Established under Section 3 of the UGC Act.

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E-CONTENT
Operations Management
MBA SEM I
Dr. Arshia Kaul
Established under Section 3 of the UGC Act. 1956 I Awarded Category - I by UGC

Gram: Lavale, Tal: Mulshi, Dist: Pune, Maharashtra, India Pin: 412115

E-CONTENT
Operations Management
MBA SEM I
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Self-Learning Material: E-Content

T2859 Operations Management (MBA I SEM I)

Authors : Dr. Arshia Kaul

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 CONTENT

MODULE - 1 : Introduction of Operations Management 01

MODULE - 2 : Types of Industries 13

MODULE - 3 : Facilities Location and Layout 23

MODULE - 4 : Production Planning and Control and 40

Project Management

MODULE - 5 : Maintenance Management 59

MODULE - 6 : Statistical Quality Control 69

MODULE - 7 : Productivity 92

MODULE - 8 : Lean Production System 107

MODULE - 9 : Service Operations Management and 118

Quality of Service
 MODULE - 1 INTRODUCTION OF
OPERATIONS MANAGEMENT

STRUCTURE
1.1 Learning Objectives
1.2 Introduction
1.3 Nature, Scope, Importance and Functions
1.4 Evolution from Manufacturing to Operations Management
1.4.1 Factory System, Manufacturing System, Quality Mass Customization
1.4.2 Contribution of Henry Ford
1.4.3 Contribution of Deming
1.4.4 Contribution of Crosby
1.4.5 Contribution of Taguchi
1.5 Summary
1.6 Keywords
1.7 Self-Assessment Questions
1.8 References

1.1 LEARNING OBJECTIVES

After studying this unit, you will be able to:
¡ Understand Nature, Scope, Importance and Functions
¡ Understand Evolution from Manufacturing to Operations Management
¡ Understand the contribution of founding fathers of Operations Management

1.2 INTRODUCTION
Every day, operations managers around the world create products to ensure societal well-being.
These goods come in a variety of shapes and sizes. They may be Whirlpool washing machines,
DreamWorks movies, Disney World rides, or Hard Rock Cafe meals. Every day, these businesses
manufacture thousands of intricate products that are supplied to customers when, where, and
how they purchased them. For more than 35 million visitors globally each year, Hard Rock
performs this. This is a difficult endeavour, and operations managers have demanding jobs
whether they work for Whirlpool, DreamWorks, Disney, or Hard Rock.
Restaurants and factories both fall within the purview of operations management (OM). The OM
methods are applicable to almost all productive organizations globally. No matter the setting-
whether it's an office, hospital, restaurant, department store, or factory-operations management
is necessary for the creation of goods and services. Additionally, successful applications of OM
concepts, tools, and procedures are necessary for the efficient production of goods and services.

01
1.3 NATURE, SCOPE, IMPORTANCE AND FUNCTIONS
Nature
Producing products and services is known as production. Operations management (OM) is the
collection of tasks that converts inputs into outputs to produce value in the form of goods and
services. All organisations engage in activities that produce products and services. The actions
that create goods in manufacturing companies are typically pretty clear. We may observe the
making of actual products like a Harley-Davidson motorcycle or a Sony TV in them.
The production function may be less visible in a company that doesn't produce tangible goods or
products. We frequently refer to these actions as services. Services could be "hidden" from the
general public and even the client. The product may be anything from moving money from a
savings account to a checking account to a liver transplant, replacing a vacant seat on a flight, or
paying for a student's education. The manufacturing processes that take place within the
company are frequently referred to as operations, or operations management, regardless of
whether the final outcome is a good or a service.

Importance of OM
The following is the importance of OM for organizations
1. One of the three key activities of any organisation is organisational management, which is
closely tied to all other business operations. It is critical to understand how the OM activity
works since it affects all companies that advertise (sell), finance (account), and produce
(operate). As a result, we research how individuals organise themselves for successful
business.
2. We research OM because we're interested in how commodities and services are made. The
area of our society that produces the goods and services we utilise is known as the
production function.
3. To comprehend what operations managers, perform, we study OM. Any position inside an
organisation can benefit from knowing what operations managers do in order to function
more effectively. Additionally, knowing OM will make it easier for you to investigate the
many rewarding employment prospects in the industry.
4. Because OM is such an expensive component of a company, we analyse it. Most
businesses invest a significant portion of their revenue in their OM function. In fact, OM
offers a significant opportunity for an organisation to increase its revenue and boost its
social impact.

Scope and Functions of OM

The following is the Scope of Operations Managers and how they function:
1. Design of goods and services: Defines a large portion of the operational requirements in
each of the other OM decisions. For instance, product design typically sets the top and
lower bounds of quality, along with significant consequences for sustainability and the
necessary human resources.
2. Managing quality: Establishes rules and procedures to identify and meet the quality
expectations of the client after determining these requirements.
3. Process and capacity strategy: Determines the procedure used to produce a good or service

02
 (i.e., the production process) and binds management to particular technology, quality,
human resources, and capital investments that control a large portion of the company's
fundamental cost structure.
4. Location strategy: Entails making decisions about proximity to clients, suppliers, and
talent while considering costs, infrastructure, logistics, and the government.
5. Layout strategy: To identify the effective flow of commodities, people, and information, it
is necessary to integrate capacity demands, personnel levels, technological requirements,
and inventory requirements.
6. Human resources and job design: Decides how to find, inspire, and keep employees who
have the necessary ability and abilities. The design of the entire system includes pricey and
essential human components.
7. Supply chain management: Determines how the supply chain will be integrated into the
firm's strategy, including decisions about what will be purchased, from whom, and under
what circumstances.
8. Inventory management: Examines how to order and store inventory while taking
consumer satisfaction, supplier capacity, and production schedules into account.
9. Scheduling: Establishes and executes intermediate- and short-term schedules that satisfy
client expectations while making effective and efficient use of personnel and facilities.
10. Maintenance: Requires decisions that take into account the staffing needs, production
demands, and facility capacity to maintain a dependable and stable process.

1.4 EVOLUTION FROM MANUFACTURING TO OPERATIONS MANAGEMENT

Although OM is a relatively new profession, it has a lengthy and fascinating history. The
discoveries and contributions of many people have improved our lives and the OM discipline.

1.4.1 FACTORY SYSTEM, MANUFACTURING SYSTEM, QUALITY MASS

CUSTOMIZATION

Figure 1.1: Evolution of Operations Management

1.4.2 CONTRIBUTION OF HENRY FORD

By 1913, Henry Ford and Charles Sorensen had merged their knowledge of standardised parts
with that of the meatpacking and mail-order industries' "quasi-assembly lines" and added the
ground-breaking idea of the assembly line, where people stood still and things moved. Henry

03
Ford used scientific management to speed up the manufacturing of the Model T, cutting the time
needed to manufacture a car from a peak of 728 hours to just 1.5 hours. Six workmen were pacing
along a conveyor belt as a Model T chassis slowly moved down it, picking up components from
evenly placed stacks on the floor and attaching them to the chassis. Because the Model T could be
built quickly and in large quantities, or "en masse," the term "mass production" was coined.

1.4.3 CONTRIBUTION OF DEMING

Frederick Taylor and W. Edwards Deming both agreed in 1950 that management had to do more
to enhance the working environment and business procedures in order to raise quality. The part
that management should play in quality improvement was underlined by W. Edwards Deming.
Quality, according to Deming, is the continual development of a reliable system. This definition
places emphasis on two ideas. The administrative, design, production, and sales systems must all
be statistically stable before anything else. This necessitates measuring quality parameters and
tracking them over time. The system is stable if these measures have a constant variance centred
around a constant average. The continual improvement of multiple systems to lower variation
and better meet customer needs makes up the second part of Deming's definition. In his
renowned 14 principles, Deming outlined his quality philosophy (Table 1.1).
He emphasised that senior executives should manage for the long term rather than sacrificing
quality for immediate financial gain. Deming suggested that top management should pay more
attention to long-term quality improvement and customer service than it does to quarterly
earnings reports and short-term goals. Along with others, he asserted that management should
stop relying on mass inspection to attain quality and place more emphasis on defect prevention.
Deming recommended using statistical techniques, competent supervision, and employee
training to achieve this goal.
Deming continued by urging management to remove boundaries between departments and
promote collaboration among employees in order to deliver high-quality goods and services. He
believed that a lot of the work standards, individual performance compensation schemes, and
quotas used by businesses hinder collaboration between people and departments and, as a result,
prevent quality development.
Deming was a fervent supporter of using statistics to improve and stabilise processes. You can't
get better quality by working harder. To identify variation causes, manage variation, and
eliminate product variation, employees and management need the right tools.
The majority of quality issues, according to Deming and other quality pioneers, are brought on
by inadequate processes rather than by subpar employees. They contend that management
should alter the system to improve quality rather than placing the burden for quality issues on the
employees. Management at all levels must take ownership of quality.

1.4.4 CONTRIBUTION OF CROSBY

He emphasised that the costs of poor quality (such as lost labour and equipment time, scrap,
downtime, and lost sales) far outweigh the cost of preventing poor quality in his 1979 book,
Quality Is Free. In his 1984 book, Quality Without Tears, he defined the absolutes of quality
management: quality is defined as conformance to requirements, quality results from
prevention, and the performance standard is "zero defects."
While Crosby, like Deming and Juran, emphasises the necessity of the management's
commitment and the elimination of error-causes, there are several areas where his approach to

04
quality differs significantly from Deming's. Deming attacked Crosby's emphasis on zero defects
as being directed at the incorrect population (workers) and leading to employee discontent.
Setting goals, a key component of Crosby's approach, has also come under fire for encouraging
undesirable accomplishment. The truth is that Deming was most likely responding to the misuse
of goals and slogans. If they had always been utilised correctly within the Crosby system,
Deming might not have condemned them.
The essence of Crosby's teachings is contained in what he calls the "four absolutes of quality."
The definition: Quality is conformance to requirements, not goodness.
The system: Prevention, not appraisal.
The performance standard: Zero defects.
The measurement: The price of non-conformance to requirements, not quality indices.
Based on these premises, he developed a 14-step methodology.
Crosby's 14 Steps
1. Management commitment: To clarify the management's stand on quality.
2. Quality improvement team: To run the quality improvement programme.
3. Quality measurement: To display current and potential non-conformance problems in the
manner that permits objective evaluation and corrective action.
4. Cost of quality: To define the ingredients of the cost of quality, and explain its use as a
management tool.
5. Quality awareness: To provide a method of raising personal concern among the personnel
in the company towards the conformance of the product and service, and the reputation of

05
 the company on the issue of quality.
6. Corrective action: To provide a systematic method of resolving the problems identified
through actions taken previously.
7. Zero defects planning: To examine the various activities that must be conducted in
preparation for formally launching the zero defects programme.
8. Supervisor training: To define the type of training that supervisors need in order to actively
carry out their roles with regard to the quality improvement programme.
9. Zero defects day: To create an event that will let all employees realise, through a personal
experience, that there has been a change.
10. Goal setting: To turn pledges and commitments into action by encouraging individuals to
establish improvement goals for themselves and their groups.
11. Error cause removal: To give individual employees a method of communicating to the
management, the situations that make it difficult for employees to meet the pledge to
improve.
12. Recognition: To appreciate those who participate.
13. Quality councils: To bring together professionals in the domain of quality for planned
communication on a regular basis with the workforce and management alike.
14. Do it over again: To emphasize that the quality improvement programme never ends.

1.4.5 CONTRIBUTION OF TAGUCHI

Japanese quality specialist Dr. Genichi Taguchi is well-known for his work in the field of product
design. He calculated that poor product design was responsible for as much as 80% of all
damaged goods. As it was cheaper and simpler to make modifications at this time than it was later
in the production process, Taguchi emphasised that businesses should concentrate their quality
efforts on the design stage.
Taguchi created methods to evaluate external impacts on processes (which he described to as
noise), which he then used to construct the signal-to-noise ratio as a metric of a process's quality.
The Taguchi Loss Function, which he created, is a quadratic function that quantifies the cost to
society of process variation that causes items to not be produced precisely at the desired values.
He created the Taguchi Method, a strategy for comprehending and improving the efficiency of
processes that makes use of orthogonal arrays and linear graphs. He also created the concept of
robustness, which is a process or product's capacity to function even in the face of unpredictable
external effects (noise).
Taguchi is renowned for using the design of experiments to improve product design. This
technique is an engineering strategy that focuses on creating robust designs that allow things to
function under a variety of circumstances. He thought that it was more challenging to manage the
environmental factors. The key component of Taguchi's strategy is a statistical technique that
quickly focuses on product variants that separate the undesirable qualities from the desirable
ones.
He argued that all potential barriers to product uniformity and long-term stability should be
researched, and safeguards should be included in the product design process itself. He referred to
it as the sturdy design idea. A product with a robust design can function under a variety of
circumstances.

06
Taguchi's Approach
1. Identify the main functions, side effects and failure modes.
2. Identify noise factors and the testing conditions for evaluating loss of quality.
3. Identify the quality characteristics to be observed and the objective functions to be
optimized.
4. Identify the control factors and their alternate levels.
5. Design the matrix experiment and define the data analysis procedure.
6. Conduct the matrix.
7. Analyse the data, determine optimum levels for the control factors and predict
performance under these levels.
8. Conduct the verification experiment and plan future actions.

1.5 SUMMARY
¡ It is critical to understand how the OM activity works since it affects all companies that
advertise (sell), finance (account), and produce (operate).
¡ We research OM because we're interested in how commodities and services are made.
¡ OM will make it easier for you to investigate the many rewarding employment prospects in
the industry.
¡ In fact, OM offers a significant opportunity for an organisation to increase its revenue and
boost its social impact.
¡ Henry Ford used scientific management to speed up the manufacturing of the Model T,
cutting the time needed to manufacture a car from a peak of 728 hours to just 1.5 hours.
¡ Quality, according to Deming, is the continual development of a reliable system. This
definition places emphasis on two ideas. The administrative, design, production, and sales
systems must all be statistically stable before anything else.
¡ In his 1984 book, Quality Without Tears, Crosby defined the absolutes of quality
management: quality is defined as conformance to requirements, quality results from
prevention, and the performance standard is "zero defects."
¡ Japanese quality specialist Dr. Genichi Taguchi is well-known for his work in the field of
product design.
¡ The Taguchi Loss Function, which he created, is a quadratic function that quantifies the
cost to society of process variation that causes items to not be produced precisely at the
desired values.

1.6 KEYWORDS
¡ Operations Management: Operations management (OM) is the collection of tasks that
converts inputs into outputs to produce value in the form of goods and services.
¡ Quality: Establishes rules and procedures to identify and meet the quality expectations of
the client after determining these requirements.
¡ Mass Customization: build to order

07
¡ Taguchi Loss Function: The Taguchi Loss Function, which he created, is a quadratic
function that quantifies the cost to society of process variation that causes items to not be
produced precisely at the desired values.
¡ Design of Experiments: This technique is an engineering strategy that focuses on creating
robust designs that allow things to function under a variety of circumstances.

1.7 SELF ASSESSMENT QUESTIONS

Long questions
1. Describe Evolution of operations management?
2. What is the importance of operations management?
3. What is the scope of operations management?
4. What are Crobsby's 14 steps of quality management?
5. What is Deming's 14 step methodology?
6. What is the contribution of Taguchi to operations management?

Short questions
1. What are the four absolutes of Crosby?
2. Give differences between the goods and services?
3. What is mass customization in operations?
4. Briefly describe the Taguchi loss function.
5. What is the concept of design of experiments?
6. What is the concept of service operations?

Fill in the blanks

a) When a tangible product is NOT included in the service, it is called _______ (Pure
Service)
b) The person who introduced standardized, interchangeable parts was _______ (Eli
Whitney)
c) The initial decision whether a manufacturer fabricates in-house or uses an outside supplier
is known as _____________________? (A Make-or-Buy decision)
d) The physical environment of a service operation is often referred to as the
___________________? (Servicescape)
e) _______ is an organized creative approach which has its objective, the efficient
identification of unnecessary cost which provides neither quality nor use nor life
appearance nor customer features. (value analysis)
f) ________ is the analysis an comparisons of items to group them into families with similar
characteristics. (group technology)

08
True/ False
1. Eli Whitney was the person most responsible for popularizing interchangeable parts in
manufacturing - True
2. Intangibility is a feature of goods. False
3. Deficit items are those materials and equipments which have no immediate use but have
accumulated due to faulty planning, forecasting and purchasing. False
4. A fixed automated system is one that is capable of producing a variety of products( or parts)
with virtually no time lost for changeovers from one product to the next. False
5. Edward Deming is called the father of scientific management. False
6. Employee punishment is an objective of operations management. False

Multiple choice question

1. Services often:
a) are tangible.
b) are knowledge based.
c) are low in customer interaction.
d) have consistent product definition.

2. The "father" of scientific management is

a) Henry Ford.
b) Eli Whitney.
c) Michael Schumacher.
d) Frederick W. Taylor.

3. The three major business functions necessary to all organizations are

a) marketing, production, operations.
b) Finance/accounting, personnel, operations.
c) marketing, finance/accounting, production/operations.
d) marketing, finance/accounting, research & development.

4. Which of these is NOT one of the basic functions of the management process.
a) Staffing
b) Leading
c) Controlling
d) Inspecting

09
5. Which of these statements accurately captures a current trend in operations?
a) Products and services are designed more quickly and by teams.
b) Jobs are increasingly specialized as workers focus on basic assembly tasks.
c) Cost competition is more important than any other basis for competition.
d) There is increased focus on local markets and local competition.

6. The person who developed plant-wide quality control systems was

a) Frederick Taylor.
b) W. Edwards Deming.
c) Henry Ford.
d) Eli Whitney.

Match the following

Column A Column B
a) Walter Shewhart 1. Coercion (b)
b) Not a Scientific management principle 2. Quality is easily measured (d)
c) Henry Ford 3. enterprise asset management (e)
d) Manufacturing operations 5. Henry Fayol (f)
e) Integrated unit 6. Statistical Quality Control (a)
f) Specialization of labour in manufacturing 7. Assembly Line operations (c)

10
¡ Case Study

Source: Render Heizer (12th Edition)

11
Questions:
1. Keeping the case in mind, how can you compare the operations between Hard rock café
and dominos?
2. What are the functions of operations management used in a restaurant? Describe as an
application to the operations management

1.8 REFERENCES
¡ Heizer, J., Render, B., Munson, C., & Sachan, A. (2017). Operations management:
sustainability and supply chain management, 12/e.
¡ Roy, R. N. (2007). A modern approach to operations management. New Age
International.

12
 MODULE - 2 TYPES OF INDUSTRIES

STRUCTURE
2.1 Learning Objectives
2.2 Introduction: Variety of Businesses -Integration of Manufacturing and Services
2.3 Scale of Operations
2.4 Methods of Manufacturing
2.4.1 Project Process
2.4.2 Jobbing
2.4.3 Batch Production
2.4.4 Flow/Continuous Production
2.5 Summary
2.6 Keywords
2.7 Self-Assessment Questions
2.8 References

2.1 LEARNING OBJECTIVES

After studying this unit, you will be able to:
¡ Understand variety of businesses - integration of manufacturing and services
¡ Understand scale of operations
¡ Understand the methods of manufacturing and their characteristics

2.2 INTRODUCTION: VARIETY OF BUSINESSES -INTEGRATION OF

MANUFACTURING AND SERVICES
Manufacturing (or production) is a conversion process that results in the tangible output of a
product. A service-based conversion process, on the other hand, results in an intangible output,
such as a deed, a performance, or an effort. Mesfin Industries, for instance, creates a lot of
tangible goods, whereas Ethiopian Passenger air transportation services are provided by airlines
as an intangible output.
Typically, manufacturing and service operations are distinguished by the following
characteristics: o Consumption of output, tangible and intangible; nature of work (jobs); level of
customer contact; customer involvement in conversion; measurement of performance.
Simply put, manufacturing is distinguished by tangible outputs (products), outputs that
customers consume over time, jobs that require less labour and more equipment, little customer
contact, no customer involvement in the conversion process (in production), and sophisticated
methods for measuring production activities and resource consumption as products are made.

13
Contrarily, service is defined by intangible outputs, outputs that customers consume right away,
jobs that require more labour and less equipment, close customer contact, regular customer
involvement in the conversion process, and simple methods for measuring conversion activities
and resource consumption. However, other services, such as Internet, telephone, and software
services for computers, are equipment-based. Some services, like tax preparation, hair styling,
and golf teaching, are based on individuals.
Let's examine the conversion process's consumer participation elements. Managers may find it
helpful to distinguish between throughput and output types of consumer participation in service
operations. Throughput is an item travelling through the process, whereas output is a service that
is generated. The medical care provided to the child in a paediatrics clinic is the clinic's output,
and thus the youngster also counts as a throughput because of the conversion process. The
students attending Addis Ababa University are in a similar situation. In contrast, the customer
does not go through the conversion procedure at a fast-food establishment. The throughputs are
the food items while they are being prepared and transformed, whereas the outputs are the
burgers, pizzas, and French fries served quickly (both products and services).
For each commercially successful product, product definition, selection, and design take place
frequently-possibly hundreds of times. According to DuPont, it takes 250 ideas to produce a
single viable product. Operations managers create cultures inside their firms that accept this risk
and are tolerant of failure. They learn to continue the manufacturing operations to which they are
already engaged while accommodating a large number of fresh product concepts.
Although the phrase "products" frequently refers to material commodities, it can also refer to
services provided by businesses. For instance, a new "product" is described when Allstate
Insurance sells a new homeowner's policy. In a similar vein, when Citicorp launches its mortgage
division, it does so with a variety of new mortgage "products.”

2.3 SCALE OF OPERATIONS

Global corporations like Regal Marine are aware that a company's contribution to society is what
keeps it alive. The secrets to success are great products. Anything less than an excellent product
strategy can be devastating to a firm. Many businesses concentrate on just a few goods and stick
to them in order to maximise their chances of success.
Honda, for instance, focuses on and excels at engines. Almost all of Honda's sales-including
those of cars, motorbikes, generators, and lawn mowers-are dependent on the company's
superior engine technology. Similar to how Intel focuses on microprocessors, Michelin focuses
on tyres.
Companies must constantly search for new items to create, manufacture, and release to the
market because the majority of products have a constrained and even predictable life cycle.
Operations managers insist on effective customer, product, process, and supplier
communication since it increases the likelihood that their new products will succeed. The
objective of 3M is to generate 30% of its profit from items released in the previous four years.
Apple's most recent four years of product launches account for about 60% of its total sales.
Benchmarks, of course, differ by industry; Rubbermaid releases a new product every day,
whereas Regal releases six new boats year.
It is impossible to overstate the significance of new items. Sales of items that are less than five
years old account for a significant share of revenue for major corporations. Despite ongoing high
sales of its phenomenally successful Sensor razor, Gillette created its multiblade razors out of a
desire for new products, and Disney continues to innovate with new rides and new parks despite

14
the fact that it is now the top provider of family entertainment in the world. Many new products
fail, despite ongoing efforts to launch successful new items.
Effective product strategy outlines the range of the product line and links investment, market
share, and product decisions. The goal of the product decision is to create and put into action a
product strategy that matches consumer expectations while giving the company a competitive
edge. Product strategy, one of the OM's ten decisions, might concentrate on creating a
competitive advantage through differentiation, low cost, quick response, or a mix of these.

2.4 METHODS OF MANUFACTURING

Project Process
A project is a brief undertaking started to develop a special good or service. Because every
project has a clear beginning and finish, we refer to it as temporary. Temporary does not always
imply short-lived; many initiatives go on for years. Nevertheless, a project's duration is always
limited. Projects are one-time activities. Additionally, the project's product or service is not
typically considered transient. Most undertakings result in long-lasting effects. A project to build
a national monument, for instance, will produce results that are anticipated to last for
generations. Unique simply indicates that the good or service differs in some discernible way
from all other equivalent goods or services. For instance, a professor might teach the same
subject over the course of several semesters, but every time, the students will be different, or he
might employ a different teaching method or set of illustrations to help the students understand
the material. In this way, the Professor is constantly faced with a fresh task and brand-new
endeavour.
Some examples of Projects are:
Creating a new product or service is one example of a project.
¡ Changing an organization's structure, personnel, or way of doing things.
¡ Creating a fresh transportation vehicle.
¡ Creating a fresh information infrastructure.
¡ Building or constructing a facility.
¡ Engaging in a political campaign.
¡ Putting into practise a new business technique.
To fulfil or exceed the needs and expectations of stakeholders for a project, project management
is the application of knowledge, skills, tools, and strategies to project operations.

Job-shop
The job shop production system contains the following characteristics: (a) a small number of
goods produced only once; (b) a small number of items produced sporadically when the need is
felt; and (c) a small number of products produced periodically at known intervals.
On a very small scale, this is the earliest method of production. A more common name for it is
"job-shop or unit" production. This approach enables particular customer needs to be satisfied.
Every job order is unique and cannot be replicated. A few examples are the production of
aeroplanes, ships, and spacecraft, as well as the building of ships, boilers, turbines, machine
tools, aesthetic objects, and dies. The following are some of the features of this system:

15
¡ Due to the system's high degree of operational flexibility, general-purpose machines are
needed.
¡ Although computer-aided design (CAD) is employed, automation is typically not utilised
in this system.
¡ It deals with output that is "low volume and large variety." It is renowned for providing
quick value addition and can accommodate special customer orders or jobs of one kind at a
time.

Advantages
¡ The factory employing this method of manufacturing faces a low risk of loss. Flexibility
eliminates the possibility of a plant failure brought on by a drop in demand. To keep going,
it can always acquire one or the other employment instructions.
¡ Is simple to start and costs less money.
¡ Due to the extremely small workforce, there are less or no management issues.

Disadvantages
¡ Only personnel with a variety of talents are required to handle various job types. The price
of labour rises as a result.
¡ Low level of equipment usage
¡ The cost of material procurement increases as less raw materials are acquired.

Batch Production
A batch of products produced only once, a batch of items produced at irregular intervals when a
need is felt, a batch of items produced periodically at set intervals to meet a continuous need are
all examples of batch production.
The batch production method is frequently used in medium-sized businesses. A step between
mass manufacturing and job-shop production is batch production. This method is known as a
"batch production system" because it produces two or more types of products in lots or batches at
regular intervals. It has these characteristics:
¡ When the rest interval ends, batch production becomes flow production. The processing of
materials occurs continuously and gradually in flow production.
¡ Scale-wise, batch production is greater than job production, but less than mass production.
¡ Robots may automate material handling, much like CNC machining centres.
¡ This technique produces medium-sized quantities (5 to 50 of the same commodities). In
general, lots may be generated occasionally or on a regular basis to satisfy ongoing
consumer requests.
¡ In general, plant capacity exceeds demand.

16
Advantages
¡ It is adaptable in that it can switch jobs for practically no additional expense.
¡ If demand for one product declines, production rates for other products may rise, reducing
the risk of loss.
¡ It requires general-purpose machines with high production rates.
¡ Especially well-suited for computer-aided manufacturing (CAM).

Disadvantages
¡ As the amount of raw materials to be acquired is less than it would be for mass
manufacturing, it is not possible to take advantage of discounts associated with buying in
bulk.
¡ Specially created jigs and fixtures are required.

Flow/Continuous Production
Continuous Production which consists of
(a) Mass production
(b) Flow production
In this, the production activity runs in three shifts per day or for a full 24 hours. For instance, a
steel plant falls within this category. It is impossible to abruptly interrupt the production process
without seriously harming the blast furnace and associated machinery. The soft drink industry, a
fertiliser plant, a power plant, and others are other instances. Only the continuous type of
production includes mass and flow production. Here is an explanation of them:
Mass production: In this form, many similar goods are manufactured, yet the machinery need
not be built specifically to do so. The machinery and plant are adaptable enough to handle other
items requiring the same production procedures. For instance, a highly automated press shop that
may be used to manufacture various types of steel metal components or products without
requiring substantial adjustments.
Flow production: In this type, the layout, equipment, and plant itself are all primarily intended
to create a specific kind of good. Flexibility is restricted to small adjustments to the models'
layout or design. Automobiles, engines, kitchen appliances, home furnishings, chemical
factories, etc. are a few well-known examples. In the event that management decides to transition
to a different kind of product, the tooling, layout, and equipment will all undergo significant
change.
The general characteristics of continuous manufacturing are as follows:
¡ It is highly capital demanding and highly automated (process automation). Items naturally
transition continuously from one step to the next.
¡ It has very little to no flexibility due to its fixed or rigid automation. The plant's design
makes it suitable just for one kind of product. Each machine in the system has a specific
type of task assigned to it.
¡ The employment of cranes, conveyors, and other equipment is done to prevent material
handling issues.

17
¡ This system has no inventory of work-in-progress (WIP).

Advantages
¡ There is less variety but greater quality and number of items, and there is little waste.
¡ A bigger margin of profit can be generated on the purchase because the raw materials are
bought in bulk.
¡ The number of semi-skilled and few skilled workers needed is minimal. This significantly
lowers the cost of labour.

Disadvantages
¡ Significant losses on invested capital may occur during the period of lower demand.
¡ The system cannot be changed to accommodate other types of manufacturing because
every machine is specialised and dedicated to a single task.
¡ The majority of the workforce performs the same task again, which might get tiresome for
them. Additionally, because this type of manufacturing is done on a big scale, it is unable to
accommodate individual tastes.
The distinction of the processes can be well understood on a graph of volume and variety. The
graph is shown in Figure 1.

Figure 1: Distinction of Processes on Volume and Variety

Source: https://www.linkedin.com/pulse/operation-managers-need-know-the-volumevariety-
spectrum-li/

2.5 SUMMARY
¡ Manufacturing (or production) is a conversion process that results in the tangible output of
a product.

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¡ Many businesses concentrate on just a few goods and stick to them in order to maximise
their chances of success.
¡ The job shop production system contains the following characteristics: (a) a small number
of goods produced only once; (b) a small number of items produced sporadically when the
need is felt; and (c) a small number of products produced periodically at known intervals.

2.6 KEYWORDS
¡ Project Process: A project is a brief undertaking started to develop a special good or
service.
¡ Batch production: produced only once, a batch of items produced at irregular intervals
when a need is felt, a batch of items produced periodically at set intervals to meet a
continuous need are all examples of batch production.
¡ Mass production: In this form, many similar goods are manufactured, yet the machinery
need not be built specifically to do so.
¡ Flow production: In this type, the layout, equipment, and plant itself are all primarily
intended to create a specific kind of good.

2.7 SELF-ASSESSMENT QUESTIONS

Long answer
1. Explain process type production. Also give the advantages and disadvantages.
2. Explain project process of production. Also give the advantages and disadvantages.
3. What is the difference between the process type and product type process?
4. What are the characteristics of job-shop production process? Also give the advantages and
disadvantages.
5. Explain assembly line process.
6. What are the advantages and disadvantages of continuous process?

Short Answer
1. Define batch production.
2. Define project process.
3. Explain the flow type of process.
4. What is Job shop process?
5. What is the assembly line process?
6. What is mass customization?

True/ False
1. Resources can be in the form of human, material and capital. - True
2. Materials management is meant to fix cash dividend. - False
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3. Operations management department has interaction with finance and marketing
department. - True
4. Intermittent system is a production system. - True
5. Volume of production is large in a job-shop production. - False
6. Competition is an input of a production system. - False

Fill in the blanks

1. Production facilities are arranged as per the sequence of production operations from the
first operations to the finished product. This method is called _____ process production
2. _____ is a technology concerned with the application of mechanical, electronic and
computer-based systems to operate and control production. Automation
3. The impact of strategies on the general direction and basic character of a company is____
long range
4. _____ refers to the manufacturing of large volume of a single or a very few varieties of
products with a standard set of processes. Continuous production
5. ____ refers to the process of creating new products or modifying the existing ones within a
predetermined time frame and cost price. Product development
6. Frederick Taylor is called the Father of ______ scientific management

Multiple choice questions

1. Which of the following is TRUE about business strategies?
a) All firms within an industry will adopt the same energy
b) Well-defined missions make strategic development much easier
c) Strategies are formulated independently of SWOT analysis
d) An organization should stick with its strategy for the life of the business

2. The fundamental purpose of an organizations mission statement is to

a) Define the organizations purpose in the society
b) Define the operational structure of the organization
c) Generate good public relations for the organization
d) Define the functional areas required by the organization

3. Which of the following is a part of production system?

a) Input
b) Output
c) Transformation process
d) All of these

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4. ______ is that aspect of operation management function, which is concerned with the
acquisition, control and use of materials needed and flow of goods and services connected
with the production process.
a) Materials management
b) Division of labour
c) Mass production
d) Craft production

5. Which of the following is a characteristic of intermittent production system?

a) The flow of production is intermittent
b) The volume of production is generally small
c) A wide variety of products are produced
d) All of these

6. Which of the following is an advantage of job production?

a) It tries to satisfy the unique requirements of customers
b) Employees will become more skilled
c) Full potential of employees can be utilized
d) All of these

Match the following

Column A Column B
a) Material Handling 1. Supplier selection (c)
b) Speculative Pricing 2. Henry Ford (d)
c) Purchasing department 3. Conveyor belts (a)
d) Moving assembly line 4. Tentative profits by sale at higher price (b)
e) Computer aided manufacturing 5. Factory planning (f)
f) Production Planning 6. manufacturing systems utilizing computer
software program that control actual machine
on the shop floor (e)

Case study
Discuss on the differences in process-oriented process and product oriented process based on
industry example. For process-oriented consider a t-shirt manufacturing process and for a
product oriented consider a potato chips manufacturing.

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2.9 REFERENCES
¡ Heizer, J., Render, B., Munson, C., & Sachan, A. (2017). Operations management:
sustainability and supply chain management, 12/e.
¡ Roy, R. N. (2007). A modern approach to operations management. New Age International.

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 MODULE - 3 FACILITIES LOCATION AND LAYOUT

STRUCTURE
3.1 Learning Objectives
3.2 Introduction
3.3 Strategic importance - Factors affecting location and layout
3.4 Installation of facilities - single location, multi-location decisions
3.5 Principles and Types of facilities layout
3.6 Summary
3.7 Keywords
3.8 Self-Assessment Questions
3.9 References

3.1 LEARNING OBJECTIVES

After studying this unit, you will be able to:
¡ Understand Strategic importance - Factors affection location and layout
¡ Understand Installation of facilities - single location, multi-location decisions
¡ Understand Principles and Types of facilities layout

3.2 INTRODUCTION
Global business is becoming more prevalent, and world marketplaces are still growing. Indeed,
choosing where to place their operations is one of many businesses' most crucial strategic
decisions, including FedEx, Mercedes-Benz, and Hard Rock.
FedEx paved the way for "round-the-world" flights connecting its Paris and Memphis package
hubs to Asia when it built its Asian hub in Guangzhou, China. Mercedes-Benz conducted a year-
long search among 170 locations in 30 states and two countries before deciding to establish its
first significant overseas plant in Vance, Alabama. After three years of planning, a Russian food
supply network finally established a Hard Rock Cafe in Moscow. The importance of location
selections is demonstrated by the strategic influence, financial burden, and global component of
these choices.
Since location has a significant impact on both fixed and variable costs, businesses all over the
world are addressing the placement decision utilising the principles and strategies presented in
this unit.
Further, layout decisions are only made occasionally, but because they have long-term effects,
they must be carefully thought out. The cost of manufacturing goods and providing services will
be impacted by the layout design for many years to come. The facility's objectives are first stated
before plans are created. These objectives are met via layouts. Improved designs are sought after

23
the creation of the initial designs. Because there are so many different designs that might be used,
this can be a time-consuming and difficult task. This is why numerical and computer-based
models are frequently employed.
For the optimum coordination of material, man, and machine efficiency in a plant, the optimal
physical arrangement of machines, processing equipment, and service departments is known as
the "plant layout." It is the physical resources' spatial arrangement in the production process. It
also refers to how a factory's area is organised for things like indirect labour, storage, and
material flow.
This may refer to the set up that is already in place for an operational plant. This refers to the
layout of the machines, equipment, etc. in the various parts or shops of a new factory, though.
These should be set up so that the cost of moving materials, the cost of storing materials between
processes, the investment in machines and equipment, etc., are all as low as feasible and the
product is as affordable as possible.
There may be several causes for the need to plan a layout. Some of them might include the
following:
¡ Need to make minor changes to the current layout due to method improvements, new types
of inspection plans, and new types of products;
¡ Need to rearrange the existing layout due to marketing and technological change;
¡ Relocating the existing facilities due to new location;
¡ Building a new plant.

3.3 STRATEGIC IMPORTANCE - FACTORS AFFECTING LOCATION AND

LAYOUT
Strategic importance - Factors affecting location
Location significantly affects the company's overall risk and profit. For instance, the cost of
transportation alone can account for up to 25% of a product's selling price, depending on the
product and the type of production or service being provided. In other words, a company may
need one-fourth of its total revenue only to pay for the freight costs associated with importing
raw materials and exporting finished goods. Taxes, labour, the cost of raw materials, and rent are
some additional expenses that location may have an impact on.
Because of how important transportation economics are, businesses and even entire towns have
come together to capitalise on their transportation advantages. Rivers and ports played a
significant role in location decisions for hundreds of years. More recently, rail hubs and
subsequently interstate roads came into play. Airports today are frequently the determining
factor since they offer quick, inexpensive transit for both people and commodities.
Companies rarely decide where to locate themselves, and when they do, it's usually because
demand has outgrown the capacity of the current factory or because of changes in labour
productivity, costs, costs, exchange rates, or local attitudes. Companies may also move their
manufacturing or service locations as a result of changes in client demand and demographics.
There are three possible options for locations: (1) extending an existing facility rather than
moving; (2) keeping present locations but putting a new facility somewhere else; or (3) closing
the current facility and moving somewhere else.
The choice of site is frequently influenced by the sort of business. Although sites that encourage

24
innovation and creativity may also be crucial, industrial location decisions are typically made
with the goal of saving costs. The goal of the plan is to increase revenue for businesses that
provide professional and retail services. However, the decision to locate a warehouse may be
influenced by both delivery time and cost. Maximizing the advantages of location for the firm is
the goal of location strategy.
The potential of location to influence costs and revenues means that it frequently can make or
break a company's business strategy. Every major industry, from automobiles to mobile phones,
is currently served by important international corporations, or they plan to do so. Making
location decisions that support a low-cost plan calls for extra attention.
Many expenses become fixed and challenging to cut once management commits to a particular
site. For instance, even excellent management and an excellent energy plan would start out at a
disadvantage if a new factory location is in an area with high energy expenses. If the workforce in
the chosen area is expensive, poorly trained, or has a bad work ethic, management is in a similar
predicament with its human resource strategy. As a result, putting in the effort to choose the best
site for a facility is worthwhile.
Globalization has made facility location selection much more difficult. Because of the
development of: (1) market economics; (2) better international communications; (3) faster, more
dependable travel and shipping; (4) easy cash transfer between countries; and (5) wide variations
in labour costs, globalisation has occurred. Nowadays, many businesses are thinking about
creating additional branches of their banks, factories, or retail outlets abroad. Decisions about
where to go are international in scope.

General Factors influencing Location Selection

Location Near Good Highways
This includes the standard of the roadway network and how it connects to markets, resources,
and labour. It goes without saying that the presence of interstate super highways facilitates access
to the suburbs, small towns, and rural areas.

Abundant Supply of Workers

Locating the factory in a region with access to skilled, semi-skilled, and unskilled workers is
always ideal. This explains why Firozabad (India), which has skilled labour available, is where
the glass and bangle industries are located. The same justifications apply to the silk saree and
carpet industries in Kanziwaram and Mirzapur, respectively. Having no labour issues is also
ideal. The location of the plant will also be influenced by the local wage rate, labour facilities, and
the history of management and labour relations in the area. Steel industry needs a lot of rural
labour, and country labourers can be employed for lower wages. Perhaps this explains why the
majority of India's steel factories are found in rural areas.

Proximity to Markets
Plant should be situated closer to the market for consumers. Cement, brick, roofing, and gypsum
board manufacturing plants are located closer to the market. Shipping costs are of secondary
concern to businesses making products like watches, jewels, and fountain pens, where labour
and material expenses are high, and plant locations are not chosen based on closeness to markets.
It is crucial for many businesses to site their factory close to their clientele. Particularly,
accessibility to the market is considered to be the most important location element for service
businesses including pharmacies, restaurants, post offices, and barbershops. When transporting

25
finished items is expensive or challenging, manufacturing companies find it advantageous to
remain close to their clients (perhaps because they are bulky, heavy, or fragile).

The cost and availability of suitable land

Usually, the price of the land has little bearing on where a factory will be built. Land may be
supplied at a discount or for free in towns that are eager to draw additional plant life, which could
persuade certain plants to settle there.

Sufficient water supply

Almost all types of plants require water to survive. Some plants, however, are very reliant on
water. For daily operation, thermal power plants, hydroelectric power plants, and steel plants all
require large amounts of water. For this, the plant needs to be situated closer to lakes or rivers.

Proximity to suppliers and raw materials

Manufacturing facilities for heavy or perishable goods are typically found close to the location of
the raw material suppliers. For instance, creameries, meat packing facilities, and canning
factories should be positioned closer to the food processing industry. Because raw materials and
finished goods are sometimes perishable and shipping is expensive, businesses often locate close
to their sources. Because they work with perishable raw materials, bakeries, dairy facilities, and
frozen seafood processors frequently situate themselves close to suppliers. In these situations,
"weight loss" serves as the guiding principle. If processing of the raw material results in
significant weight loss, the facility should be situated closer to the raw material source. Another
rule is "weight balancing," which states that the relative cost of shipping raw materials must be
compared to the cost of delivering finished goods. Consequently, the supply of coal and iron ore
should be close to the steel industry. The majority of India's steel factories are situated near
sources of coal, iron ores, and other raw resources. Examples used to support these criteria
include Tata Steel and the SAIL-owned steel facilities.

Nearness to a Plant Already Existing

Maintaining the new plant in close proximity to the parent plant is advised. As a result, it is
possible to keep the truck assembly facility close to the steel plant because the two facilities may
complement one another. The end result of one becomes the starting point for another. Once
more, it is clear why Tata Steel and Telco are situated closer to one another in Jamshedpur. Cost-
saving measures will be possible and executive monitoring and staff consultations can become
standard. Engineers and executives are able to travel frequently for the consulting and
management tasks.

Transportation
For some businesses, it is advantageous to be situated close to a seaport or an inland waterway in
order to benefit from the cheaper costs associated with shipping resources (such as coal, iron ore,
petroleum products, etc.) by boat, barge, or ship. It would also be nice to have access to train or
trucking infrastructure.

Power Source
For the plant to operate effectively, it is desirable to have an inexpensive power source. In
general, the cost of electricity supply per unit is less expensive in rural areas than in cities. Some
businesses opt to run their own backup power plant.
26
Wastewater Treatment and Pollution
Water pollution should be avoided by adhering to anti-pollution laws. Waste products poured
into rivers or streams could cause issues for a new business that needs a source of clean, fresh
water.
Waste disposal issues, for instance, affect businesses that produce antibiotics, steel, chemicals,
and radioactive materials. Examples of environmental issues include: Union Carbide, Three
Mile Island (USA), Cello Field (UK), Chernobyl (USSR), and Cello Field (UK) (India).
Most nations have laws that forbid businesses from disposing of industrial waste in rivers.

Taxes
When deciding where to locate a plant, one should also take into account the types and quantities
of state-imposed taxes (such as excise taxes, sales taxes, income taxes, etc.). The types of taxes
and the criteria used to determine them should be researched beforehand. To entice investors to
establish their factories to produce specific priority products, some states and territories grant tax
exemption for a predetermined amount of time.

National defence
National defence interests should determine where military or defense-related industries are
situated, preferably outside of the nation's boundaries.

Administration in the community and mentality

The local community and government should be open to the plant being built nearby. The
community should also supply the essential municipal services, such as waste disposal, street
maintenance, police and fire protection, and so forth. Additionally, the mentality of the
workforce may vary from nation to nation, area to region, and small town to city. Relevant factors
include employee perceptions of absenteeism, unions, and employee turnover.

Schools, churches, parks, and neighbourhoods

It makes sense to choose a town or area that will offer their employees and their families the
greatest services and living circumstances. It should be desired to have top-notch parks, schools,
hospitals, residential areas, etc.

Future Expansion Space

The demand for goods is ever-changing. If demand grows, it might be necessary to expand the
plant's capacity, or if demand is really low, it might be necessary to switch the product entirely.
Therefore, there should be enough room for the plant to grow or diversify in the future.

Strategic importance - Factors affecting layout

Layout determines an organization's competitive priorities in terms of capacity, processes,
flexibility, and cost, as well as the quality of work life, customer interaction, and image, thus,
layout has strategic consequences. An organisation can establish a strategy that supports
distinctiveness, low cost, or reaction with the use of an efficient layout. For instance, Benetton
supports a differentiation strategy by making significant investments in warehouse design that
facilitate quick, precise sorting and delivery to its 5,000 shops. Walmart's warehouse architecture
and store layouts both promote a low cost strategy. The organisational structure of Hallmark's

27
offices, where many professionals work in open-conversation work cells, supports the quick
development of greeting cards. Layout strategy's goal is to create an effective and efficient layout
that will suit the company's competitive needs.
Layout design must always take the following goals into account:
¡ Better use of resources, including people, equipment, and space
¡ Better movement of people, materials, and information
¡ Improved customer/client interaction, safer working environment, higher employee
morale, and flexibility (whatever the layout is now, it will need to change)
Layout designs need to be considered as dynamic in this environment of mass customization and
shorter life cycles. This requires taking into account portable, adaptable, and small equipment.
Moving store displays, flexible office furniture, and prefabricated warehouse racks are all
required. Operations managers must incorporate flexibility into layouts so that changes to
product models and production rates may be made quickly and easily. Managers cross-train their
staff, maintain equipment, keep investments low, cluster workstations, and employ tiny, mobile
equipment to achieve flexibility in layout. In some circumstances, having mobile equipment is
necessary to prepare for upcoming changes in volume, procedure, or product.
Layouts are influenced by the many types of industries, production methods, goods, production
volumes, and manufacturing techniques utilised to create the final products. Below is further
information on them.

Types of Industries
Industry based on synthetic processes: In this, two or more components are combined to create a
product, such as cement, which is created by mixing clay and limestone.
based on analytic processes It works against the synthetic process. Here, the material is divided
into several pieces to produce the finished goods. For instance, the fractional distillation (or
"breaking process") of crude oil yields petroleum products.
Industry based on the conditioning process: Here, basic materials are transformed into the
required products, such as milk products in a dairy farm or jute goods in the jute sector.
based on extraction processes Heat is used to separate the desired product from the raw material,
such as steel from iron ores and aluminium from bauxite.
Types of Production System
Continuous Production
They are distinguished by a small product mix, huge volumes of standardised, capital-intensive
items made for inventory storage, unique equipment, and continuous product flow.

Job-shop Production
Made-to-order, low volume, labor-intensive products, a diverse product mix, general purpose
machinery, interrupted product flow, and frequent schedule adjustments are characteristics of
this. Flexible systems require general-purpose equipment and highly qualified personnel. For
instance, a spacecraft, an aeroplane, specialised tools and equipment, or a product prototype.

28
Batch Production
They are distinguished by medium-sized quantities of the same kind of thing or thing, together
with the following additional characteristics:
To meet continuous customer demand, lots may be manufactured once or on a regular basis.
Plant capacity is typically higher than demand. General-purpose machines have higher
production rates. Specially built jigs and fixtures are most suitable for CAM.
An illustration would be machinery, furniture, home appliances, casting, plastic moulding, press
shops, etc.

Types of Product
Whether the product is heavy or light, large or small, liquid or solid, etc.

Volume of Production
Whether the production is done in tiny, lots, batches, or enormous amounts (mass production).
It takes a methodical, scientific approach to deal with a plant layout for any type of
manufacturing circumstance. One such technique, called Systematic Layout Planning, is briefly
explored in the section that follows. This subject is covered in full in a different course called
Plant Design.

3.4 INSTALLATION OF FACILITIES - SINGLE LOCATION, MULTI-LOCATION

DECISIONS
For location decisions, there are multiple aspects that need to be considered. One such aspect is
how many locations the organization is planning to choose the location for. It may be decision to
be made for a single location or to select multiple sites for choice. For example a case you want to
choose a single central location as a hub for many other location, is a single location selection
decision. On the other hand, if you want to make a decision regarding opening different branches
of a fast-food joint, then we need to take a decision for multiple locations.

3.5 PRINCIPLES AND TYPES OF FACILITIES LAYOUT

PRINCIPLES OF PLANT LAYOUT
¡ Principle of overall integration (of man, materials, machine, supporting activities, etc)
¡ Principle of minimum distance between operations
¡ Principle of flow (arranging machines according to the sequence of operations)
¡ Principle of cubic space
¡ Principle of satisfaction and safety
¡ Principle of flexibility of rearrangement at a minimum cost.

TYPES OF LAYOUT
The ideal location for equipment (in production settings), offices and furniture (in office

29
settings), or service centres are all examples of layout selections (in hospitals or department
stores). In this unit, we'll go over the following layouts:
Fixed position layout: takes into account the layout needs of big, clunky projects like ships and
buildings. In this, the majority of the item is fixed in place. The product is finished with the
majority of the components remaining in one location, and all the necessary tools, equipment,
labourers, and smaller bits of materials are transported to it. This approach is used to create very
heavy assemblies, such as those for ships, aeroplanes, cranes, train coaches, highways, bridges,
homes, oil wells, etc., that only require small, lightweight tools.
Three problems make it difficult for fixed-position layout management approaches to be
successfully developed:
¡ Space is scarce at almost every location.
¡ As the project progresses, different elements become increasingly important since
different materials are required at various phases of building.
¡ The amount of supplies required fluctuates. For instance, as a project advances, the rate of
use of steel panels for a ship's hull fluctuates.
An alternate approach is to carry out as much of the project off-site as is practical because issues
with fixed-position layouts are so challenging to resolve on-site. When conventional units (such
as pipe-holding brackets) are put together on a nearby assembly line, this strategy is employed in
the shipbuilding sector (a product-oriented facility). Additionally, several shipyards are
experimenting with group technology to group parts.
Advantages
It can be quickly altered if the product design changes; is very simple and inexpensive to set up;
and since all of the workers are in one location, supervision is simple.
¡ Transportation of bulky materials is less expensive.
¡ The individual or group of individuals who make up the assembly can readily be held
accountable for quality.

Limitations
This technology can be used to create components that only require small, portable equipment,
but it also requires expert labour and intricate fixtures and jigs.

Figure 1: Fixed Position Layout

Source: http://www4.idt.mdh.se/course/PPU426/Layout.pdf

30
Process-oriented layout: Low-volume, high-variety production, sometimes known as "Jobshop"
or intermittent production, is addressed through process-oriented layout.
It is a manufacturing layout for low-volume, high-variety goods. In this form, a section, area, or
department contains all of the identical machines and equipment. For instance, all welding
supplies are kept in one area, all drilling equipment in another, all lathes in a third, and so forth. It
is utilised in sporadic (discontinuous) production. Figure 3.5 depicts the progression of two
distinct jobs via various departments in accordance with their order of operations. It works best
when creating items with various specifications or when working with patients, clients, or
consumers who have various wants.
Each product, or each small group of products, goes through a particular set of processes in this
job-shop setting. A hospital or clinic is a wonderful illustration of a process layout. Patients need
to be routed through admissions, laboratories, surgical rooms, radiology, pharmacies, nursing
beds, and other areas depending on their individual needs. The organisation of tools, abilities,
and supervisions revolves around these procedures.
Advantages
¡ Since multiple goods can be produced on one machine, fewer equipment are required. This
offers a great deal of flexibility while requiring minimal capital.
¡ When one machine breaks down, the task can be completed by other, comparable devices.
¡ In the event of an absence, a worker from the same section can fill in.
¡ By exerting greater effort on his machine, a worker improves his skills and increases his
ability to make money.
¡ The layout is adaptable in terms of production rate, design, and manufacturing processes,
which makes the work more fascinating for the employees.

Limitations
¡ Because of inefficiencies in the production processes, general purpose equipment
demands a high level of labour expertise and has higher WIP inventories.
This design need additional room.
¡ Automating material handling is really challenging.
¡ Difficult scheduling, shifting setups, and special material handling all add to the length of
time it takes to complete a product. Long distances and waiting times contribute to the
longer overall production cycle time.
¡ Since raw materials must travel farther, there is a large cost associated with material
handling.
¡ Requires more cooperation and inspection.

31
 Figure 2: Process Oriented Layout
Source: http://www4.idt.mdh.se/course/PPU426/Layout.pdf

Product-oriented layout: seeks the best personnel and machine utilization in repetitive or
continuous production. Because it was initially used in the USA to assemble automobiles, this
plan is also known as an assembly line layout. This layout is based on items or groups of related,
low-variety, high-volume products. One product, or one sort of product, is generated in a specific
area while using this layout style. This is employed in industries that involve repeated,
continuous production or mass production.
The machines and tools are set up in the sequence that they are required to work on a product.
With no need for material handling, the raw material is taken at one end of the line and moved
quickly from one operation to the next.
This layout is based on the supposition that: o Production volume is sufficient for high equipment
use.
¡ Product demand is consistent enough to warrant a significant investment in specialist
machinery.
¡ The product has reached a stage in its life cycle that makes investing in specialised
equipment justified, or is about to reach that stage.
¡ To guarantee that supplies of raw materials and components will function with the
specialised machinery, they must be sufficient and of uniform quality (adequately
standardised).
Advantages
¡ The price of material handling is low.
¡ Because labour does the same procedures consistently, he gets specialised and completes
the task rapidly.
¡ Because the labourer only needs to perform one sort of work, training is not difficult.
¡ Product control becomes really simple.
¡ Lower storage costs for materials between operations due to decreased WIP stockpiles.
¡ Less room is needed.

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¡ An uninterrupted and fluid work flow.
¡ Quick throughput or quicker product completion.

Limitations
¡ Lack of adaptability is bad if the product is modified.
¡ It is challenging to balance the burden.
¡ Expensive because different machines are required to do the same task on various items.
¡ The output is immediately impacted if one machine in the line breaks down or if one
operator isn't there.
¡ Strict and specialised oversight.

Figure 3: Product Oriented Layout

Source: https://www.javatpoint.com/types-of-layouts

Fabrication and assembly lines are two different styles of product layout. On a number of
machines, the fabrication line creates parts, such as tyres for cars or refrigerator parts. The
fabricated parts are assembled at a number of workstations along an assembly line. Both of these
repeated operations require that the fabrication line be "balanced," meaning that the time taken to
complete work on one machine must be equal to or "balance" the time taken to complete work on
the machine after it.
Task rotation can balance assembly lines by distributing work among different people. In order to
achieve the desired output level, the main challenge in product layout design is to balance the
output at each workstation on the production line so that it is about equal. A well-balanced
assembly line provides the benefit of high staff and facility utilisation as well as equity in
workload distribution between employees. The goal of line-balancing is to achieve a required
output from the line while minimising imbalance between machines or workers. For this,
management must be familiar with the employed tools, machinery, and working techniques.
Then it is necessary to calculate the amount of time required for each assembly task, such as
drilling a hole, tightening a nut, or painting a part. Additionally, management must understand
the order of precedence amongst the various activities (i.e. the sequence in which different tasks
must be performed).
Office layout: To allow for movement and information, place employees, their tools, and
spaces/offices in the appropriate positions. The emphasis on information in office and

33
manufacturing layouts is the primary distinction. Production depends on the movement of
materials only in some manufacturing environments and in some office settings. The
arrangement of employees, their tools, and spaces/offices in an office is done to promote
comfort, safety, and the flow of information.
In terms of workplace layout, we should take note of two key developments. First, by transferring
information electronically, technology like cellular phones, beepers, fax machines, the Internet,
home offices, laptop computers, and PDAs enable greater layout freedom. The way workplaces
operate is changing as a result of technology advancement. Second, dynamic demands for space
and services are produced by virtual businesses. Less office personnel are needed on-site
because of these two developments.
Even if information is moving more and more electronically, task-based analysis of office design
is still necessary. Therefore, using a tool known as a relationship chart, managers can assess both
electronic and traditional communication patterns, separation requirements, and other factors
affecting employee effectiveness.

Figure 4: Assembly Line Layout

Source: https://www.allaboutlean.com/line-layout-i-s-u-l-lines/

Retail layout: determines how much shelf space to allot and reacts to consumer behaviour. The
foundation of retail layouts is the notion that client exposure to products directly affects sales and
profitability. As a result, the majority of retail managers work to expose customers to a wide
variety of goods. According to studies, sales and return on investment increase in direct
proportion to the rate of exposure.
For figuring out the general layout of several stores, the following suggestions are useful:
¡ Find the high-draw items on the store's outside edges. As a result, we frequently find
bakery goods like bread on one side of a supermarket while dairy products are on the other.
¡ Put high-impulse and high-margin products like housewares, cosmetics, and shampoos in
visible locations.

34
¡ Distribute what are referred to as "power items" in the industry-things that might dominate
a shopping trip-to both ends of an aisle and scatter them to improve visibility of other items.
¡ Because end aisle spots have a very high exposure rate, use them.
¡ Clearly communicate the store's objective by selecting the lead-off department's location
carefully. For instance, place the bakery up front to appeal to clients who value expediency
if prepared foods are part of the objective.
After deciding on the overall design of a shop space, merchandise needs to be set up for sale.
This layout takes a lot of factors into account. But maximising profitability per square foot of
floor space is the primary goal of retail layout (or, in some stores on linear foot of shelf space).
Although pricey or big-ticket items may generate more dollar sales, the profit per square foot
may be lower. Managers might use computerised tools to evaluate the financial viability of
various merchandising strategies.
Slotting is an additional and rather debatable aspect of retail planning. Manufacturers must pay
slotting fees to place their products on the shelves of a chain of grocery stores or retail outlets.
Retailers can now charge up to $ 25,000 to add an item to their chain as a result of widespread
new product releases. Retailers now have tremendous leverage because to market economics,
mergers, and technology during the past ten years. POS systems and scanner technologies, which
enhance management and inventory control, increase the struggle for shelf space. Many small
businesses contend that slotting fees impede the development of new items, restrict their
capacity to grow, and increase consumer prices while also raising ethical and legal questions.
Warehouse layout: explains how space and material management are traded off. The goal of
warehouse layout is to determine the ideal balance between handling costs and warehouse space
expenses. Therefore, it is the management's responsibility to maximise the use of the
warehouse's "cubic space"-that is, to utilise its entire volume while maintaining low material
handling costs, which are defined as all expenses associated with the incoming, storing, and
outgoing transport of materials to be warehoused. The price also includes depreciation,
insurance, personnel, material, and monitoring. Effective warehouse layouts can reduce material
deterioration and damage on the premises. The ideal layout depends on the diversity of goods
kept and how many are "chosen." A warehouse with a smaller number of items will naturally
have a higher density than one with a larger number of items.
Automated systems are used for storage and retrieval in modern warehousing management
(ASRS). Compared to manual approaches, it can increase production by an estimated 500%. The
link between the receiving/unloading area and the shipping/loading area is a crucial aspect of
warehouse layout. The sort of commodities discharged, what they are unloaded from (trucks, rail
cars, barges, etc.), and where they are unloaded all affect the facility design.
Cross-docking is the practise of processing supplies and materials as they are received in order to
avoid having to store them. In a manufacturing plant, the assembly line receives the product
directly (JIT). Labeled and presorted shipments arrive at the shipping dock in a distribution
centre for quick rerouting, skipping the formal receiving, stocking/storing, and order-selection
processes. The elimination of these operations results in a 100% cost savings because they don't
add any value to the product. Crossdocking lowers the expenses of product handling, inventory,
and facilities, but it necessitates I strict scheduling and (ii) accurate product identification in
shipments, typically with bar codes so that they may be transported swiftly to the right shipping
dock.

35
3.6 SUMMARY
¡ Indeed, choosing where to place their operations is one of many businesses' most crucial
strategic decisions.
¡ Layout decisions are only made occasionally, but because they have long-term effects,
they must be carefully thought out.
¡ There are three possible options for locations: (1) extending an existing facility rather than
moving; (2) keeping present locations but putting a new facility somewhere else; or (3)
closing the current facility and moving somewhere else.
¡ Layout design must always take the following goals into account:
¡ Better use of resources, including people, equipment, and space Better movement of
people, materials, and information
¡ Improved customer/client interaction, safer working environment, higher employee
morale, and flexibility (whatever the layout is now, it will need to change)

3.6 KEYWORDS
¡ Fixed position layout: takes into account the layout needs of big, clunky projects like
ships and buildings.
¡ Process-oriented layout: Low-volume, high-variety production, sometimes known as
"Jobshop" or intermittent production, is addressed through process-oriented layout.
¡ Fabrication and assembly lines are two different styles of product layout. On a number of
machines, the fabrication line creates parts, such as tyres for cars or refrigerator parts.
¡ Office layout: To allow for movement and information, place employees, their tools, and
spaces/offices in the appropriate positions.
¡ Retail layout: determines how much shelf space to allot and reacts to consumer behaviour.
¡ Warehouse layout: explains how space and material management are traded off.

3.7 SELF-ASSESSMENT QUESTIONS

Long Answers
1. What are the factors which affect decisions related to location planning?
2. What are the factors which affect decision related to layout?
3. What are the different types of layouts?
4. What are the principles of layout planning?
5. What is the concept of single location and multiple location problem?
6. What is the difference and similarities between office layout and retail layout?

Short Answers
1. What is the concept of retail layout?
2. What is the concept of single location problem?

36
3. Describe multiple location problem.
4. Describe with example fixed layout.
5. What are the advantages and disadvantages of product-oriented layout?
6. What is the process-oriented layout?

Fill in the blanks

1. Fixed position layout is also called as ____ of layout. Project type
2. ______ is the level of output volume for which total cost equals total revenues - breakeven
point
3. ____ is the arrangement of a facility so that equipment used to make similar parts or
families of parts is grouped together. Cellular layout
4. In _______, machines and other supporting services are located according to the
processing sequence of the product. Product layout
5. The layout in which the production is performed in a fixed position is called ____ project
layout
6. _____ decision is the systematic process of determining a geographic site for a firms
operations. Location planning

True/False
1. Maximization of materials handling cost is the objective of plant layout. False
2. Product layout is one in which all the equipments performing similar tasks are grouped
together. False
3. Supply of materials does not affect the plant location decision . False
4. Climate conditions affects the choice of plant location selection decision. True.
5. The fact that most types of firms are located in every section of the country suggests that in
many cases, location decisions are not overly important; one location typically is as good
as another. False
6. A strategy that emphasizes convenience for the customers would probably select a single
very large facility. False

Multiple choice questions

1. Which of these layout types is most associated with a mass process?
a) Fixed position layout
b) Process layout
c) Product layout
d) Cell layout

37
2. Which of these layout types is most associated with a project process?
a) Fixed position layout
b) Process layout
c) Product layout
d) Cell layout

3. Which of these layout types is most associated with a batch processing operation?
a) Fixed position layout
b) Process layout
c) Product layout
d) Cell layout correct

4. Locating several mobile phone shops in the same part of a town is an example of
__________________________?
a) Saturation marketing
b) Saturation clustering
c) Competitive marketing
d) Competitive clustering

5. Which of the following is not a socio-economic factor that can influence the choice of
location for an operation?
a) Local labour markets
b) Business climate
c) Transportation networks
d) Proximity to competitors

6. Which of the following is not a physical factor that can influence the choice of location for
an operation?
a) Nature of the communication links
b) Access to customers
c) Access to raw materials
d) Provision of water supply

38
Match the following
Column A Column B
a) Spoilage of products 1. Increase labour efficiency (d)
b) Single story building 2. Software for location analysis (e)
c) Multi-story building 3. location near market (a)
d) Good plant layout 4. Minimize cost consequences (f)
e) GIS 5. Material handling becomes very complicated (c)
f) Location selection 6. Location does not need lot of land (b)

Case Study
There is an impact of location planning on layout planning. Using a case of different industries
explain.

3.8 REFERENCES
¡ Heizer, J., Render, B., Munson, C., & Sachan, A. (2017). Operations management:
sustainability and supply chain management, 12/e.
¡ Roy, R. N. (2007). A modern approach to operations management. New Age International.

39
 PRODCUTION PLANNING AND
MODULE - 4 CONTROL AND PROJECT
MANAGEMENT

STRUCTURE
4.1 Learning Objectives
4.2 Importance and Function of Production Planning and Control
4.3 Introduction to CPM- PERT
4.4 Network Crashing
4.5 Summary
4.6 Keywords
4.7 Self-Assessment Questions
4.8 References

4.1 LEARNING OBJECTIVES

After studying this unit, you will be able to:
¡ Understand Importance and Function of Production Planning and Control
¡ Understand CPM- PERT
¡ Understand Network Crashing
¡ Understand how to solve numericals related to CPM- PERT

4.2 IMPORTANCE AND FUNCTION OF PRODUCTION PLANNING AND

CONTROL
Production is the planned process of transforming raw materials (RM) into usable goods.
Numerous manufacturing and service industries are involved in production. The most efficient
use of natural resources, including people, money, machinery, supplies, and time, is required for
production systems. Therefore, it is imperative that production planning be completed before
beginning the process of actual production in order to foresee potential obstacles and decide in
advance how the production should be carried out in the best and most efficient way.
Although production and operation are frequently used interchangeably in industrial contexts,
production is actually a particular form of operation. An operation might involve fighting a war,
promoting literacy among the populace, eliminating poverty from society, and so forth. Several
definitions of operations planning and control are provided below (OPC).
Production, also known as Operations Planning and Control (OPC), is the process of carrying
out the plans, including the precise scheduling of tasks, allocating workloads to equipment (and
employees), and ensuring that work moves smoothly through the system.
"First plan your work, then work your plan," is the Operations Planning and Control (OPC)

40
philosophy. Planning is essential before beginning any project in order to make the most use of
the resources at hand. The decision-making stage of production management is planning.
Operations control is concerned with the execution of a predetermined operations plan or policy
and the control of all aspects of operations in accordance with such a plan or policy. Operations
planning is concerned with the determination, acquisition, and arrangement of all facilities
necessary for the future operations. In the industrial industry, it is also known as "Production
Planning and Control (PPC)".
Formally, OPC or PPC is the process of organising the production in advance, determining the
precise path for each item, establishing the beginning and ending dates for each item, providing
the shop production orders, and finally monitoring the progress of products as they are ordered.
The factory's "nerve centre" is another name for it.

Importance of Production Planning and Control

The benefits of OPC are mainly as follows:
1. Benefits for investors and consumers. Better planning results in higher firm production,
timely and effective product delivery, more products available to consumers at lower
prices, and better products overall. This translates into more value for the money spent by
consumers and higher product satisfaction. This translates into high profit margins for the
investors as well, who can then reinvest more money into the production process to raise
the plant's productivity and efficiency. This way, the cycle may continue.
2. Producers, employees, the community, and shareholders all stand to gain. With better
planning, the company may generate more revenue and, as a result, give its employees
higher wages. There won't be any lost work time like there used to be when there wasn't any
or very little scientific planning. This will result in more stable employment, better working
conditions, and higher employee satisfaction. Additionally, it will maintain the workers'
high levels of motivation for more effective work. Dividend payments provide financial
certainty and a sufficient return to shareholders or investors. Taxes could bring in a lot of
money for the government, and the community could benefit from stronger infrastructure,
more economic and social stability.
3. Benefits for the country. The country gains social, political, and economic stability as
well as a stronger reputation internationally and more influence over world policy.
Additionally, it improves the nation's security and economy.

Function of Production Planning and Control

The functions of OPC are mainly as follows:
1. Release orders in accordance with the priority plan to the system. By defining the order in
which materials or jobs are distributed to work centres, priority refers to the control over
the status of jobs and work activities.
2. Place jobs in particular work centres (including machine loading, or shop loading). Also
known as "short-run capacity planning," these actions.
3. To indicate the order in which jobs are to be processed, provide sequencing priorities. The
dispatching function, which is the actual approval for the task to start, may also fall under
this category.

41
4. Tracking jobs and accelerating them as needed will help you manage the manufacturing
lead time.
5. Utilize reports like summary, scrap, rework, and others to keep track of the priority status
of jobs.
6. Utilize input/output data of workload vs capacity to keep track of a facility's capacity
status. Short-run capacity control is another name for the input/output controls.
Shop floor controls are frequently used to refer to the tasks of sequencing, tracking, expediting,
and status control [Joseph G. Monks]. To assist in carrying out the aforementioned tasks, various
methods (such as: pictorial, charting, and computer algorithms) have been developed.

4.3 INTRODUCTION TO CPM- PERT

A project is a brief undertaking started to develop a special good or service. Because every
project has a clear beginning and finish, we refer to it as temporary. Temporary does not always
imply short-lived; many initiatives go on for years. Nevertheless, a project's duration is always
limited. Projects are one-time activities. Additionally, the project's product or service is not
typically considered transient. Most undertakings result in long-lasting effects. A project to build
a national monument, for instance, will produce results that are anticipated to last for
generations. Unique simply indicates that the good or service differs in some discernible way
from all other equivalent goods or services. For instance, a professor might teach the same
subject over the course of several semesters, but every time, the students will be different, or he
might employ a different teaching method or set of illustrations to help the students understand
the material. In this way, the Professor is constantly faced with a fresh task and brand-new
endeavour.
Creating a new product or service is one example of a project.
¡ Changing an organization's structure, personnel, or way of doing things.
¡ Creating a fresh transportation vehicle.
¡ Creating a fresh information infrastructure.
¡ Building or constructing a facility.
¡ Engaging in a political campaign.
¡ Putting into practise a new business technique.
To fulfil or exceed the needs and expectations of stakeholders for a project, project management
is the application of knowledge, skills, tools, and strategies to project operations.

SOME TERMS RELATED TO NETWORK PLANNING

Event: An event is a particular moment in time that designates the beginning and end of an
activity. Event doesn't use up any time or resources. The event number is written inside the circle
that serves as its symbol, either as a circle or a node. Examples of events include the
commencement of the exam, the conclusion of the game, the beginning and finish of a
conference, etc. (Refer Figure 1)
Activity: Projects are made up of various tasks or jobs that must be completed. These are referred
to as activities. A process, a cycle of material procurement or processing are examples of
activities. Examples of these tasks include laying the groundwork for a building, writing an

42
exam, securing bank financing, etc. An arrow designating an activity indicates that it starts and
ends with an event. An activity, as opposed to an occurrence, uses resources and time. The letters
a, b, c, etc. below the arrow stand for an activity, and the words "estimated time" are printed
above the arrow. (Refer Figure 1)
Dummy Activity: A dotted arrow, or "dummy activity," connects the head events when two
activities begin at the same moment. Dummy activities don't take up time. It could be either
critical or not. When the earliest start time (EST) and latest finish time are the same, it qualifies as
a crucial activity (LFT). (Refer Figure 1 and check activity b and c)

Figure 1: Network Diagram

Critical Activity: If an activity's latest ending time plus its earliest start time equals its latest
finishing time, the activity is said to be vital. Critical activities in a network diagram are those
that, if they take longer than anticipated, will cause the project to be delayed. In a network
diagram, a thick arrow designates an important activity to set it out from non-essential activities.
Critical Path: Critical activities combine to produce a critical path (CP). The longest and most
time-consuming path is a CP. CPs have no float. A vital activity can also be a dummy action that
connects two critical activities. Any delay on CP will have a corresponding delay on the entire
project.
Subprojects: Subprojects are routinely used to break down larger projects into more manageable
smaller projects. Subprojects are frequently farmed out to a third party business or to a different
functional division within the performing organisation. Subprojects include, for instance:
¡ A single stage of a project.
¡ The setting up of electrical or plumbing fixtures during construction.
¡ Computer programmes that are resting automatically.

Note: Networks can be drawn in two forms. Activity on Arrow(AOA) and Activity on Node(AON)
for the purpose of discussion of this unit we will be using AOA network and not AON network.
That means that the arrows represent the activities and not the nodes or circle.

CPM AND PERT MODEL

The Critical Path Method, or CPM. The majority of its applications have been in deterministic
contexts, such as construction projects. The majority of the materials used to construct homes,

43
bridges, and skyscrapers are common materials with well-known qualities. They make use of
very common parts and reliable technologies.

Instead of design concepts, changes mostly affect the design, size, forms, and groupings of
various components. CPM works with deterministic situations and only considers one instance
of time. It is activity-focused and suitable for both big and little undertakings. The most
adaptable and effective management planning technique, it is well known. CPM is used to plan
and manage the most rational and cost-effective series of actions to complete a project.
The steps taken by CPM to complete a project plan are as follows:
¡ Break down the project into multiple activities systematically.
¡ Give each activity a name.
¡ Sequence all of the actions logically.
Develop the arrow diagram.
¡ Count each node (event) and activity.
¡ Establish a time slot for each activity.
¡ Label the arrow graphic with the activity times.
¡ Determine the start and end hours, both early and late.
¡ Add up different times, then annotate the arrow diagram with EST and LFT.
¡ Determine the project's overall duration.
¡ If it aims to shorten the project's overall timeline. halt the network's essential operations.
¡ Reduce expenses.
¡ Refresh the network.
¡ Distribute network resources smoothly.

NUMERICALS
1. Draw the Networks for the following data

44
 Activity Description Duration (weeks) Immediate Predecessors
A Obtain the budget approval 2 -
B Obtain the machine 5 A

C Hire the operator 1 A

D Install the machine 1 B

E Train the operator 6 C

F Produce the goods 1 D,E

Solution Network

¡ Note :
¡ Numbering from left to right
¡ Projects starts from left and finishes on a time
¡ This is an activity on arrow network
¡ We are not doing activity on node network , for our case , we will consider nodes only to be
the start and finish points of activities.
¡ There must be a lower number on the start node and higher number on the end node.

2. Draw the Networks for the following data

Activity Immediate Predecessors

A -
B A
C A
D C
E B,D
F E
G B,D
H F,G

45
Solution Network

¡ Note :
¡ Event 4 can be termed as a merge event , wherein multiple activities are merging into the
event.
¡ Event 2 can be termed as a burst event, wherein multiple activities are moving out from
event 2.

Activity Duration
1-2 8 Solution Network
1-3 6
1-4 4
2-8 4
3-5 7
3-6 2
4-6 6
5-7 5
6-7 9
7-8 5

46
Questions related to CPM
For the given data find out the critical path and the duration in which the project will be
completed. Also find out the ES, EF, LS, LF and total float.

Activity Activity Duration

Nodes
Solution
A 1-2 2 Using forward pass method find out ES of
all the nodes as shown in figure below.
B 1-3 7
C 1-4 8
D 2-5 3
E 3-5 6
F 3-6 10
G 3-7 4
H 4-6 6
I 5-7 2
J 6-8 5
K 7-8 6

Using backward pass method find out LF of all the nodes as shown in figure below.

For the other calculations follow the definitions as given and find the values.

47
Program Evaluation and Review Technique is known as PERT. This is frequently employed
in probabilistic, stochastic, or non-deterministic contexts, such as in R&D and space research
programmes. These missions (to Mars, the Moon, etc.) are still in the early stages, and their
products are nonstandard and undergoing rapid technological change. Intercontinental Ballistic
Missiles (ICBMs) and lunar rockets contain some standard hardware, but much of their design
and manufacture requires new materials and technology. Projects are contracted, planned, and
scheduled before all technological issues have been resolved.
The new weapon systems and spacecraft's design, manufacture, and configuration are therefore
fraught with ambiguity. There isn't much historical data on which to base time predictions for
network construction.
The Polaris Missiles programme in the US Navy was planned and managed using PERT for the
first time in 1957 with the aim of completing the project two years early.
¡ PERT is frequently used to carry out a project's initial review.
¡ It is a very helpful tool for time and resource planning.
¡ PERT is utilised in situations where time estimates are not reliable enough. It can be used in
situations where it is difficult to accurately estimate the amount of time or resources needed
for a project.
¡ However, events are easily described, thus it is understood that part A will be made first,
followed by the construction of subassembly S, and so on.
¡ For non-repetitive project types, R&D, prototype production, space research, defence
projects, etc., PERT offers many benefits.
¡ PERT can be incorporated into a probabilistic model due to the ambiguity of activity
timings. Timing of activities can be estimated using the probability notion. The PERT's
statistical probability feature predicts the likelihood of achieving the given target dates.
¡ PERT is regarded as an event-oriented system since it focuses mostly on events.

PERT Methodologies
The following steps make up the PERT planning technique:

48
¡ The project is methodically divided into various activities.
¡ The order of the activities is logical.
¡ A network diagram has been created. Activities and events have numbers.
¡ The anticipated time for each task is computed using three time estimates.
¡ For each activity, the standard deviation and variance are calculated.
¡ Calculated are the earliest starting times and latest finishing times.
¡ The network diagram shows the expected time, the earliest starting time, and the latest
finishing time.
Slack is determined
¡ The network diagram's critical path(s) has been identified and annotated.
¡ The critical path's length or the project's overall time is determined.
¡ Lastly, it is determined whether the project will be completed by the deadline.

PERT uses the optimistic, most likely, and pessimistic time predictions to account for
uncertainty. Time estimates from PERT follow the beta distribution.

Optimistic time(to): If everything goes perfectly, an action will take the least amount of time
possible.
Most likely time(tm): It is the period of time during which the activity would typically be
anticipated to end under normal circumstances.
Pessimistic time (tp): It is the amount of time that would be needed to finish the task in the
worst-case scenario. Catastrophes like earthquakes, floods, fires, etc. are excluded from this.
Although creating these time estimates is not always simple, when combined they provide
helpful knowledge about the anticipated uncertainty of a task. The three-time estimations
shouldn't differ much from one another for routine activities. However, the range of the expected
completion timeframes will be bigger the more uncertain an activity is.
A weighted average of three time estimates is used by PERT to determine the predicted value of
duration. It is predicated that tm is four times more likely to occur than the other two, and that to
and tp are equally likely to happen. Thus, the anticipated time

The anticipated time is the amount of time we would anticipate if the activity were performed
numerous times. But in reality, things don't happen repeatedly; they usually only happen once.

49
ALGORITHM USED IN CALCULATING CRITICAL PATH

VARIABILITY OF ACTIVITY TIMES

We will be less confident in the average value we generate if the time needed for an activity is
highly variable (i.e., if the range of our estimations is very wide).
In statistics, the terms standard deviation and variance are frequently used to describe how
variable the values are. The variance is the sum of all squared deviations from the mean for all
numbers. Three time estimates of 3, 4, and 8 weeks result in a mean of 5, a variance of ((3 - 5)2 +
(4 - 5)2 + (8 - 5)2/3 = 14/3), and a standard deviation is the square root of variance which is equal
to 2.16 weeks.

50
The variance of a sum of independent activity times is equal to the sum of their individual
variances. Since Te is the sum of te's along the critical path, then the variance of Te equals the
sum of all the variances of these activities.

NUMERICALS PERT
Q1. Analyse the data and answer the questions that follow:
Optimistic Most likely Pessimistic
Activity o m b
1-2 2 4 6
1-3 6 6 6
1-4 6 12 24
2-3 2 5 8
2-5 11 14 28
3-4 15 24 45
3-6 3 6 9
4-6 9 15 27
5-6 4 10 16

a. Show the network of project

b. Identify the critical activities
c. What is the expected project duration and its variance ?
d. What is the probability that project duration will exceed 60 days?
e. What is the chance of completing the project between 45 and 54 days?
f. What is the probability of completing the project within 30 days?

Solution
Optimistic Most Pessimistic te=(a+4m+b/6) Variance of
likely activity=(b-
a/6)^2
Activity o m b
1-2 2 4 6 4 (4/6)^2
1-3 6 6 6 6 0
1-4 6 12 24 13 9
2-3 2 5 8 5 1
2-5 11 14 28 15.83 (17/6)^2
3-4 15 24 45 26 25
3-6 3 6 9 6 1
4-6 9 15 27 16 9
5-6 4 10 16 10 4

Using the expected time of the activities we find out the network and the total duration is 51.
Also the variance of the network is the sum of variance of the critical activities.

51
The critical activities are 1-2-3-4-6
Variance of the project = 319/9
d. What is the probability that project duration will exceed 60 days?
Using normal distribution X~ N(51,319/9) (estimation of beta distribution of normal)
P(X>60)
= P( Z > 1.511) =0.0655 (standardizing the X variable to standard normal)
e. What is the chance of completing the project between 45 and 54 days?
Using normal distribution X~ N(51,319/9) (estimation of beta distribution of normal)
P( 45<X<54 )
= P( -1.007< Z<0.5034) =0.5328
f. What is the probability of completing the project within 30 days?
Using normal distribution X~ N(51,319/9) (estimation of beta distribution of normal)
P( X<30 )
= P(Z< -3.527) =0.0002

4.4 NETWORK CRASHING

By allocating more resources and manpower to project operations, frequently in the form of
overtime, project length can be decreased (material, equipment, etc). However, adding more
labour and resources raises the entire project cost because they are more expensive. As a result,
the choice to shorten the project's duration must be supported by an examination of the cost-
versus-time trade-off.
By lowering the time of one or more of the key project activities to a duration that is shorter than
the average activity duration, a technique known as project crashing can reduce the overall
project duration. Crashing refers to this decrease in the regular activity times. Crashing is
accomplished by giving the targeted activities extra financial resources.
The predicted project length from the arrow diagram is sometimes perceived as being too long,
and management often wants to complete the project faster to ensure progress payments or to
avoid lateness fines, among other reasons. Different options are investigated to achieve this. To
find ways to shorten the length of each (critical) task, work study techniques of systematic
questioning (as in critical examination under method study) are used.
The key path tasks are divided into Do and Ancillary tasks. Do activities are supported by
ancillary activities. Cutting threads on a bar is an example of a Do action, but setting up to cut
threads is an ancillary activity. Following identification, Do activities are exposed to a systematic
questioning technique that includes a series of inquiries on the goal, setting, order, characters,
and means.
In order to shorten the time of the crucial activities, the second technique is to trade off or move
some resources from the float-producing activities to the critical operations. Resources are
redistributed and variations in duration are accompanied by trading-off. The resources could
include labour force, quantity of machinery and equipment, cash, better and more appropriate
materials, etc.
If efficiency does not increase and the project's time does not decrease despite the use of work
52
study techniques, trade off, and other potential solutions, the only remaining option is network
compression.
In other words, network, contraction, expedition, or crashing of operations are used as last resorts
when all other methods of reducing project length at practically no additional expense fail. This
improvement system incurs higher costs due to the hiring of personnel for overtime shifts, the
acquisition of additional machinery, the use of superior materials, specialised labour, etc. As
more and more operations are cancelled, the cost rises and, naturally, the project's length
shortens. The extra cost incurred and the amount of project time saved must be balanced.
Activities can be classified as either critical or non-critical. Crashing non-critical operations
serves no use because they have no control over how long the project will take. Early completion
of non-critical tasks has little advantage; instead, it increases work-in-progress. Crashing is
therefore limited to essential tasks that, if finished earlier, can shorten project length.
The key activity that has the lowest cost-time slope-i.e., the one that crashes the cheapest-is the
one that crashes first. Until the activity length can no longer be reduced or the original critical
path's duration is cut past a particular point where another path becomes critical, activities are
crashed one after the other. A single activity from each of the critical pathways is then picked to
crash by the same length of time. A further reduction in project length is thus impossible due to
either the network reaching the compression limit or the cost of crashing being greater than the
amount of time saved.
Before really crashing the network, the following terms need to be understood.
Normal Cost (Nc) is the lowest cost associated with completing an activity in the shortest amount
of time using standard methods, without the use of overtime or other specialised resources.
Normal Time (NT) is the shortest amount of time needed to attain the standard cost.
Crash Cost (Cc): This is the least expensive way to complete a task while utilising all available
resources, such as extra labour, equipment, appropriate materials, etc.
Crash Time (CT): This is the shortest amount of time that can be linked to a crash.

As can be seen from the following graph, as a project's completion time is shortened, the
associated costs rise. In a project, there are two different forms of cost: direct and indirect, or
overhead. The indirect cost goes down as project time is cut while the direct cost goes up.

4.5 SUMMARY
¡ Production is the planned process of transforming raw materials (RM) into usable goods.
53
¡ Production, also known as Operations Planning and Control (OPC), is the process of
carrying out the plans, including the precise scheduling of tasks, allocating workloads to
equipment (and employees), and ensuring that work moves smoothly through the system.
¡ Better planning results in higher firm production, timely and effective product delivery,
more products available to consumers at lower prices, and better products overall.
¡ The country gains social, political, and economic stability as well as a stronger reputation
internationally and more influence over world policy.
¡ By defining the order in which materials or jobs are distributed to work centres, priority
refers to the control over the status of jobs and work activities.
¡ Tracking jobs and accelerating them as needed will help you manage the manufacturing
lead time is another function of operations planning and control.
¡ A project is a brief undertaking started to develop a special good or service. Because every
project has a clear beginning and finish, we refer to it as temporary.

4.6 KEYWORDS
¡ Event: An event is a particular moment in time that designates the beginning and end of an
activity.
¡ Activity: Projects are made up of various tasks or jobs that must be completed. These are
referred to as activities.
¡ Dummy Activity: A dotted arrow, or "dummy activity," connects the head events when
two activities begin at the same moment.
¡ Critical Activity: If an activity's latest ending time plus its earliest start time equals its
latest finishing time, the activity is said to be vital.
¡ Critical Path: Critical activities combine to produce a critical path (CP).

4.7 SELF-ASSESSMENT QUESTIONS

Long answer questions
1. For the given data find out the critical path and the duration in which the project will be
completed. Also find out the ES, EF, LS, LF and total float.

Activity Nodes Duration

1-2 4
1-3 6
2-6 8
3-4 7
3-5 4
4-6 6
5-6 5
5-7 19
6-7 10

54
Solution: Duration of project is 29 . Critical paths: 1-4-7, 1-3-4-6-7.

2. For the given data find out the critical path and the duration in which the project will be
completed. Also find out the ES, EF, LS, LF and total float.
Activity Predecessor Duration (days)
A --- 2
B --- 1
C A 3
D B 2
E B 1
F C,D 3
G C,D 1
H E,F 4

3. What is the difference between CPM and PERT?

4. What is the concept of production planning and control?
5. What is the difference between optimistic, pessimistic and most likely times in PERT?
6. What is the ES, EF, LS, LF and Total float?

Short Answer Questions

1. What is the concept of event and activity in a network?
2. What is the concept of critical activities and critical path in a network?
3. What is the difference between ES and EF?
4. What is total float in a network?
5. What is the variance in a PERT network?
6. What is the concept of project? Explain with examples.

Fill in the blanks

1. ______ is the time table for performing activities utilizing resources or allocating
activities. Scheduling
2. A(n) _______ is a point in time that marks the beginning or end of an activity. Event
3. The process of reducing total time that it takes to complete a project by employing
additional resources is called ______. Crashing
4. PERT often assumes that the time estimates follow the _______ probability distribution.
Beta
5. In PERT/CPM, a(n) _________ is a time-consuming job or task. Activity
6. In an AON network representation, the _______ represents the activities. nodes

55
True/False
1. PERT assumes that activity times are probabilistic, while CPM assumes that activity times
are deterministic. True
2. In CPM, we assume that resources are expended in a(n) exponential rate. False
3. Major events in projects are often referred to as milestones. True
4. Activity is a particular task performance. True
5. Full form of PERT is Program Evaluation and Review Technique. True
6. A PERT network is activity-oriented while a CPM network is event-oriented. False

Multiple Choice Questions

1. ________ is the fixation of time and date for each operation as well as it determins the
sequence of operations to be followed.
a) Dispatching
b) Scheduling
c) Routing
d) All of these

2. Scheduling techniques for employees, machines, jobs in manufacturing are associated

with
a) Frank B Gilbreth
b) Henry L Gantt
c) FW Harris
d) Elton Mayo

3. ____ is a time-table of operations specifying the time and date when each operation is to be
started and completed.
a) Time study
b) Schedule
c) Loading
d) None of these

4. Which of the following is an objective of scheduling?

a) Meet due dates
b) Mininmize lead times
c) Minimize setup time and setup cost
d) All of these

56
5. _____ starts from some date in the future and schedules the required operations in reverse
sequence. Backward scheduling
6. ________ are used to represent activity in a network diagram.
a) Circles
b) Squares
c) Rectangles
d) Arrows

Match the following

Column A Column B
a) Shortest possible time in which an activity 1. Optimistic time estimate (b)
can be achieved under ideal circumstances
is known as ____
b) According to the time estimates made 2. identify all the project tasks (f)
by the PERT planners, the maximum time
that would be needed to complete an activity
is called as
c) Total float can be expressed as 3. Optimistic time estimate (a)
d) The critical path 4. Activity oriented technique (e)
e) CPM is the 5. Longest path (d)
f) First step in the creation of CPM/PERT 6. Latest start time- earliest start time (c)
network.

Case Study

Activity Predecessor Duration Activity Predecessor Duration

(days) (days)
A --- 6 G D 2
B --- 4 H A,C 10
C B 7 I D 6
D --- 2 J G 13
E B 4 K E,F,J 9
F D 10 L I 3

57
4.8 REFERENCES
¡ Heizer, J., Render, B., Munson, C., & Sachan, A. (2017). Operations management:
sustainability and supply chain management, 12/e.
¡ Roy, R. N. (2007). A modern approach to operations management. New Age International.
¡ Vohra, N. D. (2006). Quantitative Techniques in Management, 3e. Tata McGraw-Hill
Education.

58
 MODULE - 5 MAINTENANCE MANAGEMENT

STRUCTURE
5.1 Learning Objectives
5.2 Importance and Types of Maintenance
5.3 Maintenance Planning
5.4 Spare Parts Management
5.5 Summary
5.6 Keywords
5.7 Self-Assessment Questions
5.8 References

5.1 LEARNING OBJECTIVES

After studying this unit, you will be able to:
¡ Understand Importance and Types of Maintenance
¡ Understand Maintenance Planning
¡ Understand Spare Parts Management

5.2 IMPORTANCE AND TYPES OF MAINTENANCE

To prevent the unfavourable effects of equipment failure, managers at Orlando Utilities
Commission (OUC). Companies struggle for reliability. A generator failure at OUC is
exceedingly expensive for both the business and its clients. Power outages happen instantly and
could have terrible repercussions. A similar attitude is shared by management at Frito-Lay, Walt
Disney Company, and United Parcel Service (UPS). For Frito-Lay to achieve high plant
utilisation and superior sanitation, maintenance is essential. Disney needs spotless facilities and
secure rides to maintain its position as one of the most well-liked vacation spots in the world.
Similar to this, UPS's renowned maintenance programme keeps its delivery cars running and
appearing brand new for at least 20 years.
These businesses, like the majority of others, are aware that inadequate maintenance can cause
disruption, inconvenience, waste, and even loss of life. Successful maintenance and reliability
are characterised by the interdependence of the mechanic, the mechanic's machine, and the
operator. A company's performance is improved and its investment is safeguarded by effective
maintenance and reliability management.
Maintaining the system's functionality is the goal of maintenance and dependability. Effective
maintenance eliminates variability. To meet desired performance and quality criteria, systems
must be designed and maintained. All actions taken to maintain the functionality of a system's
components are considered maintenance. A product's reliability is the likelihood that it will

59
perform as intended over a predetermined period of time and under predetermined
circumstances.

Types of Maintenance
Emergency maintenance is unscheduled maintenance that must be performed right away to
prevent major consequences, such as loss of output, significant asset damage, or for safety
concerns. Emergency situations should not become the norm. It is important to have planned
maintenance methods to ensure such a possibility.
Planned Maintenance: Maintenance that is organised, controlled, and documented in
accordance with a preset plan is referred to as planned maintenance. Preventive and corrective
maintenance are two categories of planned maintenance.
Preventive maintenance, also known as diagnostic or predictive maintenance, is maintenance
carried out at predetermined intervals or in accordance with other set criteria with the goal of
lowering the probability that an item's condition will deteriorate below a specified threshold for
acceptability. You make an effort to foresee failure and then make an effort to stop it from
happening by taking preventive measures. The fundamental tenet of preventive maintenance is
the adage "prevention is better than cure" or "A stitch in time saves nine." Machines can undergo
preventive maintenance while they are in operation or while they are shut down.
Running Maintenance: Upkeep that can be done while the object is in use.
Shutdown maintenance is work that can only be done when an item is not in use. Additional
preventative maintenance may be condition-based or time-based.
Time-based Preventive Maintenance: This policy is in place when the wear and tear on any
component of an equipment is expected to occur throughout the course of the equipment's life
and is time dependent (in the third stage of the bath tub curve). Additionally, the expenses of
replacing the item should be far lower overall than those of failed replacement repair.
Condition-based Maintenance: When a measured parameter of the unit's condition or
performance changes significantly, signalling a substantial degradation in the unit, maintenance
is performed. Here, one can employ SIGNATURE ANALYSIS, a method of predictive
maintenance, to record systematically signals or information derived from things like
mechanical vibrations, noise signals, acoustic and thermal emissions, changes in chemical
compositions, smells, pressure, relative displacement, and other things, in order to continuously
monitor the health of the equipment.
The term "Signature Analysis" refers to the scientific collection of these illuminating signals or
signatures, diagnosis and detection of the faults, if any, present by a thorough analysis of these
signatures based on the knowledge previously acquired in the field, and assessing the severity of
the faults for decision-making. The method uses electrical equipment that was created
specifically with different capabilities, application modes, and design elements in mind. The
most flexible parameters in machine condition monitoring techniques are vibration and noise
signals. Vibration checks performed on a regular basis might identify any current or potential
issues. Vibration signature analysis identifies the problematic component of the machine and its
root cause. Vibration analysis is fairly comparable to sound or noise analysis.
As the conditions of the machinery are indicated well in advance, condition-based maintenance
thereby decreases injuries and fatal incidents caused by machinery. It makes it possible to safely
shut down the plant when an immediate shutdown is not allowed. Additionally, it enables early
planning to lessen the impact of approaching failures and be prepared with the required spare

60
components. However, condition monitoring is not always employed because it requires a lot of
manpower, is expensive to monitor, and can be challenging to monitor some data.
Corrective Maintenance: Maintenance done to bring back something that has fallen out of good
shape. It entails quick fixes that can become necessary in between inspections.
Design-out Maintenance: Another approach that is widely used in industrialised nations is
maintenance. Later in this unit, this is covered in more detail. Here, the policy seeks to minimise
the impact of failure and get rid of the source of upkeep. In essence, an effort is made to identify
the flaws in the equipment's design. Numerous pieces of equipment have poor designs, which
frequently fails. Additionally, the requirement for additional lubrication frequencies may be
eliminated by selecting the right tribological materials.

5.3 MAINTENANCE PLANNING

Some people very broadly define maintenance as any task carried out by a maintenance person.
The phrase "works engineering" is frequently used in manufacturing organisations to refer to the
installation, commissioning, maintenance, replacement, and removal of plant, machinery, etc.
However, the phrase is rarely used when talking about service organisations, towns, and the
military forces. Fortunately, "tero-technology" covers all of these scenarios, though it will take
some time before terms like "tero-technology manager" become widely accepted. However, the
maintenance function manager is getting more attention than ever before, regardless of their job
title: estates manager, works manager, chief engineer, plant engineer, building manager, or
maintenance manager.
The following are the main goals of maintenance activity:
a) To maximise all assets' availability and dependability, particularly plant machinery and
equipment, and to maximise return on investment.
b) To increase the usable life of assets by reducing deterioration and wear and tear. For our
nation in particular, as opposed to wealthy nations, where replacement would be more
cost-effective than maintenance.
c) To guarantee that all emergency equipment, such as standby units, fire fighting and rescue
units, etc., is always operationally ready for use.
d) For the protection of facility users' staff
From the perspective of the line managers, the benefits of better maintenance practises include: I
safeguarding the buildings and plant; (ii) increasing utilisation and decreasing downtime; (iii)
saving money in the maintenance depot; (iv) maximising resource utilisation; (v) maintaining a
safe installation; (vi) preventing waste of tools, spares, and materials; and (vii) providing cost
records for future budgeting.
Given addition, although though it may seem far off in Indian settings, we are seeing a trend
toward higher automation, computerization, and mechanisation every day. Whatever the level or
extent of automation, the asset maintainer will always have a greater share of responsibility.
Several justifications for this include:
1) As plant output capacities increase, downtime (i.e., when the plant is not in use) becomes
more expensive.
2) Reliance on control systems might result in complete output disruption when one machine
or other process component malfunctions.

61
3) Less operator interaction is possible to correct for machine malfunctions or faults.
The implications on the maintenance department include the need for greater multidisciplinary
cooperation combined with a systems approach to maintenance, as well as a new necessity for
new abilities in computer control repair. As every effort is made to prevent catastrophic failure,
systematic maintenance can result in significant cost, resource, and labour savings. Failure or
plant breakdown could lead to issues like lost production time, production rescheduling, spoilt
materials as a result of an abrupt process stop that might damage components, failure to recover
overhead costs as a result of lost production hours, need for overtime, need for subcontracting
work to fill temporary labour shortages, etc.

5.4 SPARE PARTS MANAGEMENT

Budgets are being strained, margins are getting smaller, and operational costs are going up. The
key is to enhance sales while minimising operating expenses. The first step is to be aware of what
is in your inventory. For all forms of maintenance work, including inspections, preventive
maintenance, and repairs, ideal spares conditioning is essential. Spare components are often
needed intermittently for maintenance operations, with the exception of protective activities.
Therefore, a key element in the timely execution of the maintenance process is the quick and safe
coordination of the demand for replacement parts with the supply of spare parts at the required
time. One of the most commonly reported reasons for the delay in finishing maintenance work is
a lack of materials.
Simply expanding warehouse stock will not be sufficient to address this issue because equipment
spare parts are typically of extremely high quality. A maintenance planner should be aware of
possibly crucial components' locations. Higher production, better quality, and lower operating
costs are the outcomes of effective maintenance management. Spare parts are essential in these.
"What you picture is usually what happens," Effective work planning and scheduling requires
that you are aware of the task at least 24 hours before it needs to be started. An important
component of a successful spare parts management programme is the appropriate planning and
administration of the spare parts inventory. Downtime is increased if the precise parts are
accessible when they are required for routine maintenance or repairs. Additionally, if there are a
lot of parts on hand, carrying the inventory costs a lot of money for the company. There are
numerous ways to manage spare parts.
Every industry, including mining, chemical production, and service providers like contact
centres, banks, insurance companies, and hospitals, uses technological tools to carry out their
daily operations. These tools are not only important assets for every single business; they also
need upkeep, which, depending on the type and extent of the tools, can be a genuine burden.
These instruments are typically referred to as spare parts. Let's define "Spare parts" and
determine the general perception before discussing the impact. A component, sub-unit, or main
assembly that is kept on hand for replacement as needed is referred to as a spare part.
In order to achieve desired production results in terms of quality, quantity, and time, spare parts,
maintenance, and operating supplies include all types of parts and materials required to maintain
the production assets in acceptable working condition.
There are three main categories of spare parts:
There are three types of spare parts: preventative maintenance (PM) spares, opportunity
maintenance (Opportunity spares), repair components (Breakdown spares), and overhaul
(Shutdown) spares, which are needed for planned plant shutdowns or overhauls.

62
For the repair parts, it is impossible to forecast the amount and timeline of the required. Only, it is
occasionally possible to anticipate when they will be needed. They require statistical techniques
to control their inventory.

SPARE PARTS MANAGEMENT AND OTHER SYSTEMS

Numerous business activities that are part of spare parts management call for data from
numerous application classes as well as application support. The following systems must
communicate with a spare parts management system:
The term "ERP Systems" (Enterprise Resource Planning) refers to a broad range of processes
supported by multi-module application software that help a company with product planning,
components procurement, inventory management, supplier and customer interaction, order
tracking, etc. This type of system's primary function is the management of transactions like
purchases, inventory transactions, returns, etc.
Systems that support maintenance planning and implementation, the recording of service
history, etc. in addition to timekeeping systems, quality control systems, production scheduling
systems, etc. are known as MES Systems (Manufacturing Execution Systems).
SCM Systems (Supply Chain Management): Systems with advanced planning and scheduling
capabilities, which include IT strategy, supplier relationships, and inventory reduction, all of
which have an impact on how efficiently your supply chain operates. Systems for managing the
supply chain have replaced earlier procedures in which manufacturers sent consumers spare
components as they needed them. Customers are now able to specify when and how they want
their spare parts supplied to vendors. The goal of supply chain management is to eliminate waste,
excess expenses, and inventories from the supply chain, which runs backwards from the
customer and includes all of his suppliers, suppliers of those suppliers, and so on. It is envisaged
that inventories generated by uncertainty and slow reaction will be significantly reduced by
having the programme directed by the client.
The MIS (Management Information Systems) for spare parts has the same objectives as the
MIS for other materials. The MIS typically produces the following reports: Stock and
consumption status report; pending indents report; pending purchase orders report; stock-out
report (also known as a report on dangerously low stock position); overstock/understock report;
and ABC analysis, separately for repair items and overhaul items.

BENEFITS OF SPARE PARTS MANAGEMENT

It is essential for businesses to promote their sales services and specific service part supplies due
to the convergence of economic, technological, and market dynamics. Implementing a strong
internal parts management can be done effectively through spare parts management. For
businesses looking to stay competitive, the availability of spare parts has become increasingly
important. The key components of a spare parts management process are described in this
section, including creating an internal parts management board, creating a preferred parts list or
corporate parts baseline, creating a procedure for choosing and authorising parts, creating a
procedure for qualifying parts, etc.
Condensed Acquisition Lead-Time: By using preferred spare parts, the government and
business avoid the costs and time delays associated with creating and developing replacement
parts as well as the challenge of purchasing a new item without readily available history or
documentation. The amount of time between the purchase request and the part's arrival is

63
reduced when preferred replacement parts are used.
Cost Savings: By promoting the adoption of frequently used or preferred parts, spare parts
management helps reduce the design and life-cycle costs of equipment. Because generic parts
are utilised in many applications, standardising parts-replacing numerous comparable parts with
a single universal part-leads to bigger part-type purchases. Larger part-type purchases enable
both the contractor and the client to benefit from scale economies. The expense of keeping
technical data and of storing, tracking, and sending numerous parts is reduced by part
standardisation for the contractor.
Increased Safety and Supportability of Systems and Equipment: Preferred components
reduce risk and increase the likelihood that equipment will perform as intended. Preferred
components have a track record of reliability, withstanding rigorous testing and functioning at
predetermined standards. By using them, fewer parts fail, fewer maintenance procedures are
required, and perhaps even failures that might result in mission failure or fatalities are avoided.
Improved Interoperability and Logistics Readiness: When devices or systems employ
generic parts, repair times are shortened since parts are more likely to be on hand and personnel
spend less time resolving specific issues. Additionally, because fewer parts need to be supplied,
adopting standard components streamlines logistics support and increases substitutability. This
results in cost reductions when buying, testing, storing, and shipping parts.

COST CONTROL FOR SPARE PARTS: ROLE OF MAINTENANCE

Cost due to a spare part's end of life takes the following forms: a) Cost due to the part not being
available when the machine needs it, b) Consumption value, c) Inventory carrying cost, and d)
Capital cost of non-moving objects.
Operations must avoid breakdowns, and maintenance must make sure that maintenance is
completed on schedule and to a high standard in order to reduce the need for difficult repair
components. Eliminating failures that necessitate high cost, important products must be
maintenance's top focus. Frequently, rebuilt parts can be purchased for a small portion of the cost
of new ones. Purchase from OEM/reliable vendors, low LT, and standard parts will all save costs.
The operational costs of the spare parts system will be decreased by the use of straightforward
methods, computerised scientific analysis, and updating of inventory characteristics.

UNIQUE PROBLEMS OF SPARE PARTS MANAGEMENT

Primary materials that are related to the ongoing operation of the machinery include
consumables and raw materials. Spare parts are "secondary" goods that are connected to a
machine's malfunction. The majority of issues with managing the inventory of replacement parts
are caused by these features. Here is a list of them:
1) The timing and volume of requirements are unpredictable.
2) The safety stock is extremely high compared to the pace of consumption, which results in
idle inventory.
3) Need for separate inventory control systems for various spare part kinds
4) It is impossible to thoroughly inspect parts that have been bought. As a result, a fake spares
market develops.
5) For the majority of spares, data are not available to estimate consumption rates.

64
 Engineering evaluations for novel machines can be flawed.
6) The cost of this manufacture is not tied to the prices of spare components, but rather to
other economic considerations.
7) Modifications and model changes make it harder to find earlier parts.
8) The variety of replacement parts required is too wide for effective manual control.
9) Identification and preservation are difficult and error-prone due of the wide variation.
10) Obsolescence occurs frequently. Almost no parts have any resale value, not even
serviceable ones.

5.5 SUMMARY
¡ A company's performance is improved and its investment is safeguarded by effective
maintenance and reliability management.
¡ Maintaining the system's functionality is the goal of maintenance and dependability.
Effective maintenance eliminates variability.
¡ A key element in the timely execution of the maintenance process is the quick and safe
coordination of the demand for replacement parts with the supply of spare parts at the
required time.
¡ There are three types of spare parts: preventative maintenance (PM) spares, opportunity
maintenance (Opportunity spares), repair components (Breakdown spares), and overhaul
(Shutdown) spares, which are needed for planned plant shutdowns or overhauls.

5.6 KEYWORDS
¡ Emergency maintenance is unscheduled maintenance that must be performed right away
to prevent major consequences, such as loss of output, significant asset damage, or for
safety concerns.
¡ Planned Maintenance: Maintenance that is organised, controlled, and documented in
accordance with a preset plan is referred to as planned maintenance.
¡ Preventive maintenance, also known as diagnostic or predictive maintenance, is
maintenance carried out at predetermined intervals or in accordance with other set criteria
with the goal of lowering the probability that an item's condition will deteriorate below a
specified threshold for acceptability.
¡ Running Maintenance: Upkeep that can be done while the object is in use.
¡ Shutdown maintenance is work that can only be done when an item is not in use.
Additional preventative maintenance may be condition-based or time-based.
¡ Time-based Preventive Maintenance: This policy is in place when the wear and tear on
any component of an equipment is expected to occur throughout the course of the
equipment's life and is time dependent (in the third stage of the bath tub curve).
¡ Corrective Maintenance: Maintenance done to bring back something that has fallen out
of good shape.
¡ Design-out Maintenance: Another approach that is widely used in industrialised nations
is maintenance.
65
5.7 SELF-ASSESSMENT QUESTIONS
Long Answer Type
1. What is the concept of maintenance management?
2. What is the concept of spare parts management?
3. What is the difference between predictive and preventive management?
4. What is the interaction of other systems of with the spare parts management?
5. Describe benefits the spare parts management.
6. What is maintenance planning?

Short Answer Type

1. What is the predictive management?
2. What is the preventive maintenance?
3. What is corrective maintenance?
4. What is running maintenance?
5. What is time-based preventive maintenance?
6. What is planned maintenance?

Fill in the blanks

1. ______ is defined as the combination of tasks that are required to keep a machine or part of
a machine in the desirable condition. (maintenance)
2. Maintenance helps an organization to ensure the health and safety of employees through
___________ (hazard identification and management).
3. Formal approach to increase the efficiency of the entire maintenance system by creating a
balance between resources and requirements of maintenance is _______ ( maintenance
optimization).
4. ___________ is responsible for the maintenance of computer systems in an organization.
(network administrators).
5. KPI should be _______. (qualitative)
6. _____ is the expected time duration between inherent failures of a machine or equipment
while in use. (MTBF- mean time before failure)

True/False
1. A machine is said to be a quality machine if it has no downtime. True
2. To ensure the quality of their machines and equipment, organizations need to focus on non-
conformance of machine specifications. False
3. One of the reasons of machine failure could be Obsolescence. True
4. Surface degradation results in degradation and in-machine failure due to friction, wear, and

66
 tear, or lack of lubrication. True
5. Sudden breakdown or failure results in considerable production loss represent low critical
loss. True
6. The main objectives of adopting preventive maintenance is to reduce machine
breakdowns. True

Multiple choice
1. Which one of the following is not an objective of maintenance management?
a) To reduce breakdowns of machines
b) To keep the machines and other facilities in a bad condition
c) To keep the plant in good working condition
d) All of these

2. _____ can be defined as the measurements that detect the onset of a degradation
mechanism, thereby allowing causal stressors to be eliminated or controlled prior to any
significant deterioration in the component physical state.
a) Breakdown maintenance
b) Predictive maintenance
c) Past maintenance
d) None of these

3. In the case of _______ type of maintenance , no actions or efforts are taken to maintain the
equipment as the designer originally intended to ensure design life is reached.
a) Breakdown maintenance
b) Preventive maintenance
c) Both a) and b)
d) None of these

67
Match the following
Column A Column B
a) Preventive maintenance 1. Decreases (d)
b) Identifying the loopholes and defects in the 2. Zero down time (f)
existing maintenance system and
suggesting the areas for improvement is one
of the functions of a
c) Belt of an electric motor is broken, it needs 3. Frequency of breakdown (e)
d) With the increase in preventive maintenance 4. Maintenance auditor (b)
cost, breakdown maintenance cost
e) Number of breakdowns / available machine 5. Lubrication (a)
hours
f) Total productive maintenance aims at 6. Corrective Maintenance (c)

Case study
Discuss based on industry examples what type of different maintenance they can plan for
improving their efficiency.

5.8 REFERENCES
¡ Heizer, J., Render, B., Munson, C., & Sachan, A. (2017). Operations management:
sustainability and supply chain management, 12/e.
¡ Roy, R. N. (2007). A modern approach to operations management. New Age International.
¡ Vohra, N. D. (2006). Quantitative Techniques in Management, 3e. Tata McGraw-Hill
Education.

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 MODULE - 6 STATISTICAL QUALITY CONTROL

STRUCTURE
6.1 Learning Objectives
6.2 Introduction
6.3 Cent percent inspection
6.4 Sample inspection
6.5 Statistical Quality Control
6.5.1 Construction and Interpretation of Control Charts (X-R, n,p,c, np)
6.6 Introduction to Six Sigma
6.7 Summary
6.8 Keywords
6.9 Self-Assessment Questions
6.10 References

6.1 LEARNING OBJECTIVES

After studying this unit, you will be able to:
¡ Understand Quality Control
¡ Understand concept of inspection
¡ Understand the control charts and construction
¡ Understand the basics of six sigma

6.2 INTRODUCTION
Quality of the product is a priority for any manufacturing company. While meeting production
deadlines and quality standards is critical, it's also crucial that the final product adhere to
predetermined standards. Because high-quality goods and services are what lead to satisfied
customers. For the company to survive and expand, producing high-quality goods and services is
essential given the level of competition at the national and worldwide levels as well as consumer
awareness. The likelihood that quality and productivity will increase national prosperity and
work-life balance is higher.
However, by operating the company at the targeted economic level, the management seeks to
satisfy customers. By effectively combining quality development, quality maintenance, and
product quality enhancement, both of these can be achieved.
Quality is a relative concept that typically refers to the finished product. For instance, a gear used

69
in a machine that extracts sugarcane juice would not have the same surface smoothness,
tolerance, or accuracy as a gear used in the head stock of a lathe, but it still might be regarded as
having acceptable quality if it performs well in the juice extractor. Thus, the most cost-effective
definition of quality is its suitability for use or purpose.
The perception of a person in a particular circumstance determines the quality. It may be a user-,
cost-, or supplier-oriented problem. The needs of the consumer determine the product's quality
because the item is made specifically for their usage.
Planning, achieving, controlling, and constantly improving quality are required.
The term "quality" can mean several different things:
1. Fitness for Purpose
If a component performs well in the machinery for which it was designed, it is said to be of
good quality. Thus, appropriateness for purpose is the definition of quality.
2. Adherence to specifications
Quality refers to a material's or component's capacity to deliver satisfactory performance
in a situation for which the user intended it. Thus, a product's quality refers to its
compliance with specifications. Depending on the qualities needed for a particular
application, customer requests must be evaluated and converted into specifications. Every
application has its own peculiarities, just like every individual has unique traits.
As an illustration, think of a fountain pen. The purpose of a fountain pen is to write on
paper, so in order to execute this function effectively, the pen must have the following The
purpose of a fountain pen is to write on paper, so in order to execute this function
effectively, the pen must have the following features:
¡ It must carry enough ink to prevent the need for frequent refills; It must control the flow of
ink into the nib
¡ It must have a smooth writing nib.
¡ The characters on the paper should be marked by it. Neither the marking nor its width
should be excessive.
¡ It shouldn't cause the paper to tear.
¡ It should be small enough to fit between your fingers.
¡ It ought to be nicely presented.
¡ When not in use, it ought to keep the ink from drying out.
¡ It shouldn't be slippery or uncomfortable for fingertips.
¡ It need to stay firmly in the pocket.
¡ It shouldn't be prohibitively pricey.
¡ It ought to have a respectable lifespan. It ought should endure reasonable shocks
(unbreakable).
3. Grade
A defining characteristic or grade of a product includes how it looks, performs, lasts, is
reliable, tastes, smells, can be maintained, etc. Typically, this is referred to as a quality
attribute.

70
4. Preference Level
A product's quality is determined by how much a customer prefers it over competing items
of the same grade, which is sometimes referred to as the customer's performance.
5. Degree of Excellence A product's level of general excellence is determined by its quality.
6. Promises' Level of Fulfillment: A product's quality is an indicator of how well the
promises made to buyers were kept.
Quality and quality attributes: A product's conformity to specific criteria can be used to
describe quality in general. Quality is dependent on specific product-related qualities.
Specifications or levels of tolerance are specified for all significant product quality
attributes when a product is designed. These traits are referred to as the quality. For
instance, the length requirements for a ballpoint pen refill can state that it should fall
between 9.90 and 10.10 centimetres.

Controlling the Process: The control activities of a process must be such that the output
product's quality characteristics are maintained at the required levels.
In order to take the proper measures in regard to the quality monitoring of a process, statistical
process control is a methodology that periodically gathers and analyses data on quality attributes
from the process. The most popular method for statistical process control is the use of control
charts.
Variations and Stable/Unstable Process: Despite steady conditions, there will always be some
variation in quality parameters (for instance, the length of filling) (for example, same machine
settings, almost identical material quality and experience of operators). Small conditional
changes may be responsible for the subtle variations in quality features. These insignificant
factors, often known as chance causes, are unavoidable.
Such alterations result in variation known as chance cause variation. The stable process is,
nevertheless, disrupted by some significant chances, such as a change in the machine settings or a
significant decline in the quality of the raw materials. These variations need to be found and
fixed. They are known as assignable causes because you can link change to one or more specific
causes. A process may become unstable due to such circumstances.

6.3 CENT PERCENT INSPECTION

On production lines, 100% inspection and sample inspection are the two types of quality checks
used. It would not be practical or cost-effective to inspect every component made in large

71
quantities at a low cost, such as electronic components, light bulbs, and nuts and bolts, because to
the significant rise in labour expenses. Additionally, a 100% examination is not practical when
doing so could result in product damage. As a result, products that support life, are valuable, and
are not consumed or damaged during inspection often undergo 100% inspections. This indicates
that various items go through sampling inspections in various phases.
A batch of parts is tested against specified tolerances of specific features as part of a 100 percent
inspection, which implies every part is examined. It does not mean that every single quality
feature on a product is tested; that is done as part of total quality assurance and is referred to as
"Complete Testing" or "Complete Inspection." "100% of testing is only 80% accurate." - Dr.
Juran .

6.4 SAMPLE INSPECTION

In sampling inspection, pieces of a target lot (the inspection lot) are removed for examination in
order to assess the lot's acceptability in light of the lot's quality requirements. Manufacturers can
save on inspection expenses and time because there are fewer things to inspect compared to a
100% examination. A number of test items that cannot be examined during 100% inspection can
instead be examined during sampling inspection.
Inspections of samples, meanwhile, do not ensure the quality of all manufactured goods. As a
result, in order to assure consistently excellent quality, sampling inspections require a system
that lowers inspection costs while taking into account the benefits to the producer and
consumers. This implies that the inspection strategy and the method used to choose the right
sample size for the manufacturing process are crucial.
(https://www.keyence.co.in/ss/products/measure-sys/measurement-selection/process/
sampling- inspection.jsp)

6.5 STATISTICAL QUALITY CONTROL (CONTROL CHARTS)

Control can be characterised as a procedure used to monitor performance and assess it against a
predetermined standard. It is required to take corrective action if the observed performance
deviates from the standard performance.
The phrase "quality control" can signify several different things:
¡ Quality control is the process by which we assess the actual performance in terms of
quality, compare it to the standards, and, if there is a discrepancy, take corrective action.
¡ It is a methodical approach to managing variables that have an impact on the product's
quality. Material, equipment, machinery, type of labour, environmental factors, measuring
devices, etc. all have a role.
¡ Quality control is the broad range of actions used to guarantee that an operation will deliver
goods of the highest possible quality while incurring the fewest expenses.
¡ It can also be characterised as the equipment, know-how, or abilities used to carry out high-
quality tasks.
¡ It is the name of the department that dedicates its entire time to carrying out high-quality
activities.
¡ Quality control is the process used to ensure that the quality objectives are met.

72
¡ It is a strategy, system, or approach for dealing with quality issues.

Procedures for a Quality Control Program

¡ Create a quality policy, first.
¡ Establish standards (specifications) for the product based on the performance, cost, and
profit of the client.
¡ Choose an inspection strategy and establish a checking procedure.
¡ Look for deviations from established norms or requirements.
¡ Take remedial action through the appropriate channels and implement the necessary
adjustments to meet standards.
¡ Select a salvage strategy, i.e., determine whether to destroy the complete assembly or
repurpose the damaged pieces.
¡ Coordinating issues with quality.
¡ Raising the organization's awareness of quality. Quality control is not the responsibility of
a specific division or individual. Any supervisor's principal duty is to produce work of an
acceptable standard.

Goals of Quality Control

¡ To increase the company's revenue by making the product more appealing to clients; for
example, by offering a long lifespan, more versatility, appealing aesthetics,
maintainability, etc.
¡ To lower costs for the company by minimising losses from defects. For instance, to reduce
scrap, rework, sorting, customer returns, and other waste.
¡ To accomplish manufacturing interchangeability in large-scale production.
¡ To make goods at the lowest possible cost while maintaining the highest quality.
¡ To protect the manufacturers' reputation and the goodwill of their customers.
¡ Make inspections quick to ensure quality control at the right points in the production
process to guarantee the creation of defect-free goods.
¡ Evaluating the process for compliance with the stated standards and acting appropriately
where there are discrepancies.
¡ To increase quality and productivity through experimentation, process control, and
customer feedback.
¡ Creating a process for positive vendor-vendee relationships.
¡ Making the organisation more quality-conscious.
Control Chart Construction steps:
¡ Periodic sample collection
¡ Create quality metrics for the sample that was gathered.
¡ Plot sample size (-axis) against a quality attribute ( -axis)

73
 ¡ Verify that the quality attribute value is within the upper and lower control limits.
¡ The attributes of quality generally follow a normal distribution. As a result, the upper
and lower limits can be calculated using the "Three Sigma Limits" as the lower and
higher limits, respectively.
¡ Control over the mean and variability is desired if a variable is a quality attribute.

Statistical Control in Detail

To ensure that the manufactured items meet the established quality standards, a quality control
system conducts inspection, testing, and analysis. "Statistical Quality Control" is the term used.
The statistical techniques are used to regulate, enhance, and maintain quality or to address issues
with quality. The gathering, organisation, analysis, interpretation, and presentation of data are all
aspects of statistics. It is founded on the mathematical theory of probability and the law of large
numbers. It is merely one of several tools required to resolve quality issues because it considers
the possibility of variance. It takes statistical thinking to create an information system that
satisfies the concepts of "prevention," "control," and enhancing product quality.
SQC is systematic contrasted to random process inspection's guesswork, and the quantitative
statistical technique identifies errors in judgement and neutralises personal bias.
Three general activities make up SQC:
1. Accurate data is systematically collected and graphically recorded.
2. Data analysis.
3. Adopting actual engineering or management measures if the information gathered shows
material departures from the predetermined boundaries.
Modern procedures for SQC and acceptance sampling are crucial for raising productivity,
improving quality, boosting consumer confidence, and growing the nation's industrial sector.
Statistical quality control, which is based on probability theory, is crucial to overall quality
control.
1. Frequency distribution: is a tabulation or tally of the number of times a given quality
characteristic occurs within the samples. Graphic representation of frequency distribution
will show: (a) Average quality (b) Spread of quality (c) Comparison with specific
requirements (d) Process capability
2. Control chart: is a graphical representation of quality characteristics, which indicates
whether the process is under control or not.
3. Acceptance sampling: Evaluation of a piece of a product or material inside a lot for the
purpose of accepting or rejecting the lot based on whether or not it complies with a quality
specification is known as acceptance sampling. It decreases inspection time and expense
and puts more effective pressure on quality improvement than could reasonably be
achieved by 100% inspection. It is employed when confidence in the calibre of the
delivered or produced goods is sought.
4. Data analysis: It uses specialised techniques, such as analysis of variance, analysis of
correlation, analysis of tolerance, analysis for engineering design, and problem-solving
approaches to root causes. The design of items, the purchasing of raw materials, semi-
finished goods, and finished goods, the manufacturing processes, inspection, packaging,
sales, and after-sales services can all be done using statistical methods.

74
Benefits of Statistical Quality Control:
¡ Efficiency: The usage of SQC provides quick and cost-effective examination.
¡ Reduction of Scrap: By anticipating problems before they arise and lowering the amount
of ruined work, it identifies the root cause of excessive variety in manufactured products.
¡ In addition, acceptance sampling is used in SQC and puts more pressure for quality
improvement than 100% inspection can.
¡ Simple defect finding: In SQC, following the plotting of the control charts X, R, p, c, u, np,
points that deviate from the upper or lower control limits indicate a decline in quality, and
the appropriate remedial action is subsequently conducted. However, with 100%
inspection, undesirable quality deviations may be found after a significant number of
defective products have been created.
¡ Adherence to specification: As long as statistical control is maintained, future
specifications can be correctly predicted, allowing one to determine if manufacturing
processes can produce goods that meet the specified set of specifications.
¡ increases productivity and decreases unused man and machine hours.
¡ Productivity is increased by using people, equipment, and materials efficiently.
¡ Improved customer relations brought about by general product improvements and
increased market share.
¡ SQC has created a common vocabulary that all three groups-designers, production
workers, and inspectors-can utilise to come up with logical solutions to one another's
difficulties.
¡ The removal of manufacturing process bottlenecks
¡ Identify the instances and locations in which complete inspection, sorting, or screening are
necessary.
¡ Educating personnel about quality.

Meaning and Scope of Statistical Quality Control

One of the most crucial elements influencing consumer choice among competing goods and
services is quality. The traditional definition of quality is founded on the idea that goods and
services must satisfy the needs of their users (at the risk of the consumer).
Quality refers to usability.
Variability has an inverse relationship with quality.
Fitness for usage has two general components.
1. Quality of Design
2. Quality of Conformance
All goods and services are created on a global scale in a range of grades or levels of quality, hence
the phrase "quality of design" is the correct technical word.
For instance, the primary goal of all autos is to provide the consumer with safe transportation.
However, there are differences amongst cars in terms of size, amenities, appearance, and

75
performance. These variations among different kinds of cars.
How closely the product adheres to the requirements set forth in the design determines the
quality of compliance. The choice of the manufacturing process, the training and oversight of the
workforce, the type of quality assurance system utilised (process control, tests, inspection
activities, etc.), the degree to which these quality assurance producers are followed, and the
modification of the workforce to achieve quality are all factors that affect the quality of
conformance.

Control Chart
A control chart is a crucial tool or statistical tool used in the analysis and management of
repetitive activities. It was created by A. Shewhart and is based on the idea that any repeating
process contains some degree of variability.
A control chart is a visual depiction of the data that was gathered. The data may be related to
samples' assessed quality attributes.
Patterns on control charts
Two sorts of Control Chart patterns can be distinguished.
1. Common cause of variation or chance pattern of variation
2. Variation with a pattern of assignable causes

1. Chance Pattern of Variation

A control chart having a chance pattern of variation will have the following three characteristics:
¡ Most of the points will lie near the central line.
¡ Very few points will be near the control limits.
¡ None of the points (except 3 in a thousand) fall outside the control limits.

2. Assignable Cause Pattern of Variation

The most important types of assignable cause patterns of variations are:
¡ Extreme Variation
¡ Indication of Trend
¡ Shifts
¡ Erratic Fluctuations

Extreme Variation
The points that are outside of the upper and lower control boundaries are used to identify extreme
variation. Since corrective action is required to create the goods within the defined limitations, it
suggests some assignable causes of error are present when the sample on an X ? chart, p chart, or
both points outside these limits.
(a) Measuring and calculation errors

76
(b) Samples selected at the peak of pressure, temperature, and other parameters.
(c) Incorrect machine, tool, or other setting.
(d) Samples selected before or after a procedure.

Indication of Trend
It can be assumed that a process is indicating a trend if successive points on an `X or R chart tend
to move steadily either towards LCL or UCL. This means that change is occurring gradually and
that even though all of the points are located within control limits, it is likely that the process will
eventually become out of control if the proper case or corrective action is not made.

Causes of Trend
¡ Tool wear
¡ Wear of threads on clamping device
¡ Effects of temperature and humidity
¡ Accumulation of dirt and clogging of fixtures and holes

Shift
On either an `X or R chart, it can be assumed that a change in the process has occurred when
several successive points fall above or below the middle line, indicating the presence of some
assignable cause. It is generally assumed that when seven consecutive points lie above or below
the central line, the shift has occurred.

Causes of Shift
¡ Change in material
¡ Change in operator, inspector, inspection equipment
¡ Change in machine setting
¡ New operator, carelessness of the operator
¡ Loose fixture etc.
There are ups and downs with erratic fluctuation. This could be caused by a single source or a
combination of causes that have an impact on the degree and spread of the process. It can be
challenging to pinpoint the reasons for unpredictable swings. It might be the result of various
factors working on the process at various points in time.

Causes of Fluctuations
¡ Frequent adjustment of machine
¡ Different types of material being processed
¡ Change in operator, machine, test equipment etc.

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History of Control Charts
An overview of statistical quality control's history
¡ 1924: In a Bell Laboratories Technical Memorandum, W. A. Shewhart introduces the
control chart idea.
¡ H. F. Dodge and H. G. Roming of Bell Laboratories establish and redefine the acceptance
sampling method in 1928.
¡ Industrial quality control (a journal) starts publishing in 1944.
¡ In 1946, many quality associations merged to become the American Society for Quality
Control (ASQC).
¡ Quality Control Handbook initially published in 1957 by Turan and Gragna.
¡ Established in 1959, Technometrics is a journal of statistics for the certainty of physical
and chemical engineering. The first editor is J. Stuart Hunder.
¡ Quality Progress (Journal of Quality Technology) replaced Industrial Quality Control in
1969.
¡ The journal Quality Engineering debuts in 1989.
¡ Motorola launches its six-sigma effort in 1989.

Basic Principles of Control Chart

A typical control chart is a graph that plots a quality feature against the sample size or time that
has been determined through measurement or computation of a sample statistic. The centre line
of the graph denotes the average value of the quality attribute related to the under control
condition. Upper Control Limit (UCL) and Lower Control Limit are two additional horizontal
lines (LCL). These control boundaries are selected such that almost all of the sample points will
fall within them if the process is under control. It is presumed that the process is under control and
that no more intervention is required as long as the points plot inside the control limits. The
process is said to be out of control if a point plots outside the control bounds.
If the points behave in a systematic or non-random way, even if they all plot within the control
bounds, this may be a sign that the process is out of control. All the plotted points should have a
largely random pattern if the process is under control. A non-random pattern on a control chart
usually has a purpose, and if it can be identified and removed, process efficiency can be
increased.
The use of control charts and hypothesis testing go hand in hand. The process mean is in control,
that is, equal to some value m0, if the value of `X plots between the control bounds. On the other
hand, we draw the conclusion that the process mean is out of control, or equivalent to some value
m1 # m0 exceeds either control limit. In this way, the control chart functions as a test of the
statistical control hypothesis, and a point charting outside the control bounds is equal to rejecting
the statistical control hypothesis. But there are various ways in which control charts and
hypothesis tests differ from one another.
Finding the problem's underlying root cause and addressing it is crucial for identifying and
eliminating assignable causes.
The Out of Control Action Plan is a crucial component of the corrective action procedure linked
to the use of control charts (OCAP). The OCAP includes terminators-actions done to ideally

78
eliminate the assignable cause-and check points, which are possible assignable causes that could
be addressed.
An OCAP is a live document in that it will change as more information and comprehension about
the process are gathered. As a result, an initial OCAP should be presented together with a control
chart.

Uses of Control Charts

A control chart's primary function is process improvement. In general, we have discovered that
¡ Most systems do not function in a condition of statistical control.
¡ As a result, assignable causes will be found through the diligent and routine use of control
charts. Variability will be decreased and the process will be enhanced if these causes can be
eradicated from the system.
¡ Only assignable causes will be found by the control chart. Usually, managements,
operators, and engineers must take action to remove the assignable reasons.

Reasons Control Charts are Used Frequently in Industries

¡ Control charts are a tried-and-true method for boosting output.
¡ Control charts are useful for preventing defects
¡ Control charts avoid adjusting processes unnecessarily.
¡ Control charts offer information for diagnosis.
¡ Control charts offer information on the capacity of the process.

Types of Control Charts

Control charts are classified into two types.
¡ Variable Control Charts
¡ Attribute Control Charts

Variable Control Chart

Variable control chart mainly consist of three charts namely
¡ Mean (Average) control chart ( `X )
¡ Range control chart (R)
¡ Standard deviation control chart (s)

Attribute Control Chart

Attribute control chart mainly consist of three charts which are
¡ Fraction defective chart (p)

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¡ Chart for defects (c)
¡ Chart of number of defectives (np or d)

Assignable Causes of Variation

The assignable causes manifest in many circumstances.
¡ Points exceed the allowable control limits.
¡ A chain of seven or more points
¡ Points create a pattern.
¡ The points are extremely near the central line.

Constant Cause System or Common Causes

It's a constant cause system and the process is under control if all the points fall within the control
ranges without forming a trend or any sequence of points.

Process Control and Product Control

Controlling and maintaining the quality of the manufactured product is the primary goal of every
production procedure. to ensure that it meets the required quality requirements. Process control
is what this is known as, and control charts are used to study it.
Instead of weighing the products, inspect each one individually so that they can accept or reject
the measurement as needed. This is referred to as "product control," and Dodge and Roming's
acceptance sampling plan is used to study it.

Specification Limits and Tolerance Limits

Specification Limits
For a product to be used profitably for the purpose for which it is intended, manufacturers must
decide on the maximum and lowest acceptable dimensions of specific quality attributes. The
item is considered faulty and cannot be used if the measurements are outside of these ranges. The
term "specification limits" refers to the maximum and minimum ranges of individual item
variation that are specified in the product design.

Tolerance Limits
These are the ranges of variation for a product's quality measure that, assuming the process is in a
condition of statistical quality control, at least a certain percentage of the product should fall
inside (with a certain likelihood). For instance, we can assert that, with a probability of 0.99, at
least 90% of the items will have dimensions inside a given range. The term "statistical tolerance
limits" is another name for these boundaries.
Specification limitations and tolerance limits are words that are frequently used synonymously.
Indeed, the two phrases are defined as "the conformance boundaries for a particular unit of a
manufacture or service activity" in the American Society for Quality Control's (ASQC)
Glossary's (1983) single entry for the two terms. The Glossary does make the suggestion that

80
specification limits are better suitable for classifying materials, goods, or services according to
their specified requirements, whereas tolerance limits are often favoured in evaluating the
manufacturing or service environment.
For instance, a government supply company offers mop specs. One of these requirements relates
to the kind of wood that will be utilised for the handle. The handle's length is also specified as
being 120±2 cm. The final requirement may alternatively be seen as a tolerance. Specifications,
as opposed to tolerance, relate to the traits that are part of the specifications.

3s Limits
A. Shewhart has proposed 3s limits to construct control charts. The distance between
central line and any way one of the control limits is 3s. Let us take a sample of size n is {x1,x2,…,
xn } and its statistic is taken as t (i.e.) E(t) = mi and V(t)= si2. Thus, t~N(mi, si2).
According to Normal Law,

Difference between defect and defective

If an object doesn't meet the requirements for any of the characteristics, it is considered to be
defective. A defect is any quality that does not satisfy the requirements.
If an object has at least one problem, it is considered defective. For instance, if a casting has
unwelcome hard areas, blow holes, etc., the casting is defective, and the defects are the hard
places, blow holes, etc. that make the casting flawed.
The quantity of defectives in subgroups of constant size is represented by the np chart.
Contrarily, the c chart is applicable to the quantity of flaws in a subgroup of constant size.

Construction of Average and Range ( `X and R) Charts

In order to examine the central tendency and spread of a process on a single measurably distinct
characteristic, `X and R charts are used in conjunction with variable data (such as measurements
of length, diameter, weight, etc.). The results of an `X-chart can occasionally be unsatisfactory.
This could happen because of an outdated computer, worn-out components, alignment issues, or
processing that is intrinsically unpredictable. The range chart is utilised as an additional control
tool in this situation. The goal of this chart is to continuously monitor the process's variability.
The R chart simply adds more details on the production process to the `X chart rather than
replacing it.
Steps of Construction
1. Find the mean of each subgroup `X (1) , `X (2) , `X (3),... `X (k) and the grand mean of all
subgroups.

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2. Find the UCL and LCL using the equations

Where`S = average of Range of sub-groups.( Range=Largest value in the sub-group-smallest

value in the sub-group
A(3) values can be found based on the table below.

3. Plot the LCL, UCL, centerline, and subgroup means.

4. To assess whether the process is under control, interpret the data according to the following
rules:
¡ Eight consecutive points on the same side of the centerline, with one point outside the 3-
control-limits.
¡ Six points that grow or drop one after the other
¡ at least two of the three spots on the same side of the centerline must be farther than two
units from the centerline.
¡ Four of the five spots that are on the same side of the centerline are farther than sigma from
the centerline than the other three.
¡ identifying process irregularities by employing an average run length (ARL).

R chart
1. Choose n measurements for each of k successive subgroups, where k must be at least 20. n
often ranges from 1 to 9. It is extremely typical to use 3, 4, or 5 measurements per subgroup.
2. Find the range of each subgroup s(i) where s(i) = biggest value - smallest value for each
subgroup i.
3. Find the centerline for the R chart, denoted by

Find UCL and LCL as follows :

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5. Find D(3) and D(4) values from the following table

6. Plot the subgroup data to check for statistical control of the procedure. If not, identify the
assignable cause, get rid of it, and the subgroup(s) before repeating the first three steps.
Subgroups having out-of-range points for which no assignable causes can be determined
should NOT be eliminated.
7. Once the R chart is in a state of statistical control and the centerline RBAR can be
considered a reliable estimate of the range, the process standard deviation can be

Numerical
For the following data of 20 sets of measurements draw the `X and R charts.

R Chart Limits

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`R = 0.0005
UCL = D(4) `R= 2.574 * .0005 = 0.001287
LCL = D(3) `R = 0.000 * .0005 = 0.000
`X Chart Limits
`X = 2.0000
UCL = `X + A(2) `R = 2.000 + 1.023*.0005 = 2.0005115
LCL = `X- A(2) `R = 2.000 - 1.023*.0005 = 1.9994885

p-chart
p-chart is used to analyze attribute data (e.g. good or bad classification), such as the fraction
nonconforming to a process. There are three ways of making p-chart: (i) fraction defective chart
or p-chart, (ii) number of defective chart or np-chart, and (iii) percent defective chart or 100p-
chart.
Similar to`X and R charts, the p-chart is widely used in business. It just needs attribute data,
therefore techniques like go-no-go measuring, visual inspections, etc., supply the necessary
information. In contrast to X and R charts, the p chart is more appealing when merging multiple
qualities into a single figure. Sadly, typical subgroup sizes are frequently between 50 and 300
items.
p = fraction defective
= (number of defective units in each lot inspected/no. of units in the lot)
= x/n
In order to achieve the desired level of within-subgroup homogeneity, approximately m = 20 or
30 subgroups of size n are chosen from the process, with any discrepancies in the manufacturing
process eventually becoming apparent within subgroups. The statistic pi = xi/ni is calculated for
each group i.
Recall that the binomial distribution with mean = np and variance 2 = npq, where q = 1 - p and
where p is the process fraction defective, describes the number of nonconforming items in a
sample of size n from a finite process. The suitable metric for each subgroup, given that we are
interested in a p chart, is x/n, or the subgroup fraction nonconforming, which has a mean of p and
a variance of pq/n. Following equations are used to establish 3 control limits from m subgroups.

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c-chart
c-chart is used when attributes data, such as a count of the number of defects per sample unit, is
the focus.
This is a technique for mapping attribute properties. In this instance, a single unit of length,
width, area, set time, etc. is used as the sample. Finding the number of flaws per unit rather than
the percentage of defectives is necessary in particular circumstances. A automobile or a radio, for
instance, are big units made up of several little components. There could be issues with the radio
in several places. Based on Poisson distribution, a c-chart is created.

Numerical
Compute the control limits for c-chart.

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Total number of defects = 58 + 52 = 110
Average number of defects = `C = 110/20 = 5.5

as negative defects are not possible. If any of the values fall outside the control limits, eliminating
the observation which fall outside.

6.6 INTRODUCTION TO SIX SIGMA

Six Sigma is a quality improvement methodology for businesses that counts the number of flaws
in a process and aims to systematically fix them. The Six Sigma management technique was
created in 1984 by Motorola engineer Bill Smith to eliminate inconsistencies in the company's
electronic production processes that were resulting in defective products. Since then, top
management and project teams in a wide range of industries have adopted the tactics, tools, and
cultural norms that support the management system to increase operational excellence.
Furthermore, the definition of "defect" has expanded to cover any shortcoming in business
procedures that inhibits a corporation from satisfying the needs of its customers.

How does Six Sigma work?

The Greek letter sigma is used in statistical analysis to represent a standard deviation from the
mean. The father of statistical process control, Walter Shewhart, argued that three sigma from the
mean is the tipping point in lean manufacturing, indicating that there are too many failures and
that process change is necessary.
Until Bill Smith recommended collecting and analysing data at a more granular level and
designating six sigma the point at which a process had to be fixed, this was the recognised norm
for many years.
Six sigma allows for 3.4 mistakes per million opportunities because it is nearly hard to reach zero
defects, a concept known as infinite sigma. Three sigma, on the other hand, permits 66,807 errors
for every million opportunities.
A business using Six Sigma methodology employs statistics to produce a baseline sigma after the
required data has been acquired. The baseline acts as a benchmark for evaluating future
improvement and shows how near or how distant the organisation is from reaching six sigma.

Importance of Six Sigma

Six Sigma supporters assert that benefits of their business strategy include a reduction in process
costs of up to 50%, shorter cycle times, less material waste, a better understanding of customer
requirements, higher customer satisfaction and value stream, and more dependable goods and
services.
The federal trademark term Six Sigma is owned by Motorola, and it is widely accepted that Six
Sigma may be expensive to execute and that it can take years before a company starts to show
financial rewards.

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Businesses outside of manufacturing were able to better comprehend how Six Sigma approaches
might be applied to increase customer satisfaction in any industry thanks to General Electric
CEO Jack Welch's very public endorsement of the methodology in 1995.

The key sigma principles are the following:

Customer focus
Use data
Improve continuously
Involve people
Be thorough

Six Sigma techniques

One of the two improvement approaches, Six Sigma DMAIC or Six Sigma DMADV, can be used
to implement the aforementioned concepts. Each term has a unique use, but their names are taken
from the crucial milestones in their respective processes.
The acronym DMAIC (define, measure, analyse, improve, control) is used to improve an
existing process.
A new process is developed using the DMADV (define, measure, analyse, design, and validate)
method.

DMAIC
The Six Sigma DMAIC is broken down into the following steps:
Define: List all customer deliverables as well as the project's objectives.
Measure: Recognize present efficiency.
Analyze: Discover the underlying reasons of any flaws.
Improve: approaches to get rid of flaws and fix the procedure to improve.
Control: Manage the efficiency of upcoming processes.

DMADV
Here is a step-by-step summary of the Six Sigma DMADV approach, which shares the first three
steps with DMAIC. Some businesses substitute DFSS (design for Six Sigma) for DMADV since
the two acronyms are so similar to one another.
Define: List the project's parameters and all of the deliverables to the client.
Measure: Recognize present efficiency.
Analyze: Discover the underlying reasons of any flaws.
Design: a procedure that satisfies the demands and expectations of the client.
Verify: Ensure the procedure is intended to satisfy the demands of the consumer and is effective.

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When deciding between Six Sigma DMAIC and DMADV, it's critical to comprehend the
situations in which each method should be applied.
When an existing product or service is not performing to its greatest standards or satisfying
consumer needs, the DMAIC methodology should be applied.
When a company is creating a new good or service, or when DMAIC for an existing project or
process fails, the DMADV approach should be employed.

6.7 SUMMARY
¡ Quality of the product is a priority for any manufacturing company.
¡ Quality is a relative concept that typically refers to the finished product.
¡ Controlling the Process: The control activities of a process must be such that the output
product's quality characteristics are maintained at the required levels.
¡ Despite steady conditions, there will always be some variation in quality parameters (for
instance, the length of filling) (for example, same machine settings, almost identical
material quality and experience of operators).
¡ Small conditional changes may be responsible for the subtle variations in quality features.
These insignificant factors, often known as chance causes, are unavoidable.
¡ On production lines, 100% inspection and sample inspection are the two types of quality
checks used.

6.8 KEYWORDS
¡ Quality control is the process by which we assess the actual performance in terms of
quality, compare it to the standards, and, if there is a discrepancy, take corrective action.
¡ Statistical Quality Control : To ensure that the manufactured items meet the established
quality standards, a quality control system conducts inspection, testing, and analysis.
¡ Frequency distribution: is a tabulation or tally of the number of times a given quality
characteristic occurs within the samples.
¡ Control chart: is a graphical representation of quality characteristics, which indicates
whether the process is under control or not.
¡ Acceptance sampling: Evaluation of a piece of a product or material inside a lot for the
purpose of accepting or rejecting the lot based on whether or not it complies with a quality
specification is known as acceptance sampling.

6.9 SELF-ASSESSMENT QUESTIONS

Long Answer Questions
1. What are the basic principles of control charts?
2. What is the difference between variable and attribute charts?
3. Explain the concept of six sigma.
4. Explain the different definitions of quality

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5. Explain the specification limits and tolerance limits.
6. What are the uses of control charts and what are the areas in which it is used?

Short Answer Questions

1. Explain R chart.
2. Explain specification limit.
3. Explain tolerance limits.
4. Explain attribute charts
5. Explain statistical quality control.
6. Describe the variable charts.

Fill in the blanks

1. ______ is used to monitor characteristics that can be measured and have a continuum of
values such as height, weight, volume etc. (control chart for variables)
2. ______ is a group of workers from the same area who usually meet to discuss their
problems, investigate, recommend solutions and to corrective actions. (Quality circle)
3. Cost of poor quality does not include ____ and ___ cost. ( detection and prevention)
4. DPMO is the short form of Defects per ____ opportunities. (million).
5. Pareto principle states that roughly _____ of the effects are from _____ of the causes.
(80%, 20%)
6. ______ is the technique to quickly generate creative or original ideas on or about a
procedure , problem, product or service. (brainstorming)

True/False
1. Financial leverage is part of production planning and control. False
2. Appraisal cost is not part of cost of quality. False
3. Walter Shewhart developed statistical quality control techniques. True
4. Control chart for attributes is used to monitor characteristics that have discrete values and
can be counted. True
5. P-chart is a control chart for variables. False
6. Quality circle trades in equity. False

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Multiple choice questions
1. _____ is the term used to describe the set of statistical tools used by quality professional for
the purpose of quality control.
a. Accounting standards
b. Statistical quality control
c. Population study
d. None of these

2. ______ is the art of applying tests, preferably by the aid of measuring appliances to observe
whether a given item or product is within the specified limits of variability or not.
a. Inspection
b. Planning
c. Leading
d. None of these

3. ______ is the process of verification or correction in the quality of the product when the
deviations in the quality are found to be more than expected.
a. Policies
b. Quality Control
c. Quality measurement
d. None of these

4. Inspection sampling plans is developed by

a. W A Shewhart
b. H.F. Dodge & H G Roming
c. P. M. Blacker and others
d. John Mauchlly and J. P. Eckert

5. Which of the following is an objective of quality control?

a. To produce good quality products
b. To reduce companies cost through reduction of losses to defects
c. To produce optimal quality at reduced price
d. All of these

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6. In this sampling plan, the inspection results of two sample sizes are used to decide whether
to accept or reject the complete lot
a. Single sampling plan
b. Double sampling plan
c. Questionnaire
d. Census investigation

Match the following

Column A Column B
a. P-chart Prevention cost (d)
b. R chart Measuring or auditing products services to
assure conformance to quality standards
and performance requirements (e)
c. TQM Cost resulting from products not
conforming to requirements or user needs
(f)
d. Prevent poor quality in products and services Control chart for variable (b)
e. Appraisal cost Continuous improvement (c)
f. Failure cost Control chart for attributes (a)

Case study
For quality production in the firm how are quality control charts used, explain using examples
from real-life industries.

6.10 REFERENCES
¡ Heizer, J., Render, B., Munson, C., & Sachan, A. (2017). Operations management:
sustainability and supply chain management, 12/e.
¡ Roy, R. N. (2007). A modern approach to operations management. New Age International.

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 MODULE - 7 PRODUCTIVITY

STRUCTURE
7.1 Learning Objectives
7.2 Work Study
7.2.1 Objectives
7.2.2 Scope
7.2.3 Uses
7.3 Method Study
a. Flow Process Chart
b. Flow Diagram and Process Mapping
7.4 Work Measurement Elements
7.4.1 Performance Rating
7.4.2 Allowances
7.4.3 Standard Time
7.4.4 Synthetic Time Standards
7.4.5 Work Sampling
7.5 Summary
7.6 Keywords
7.7 Self-Assessment Questions
7.8 References

7.1 LEARNING OBJECTIVES

After studying this unit, you will be able to:
¡ Understand Work study: Objectives, Scope and Uses
¡ Understand flow process chart
¡ Understand flow diagram and process mapping
¡ Understand work measurement Elements

7.2 WORK STUDY

The phrase "methods engineering" refers to both the study of methods and the measuring of
work. They each attempt to respond to inquiries like, "How should a task be performed? And how
long, with allowances, should it take to complete the task? Methods Study is the examination of
the intricate designs of workstations and, to a lesser extent, the connections between them.

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In order to develop an organisation, management uses the methods study or work study approach
to look into all the aspects affecting its economy and efficiency. It makes the erroneous
assumption that there is always one ideal approach to complete a task. The best and safest way to
discover this "one optimal way" is through a scientific methodology. It is possible to measure and
establish a standard time for how long it takes to complete a task in the best possible way. Work
study is applicable to a number of industries, including those in production, operations, and
research, marketing, sales, and distribution, materials handling, design, building, and other
construction, transportation, healthcare, defence, agriculture, etc.
An estimation of the time needed for a typical employee to complete a certain task at a
workstation is determined during the planning stage. Management mandates a job restudy after
the individual has mastered the task and the factors impacting it have stabilised (e.g., tooling,
material, method, and circumstances are accessible and regularly applied). An industrial
engineer or technician designs and publishes the standard procedure and establishes the time
standard for completing the task, taking into account nonproductive allowances, through
observation and analysis. This period of time serves as a benchmark for how long it should take a
typical qualified employee, with prorated allowances, to complete the specified operation, per
unit of product.
The predicted direct labour time for a finished unit of a product is represented by the total number
of activities for that product. By comparing the actual number of units generated by an employee
over a period of time with the number of units the employee would have produced based on
standard time, this time serves the objective of giving management a basis for evaluating
employee performance. Work measurement is the method used to establish the average duration
of an operation.

Avoiding waste of any type is the goal of work study (time, human effort, materials, capital,
etc.). Its catchphrase is "work smart, not hard." [Turner]
¡ To create a uniform process for performing a task.
¡ To calculate the standard time (ST) for completing a work that will be used to calculate pay.
¡ To reduce manufacturing unit costs by choosing the best machine tools, settings, and
procedures.
¡ Reduce idle time for workers and equipment by designing the plant properly to reduce the
mobility of materials, operators, and operators.
¡ To reduce extraneous movements made by people while executing a task.
¡ To make the best use possible of resources like labour, equipment, or materials.
Work study consists of (a) Method study, and (b) Work measurement. We will discuss each of
them in the following sections.

7.3 METHOD STUDY

Method study is the practise of giving work a thorough, critical examination in order to increase
its effectiveness and/or efficiency. Although it was first intended for the study and enhancement
of repetitive, manual work, it can be used to all kinds of work at all organisational levels. Anytime
someone looks for more efficient ways to accomplish something-such as mow the lawn, prepare
meals, wash vehicles, get to work-they are either consciously or unconsciously conducting a
technique research. To carry out the technique study, nevertheless, a methodical strategy is
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necessary. The following are the steps for doing a method study:
1. Select: Decide on the task, activity, procedure, or approach for study.
2. Record: Note all relevant information for the chosen employment.
3. Examine: Inspect the facts that have been recorded for the chosen work.
4. Develop: Improve your strategy by studying the documented facts.
5. Install: Implement the recently discovered technique, and
6. Maintain: Continue to use this newly installed technique to reap the desired benefits.

We will discuss some of the steps in detail:

Select
Work is chosen because it addresses an identified opportunity or problem (resulting from a
systematic review of the data, high levels of dissatisfaction and complaint, or as part of a change
in policy, practise, technology, or location), and typically because it satisfies certain
requirements for urgency or priority. The person in question must take the following factors into
account before choosing a job.
Industrial engineers, management personnel, and equipment are all involved in the method
research from an economic perspective. Therefore, the process is expensive for the organisation
that decides to implement the technique study programme. It's crucial to balance the benefits of
this study's findings against its expenses. The advantage from this effort will be fleeting, and the
costs of this study may outweigh the gain if the task chosen for study is not anticipated to last for a
long time, is relatively tiny, or is projected to undergo a design change in the near future.
Therefore, method study engineers should choose the work for study carefully.
Prior to accepting a job for a technique study, we must have sufficient technical skills. For
instance, it is felt that the production pace in an assembly shop is lower than anticipated.
According to the method research analyst, ineffective layout, line balancing, and working
practises may be to blame for lower production, and a skilled industrial engineer should look at
these issues. Simply identifying the issue will be useless if the company lacks the knowledge
necessary to solve it.
Human reactions are quite significant and deserve careful study. Even if studying a particular
profession will result in significant benefits for the company, it is wise to take into account
everyone involved or, in the worst case scenario, to abandon the study completely if it is likely to
provoke unrest among the workers.

Record
The second stage is recording. The pertinent information regarding numerous procedures,
inspections, transportations, etc. is accurately documented after choosing a certain assignment
for MS. There are many different recording methods available; the one chosen will depend on the
nature of the study and the work being analysed, as well as the amount of information required.
Many of the techniques consist of straightforward charts and diagrams, although these can be
complemented by computer-based tools as well as photography and video techniques.

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Methods Study Charting Techniques
Charting methods include a lot of the conventional methods used in methods engineering. In
general, charting techniques give a topic a pictorial dimension and also focus data collecting on
it. The following is a discussion of these graphs and diagrams:
1. Operations Process Chart
2. Flow Process Chart
3. Flow Diagram
4. Man-Machine Chart
5. Multiple Activity Chart
6. String Diagram.
We are going to discuss Operations Process Chart, Flow Process Chart, Flow Diagram and
process mapping more in detail in this section.
Operations Process Chart (OPC): This chart has been used for a very long time to show the
processes, checks, and order in which they occur during the production of a full product.
Operation refers to all tasks carried out by a person or group of people simultaneously at a single
area.

Flow Process Chart

While only operations were considered in the OPC, the flow process chart (FPC) also takes into
account production-related transports, transfers, delays, and storages. Additionally, it provides
information on how far things are transported and how long certain processes take, like
transportation, delays, and inspections. It is typically ready for one assembly component at a
time. Storage implies that a product has left the control of manufacturing and is now under the
management of another organisation (e.g., the stockroom or warehouse). Delay suggests that
production is still directly in charge of the final product. The following symbols, used in that
order, stand for various tasks like operation, transportation, inspection, storage, and delay.

The flow process chart is especially useful for tracing the extraordinary distance that a section of
a plant travels, especially if the plant was not constructed scientifically. There are three different
types of flow charts:
1. A flow chart (machine type)
2. A flow process chart in (man type). This is a picture depiction of the various actions a
person does when performing a task and his moves from one location to another in carrying
out the task.
3. Product Type Flow Process Chart: This diagram is based on a product analysis. This is a
picture a visual representation of the various stages used to transfer a product from one
state to another stage to the next.
Analyses of the systems and critical evaluation of the acquired data are performed. The goal is to
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identify those areas of the entire work system that need to be improved or present opportunities
for positive change, frequently through a systematic questioning approach.

Flow Diagram
¡ It is a line diagram that shows the path taken by the object under investigation in a plan
view of a work at a specific scale. It displays the journey that objects, people, or machines
have taken. It is possible to utilise an isometric drawing when there are multiple floors
involved.
¡ Flow process diagrams and flow charts are relatively straightforward and useful tools for
method analysis. They are highly helpful in choosing the optimal layout and in creating the
overall flow of operations.
¡ They are excellent tools for studying and enhancing a challenging task since they provide a
clear picture of a process.

Process Mapping
A management tool called process mapping is used to graphically represent the flow of work, the
steps, and the participants in a business process. These diagrams are also frequently referred to as
workflow diagrams or flowcharts. This technique is used by organisations to increase a process'
efficiency and to better understand it. Stakeholders can pinpoint process elements that can be
improved by generating simple-to-follow diagrams. This entails locating process bottlenecks
and other inefficiencies, such as repetitive tasks that are best automated.
Process mapping has several advantages. Abstract benefits like enhanced process
comprehension and increased productivity were highlighted. Additional advantages of
developing a process map include:
Increasing work satisfaction Employees value the openness that a process map offers since it
lets them know what to expect and what their duties are.
Enhance worker performance. Employees who are aware of their responsibilities and where to
go for assistance when needed are more productive.
Friendly to users Business process maps are easy to understand and are perfect for activities like
staff training and brainstorming meetings. Designing, testing, and sharing processes with the
team is made simple with BPM software.
Certifications: assist businesses in obtaining and keeping up-to-date ISO 9000 and 9001
certifications.
Problem-solving: Organizations can test what-if scenarios and hypothetical scenarios using a
business process map, which makes it simpler to pinpoint issues and potential solutions.

Install
Any technique research is successful when there is real change "on the ground." Consequently,
the Install phase is crucial. Theoretical change is simple; real change requires careful preparation
and management of the individuals involved in the scenario under consideration. They could
require consoling, retraining, and help while learning new abilities. Install may, in some
circumstances, necessitate the concurrent operation of both the old and new systems, the

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building up of buffer inventories, etc.

Maintain
It is vital to check that the new method is operating, that it is being followed, and that it has
produced the expected results after the introduction of new working methods. The maintenance
phase is now. Method drift occurs when people start to either bring new modifications or revert to
previous working practises. Some of these might be advantageous (and ought to be legally
adopted); others might be ineffective or dangerous. To formally compare practise with the
specified technique and find such "irregularities," a method audit can be utilised.

7.4 WORK MEASUREMENT ELEMENTS (STANDARD TIME)

Methods engineering includes the subsets of methods study and work measurement. One of the
most crucial factors in engineering, research, and production has always been time. For instance,
Galileo's studies with falling objects heavily relied on measurements of space and time. Taylor
introduced the idea of timing human activity as a way to assess how well workers are doing in the
workplace.
Time study is a methodical procedure that involves closely monitoring and timing (with a timing
device) human work in order to determine how long it will take an experienced worker to
complete the task when performing at a specific level of performance.

Stopwatch Time-Study
Taylor's first method of measuring work was this one. In doing so, the analyst dissects an
operation into its constituent parts. The analyst then records the amount of time that has passed at
the conclusion of each element for a number of study cycles as the operator repeats the process.
Additionally, the analyst tracks the operator's rate of activity and compares it to their idea of a
typical rate for the task at hand to create a "performance rating factor." Operation being studied
while taking into account the appropriate operational allowances.
The worker under study's speed and competence, or performance rating (PR), are taken into
account when calculating the average time across a number of cycles. Last but not least, an
allowance factor (AF) is used to account for fatigue, unavoidable delays, and personal demands.
It usually corresponds to a fraction of the normal time.

Steps in Conducting a Time Study

1. Select the job, inform the workers, and define the best method.
2. Time an appropriate number of cycles n. Use a sample size chart or graph to determine n.
3. Compute the sample size required. For desired level of accuracy, sufficient no of
observations are required. For many kinds of measurements, a level of ± 5% accuracy is
considered satisfactory. For this level of accuracy, the formula for determining the no of
observations is

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4. Prepare a schedule to observe the worker at appropriate time. The concept of random
numbers may be used to provide for random observations.
5. Observe, rate, and record the worker activities per schedule.
6. Record starting time, stopping time, and no. of acceptable units completed during the
period.

Uses of Work Standards and Time Estimates

¡ A review of recent or previous performance
¡ Worker compensation, incentive payments, and productivity measurement
¡ Evaluation of facilities and equipment
¡ Analysis of alternative operating procedures and job approaches
¡ Future performance forecasting.

The steps are as follows:

¡ Analysis (i.e., dissecting the work into manageable, quantifiable components);
¡ Measuring (these elements); and
¡ Synthesis (from those measured components to arrive at a time for the complete job).
The observer first conducts a pilot study to observe the work initially in order to identify parts
that are convenient in terms of their length and that can be easily recognised for measurement.
Later investigations are conducted with the observer timing each instance of each component
(using a stopwatch or other timing tool) while simultaneously evaluating the worker's
performance based on a standardised rating system. (Among the main justifications for
measuring components of the rate at which a worker completes a piece of work, rather than the
entire piece of work, is to expedite the rating process. Over time, works will change; however, if
the elements are appropriately chosen, the rate of work should remain constant for the very brief
period of the element.

Number of Observations
The quantity of cycles that should be kept track of depends on the work's amount of variability
and the needed level of accuracy. It is possible to estimate the number of observations necessary
under given circumstances using statistical approaches since time study is essentially a sampling

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technique in which the value of the time required for the job is dependent on the observed times
for a sample of observations. If possible, this total number of observations should be made on a
variety of employees and under a variety of situations (if they are varied).
Allowances are added to derive a standard time. (for instance, to allow the worker to recover
from the physical and mental impacts of performing the activity) once a typical time for each
component has been established.
Although it might be challenging to time tasks with extremely short cycle periods, time study is a
very flexible technique that is applicable for a variety of activities conducted under a variety of
settings (of a few seconds). It accounts for particular and unique circumstances because it is a
direct observation technique, although it does rely on the usage of the subjective rating process.
However, it is frequently utilised and, when done correctly, delivers reliable results.
Additionally, it is significantly more affordable than it was in the past because to the usage of
electronic data collection equipment and personal computers for analysis.

Techniques of Time Study

Work can be evaluated in a number of ways, and numerous methods have been developed.
Regardless of the specific measurement technology being utilised, the fundamental process
consists of three steps:
The job is broken down into manageable, discrete components known as elements during the
analysis phase. The measurement phase uses a specific measurement technique to determine the
amount of time needed (by a qualified worker performing at a defined level of performance) to
complete each element of work. The synthesis phase then adds the various elemental times along
with the necessary allowances (see below) to create the standard time for the job.
There are two types of work measurement techniques: ones that rely on actual work observation
and ones that don't. Examples of ways that can offer times from simulation or even visualisation
of the work include predefined motion-time systems (PMTS) and the use of synthetic or standard
data. However, it is almost clear that the data on which such procedures are based came from
earlier observation of actual work.

Performance Rating
A process for converting observed times to times for the "qualified worker operating at a
predetermined level of performance" is included in direct observation approaches (such as time
study and analytical estimating). Rating is the name of the most popular of these procedures. This
entails the observer (after receiving the necessary training) evaluating the worker's rate of
production in relation to their conception of the rate corresponding to a standard rating. This
evaluation is based on the elements of the task, including effort, dexterity, movement speed, and
consistency. On a rating scale-of which three or four are often used-the evaluation is made. Thus,
using a scale of 0 to 100, the observer assesses the worker's rate of labour in relation to the
average rate of work (100).
The rating is then used to convert the observed time to the normal time using the simple formula:
Normal Time = Observed time × Rating factor
Given that it is a subjective evaluation, rating is a somewhat contentious area of measuring. The
resulting normal timings are not comparable when different observers rate things differently.
However, skilled raters exhibit a remarkable degree of consistency. It is crucial that the raters
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receive appropriate instruction, and that this instruction is consistently updated (to maintain a
common perception of standard rating).

Allowances
Workers experience exhaustion as a result of the work they are doing and the circumstances in
which they are working when doing a full shift or working day. The standard procedure is to
provide a worker some "allowance" so that they can recover from their exhaustion and respond to
their personal requirements.
The amount of the allowance is determined by the type of job being performed and the workplace
environment, and is frequently determined using a predetermined set of standards and scales.
Some contend that rest periods are unneeded. This school recommends that the observer
immediately modifies the idea of standard rating to account for the weight when performing
activities like hauling big weights.
Small amounts of work that may happen erratically and inconsistently are common in many
occupations. It is frequently uneconomical to quantify such occasional work, so an extra
allowance is provided to account for it and other irregular delays of a similar nature. The
assessment of this allowance, known as a contingency allowance, can be done by observation,
historical record analysis (for things like tool sharpening or replacement), or experience. As a
result, a standard time is created that accounts for the time the work "should" take (when done by
a skilled worker) as well as any additional allocations in the form of allowances that are
necessary to account for rest time, contingency time, and possibly unoccupied time. This
lengthens the work cycle as a whole.

Factor Skill Effort Conditions Consistency

Grade (1) (2) (3) (4)

Super (1)/ A1=+0.15 A1= +0.13 A=+0.06 A=+0.04

Excessive (2) /
A2=+0.13 A2=+0.12
Idea(3) / Perfect
(4)

Excellent B1=+0.11 B1=+0.10 B= +0.04 B = +0.03

B2=+0.08 B2=+0.08

Good C1=+0.06 C1=+0.06 C=0.02 C=0.01

C2=+0.03 C2=+0.03

Average D=0.00 D=0.00 D=0.00 D=0.00

Fair E1= -0.04 E1= -0.04 E = -0.03 E = -0.02

E2= -0.10 E2= -0.08

Poor F1= -0.16 F1= -0.12 F = -0.07 F = -0.04

F2= -0.22 F2= -0.17

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Summarised formula for calculation :
Westing house rating = sum of rating i.e. rating of ( skill + effort + conditions + consistency) as
given in the table above.
Rating Factor = 1 +/- Westinghouse rating
Normal time = Observed time * rating factor
Standard Time = Normal time * ( 100/ 100-Total allowances in percentage)
The observed time for an element was one minute and the rating were found to be as follows :
Skill : Fair E1
Effort : Excessive A1
Condition : Good C
Consistency : Excellent : B
Determine the normal time or basic time for the element under observation. Also find the
standard time @ 20% allowance.

Solution:
From the performance Rating Tables of Westinghouse system:

Skill Fair E1 0.04

Effort Excessive A1 0.13

Condition Good C 0.02

Consistency Excellent B 0.03

Overall (Total) rating 0.22

i.e. positive rating +0.22 over unity = 1+ 0.22 =1.22

Normal Time = Observed Time * Rating Factor
= 1* 1.22 = 1.22 min
Standard Time = 1.22*(100/100-20)= 1.22/0.8= 1.525 mins

Other Measurement Techniques

The selection of an appropriate measuring technique is influenced by a number of variables, such
as the measurement's goal, the amount of detail necessary, the time allotted, the availability of
specified data, and the measurement's cost.
To some extent there is a trade-off between some of these factors. For example, techniques which
derive times quickly may provide less detail and be less suitable for some purposes, such as the
establishment of individual performance levels on short-cycle work. These are popular
techniques for the Time Study:

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(a) Work sampling
(b) Predetermined Motion Time System (PMTS)
(c) Synthesis from standard data
(d) Estimating
¡ Analytical estimating
¡ Comparative estimating

Work Sampling
L. Tippet introduced this to the British textile industry for the first time in the 1930s.
It is employed to calculate how much time a worker spends on various jobs. To record a worker's
activity, random observations are needed. The findings are used to determine how employees
divide their time between different activities. This information can result in adjustments to
personnel, job transfers, cost estimates for activities, and the establishment of delay allowances
for "labour standards."
Work sampling is frequently referred to as a "ratio delay" research when it is carried out to
determine delay allowances.
Work sampling can be used to determine:
¡ the percentage of the day a worker is working; and
¡ the percentage of the day he is idle.
¡ A worker's working and non-working hours are used to calculate his performance rating.
¡ To determine the typical duration of an operation.

Advantages Work Sampling

¡ When compared to stop watch time study, it is significantly less expensive and requires
little to no training to complete.
¡ It can clock lengthy operations that are nearly impossible to time using a stopwatch. For
timing group activities, it works quite well.
¡ No timing equipment, such as a stopwatch or micro-chronometer, is required.
¡ Even if the study is halted in the middle, the results are unaffected.
¡ Observations are possible with the required level of accuracy.
¡ Large numbers of observations spread out over days or weeks reduce the impact of daily
variations on the outcomes. By figuring out where delays are coming from, it can increase
efficiency.

Limitations
¡ Using work sampling to analyse short-term activities is both time- and cost-inefficient.
¡ It is also not cost-effective to study one worker or one machine.
¡ It does not segment the work into components and does not offer component information.
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¡ It does not assist in enhancing work methodology.
¡ Normally, it doesn't take into account how quickly an operator is working.
¡ Employees might not trust work sampling since they don't understand its underlying ideas.

Applications:
¡ Calculating the working and non-working hours of people and machines.
¡ Timing frequent or infrequent long-duration activities that are regular or irregular.
¡ To calculate the time standard for indirect labour and the percentage of inspector
utilisation.
¡ Calculate allowances for unforeseen delays.
¡ To calculate the amount of time that material handling equipment is actually in use each
day.
¡ When describing patterns of resource use.
¡ For accounting and expense control purposes.
¡ In offices, farms, storage, retail, hospitals, the textile sector, and m/c shops, among other
places.

STANDARDIZATION
The strategic endeavour of standardisation involves parties with various business and societal
objectives. You can negotiate the sometimes difficult landscape of standards development by
being aware of the game's rules and the intentions of the other participants. You will end up
somewhere else if you don't know where you are going, as the legendary baseball player Yogi
Berra famously said.
It is a document, established by consensus and approved by a recognised organisation, that
specifies for common and repeated usage, rules, guidelines, or characteristics for actions or their
results, with the goal of creating the highest degree of order.
Nevertheless, it might be simpler to comprehend if you look at some instances of products that
adhere to criteria.
A roll of film for photography. Because of standards, it functions. the evidence Any 35 mm
camera that it fits into will allow you to take colour pictures of your loved ones anywhere in the
world. And in the event that the battery had died and the flash was inoperable? You just need to
insert a new battery to finish the task. Why does the battery function? according to standards.
An ATM card operates as expected. You can bring it everywhere. Insert into a cash machine. So
that you can enjoy your holiday, money is brought out. Unless, of course, you've over your credit
limit, in which case a personal financial advisor is precisely what you need. And fortunately for
you, personal financial planners are now being subject to global standards that are being
developed.
The room's lighting. Electric lights are a need for daily life that we often take for granted until we
need to change a bulb or, worse yet, experience a blackout. Now you object, saying, "Wait a
minute, I have to bring an adaptor when I travel abroad in order to connect my laptop into the
socket."

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7.5 SUMMARY
¡ The phrase "methods engineering" refers to both the study of methods and the measuring
of work.
¡ Methods Study is the examination of the intricate designs of workstations and, to a lesser
extent, the connections between them.
¡ An estimation of the time needed for a typical employee to complete a certain task at a
workstation is determined during the planning stage.
¡ Avoiding waste of any type is the goal of work study (time, human effort, materials,
capital, etc.).
¡ Method study is the practise of giving work a thorough, critical examination in order to
increase its effectiveness and/or efficiency.
¡ The pertinent information regarding numerous procedures, inspections, transportations,
etc. is accurately documented after choosing a certain assignment for MS.

7.6 KEYWORDS
¡ Operations Process Chart (OPC): This chart has been used for a very long time to show
the processes, checks, and order in which they occur during the production of a full
product. Operation refers to all tasks carried out by a person or group of people
simultaneously at a single area.
¡ Flow Process Chart: While only operations were considered in the OPC, the flow process
chart (FPC) also takes into account production-related transports, transfers, delays, and
storages.
¡ Process Mapping: A management tool called process mapping is used to graphically
represent the flow of work, the steps, and the participants in a business process.

7.7 SELF-ASSESSMENT QUESTIONS

Long answer questions
1. What is the method study?
2. What is the method study?
3. Describe work sampling.
4. Explain standardization and benefits of standards.
5. What are the steps of conducting time study?
6. What is the use of standards and time estimates?

Short answer questions

1. What is performance rating time study?
2. What are allowances in time study?
3. What are the limitations of work sampling?

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4. What is process mapping?
5. What is operations process chart?
6. What is normal time?

Fill in the blanks

1. ____ is the process of setting of productive activities in motion through release of orders
and instructions, in accordance with previously planned timings. (dispatching).
2. ______ involves systematically recording, analysing and synthesizing the times required
to perform a motion. (Time study)
3. _______ is measure of the quantity of output per unit of input Productivity
4. ________ is the systematic recording and critical examination o existing and the proposed
way of doing work as a means of developing effective methods. Method study

True/ False
1. If inputs decrease while output remains constant the productivity will increase. True
2. Work sampling is a technique of work measurement. True

Multiple choice
1. ______ is a recording technique for micro motion study
a) Simultaneous Motion Cycle Chart
b) Simultaneous Master Cycle Chart
c) a) and b)
d) None of these

2. Which of the following is the objective of motion study?

a) To eliminate more effective and productive patterns of movements
b) To develop more effective and productive patterns of movements
c) a) and b)
d) none

3. Scientific management, time study and work study are associated with
a) Adam Smith
b) Eli Whitney and others
c) Charles Babbage
d) Frederick Taylor

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4. Motion of study of jobs in production management is contributed by
a) Frank L Gilbreth
b) Henry L Gantt
c) FW Harris
d) Elton Mayo

5. _______ involves determination of the progress of work, removing bottlenecks in the flow
of work and ensuring that the productive operations are taking place in accordance with the
plans
a) Follow up
b) Time management
c) Time study
d) Time booking

6. Which of the following technique is employed for measuring work?

a) Time study
b) Work sampling
c) Predetermined motion studies
d) All of these

Case study
Stating examples from real-life please give how the work and time study are used in
organizations. Compare two different organizations in how they use work and time study.

7.8 REFERENCES
¡ Heizer, J., Render, B., Munson, C., & Sachan, A. (2017). Operations management:
sustainability and supply chain management, 12/e.
¡ Roy, R. N. (2007). A modern approach to operations management. New Age International.

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 MODULE - 8 LEAN PRODUCTION SYSTEM

STRUCTURE
8.1 Learning Objectives
8.2 Introduction to Toyota System
8.3 JIT
8.4 KANBAN
8.5 Summary
8.6 Keywords
8.7 Self-Assessment Questions
8.8 References

8.1 LEARNING OBJECTIVES

After studying this unit, you will be able to:
¡ Understand Nature, Scope, Importance and Functions
¡ Understand Evolution from Manufacturing to Operations Management
¡ Understand the contribution of founding fathers of Operations Management

8.2 INTRODUCTION TO TOYOTA PRODUCTION SYSTEM

Through continuous improvement, lean operations give the consumer exactly what they want,
when they want it, and without wasting anything. Workflow that is started by the "pull" of the
customer's order drives lean operations. The just-in-time (JIT) method emphasises throughput
and low inventory as a means of forcing continual problem solutions. Assembly lines are a
perfect fit for the Toyota Production System (TPS), which places a strong focus on continuous
improvement, respect for others, and standardised work standards. Eliminating waste, removing
variability, and increasing throughput are three core concerns that operations managers handle
regardless of strategy and label.
Lean manufacturers aim for perfection: no waste, no faulty parts, no inventory, and only value-
added activities. Any activity that the client does not perceive as adding value is a waste. Value of
a product is decided by the consumer. It is a waste if the customer refuses to pay for it. Seven
categories of waste were recognised by Taiichi Ohno, who is well known for developing the
Toyota Production System. These groups, which include many of the ways businesses squander
money or suffer financial losses, have grown in popularity in lean organisations. The seven
wastes of Ohno are:
Overproduction: It is wasteful to produce more than a customer orders or to start a project
before it is needed.
Queues: Wasting time waiting, storing, and being idle (they add no value).

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 Figure 1: Toyota Production System
Source: https://onlinelibrary.wiley.com/doi/abs/10.1002/qre.2059

Transport: It is wasteful to move materials back and forth between factories or work locations or
to handle them more than once.
Inventory: Wastes include unused raw materials, work-in-process (WIP), finished
commodities, and extra operating supplies.
Motion: Moving people or objects without adding value is wasteful.
Overprocessing: Wasteful work is done on a product that provides no value.
Product defect: Wastes include returns, warranty claims, rework, and scrap.
The idea that other resources, including energy, water, and air, are frequently wasted but
shouldn't be is suggested by a broader perspective-one that looks beyond the present output.
Production that is effective and sustainable reduces inputs, increases outputs, and leaves no
waste.

8.3 JIT
The value of all raw materials, fuels and lubricants, spare parts, consumable maintenance items,
semi-processed materials, and completed goods stock at any particular time is referred to as
inventory in financial jargon. The quantity of raw materials, gasoline and lubricants, spare parts,
and semi-processed commodities must be stocked for the proper functioning of the plant would
be the operational definition of inventory. Inventory is defined as an idle resource or any sort with

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an economic value because these resources are idle when held in stores.
Raw materials, production components, work-in-progress, and finished goods inventories
should be separated for control purposes because the reasons for their existence and the factors
that contribute to their size are distinct. The purpose of obtaining raw materials and production
components from external vendors is to decouple the purchasing function from the production
function. The size of this inventory depends on a number of variables, including the internal lead
time for purchases, supplier lead times, vendor relationships, availability of the material,
government import policies, in cases where the material is imported, the annual consumption of
the material (ABC classification), and the relative criticality of the material (VED
classification).
Work-in-progress inventory may be kept for decoupling subsequent manufacturing processes or
it may be kept simply because of the production cycle time. Decoupling could be used to develop
an incentive programme or to allow the various production departments to independently plan.
The length of the production cycle, the level of machine utilisation, the firm's make/buy rules,
and the management strategy for decoupling the many manufacturing phases all affect the size of
this inventory.
The marketing department insists on a sizeable finished products inventory since it is necessary
to maintain the completed goods inventory in order to ensure a free-flowing supply to the
customers. The size also depends on the company's capacity for warehousing and shelf life as
well as its ability to adhere to client delivery schedules and the marketing department's ability to
push the products.
The accuracy and specifics of the final forecast-all inventories are geared toward future
requirements and are thus sensitive to this factor-and the available storage space-the logical step
to this factor is the shelf life of the items stored, a factor to take into account in the case of
perishable goods-are two factors that affect inventories of all types.
Just in Time (JIT) is a Japanese invention, and Toyota improved many of its critical
components. Some elements of the management techniques Toyota created have an ideological
connection to the distinct traditions, culture, and labor-management relationships in Japan.
However, JIT production is applicable anywhere and has nothing specifically Japanese about it.
Many businesses throughout the world have effectively used the concepts. JIT production refers
to manufacturing and acquiring goods in incredibly small amounts just when needed. Simple
hand-to-mouth manufacturing practises result in lower stocks and fewer storage facilities, racks,
conveyors, forklifts, computer terminals for inventory control, and of course, material control
employees.
Work-in-process (WIP) inventory is low and production lead times are short because products
are assembled right before they are sold, subassemblies are created right before the products are
assembled, and components are fabricated right before the subassemblies are made. The
businesses need to thrive in other areas in order to function with such low inventories. They must
maintain a high standard of quality across the board. They require the participation and
cooperation of all employees in order to attain this quality and coordination. TIT manufacturing,
often known as manufacturing excellence, is a comprehensive continuous improvement ethos.
More significant is the lack of ongoing improvement. More importantly, the lack of spare stocks
makes it essential to run an error-free operation because there isn't a safety net of extra
components to keep production continuing when issues arise, allowing errors to be tracked down
and eliminated for good.
Removing inventory is the first step in the JIT transition. Less materials are purchased, and fewer
components and goods are produced; as a result, stocks have a reduced lot size. Work stops as a
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direct result of this. When feeder operations fail or produce too many detectives and there is no
buffer stock to keep things moving, production halts. When this occurs, analysts and engineers
work to find solutions and keep things running smoothly. Each time an issue is presented and a
solution is offered, productivity and quality also go up.
JIT is a concept of improvement that actively seeks out and fixes any issues or flaws that hinder
an organization's effectiveness and efficiency. In essence, it aims to get rid of all waste in the
company, including the waste of not fully utilising the abilities, skills, and potential of its
workers. Waste is everything that does not create value for a customer, whether they are internal
or external. Although the ideology has its roots in manufacturing processes, its ideas have been
extended to various fields like work methods, services, and distribution. JIT is a powerful and
effective tool for improvement.

CHARACTERISTICS OF JUST-IN-TIME SYSTEMS

For continual process and product quality improvement, just-in-time systems concentrate on
minimising inefficiency and wasted time in the production process. JIT operations require
reduced inventory and employee involvement. Numerous names for just-in-time systems exist,
such as zero inventory synchronous manufacturing, lean production, stock less production (used
by Hewlett-Packard), material as needed (by Harley-Davidson), and continuous flow
manufacturing (IBM). The following traits of JIT systems are covered in this section: people
involvement, teamwork, discipline, total quality management, pull method of material flow,
small lot sizes, rapid setup, uniform workstation loads, standardised components and work
methods, close supplier ties, flexible work force, product focus, automated production, and
preventive maintenance.

People Involvement
Since management relies on others to carry out organisational goals, all management initiatives
likely involve some behavioural components. Plans and decisions made by management are
merely the foundation. The subsequent human behaviour is what makes a corporation successful
or unsuccessful. Some individuals have the misconception that JIT is merely an inventory
programme because of words like zero inventory and stock less production. If JIT is to truly
succeed on the technological side, it has a strong human resources management component that
must be acknowledged. JIT's success may be largely attributed to the fact that businesses who
adopt it train their staff in the necessary skills, assign them responsibilities, and coordinate and
inspire them.
The JIT philosophy of continuous improvement and waste minimization defines waste as any
operation that does not enhance the product's value or directly benefit the customer.
Underutilizing human talent is one type of waste that is subtle and challenging to address. JIT
aims to make better use of the creative skills of workers, suppliers, subcontractors, and other
individuals who could help the business advance.
People ultimately determine whether a business succeeds or fails. JIT doesn't deviate from this
rule. Having a committed workforce committed to working together to solve production
problems is crucial since JIT is a system of enforced problem solving.

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Teamwork
A culture of cooperation and mutual trust must be established in an organisation first and
foremost. Workers and managers must view one another as fellow employees dedicated to the
success of the business.
A culture of open trust and teamwork in which people interact to recognise, define, and resolve
problems is the foundation of successful people participation. Sometimes people make the false
assumption that this component is just another programme, like a quality circle or suggestion
programme. These initiatives as well as others, such ad hoc project teams that concentrate on
particular improvement goals and semi-autonomous work teams whose membership rarely
changes, can be used to involve people.
The companies are open to attempting something new that seems like a worthwhile
improvement, and people are encouraged to offer ideas to improve techniques, which are rapidly
and fairly considered.
The empowerment of workers is another critical element that is essential to JIT. This implies that
employees are allowed the freedom to solve production-related issues on their own. Workers are
empowered to halt production at any time due to issues such as poor quality, broken machines, or
safety concerns, rather than waiting for orders from above. Workers are then urged to collaborate
in order to rapidly resume production. once employees have discovered issues. They are urged to
get together before or after work to talk about the issues during breaks.

Discipline
However, an open, improvement-focused environment does not imply that every person is free
to work however they choose. Typically, there is a prescribed method for carrying out each task.
A new standard process will be established if an improvement is proposed and accepted. Because
of this uniformity, there are no variances in goods or services that can result in flaws. Defects
arise when a substance or process that typically yields positive results has undergone some
change. It is recommended to stick with an effective process that produces high-quality products
until a superior method is tried and approved.

Total Quality Management (TQM)

In JIT systems, scrap and rework are eliminated in an effort to achieve a constant flow of
materials. Conformance to product or service specifications is necessary for efficient JIT
operations. JIT methods regulate quality at the point of production, with employees serving as
their own quality controllers. A TQM system must be in place for JIT production to work. A TQM
culture spread throughout the entire firm is essential for effective JIT manufacturing. Everyone
must participate in TQM, just as everyone must participate in JIT. Total dedication to producing
goods of the highest quality each and every time and total dedication to generating goods for
prompt customer delivery share a crucial characteristic. Both have a sharp focus on the
overarching objective of happy consumers.

Pull Method of Material Flow

When it comes to material flow, just-in-time systems use the pull strategy. The push method is a
different well-liked approach to material movement, though. We take the restaurant's fast food
dish production system into consideration to distinguish between these two systems. There are

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two desks available. The person making the dish is in charge of preparing the cutlets, toasting the
buns, and then topping them with ketchup, pickles, onions, lettuce, and cheese before inserting
the cutlets into the buns and plating them on a tray. The person who completes the assembly takes
the tray, wraps the buns in paper, and replenishes the supply. Because any buns that are still
unsold 10 minutes later must be destroyed, inventories must be kept to a minimum. The order of
material flow is from the producer of the dishes to the person who puts everything together at the
end, and then to the customer. Utilizing the push technique, which starts the item's production
ahead of client needs, is one way to control this flow. With this approach, management plans the
delivery of all raw materials (such as veggies, buns, and sauces) and approves the beginning of
manufacturing, all before the meal is required.

Small Lot Sizes

Users of JIT systems preserve inventory with minimal lot sizes rather than accumulating a
reserve of stock. There are three advantages to small lots. The inventory carried between orders
that is above the safety stock is first reduced by small lot sizes. A typical cycle inventory is equal
to 50% of a lot: Cycle inventory decreases as the size of the lot increases. Reducing cycle
inventory decreases the time and space needed for production and inventory keeping.
Small lot sizes also shorten lead times. Because the overall processing time at each workstation is
longer for large lots than for small lots, a decrease in lead time also reduces pipeline (WIP)
inventory. Additionally, a huge lot frequently has to wait longer to be processed while the
previous workstation finishes processing another large lot. Large lots also result in greater delays
if any defective goods are found because the whole lot needs to be examined to find all the items
that need to be repaired. Small lots also contribute to a consistent operating system workload.
Large lots require lengthy processing times on a single workstation, which makes scheduling
more difficult.

Short Setup Times

Increased setup frequency is a drawback of smaller lot sizes. Small lots are possible in activities
when setup durations are typically short. Increasing the frequency of setups, however, may result
in the inefficient use of staff and equipment in fabrication procedures requiring lengthy setup
times. For these businesses to profit from small-lot production, setup times must be cut down.

Uniform Workstation Loads

The daily workload on each workstation is most optimal for JIT systems if it is fairly uniform. A
uniform daily demand at all workstations can be created by assembling the same kind and
quantity of units every day. This will result in uniform loads. The monthly master production
schedule is created using capacity planning, which recognises capacity restrictions at essential
workstations, and line balancing.

Product Focus
The number of setups may be lowered with a product focus. In order to completely remove
setups, groups of machines and employees can be arranged into a product layout if volumes of a
certain product are high enough. Group technology can be used to build compact production
lines that produce in-volume in families of components with comparable characteristics when

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the volume is insufficient to keep a line of related items active. There are very few changes from
one product family's component to the next in the same family.

THE JUST-IN-TIME MANUFACTURING PHILOSOPHY

Manufacturing companies have long attempted to offer items with the highest value at the lowest
price. Presently, the top companies offer the best items at the lowest prices with the quickest
turnaround times. A quick response to market needs gives businesses a strong, long-lasting
competitive advantage. Indeed, time has become a key factor in global competition, radically
altering how businesses compete. It is no longer acceptable for businesses to produce high-
quality goods at low prices. In order to succeed in today's market, businesses must be the first to
deliver goods and services quickly to customers. Today, JIT is the weapon of choice for cutting
the length of this cycle.

Prerequisites for JIT Manufacturing

The basic idea of JIT is rather simple- drastically reduce work-in-process (WIP) inventories
throughout the production system. In this way, products flow from suppliers to production to
customers with little or no delays or interruptions beyond the amount of time they spend being
produced at work centers in manufacturing. The overall objective of JIT manufacturing is to
reduce manufacturing lead times, and this is achieved by drastic reduction in WIP. The result is a
smooth, uninterrupted flow of small lots of products throughout production.
The repetitive manufacturing processes, where batches of standard goods are produced at fast
speeds and high volumes with materials moving in a continuous flow, have seen the most success
with JIT applications. Perhaps the best illustration of the application of JIT in repetitive
manufacturing can be seen in the Toyota auto factory, where the idea may have first emerged.
Planning and control are relatively easy in these factories due to the continuous flow of goods,
and JIT functions well in these shop-floor settings.
In large, extremely complex job shops where production planning and control are exceedingly
difficult, JIT is rarely used successfully. JIT has been adopted by smaller, less sophisticated work
shops, but these businesses have changed their operations in a number of ways to make them
more resemble repetitive manufacturing.
JIT is not a free service; prior to realising its advantages, the factory's operations must undergo
some adjustments. Improve production schedule stability is one of these modifications.
¡ Concentrate the factories.
¡ Increase the manufacturing work centres' output capacities.
¡ improve the quality of your items.
¡ Employees should receive cross-training to become multi-skilled and capable in a variety
of occupations.
¡ Preventive maintenance lowers equipment breakdowns.

8.4 KANBAN
The information system known as Kanban and mechanisms for deciding on production
techniques are essential to achieving the Just-in-Time goal. These two ideas helped achieve the

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goal of having the appropriate quantity of parts or components in the appropriate location at the
appropriate time.
A special Japanese information system called Kanban "harmoniously" regulates the
manufacturing amounts in each operation.
A Work Center (WC) uses the Kanban system, a straightforward information system, to instruct
its supplier WC to ship a container of a certain item and to give the supplier WC permission to
create another container of the same item. The word kanban, which means "card" or "sign" in
Japanese, is where the name originates. To initially identify the supplying work centre, a card
was employed. A WC can request resupply from its supplier WC via a number of different
mechanisms. A request for more material might be communicated, for instance, by a blinking
light, the empty container itself, or a message on a computer terminal.
In the two-card kanban system, a production card, also known as a P-card, authorises a WC to
produce one standard container of the specified part. The second form of card, referred to as a
move card or M-card, permits the transfer of one container containing the specified portion from
one WC to another WC according to the instructions on the card. These cards are often reissued,
and new ones are only issued when manufacture of an item is about to begin or undergo a
significant change. The production card moves back and forth between the place where the item
is manufactured and the outbound material location at a WC. The supplier WC and the WCs that
supply it are connected by similar card transactions. Additionally, the user WC will be connected
to one or more supply-related WCs. These links connect the WC that handles the product's initial
manufacturing processes with the final assembly operation. Through a kanban signal, even the
supplier of raw materials is frequently connected to the starting process. Kanbans that are picked
up after a delivery allow the vendor to produce the required items and deliver them along with the
following delivery.
The kanban systems can be a very straightforward, low-cost, and efficient way to coordinate
vendors and work centres. The organisations must be well-managed so that every container
always has an authorised Kanban, guaranteeing that only the necessary products are produced
and that an excessive amount of inventory does not accumulate. The converse risk exists as well,
which is that some WC may run out of supplies and force all following WCs to halt functioning.
Because there isn't enough inventory to keep the plant operating while an issue is fixed, defects
must not impede production for this pull method or any other pull method to work well with
minimal inventories.

8.5 SUMMARY
¡ Lean manufacturers aim for perfection: no waste, no faulty parts, no inventory, and only
value-added activities. Any activity that the client does not perceive as adding value is a
waste.

8.6 KEYWORDS
Seven wastes of Lean :
Overproduction: It is wasteful to produce more than a customer orders or to start a project
before it is needed.
Queues: Wasting time waiting, storing, and being idle (they add no value).
Transport: It is wasteful to move materials back and forth between factories or work locations

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or to handle them more than once.
Inventory: Wastes include unused raw materials, work-in-process (WIP), finished
commodities, and extra operating supplies.
Motion: Moving people or objects without adding value is wasteful.
Overprocessing: Wasteful work is done on a product that provides no value.
Product defect: Wastes include returns, warranty claims, rework, and scrap.
The idea that other resources, including energy, water, and air, are frequently wasted but
shouldn't be is suggested by a broader perspective-one that looks beyond the present output.
Production that is effective and sustainable reduces inputs, increases outputs, and leaves no
waste.

8.7 SELF-ASSESSMENT QUESTIONS

Long Answer Type questions
1. What is the concept of JIT?
2. What is the concept of Kanban ?
3. Explain the lean production.
4. What are the seven wastes of lean production?
5. Describe JIT and Kanban as part of lean production.
6. Describe the Toyota production system.

Short Answer Types questions

1. What is teamwork in JIT?
2. What is people involvement in JIT?
3. What is the waste of motion in lean production?
4. What is the waste of overprocessing in lean production?
5. What is the waste of transport in lean production?
6. What is the waste of overproduction in lean production?

True/ False
1. MRP is different from JIT in terms of inventory. True
2. JIT believes in overproduction. False
3. JIT combines the benefits of job order production and Line production. True
4. Multi-skilled workers are required in JIT. True
5. Kanban helps to create change by replacing your existing process. False
6. Kanban is not an exclusive approach to project management, but can be used for general
ongoing everyday work tasks. True

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Fill in the blanks
1. JIT in time aimed at ______. Zero inventories
2. Kanban is a(n) __________ process that allows for __________ changes. ( Continuous
Flow, Incremental)
3. Lean production is related to _____. Customized production
4. The term autonomation is _____. Jidoka
5. Lean production is a philosophy that aims to systematically _______waste. Eliminate
6. In Kanban, demand flows _________. Upstream

Multiple choice questions

1. Just-in-Time was successfully implemented by
a) Toyota
b) Honda
c) Suzuki
d) Volkswagen

2. In Just-In-Time system
a) There is no delay
b) Conveyance times are balanced
c) Both (a) and (b)
d) There is unequal production at different places

3. Such setups which have single digit (in minutes) setup times are called
a) Single setups
b) One touch setups
c) Minute setups
d) None of the above

4. POK stands for

a) Product ordering Kanban
b) Process Ordering Kanban
c) Production Ordering Kanban
d) Plan Ordering Kanban

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5. In Just-In-Time the vendor is to be viewed by the company as a
a) Manager
b) Worker
c) Partner
d) None of the above

6. Just-In-Time is
a) Single unit production
b) Big lot size production
c) Both (a) and (b)
d) None of the above

Match the following

Column A Column B
a) Autonomation 1. Transporting (c)
b) Kanban 2. elimination of waste (e)
c) one of the 5 wastes 3. Supermarket model (b)
d) Shorter cycle times 4. improve customer value (f)
e) Improvement activity 5. uncovers problems (d)
f) lean manufacturing 7. Automation with a human touch (a)

Case Study
For a real-life case study discuss how the JIT and KANBAN system could help. Site suitable
situations.

8.8 REFERENCES
¡ Heizer, J., Render, B., Munson, C., & Sachan, A. (2017). Operations management:
sustainability and supply chain management, 12/e.
¡ Roy, R. N. (2007). A modern approach to operations management. New Age International.

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 SERVICE OPERATIONS
MODULE - 9 MANAGEMENT
AND QUALITY OF SERVICE

STRUCTURE
9.1 Learning Objectives
9.2 Introduction to Service Operations
9.3 Quality of Service
9.4 Summary
9.5 Keywords
9.6 Self-Assessment Questions
9.7 References

9.1 LEARNING OBJECTIVES

After studying this unit, you will be able to:
¡ Understand Nature, Scope, Importance and Functions of Service Operations
¡ Understand Quality of Service

9.2 INTRODUCTION TO SERVICE OPERATIONS

Services are, of course, the other half of the product equation. The banking, finance, insurance,
transportation, and communications sectors all fall under the service umbrella. A medical
treatment that barely leaves the slightest of scars to a service firm's offering of a A wonderful
sandwich, a shampoo and cut at the hair salon, or a scar following an appendectomy.
Services have a distinct characteristic-the customer-which makes designing them difficult.
interaction.
Professor Scott Sampson created the Process-Chain-Network (PCN) approach, which focuses
on how procedures can be created to maximise interaction between businesses and with their
clients. A process chain is a series of actions that carry out a task, such as building a house, filing
taxes, or making sandwiches. A manufacturer, a service provider, or a customer are all examples
of process participants. A group of participants makes up a network. Each participant's set of
controlled actions is contained within a process domain.
Each participant's activities are divided into three process regions:
1. Process stages involving participant engagement are included in the direct interaction
zone. For instance, a sandwich customer deals directly with sandwich shop staff.
2. Process stages in which one player is operating on another participant's resources, such as
their information, materials, or technologies, are included in the surrogate (substitute)
interaction region. This happens when the sandwich vendor prepares sandwiches in the
restaurant kitchen, or alternatively, when the client gets access to the sandwich fixings at
the buffet and puts the sandwich together himself. Direct interaction is constrained in

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 surrogate interactions.
3. The phases in the independent processing region involve the sandwich client or sandwich
provider acting on resources over which they each have the most authority. This area best
matches make-to-stock production. Similar to that, sandwiches made by customers at
home appear to the right, in their own autonomous processing space.
Quality control, facility location and layout, job design, inventory, and other operating
difficulties are common to all three process regions, but each region has a different approach to
resolving them. Only in the realm of direct and surrogate engagement do service activities exist.
The knowledge gained from a PCN analysis, in the eyes of an operations manager, is crucial for
positioning and establishing procedures that can support strategic goals. Operations are crucial
because they can specify the type of business a company is in and the value proposition it wants
to offer to clients. Other businesses, like Subway, use differentiation strategies that involve
plenty of client engagement. Each process region has a different operational approach.
Businesses should probably position themselves in the autonomous processing area of their
process domain if they wish to achieve significant economies of scale or more control over their
operations. Companies that want to give customised value to customers should position
themselves more in the process domain. PCN analysis can be used in many different business
contexts.

9.3 QUALITY OF SERVICE

Due in part to customer involvement in the service's design, execution, or both, service
productivity is infamously low. The difficulty of product design is exacerbated by this. We will
now go over a variety of strategies for improving service effectiveness, along with a number of
strategies for reducing this interaction.
Limit the Options: Design requirements can be anything from a menu (in a restaurant) to a list
of possibilities (for a funeral) to a verbal description since clients may be involved in the design
of the service (for example, for a hairdo or a funeral) (a hairstyle). However, ambiguity may be
lessened by offering a list of options (in the case of the funeral) or a collection of pictures (in the
case of the haircut). Early product definition resolution can increase productivity and help satisfy
customer expectations.
Delay Customization: Create the product with as little customization as feasible during the
manufacturing process. A hair salon runs in this manner. The colour and styling (customising) are
done last, even if the shampoo and condition are performed in a regular manner with less
expensive labour. Additionally, this is how most restaurants run: How do you want that prepared?
Which salad dressing would you want to have?
Modularization: Modulate the service so that changing modules is the only way to customise it.
Using this technique, "custom" services can be created as common modular entities. Modular
flexibility enables you to purchase meals, clothing, and insurance on a mix-and-match (modular)
basis, much as modular design enables you to purchase a high-fidelity sound system with only
the features you desire. College courses and investments (portfolios of stocks and bonds) are
examples of how the modular method can be utilised to tailor a service.
Automation: Separate the service into manageable components, then decide which components
are best suited for automation. For instance, banks have been quite successful in creating a
product that both improves customer service and lowers costs by isolating check-cashing
operations via ATM. Similar to this, airlines are already offering ticketless service through

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kiosks. By reducing costs and queues at airports and enhancing consumer pleasure, a strategy
like kiosks creates a win-win "product" design.
Moment of Truth: High customer interaction indicates that there are critical moments in the
service business where the relationship between the provider and the client is important. The
degree of the customer's satisfaction with the service is established at that point. The moment that
best embodies, improves upon, or subverts the customer's expectations is known as the moment
of truth. A simple grin from a Starbucks barista or the checkout clerk concentrating on you rather
than talking over his shoulder to the cashier at the next counter could be that moment. Moments
of truth can happen when you place a McDonald's order, get a haircut, or sign up for classes at a
college. Finding critical moments and creating operations that meet or exceed client expectations
are the duties of the operations manager.

9.4 SUMMARY
¡ Process stages involving participant engagement are included in the direct interaction
zone. For instance, a sandwich customer deals directly with sandwich shop staff.
¡ Process stages in which one player is operating on another participant's resources, such as
their information, materials, or technologies, are included in the surrogate (substitute)
interaction region.
¡ The phases in the independent processing region involve the sandwich client or sandwich
provider acting on resources over which they each have the most authority.
¡ Design requirements can be anything from a menu (in a restaurant) to a list of possibilities
(for a funeral) to a verbal description since clients may be involved in the design of the
service (for example, for a hairdo or a funeral) (a hairstyle).
¡ Create the product with as little customization as feasible during the manufacturing
process.

9.5 KEYWORDS
¡ Modularization: Modulate the service so that changing modules is the only way to
customise it.
¡ Automation: Separate the service into manageable components, then decide which
components are best suited for automation.

9.6 SELF-ASSESSMENT QUESTIONS

Long answers
1. What is the concept of quality of service?
2. How are services firms different from product production firms?

Short answers
1. What are the features of a service firm?

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True/False
1. Services are not affected by recession in market. True
2. Service processes that are devoted to producing knowledge- based or advice-based
services are called professional services. True
3. Customer's control of the situation is maximum in self-service option. True
4. In service operations management the BOR term means bill of receivers. False
5. Shopping attitude of customer can be considered a goal seeking customer. True
6. Services can be inventoried. False

Multiple Choice questions

1. Which of the following is an example of a Service Business?
a) Law firm
b) Hospital
c) Bank
d) All of the above

2. Which is not a significant difference between manufacturing and service operations?

a) cost per unit
b) uniformity of output
c) labor content of jobs
d) Measurement of productivity.

3. Which of the following is not a characteristic of service operations?

a) intangible output
b) high customer contact
c) high labor content
d) easy measurement of productivity

4. Service strategy development begins by selecting which of the following as an operating

focus or performance priority?
a) Price
b) Quality
c) Variety
d) All of the above

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5. Which of the following "best practices emphasized by service executives" had the highest
mean emphasize rating?
a) Leadership
b) Accessibility
c) Quality values
d) Customer orientation

6. The Experience in SCM involves

a) Consumer Service Experience
b) Business Experience
c) a and b both
d) none of these

Case Study
Keeping in mind the characteristics of a manufacturing firm, differentiate it from the service
industry by taking specific examples of the firms.

9.7 REFERENCES
¡ Heizer, J., Render, B., Munson, C., & Sachan, A. (2017). Operations management:
sustainability and supply chain management, 12/e.
¡ Roy, R. N. (2007). A modern approach to operations management. New Age International.

122
 T2859
Operations Management
MBA SEM I

ISBN: 978-93-95877-01-5

SYMBIOSIS INTERNATIONAL (DEEMED UNIVERSITY)

Gram: Lavale, Tal: Mulshi, Dist: Pune, Maharashtra, India Pin: 412115