Q1. WHAT IS PRODUCTIVITY? WRITE A BRIEF NOTE ON CAPITAL PRODUCTIVITY. A1. Productivity is a measure of the efficiency of production.

Productivity is a ratio of production output to what is required to produce it (inputs). The measure of productivity is defined as a total output per one unit of a total input. These definitions are short but too general and insufficient to make the phenomenon productivity understandable. A more detailed theory of productivity is needed, which explains the phenomenon productivity and makes it comprehensible. Furthermore is needed operationalization of the concept productivity that makes it a measureable quantity. In explaining and operationalizing a set of production models are used. A production model is a numerical expression of the production process that is based on production data, i.e. measured data in the form of prices and quantities of inputs and outputs. It is most advisable to examine any phenomenon whatsoever only after defining the entity the phenomenon under review forms part of. Then it will be possible to analyse the phenomenon as part of such an entity. Hence, productivity cannot be examined as a phenomenon independently but it is necessary to identify the entity it belongs to. Such an entity is defined as production process. It goes without saying that productivity is a critical factor of production process in one way or another. To define the way is the object of this article. The benefits of high productivity are manifold. At the national level, productivity growth raises living standards because more real income improves people's ability to purchase goods and services, enjoy leisure, improve housing and education and contribute to social and environmental programs. Productivity growth is important to the firm because it means that the firm can meet its (perhaps growing) obligations to customers, suppliers, workers, shareholders, and governments (taxes and regulation), and still remain competitive or even improve its competitiveness in the market place. Capital Productivity Output per unit of value of fixed production assets (fixed capital). In a socialist economy, capital productivity characterizes the efficiency with which fixed capital stock is used. It is commonly employed in economic analysis and in the formulation of production plans and plans for capital expenditures, both for the national economy as a whole and for individual sectors, production associations, and enterprises. Data on the gross social product and on national income (from productive activities) are used in calculating capital productivity for the national economy as a whole; for calculating the productivity of individual sectors, data on gross (commodity) or net output are used. In sectors
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During the eighth five-year plan (1966–70). lower production costs. The level of capital productivity and the pattern of changes in productivity depend in large measure on technical and economic indicators describing the utilization of machinery and equipment and especially on increases in the equipment shift index. again leading to lower productivity. Productivity is influenced by a number of factors.where the output is homogeneous (petroleum. using either the average value over the year or the value as of the end of the year. 36 kopeks in agriculture. 50 kopeks in industry. For example. the accelerated development of industrial branches with relatively low capital productivities may lower productivity for industry as a whole. 13. capital productivity in industry in the USSR rose through the 1950’s and declined between 1961 and 1965. if outlays for additional fixed capital stock can be recouped in the period prescribed by norms. The working of mineral deposits at greater depths requires additional expenditures in fixed capital. by the deterioration of geological and mining conditions in the existing mineral deposits. Its growth depends primarily on the level of technology. Capital productivity is calculated on the basis of the balance valuation of the fixed production assets (depreciation costs included). and 1. and by difficulties encountered in supplying light industry and the food processing industry with agricultural raw materials because of extremely adverse weather conditions over a number of years. there was a slight decline (by 3 percent). Capital productivity has fluctuated over the years because it is simultaneously influenced by a variety of factors. the Meghna Sharma Page 2 . productivity showed no change with regard to gross output but increased with regard to net output. physical units are sometimes used in the calculations. Capital productivity is the reciprocal of the capital-output ratio. Improved use of fixed capital stock is reflected not only in higher capital productivity but also in higher labor productivity. thereby lowering capital productivity. and improved product quality. and the proportion of capital investment earmarked for reconstruction and retooling. Thus. the national income produced in current prices per ruble of fixed production assets in the USSR in 1975 amounted to 45 kopeks in the national economy as a whole. Many factors act to lower productivity. cement). coal. Capital productivity differs from one branch of material production to another. During the ninth five-year plan. Thus. Various purification facilities included in industrial projects which do not directly influence the volume of production nevertheless raise the total cost of the fixed capital stock. Thus. caused primarily by construction programs launched in the country’s eastern and northern regions. The expansion of production in the country’s eastern and northern regions has the same effect because the cost of fixed capital stock is between 30 and 50 percent higher there than in the European part of the USSR. the organizational and technical measures employed in managing production capacities.4 kopeks in transport and communications.18 rubles in construction.

the semi finished parts are machine in the sequence determined by the process requirements a flow line is established. The costs involved in changing the set up of automated flow lines are high. So. After completing an operation on a machine. The global trends are favouring flexibility in the manufacturing systems. we have an automated flow line. DESCRIBE BRIEFLY THE AUTOMATED FLOW LINES. Sometimes. One important consideration is to balance times that different machines take to complete the operations assigned to them. Designers now incorporate flexibility in the machines which will take care of small changes in dimensions by making adjustments or minor changes in the existing machine or layout. a few of the operations can be done on a single machine with a number of attachments. Cellular Manufacturing along with conventional Product and Process Layouts are still resorted to as they allow flexibility for the production Meghna Sharma Page 3 . automated flow lines are considered only when the product is required to be made in high volumes over a relatively long period. Q2. We assume that product life cycles are sufficiently stable to invest heavily on the automated flow lines to achieve reduced cost per unit. The change in movements needed can be achieved by programming the machines. It is necessary to design the machines in such a way that the operation times are the same throughout the sequence in the flow of the martial. and in organizations. In fixed automation or hard automation. A2. Human intervention may be needed to verify that the operations are taking place according to standards. where one component is manufactured using several operations and machines it is possible to achieve this condition – or very nearly. When several automated machines are linked by a transfer system which moves the parts by using handling machines which are also automated. at enterprises. held. for completing different operations. rotated. The raising of capital productivity leads to increased efficiency of production. Provision for extra pallets or tool holders or conveyors are made in the original design to accommodate anticipated changes. The materials need to be moved. Group Technology. positioned etc. lifted. Five-year plans make provision for better use of fixed capital stock and for the development and implementation of programs to raise capital productivity in various sectors of the national economy.investment is economically warranted even if capital productivity is slightly lowered. They are moved further to other machines for performing further operations. The logic to be followed is to find out whether the reduction in cost per piece justifies the costs of designing. The parts at various stages from raw material to ready for fitment or assembly are processed continuously to attain the required shapes or acquire special properties to enable them to perform desired functions. manufacturing and setting up automated flow lines. When these can be achieved with the help of automation and the processes are conducted with self regulation. we will have automated flow lines established.

This process is called assembly. many companies have found that well designed flow lines suit their purpose well. The main consideration for using automated assembly lines is that the volumes justify the huge expenses involved in setting up the system. Bottlenecks cannot be permitted. Methodologies of achieving the final result may vary. At 5. Production managers see every bottleneck as an opportunity to hasten the flow and reduce inventories. every bottleneck gets focused upon and solutions found to ease them. To see that the flow is kept at the same pace we provide two locations 2a and 2b so that operations 3.system. Usually. but the basic principle is to fit all parts together and ensure linkages so that their functions are integrated and give out the desired output. The time taken at any of the locations should be the same. screwing or even welding. By necessity. Flow lines compel engineers to put in place equipments that balance their production rates. Otherwise the flow is interrupted. The frame itself consists of a construction made up of several components and would have been ‘assembled’ or ‘fabricated’ in a separate bay or plant and brought to the assembly line. All parts or subassemblies are fitted to enable the product to be in readiness to perform the function it was designed to. The finished item comes out at the end of the line The material goes from station 1 to 5 sequentially. In automated assembly lines the moving pallets move the materials from station to station and moving arms pick up parts. a frame. An operator will oversee that the assemblies are happening and there are no stoppages. base will be the starting point of an assembly. body. we may provide more personnel to complete operations. It is not possible to think of inventories (Work In Process) in a flow line. Sensors will keep track of these activities and move the assemblies to the next stage. Operation 2 takes longer time. You will note that the same task gets repeated at each station continuously. Product Layouts are designed so that the assembly tasks are performed in the sequence they are designed. say twice as long. However. Meghna Sharma Page 4 . riveting. With methodologies of JIT and Lean Manufacturing finding importance and relevance in the competitive field of manufacturing. 4 an 5 need not wait. it is important to note that setting up automated flow lines will not be suitable for many industries Automated Assembly Lines : All equipments needed to make a finished product are laid out in such a way as to follow the sequence in which the parts or subassemblies are put together and fitted. place them at specified places and fasten them by pressing.

The physical space of the product is amenable to have cross sections made. suppliers. Considering the practices of TQM as discussed in six empirical studies.Rapid Prototyping : Prototyping is a process by which a new product is developed in small numbers so as to determine the suitability of the materials. McKone. it is important that the prototypes are made within the shortest possible time. grinding machines. TQM functions on the premise that the quality of products and processes is the responsibility of everyone who is involved with the creation or consumption of the products or services offered by an organization. study the various methods of manufacture. LOM (Laminated Object Manufacture). Rapid prototyping facilitates this. FDM (Fused Deposition Modeling). and Schroeder (2001) identified the Meghna Sharma Page 5 . Conventional machines like lathes. Any shape can be generated in this method. type of machinery required and to develop techniques to overcome problems that my be encountered when full scale manufacture is undertaken. TQM capitalizes on the involvement of management. workforce. EBM (Electronic Beam Melting) are some of Rapid Prototype Modeling Processes. EDM (Electro Discharge Machining) also help in the production of prototypes. It helps in confirming the design and any shortcomings can be rectified at low cost. Total quality management or TQM is an integrative philosophy of management for continuously improving the quality of products and processes. If serious defects or problems arise during the manufacture. Cross sections taken at very close positions gives thin layers which enable the generation of a solid model of the designed product. In other words. a thorough change in design or even its replacement may be considered. To arrive at decisions to make use of the advantages stated above. and even customers. It uses virtual designs from Computer Aided Design – CAD or animation modeling which transforms dimensional data to 3dimensional views. A3. Since the basis data about the product is already available in CAD. the above processes can produce models in a matter of a few days. Advanced technologies like – SLS ( Selective Laser Sintering). Prototypes do meet the specifications of the components that enter a product and performance can be measured on those. Cua. A bimonthly magazine TCT Magazine – calling the Rapid Prototyping as Time Compressing Techniques – is dedicated to the publication of latest developments in this field as researched and developed by practitioners around the world Q3. in order to meet or exceed customer expectations. WHAT IS MEANT BY TOTAL QUALITY MANAGEMENT? MENTION THE 14 POINTS OF DEMING’S APPROACH TO MANAGEMENT. milling machines. Because of their advantages Rapid Prototyping is being increasingly used. The data that is thus created helps build a solid model exactly as per the drawings.

Everyone working in a transport corporation can find ways to promote quality and efficiency. Customer demands are always changing. information and feedback. To create a constancy of purpose necessitates the development of a mission statement for the transport corporation. use of electric. The major benefit of the new philosophy is the creation of a continuous learning environment. to improve all aspects of the transportation system. 2. education. Therefore. strategic planning. supplier quality management. the transportation organization must strive to maximize efficiency and effectiveness through constant improvement. For example. A real concern is the availability of a wide network of service stations supplying gas or replacing discharged batteries with charged ones.and gas-based vehicles can reduce pollution in urban areas (Shridharan 2002). The transportation organization’s highest priority must be to provide the best transportation services to its community at the lowest cost possible. The transport agency must create a constancy of purpose by putting the customer first. Acceptable defective services and poor work performance are among the most severe roadblocks to better quality. 1. defects. Adopt New Philosophy In today’s economic age. The common thread in adopting a new philosophy is meeting the needs of those who pay for and use the services provided by the transportation organization. with the support of top management. The corporate sector should lobby for electric-and gas-based vehicles for urban areas. cross-functional training. and employee involvement.nine common TQM practices as cross-functional product design. and maintenance of the transport system. should adopt a new work philosophy by meeting in cross-functional teams or quality circles to set priorities for staff training. It is mistake to presume that services offered at present can keep an organization solvent and ahead of competition. and to promote excellence and personal accountability. Meghna Sharma Page 6 . and management’s failure to understand problems within the corporation. Innovation generates new and improved services. Create Constancy of Purpose The customer is the most important part of transport service. Employees. This flexibility permits innovation. Gas and battery industries can work together with the automakers industry to provide solutions with sustained business opportunities for themselves. customer involvement. The organization is responsible to both its community and its own workforce in maintaining a high level of excellence and value. people on the job who do not understand the job and are afraid to ask questions. which is achieved by putting resources into research. businesses cannot survive with commonly accepted levels of mistakes. The plan-do-check-act (P-D-C-A) cycle allows the statement to evolve as customer demand grows and changes. committed leadership. process management.

business drifts to the lowest bidder. Instead. Cease Dependence on Mass Inspection Lasting quality comes not from inspection. Price has no meaning without a measure of quality. Meghna Sharma Page 7 . Quality circles/cross-functional teams work together to improve transport service delivery. Transport agencies should select suppliers that can provide statistical evidence of quality. transport agencies should know what quality they are delivering. but more importantly. low quality and high cost being the inevitable results. but from improvements in the system. Management is obligated to look continually for ways to reduce waste and improve quality. End the Practice of Awarding Business on Price Tag Alone Today’s requirements for transport service suppliers are uniformity and reliability. The organization’s managers must be knowledgeable in the statistical control of quality. For example. Improvement is not a one-time effort. they must consider joint planning for improvement and joint improvement activities to serve customers better than their competitors. They must proceed under the new philosophy: the right service quality characteristics must be built in without dependence on inspection. Every worker and every department must commit to constant improvement. Without adequate measures of quality. 5. These groups may use basic quality tools to identify issues that need attention. which faults are local and which ones belong to the system? The responsibilities should be given where this fault belongs. To achieve best economy and productivity. The use of statistical quality tools helps to identify trouble spots and their sources. 4. resulting in lower costs and improved quality of transport operations and services. This requires close cooperation between those who provide the services and those who consume them.3. Thus. the organization should seek the best quality in a long-term relationship with a single supplier for only one item. by breaking through existing performance levels to new. Quality circles/teams continuously work to meet the needs of the people they serve. Since transport organizations tend to think of their suppliers as “partners” in their operations. The results of implementing this strategy are longer lasting items and greater quality service at no additional cost. One of the first steps for managers is to learn enough about the statistical control of quality to access the qualification of an operator by talking with them in statistical language. higher levels. improved transport service can result from focusing not only on achieving present performance levels. Improve the System of Transport Service Quality can be built into all transportation activities and services and can be assured by continuous examination to identify potential improvements. The statistical control of the process provides the only way for transport operators to build quality service and the only way to provide managers evidence of uniform. repeatable quality and cost of service.

9. The economic loss from fear is appalling. Leading consists of helping workers do a better job and of using learning by objective methods for those employees in need of individual help. the company could face ruin. In a secure environment. They should receive training in synergetic or cooperative supervision and work in supportive teams to improve instructions and learning. unnecessary duplication of effort. Supervisors should be trained continually. people fear punitive assignments or other forms of discrimination or harassment. or other working conditions that impair quality service in transportation. To counter this fear. Suggesting new ideas is risky. Training must be totally reconstructed. On-the-job quality improvement training ensures that every employee has a thorough understanding of customer needs for transport services. not afraid to ask for further instructions. This strategy is not only a powerful tool for integrating departments of the transportation organization. Sharing a unified purpose and direction helps to improve the transport organization’s services. Institute Training Quality circles help the human resource division to select training programs that increase the job skills of both main and support staff. Institute Leadership The leader creates opportunities for all employees (good and bad performers) to interact and identify opportunities for improvement. Statistical methods must be used to learn when training is finished and when further training would be beneficial. but if departmental goals conflict. and not afraid to report vehicles out of order. Drive Out Fear Improved performance cannot occur unless employees in the transport organization feel comfortable to speak truthfully and feel confident that their suggestions will be taken seriously.6. Breakdown Barriers Between Departments According to Deming. employees must feel secure. Most workers are afraid to ask questions or to report trouble. and implementing innovative experiments. people can work superbly in their respective departments. workers are not afraid to express ideas not afraid to ask questions. Quality Function Deployment (QFD) and quality circles improve cross-communication and encourage brainstorming among members of the transport organization. and a heavy loss in resources. creating new solutions. poor lighting. 7. Meghna Sharma Page 8 . but it also strongly promotes the principle of “do it right the first time” (Srividya and Metri 2000). Lack of coordination or disintegration between departments can lead to costly rework. QFD helps to capture the “voice of the customer” and convert it into service design requirements. 8. The job of supervisor is not to tell employees what to do or to punish but to lead them toward better job performance. total quality encourages applying new methods. Leadership training will help to introduce new best practices in transportation services to satisfy customer needs. To ensure better quality and productivity.

Both management and employees must continuously acquire knowledge to be of service to the community. people want to provide service without defects. 13. Leadership and continuous system improvement make this possible.10. numerical quotas cost as much as loss in terms of poor materials and mistakes. For instance. but people who are growing through education and life experiences as well. workers are idle the last hour or two. 11. pride. like those encouraging zero accidents or zero defects. If the transport organization’s focus is on improving its work processes. Removing quotas encourages employees to apply new ideas to old tasks. Numerical goals can even produce a negative effect because they generate frustration. To achieve pride in work.. and Targets for the Workforce Slogans. 12. staff and community do not have the same knowledge base or purpose of work. The goal is to fulfill the needs of the community. the community). Slogans. inspection simply identifies defects but does not explain how to prevent them. Eliminate Slogans. and growth should be emphasized. Eliminate Numerical Quotas Numerical quotas will not help workers do a better job. Communicating the organization’s mission and achieving respect among the staff and the community is one of the greatest challenges facing transport organizations. In many factories at the end of the day. they do no more work yet they cannot go to home. hard work. and nonvalue-added activities will diminish. posters. Encourage Education and Self-improvement for All Employees The transport organization needs not only good people. efficiency and effectiveness will rise. For example. including teamwork and statistical techniques. and other such devices are management’s lazy way out. They should be educated in new methods. transport employees may receive training on ISO 14000 Meghna Sharma Page 9 . Remove Barriers to Pride of Workmanship The transport industry cannot function properly without employees who are proud of their output and who feel respected as individuals and professionals. service. In fact. superiors must listen to the transport staff/employees and transport staff must listen to the recipients of their service (i. For instance. A better approach is to provide the means to the desired ends.e. Instead of numerical quotas. and posters reinforcing the slogans do not help workers do a better job. the transportation staff prevents waste and reduces accidents by managing its own quota-free environment. not to increase the number of people transported. Therefore. Intrinsically. the quota system will not help the organization’s competitive position or contribute to continuous improvement. Exhortations. bus transportation schedules and stop locations are now planned to meet the community’s needs. They have completed their quotas for the day and are waiting for the whistle to blow. Often. service quality will increase. For instance.

14. such as a quality council. A4. time. In practice. undertaken to meet unique goals and objectives. The key benefit is that project performance is observed and measured regularly to identify variances from the project management plan. Monitoring and controlling consists of those processes performed to observe project execution so that potential problems can be identified in a timely manner and corrective action can be taken. which are repetitive. and often constrained by funding or deliverables). and budget. Typical constraints are scope. Every activity. Project Management is the discipline of planning. when necessary. or semi-permanent functional activities to produce products or services. Take Action to Accomplish Transformation The essence of TQT is an organization-wide focus on meeting the needs of those who use and/or pay for transport services. every process. Everyone within the organization can be given an opportunity to understand the TQT program and their individual role within that effort. securing. A project is a temporary endeavor with a defined beginning and end (usually time-constrained.for providing environmental-friendly transport services to the community. Monitoring and controlling Monitoring and controlling process group processes. DESCRIBE BRIEFLY THE PROJECT MONITORING AND CONTROL. and managing resources to achieve specific goals. the management of these two systems is often quite different. The primary challenge of project management is to achieve all of the project goals and objectives while honoring the preconceived constraints. Q4. Meghna Sharma Page 10 . organizing. The temporary nature of projects stands in contrast with business as usual (or operations). and every job in the transport organization can be improved. to control the execution of the project. and as such requires the development of distinct technical skills and management strategies. The secondary—and more ambitious—challenge is to optimize the allocation of necessary inputs and integrate them to meet pre-defined objectives. with a plan of action to carry out the transport agency’s quality mission. Implementation of Deming’s 14 points requires a special top management team. Improvement teams that include broad representation throughout the organization can help ensure success of initial efforts and create opportunities for cross-disciplinary dialog and information exchange. permanent.typically to bring about beneficial change or added value.

and it includes    Continuing support of end-users Correction of errors Updates of the software over time Monitoring and controlling cycle In this stage. scope. etc. effort. Influencing the factors that could circumvent integrated change control so only approved changes are implemented. Meghna Sharma Page 11 . the monitoring and control process also provides feedback between project phases. Project maintenance is an ongoing process. in order to implement corrective or preventive actions to bring the project into compliance with the project management plan. Identify corrective actions to address issues and risks properly (How can we get on track again).Monitoring and controlling includes     Measuring the ongoing project activities ('where we are').) against the project management plan and the project performance baseline (where we should be). Monitoring the project variables (cost. auditors should pay attention to how effectively and quickly user problems are resolved. In multi-phase projects.

It is important not to lose sight of the initial goals and targets of the projects. Hence. and efficiency. and are therefore not a simple solution for a company to adopt. A5. JIT inventory systems expose hidden cost of keeping inventory.. to name a few. The end product of this effort is what the industry terms as-built drawings. the viability of the project has to be re-assessed. Quick notice that stock depletion requires personnel to order new stock is critical to the inventory reduction at the center of JIT. which tell production when to make the next part. To meet JIT objectives. any change that modifies the tangible portions of the finished work. more specifically. Q5.end up with the opposite of the desired result. but not necessarily limited to.Over the course of any construction project. the change normally needs to be documented to show what was actually constructed. The company must follow an array of new methods to manage the consequences of the change. WRITE A BRIEF NOTE ON JUST-IN-TIME (JIT). the design drawings. Change is a normal and expected part of the construction process. When changes are introduced to the project. differing site conditions. its effective application cannot be independent of other key components of a lean manufacturing system or it can ". Just in time (JIT) is a production strategy that strives to improve a business return on investment by reducing in-process inventory and associated carrying costs. or more simply. The record is made on the contract documents – usually. quality. When the changes accumulate. the owner usually requires a final record to show all changes or. Meghna Sharma Page 12 . the complete mechanism for making this work is often misunderstood. value engineering and impacts from third parties." In recent years manufacturers have continued to try to hone forecasting methods such as applying a trailing 13 week average as a better predictor for JIT planning. The philosophy of JIT is simple: inventory is waste. “as built. Beyond executing the change in the field. This is referred to as change management. This saves warehouse space and costs. Kanban are usually 'tickets' but can be simple visual signals. However. For instance. such as the presence or absence of a part on a shelf. Just-in-time production method is also called the Toyota Production System. the forecasted result may not justify the original proposed investment in the project. some research demonstrates that basing JIT on the presumption of stability is inherently flawed.. however. JIT focuses on continuous improvement and can improve a manufacturing organization's return on investment. material availability. To achieve continuous improvement key areas of focus could be flow. employee involvement and quality. the process relies on signals or Kanban between different points in the process. Implemented correctly. Changes can be the result of necessary design modifications. the work scope may change. contractor-requested changes.” The requirement for providing them is a norm in construction contracts.

and to constantly improve those processes to require less inventory. Increased scale has required a move to vans and lorries (trucks). Transaction cost approach JIT reduces inventory in a firm. without the safety net of inventory.The ideas in this way of working come from many different disciplines including statistics. Environmental concerns During the birth of JIT. and process variability. production management. Management may be tempted to keep stock to hide production problems. However. These problems include backups at work centers. Newman (1994) investigated this effect and found that suppliers in Japan charged JIT customers. at the right time. instead of adding and storing value. industrial engineering. a 5% price premium. contrary to traditional accounting. and behavioral science. a firm may simply be outsourcing their input inventory to suppliers. machine reliability. This violates three JIT waste guidelines: Time—wasted in traffic jams Inventory—specifically pipeline (in transport) inventory Scrap—fuel burned while not physically moving Meghna Sharma Page 13 . The JIT inventory philosophy defines how inventory is viewed and how it relates to management. or waste. Secondly. at the right place. This way of working encourages businesses to eliminate inventory that does not compensate for manufacturing process issues. allowing any stock habituates management to stock keeping. The JIT system has broad implications for implementers. This does not mean to say JIT is implemented without awareness that removing inventory exposes pre-existing manufacturing issues. on average. and in the exact amount”-Ryan Grabosky. and inadequate capacity. the Just-in-Time inventory system focus is having “the right material. In short. multiple daily deliveries were often made by bicycle. even if those suppliers don't use Just-in-Time (Naj 1993). Cusumano (1994) highlighted the potential and actual problems this causes with regard to gridlock and burning of fossil fuels. Inventory is seen as incurring costs. lack of flexibility of employees and equipment.

Cutting setup time allows the company to reduce or eliminate inventory for "changeover" time.. Fixing up of standards for volatility of quality according to the quality circle Demand stability Karmarker (1989) highlights the importance of relatively stable demand. the 1992 railway strikes caused General Motors to idle a 75. Employees with multiple skills are used more efficiently. Where input prices are expected to rise. Karmarker argues that without significantly stable demand. If not. firms may hoard high-quality inputs.    Meghna Sharma Page 14 . If there is no demand for a product at the time. As with price volatility. storing inventory may be desirable. either by not having to pay workers overtime or by having them focus on other work or participate in training. which helps ensure efficient capital utilization rates. Benefits Main benefits of JIT include:  Reduced setup time. Quality volatility JIT implicitly assumes that input parts quality remains constant over time. Longer term price agreements can then be negotiated and agreed-on quality standards made the responsibility of the supplier. JIT becomes untenable in high capital cost production. Production scheduling and work hour consistency synchronized with demand. Supply stability In the U. it is not made. This saves the company money.S.000-worker plant because they had no supply.Price volatility JIT implicitly assumes a level of input price stability that obviates the need to buy parts in advance of price rises. which simplifies inventory flow and its management. The tool used here is SMED (single-minute exchange of dies). Small or individual piece lot sizes reduce lot delay inventories. The flow of goods from warehouse to shelves improves. a solution is to work with selected suppliers to help them improve their processes to reduce variation and costs. Having employees trained to work on different parts of the process allows companies to move workers where they are needed.

WHAT IS VALUE ENGINEERING? EXPLAIN ITS SIGNIFICANCE. It is a primary tenet of value engineering that basic functions be preserved and not be reduced as a consequence of pursuing value improvements.e. In the screw driver and can of paint example. thereby increasing the value for the manufacturer and/or their customers. In the United States. In most cases this practice identifies and removes unnecessary expenditures. Supplies come in at regular intervals throughout the production day. Meghna Sharma Page 15 . the need for storage facilities is reduced. A company without inventory does not want a supply system problem that creates a part shortage. A6.and what it is being done to . Value. the most basic function would be "blend liquid" which is less prescriptive than "stir paint" which can be seen to limit the action (by stirring) and to limit the application (only considers paint.) This is the basis of what value engineering refers to as "function analysis".    Increased emphasis on supplier relationships. value engineering is specifically spelled out in Public Law 104-106. Smaller chance of inventory breaking/expiring. VE follows a structured thought process that is based exclusively on "function". i. what something "does" not what it is. Value engineering (VE) is a systematic method to improve the "value" of goods or products and services by using an examination of function. For example a screw driver that is being used to stir a can of paint has a "function" of mixing the contents of a paint can and not the original connotation of securing a screw into a screw-hole.the noun) and to do so in the most non-prescriptive way possible." Value engineering is sometimes taught within the project management or industrial engineering body of knowledge as a technique in which the value of a system’s outputs is optimized by crafting a mix of performance (function) and costs. In value engineering "functions" are always described in a two word abridgment consisting of an active verb and measurable noun (what is being done the verb . which states “Each executive agency shall establish and maintain cost-effective value engineering procedures and processes. Minimizes storage space needed. Q6. Value can therefore be increased by either improving the function or reducing the cost. as defined. is the ratio of function to cost. This makes supplier relationships extremely important. When parts move directly from the truck to the point of assembly. Supply is synchronized with production demand and the optimal amount of inventory is on hand at any time.

This provides a better understanding of the principles. Audit Where can I find more about Value Engineering? The best and most convenient way to learn the technique of Value Engineering and its application. This procedure involves the following 8 phases : 1. 1977 and dedicated to the advancement of Value Engineering through education. Orientation 2. INVEST is a professional society established in October. INVEST has members in virtually every state in India. Recommendation 7. Implementation 8. Information 3. methods and concepts of value technology. is by becoming a member of Indian Value Engineering Society (INVEST).Value Engineering helps your organization in :           Lowering O & M costs Improving quality management Improving resource efficiecy Simplifying procedures Minimizing paperwork Lowering staff costs Increasing procedural efficiency Optimizing construction expenditures Developing value attitudes in staff Competing more sucessfully in marketplace Value Engineering helps you to learn how to :      Improve your career skills Separate "Symptoms" from "problems" Solve "root cause" problems and capture opportunities Become more competitive by improving "benchmarking" process Take command of a powerful problem solving methodology to use in any situation How is Value Engineering Applied? The technique of Value Engineering is governed by a structured decision making process to assess the value of procedures or services. a Value Management Job plan can be followed. Evaluation 6. Meghna Sharma Page 16 . Whenever unsatisfactory value is found. It maintains a network of chapters throughout the country and provides its members with additional educational opportunities at the local level. Function 4. Creativity 5.