OM Viva Notes

 Simple Manufacturing Process:

Manufacturing is a process by which goods or services are produced. It is process of
changing input into output wherein inputs are raw materials, parts, consumable, energy,
engineering details, production schedule, IT and output are produced goods, transported
goods, delivered messages, cured patient, serviced customers.
Productivity = Output/Input
Objective of manufacturing process is
- Producing right kind of goods and services that satisfy the customer needs (effectiveness
objective)
- Maximising output of goods and services with minimum resource inputs (efficiency
objective)
- Minimising the timing (lead time objective)
- Minimising cost of producing goods or rendering a service (cost objective)

 Types of Layout
1. Process or Functional Layout
- It is generally associated with batch production
- The factory is divided into departments or process units and within these all similar
facilities are grouped together.
- It is suitable when products are non-standard or there is variation in processing times of
individual operations

Principal of good location:-

1) Regional factor
2) Community factor
3) Site selection
4) Transportation facility
5) SAFTEY requirements
6) Availability of land and cost
7) LABOUR AND WAGES

2. Product or line Layout

- Also called as layout of sequence
- The layout of plant, shape and size of its building, location of service yards & storage
yards, position of material handling equipment is such that the material flow
unidirectionally and at steady rate.
- It is suitable when products are standard and to be produced in large quantities
- Eg: assembly line of automobiles, refrigerator, radios, television sets.

3. Project or fixed position layout

 - The heavy materials, components of sub-assemblies, under this layout remains fixed at
one place.
- Men, machines, and tools required are brought to the place to complete the job.
- It is suitable when one or few pieces of identical product are to be manufactured or
when assembly consist of large number of heavy parts, the cost of transportation is very
heavy.
- Eg: Aeroplane, ships.
 What is EOQ
- Economic order quantity (EOQ) is the ideal order quantity a company should purchase to
minimize inventory costs such as holding costs, shortage costs, and order costs.
- The EOQ is a company's optimal order quantity that minimizes its total costs related to
ordering, receiving, and holding inventory.
- One of the important limitations of the economic order quantity is that it assumes the
demand for the company’s products is constant over time.
Q=√2DS/H

Q=EOQ units
D=Demand in units (typically on an annual basis)
S=Order cost (per purchase order)
H=Holding costs (per unit, per year)
 Types of inventories
Inventory is defined as a stock or store of goods. These goods are maintained on hand at or
near a business's location so that the firm may meet demand and fulfil its reason for
existence.

Types:

- Raw Materials
- Work -In – Progress
- Finished goods
- MRO goods (Maintenance, Repair, operating supplies)
 Components of supply chain
- Planning
- Information
- Source
- Inventory
- Production
- Location
- Transportation
- Return of goods

 What is method study

It is a systematic recording and critical examination of existing and proposed ways of doing
work, as a means od developing and applying easier and more effective methods and
reducing cost.
Benefits:
- Improved work environment
- Improved facility layout
- Better utilization of facility
- Greater safety
- Lesser material handling
- Smooth production flow
- Lower WIP

Steps of method study:-

Select- to analyze task
Record- proposed existing task
Examine- various criteria
Develop- better performance
Install
Maintain

Tools and Techniques of Method Study:-

Flow Process Chart: …
Flow Diagram: …
String Diagramflow process chart: …

Six types of manufacturing processes:-

Job shop manufacturing. …
Repetitive manufacturing. …
Discrete manufacturing. …
Batch process manufacturing. …
Continuous process manufacturing. …
3D printing. …
Machining. …
Joining.

Carrying costs are the various costs a business pays for holding inventory in
stock. Examples of carrying costs include warehouse storage fees, taxes,
insurance, employee costs, and opportunity costs.

Ordering Costs

Ordering costs include payroll taxes, benefits and the wages of the procurement
department, labor costs etc. These costs are typically included in an overhead
cost pool and allocated to the number of units produced in each period.
 Method study:-method study bus the systemic recording and critical
examination of existing & proposed way of doing work for effective cost
reduction .

Time study – time study required to manufacture each element of final product.

Factor affecting site selection of warehousing:-

Rent Rates & Taxes.

Workforce Availability, Labor Skills & Costs.

Roads, Highways & Traffic Flow.

Proximity to Airport, Railway Stations & Ports.

Markets & Local Environment Factors.

Building Availability & Utility Costs.

Why warehouse:-Warehousing allows for timely delivery and optimized

distribution, leading to increased labor productivity and greater customer
satisfaction. It also helps reduce errors and damage in the order fulfillment
process.

 Functions of warehousing
- Storage
- Price Stabilization (Fall in the prices of goods when their supply is in abundance
and rise in their prices during the slack season are avoided.)
- Risk Bearing (theft, fire, exploration)
- Financing (Loans can be raised from the warehouse keeper against the goods
stored by the owner. Goods act as security for the warehouse keeper.)  
- Grading and Packing (packing, convenient size)

 Mode of transportation
- Roadways
- Airways
- Waterways
- Pipelines
 - Railways

 Process for supplier selection

- Create supplier selection scorecard
- Identify suitable suppliers
- Rank the scorecard
- Negotiate
- Create contract

- Evaluating offers
- Operational capacity analysis
- Technical capability analysis
- Financial analysis
- Conclusion

Work measurement:- is the application of techniques which is designed to establish the time for an
average worker to carry out a specified manufacturing task at a defined level of performance. User-
planning, estimating, training and checking employees performance, cost control.

Technique of work measurements:- time study, synthetic study, work sampling, mtm( motion time
study, analytical estimation.

What is Setup Time?

Setup time is the interval needed to adjust the settings on a machine, so that it is ready to process a
job. Shortening the amount of setup time is critical for engaging in short production runs, so that a
business can more easily engage in just-in-time production. When this is done, a business can
profitably run smaller batches of products, since there is a reduced setup cost associated with each
incremental unit.

Work sampling:- statistical technique to determine time spent by worker in performing different
activities.

Steps :define task

Element of task

Format of task
Identify the person for sampling

Random sampling

Study and analyze

Result

Plan layout:- it’s reflective utilization of man, money , material, minute, machinary to minimize
wastege.

Most Common Flowchart Types:-

The Process Flowchart. Illustrate How a Process Works or Plan a Project with a Process Flowchart. …

The Workflow Chart or Workflow Diagram. Understand How Data and Documents Flow Within Your
Organization. …

The Swimlane Flowchart. …

The Data Flowchart.

Some of the major factors which affect plant layout are: (1) Policies of management (2) Plant
location (3) Nature of the product (4) Volume of production (5) Availability of floor space (6) Nature
of manufacturing process and (7) Repairs and maintenance of equipment and machines.

What are the cost associated with EOQ?

The economic order quantity (EOQ) refers to the ideal order quantity a company should purchase in
order to minimize its inventory costs. A company’s inventory costs may include holding costs,
shortage costs, and order costs.

What are different allowance considered in time study?

Relaxation allowance is the most essential part of the time added to the basic time. Other
allowances like contingency allowances, policy allowances or other special allowances are applied
under certain conditions only. Relaxation allowances are added so as to allow the worker or
operator to recover from fatigue.