different customers (or consumers).
• Under this method, the payments are to be made to the experts. Thus, it is
very expensive method.
•
Market Test method
This method is best suitable for the sales forecasting of a new product or
potential of existing products in new geographical areas. Under this method,
some certain segments of the market are selected and the particular product is
introduced on trial basis in these segments only. The results of sales in these
segments are collected and analyzed and on the basis of these results, the sales
forecasts are made for the whole market.
Merits:
• Suitable for new products.
• Less risky, as the launch of new product is limited for certain segments of
the market.
• It provides an opportunity for the market and product development.
• It helps the enterprise not only up forecasting the sales but also in
evaluating the merits· and demerits of its product.
Demerits:
• Time consuming process, as it observes the actual buying pattern of
consumers.
• The results of the method are not necessary to be reliable because all the
segments of a market have different characteristics and consumers of all
the segments have different tastes and preferences.
• Test of marketing is very costly as it requires actual production of the
product and in the event of failure of product the total cost of
administrating the product goes waste.

Trend analysis method

The trend method is based on analysis of past sales patterns. It is used when the
available sales data are of different time periods. This method is based on the
assumption that future events are a continuation of the past. Thus, historical data
can be used to predict the future.
Merits:
• Very simple and economical.
• If the factors affecting sales remain constant, the results are most reliable.
Demerits:
• The accuracy of trend projection method depends on the availability of
time series data; the longer the series, the better the results.
• This method is based on the assumption that all the factors affecting sales
remains constant during the period of forecasting, but this assumption is
 not real. The reality is that the factors affecting the demand of a product
always keep on changing. Thus, the results drawn under this method are
not expected to be true or reliable.
• It may not necessarily be true that past pattern would be continued in the
future.

Composites of sale force opinion method

Under this technique of sales forecasting, the views and opinions of all the
salesmen and sales executives of the enterprise are collected. Sales forecasts of
the enterprise are made on the basis of analysis and interpretation of these
opinion and views.
Merits:
• This method is based upon the opinions and views of the persons who are
in the real touch of real consumers.
• The results drawn under this method are expected to be most reliable.
• This method provides direct incentives to the Sales Force of the
enterprise because they feel themselves an integral part of the enterprise.
• This method is very easy, simple and economical.
• This method is very useful in determining the individual responsibility of
sales personnel.
Demerits:
• Salesmen are not in touch with the changes in the factors affecting the
sales of the enterprise.
• Not suitable appropriate for making sales forecasts for new products.
• Salesmen are not very reliable estimators of the sales of the enterprise.

Historical Analogy Method:

This is used for forecasting the demand for a product or service for which there
is no past demand data. Sometimes, the product may be new, but the
organization might have marketed other products earlier with features similar to
those of the new product. So, the marketing personnel may use the historical
analogy between the two products and derive the demand for the new product
using the historical data for the earlier product.
The Delphi technique is an iterative technique that can be used to enhance the
value of expert’s opinion. The survey of buyer’s expectations requires careful
attention to wording, sampling, and methods of selection. These methods are
conducted in situations where there is no quantitative data available to the sales
manager to forecast the sales for the future.

Quantitative Methods:
Test Marketing:
Test marketing is one of the popular methods for measuring consumer
acceptance of new products. The results from a test market are extrapolated to
make predictions about future sales. Companies select a limited number of cities
with populations which are representative of the target customers in terms of
demographic factors that include age, income, lifestyle and shopping behaviour.
A product is made available at the retail outlets and the features are highlighted
either through in-store promotion or through a small advertising campaign.
Then the performance of the product is tracked through consumer research and
modifications if any are made before taking it for a national launch.
This is a method of simulating future sales in a limited market to test the level
of acceptance of the product in the representative market and then execute a
national campaign. In another approach companies select two markets. One
market is called a ‘test market’ where the product is marketed without any
promotional campaign.
A similar market is selected and is termed as ‘control market’ where the product
is sold with a promotional campaign. The difference in sales between both the
markets is a measure of the effectiveness of the sales promotion campaign. Any
inconsistency with the sales variation in both the markets is an indicator of the
gap between the customer’s perception and the performance of the product
features.
By a complex test marketing procedure, one can measure the effectiveness of
the core product in inviting trial, making people loyal, effectiveness of the
promotional campaign, and in-store promotions. Proper experimental design
and mathematical analyses are important to correctly evaluate test market data.
One example of test marketing occurred in testing the Ganga soap in India. Two
markets were selected for test marketing. The north Indian market was taken as
a test market, whereas the southern market down the Godavari River was used
as the control market. The product was promoted in this market, whereas the
product was only displayed in the test market.
The sales responses were used to extrapolate the data to find out the national
level of sales, and forecasting was done for three years to augment the national
launch. Companies often change product features and promotional themes as a
result of the data obtained in a test-market situation. This is because the test
marketing statistics many a time are found to be discouraging.

Time Series Analysis:

In time series analysis, it is important to collect relevant past data for future
projects. Time series analysis is a series of techniques that make forecasts based
on past patterns of data. These data are collected, observed, and recorded at
regular intervals of time. These methods are useful when the market forces are
somehow stable and the market shows least erratic behaviour. Actions taken by
the firm and the competitor’s move are not taken into account.
Time series methods use chronologically ordered raw data. Historical data are
used to project future events. For example, past sales are used to project future
sales. However, future events are often different from past events, which make
the accuracy of such methods far less than 100 per cent.
Although this method has certain limitations, past sales are useful information
inputs in the forecasting procedure. By studying the historical correlation of
sales levels over time, a sales manager can identify a trend and find a general
indication of the possible continuation of the time series.
The major advantage of time series analysis is its objectivity as it is based on
the established record of historical data. In a time series, time is the most
important factor because the variable is related to time. The sales managers can
undertake time series analysis in four ways. The changes that have occurred as a
result of the general tendency of the data to increase or decrease are known as
secular movements.
Changes that have taken place during a period of 12 months as a result of
change in climate, weather conditions, and festivals are termed as seasonal
variations. Changes that have taken place as a result of booms and depressions
are called cyclical variations. Changes that have taken place as a result of such
unpredictable forces as floods, earthquakes, famines, etc. are classified as
irregular or erratic variations.
If there is a change in the company’s effort in the form of wearing out of
advertising, excess of sales promotion, alteration in the prices, opening of new
distribution outlets, or discovery of new usage for the product, any such change
may affect the time series and the trend may shift dramatically, thereby
reducing the accuracy level of the method used for forecasting.
All-time series models look for patterns in the past data. The four components
of the past data relevant to time series analysis are trend, seasonality,
cyclicality, and irregularity.
A trend is the underlying movement in the time series. For example, if there is a
growth of 1 per cent in population, there will be a likely trend of increase in
demand for basic commodities such as rice, wheat, and sugar.
A trend can move up or down depending on the product development efforts,
consumer tastes, changes in technology, broad economic trends, and other
fundamental issues in the market for the product. Seasonality is the extent to
which the time series varies consistency within a period of one year. For
example, sales of fans and refrigerators in India are very seasonal with a sales
peak happening in summer and a slump in winter.
Cyclicality is change that occurs over a period exceeding one year. Certain
changes in the economy, such as change in the bank interest rates, tend to occur
over a period stretching more than one year. Housing, automobiles, and travel
industries are examples of cyclical industries. Customers are likely to purchase
these items depending on the fluctuations in the bank interest rates.
Irregularity is changes in sales patterns that occur randomly. Floods,
earthquakes, and droughts occur randomly and affect the demand patterns.
Random influences can have a major effect on the sales pattern. The more
popular time series methods of forecasting include trend projections, free hand
or graphic method, moving averages method, exponential smoothing method,
and regression method.

Statistical Methods (Also Called Quantitative Methods):

Various statistical techniques are used to estimate sales.
Examples are:
i. Moving Average Method.
ii. Time Series Analysis Method.
iii. Economic Indicators Method also called Barometric Forecasting. Regression
method is used here.

Moving Average Method:

The method suggests drawing an average of the sales of a number of years to
predict the sales of a coming period. The objective is to smooth out the
fluctuations and provide a close estimate of the forecasted sales.
So, the sales of the preceding three years are considered to forecast the sales of
the year of interest. This is a very simple method and the calculation for this is
easy too. When the market is stable for a considerable period of time, it gives an
accurate estimate of sales. Alternatively, this can be construed that when factors
influencing sales are common for previous three years (for calculating three-
year moving average), this method gives accurate projection of sales.

Exponential Smoothing Method:

It is similar to the moving average method. In moving average, the sales of
previous years are given equal importance but in exponential smoothing, the
recent past sales are given more weight than the earlier pasts. The objective is to
smooth out fluctuations in the time series for accurate estimation of sales
forecast.

Economic Indicator’s Analysis Method:

This method of sales forecasting is based on certain indicators affecting
conditions in the market. After a thorough study of the economic indicators, the
forecasting is made.

Question Paper – May 2017

Q.1 a) Discuss the core concept of TQM in operations with its benefits.
b) Explain the various dimensions of product & service quality.
Ans. a) Total quality management (TQM) is the continual process of detecting
and reducing or eliminating errors in manufacturing, streamlining supply chain
management, improving the customer experience, and ensuring that employees
are up to speed with training. Total quality management aims to hold all parties
involved in the production process accountable for the overall quality of the
final product or service.
TQM was developed by William Deming, a management consultant whose
work had a great impact on Japanese manufacturing. While TQM shares much
in common with the Six Sigma improvement process, it is not the same as Six
Sigma. TQM focuses on ensuring that internal guidelines and process standards
reduce errors, while Six Sigma looks to reduce defects.
Total quality management (TQM) is a structured approach to overall
organizational management. The focus of the process is to improve the quality
of an organization's outputs, including goods and services, through continual
improvement of internal practices. The standards set as part of the TQM
approach can reflect both internal priorities and any industry standards currently
in place.
TQM is considered a customer-focused process and aims for continual
improvement of business operations. It strives to ensure all associated
employees work toward the common goals of improving product or service
quality, as well as improving the procedures that are in place for production.

The advantages of total quality management (TQM) include:

• Cost reduction. When applied consistently over time, TQM can reduce
costs throughout an organization, especially in the areas of scrap, rework,
field service, and warranty cost reduction. Since these cost reductions
flow straight through to bottom-line profits without any additional costs
being incurred, there can be a startling increase in profitability.
• Productivity improvement. Productivity increases significantly, since
employees are spending much less of their time chasing down and
correcting errors. Increased productivity means more output per
employee, which typically results in increased profits.
• Customer satisfaction. Since the company has better products and
services, and its interactions with customers are relatively error-free,
there should be fewer customer complaints. Fewer complaints may also
mean that the resources devoted to customer service can be reduced. A
higher level of customer satisfaction may also lead to increased market
share, as existing customers act on the company's behalf to bring in more
customers.
• Defect reduction. TQM has a strong emphasis on improving quality
within a process, rather than inspecting quality into a process. This not
only reduces the time needed to fix errors, but makes it less necessary to
employ a team of quality assurance personnel.
• Morale. The ongoing and proven success of TQM, and in particular the
participation of employees in that success can lead to a noticeable
improvement in employee morale, which in turn reduces employee
turnover, and therefore reduces the cost of hiring and training new
employees.
b) Dimensions of product and service quality:
Garvin proposes eight critical dimensions or categories of quality that can serve
as a framework for strategic analysis: Performance, features, reliability,
conformance, durability, serviceability, aesthetics, and perceived quality.
 
1. Performance:
Performance refers to a product's primary operating characteristics. For
an automobile, performance would include traits like acceleration,
handling, cruising speed, and comfort. Because this dimension of quality
involves measurable attributes, brands can usually be ranked objectively
on individual aspects of performance. Overall performance rankings,
however, are more difficult to develop, especially when they involve
benefits that not every customer needs.
 
2. Features:
Features are usually the secondary aspects of performance, the "bells and
whistles" of products and services, those characteristics that supplement
their basic functioning. The line separating primary performance
characteristics from secondary features is often difficult to draw. What is
crucial is that features involve objective and measurable attributes;
objective individual needs, not prejudices, affect their translation into
quality differences.
 
3. Reliability:
This dimension reflects the probability of a product malfunctioning or
failing within a specified time period. Among the most common
measures of reliability are the mean time to first failure, the mean time
between failures, and the failure rate per unit time. Because these
measures require a product to be in use for a specified period, they are
more relevant to durable goods than to products or services that are
consumed instantly.
 
4. Conformance:
Conformance is the degree to which a product's design and operating
characteristics meet established standards. The two most common
measures of failure in conformance are defect rates in the factory and,
once a product is in the hands of the customer, the incidence of service
calls. These measures neglect other deviations from standard, like
misspelled labels or shoddy construction, that do not lead to service or
repair.
 
 5. Durability:
A measure of product life, durability has both economic and technical
dimensions. Technically, durability can be defined as the amount of use
one gets from a product before it deteriorates. Alternatively, it may be
defined as the amount of use one gets from a product before it breaks
down and replacement is preferable to continued repair.
 
6. Serviceability:
Serviceability is the speed, courtesy, competence, and ease of repair.
Consumers are concerned not only about a product breaking down but
also about the time before service is restored, the timeliness with which
service appointments are kept, the nature of dealings with service
personnel, and the frequency with which service calls or repairs fail to
correct outstanding problems. In those cases where problems are not
immediately resolved and complaints are filed, a company's complaints
handling procedures are also likely to affect customers' ultimate
evaluation of product and service quality.
 
7. Aesthetics:
Aesthetics is a subjective dimension of quality. How a product looks,
feels, sounds, tastes, or smells is a matter of personal judgement and a
reflection of individual preference. On this dimension of quality it may be
difficult to please everyone.
 
8. Perceived Quality:
Consumers do not always have complete information about a product's or
service's attributes; indirect measures may be their only basis for
comparing brands. A product's durability for example can seldom be
observed directly; it must usually be inferred from various tangible and
intangible aspects of the product. In such circumstances, images,
advertising, and brand names - inferences about quality rather than the
reality itself - can be critical.

Q.2 Discuss the tools and techniques of TQM provided by any two Quality
Gurus of your choice.
Ans. TQM Tools:
• Pareto Principle
• Scatter Plots
• Control Charts
• Flow Charts
• Cause and Effect , Fishbone, Ishikawa Diagram
• Histogram or Bar Graph
 • Check Lists
• Check Sheets

Pareto Principle
The Pareto principle suggests that most effects come from relatively few causes.
In quantitative terms: 80% of the problems come from 20% of the causes
(machines, raw materials, operators etc.); 80% of the wealth is owned by 20%
of the people etc. Therefore effort aimed at the right 20% can solve 80% of the
problems. Double (back to back) Pareto charts can be used to compare 'before
and after' situations. General use, to decide where to apply initial effort for
maximum effect.
 
Scatter Plots
A scatter plot is effectively a line graph with no line - i.e. the point intersections
between the two data sets are plotted but no attempt is made to physically draw
a line. The Y axis is conventionally used for the characteristic whose behaviour
we would like to predict. Use, to define the area of relationship between two
variables.
 
Control Charts
Control charts are a method of Statistical Process Control, SPC. (Control system
for production processes). They enable the control of distribution of variation
rather than attempting to control each individual variation. Upper and lower
control and tolerance limits are calculated for a process and sampled measures
are regularly plotted about a central line between the two sets of limits. The
plotted line corresponds to the stability/trend of the process. Action can be taken
based on trend rather than on individual variation. This prevents over-
correction/compensation for random variation, which would lead to many
rejects.
 
Flow Charts
Pictures, symbols or text coupled with lines, arrows on lines show direction of
flow. Enables modelling of processes; problems/opportunities and decision
points etc. Develops a common understanding of a process by those involved.
No particular standardisation of symbology, so communication to a different
audience may require considerable time and explanation.
 
Cause and Effect , Fishbone, Ishikawa Diagram
The cause-and-effect diagram is a method for analysing process dispersion. The
diagram's purpose is to relate causes and effects. Three basic types: Dispersion
analysis, Process classification and cause enumeration. Effect = problem to be
resolved, opportunity to be grasped, result to be achieved. Excellent for
capturing team brainstorming output and for filling in from the 'wide picture'.
Helps organise and relate factors, providing a sequential view. Deals with time
direction but not quantity. Can become very complex. Can be difficult to
identify or demonstrate interrelationships.
 
Histogram or Bar Graph
A Histogram is a graphic summary of variation in a set of data. It enables us to
see patterns that are difficult to see in a simple table of numbers. Can be
analysed to draw conclusions about the data set.
 
A histogram is a graph in which the continuous variable is clustered into
categories and the value of each cluster is plotted to give a series of bars as
above. The above example reveals the skewed distribution of a set of product
measurements that remain nevertheless within specified limits. Without using
some form of graphic this kind of problem can be difficult to analyse, recognise
or identify.
 
Check Sheets
A Check Sheet is a data recording form that has been designed to readily
interpret results from the form itself. It needs to be designed for the specific data
it is to gather. Used for the collection of quantitative or qualitative repetitive
data. Adaptable to different data gathering situations. Minimal interpretation of
results required. Easy and quick to use. No control for various forms of bias -
exclusion, interaction, perception, operational, non-response, estimation.
 
Check Lists
A Checklist contains items that are important or relevant to a specific issue or
situation. Checklists are used under operational conditions to ensure that all
important steps or actions have been taken. Their primary purpose is for guiding
operations, not for collecting data. Generally used to check that all aspects of a
situation have been taken into account before action or decision making.
Simple, effective.

TQM Techniques:
Six Sigma
Six Sigma drew inspiration from the quality improvement methodologies of
preceding decades, including quality control, TQM, and Zero Defects. It focuses
on improving the quality of process outputs by identifying and removing the
causes of defects while minimizing the variability in manufacturing and
business processes Like TQM, the Six Sigma philosophy asserts that achieving
sustained quality improvement requires commitment from the entire
organization, particularly top-level management.
Just-in-Time ( JIT )
The Just-in-Time (JIT) method is a production strategy for improving business
return on investment by reducing in-process inventory and associated carrying
costs. JIT focuses on continuous improvement to maximize an organization’s
return on investment, quality, and efficiency. The JIT inventory system focuses
on having “the right material, at the right time, at the right place, and in the
exact amount” and defines inventory as a cost factor.
JIT programs often include a focus on Total Quality Control. For example,
when a process or parts quality problem surfaces on Toyota’s production line,
the entire production line is slowed or even stopped while the problem is dealt
with. JIT must be organization-wide and consistent.

Pareto Analysis
Pareto analysis is a statistical technique used to select a limited number of tasks
that produce significant overall effect. It uses the Pareto principle: most
problems have a few key causes. Pareto analysis also concludes that 80% of the
result can be generated by focusing on 20% of the key work.

Five Whys
The Five Whys is a question-asking technique used to explore the cause-and-
effect relationships underlying a particular problem. The primary goal of the
technique is to determine the root cause of a defect or problem, which points
toward a process that is not working well or does not exist. The technique was
originally developed by Sakichi Toyoda and was used by Toyota Motor
Corporation as it evolved its manufacturing methodologies. It is now used
within Kaizen (continuous improvement), lean manufacturing, and Six Sigma.

Q.3 What do you mean by Route Sheets? Explain the use of Route Sheets by
taking a suitable case example.
Ans. In order to track a specific set of steps or a sequence in the manufacturing
process, a route sheet is used to note a number of things. Route sheets identify
and number a work order, and generally include a symbol or another
concrete way to identify a part. The number of pieces in each production lot is
estimated and recorded, as is the total number of pieces to be produced. The
procedures and sequence of each operation on a given part is noted. All of the
machines and necessary equipment to perform the operation are listed on a route
sheet. Finally, you would find that a prediction of set-up and production time
for each piece would be included.
Route sheets can be applied in different ways. They may be used as planning
tools, and for quality control purposes. When used as planning tools, a routing
sheet may be used by different departments as they set up the step by step
production of an item. Different supervisors and managers are able to monitor
progress, production time, equipment use, and operator history throughout the
production process using the routing sheet.
Therefore, a route sheet can be used during planning, production, monitoring,
and quality control for an item or items during the manufacturing process.
Routing may be defined as the "selection of proper follow which each part of
the product will follow, while being transferred from raw material to finished
products. Path of the products will also give sequence of operations to be
adopted while manufacturing." In other words, routing means determination of
most advantageous path to be followed from department to department and
machine to machine till raw materials get its final shape. Routing determines the
best and cheapest sequence of operations and to see that this sequence is rigidly
followed. Routing is an important function of PPC because it has a direct
bearing on the "time" as well as "cost" of the operation. Defective routing may
involve back tracking and long routes. This will unnecessarily prolong the
processing time. moreover, it will increase the cost of material handling.
Routing is affected by plant layout. In fact, routing and affected by plant layout
are closely related. In product layout the routing is short and simple while under
the process layout it tends to be long and complex.

Routing Procedure:
1. Analysis of the product: the finished product is analysed and broken into
number of components required for the product.
2. Make and buy decision: It means to decide whether all components are to
be manufactured in the plant or some are to be purchased from outside.
make and buy decision depends upon.
• The work load in the plant already existing
• Availability of equipment
• Availability of labour
• Economy consideration
3. Raw materials requirements A part list and bill of materials is prepared
showing name of part, quantity materials specification, amount of
materials required etc.
4. Sequence of operations which the raw materials are to undergo are listed.
5. Machines to be used, their capacity is also listed.
6. Time required for each operation and subassemblies are listed.
7. The low size is also recorded.
The data thus obtained is utilized for preparing master route sheets and
operation charts. the master route sheets give the information regarding the time
when different activities are to be initiated and finished, to obtain the product
and required time.
The next step is to prepare the route sheet for the individual item or component.
Route sheet
The operation sheet and the route sheet differs only slightly. An operation sheet
shows everything about the operation i.e. operation descriptions, their sequence,
type of machinery, tools, jigs & fixture required, setup & operation time etc.
whereas, the route sheet also details the section (or department) and the
particular machine on which the work is to be done. the operation sheet will
remain the same if the order is repeated but the route sheet may have to be
revised if certain machines are already engaged to order. except thin small
difference, both sheets contain practically the same information and thus
generally combined into one sheet known as operation and route sheet.

Name – Gear
Material – m.s.
Quantity – 100 Nos.
Departmen Machin Operatio Description Tool Jigs/Fixtur Time
t e n e Setup Operatio
n
Smithy Power 1 Forging - - 4 Hrs 30 min.
Hamme 2 Punching - - 1 Hr 25 min.
r PH/15 Hole
Heat Furnace 3 Normalizin - - 4 Hrs 4 Hrs
Treatment F/H/4 g
Machine Center 4 Face 2 end. Lathe Chuck 15 min. 1 Hr
Shop Lathe Turn onter Tool
CL-5 & inner
face
Milling 5 Cut teeth Side & Dividing 40 min. 5 Hrs.
m/c face Head
Mm/15 cutter
Slotter 6 Make the Slottin - 10 min. 30 min.
SL/7 key way g tool

Advantages of Routing:
1. Efficient use of available resources.
2. Reduction in manufacturing cost.
3. Improvement in quantity and quality of the o/p.
4. Provides the basis for scheduling and loading.

Q.4 Explain the following:

a) Sales Forecasting and its various methods
b) Factors influencing PPC
c) Concept of ISO-9000 and ISO-14000
Ans. a) Refer Question Paper – May 2018, Q.5 c)
b) Factors influencing PPC: The factors that affect the application of
production planning and control to manufacturing are given as follows:
1. Type of Product:
It is the complexity of the product that is important, not what the product
is, except as this may in turn relate to the market being served. Production
control procedures are much more complex and involve many more
records in the manufacture of large steam turbine generator sets or
locomotives to customer orders then in the production of large quantities
of a standard product involving only a few component parts, such as
electric blankets, steam irons, or similar small appliances.
2. Type of Manufacturing:
This is probably the most influential factor in the control situation. For a
large continuous manufacturing plant producing a standard product, we
have already indicated that the routing was included in the planning of the
plant layout. Production planning and control in operations has got great
scope and significance due to interactive role and interdependency with
practically all the sections of the production department. Production
planning and control gets the inputs from the design and development
department for both product and process and PPC gives not only the
whole planning to manufacturing and assembly section, but also monitors
and controls at each and every step of work process. PPC has to interact
with all other departments such as Sales and Distribution, Procurement
and Inventory, Repair and Maintenance, Quality Control and Industrial
Engineering and Work Study in both directions, which shows the
interdependency of PPC with other sections of the production department.
3. Procurement And Inventory Management:
Planning for procurement of raw materials, components and spare parts in
the right quantities and specifications at the right time, from the right
source and at the right price. Purchasing, storage, inventory control,
standardization, variety reduction, value analysis and inspection are the
other activities associated with materials.
4. Manufacturing And Assembly:
Production planning and control involve generally the organization and
planning of manufacturing process. Especially, it consists of the planning
of routing, scheduling, dispatching inspection, and coordination, control
of materials, methods machines, tools and operating times. The ultimate
objective is the organization of the supply and movement of materials and
labour, machine utilization and related activities, in order to bring about
the desired manufacturing results in terms of quality, quantity, time and
place.
5. Market Forecast:
The market forecast is value to production planning and control is that it
will indicate future trends in demand for manufactured product. Work
shift policies, plans for an increase or decrease in manufacturing activity,
or possible plant expansions may often be based upon the market
 forecasts and in turn affect the planning of the production planning and
control group.
6. Engineering Specifications:
Blueprints and bills of materials are used by production planning and
control when they become a component part of the packaged instructions
issued to the shop through the control office. One good planning
procedure is to accumulate all necessary data for a shop order in a single
package- the standard process sheet, the blueprint, the bill of material (if
an assembly operation is involved), the route sheet, and possibly the
schedule for the production of the order.
7. Quality Control:
A good PPC will provide for adherence to the quality standards so that
quality of output is ensured. PPC is of immense value to the entrepreneur
in capacity utilization and inventory control. More importantly it
improves his response time and quality. As such effective PPC
contributes to time, quality and cost parameters of business success.

Utility and Benefits of PPC Functions:

The implementation of production planning and control system yields various
advantages to any organization for various functional activities, which include
the following:
• Last Hour Rush is Avoided:
Production is well planned and controlled as per the given time schedules.
Therefore, production control reduces the number of emergency orders
and overtime works on plant and thus reduces the overheads.
• Problem Areas of Bottlenecks get reduced:
The incomplete work or work-in-transit does not get piled up because
production control balances the line and flow of work.
• Cost Reduction:
An appropriate production control increases the men-machine utilization,
which maintains in process inventories at a satisfactory level, leads to a
better control of raw materials inventory, reduces costs of storage and
materials handling, helps in maintaining quality and limits rejection and
thus ultimately reduces the unit cost of production.
• Optimum Utilization of Resources:
It reduces the time loss of the workers waiting for materials and makes
most effective use of equipment.
• Better Coordination of Plant Activities:
PPC coordinates the activities of the plant that leads to concerted effort
by workforce.
• Benefits to Workers:
PPC results into better efficiency and productivity, which leads to
adequate wages, stable employment, job security, improved working
 conditions, increased job satisfaction and ultimately high morale.
• Improved Services to Customers:
PPC leads to better services to the customers as it ensures production in
accordance with the time schedules and, therefore, deliveries are made as
per the committed schedules.

CONSTRAINTS OF PPC:
The PPC department has to work with the following constraints and limitations:
• PPC is a time taking activity, particularly for the complex product mix as
well as for the products having a large number of components and parts
because of difficulty in carrying out routing, scheduling and loading
functions.
• PPC generally works on certain given conditions and assumptions as well
as depends on uncertain demand forecast. So, working becomes
inaccurate many a time.
• Production capacity, quality of materials, availability of materials and
power, skill level of manpower managing PPC are the main constraints
for effective functions of PPC.
• Plans, checks and controls provided by PPC are generally resisted by the
workers and even supervisors of all other departments.
• Business environment makes very difficult situations for the working of
PPC, particularly when changes in technology, customers demand and
taste, government policy, etc. are very frequent and of dynamic nature.
The above constraints are to be overcome for effective PPC and optimizing the
objective functions of operations, i.e. minimizing costs and maximizing profits.

Ans. c) Concept of ISO-9000 and ISO-16000:

The International Organization of Standardization (ISO) is a worldwide
federation consisting of member bodies from 91 countries, which promotes the
development of international manufacturing, trade and communication
standards.
ISO 9000 refers to a generic series of standards published by the ISO that
provide quality assurance requirements and quality management guidance. ISO
9000 is a quality system standard, not a technical product standard. The ISO
9000 series currently contains four standards - ISO 9001, ISO 9002, ISO 9003
and ISO 9004. Firms select the standard that is most relevant to their business
activities. However, these four standards will be revised in late 2000. More
information is provided later in this paper under ISO 9000:2000.
ISO 14000 refers to a series of standards on environmental management tools
and systems. ISO 14000 deals with a company's system for managing its day-to-
day operations and how they impact the environment. The Environmental
Management System and Environmental Auditing address a wide range of
issues to include the following:
 1. Top management commitment to continuous improvement, compliance,
and pollution prevention.
2. Creating and implementing environmental policies, including setting and
meeting appropriate targets.
3. Integrating environmental considerations in operating procedures.
4. Training employees in regard to their environmental obligations.
5. Conducting audits of the environmental management system.
ISO 9000 and ISO 14000 are tools to assist business and government to insure
the quality of their products and services, and to manage the impact of their
activities on the environment. Like all ISO standards, their use is voluntary
unless a business sector makes them a market requirement or a government
issues regulations making their use obligatory. Organizations that implement
ISO 9000 and ISO 14000 voluntarily do so to improve operations and provide
real benefits.

Q.5 What do you understand by Production Planning and Control? Discuss the
duties of Production Controller in detail.
Ans. For efficient, effective and economical operation in a manufacturing unit
of an organization, it is essential to integrate the production planning and
control system. Production planning and subsequent production control follow
adaption of product design and finalization of a production process.
Production planning and control address a fundamental problem of low
productivity, inventory management and resource utilization.
Production planning is required for scheduling, dispatch, inspection, quality
management, inventory management, supply management and equipment
management. Production control ensures that production team can achieve
required production target, optimum utilization of resources, quality
management and cost savings.
Planning and control are an essential ingredient for success of an operation unit.

The benefits of production planning and control are as follows:

 It ensures that optimum utilization of production capacity is achieved, by
proper scheduling of the machine items which reduces the idle time as
well as over use.
 It ensures that inventory level are maintained at optimum levels at all
time, i.e. there is no over-stocking or under-stocking.
 It also ensures that production time is kept at optimum level and thereby
increasing the turnover time.
 Since it overlooks all aspects of production, quality of final product is
always maintained.

Production Planning
Production planning is one part of production planning and control dealing with
basic concepts of what to produce, when to produce, how much to produce, etc.
It involves taking a long-term view at overall production planning. Therefore,
objectives of production planning are as follows:
 To ensure right quantity and quality of raw material, equipment, etc. are
available during times of production.
 To ensure capacity utilization is in tune with forecast demand at all the
time.

A well thought production planning ensures that overall production process is

streamlined providing following benefits:
 Organization can deliver a product in a timely and regular manner.
 Supplier are informed will in advance for the requirement of raw
materials.
 It reduces investment in inventory.
 It reduces overall production cost by driving in efficiency.

Production planning takes care of two basic strategies’ product planning and
process planning. Production planning is done at three different time dependent
levels i.e. long-range planning dealing with facility planning, capital
investment, location planning, etc.; medium-range planning deals with demand
forecast and capacity planning and lastly short term planning dealing with day
to day operations.

Production Control
Production control looks to utilize different type of control techniques to
achieve optimum performance out of the production system as to achieve
overall production planning targets. Therefore, objectives of production control
are as follows:
 Regulate inventory management
 Organize the production schedules
 Optimum utilization of resources and production process

The advantages of robust production control are as follows:
 Ensure a smooth flow of all production processes
 Ensure production cost savings thereby improving the bottom line
 Control wastage of resources
 It maintains standard of quality through the production life cycle.

Production control cannot be same across all the organization. Production

control is dependent upon the following factors:
 Nature of production (job oriented, service oriented, etc.)
  Nature of operation
 Size of operation

Production planning and control are essential for customer delight and overall
success of an organization.

Duties of Production Controller:

• Assist in production activity control to meet business and financial
objectives.
• Work with Managers to plan and manage production tasks to improve
runtime.
• Review production plans to identify and report potential risks to
Manager.
• Develop inventory control techniques to avoid shortages and excesses.
• Assist in processing customer orders and shipments according to the
established schedule.
• Assist Managers in controlling production costs while maintaining the
quality standards.
• Review job orders and accordingly establish priorities and schedules.
• Monitor execution of job orders and adjust schedules for timely delivery.
• Maintain up-to-date knowledge on company objectives, production
strategies and support activities.
• Plan and monitor material movement in production cycles to ensure
continuous operations.
• Plan equipment, material and manpower needs for job order.
• Coordinate with Manager in resolving production planning and control
issues.
• Work with Manager to prepare job order documents and give timely
approvals.
• Work with cross-functional teams to complete job orders on-time and
within customer specifications.
• Communicate production updates to Managers and customers on regular
basis.

Question Paper – April 2016

Q.1 What are the dimensions of Quality? Explain them in case of hospitals.
Ans. Garvin proposes eight critical dimensions or categories of quality that can
serve as a framework for strategic analysis: Performance, features, reliability,
conformance, durability, serviceability, aesthetics, and perceived quality.
 
1. Performance:
 Performance refers to a product's primary operating characteristics. For
an automobile, performance would include traits like acceleration,
handling, cruising speed, and comfort. Because this dimension of quality
involves measurable attributes, brands can usually be ranked objectively
on individual aspects of performance. Overall performance rankings,
however, are more difficult to develop, especially when they involve
benefits that not every customer needs.
 
2. Features:
Features are usually the secondary aspects of performance, the "bells and
whistles" of products and services, those characteristics that supplement
their basic functioning. The line separating primary performance
characteristics from secondary features is often difficult to draw. What is
crucial is that features involve objective and measurable attributes;
objective individual needs, not prejudices, affect their translation into
quality differences.
 
3. Reliability:
This dimension reflects the probability of a product malfunctioning or
failing within a specified time period. Among the most common
measures of reliability are the mean time to first failure, the mean time
between failures, and the failure rate per unit time. Because these
measures require a product to be in use for a specified period, they are
more relevant to durable goods than to products or services that are
consumed instantly.
 
4. Conformance:
Conformance is the degree to which a product's design and operating
characteristics meet established standards. The two most common
measures of failure in conformance are defect rates in the factory and,
once a product is in the hands of the customer, the incidence of service
calls. These measures neglect other deviations from standard, like
misspelled labels or shoddy construction, that do not lead to service or
repair.
 
5. Durability:
A measure of product life, durability has both economic and technical
dimensions. Technically, durability can be defined as the amount of use
one gets from a product before it deteriorates. Alternatively, it may be
defined as the amount of use one gets from a product before it breaks
down and replacement is preferable to continued repair.
 
 6. Serviceability:
Serviceability is the speed, courtesy, competence, and ease of repair.
Consumers are concerned not only about a product breaking down but
also about the time before service is restored, the timeliness with which
service appointments are kept, the nature of dealings with service
personnel, and the frequency with which service calls or repairs fail to
correct outstanding problems. In those cases where problems are not
immediately resolved and complaints are filed, a company's complaints
handling procedures are also likely to affect customers' ultimate
evaluation of product and service quality.
 
7. Aesthetics:
Aesthetics is a subjective dimension of quality. How a product looks,
feels, sounds, tastes, or smells is a matter of personal judgement and a
reflection of individual preference. On this dimension of quality it may be
difficult to please everyone.
 
8. Perceived Quality:
Consumers do not always have complete information about a product's or
service's attributes; indirect measures may be their only basis for
comparing brands. A product's durability for example can seldom be
observed directly; it must usually be inferred from various tangible and
intangible aspects of the product. In such circumstances, images,
advertising, and brand names - inferences about quality rather than the
reality itself - can be critical.

Q.2 What are the factors which influence Production Planning and Control?
Discuss the suitable example of any manufacturing industry.
Ans. Factors influencing PPC: The factors that affect the application of
production planning and control to manufacturing are given as follows:
• Type of Product:
It is the complexity of the product that is important, not what the product
is, except as this may in turn relate to the market being served. Production
control procedures are much more complex and involve many more
records in the manufacture of large steam turbine generator sets or
locomotives to customer orders then in the production of large quantities
of a standard product involving only a few component parts, such as
electric blankets, steam irons, or similar small appliances.
8. Type of Manufacturing:
This is probably the most influential factor in the control situation. For a
large continuous manufacturing plant producing a standard product, we
have already indicated that the routing was included in the planning of the
 plant layout. Production planning and control in operations has got great
scope and significance due to interactive role and interdependency with
practically all the sections of the production department. Production
planning and control gets the inputs from the design and development
department for both product and process and PPC gives not only the
whole planning to manufacturing and assembly section, but also monitors
and controls at each and every step of work process. PPC has to interact
with all other departments such as Sales and Distribution, Procurement
and Inventory, Repair and Maintenance, Quality Control and Industrial
Engineering and Work Study in both directions, which shows the
interdependency of PPC with other sections of the production department.
9. Procurement And Inventory Management:
Planning for procurement of raw materials, components and spare parts in
the right quantities and specifications at the right time, from the right
source and at the right price. Purchasing, storage, inventory control,
standardization, variety reduction, value analysis and inspection are the
other activities associated with materials.
10.Manufacturing And Assembly:
Production planning and control involve generally the organization and
planning of manufacturing process. Especially, it consists of the planning
of routing, scheduling, dispatching inspection, and coordination, control
of materials, methods machines, tools and operating times. The ultimate
objective is the organization of the supply and movement of materials and
labour, machine utilization and related activities, in order to bring about
the desired manufacturing results in terms of quality, quantity, time and
place.
11.Market Forecast:
The market forecast is value to production planning and control is that it
will indicate future trends in demand for manufactured product. Work
shift policies, plans for an increase or decrease in manufacturing activity,
or possible plant expansions may often be based upon the market
forecasts and in turn affect the planning of the production planning and
control group.
12.Engineering Specifications:
Blueprints and bills of materials are used by production planning and
control when they become a component part of the packaged instructions
issued to the shop through the control office. One good planning
procedure is to accumulate all necessary data for a shop order in a single
package- the standard process sheet, the blueprint, the bill of material (if
an assembly operation is involved), the route sheet, and possibly the
schedule for the production of the order.
13.Quality Control:
A good PPC will provide for adherence to the quality standards so that
 quality of output is ensured. PPC is of immense value to the entrepreneur
in capacity utilization and inventory control. More importantly it
improves his response time and quality. As such effective PPC
contributes to time, quality and cost parameters of business success.

Q.3 Write short notes on any two of the following:

a) Quality Circle
b) Fish Bone Diagram
c) 14 Principles of Deming
Ans. a) Quality Circle:
A quality circle or quality control circle is a group of workers who do the same
or similar work, who meet regularly to identify, analyze and solve work-related
problems. It consists of minimum three and maximum twelve members in
number. Normally small in size, the group is usually led by a supervisor or
manager and presents its solutions to management; where possible, workers
implement the solutions themselves in order to improve the performance of the
organization and motivate employees. Quality circles were at their most popular
during the 1980s, but continue to exist in the form of Kaizen groups and similar
worker participation schemes.
Typical topics for the attention of quality circles are improving occupational
safety and health, improving product design, and improvement in the workplace
and manufacturing processes.
Quality circles are typically more formal groups. They meet regularly on
company time and are trained by competent persons (usually designated as
facilitators) who may be personnel and industrial relations specialists trained in
human factors and the basic skills of problem identification, information
gathering and analysis, basic statistics, and solution generation. Quality circles
are generally free to select any topic they wish (other than those related to salary
and terms and conditions of work, as there are other channels through which
these issues are usually considered).
Quality circles have the advantage of continuity; the circle remains intact from
project to project.
A quality circle is a participatory management technique that enlists the help of
employees in solving problems related to their own jobs. Circles are formed of
employees working together in an operation who meet at intervals to discuss
problems of quality and to devise solutions for improvements. Quality circles
have an autonomous character, are usually small, and are led by a supervisor or
a senior worker. Employees who participate in quality circles usually receive
training in formal problem-solving methods—such as brain-storming, pareto
analysis, and cause-and-effect diagrams—and are then encouraged to apply
these methods either to specific or general company problems. After completing
an analysis, they often present their findings to management and then handle
implementation of approved solutions. Pareto analysis, by the way, is named
after the Italian economist, Vilfredo Pareto, who observed that 20 percent of
Italians received 80 percent of the income—thus the principle that most results
are determined by a few causes.

Ans. b) Fish Bone Diagram:

The fish bone diagram is a method for analysing process dispersion. The
diagram's purpose is to relate causes and effects. Three basic types: Dispersion
analysis, Process classification and cause enumeration. Effect = problem to be
resolved, opportunity to be grasped, result to be achieved. Excellent for
capturing team brainstorming output and for filling in from the 'wide picture'.
Helps organise and relate factors, providing a sequential view. Deals with time
direction but not quantity. Can become very complex. Can be difficult to
identify or demonstrate interrelationships.

Ans. c) Deming’s Fourteen Obligations of Top Management

1. Create constancy of purpose for improvement of product and service.
Allocate resources to provide for long range needs rather than only short
term profitability
2. Adopt the new philosophy. We can no longer live with commonly
accepted levels of delays, mistakes, defective materials, and defective
workmanship.
3. Cease dependency on mass inspection to achieve quality. Quality is
achieved by building quality into the product in the first place.
4. End the practice of awarding business on the basis of price tag
alone. The aim is to minimize total cost, not merely initial cost. Establish
long term relationship with suppliers to develop loyalty and trust.
5. Improve constantly and forever every process for planning, production,
and service. It is management’s job to work continually on improving
total system.
6. Institute training on the job for all, including management, to make
better use of every employee. New skills are required to keep up with
changes in products and processes.
7. Adopt and institute leadership aimed at helping people do a better job.
Management must ensure that immediate action taken on issues that are
detrimental to quality.
8. Drive out fear so that everybody may work effectively and more
productively for the company.
9. Break down barriers between departments and staff areas. Everyone
must work together to tackle problems that may be encountered with
products or service.
10.Eliminate slogans and exhortations for the work force as they create
adversarial relationships. Also, bulk of the causes of low quality &
productivity belong to the system and lie beyond the power of the work
 force.
11.Eliminate arbitrary numerical targets for the workforce and
management. Substitute aids and helpful leadership in order to achieve
continual improvement.
12.Remove barriers that rob people of pride of workmanship. This
includes the annual appraisal of performance and Management by
Objective.
13.Encourage education. Institute a vigorous program of education and
self-improvement for everyone
14.Clearly define top management’s permanent commitment to ever
improving quality and productivity. Put everybody in the company to
work to accomplish the transformation. Support is not enough, action is
required.

Q. 4 What is Routing? Explain the process of preparing Rout Sheet.

Ans. Routing means determination of the route to be followed by each
part/component being transformed from input/raw material into final product.
Obviously where one single part/product is produced by fixed set of machines
the job of routing becomes automatic or mechanized. In continuous production
systems with line type or product type layout, no managerial effort is required
for routing though different sets of machines may be utilized in manufacturing
the products in such systems.
For different types of products to be manufactured like in intermittent
production system, routing becomes a complex task.
Routing of a production order contains complete information of the product to
be manufactured, complete details of each operation to be performed, the set up
time and the standard time needed for completing the job/product.

Procedures for Routing in Production:

Routing is the purpose of the pathway of movement of raw materials through
various machines and operations from the beginning of the manufacturing
process to the completion of product in its finished form. It is laying out the
sequence of machines, process, and operations that are the most desirable and
efficient. It is determining the exact route or path a product has to follow right
from raw material till its completion.
Routing is a systematic process. The routing procedure for a new product or part
may consist of the following steps:
1. Determination of what to make and what to buy:
An analysis of the product is made to determine whether to manufacture a
component in the factory or to purchase it from outside. This is done to
find out what parts (goods) should be manufactured and what parts
should be purchased. This depends mainly on the relative cost. It also
depends on other factors such as technical consideration, purchase
 policies, availability of personnel, availability of equipment, etc.
Generally, during less-busy periods; most of the parts are manufactured
in the factory. However, during the busy period, many parts are
purchased from outside.
2. Determination of material requirements:
Each item in the product line is divided into its components and parts
required for its manufacturing. Routing section prepares a parts list which
includes the drawings, specifications, standards of quality, and
identification symbols of parts. Its combined with a bill of materials. This
will show each part name, quantity required and the kind and amount of
material required for each part. From this list, the inventory control
section can determine the adequacy of the materials in stock or on order.
To determine the material requirements, the “ parts short list”  is also
prepared. It lists only those parts which are short and hence must be
obtained to complete the product.
3. Determination of manufacturing operations and their sequence:
Routing section now analyses the production standards and estimates
together with data on machine capacities and characteristics. From these
facts, it establishes the operations necessary to manufacture the article
and lists them in their proper sequence on the route sheet. The route sheet
indicates for each operation its standard process time, the type of a
number of machines used, materials and tools required.
4. Determination of lot sizes:
Routing section also determines the number of units to be produced in
any one lot. If products are made to customer's order, the lot size is
generally equal to it. Where production is done to stock replacing
depleted inventories, the lot size to be manufactured will usually be based
on the principle of “economic lot quantities”. Where production is done
on a weekly or monthly schedule, the quantity to be manufactured for the
period will be based on the influx or backlog of sales orders subject to
any limitations in the manufacturing capacity.
5. Determination of scrap factors:
In most production processes, it is reasonable to expect some scrap. This
happens because of manufacturing defects or wastage these defective
pieces are called scraps. Routing section should take this scrap factor into
account when determining lot size of various components parts of the
final assembly, it is important to know where scrap is most likely to
occur- whether it occurs progressively or all at once after a certain
operation. Hence, it is necessary to establish a standard scrap factor at
every stage of production. The scrap factors can be estimated on the basis
of experience or scrap history.
6. Determination of the cost of the article:
The routing section may also contribute to cost estimating, although it is
 the prime responsibility of the cost mange accounting department. Cost of
the component parts and final product largely depend on the materials
and manpower required for manufacturing. Direct material and labor
costs are computed, and specific and general indirect expenses are
allocated to the product to arrive at the cost estimate
7. Organization of production control forms:
The types of production have much influence upon the forms required by
the plant departments. production control is organized around schedule
from in case of mass manufacturing. Job order manufacturing requires the
use of a number of control forms such as job cards, shop orders, labor
cards, for performing the operations. It should be remembered that
production control forms in themselves are costly to use. Hence, these
should be reduced to minimum consistent with the degree of control
desired.
8. Prepare route sheet:
Route sheet is prepared on a production control form. It shows the part
number, description of the part and the materials required. It is prepared
by a route clerk. Separate route-sheet is required for each part of a
customer's order.

Q.5 Discuss the concept of Six Sigma. Throw light on latest development in Six
Sigma.
Ans. Six Sigma is a disciplined, statistical-based, data-driven approach and
continuous improvement methodology for eliminating defects in a product,
process or service. It was developed by Motorola and Bill Smith in the early
1980’s based on quality management fundamentals, then became a popular
management approach at General Electric (GE) with Jack Welch in the early
1990’s. The approach was based on the methods taught by W. Edwards
Deming, Walter Shewhart and Ronald Fisher among many others. Hundreds of
companies around the world have adopted Six Sigma as a way of doing
business.
Sigma represents the population standard deviation, which is a measure of
the variation in a data set collected about the process. If a defect is defined by
specification limits separating good from bad outcomes of a process, then a six
sigma process has a process mean (average) that is six standard deviations from
the nearest specification limit. This provides enough buffer between the process
natural variation and the specification limits.
For example, if a product must have a thickness between 10.32 and 10.38 inches
to meet customer requirements, then the process mean should be around 10.35,
with a standard deviation less than 0.005 (10.38 would be 6 standard deviations
away from 10.35), assuming a normal distribution.
Six Sigma can also be thought of as a measure of process performance, with Six
Sigma being the goal, based on the defects per million. Once the current
performance of the process is measured, the goal is to continually improve the
sigma level striving towards 6 sigma. Even if the improvements do not reach 6
sigma, the improvements made from 3 sigma to 4 sigma to 5 sigma will still
reduce costs and increase customer satisfaction.

Six Sigma at many organizations simply means a measure of quality that strives
for near perfection. It can be called “Six Sigma,” or it may have a generic or
customized name for the organization like “Operational Excellence,” “Zero
Defects,” or “Customer Perfection.”