Primary Processes

Secondary Processes
Polishing Electroplating Burnishing Painting
Polishing and buffing are finishing processes for
smoothing a work piece surface using an abrasive and a
work wheel or a leather strop.
These processes are used to join two or more pieces
of metal parts either temporary or permanent.

There are some permanent joining processes:

i) Welding
ii) Soldering

There are some temporary joining processes:

iii) Nut and Bolts joints
iv) Keys and cotter joints
Annealing:- Annealing is a heat process whereby a metal is
heated to a specific temperature ,colour and then allowed to
cool slowly.

Tempering:- Tempering is a heat treatment technique applied

to ferrous alloys, such as steel or cast iron, to achieve
greater toughness by decreasing the hardness of the alloy.
The reduction in hardness is usually accompanied by an
increase in ductility, thereby decreasing the brittleness of the
metal.

Hardening:- Hardening is a metallurgical metal working

process used to increase the hardness of a metal.
MODERN MANUFACTURING METHODS (NCM)

i) Electrical Discharge Machining (EDM):- It is also known as spark

machining, spark eroding, burning, die sinking, wire burning or wire
erosion, is a manufacturing process whereby a desired shape is
obtained by using electrical discharges Material is removed from
the workpiece by a series of rapidly recurring current discharges
between two electrodes, separated by a dielectric liquid and subject
to an electric voltage.
ii) Electro Chemical Machining (ECM):- It is normally used for
mass production and is used for working extremely hard
materials or materials that are difficult to machine using
conventional methods
iii) Ultrasonic Machining (USM):- It is a
subtraction manufacturing process that removes material from the
surface of a part through high frequency, low amplitude vibrations of a
tool against the material surface in the presence of fine abrasive
particles.
iv) Electron Beam Machining (EBM):- It is a process where high-
velocity electrons concentrated into a narrow beam are directed
toward the work piece, creating heat and vaporizing the material. EBM
can be used for very accurate cutting or boring of a wide variety of
CAPACITY PLANNING
 Capacity is the upper limit or ceiling on the
load that an operating unit can handle.

 Capacity also includes

 Equipment
 Space
 Employee skills
 What kind of capacity is needed?
 How much is needed?
 When is it needed?
1. Impacts ability to meet future
demands
2. Affects operating costs
3. Involves long-term
commitment
4. Affects competitiveness
5. Affects ease of management
6. Impacts long range planning
Capacity planning is necessary when an
organization decides to increase its
production or introduce new products into
the market. Once capacity is evaluated and a
need for new or expanded facilities is
determined, decisions regarding the facility
location and process technology selection are
taken.
 Design capacity
 Maximum obtainable output
 Effective capacity, expected variations
 Maximum capacity subject to planned and expected
variations such as maintenance, coffee breaks, scheduling
conflicts.
 Actual output, unexpected variations and demand
 Rate of output actually achieved--cannot exceed effective
capacity. It is subject to random disruptions: machine
break down, absenteeism, material shortages and most
importantly the demand.
 Actual output
Efficiency =
Effective capacity

Actual output
Utilization =
Design capacity
Both measures expressed as percentages
Design capacity = 50 trucks/day available
• Effective capacity = 40 trucks/day, because 20% of truck capacity go
through planned maintenance
• Actual output = 36 trucks/day, 3 trucks delayed at maintenance,
1 had a flat tire

Efficiency Actual Output 36 units / day

 

Utilization  90%
EffectiveCapacity 40 units / day
Actual Output 36 units / day
 
9
Assessing existing capacity
Forecasting future capacity needs
Identifying alternative ways to
modify capacity
Evaluating financial, economical and
technological capacity alternatives
Selecting a capacity alternative most
suited to achieve the strategic mission of
the firm.
Long term capacity strategies – develop new
product lines , expand existing facilities ,
construct or phase out production plants.
The phase-in strategy – it is planning for the
next model even when the present model is
moving well.
Short term capacity strategies - Overtime ,
Hiring Firing etc.
 Factors Affecting Capacity planning
The following factors influence capacity
Planning:
1. Technological Options.
2. Competitor’s Strategies.
3. Building Requirements / restrictions.
4. Cost of Capital.
5. Human Resource Options.
6. State and Central Laws & Regulations.
Controllable Factors – amount of labour
employed, facilities installed, machines,
shifts worked per day, days worked per week,
overtime work.
Less Controllable Factors – absenteeism,
labour-performance, machine breakdown,
material shortage, rework, problems such as
strike, lockout, fire accidents etc.
Long term capacity: it is dependent on various other
capacities –
Design capacity-the maximum output possible as
indicated by equipment manufacturer under ideal
work condition.
Production capacity-the max. output possible from
equipment under normal working condition or day.
Sustainable capacity-the max. production level
achievable in realistic work condition and considering
normal machine breakdown, maintenance etc.
Effective capacity-the optimum production level under
pre-defined job and work-schedules, normal machine
breakdown, maintenance, etc.
the strategic capacity planning undertaken
by organization for 2 to 3 years of a time
frame is referred to as medium term capacity
planning
 The strategic planning undertaken by
organization for a daily weekly or quarterly
time frame is referred to as short term
capacity planning.
 Increasing the Capacity
• As a first step we must check and remove the bottlenecks causing
the lowering of production.

Step 1 Step 3
Step 2
Out puts
Inputs

20units/hr
50 units/hr 50 units/hr

• After we have removed the bottlenecks, we should plan the

capacity increase if required.
 Managing demand
• Demand Exceeds Capacity: The price of the
product is raised to decrease the demand or
Long lead time schedules are made to
discourage marginally.
• Capacity Exceeds Demand: The price of the
product is reduced or sale promotional
schemes are launched to increase its demand
or product is introduced with improved
qualities.
• Adjusting to Seasonal Demands: Capacity can
best be utilized by combining products that
have complimentary seasonal patterns.
 Managing demand
However in case of small difference in the capacity and the
demand, the following tactics can be utilized for matching
capacity to demand:
• Increasing or decreasing the number of employees.
• Adjusting equipment and processes by buying additional
machinery or leasing out existing extra equipment.
• Improving methods to improve productivity, reduce the
rejects and re-works.
• Re-design the product to facilitate/ accommodate/
attract more clients.
 Economies of Scale
It is believed that average unit cost of a goods
or service can be reduced by increasing its
output rate.
• Spreading Fixed Cost:
• Reducing Construction Cost:
• Reducing Cost Of Purchased Materials:
1. Bulk Purchase
2. Transportation cost
3.Finding Process Advantage: (gain labor experties for
improvement)
 Capacity Planning strategy

• Sizing Capacity Cushion: This depends on the type of

product that is to be made and the type of machinery
involved. It can be as high as 50% and as low as 15-20%.

• Timing and Sizing Of Expansion: It is to make a

decision as to when and how much to expand? It depends
whether the company wants to stay ahead of the demand or
just want to have the policy of wait and see that is to follow
the leader.
 Capacity Planning
• It is important because if we do not plan the
capacity in a way to meet the future demands,
we might miss opportunities of growth and
profits.
However Capacity planning requires the
knowledge of current capacity and its utilization
• Capacity Planning can be done at two levels:
1. Long Term Plans
2. Short Term Plans
 Decision Tree
- 14 ,0 00 . 10 0, 00 0.00 Pro
M a rk et F av ou ra ble 40 fit
00 %

M a rk et U n f av ou rab le 6
0% -90 . 0 00 .00 L o s

1
s

n
ti o
60 ,0 00 .00 P rofi

Op
+18,0 00 .0 M a rk et F av ou ra ble 40 t
0 %
2
on
O pti
M a rk et U n f av ou rab le 6
-10 , 0 00 .00 L o s
0%
s

• JO B O
pt
io +13,0 00 .0
n M a rk et F av ou ra ble 40
40 ,0 00 .00 P rofi
30 t
Op %
ti

M a rk et U n f av ou rab le 6
on

5, 00 0.0 0 L o
0%
ss
4

Do N oth i n
g
Forecasting Capacity Requirements
A
d d
an an
em D em
D
c t ed ted
pe pec
B Ex Ex

New Capacity New Capacity

Demand
Demand
1 2
Time ars 3 1 2 3
Ye Time Ye ars

D
C
nd d
an
ma m
New Capacity dD
e New Capacity De
te ted
pec pec
Ex Ex
Demand

Demand
1 2 3 1 2 3
Time Years Time Ye ars
 1000
Break even Analysis
900

800

Total R e v e n u e line
700

Rupees
Cost in
600
Total Cos t line
500 r idor
f i t Cor
B re a k E v e n Pro
400

Variable C o s t
300

d or
rri
200
s Co
L os

100 Fixed Cost

0
100 200 300 40 0 500 60 0 800 900 1000
700
N u m b e r of U ni t s P ro d u c e d
 Capacity planning is long-term decision that establishes a firm's overall
level of resources. Capacity decisions affect the production lead time,
customer responsiveness, operating cost and company ability to compete.
Inadequate capacity planning can lead to the loss of the customer and
business. Excess capacity can drain the company's resources and prevent
investments into more lucrative ventures. The question of when capacity
should be increased and by how much are the critical decisions. Failure to
make these decisions correctly can be especially damaging to the overall
performance when time delays are present in the system.