1) importance of POM

2) General Envt.
3) Strategy 5PO
4) Design product
process
tech
job
5) PPC

6) improvement
7) operations challenges
 ndim T red
High Cost Low Cost ndim O
Low volume High

High variety Low

High variation in demand Low

High visibility Low

 STRATEGY
5PO
Q
S what you want to become
D
F
C what you are
 P
P
P
MKTG P
P

PRODUCTION
 STRATEGY
5PO
Q
S WHAT YOU WANT TO BECOME
D
F
C
WHAT YOU ARE
 P
P
MKT P
P
P

PRODUCTION
Process Types General Management characteristics with which to manage operations
1) Project Process volume very low, variety very high. Only one product is made. There is no repetition in
making the product. In case there is repetition then it is after a very very long time.

2) Jobbing process volume increases slightly and variety reduces slightly. There is repetition
in making the product after long time. Example 1)visiting card 2) Furniture
restorer 3) small job shops in large manufacturing organizations
3) Batch Processes Most processes in the world are batch processes. Volume increases substantially
variety reduces substantially, there is repetion in making the product after
regular time intervals 4) Mass Processes are batch process
Tractors Implement Escorts TIA machine shop with a larger production run
Accessories 45 gears 2015a Coca Cola

Setup Time (2 days) setup time (5 days)

run time (3 days) run time (3 months)

3000 EBQ/EOQ for production run 3,000,000

90 Time period for production run (3 months) 3 months

5
85

5) Continuous Process 24 hours 365 days running Electricity, Steel, Petroleum, Large Chemical Plants
are batch process

Chemical Plants
Layout Types it means how the physically transforming resources (machine and manpower)
would be layed out in the plant

1) Fixed Position Layout also known as Stationary Layout, Project Layout,

The product to be manufactured/processed remains fixed/stationary, however, the man, machine,
material required to make the product; moves around the product. This happens when
the product is too heavy to move, too delicate to move, too voluminous to move

2) Process Layout:- it is also know as functional layout, jobshop layout

Similar processes/machines Large Hospital such as AIIMS TIA machine shop in Escorts
in one room

GF

TIA Turning Machines

broaching machines
milling machines
hobbing machines
grinding
chrome plating

4) Product Layout:- also know as line layout, assembly line layout

Machines layed out one after the other. This happens because either the volume is too large
or the sequence of steps required to make the product necessitate that the machines be layed out
one after the other. car assembley, car washing, shoe manufacturing, shoe sole manufacturing

1) cutting machine or Clicking machine

2) Edge Trimming Machine
3) Stamping Machine 7%
4) Milling Machine 7%
5) Skyving Machine 3%
6) Assembly sole with heel to make complete sole
7) Painting

3) Cell Layout or Group Technology Layout

To make a few products, their machine in one room. This happens when the volume is
large and the variety is less. Cell Layout resembles a "shop within a shop", "Plant within a Plant",
"Factory within a Factory" concept
Cardio Thorachic unit

AIIMS
1) WHAT IS INVENTORY
2) WHAT ARE THE TYPES OF INVENTORY
3) WHAT IS THE PURPOSE OF INVENTORY
4) VARIOUS INVENTORY MANAGEMENT SYSTEMS
5) WHAT ARE THE VARIOUS COSTS OF INVENTORY

MODEL 1 EOQ = ECONOMIC ORDER QTY

DEMAND D= 18000 PER TIME PERIOD

(USUALLY PER ANNUM)

COST OF ITEM Ci 5 RS. PER UNIT

ORDERING COST C 50 RS PER ORDER

ACQUISITON COST
SETUP COST
PROCUREMENT COST

HOLDING COST H 9% RS PER UNIT PER TIME PERIOD

CARRYING COST 0.45 1) THE TIME PERIOD SHOULD BE THE SAME AS DEMAND
CARRYING RATE 2) SOME HOLDING COST IS GIVEN IN % THEN IT WILL TAKEN TO % OF COST OF

BACKORDERING COST S RS PER UNIT

SHORTAGE COST
SIMRAN
RICE 20 KG PER MONTH
COST RS 50 PER KG
 QTY FIXD BUT NOT TIME Q TYPE FIXED QTY EOQ
FIXED REORDER LEVEL SYSTEM
FIXED ORDER POINT SYSTEM

TIME IS FIXED BUT NOT THE QTY P TYPE FIXED TIME PERIOD SYSTEM

EOQ SQRT(2*D*C/H) 2000

TC D*Ci +(D/Q)*C +1/2(Q*H)

90000 450 450 90900
FXD COST ORDERING COST HOLDING COST

LET US ASSUME THAT NUMBER OF WORKING DAYS ARE 300 DAYS

N= NUMBER OF ORDERS= (D/Q) 9

T=TIME PERIOD BETWEEN EACH ORDER =(1/N)*NO.OF WORKING DAYS

TAKEN TO % OF COST OF ITEM 33.33333333333

DAILY DEMAND RATE= 60

LET LEAD TIME = 3 DAYS

REORDER LEVEL=ROL= DAILY DEMAND RATE*LEAD TIME

180
ORKING DAYS

RATE*LEAD TIME
INVENTORY

1) WHAT IS INVENTORY
2) WHAT ARE THE TYPES OF INVENTORY
3) WHY ARE INVENTORIES REQUIRED
4) WHAT ARE THE VARIOUS INVENTORY MANAGEMENT SYSTEM
5) VARIOUS COSTS INVOLVED IN INVENTORY

MODEL 1 EOQ ECONOMIC ORDER QTY

DEMAND D= 18000 UNITS PER TIME PERIOD

PA (USUALLY PER ANNUM)

COST OF ITEM Ci 5 RS PER UNIT

ORDERING COST C 50 RS PER ORDER

ACQUISITION COST
SETUP COST

HOLDING COST H 9% RS PER UNIT PER TIME PERIOD

CARRYING COST 0.45 1) THE TIME PERIOD OF DEMAND AND HOLDING COST SHOULD BE THE SAME
CARRYING RATE 2) SOME TIMES HOLDING IS GIVEN IN %, THEN IT IS TAKEN TO BE % OF COST OF

SHORTAGE COST B RS PER UNIT

BACKORDERING COST
ANURADHA

DEMAND=20 KG
COST OF RS 50/KG
ORDERING HOLDING
Q FXD COST COST COST
20 1000 10 100
10 1000 20 70
5 1000 40 60
4 1000 50 50
2 1000 100 25
 QTY IS FIXED BUT NOT THE TIME Q TYPE EOQ
FIXED REORDER SYSTEM
FIXED REORDER POINT/TIME SYSTEM

TIME PERIOD FIXED BUT NOT QTY P TYPE PERIODIC REVIEW

FIXED TIME PERIOD SYSTEM

ORDERING COST (D/Q)*C

HOLDING COST 1/2*Q*H

1/2*Q*H = (D/Q)*C

EOQ Q = √2*D*C/H 2000

ORDERING HOLDING
TC = FIXED COST COST COST

SHOULD BE THE SAME TC= D*Ci +(D/Q)*C + 1/2*Q*H

EN TO BE % OF COST OF ITEM 90000 450 450
90900

N = NUMBER OF ORDERS 9

LET THE NUMBER OF WORKING DAYS = 300 DAYS IN A YEAR

T= TIME PERIOD BETWEEN ORDERS= (1/N)*NUMBER OF WORKING DAYS
33.33333333
DAILY DEMAND RATE= 60

LET THE LEAD TIME= 3 DAYS

REORDER LEVEL (ROL)= DAILY DEMAND RATE *LEAD TIME

180
SELECTIVE INVENTORY CONTROL TECHNIQUE
ABC ANALYSIS
80:20 PRINCIPLE
quality 800

99.74% 798

95.44% 764

68.26%

135 140 mean=150cm 160 165

mean - 3 sigma std dev=5cm mean+3 sigma
conformance to specifications

VA/VE cost to function analysis

taxi/car 200
Auto 100

bus 40
INVENTORY
MRP PUSH SYSTEM OF PRODUCTION

JIT/LEAN PULL SYSTEM DEMAND PULLS PRODUCTION

SYNCHRONOUS MANUFACTURING
 BIG JIT HAVING AND ENVIRONMENT FOR JIT TO WORK

JIT
(LEAN)
LITTLE JIT MECHANISM BY WHICH JIT WILL WORK
BIN
KANBAN
CARD
GOLF
LIGHT
 statistical quality control/statistical process control
SQC / SPC

FOR VARIABLES FOR ATTRIBUTES

( CONTINUOUS, DECIMAL VALUES, ( DISCRETE, WHOLE NUMBER
INFINITE VALUES, MEASURED, FINITE, COUNTED)
MEASURING INSTURMENT)

X BAR CHART R BAR CHART P BAR CHART

(MEAN CHART) (RANGE CHART) (PROPORTION / FRACTION,
DEFECTIVE CHART)
UCL
CL
LCL mean(+-)3sigma variables

continuous

discrete attributes
tical process control

variable
E, WHOLE NUMBER

continuous
values in decimal, inifinte values
NP BAR CHART C BAR CHART measured, measuring instrument
TION / FRACTION, (NUMBER PROPORTION/ (NUMBER
FRACTION DEFECTIVE DEFECTS discrete
CHART) CHART) whole number, finite values
counted
mean(+)3sigma R R 200.25
UCL s s s

cl=mean 200.00

R 199.75
mean(-)3sigma R
LCL

SIGMA= 0.333

quality control charts with 3 sigma limits

CL= mean 99.74%
UCL mean(+)3sigma
LCL mean(-)3sigma
 1±0.005 R&D
UTL/LTL
UTL= 1.005
CL= 1
LTL 0.995

5±0.05
USL/LSL
USL 5.05
COUGH SYRUP 5%
CL 5

LSL 4.95

Cpk= PROCESS CAPABILITY 2

SIX SIGMA

DPMO 150000 4
4

DPMO=DEFECTS PER MILLION OPPURTUNITY

LOAN
2 DEFECTS OUT OF 1 BILLION SIX SIGMA
4 DEFECTS OUT OF 1 MILLION

CCR/CTQ CCR/CTQ
10 DAYS NO DELAYED DELIVERIES
NO WRONG DELIVERIES
NO CRUMPPLED DELIVERIES

DMAIC CYCLE FOR SIX SIGMA IMPLEMENTAION

DEFINE
MEASURE
ANALYSE
IMPROVE
CONTROL