OPERATION MANAGEMENT

UNIT – 1
PART B

Definition, Objectives and Functions of Operation Management

DEFINITION:-
Operations management is an area of management concerned with designing
and controlling the process of production and redesigning business operations in
the production of goods or services
Simply put, operations management is the administration of business activities
to accomplish goals, achieve higher productivity, and maximize profitability.

OBJECTIVES:-
Management is accountable for establishing and attaining objectives for the
company. It has to deliver a variety of objectives in all operations contemplating
the interest of all shareholders including, stakeholders, consumers, the
government and employees. The principal objective of any company must be to
use material and human resources to the maximum potential benefit, i.e., to
meet the financial objectives of a firm. And, they are survival, profit and
growth.
Survival: The essential objectives of any industry is survival. Management
must attempt to assure the continuation of the business. In order to survive, an
industry must gain enough funds to meet the costs that would be incurred.
Profit: Poor survival is not sufficient for the industry. Management has to make
sure that the company earns the profit. Profit contributes to a necessary catalyst
for the sustained successful performance of the firm. Profit is crucial for
meeting the costs and uncertainties of the business concern.
Growth: A firm requires to add to its chances, in the long run, for this it is
necessary for the concern to develop. To prevail in the business, management
must utilise adequately the growth potential of the firm.
FUNCTIONS:-
 i. Functions of management are as follows:
ii. Planning
iii. Organising
iv. Staffing
v. Directing
vi. Coordinating
vii. Reporting
viii. Budgeting

PLANNING:-
Planning involves the setting of goals and these predetermined goals are
accomplished with the help of managerial functions like planning, organising,
staffing, directing and controlling. Planning provides standards against which
actual performance is measured.

ORGANISING:-
Organizing is the function of management that involves developing an
organizational structure and allocating human resources to ensure the
accomplishment of objectives. The structure of the organization is the
framework within which effort is coordinated.

STAFFING:-
In management, staffing is an operation of recruiting the employees by
evaluating their skills and knowledge before offering them specific job roles
accordingly. A staffing model is a data set that measures work activities, how
many labor hours are needed, and how employee time is spent.

DIRECTING:-
Direction is an aspect of management that deals directly with influencing,
guiding, supervising, and motivating staff for the achievement of organizational
goals.

COORDINATING:-
Coordination is the function of management which ensures that different
departments and. groups work in sync. Therefore, there is unity of action among
the employees, groups, and. departments.It also brings harmony in carrying out
the different tasks and activities to achieve. the organization's objectives
efficiently.

REPORTING:-
Operational reporting focuses on producing detailed reports of day-to-
day organizational operations. These reports include data pertaining
to production costs, records, resource expenditures, in-depth examinations of
processes, and even accounting.
BUDGETING:-
An operating budget is a detailed projection of what a company expects its
revenue and expenses will be over a period of time. Companies usually
formulate an operating budget near the end of the year to show expected activity
during the following year.

Problems: Make or Buy Decision and Forecasting

MAKE OR BUY DECISION:-

A make-or-buy decision is an act of choosing between manufacturing a product
in-house or purchasing it from an external supplier.
Make-or-buy decisions, like outsourcing decisions, speak to a comparison of the
costs and advantages of producing in-house versus buying it elsewhere.
There are many factors at play that may tilt a company from making an item in-
house or outsourcing it, such as labor costs, lack of expertise, storage costs,
supplier contracts, and lack of sufficient volume.
Companies use quantitative analysis to determine whether making or buying is
the most cost-efficient method.
A make-or-buy decision refers to an act of using cost-benefit to make a strategic
choice between manufacturing a product in-house or purchasing from an
external supplier. It arises when a producing company faces a diminishing
capacity, experiences problems with the current suppliers, or sees changing
demand.

The make-or-buy decision compares the costs and benefits that accrue by
producing a good or service internally against the costs and benefits that result
from subcontracting. For an accurate comparison of costs and benefits,
managers need to evaluate the benefits of purchasing expertise against the
benefits of developing and nurturing the same expertise within the company.

FORECASTING:-
Forecasting is the process of making predictions based on past and present data.
Later these can be compared (resolved) against what happens. For example, a
company might estimate their revenue in the next year, then compare it against
the actual results. Prediction is a similar but more general term. Forecasting
might refer to specific formal statistical methods employing time series, cross-
sectional or longitudinal data, or alternatively to less formal judgmental
methods or the process of prediction and resolution itself. Usage can vary
between areas of application: for example, in hydrology the terms "forecast"
and "forecasting" are sometimes reserved for estimates of values at certain
specific future times, while the term "prediction" is used for more general
estimates, such as the number of times floods will occur over a long period.
Risk and uncertainty are central to forecasting and prediction; it is generally
considered a good practice to indicate the degree of uncertainty attaching to
forecasts. In any case, the data must be up to date in order for the forecast to be
as accurate as possible. In some cases the data used to predict the variable of
interest is itself forecast

PART C

Various forecasting methods and types

FORECASTING METHODS:-

Qualitative Methods – These methods are based on emotions, intuitions,

judgments, personal experiences, and opinions. This means that there is no math
involved in qualitative forecasting methods. Delphi Method, Market Survey,
Executive Opinion, SalesForce Composite are part of this type of forecasting.
#1 – Delphi Method
The agreement of a group of experts in consensus is required to conclude in the
Delphi method. This method involves a discussion between experts on a given
problem or situation. An argument or brainstorming is done to complete that
everyone involved in the debate agrees to.
#2 – Market Survey
In a market survey, interviews and surveys of customers are made to understand
the task of the customer and tap the trend well in advance to deliver the right
product or service according to the changing needs of the customer.
#3 – Executive Opinion
As the name suggests, the executives or managers are involved in such
forecasting. This method is very similar to the Delphi method; however, the
only difference here is that the executives may or may not be experts of the
matter in question, albeit they have the experience to understand the problem or
situation and formulate a forecasting method that would bring out the best
possible result.
#4 – Sales Force Composite
The information and intuition of the salesperson determine the needs of the
customer and estimate the sales in the particular region or area assigned to the
salesperson. This information is vital in forecasting the needs of the customer,
which can be used to make necessary changes in the business to meet the needs
of the customer and identify the sales volumes beforehand.

Quantitative Methods – These methods depend wholly on mathematical or

quantitative models. The outcome of this method relies entirely on mathematical
calculations. Time Series and Associative Models are a part of this type of
forecasting.
#1 – Time Series Models
Time series models look at historical data and identify patterns in the past data
to arrive at a point in the future based on these historical values. Since the
historical data has a pattern, it becomes evident that the data in the future should
also have a pattern, and this method looks at cracking the pattern in the future so
that there is very little deviance from the actual calculations and the outcomes in
the real world.
#2 – Associative Models
Associative models look at the variable that is being forecasted as being related
to other variables in the system, which means each variable is associated with
the other variable in the system. The forecast projections are made based on
these associations.

TYPES OF FORECSATING:-
Organizations use three major types of forecasting (economic, technological and
demand forecasting) in planning the future of their operations. All forecasts lead
to demand forecasting.

ECONOMIC FORECASTING:-
Economic forecasting is the process of attempting to predict the future condition
of the economy using a combination of widely followed indicators. Government
officials and business managers use economic forecasts to determine fiscal and
monetary policies and plan future operating activities, respectively.

TECHNOLOGICAL FORECASTING:-
Technological Forecasting can be defined as a probabilistic prediction of
technological changes in terms of future characteristics of useful machines,
systems or procedures. In other words, technology forecasting attempts to
predict rate of technology advance. Primarily Technological Forecasting
attempts to bring potential future technology into focus.

DEMAND FORECASTING:-
Demand forecasting is known as the process of making future estimations in
relation to customer demand over a specific period. Generally, demand
forecasting will consider historical data and other analytical information to
produce the most accurate predictions.

UNIT 2
PART B

MRP – Manufacturing Resource Planning

Material Requirements Planning (MRP) is a standard supply planning system to
help businesses, primarily product-based manufacturers, understand inventory
requirements while balancing supply and demand. Businesses use MRP
systems, which are subsets of supply chain management systems, to efficiently
manage inventory, schedule production and deliver the right product—on time
and at optimal cost.
MRP Steps and Processes
The MRP process can be broken down into four major steps:
Identifying requirements to meet demand.
The first step of the MRP process is identifying customer demand and the
requirements needed to meet it, which starts with inputting customer orders and
sales forecasts.
Using the bill of materials required for production, MRP then disassembles
demand into the individual components and raw materials needed to complete
the build while accounting for any required sub-assemblies.
Checking inventory and allocating resources.
Utilizing the MRP to check demand against inventory and allocating resources
accordingly, you can see both what items you have in stock and where they
are—this is especially important if you have inventory across several locations.
This also lets you see the status of items, which gives visibility into items that
are already allocated to another build, as well as items not yet physically in the
warehouse that are in transit, or on order. The MRP then moves inventory into
the proper locations and prompts reorder recommendations.
Scheduling production.
Using the master production schedule, the system determines how much time
and labor are required to complete each step of each build and when they need
to happen so that the production can occur without delay.
The production schedule also identifies what machinery and workstations are
needed for each step and generates the appropriate work orders, purchase orders
and transfer orders. If the build requires subassemblies, the system takes into
account how much time each subassembly takes and schedules them
accordingly.
Identifying issues and making recommendations.
Finally, because the MRP links raw materials to work orders and customer
orders, it can automatically alert your team when items are delayed and make
recommendations for existing orders: automatically moving production in or
out, performing what-if analyses, and generating exception plans to complete
the required builds.
Benefits of MRP
MRP systems allow you to plan and schedule production efficiently, making
sure materials move through the work order quickly and helping businesses
fulfill customer orders on time.
An MRP system that is integrated across an organization eliminates manual
processes, such as pulling historical sales and existing inventory. You spend less
time building Gantt charts and production flows to understand when and where
you need product available, which frees up time and removes a layer of
complexity.
When builds are complex and require multiple sub-assemblies within the work
order, it’s easy to miscalculate timing. An MRP helps you understand all of the
components that go into each sub-assembly and how long it takes to complete
each step, preventing delays in the production cycle and increasing production
yield.

Importance of Plant Layout, various types of Plant Layouts ( Product,

Process, Fixed, Cellular Manufacturing, Service Facility, Hybrid (
Combinational) Layouts)

IMPORTANCE OF PLANT LAYOUT:-

Increases Efficiency: A good plant layout will help to increase efficiency by
optimizing workflow and reducing material flow.
Enhances Productivity: With fewer obstructions and less wastage, better
communication and a more streamlined flow of the production process, a well-
organized plant layout can result in higher productivity.
Reduces Wastage: Poor layouts can cause wastage of resources due to
inefficient and ineffective production line.
Minimizes Risk and Accidents: Improved safety can be achieved in the
workplace by minimising obstructions and unnecessary equipment.
Enhances Employee Job Satisfaction: An efficient layout increases employee
job satisfaction as they are able to perform their duties quickly and precisely
with less confusion.
Responsible for Maximizing Efficiency: A well-designed plant layout takes
into account various factors such as material flow, production demands and
human resources. As a result, it can maximize efficiency
Develops Economy of Scale: Plant layouts support economies of scale and can
help to increase profits by reducing production costs.
Manages Transportation: A well-thought-out plant layout will limit the
amount of transportation necessary. This reduces the cost of production and
improves efficiency.
Facilitates Communication: Plant layout makes communication between
departments and workers much easier through enhanced visibility.
Streamlines Maintenance: By removing obstructions from areas that are
necessary for maintaining the machinery, a good plant layout has the ability to
minimize downtime and costs associated with repairs.

VARIOUS TYPES OF PLANT LAYOUT:-

PRODUCT
A product layout, also known as “line layout”, arranges production resources
around the product or service produced by that resource. That is, the resources
are arranged and dedicated to a particular product or service. For service
businesses, the resources are arranged around a specific group of customers
PROCESS
A process layout is a type of facility layout. Organizations often use process
layouts to design floor plans and arrange equipment for maximized efficiency.
Plants with a process layout may arrange work stations, machinery, tools and
other equipment in groups according to the functions they perform.
FIXED
The fixed layout permits a product to maintain at a particular place, and the
needed resources like manpower, machinery, material, equipment, etc. are
transported to the product's location. In other words, the place of the main
element or the product section remains fixed because of the larger size or
substantial body. Additionally, the expense of moving or transportation costs
will be lesser on account of moving assets when contrasted with the
transportation cost associated with the movement of the product.
CELLULAR MANUFACTURING
Cellular manufacturing refers to a manufacturing strategy used to arrange
different machines functionally in specific geometric layouts and larger
functional units known as manufacturing cells to optimize the production
process.
SERVICE FACILITY
Service Facility means the Contractor-operated, physical location where the
Contractor's elevator mechanics report. Service Facility means buildings and
structures, including fixed machinery and equipment, used or to be used to
service goods.
HYBRID COMBINED LAYOUT
Combined layout types are used by most of the manufacturing units. For
instance, both process and product layout can be part of the manufacturing
process. Such types of combined layouts are termed as hybrid layouts.

PART C
Capacity Planning and Various types of Capacity Planning

CAPACITY PLANNING
Capacity planning is the process of determining the production capacity needed
by an organization to meet changing demands for its products. In the context of
capacity planning, design capacity is the maximum amount of work that an
organization is capable of completing in a given period. A capacity planning
process involves determining how much production capacity is required to meet
changing demand for products. Design capacity refers to an organization's
maximum capacity to accomplish work over a given time period in capacity
planning.

TYPES OF CAPACITY PLANNING:-

Capacity planning itself can be split into three types: workforce, product, and
tool. Together they ensure that you have the right amount of three main
resources for the short- and long-term.
Workforce Capacity Planning
This capacity planning strategy ensures that you have the workforce needed to
meet demand. It’s all about having the right number of workers and hours
available to not just complete jobs but complete them well. Should you need to
hire more workers (or possibly downsize) you’ll know how far in advance you
need to start making changes to accommodate the length of the recruiting and
onboarding process.
Product Capacity Planning
This capacity strategy ensures that your business is equipped with the right
number of products or resources needed to fulfill deliverables. For example, a
pet store needs things like food, pet toys, and equipment like carriers, leashes,
and cages. These are all things which are required to fulfill demand.
Tool Capacity Planning
Finally, this type of capacity planning strategy ensures that your business is
equipped with the necessary tools. Such tools may include machinery, vehicles,
assembly line parts, and anything else needed to create and deliver your product
or service in a timely manner.

UNIT 3
PART B
Purchase Management – Right Quality, Selection or Proper Vendor
(Selection Criteria)
The vendor selection process is important because vetting will help your
business avoid low-quality or fraudulent vendors. Your company achieves better
terms and reasonable pricing through competitive bids. The vendor selection
process includes getting customer references. You’ll ensure that a vendor is
financially viable and can make timely product or service deliveries to meet
your business needs.
Strategy and competency in the supplier selection process contribute to a
company’s vendor risk management, enterprise risk management program,
financial results, cash flow, and customer satisfaction.
As part of the procurement process, use a company-specific vendor selection
criteria list and approved vendor list. Use Thomasnet and AI software tools to
identify potential vendors by product type. Check with your industry’s trade
association and non-competing businesses for vendor recommendations.
Use e-Procurement systems to automate vendor selection.
E-procurement systems efficiently handle:
• Finding vendors
• RFI, RFP, or RFQ uploading and responses
• Vendor bidding and auctions
• Vendor evaluation
• Negotiations
• Contracts
Document repositories and communications
Procurement includes outsourcing to service providers. These service providers
include janitorial companies, freelancers, and other independent contractors.
Seek recommendations, read customer reviews, and view work samples if
possible. Employees intending to use the services are stakeholders. They will be
part of the evaluation team assessing potential service vendors.

Store Management - Functions, Locations & Layout of Stores, why is it

important?
Store management is concerned with ensuring that all the activities involved in
storekeeping and stock control are carried out efficiently and economically by
the store personnel.

The basic responsibilities of store are to act as custodian and controlling agent
for the materials to be stored, and to provide service to users of these materials.
Proper management of store systems provide flexibility to absorb the shock
variation in demand and enable purchasing to plan ahead.

Since the materials have a cost, the organization is to manage the materials in
store in such a way so that the total cost of maintaining materials remains
optimum and an efficient store management can help with this.

Management has normally the following main objectives:

• To ensure uninterrupted supply of materials without delay to various users of
the organization.
• To prevent overstocking and understocking of the materials.
• To ensure safe handling of materials and prevent their damage.
• To protect materials from pilferage, theft, fire and other risks.
• To minimize the cost of storage.
• To ensure proper and continuous control over the materials.
• To ensure most effective utilization of available storage space.
• To optimize the efficiency of the personnel engaged in the store.

An efficient store management can ensure that right materials reaches right
person in right time hence avoiding any kind of production delays. It also
ensures that materials are stored properly hence least wastage of materials
occurs.

PART C
Supply Chain Management & various strategies applied for effective SCM
(Purchase, Storage, and Utilization)
Supply Chain Management (SCM) involves the flow of goods and services in
an efficient manner. It encompasses all the steps involved in procuring raw
materials through to the finished goods, in a way that is streamlined and
provides value to the customer.
As any successful business owner will tell you, SCM is an extremely crucial
part of operations. It establishes strong communication and relationships with
suppliers, helping to avoid shipment delays and minimize logistical errors.
Efficient SCM gives you better negotiating power to get the best rates and
products in the shortest time possible. In turn, this reduces inventory costs and
improves the overall planning and efficiency of your operations.
Supply chain management is the management of the flow of goods and services
and includes all processes that transform raw materials into final products. It
involves the active streamlining of a business's supply-side activities to
maximize customer value and gain a competitive advantage in the marketplace.
Supply chain management (SCM) is the centralized management of the flow of
goods and services and includes all processes that transform raw materials into
final products.By managing the supply chain, companies can cut excess costs
and deliver products to the consumer faster and more efficiently. Good supply
chain management keeps companies out of the headlines and away from
expensive recalls and lawsuits. The five most critical elements of SCM are
developing a strategy, sourcing raw materials, production, distribution, and
returns.
A supply chain manager is tasked with controlling and reducing costs and
avoiding supply shortages
Supply chain management (SCM) represents an effort by suppliers to develop
and implement supply chains that are as efficient and economical as possible.
Supply chains cover everything from production to product development to the
information systems needed to direct these undertakings.
Businesses rely heavily on a good supply chain system to oversee the entire
manufacturing process, from raw material procurement to product production
and distribution to customers. Supply chain management is divided into several
sections, including such as supply chain phases, features of supply chain and
elements of supply chain management. Integration, operations, purchasing and
distribution are the four elements of the supply chain that work together to
establish a path to competition that is both cost-effective and competitive.
Integration
Communicating and collaborating with all parties is a business strategy that
eliminates errors and saves money. Integrating each division with one another
combines expertise and builds teams. Manager duties become more efficient
and successful when teams are integrated into the sequence of processes, as it is
easier to monitor overall operations and identify areas for future improvement.
Operations
Supply chain operations are the backbone of the supply chain process, ensuring
your employees have consistent work. Managers monitor day-to-day operations
to ensure that various supply chain phases stay on track. Many companies today
have adopted lean manufacturing strategies, in which all processes are
consistently evaluated to determine which parts of your operations may become
more efficient. By monitoring equipment to ensure efficiency or knowing when
to decrease manpower, the operations team can make major improvements to
the supply chain system.
Purchasing
Knowing ahead of time what your supply chain process will look like within
your company is a crucial aspect. It is important to know exactly what goods to
purchase within your company, whether it is materials, supplies, tools, or
equipment. Hiring qualified purchasing personnel and ensuring that your
employees understand inventory management are critical components of a
strong supply chain. This ensures that your company does not run short on
materials, causing production to be significantly delayed. Having the wrong
person in this position can be detrimental to your business as there is potential
to overbuy raw materials and strain your company’s budget.
Distribution
The final step in the supply chain is when your product is received by
customers, either from store shelf or through direct shipping. For products to
reach their final destination, supply chain distribution must be well
planned. Implementing logistics software into your company for employees to
learn or outsourcing a third-party logistics (3PL) company will ensure products
are handled properly so that they may reach customers quickly which is the goal
of a distributor.
Knowing the 4 elements of supply chain management will help you have a
better understanding of what to focus on and improve within your company.
Being able to meet the supply and demand need of your company’s product will
significantly improve customer relationships as well as overall business
performance.
It might be challenging to keep track of all other elements of your business
while troubleshooting issues in your manufacturing process. Outsourcing a 3PL
for supply chain management can help reduce the stress that comes with
running your business, allowing your company to focus on identifying problems
and developing solutions. NewStream Enterprises, LLC provides
excellent supply chain management solutions, managing all portions of your
supply chain from procurement to fulfillment to maximize your customers’
satisfaction. Using NewStream’s services can help your business focus on
other parts of its operations while also improving its overall performance.

UNIT 4
PART B
Inventory Management – Problems - ABC Analysis
ABC analysis is an important technique when managing materials. It informs a
number of supply chain functions including sourcing, procuring, receiving, and
inventory management. Simply put, ABC analysis is the categorization of items
into three categories (A, B, and C) to determine levels of importance.
Let’s break that down a little further. Category A items are regularly counted
and tightly controlled, while Category B items are counted somewhat regularly
and loosely controlled. Category C items are counted the least frequently and
controlled loosely. ABC inventory classification is critical for successful
inventory management for several reasons.
It allows supply chain managers to:
• Identify the inventory items that pose the biggest business risks due to theft or
damage, and pose the largest opportunities from to sales.
• Help warehouse managers and other supply chain professionals to properly
prioritize their time
Empower warehouse managers to achieve close to 100% inventory accuracy.
• Generally speaking, there are two popular methods of ABC classification.
• Some supply chain professionals categorize items based on how frequently
they move.

For instance, frequently ordered items would sit in Category A, items ordered
somewhat often would sit in Category B, and items ordered less frequently
would sit in Category C.

The justification for this method is that fast-moving items are more likely to
experience stockouts. This means they’re more susceptible to loss, theft,
spoilage, or damage. Consequently, warehouse managers keep a closer eye on
items with more frequent inventory counts.
Other supply chain managers prefer to categorize items based on their value.
The most expensive items fall into Category A; items with an average price fall
into Category B; and the cheapest items fall into Category C.
The justification for this method is that these items represent the highest
individual sales for a company and, therefore, the biggest potential loss. This
would also allow managers to do the right inventory replenishment decisions.
In either case, the same logic applies: Companies have a limited amount of
time, so they want to carefully allocate their time, energy, and resources to the
areas of the business they value most.

Work Study, Method Study – Steps, Methodologies, Techniques, Types of

Method Study, Effective measurement of Method Study
Work study is the investigation, by means of a consistent system of the work
done in an organization in order to attain the best utilisation of resources i.e.
Materials, Machines, Men and Money. All the technologies and management
systems are related with productivity.

In nutshell work study is mainly concerned with the examination of human

work. In fact planning is not possible unless one knows how long it will take to
do a particular job. Thus time is very important to the manufacturer who must
keep to promise, to estimate quantities and to other industrial and business
arrangements or organizations.

Work study is not a theoretical concept but essentially a practical one and deals
with human beings who have their own attitude and style of working. So the
success of work study is dependent upon the relations between the
labour/employees and the management.

Work study involves lot of changes in various working methods. Since the
manpower in general does not like changes but prefers to continue as already
doing, so there will always be a tendency to resist any modification or new
method suggested by work study people (officers/workers) and the manpower
and the workers have confidence in the ability, integrity and fair-mindedness of
work study man, there is a good chance that sound proposals will be accepted
willingly by the manpower. Generally work study is used to describe a complete
set of techniques with the help of which work can be simplified, standardized
and measured.

PART C
Time Study, How the work is measured, how time is measured?
Time Study is the original technique of work measurement, simple in concept
though it does require a high degree of concentration and expertise on the part
of the observer. Direct time study is the technique principally used for the
measurement of repetitive work, ie work which follows a defined pattern and
method. The accuracy of the technique is dependent on a number of factors
although the most important and essential ingredient is the number of
observations recorded of the same operation, process or procedure to establish a
representative time.

The four essentials for the formal time study of any activity are:
An accurate specification of where the job starts and ends and a precise
description of the method used including details of the workplace layout,
materials, machines, tools, equipment and conditions etc.
A system of recording the actual element times (observed times) taken to carry
out the job under observation, highlighting any occasional elements or time to
be excluded.
A clear concept of ‘standard rate of working’ and to be able to performance rate
to adjust observed time.
A means of assessing the amount of rest which should be associated with the
job.
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.It is concerned with the duration of time
it takes to complete a work task assigned to a specific job. It means the time
taken to complete one unit of work or operation it also that the work should
completely complete in a complete basis under certain circumstances which
take into account of accountants time.
Work measurement helps to uncover non-standardization that exist in the
workplace and non-value adding activities and waste. A work has to be
measured for the following reasons:
• To discover and eliminate lost or ineffective time.
• To establish standard times for performance measurement.
• To measure performance against realistic expectations.
• To set operating goals and objectives.

UNIT 5
Maintenance Management – Problems

What Are the Challenges Faced by Maintenance Managers?

The challenges faced by maintenance managers are discussed below:

1. Unplanned Maintenance
Unplanned maintenance is not good for business, it takes place when an
unexpected breakdown occurs. Informal and quick actions are taken to address
the issue and resolve them. In this process inspection, repairing, old or burnt
parts are removed and new spare parts are installed. These types of activities are
done in this process. Unplanned downtime is the result of wrong anticipation or
non-anticipation at all.
2. Unscheduled Maintenance
Unscheduled maintenance and unplanned maintenance do sound similar but
they are different. For instance, unplanned maintenance is unexpected and there
is no planning for the event. Unscheduled maintenance is planned but there is
no scheduling done such as deciding a particular time allocation, technician
allocation, what activities need to be done, and so on! This is one of the most
common challenges for maintenance managers.
3. Manual Process
In maintenance, part accuracy is very important one small error can lead
to machine failure. It can impact the efficiency of employees and machines as
well.
Most of the work is affected due to the manual process and when human is
involved chances of errors increases. When things are done manually, you don't
get accurate data, and when decisions are made on manual data.
Then, most chances are that it will not get you expected results. Therefore, the
manual practice shall be avoided as it is not reliable.
4. Budget Issues
Managers try to balance expenditure on labor cost, inventory, service expenses,
etc. The management and managers always have conflict about the budget as
the management thinks that it is unnecessary expenses.
However, in these cases, the maintenance manager needs to make the
management understand how it will be beneficial for them in the long run. Once
the budget problem is sorted many problems will be automatically resolved.

Other Asset Management Features We Provide To Our

Clients

Asset Management Asset Tracking CMMS

Software Software Software

Inventory Preventive Utility

Management Maintenance Management
Software Software Software

Purchase
Purchase Requisition Helpdesk Ticketing
Order
Software System
System

5. Increasing Asset Productivity

Increasing productivity is one of the main challenges that a manager faces. To
do so, managers need to shift from reactive maintenance to proactive
maintenance.
Sometimes due to the management proactive maintenance is not implemented.
However, the manager can show real-world scenarios.
For instance, as per the blog “A company can save between 12-18% using
preventive maintenance over reactive maintenance. Every dollar spent on
preventive maintenance will save you five dollars on other expenses”
6. Time Management
Time management is very important to deliver quality and productive work. But
when you have lots of tasks in your daily activities such as meeting with other
teams, assigning tasks to maintenance teams, reading e-mails, speaking with the
vendor for inventories. Some unpredicted events also occur such as asset
failure.
Therefore, the maintenance team and manager need to prioritize their daily task
especially maintenance tasks.

Dimensions of 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.

PART C
Control chart
Meaning:-
The control chart is a graph used to study how a process changes over time.
Data are plotted in time order. A control chart always has a central line for the
average, an upper line for the upper control limit, and a lower line for the lower
control limit. These lines are determined from historical data.
Control charts are the tools in control processes to determine whether a
manufacturing process or a business process is in a controlled statistical state.
This chart is a graph which is used to study process changes over time. These
charts are also known as Shewhart charts or process-behavior charts. The data is
plotted in a timely order. It is bound to have a central line of average, an upper
line of upper control limit and a lower line of lower control limit. Besides, the
data obtained from the process can also be applied in making predictions of the
future performances of the process.
When the analysis made by the control chart indicates that the process is
currently under control, it reveals that the process is stable with the variations
that come from sources familiar with the process. No changes or corrections are
required to be made to the parameters of process control.
Types of Control Charts
After the basic chart is created, one can use various menus and options to make
necessary changes that may be in a format, type or statistics of the chart.
To create a chart, it is not necessary to know the name or structure of any chart.
You need to select the columns or variables that are to be charted and drag them
in respective zones. When the data column is dragged to the workplace, the
user starts working on it to create an accurate chart that is based on the data type
and given sample size.
Control Charts for Variables
The control charts of variables can be classified based on the statistics of
subgroup summary plotted on the chart.
X¯ chart
R Chart
S Chart
X¯ chart describes the subset of averages or means, R chart displays the
subgroup ranges, and S chart shows the subgroup standard deviations.
Regarding the quality that is to be measured on a continuous scale, a particular
analysis makes both the process mean and its variability apparent along with a
mean chart that is aligned over its corresponding S- or R- chart.
Levey – Jennings Charts
This chart displays a mean process based on a long-term sigma with control
limits. The control limits are placed such that the distance between them and the
centerline is ‘3s’. The standard deviation value ‘s’ for these charts is determined
by the same method as the standard deviation for the distribution platform.
Control Charts for Attributes
This type of data is usually continuous and based on the theoretical concept of
continuous data. Count data is a different kind of data available which is also
known as level counts of character data. The interesting variable is a unique
count here for the number of blemishes or defects per subgroup. These attribute
charts are appropriately applied for such discrete count data.
Pre-summarize Charts
The data can be combined into one measurement unit if the data you have,
contains repetitive measurements of the same unit process. But this is not
recommended until the data includes repeating measurements of every
measurement process.
Typically, pre-summarize chart summarizes the process columns into standard
deviations of sample means based on the size of the sample.
Features of Control Charts
• A control chart consists of various attributes as listed below:
• Points represent a statistic of measurements of a quality characteristic in
samples taken from the process of the data at different times. Here, the
statistic can be a mean, range, proportion, etc.
• For all samples, the mean of this statistic is calculated. For example, the
mean of the means, the mean of the ranges, the mean of the proportions.
• At the mean of the statistic, a centerline must be drawn.
• For all the samples, the standard deviation of the statistic is to be
calculated.
• The natural process limits, i.e. upper and lower control limits (these are
separate lines), indicate the origin at which the process output is
considered statistically ‘unlikely’ and typically drawn at three standard
deviations from the centerline. That means two standard deviations above
and below the centerline.