Unit-1 Production

Introduction : Every organization , irrespective of its nature of business is engaged in converting some inputs
into the output . Let us consider a manufacturing firm like a Hindustan Unliver Ltd . HUL buys raw materials,
uses its machinery and manpower and through various manufacturing processes it converts raw material into final
product , say toilet soap . On the other hand in service organization like Spice Jet , through a service delivery
system Various inputs like Pilot , aircraft , airhostess and other staffs are constantly engaged in delivering the
service s to its customers . Operations management is a discipline which focuses the manufacturing as well as
service organizations .
Definition “ Operations management is a systematic process that converts some inputs into output and
that can fetch revenue to the organization .”
Current trend of Manufacturing In INDIA :
The Manufacturing plays a significant role in the Indian economy .The Indian manufacturing sector has an average
of 9 percent growth from 2004-08 , with a record of 12.3 percent in the year 2008 . India is now fast emerging as
a global manufacturing hub . Considering automobile sector ,pharmaceutical industry , chemical industry ,
consumer durable or engineering products , all are being manufactured in India by multinational companies . .
Moreover, according to a report by the Federation of Indian Chambers of Commerce and Industry (FICCI) and
Yes Bank, India is poised to become the global manufacturing hub for luxury brands over the next five years with
manufacturing of luxury items becoming a US$ 500 million industry during this period.
India has an advantage of availability of cheap and skilled manpower ,skill of product & process engineering and
long manufacturing history . According to a survey of the manufacturing industry, carried out by FICCI among
25 core sectors, 21 capital goods, 15 intermediate goods, 26 consumers durables, and 13 consumer non-durable
sectors, the country’s manufacturing sector is expected to grow by 9.5 per cent in 2008-09, up from 8.8 per cent
last fiscal.
➢ LG is looking at making India its global manufacturing hub for its mobile handsets. The company will
soon be exporting mobile phones to Europe and the Commonwealth Independent States (CIS) from India.
➢ Luxury brands like Louis Vuitton and Frette are looking at India as a manufacturing base for their
products.
➢ Skoda Auto, a part of the international Volkswagen Group based in the Czech Republic, plans to make
India its regional manufacturing hub. It will start producing cars in India by 2010 with a manufacturing
target of 50,000 units. Besides the domestic market, these will also be exported to neighboring countries
like Nepal, Sri Lanka, Burma and Bangladesh.
➢ Aircraft manufacturer Airbus is considering India as one of the key centers for design and development
of its long haul A 350 plane.
➢ Cummins is making India its manufacturing hub for newly developed line of generator sets.
➢ Samsung plans to invest US$ 100 million over a period of four years in its manufacturing plant near
Chennai and make it its global hub.
➢ Ford is making India its manufacturing hub for engine manufacturing.
➢ Hyundai has made India the manufacturing and export hub for its small cars. The i10 is being
manufactured only in India and exported to the world. India is Hyundai’s largest base outside Korea.
➢ Suzuki too is making India its manufacturing hub for small cars. The A-Star is being manufactured solely
in India and exported to Europe.
➢ Nokia is investing an additional US$ 75 million in its Sriperumbudur plant taking the total investment to
US$ 285 million. Nearly 50 per cent of its production at Sriperumbudur is exported to countries across
the Middle East and Africa, Asia, Australia and New Zealand.
Study Material, MBA- Semester II, GHPIBM prepared by Dr. Hitesh Parmar
Goods and Services :Consider a manufacturing organization like Blue star ltd . The final product is a good , say
air conditioner . While they are also concerned about the after sales service . .While Consider any service
organization like ICICI bank . They provide serives to its customers like banking , loan etc and at the same time
they are also offering products to its customers like credit and debit card . So In any organization wheter it’s a
manufacturing or service , There will be some part of product is there and some part of services is there . It will
depend upon the industry to industry and nature of business . Fig
Maruti Udyog Ltd has products like Maruti 800 ,Alto , Omni ,Gypsy , Wagon R ,Versa , esteem , Swift ,SX4 ,
Grand vitara . Now within a each Product there can be sub offerings like Swift petrol version and desial
version . At the same time Maruti udyog ltd offers services like Maruti finance , Maruti Auto card ,Maruti
Insurance , Maruti safe drive etc .
Operations management from system’s perspective :
Every organization ,be it is a manufacturing or service can be described as a production system .Now each
system consists of several inputs like raw material ,manpower ,machineries and these inputs are converted in to
one or more desired output through a conversion process . Again there is a feedback mechanism available in
every system . Consider a television manufacturer like Samsung India ltd.
Service organization can also be described as a production system . Consider a hospital where generally input
would be unhealthy patient .Now each hospital has resources available like doctors , nurses ,equipments like
syringes , needles ,tablets available and the desired out put would be healthy patient .In this case there is a
physical input and physical output .In every system there need not be a physical input and physical output .Let
us take an example of income tax office . they get input in terms of information .and these information is
processed through officers and other staff members and the out put would be Raid . so in this case there is a non
physical input and physical output .Also there can be non physical input and non physical out put .Consider a
sales office where input would be data from market and these data would be processed through personnel and
office equipment and the out put would be processed information . Figure shows the operations management
from systems perspective.
INPUT Operations management OUTPUT
Raw material
Man power Goods/Services
Equipment Conversion process
Capital
Feedback Mechanism
Operations management from systems perspective
Now let us understand the Transformation process for a pure product ,pure service and for highbread
service one by one .
A refrigerator manufacturer :
Input ( Random disturbances ) Output

High turnover of workers/manager
Quality of Recession
Government’s taxation policy Quality of
inputs
Strikes instigated by trade unions outputs
monitored
monitored
Machines and equipments Customers

Building satisfied with
Component/Parts/subassemblies Transformation Good cooling
Workers performance,
Office infrastructure Process Less
Packaging material consumption
Capital with electricity,
Managers Good after
sales service,
New advanced
features
Feedback Mechanism
Transformation process of a service organization – An MBA institute
(Adapted from :Bedi kanishka ,Production and operations management(2007),Oxford university press,2 nd ed, pp 10 )
Transformation process for a service organization ( An MBA institute )
( Random disturbances )
Strikes of students ,teachers or staff
Undue interface of government in the working
Of institutions
Quality of inputs measured Quality of output measured
Enlighten students with

Raw minds ( Students ) Transformation
Good communication skill
Teachers
Process Pleasant personalities
Class rooms
Computer lab Leadership qualities
Library Good analytical ability
Projectors ( OHP,LCD etc) Team Spirit
Administrative staff Decision Making ability
Computer skills
Feedback Mechanism
Success at placement interviews
➢ Transformation process forGrades
a hybrid service
obtain and manufacturing organization : A Restaurant
in examination
Rising career graphs of alumni in the industry
Number of applications for the admission in the institutions
INPUT Ratings prepared
of surveysby Dr. Hitesh Parmar OUTPUT
Study Material, MBA- Semester II, GHPIBM
(Adapted from :Bedi kanishka ,Production and operations management(2007),Oxford university press,2nd ed, pp 10 )
Random Disturbances
High turn over of chefs,
waiters etc
Quality of inputs measured Inflation Quality of output measured
Gove’s taxation policy
Customers Customers satisfied with

Building Transformation
Process Good preparation of the food
Vegetable
Pleasant behavior and
Furniture
Mutton, Chicken ,pork etc personality of the waiter
Cooking oil, spices ,etc Genuine prices charged
Waiters
Managers
Feedback Mechanism
INPUT OUTPUT
Rising revenues
Repeated customers
Application of customers
(Adapted from :Bedi kanishka ,Production and operations management(2007),Oxford university press,2 nd ed, pp 10 )
The techniques and procedures generally used in production / operation system are as follows . This will also
give a brief picture about the scope of operations management .
➢ Demand forecasting
➢ Facility location
➢ Facility layout
➢ Product design and analysis
➢ Work study
➢ Capacity Planning
➢ Aggregate production planning
➢ Master Production schedule (MPS )
➢ Material Requirement Planning ( MRP)
➢ Operations scheduling
➢ Inventory control
➢ Maintenance management
➢ Quality control
Activity : Identify Five manufacturing and five service organizations near your area .also
identify inputs ,processes ,out put and feedback mechanism for each of them .
Product – service spectrum : From operations management perspective ,Pure product and pure services are just
two end of a spectrum .When we go in a restaurant , what do we buy ?Are we buying services or we just buy meal
that is available . When we buy a refrigerator ,What do we buy ?Are we buying just physical product or we also
buy after sales services? Actually all our purchases of goods ,there would always be some portion of services
and all our purchases of services , there would always be some portion of product .In reality majority of operations
share both products and services ,therefore tools and techniques available for manufacturing are equally applicable
in service industry also .Separation of product and services is just artificial from operations management point of
view .Fig shows the product service spectrum. Generally general purpose machines such as lathes , grinding ,
milling etc have a pure product attribute , so they put in one extreme end of spectrum while Ayurvedic healing
treatment ,Legal/tax consultation have more service attributes so they can be put in another end of a spectrum.
Pure Product Pure Service
Ayurvedic Healing treatment
Legal / tax consulting
Cyber café –Telephone Books
Emergency Maintenance services
Facilities maintenance
High Quality restaurant meal
Fast food in a eat out joint
Customized durable goods
Fast Moving commodities
General Purpose machine

(Source :Adapted from Mahadevan B(2007),Operations management-Theory and Practices ,pearson
education, 1st ed.pp 9)
Operations management as a services : Before we understand the services as a part of operations

management ,let us understand the characteristics of services .
➢ Services are intangible : Services do not produce tangible outputs . Products are tangible where as
services are intangible . services can not be touched or tested .services can only be felt by customers
.when A doctor is examining his patients and giving treatment to them ,there is noting like touch or test
his services only patient can feel his services. After purchasing the service the customer according to his
perception and level of satisfaction can tell whether the service was “good” or “bad “Because services
are intangible , there would always be difficult to assess the quality of service . In terms of tangible
output , we can define the quality standard very easily .
➢ High degree of variability :As compared with products ,services are more variable . A doctor examining
two different patients of same diseases might give different kind of treatment .Again the time spend on
each patient would be different .While in the case of a product ,the out put of the product will always be
same .If a car manufacturer produces 4000 car of a single model of same color in a day ,then all 4000 car
will be of same appearance and same quality .So products are homogeneous while services are
heterogeneous .
➢ Services can not be stored : products can be stores while services can not be stored .A consulting
experience of a lawyer can not be stored .Here we are talking about only pure services .The services
which have both product and service characteristics are stored and can also be used for future purpose
.In case of hotel , the food can be prepared in morning time and can be served in afternoon .
➢ Services are more people centric .: Services are produced when customer is available in the system .So
simultaneous production and consumption can happen .The interaction between customer and service
provider can lead to different level of satisfaction .So there will be high degree of customer contact in
services .The application of technology can reduce the customer contact .In our day to day life we can
find many examples through which customer contact can be reduced .A bank can reduce the customer
contact through ATM machine .Mobile banking can also reduce customer contact .On line examination
can also reduce customer contact. There are some exception in which generally customer is not present
as a participant .Repairing watches ,Preparing tax forms ,preparing architechcural design etc.
➢ Services cam be easily emulated :Services can not be patented , so competitor can easily copy the new
or improved services .The low cost model of Air Deccan is adapted by many new entrants .Similarly in
india the Retailing concept of Big bazaar is easily replicated by other players .But in case of
manufacturing ,we can take patents of product . Recently Tata motors filed 10 patents only for engine of
their NANO car .
A table provides comparison of services and goods :
Goods Services
• Tangible • Intangible
• Can be stored • Can not be stored
• Quality can be measured easily • Quality varies with time and person
• Customer involvement is low • Customer involvement is high
• Large facilities • Small facilities
• Physical presence of customer may not be • Physical presence of customer is very
important important
• Standardization is possible all over • Standardization is possible only for routine
services
• Facility location – depends upon suitable • Facility location - Near customer
factors
• Facility Design – To enhance production • Facility design :To accommodate physical
and psychological need of customer
• Product design – Environment plays a vital • Product design : only physical product
role
• Material handing cost - High • Material handling cost – Negligible
• Worker skill – Technical • Worker skill – Interaction
• Scheduling as per completion dates or • Scheduling – As per customer interest
scheduling rules
• Technology use – Generally hard • Technology use – Generally soft
• Regional ,national & International market • Generally local market
• Long response time • Short response time
• Repairs possible • Repairs impossible
➢ Similarities between Manufacturing and services :There are certain similarities between
manufacturing and services
• Both has to make an estimation of demand .Demand forecasting plays a vital role in
manufacturing or service organization .
• Both manufacturing and services has to take a decision about facility location .Though the
criteria would be different but ultimately they have to locate their facility .
• Both has to choose a suitable layout and has to take decision regarding the capacity planning.
• Both concerned about the productivity and quality
➢ The challenges for service operations .every organization is unique in nature ,however if we closely
examine the problems in a system ,then generally we find the following challenges to service operations
• Productivity : In manufacturing we can count the number of outputs which is produced in a
day or month or year . The productivity of a consultant would be difficult to measure because
he is providing only words to his customers .
• Quality: Each customer has different perception about the quality of service .while going
through the system ,one may have different kind of experience through interaction .So customer
satisfaction would be highly subjective in nature . quality standards are more difficult to
establish for them .But in manufacturing ,because the product is physical object , we can define
the quality norms and again we can check it whether it is accepted or not ?
• Capacity :We can easily calculate the capacity of a machine .If a machine is able to produce
10 units in an hour then in eight hour it would produce 80 units of a product .But in service
operations the time consumption for each customer would be different .we can not derive a
capacity of a doctor in an hour exactly .
• Inventory :products once manufactured can be stored easily and can be used in pick season
.because of nature of services ,it can not be stored .A doctor can not store his service and use it
in peak hour.
Co – ordination of Production with other departments : Every organization has basically three primary
departments -Marketing ,Production and Finance .Production is central to all of these four departments .Now let
us consider marketing department .A Marketing department identifies the needs and wants of a customer. It
identifies the demand of a product or if demand doesn’t exist then it can also create demand of a product by using
various marketing techniques .Now the data of a demand of a product is very crucial input for planning a
production activities .According to the demand of a product ,the purchase of raw material will be done .Now we
can not purchase raw material without finance function .Basically the role of a finance department is to obtain the
fund and to guide the organization for better use of that fund. If we have enough sources of finance and can also
produce a product but we are not able to sell it , then it is of no use .Again if can also produce and sell a product
but we don’t have sources of finance then also it is of no use .If we have enough sources of finance and we can
also sell the product in market but we don’t know how to produce it ,then also it of no use . Generally Human
resource department is supporting department to all other departments in an organization . The human resource
department recruits the employees and trains them according to the need of an organization .Fig shows the inter-
relation between departments .
Fig :Functions within organizations
Now within core operations functions ,there are sub functions are involved .Irrespective of their activities ,be it is
a manufacturing or service organization ,there are five layers exists .Customer layer ,Layer of Innovation, core
operations layer, operations support layer and supplier layer .
As the name suggests ,customer layer consists of ultimate customer or end users .The dealers and Retailers are
also part of this layer .Now if an organization has to sustain in long run then it has to do innovation .This layer of
innovation consists of research and development and innovative strategy .The core operations layer for a typical
manufacturing organization consists of processes like machining, fabrication, assembly and testing .While in
service organization ,it is service delivery system . Now there are various departments which directly or indirectly
support the core operations layer .Operations support layer consists of marketing, maintenance, quality ,costing,
planning ,tooling, material ,IT ,design and IE .The last layer is supplier layer .The supplier layer consists of
suppliers ,sub contractors and other specialized service providers . Fig below represents the operations functions
and its linkages .
Customer Layer Operations support layer
Ultimate Dealers Marketing Maintenance Quality

customer
Retailers
Costing Planning Tooling
Material IT Design IE
Core Operations layer
Testing Assembly
Fabrication Machining
Layer of Innovation
Service delivery system
Innovation
strategy Supplier Layer
Sub
contractors Suppliers
Research &
Development
Other service providers
(Source :Adapted from Mahadevan B(2007),Operations management-Theory and Practices , pearson

education, 1st ed. pp 14)
Fig : Operations functions and its linkages
Now from figure we can say that the customer layer has interaction with layer of innovation and marketing .The
customer layer plays a very crucial input into marketing and research and development .The layer of innovation
interacts with core operations layer and provide valuable inputs in the system .The core operations layer has direct
interaction with operations support layers like Maintenance ,Quality ,material , design etc. How ever the degree
of interaction between core operations layer and operations support layer will depend upon industry to industry
.The process industry has highest interaction between production and maintenance department whereas the textile
industry has highest interaction with marketing department . The table below shows the cooperation of other
departments with production department .The material department is responsible for providing right quantity &
quality of material at right time. So it will interact with supplier layer .
Decision Area Chemicals Engineering Fertilizers Textiles

Marketing Department VI III III Highest
Product Design Department X VII IV IV
R & D Department VIII V VII V
Finance Department VII IX VII VI
Personnel Department V VI IV IV
Maintenance Department Highest IV Highest III
Stores IV IV VI IV
Quality control Department III Highest II IV
Production engineering X VI V Lowest
Department
Board of directors Lowest Lowest Lowest VIII
Other production IX II VI VII
departments
Pollution control II VIII Highest II
(Adapted from : Bedi kanishka ,Production and operations management(2007),Oxford university press,2 nd ed,
pp 23 )
Table : Cooperation of Other departments with the production department .
➢ Organization of production function :Typically organization chart for manufacturing and services
differ in many aspects .In a Typical manufacturing organization ,Plant manager is responsible for all
production activities .The departments like Production Control, Purchase, Manufacturing, Quality
Assurance ,Engineering support etc would report directly to Plant Manager. Now within each department
also there would be other departments .i.e. Tooling, Assembly & Fabrication personnel would report to
manufacturing department .How ever the width and depth of organization chart would differ from
organization to organization. Generally it depends upon type of organization and size of the organization
.Fig below shows an organization chart for a manufacturing firm .
Plant manager
Production Engineering
Purchasing Manufacturing Quality Assurance
control Support
Tooling
Schuduling
Assembly
Materials control
Fabrication
(Adapted From : Chase, Jabocs,Aquilino,Agrawal (2009). Operations management for competetive
advantage ( Eleventh Edition ). New Delhi: Tata McGraw-Hill.,pp-14 )
(Fig :Production Department of a manufacturing firm)
In service organization like Air line ,the Operations manager would be responsible for all kinds of
operational activities .Under operations manager ,there would be Engineering department ,Maintenance
department ,Ground operations department and flight operations department .Now each department is
responsible for very unique kind of activities .flight operations department would be responsible for
flying communication and dispatching of flights whereas engineering department would be responsible
for activities related to new equipments and modification of equipments .
Operations Manager
Engineering Maintanance Ground Operations Flight Operations
New Equipment
Modification of equipment Line Maintanance Station Maintanance Flying Communications
Communications Overhaul Food & commissary Despatching
Engineering
Adapted From : Chase, Jabocs,Aquilino,Agrawal (2009). Operations management for competetive advantage (
Eleventh Edition ). New Delhi: Tata McGraw-Hill.,pp-14 )
(Fig :Operations Department of an Airline company)
➢ Duties and responsibilities of a production manager in Manufacturing organization :The

production manager would be responsible for following duties and responsibilities.
• Planning the geographical location of the factory

• Purchasing production equipments
• Layout of equipment within the factory
• Designing production processes and equipment
• Product design
• Designing production work and establishing work standards.
• Capacity planning
• Production planning and scheduling
• Production control
• Inventory management
• Supply chain management
• Quality control
• Production equipment maintenance and repair
• Measurement and monitoring of activities
• Industrial relations
• Health and safety
• Staff selection & liaising
• Budgeting and capacity planning
➢ Decision Making in production management: The operations management functions can be viewed
from time horizon .Certain decision in operations management are taken once in every five to ten years
.These decisions are strategic in nature and very crucial to the organization .Facility location is a strategic
decision and generally firm takes it after five to ten year . Identifying a new site for a plant is very
sensitive issue and takes a long exercise. The direct and indirect cost associated with selection of a
location is very high .The wrong selection of a site can harm the organization .Similarly certain decisions
in operations management are taken in three to five year of span .These decisions are also known as
tactical decision .Generally adding a new variant of a product into the existing product line is taken at
every three to five year .While some decisions in operations management are taken at short time period
and is known as control decisions . Breakdown Maintenance of a machine or scheduling of production
is operational decision .The table below shows the decisions in long time ,intermediate time and short
time horizons .
➢ Long Time Horizons
• Product design
• Quality Policy
• Technology to be employed
• Process selection
• Site selection
• Machinery and plant selection
• Plant size selection – Phased addition
• Man power training and development – phased program
• Long –gestation period raw material supply projects –phased development
• Ware housing arrangements
• Insurance Spares
• Design of jobs
• Setting of work standards
• Effluent and waste disposal systems
• Safety and maintenance systems
➢ Intermediate Time Horizon
• Product variations
• Methods selection
• Quality Implementation, inspection and control methods
• Machinery and plant loading decisions
• Forecasting
• Output per unit period decision
• Deployment of manpower
• Overtime decisions
• Shift – working decisions
• Temporary hiring or lay off of man power
• Purchasing policy
• Purchasing source selection, development and evaluation
• Make or buy decisions
• Inventory policy for raw material ,work in progress and finished goods
• Transport and delivery arrangements
• Preventive Maintenance scheduling
• Implementation of safety decisions
• Industrial relations
• Checking/setting up work standards and incentive rates.
➢ Short time Horizon
• Production scheduling
• Available materials allocation and handling
• Scheduling of manpower
• Breakdown maintenance
• Progress check and change in priorities in production scheduling
• Temporary manpower
• Supervision and immediate attention to problem areas in labor, materials ,machines etc
Types of Production system: There are four types of production system exist.
➢ Continuous production system

➢ Semi –continuous production system(Repetitive or assembly line production)
➢ Intermittent production system
• Batch Production system
• Job Production system
➢ Projects
Before we understand each production system one by one ,let us understand what are the factors that
determine the choice of a production system.
1. Quantity of Production :Quantity of production means average quantity produced in a production

system .Consider the soft drink Manufacturing organization like pepsi co india. The quantity of
production for a single brand i.e pepsi would be very large .Again consider the building of a flyover
in your city. In both the cases quantity differs very largely so the selection of a method of production
would be different in both cases .In case of Pepsico india , continuous production would be more
suitable ,where as in second case project management technique would be more appropriate.
2. Variety of Product :Variety means the number of variants in each product category .Here quantity
and variety has inverse relationship .If you want to produce high quantity of production then variety
would be less .Similarly if you want more variety in your product then volume of production would
be less. Variety doesn’t mean only the product line but in each product also firm might be offering
few variants .As we increase the variety ,the system would become more complex . The stages of
production may get increase ,the level of skill needed by workers would increase ,the change over
time from one product to another would add addition cost ,the material requirement would increase
and all these issues lead to the better operations management practices.
In service organization also similar kind of situation occurs .Consider the college canteen
where waiting time is very crucial .So if you want high quantity and less waiting time then the variety
of products would be less .Where as a hotel situated in city may be able to offer high variety of
products .
3. Flow of production :Flow of production means how the inputs of production systems get
transformed into the valuable output . Understanding of flow gives idea about how raw material and
components gets transformed into the out put .In process industries ,the flow of production would
be continuous .The transformation process of manufacturing books and manufacturing automobiles
have different flow of production .Both volume and variety influences the flow pattern in the
production system. The fig below shows the relationship between volume and variety in production
system
High High
Volume Variety
Mid variety
Mass Mid Volume Project
Production Motor manufacturing Organization
Pharmaceuticals
Petrochemicals turnkey project
Automobile execution
.(Source: Mahadevan B. (2007). Operations management theory and practices. (1st Ed.)Dorling
kindersley(India) pvt ltd,pp-57)
➢ Continuous production System :Companies like soft drinks ,shampoo, chemical, aluminum ,steel run
their plant twenty four hour in a day and seven days a week .Generally set up time for this type of
production system is high but once production started ,it keeps running for a longer period of time .The
production process is sequential in nature resources are organized in stages .Any breakdown at one stage
of production can stop whole production line .So in continuous production system better maintenance
management practices can give highest productivity .The following are the characteristics of continuous
production system .
• Production line runs twenty four hour in a day and 365 days in a year .Only at the time of any
breakdown maintenance or planned shutdown ,the production line stops .
• Production line is semi-auto mated which is relying on both computer as well as human resources
.
• Investment in machinery is very high
• Less flexible workers as product line changes less
• At every stage of production ,quality control is done
• Training requirement would be less
• Normally associated with large quantity and high rate of demand
• There is a smooth flow of material
• Skilled and unskilled workers required .Generally less flexible workers.
Now let us try to understand the continuous production system by the example of continuous casting of
Aluminium .In Aluminium Continuous casting the raw material is known as INGOT . The raw material is fed into
the tilting furnace .In this furnace the aluminum is converted into the molten metal .The melting temperature of
aluminum is 660º C. Then the molten aluminium is shifted into the holding furnace .The purpose of holding
furnace is to hold the molten aluminum at a certain level of temperature .Now this molten aluminum is ready to
use for a continuous casting purpose .
As the name suggests it is a continuous process .Through a continuous casting machine ,molten aluminum is
converted into the hot bar. The cross section of bar would depend upon the requirement of the product. Then
aluminum bar is processed into the rolling mill. The purpose of rolling mill to convert the bar into the required
diameter .You can alter the diameter of bar by increasing or decreasing the number of stands available into the
rolling mill .After reducing the bar into the required diameter ,the next stage is coiling .A coiling machine is used
for that purpose .
Now if you closely examine the process is continuous in nature .Suppose any minor mistake occurs in rolling mill
,them whole production activity gets stop .The quality control department checks the quality at every stages of
production. The quality of ingot would be checked before feeding into the furnace .The quality of molten
aluminium would be checked .The process parameters would be checked. The temperature would be check .The
worker who performs the operation of continuous casting is generally very skilled in operating the machine .So
at every stage of production the skilled work force is required. The supervision is easy because supervisor is
responsible for whole line of production .The production quantity will depend upon the speed of continuous caster
.So one can easily measure the production .i.e If one hour of production gives two ton of hot rolled aluminum
,then during a whole day it will produce 48 ton aluminum .one can easily cross check the production and running
hour of machine . The end product hot rolled aluminum coil is further used in steel industry or aluminum conductor
manufacturing industry .The figure below is a flow chart of a continuous casting process .
Continuous Casting of Aluminium :
The Raw Material (INGOT)is fed into

the Holding Furnace
The Molten Aluminium is fed into the

tilting furnace
Continuous casting is done through

continuous casting machine
Rolling is done through a Aluminium

rolling mill
Hot rolled Aluminium Coil is prepared

through coiling machine
Let us take one more example for continuous production system :
CAR BODY CONTINUOUS PRODUCTION
Take time to look at the body of a car. It is a complex piece of engineering. It is designed to
be strong, light and to prevent rust even in the worst weather.
A design team will take months to design a car body.

THE CAR BODY IS Prototypes will be made and tested to ensure that they can
DESIGNED. withstand extreme conditions like rough roads and to ensure
that they will not rust.
A car body is made from steel sheet. To help prevent it rust it

ZINC COATING OF is coated with zinc. Rolled steel sheet is ‘dipped’ into a number
STEEL SHEET. of zinc plating cells after it has been cleaned. This is a
continuous process.
Once coated with zinc, the steel is pressed into panel shapes
for various parts of a car body. The ‘press’ is very powerful
CAR PANELS ARE
and is kept behind safety cages so that people cannot get close.
PRESSED TO SHAPE.
When a sheet of steel is pressed into a shape it is automatically
moved out of the way.
PANEL PARTS ARE Panels are usually made up of two sides. They are joined by
JOINED TOGETHER. glue and then pressed together.
Robots are used to weld all the panels together. This is done
THE PANELS ARE
with great precision and can be carried out twenty four hours
WELDED TOGETHER
a day. The robots do not get tired and only need maintenance
FORMING A CAR BODY
occasionally.
The car body is cleaned very carefully before it can be painted.

‘BODY IN WHITE’ IS At this stage the body is called ‘the body in white’. Without
CLEANED. careful cleaning the paint will not take to the steel body
properly and it will have a poor finish.
The underneath of the car body is sealed with a PVC sealant.

This will prevent water getting into areas where it will
THE CAR BODY IS
eventually cause rust. Eventually, the entire underneath of the
SEALED.
car is sealed. This helps prevent stones from the road causing
damage.
The car body is now ready for painting. The paint is applied
CAR BODY SPRAYED with special sprays which coat the steel several times with
primer paint, coloured paint and a clear finish.
Wax is injected into cavities which could hold rain water. The
WAX IS INJECTED INTO
wax stops water entering and so the car body will not rust for
HOLES AND PANELS
many years
New models of car are tested on the test track. The aim is to
QUALITY CONTROL make the car body rust. The test results of the tests are used by
PROTOTYPE TESTING. designers to improve the design so that rust will eventually be
a thing of the past.
➢ Semi Continuous ( Repetitive or assembly line ) production system :Semi-continuous production

system are assembly line operation which is repetitive in nature. Henry ford is the pioneer in assembly
line operation .Automobile manufacturing units ,electronics items ,white goods etc are produced through
assembly line .Assembly line operations are also known as mass production system .Mass production is
method of producing goods in large quantity and low cost .The goods produced by mass production are
standardized and made from interchangeable parts. As the quantity is very large ,it requires mass
consumption .
Fig below shows the flow structure for a mass production system :
Pre- Manufacture Activities
Product A Product B Product C
Machining Machining Machining
Fabrication
Fabrication Fabrication
Assembly Assembly Assembly
Testing Testing Testing
Dedicated and decentralized manufacturing support
Product A
Machine Machine Machine Machine
1 2 3 m
(Source: Mahadevan B. (2007). Operations management theory and practices. (1st Ed.)Dorling kindersley(India)
pvt ltd, pp-62)
Now from figure we can easily understand that each product will follow in different departments and in each
department also there would be orderly flow of material .Let us consider that to manufacture a product A ,there
are four manufacturing operations required .They are Machining, fabrication, assembly and testing . The product
will move from these four departments ,Again in Machining department also there are certain machines available
which are arranged in sequence .
➢ Machine tools and interchangeable parts :The development of mass production was laid to develop
machine tools industry. Making of machines to make machines .By means of that large number of
identical parts can be produced at low cost and with the use of small work force .
The system of manufacture involving production of many identical parts and their assembly into
finished products came to be called the American System, because it achieved its fullest maturity in the
United States. Although Eli Whitney has been given credit for this development, his ideas had appeared
earlier in Sweden, France, and Britain and were being practiced in arms factories in the United States.
During the years 1802-08, for example, the French émigré engineer Marc Brunel, while working for
the British Admiralty in the Portsmouth Dockyard, devised a process for producing wooden pulley
blocks by sequential machine operations. Ten men, in place of 110 needed previously, were able to
make 160,000 pulley blocks per year. British manufacturers, however, ignored Brunel's ideas, and it
was not until London's Crystal Palace exhibition of 1851 that British engineers, viewing exhibits of
machines used in the United States to produce interchangeable parts, began to apply the system. By
the third quarter of the 19th century, the American System was employed in making small arms, clocks,
textile machinery, sewing machines, and a host of other industrial products.
Assembly line operation :Henry ford was the pioneer of assembly line operation at ford motor company. Before
the application of assembly line one person was assigned to assemble whole car. Henry ford divided a certain
amount of work in each work station .So the workers remain stationary and the product move from work station
to work station at a certain amount of time .Each worker is responsible only for his work station operation .The
biggest challenge in assembly line is to balance the time at each work station .After implementing the assembly
line operation ford was able to reduce the time from 728 minute to 93 minute per car
within a year.
Assembly line balancing :Before we understand how to balance the assembly line ,let us first understand the
terminology used in assembly line balancing .
1.Tasks :Elements of work or activity

2.Task precedence :Indicates the sequence in which tasks must be performed Exept the beginning task ,all
other tasks have preceding tasks .
3.Task times :The amount of time required for an automayic machine or a well trained worker to perform a
task.
4.Cycle time :The interval of time between two successive products coming off the end of a production line
or assembly line .
5.Productive time per hour :The duration ( In minutes) a work station or machine is working in each hour
.The productive time per hour is lesser than the actual available time due to lunch break ,breakdown
personnel time for the worker ,start ups and shutdowns .
6.Work Station :Physical location where a particular set of tasks is performed .Work station could be either a
machine or equipment operated by a worker or an automatic machine or a machine operated by a robot .
7.Work centre :A physical location where two or more identical work stations are located in order to provide
Study
theMaterial, MBA- Semester
needed production II,. GHPIBM prepared by Dr. Hitesh Parmar
capacity
8.Theoretical minimum number of work stations :The least number of work stations that can provide the
required production capacity by :
Sum of all tasks (∑t)

𝑁𝑡 =
Cycle Time (CT)
Available time
𝐶𝑦𝑐𝑙𝑒 𝑇𝑖𝑚𝑒 =
Out put required
9.Actual number of work stations :The total number of work stations required on the entire production line
The assembly line can be efficient when at all work stations the time required time is same.So theat each work
calculated as the next higher integer value of the number of work stations working.
10.Utilisation (Balance efficiency ): The percentage of time that a product line is working .This is
calculated as
𝑀𝑖𝑛𝑖𝑚𝑢𝑚 𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑤𝑜𝑟𝑘 𝑠𝑡𝑎𝑡𝑖𝑜𝑛𝑠

𝑈𝑡𝑖𝑙𝑖𝑧𝑎𝑡𝑖𝑜𝑛 𝑜𝑟 𝐵𝑎𝑙𝑎𝑛𝑐𝑒 𝑒𝑓𝑓𝑖𝑐𝑖𝑒𝑛𝑐𝑦 = × 100
𝐴𝑐𝑡𝑢𝑎𝑙 𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑤𝑜𝑟𝑘 𝑠𝑡𝑎𝑡𝑖𝑜𝑛𝑠
∑𝑡
station is zero .This situation is ideal situation in assembly
= line .
𝐶𝑇 ×𝑁
(Source Aswathapa k, Bhatt. S. ,Production and operations management.(2008),2 nd edi, New Delhi: Himalaya
publishing house. pp-331-332
Example :The task ,Precedence requirements and task time is given below .Balance the line .
Table :
Task Precedence requirement(s) Task time ( min )
A - 5
B - 6
C - 1
D A,B 4
E D 5
F D 2
G A,E,F 5
H G 2
Total = 30
Answer : In table the task ,precedence requirements and task time is given .Now let us solve this example step by
step .
Step – 1 : Find the bottleneck operation and minimum cycle time :
Bottleneck operation is the operation which requires the longest processing time .In our case the bottleneck
operation is task B and the task time is 6 minutes . Minimum cycle time is the time to perform bottleneck operation
.So minimum cycle time is 6 minutes .Here we are interested in minimum cycle time because we have to fix the
cycle time at each work station and after that time the assembly line will move from one work station to another
work station .In our case after every 6 minutes ,the line will move . Now our requirements is to adjust the task at
work stations so that at every work station the idle time becomes zero .
Step – 2 : Find the theoretical minimum number of work stations required : From table the total performance
time is 30 minutes and the minimum cycle time is 6 minute.
Total task time

𝑇ℎ𝑒𝑜𝑟𝑒𝑡𝑖𝑐𝑎𝑙 𝑚𝑖𝑛𝑖𝑚𝑢𝑚 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑤𝑜𝑟𝑘 𝑠𝑡𝑎𝑡𝑖𝑜𝑛𝑠 =
Cycle time
30
= = 5 work stations
6
So theoretically we required 5 work stations and at each work station the task time is 6 minutes .
Step : 3 Apply a heuristic to assign tasks to work stations . This rule is also called Longest operation time rule
.we give priority to those operation which has longest operation time .Now from table ,the longest operation time
is associated with task B and it has time of 6 minutes .Again task B doesn’t have any precedence task requirement
( there is no need of any other task to be completed for the execution of task B ).
Heuristic step 1 : The longest operating time is 6 minute and is associated with task B .So the eligible task is B
.The cycle time is 6 minute and the task time is also 6 minute so we can not assign any more task at work station
no 1 .
Table:
Heuristic Work Eligible Task Task Remaining time Remaining
Step Station task Assigned time available on the work eligible task
(Minute) station
1 1 B B 6 - -
Heuristic step 2 : Now let us consider the work station no 2 .The longest operating time is 5 minute and it is
associated with task A ,E and G . Task E has precedence requirement of task D and task G also has precedence
requirements of tasks A,E & F. So at present we can not start task E & G . We assign task A to the work station
2 . Task time is 5 minute .The remaining time is 1 minute .we can still assign a task which has one minute of
operation time .
Table:
(Minute) station
1 1 B B 6 - -
2 2 A,E,G A 5 1 C
Heuristic step 3 : Only task C has operation time of one minute and it doesn’t have any precedence requirement
. Task C is assigned to work station no 2 . Now our work station no 2 is also fully occupied and we don’t have
any remaining time for our work station . we will move to work station no 3 .
Table:
(Minute) station
1 1 B B 6 - -
2 2 A,E,G A 5 1 C
3 2 C C 1 - -
Heuristic step 4: Now longest operation time is again 5 minute and it is for task E and G .Precedence requirement
restrict us for assignment of these tasks .We have to move for another processing time .Task D has processing
time of 4 minute and it has precedence requirement of A and B which is satisfied .So we can assign task D at work
station no 3 .The remaining time for work station 3 is 2 minute after assigning task D .
Table:
(Minute) station
1 1 B B 6 - -
2 2 A,E,G A 5 1 C
3 2 C C 1 - -
4 3 D D 4 2 F,H
Heuristic step 5: The eligible tasks are F and H .The task F has precedence requirement of task D and task H
has precedence requirement of task G .So we will assign task F because task D is already finished . Our work
station no 3 is fully occupied and we don’t have any remaining time for it .
Table:
(Minute) station
1 1 B B 6 - -
2 2 A,E,G A 5 1 C
3 2 C C 1 - -
4 3 D D 4 2 F,H
5 3 F,H F 2 - -
Heuristic step 6: Now the longest operating time is 5 minutes and eligible tasks are E & G. Task E has precedence
requirement of task D which is already finished and G has precedence requirement of A,E & F which is not
satisfied .So we will assign task E to work station no 4 .If both tasks satisfies the condition ,then you can select
any of the two tasks .The remaining time is one minute .But we don’t have any task which requires one minute .
so we can not assign any task now .This one minute is completely idle at work station no 3.
Table:
(Minute) station
1 1 B B 6 - -
2 2 A,E,G A 5 1 C
3 2 C C 1 - -
4 3 D D 4 2 F,H
5 3 F,H F 2 - -
6 4 E,G E 5 1 -
Heuristic step 7 -: Repeat the procedure as explained above and assign the tasks .After assigning tasks to the
work station , you will get the following table .
Table:
(Minute) station
1 1 B B 6 - -
2 2 A,E,G A 5 1 C
3 2 C C 1 - -
4 3 D D 4 2 F,H
5 3 F,H F 2 - -
6 4 E,G E 5 1 -
7 5 G G 5 1 -
8 6 H H 2 3 -
Now consider the following table.

Work Stations Total
1 2 3 4 5 6
Available time (Min) 6 6 6 6 6 6 36
Performance Time(Min) 6 6 6 5 5 2 30
Idle time(Min) - - - 1 1 4 6
Assignment of tasks to work stations:
1 2 3 4 5 6
B A C D F E G H
𝑃𝑒𝑟𝑓𝑜𝑟𝑚𝑎𝑛𝑐𝑒 𝑡𝑖𝑚𝑒
𝑒𝑓𝑓𝑖𝑐𝑖𝑒𝑛𝑐𝑦 𝑜𝑓 𝑙𝑖𝑛𝑒 = × 100
𝐴𝑣𝑎𝑖𝑙𝑎𝑏𝑙𝑒 𝑡𝑖𝑚𝑒
30
= × 100
36
= 83.33 %
The ideal efficiency is 100 % and our line efficiency is 83.33 %
➢ Intermittent production system : This type of production system can be further classified as
• Batch Production system
• Job Production system
Now let us understand it one by one.
• Batch Production system: In continuous production system the demand of a product is very
high so organization is able to produce it for twenty hours in a day and 365 day in a year .But
as the customer expectations increases , they demand for more variants in product .This results
in decrease in demand for a single product .Organizations produce one variant of a product in
one batch and after finishing the batch , second variant is produced in second batch .Furniture
manufacturing units, news papers ,books ,cloths are manufactured with the help of batch
production system . Following are the characteristics of batch production system .
✓ A production line is set up.
✓ Each worker completes one task and passing down the production line to the next
worker.
✓ The workers are semi skilled or unskilled.
✓ The workers must be able to switch from one part of the production line to another.
They are called a flexible workforce
✓ The production line can be changed quickly, so that different products can be made.
✓ Often individual parts of the product are bought from other companies and assembled
on the production line.
✓ The production lines runs for a certain amount of time and then the product is changed.
( Source : )
• Advantages of batch production system :
✓ Machines and work force are more flexible
✓ Jobs can be specialized
✓ Small work in process inventory
✓ Job satisfaction for the operatives
✓ Efficient space utilization
✓ Investment in machine is low
✓ Quality conformance is easier to achieve
✓ Costs are easy to monitor
✓ Co-ordination of activities and production scheduling is relatively easy
• Disadvantages of batch production system :
✓ Initial cost is very high
✓ Generally production time is longer
✓ Work becomes boring and tedious
✓ Material handling is costlier
BICYCLE BATCH PRODUCTION
Modern bicycle manufacture is component based. The company buys parts such as pedals from other
manufacturers and puts the bicycle together on a production line.
The tube for the bicycle frame is cut to size. One person will
The tube for the frames - cut to
do this job and they cut enough tube for a batch of several
size
hundred bikes in a week.
The tubes are set up in a ‘jig’ which holds the frame together.
The tube is put together and The frame travels along the production line and the joints are
prepared for welding. preheated to save time. A gas torch is used to weld the frame
together.
After welding the frames and the front forks need cleaning in
The frames are cleaned in the the ‘Grit-Blaster’. This shoots tiny particles of sand, at high
‘Grit-Blaster’. speed, at the frame and cleans away the ‘residue’ left behind
by the welding process.
Each frame is checked. All frames are checked to ensure that they are straight. Small
QUALITY CONTROL adjustments can be made at this stage.
The frames are now ready for painting. This is done by using
Paint is sprayed on to the a fine spray which covers every part of the frame with paint.
frames and forks. The frame then moves down the production line into a special
oven which ‘bakes’ the paint giving it a tough finish.
The wheels are assembled by hand and they are individually

The wheels are assembled. tested in a machine which automatically tensions each spoke
to ensure that they are perfectly straight.
The frames are machined for
other parts.. The frames are machined so that other parts such as the handle
bars and the bottom bracket (pedals) can be attached. People
operate the machine tools but they need some training before
Other parts are fixed to the they can use the machines safely and efficiently.
frame.
The bicycles are now ready for the shops where they will be
Bicycles are ready for the
viewed by customers and agents. Agents will buy ‘batches’ of
shops
bicycles for large stores.
Before sending the bicycles to the shops, agents view them and
Agents view bicycles and
suggest changes for the next batch. This helps the
suggest changes.
manufacturer improve the design and production of bicycles.
• Job shop Production system : Suppose an organization is making one hundred products .Now
all these one hundred products will require different kind of process requirements .May be for
a product A , very few processes would require while for product B several processes are
required .So whenever a very small quantity and very specialized kind of products are required
,it is manufactured in job shop production system. Consider the following figure to understand
the job shop production system .
4 Product Flow
Product
1 A1 3 C1
2
D1
B1
A2 C2
2
4
B2 D2
5 3
A3 C3
1
Product Y 7 6
Work centre A Work centre B Work centre C Work centre D
A3
Individual Machines or work centers.
( Source :Martinich joseph. (2008). Production & operations management - An applied modern approach. Delhi:
Wiley India.,pp-333)
Fig:Job shop structre and product flow
With a job shop production system , product A can be produced in quantity of 5 units ,Product B can be produced
in quantity of one hundred unit and may be Product C can be produced with a quantity of 50 units .Again the
requirement to manufacture product A would be 5 minute in each machines where as for B may be the time
requirement would be different. This variation causes very tightly connected flow process in job shop production
system .Boilers ,processing equipments ,Material handling machines ,large engines ,Large turbo generators and
many other manufacturing activities are manufactured with the help of job shop production system .Usually
majority of the job production orders are executed only once and only small percentage of them are repeated
regularly .
JOB SHOP PRODUCTION SYSTEM : SPECIALIST GUITAR MANUFACTURERS
This company is made up of three people. They make guitars for

customers who are serious musicians and want an ‘exclusive’
Small company with highly
design. When made, the guitar will be expensive because it will be
skilled workers
hand made from quality materials and its manufacture will require
individual craft skills as well as a long time.
Usually a customer will want an unusual or special item made, such

A customer who wants a
as a five string bass guitar for a professional musician. An ordinary
specialist service
guitar will not produce the quality of sound that is needed.
A customer who is prepared to spend a lot of money on a specially

made product will want individual attention. A professional
The customer will need an
musician will want to try out a selection of guitars and see examples
individual service.
before deciding on the final design. This will include meeting
regularly with the designer.
When the customer has discussed designs, materials and cost with
the company he/she has to make the final decision regarding exactly
The customer will decide on
the design they want. The designer often meets the musician to help
the final design.
him/her take important decisions until they are ready to make the
bass guitar.
The final design is made by The guitar is made by skilled workers. This takes a long time and
hand and takes a long time. may take weeks to complete.
Customer receives guitar. Customers are usually very pleased with the final product as they
Customer satisfaction ? have been consulted throughout the design process.
• Advantages of job production system :The advantages and disadvantages of job shop production
system are opposite of continuous and repetitive production system .
✓ Production Flexibility
✓ Any product requiring the types of processing that are available at the work centre can be
produced.
✓ Low initial cost
✓ Greater worker satisfaction
• Disadvantages of Job shop production system :
✓ Production Planning and control is complex
✓ General purpose machines are less efficient
✓ High work in process inventory
✓ Quality conformance is difficult
✓ Sequencing is complex
✓ The process requirement and variety of products makes difficult to assign cost to each product
✓ More skilled and high paid employees are needed.

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Introduction : Every organization , irrespective of its nature of business is engaged in converting some inputs

Current trend of Manufacturing In INDIA :

Operations management from system’s perspective :

INPUT Operations management OUTPUT

Man power Goods/Services

Equipment Conversion process

Input ( Random disturbances ) Output

Machines and equipments Customers

Transformation process for a service organization ( An MBA institute )

Quality of inputs measured Quality of output measured

Enlighten students with

Customers Customers satisfied with

Pure Product Pure Service

Ayurvedic Healing treatment

Legal / tax consulting

Cyber café –Telephone Books

Emergency Maintenance services

High Quality restaurant meal

Fast food in a eat out joint

Customized durable goods

Fast Moving commodities

General Purpose machine

Operations management as a services : Before we understand the services as a part of operations

A table provides comparison of services and goods :

Fig :Functions within organizations

Customer Layer Operations support layer

Ultimate Dealers Marketing Maintenance Quality

Core Operations layer

(Source :Adapted from Mahadevan B(2007),Operations management-Theory and Practices , pearson

Fig : Operations functions and its linkages

Decision Area Chemicals Engineering Fertilizers Textiles

Table : Cooperation of Other departments with the production department .

(Fig :Production Department of a manufacturing firm)

Engineering Maintanance Ground Operations Flight Operations

(Fig :Operations Department of an Airline company)

➢ Duties and responsibilities of a production manager in Manufacturing organization :The

• Planning the geographical location of the factory

➢ Continuous production system

1. Quantity of Production :Quantity of production means average quantity produced in a production

The Raw Material (INGOT)is fed into

The Molten Aluminium is fed into the

Continuous casting is done through

Rolling is done through a Aluminium

Hot rolled Aluminium Coil is prepared

CAR BODY CONTINUOUS PRODUCTION

A design team will take months to design a car body.

A car body is made from steel sheet. To help prevent it rust it

The car body is cleaned very carefully before it can be painted.

The underneath of the car body is sealed with a PVC sealant.

➢ Semi Continuous ( Repetitive or assembly line ) production system :Semi-continuous production

Pre- Manufacture Activities

Product A Product B Product C

Machining Machining Machining

Assembly Assembly Assembly

Testing Testing Testing

Dedicated and decentralized manufacturing support

1.Tasks :Elements of work or activity

Sum of all tasks (∑t)

𝑀𝑖𝑛𝑖𝑚𝑢𝑚 𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑤𝑜𝑟𝑘 𝑠𝑡𝑎𝑡𝑖𝑜𝑛𝑠

Total task time

Now consider the following table.

The ideal efficiency is 100 % and our line efficiency is 83.33 %

Now let us understand it one by one.