1. UNIT III OPERATIONS MANAGEMENT

2. PLANT LOCATION

3. NEED FOR SELECTION ☺ When the business is newly started ☺ The existing business expansion ☺ Establishment of branches ☺ Land lease expires ☺ Other reasons

4.  Plant location involves two major activities 1. To select a proper geographic region 2. Selecting a specific site with in the region

5. PLANT LOCATION Meaning-the establishment of an industry at a particular place. It is of 2 types- 1. Localization /centralization-means concentration of similar type of industries at some particular place. E.g. textile in Mumbai. 1. Delocalization /Decentralization-means spreading of similar type of industries at different places. E.g. banking industries.

6. Factors affecting location & site decisions 1. Availability of raw materials 2. Proximity to market 3. Integration with other parts of orgn 4. Availability of labor and skills 5. Availability of Amenities 6. Transport & communication facilities

7. Factors affecting location & site decisions (contd…) 7. Suitability of climate 8. Availability of services 9. Regional regulations 10. Room for expansion 11. Safety requirements 12. Others like low interest on loans, special grants, living standards

12. Plant layout  Meaning- Plant layout is the physical arrangement of industrial facilities. It involves the allocation of space & the arrangement of equipment in such a manner that overall operating costs are minimized.

14. Factors affecting plant layout 1. Management Policy 2. Manufacturing process 3. Nature of product 4. Volume of production 5. Type of Equipment

15. Factors affecting plant layout (contd…) 6. Type of building 7. Availability of Total floor area 8. Arrangement of Material Handling Equipment 9. Service facilities 10. Possibility of future expansion

16. METHODS OF PRODUCTION The methods of production can be of the following types:  Intermittent or interrupted production Job Production Batch Production  Mass and flow line production

17. JOB PRODUCTION In this type of production, every job is different from the other in terms of type, cost, efforts, consumption of materials or specifications.

18.  ADVANTAGES Reaching the target customer’s requirements Special training to labor Best suitable for pull system of demand  DISADVANTAGES X Time taking X Large scale economies cannot be realized X Costliest X Division of labor is not possible

19. BATCH PRODUCTION All the products manufactured under a batch are similar in terms of type, cost, efforts, consumption of materials or specifications.

20.  ADVANTAGES cost of product design per unit is low Economies of production Flow of materials can be continuous Automation and mechanization  DISADVANTAGES X Varying customer demands X Not appropriate for pull system

21. MASS PRODUCTION This is also called flow production. The production can be undertaken on large and specialized machines and processes.

22.  ADVANTAGES Mechanization and division of labour Large – scale economies Minimum material handling costs  DISADVANTAGES X Special care X Idle machinery may result in wastage of resources X Bottle necks

23. Types of plant layout 1. Product layout 2. Process layout 3. Fixed Position/ Stationary layout 4. Combination lay out

24. Product layout –Layout that uses standardized processing operations to achieve smooth, rapid, high- volume flow –Here machines are arranged acc. to the needs of product & in the same sequence as the operations are necessary for manufacture. E.g. ‘back office’ of services such as banks and insurance companies.

25. Raw materials or customer Finished item Station 2 Station 2 Station 3 Station 3 Station 4 Station 4 Material and/or labor Station 1 Material and/or labor Material and/or labor Material and/or labor Used for Repetitive or Continuous Processing Product Layout (contd…)

26. Work Station 1 Work Station 2 Work Station 3 Product Layout (sequential) Used for Repetitive Processing Repetitive or Continuous Product Layout (contd…)

27. 1. High rate of output 2. Low unit cost 3. Labor specialization 4. Low material handling cost 5. High utilization of labor and equipment 6. Established routing and scheduling 7. Short processing time Advantages of Product Layout

28. 1. Creates dull, repetitive jobs 2. Poorly skilled workers may not maintain equipment or quality of output 3. Fairly inflexible to changes in volume 4. Highly susceptible to shutdowns 5. Needs preventive maintenance 6. Require large capital investment Disadvantages of Product Layout

29. Process layout –Layout that can handle varied processing requirements –Here all machines performing similar type of operations are grouped together at one location in the process layout. Thus here facilities are grouped together acc. To their functions. E.g. all drilling machines are located at one place known as drilling section.

30. Dept. A Dept. BDept. D Dept. C Dept. F Dept. E Used for Intermittent processing Job Shop or Batch Process Layout (functional)

31. 1. Can handle a variety of processing requirements 2. Machines breakdown doesn’t result in shutdown. 3. Equipment used is less costly 4. Wide flexibility in production facilities. 5. Each production unit of system works independently. 6. High utilization of facilities 7. Variety makes the job interesting. Advantages of Process Layouts

32. 1. In-process inventory costs can be high 2. Challenging routing and scheduling 3. Equipment utilization rates are low 4. Material handling is slow and inefficient & is more. 5. More space is required 6. Longer processing time 7. Back tracking may occur. Disadvantages of Process Layouts

33. Comparison of product & process layout factorsProduct layoutProcess layout 1. natureSequence of facilitiesSimilar aregp2gether 2. Machines utilizationNot to full capacityBetter utilization 3. productstandardized diversified 4. Processing timelessmore 5. Material handlingless more 6. inventoryHigh WIPLow WIP 7. breakdownCan’t tolerateCan tolerate 8. Production centresimplecomplex 9.flexibiltylowhigh 10. floor spaceRequires lessmore 11. investmenthighlow

34. FIXED POSITION LAYOUT  Layout by fixed position of the product is inherent in ship building, aircraft manufacture.

36. ADVANTAGES  It is possible to assign one or more skilled workers to a project from start to finish in order to ensure continuity of work  It involves least movement of materials  A number of quite different projects can be taken with the same layout

37. DISADVANTAGES  There appears to be low utilization of labor and equipment  It involves high equipment handling costs

38. COMBINATION LAYOUT  A combination of process and product layouts combines the advantages of the both types of layouts.  A combination layout is possible where an item is being made in different types and sizes.  Example: Hospital

39. WORK STUDY Work study is defined as that body of knowledge concerned with the analysis of the work methods and the equipment used in performing a job, the design of an optimum work method and the standardization of proposed work methods.

40. Objectives of Work Study 1. To analyze the present method of doing a job, systematically in order to develop a new and better method. 2. To measure the work content of a job by measuring the time required to do the job for a qualified worker and hence to establish standard time. 3. To increase the productivity by ensuring the best possible use of human, machine and material resources and to achieve best quality product/service at minimum possible cost. 4. To improve operational efficiency.

41. WORK STUDY METHOD STUDY WORK MEASUREMENT MOTION STUDY TIME STUDY

42. BASIC WORK STUDY PROCEDURE 1. Select the job or process or the operation to be studied. 2. Record all relevant facts about the job or process or operation using suitable charting techniques. 3. Examine critically all the recorded facts, questioning the purpose, place, sequence, person and the means of doing the job/process/operation. 4. Develop the new method.

43. 5. Measure the work content and establish the standard time using an appropriate work measurement technique. 6. Define the new method. 7. Install the new method as standard practice. 8. Maintain the new method for the job/process/operation

44. RECORDING SYMBOLS Standard SymbolName of Activity Operation Transportation/Movement Inspection Delay/ Temporary storage Storage Combined Activity

45. PROCESS CHARTS  Outline Process Chart  Operation Process Chart  Flow Process Chart  Two handed Process Chart  Multiple Activity Chart  Man – Machine Chart  Flow Diagram  String Diagram  SIMO Chart

46. PRIMARY QUESTIONS The PURPOSE for which ThePLACEat which TheSEQUENCEin which The PERSONby whom The MEANSby which

47. ELIMINIATING COMBINING REARRANGING OR SIMPLIFING those activities With a view to

48. SECONDARY QUESTIONS The secondary questions cover the second stage of the questioning technique, during which the answers to the primary questions are subjected to further query to determine whether possible alternatives of place, sequence, persons and means are practicable and preferred as a means of improvement upon the existing method.

49. PURPOSE:what is done? why is it done? what else might be done? what should be done? PLACE:where is it done? Why is it done there? Where else might it is done? Where should it be done?

50. SEQUENCE:When is it done? Why is it done? When might it be done? When should it be done? PERSON:who does it? Why does that person do it? Who else might do it? Who should do it? MEANS:How is it done? Why is it done that way? How else might it be done? How should it be done ?

51. METHOD STUDY Work methods analysis or Method Study is a scientific technique of observing, recording and critically examining the present method of performing a task or job or operation with the aim of improving the present method and developing a new and cheaper method.

52. MOTION STUDY Motion Study is the science of eliminating wastefulness, resulting from using unnecessary; ill – directed and inefficient motion. The aim of motion study is to find and perpetuate the scheme of the least waste methods of labor.

53. OBJECTIVES OF MOTION STUDY  To study the existing method  To develop an improved method  To reduce excessive materials handling  To improve utilization of resources  To eliminate wasteful and inefficient motions  To standardize work methods or processes.

54. TYPES OF MOTION STUDY 1. Micro motion Study Take motion picture of the operations Analyze the film The film is analyzed by breaking the job cycle into micro motions or therbligs. Therbligs indicate the basic motions consisting of three parts i) When the motion begins ii) The nature of the motion iii) When the motion ends. Ex: Search – Sr; Select – St; Transport empty – TE etc Prepare a SIMO chart

55. 2. Memomotion Study It is a special form of motion study in which motion pictures are taken at slow speed using a motion picture camera.

56. WORK MEASUREMENT It is defined as the application of techniques designed to establish the work content of a specified task by determining the time required for carrying out the task at a defined standard of performance by a qualified worker.

57. A qualified worker is one who is accepted as having the necessary physical attributes, who possess the required intelligence and education and who has acquired the necessary skill and knowledge to carry out the work in hand to satisfactory standards of safety, quantity and quality. THE QUALIFIED WORKER

58. OBJECTIVES OF WORK MEASUREMENT 1. Improved planning and control of activities or operations. 2. More efficient manning of the plant 3. Reliable ideas for labor performance 4. Reliable basis for labor cost control 5. Basis for sound incentive schemes

59. WORK MEASUREMENT PROCEDURE Break the job into elements Record the observed time for each element Establish elemental time values by extending observed time into normal time by applying a rating factor Assess relaxation allowances Determine the frequency of occurrences of each element in the job, multiply the work content by its frequency to arrive at work content of the job

60. Elements Observed Time= Elemental Time by observed worker Basic Time (or) Normal Time= O.T * Rf Work Content (or) Standard Time(Each Element) = Normal Time + Allowances Work Content (or) Standard Time(Job) = Σ[Standard Time +* Frequency of Occurrences JOB Rating Factor = Rating of Observed worker/Rating of Qualified Worker

61. THE TECHNIQUES OF WORK MEASUREMENT 1. Direct Time study 2. Synthesis Method 3. Analytical Estimating 4. Predetermined Motion Time System (PMTS) 5. Work Sampling / Activity Sampling / Ratio Delay method

62. DIRECT TIME STUDY Time study is concerned with the determination of the amount of time required to perform a unit of work. The main objective is to determine by direct observation, the quantity of human work in a specified task and hence to establish the standard time, within which an average worker working at a normal pace should complete the task using a specified method.

63. PROCEDURE OF TIME STUDY a. Obtaining and recording all available information about the job, operator and the surrounding conditions likely to affect the execution of the work b. Recording the complete description of the method, breaking down the operation into 'elements' c. Measuring with a stopwatch and recording the time taken by the operator to perform each 'element' of the operation. i) Non – fly back ii) Fly Back iii) Split hand

64. SYNTHESIS METHOD Synthesis is a technique of work measurement for building up the time required to do a job at a defined level of performance by synthesizing or totaling elemental time values obtained from previous time studies on other jobs containing similar job elements or from standard data.

65. ANALYTICAL ESTIMATING It is used to determine the time values for jobs having long and non- repetitive operations.

66. Procedure: 1. Find the job 2. Break the job into elements 3. Select time value from standard data catalogue 4. Estimate time values for remaining elements 5. Add 3 and 4 6. Add Relaxation allowances

67. PREDETERMINED MOTION TIME SYSTEM (PMTS) It is defined as a work measurement technique by which normal or basic times are established for basic human motions and these time values are used to buildup the time for a job at a defined level of performance. Predetermined time standards are standard data for wide variety of basic body motions which are common in many industrial operations.

68. WORK SAMPLING / ACTIVITY SAMPLING / RATIO-DELAY METHOD Work Sampling randomly samples the work of one or more employees at periodic intervals to determine the proportion of total operations that is accounted for in one particular activity. We precisely record what the worker or machine is doing (i.e., working or idle) at the time of observation.

69. Let ‘p’ be the proportion of the activity. Then, p = X/N = No. of observations of the activity Total no. of observations Let ‘q’ be the proportion of no activity Then, p + q = 1 Extending the same for several observations (say N) (p+q)^ N = 1 If this is expanded using binomial theorem, the distribution will have a mean value of Np and S.D of √ Npq.

70. Normal Deviation, Mean = NP/N = p S.D = √ (Npq) / N = √ [p(1-p)/N] N= c^2 p(1-p) / E^2 Where c is the constant corresponding to the confidence level C=1 for 68.3 % CL C=2 for 95% CL C=3 for 99% CL

71. for c=1; E= 31.7% = 0.32 for c=2; E=5% = 0.05 for c=3; E=1% = 0.01

72. STATISTICAL QUALITY CONTROL  Quality refers to the sum of the attributes or properties that describe a product.  Inputs Acceptance Sampling Outputs  Process – Control Charts

73. CONTROL CHARTS  Control charts for variables – X Chart R Chart  Control charts for attributes – np chart p chart c chart u chart

74. TABLE OF CONSTANTS nA2A2 D3D3 D4D4 21.88003.268 31.02302.574 40.72902.282 50.57702.114 60.48302.004 70.4190.0761.924 81.3730.1361.864 90.3370.1841.816 100.3080.2231.777

75. X - CHART 1. Compute average of averages x. 2. Compute average range R. 3. UCL = x + A 2 R LCL = x - A 2 R

76. R - CHART 1. Compute average of averages x. 2. Compute average range R. 3. UCL = D 4 R LCL = D 3 R

77. C - CHART C Chart is used where there are a number of defects per unit. Here the sample size should be constant. X- Axis No. of samples Y- Axis No. of defects per each sampled unit UCL = c + 3√ c LCL = c - 3√ c Where, c = Total no. of defects in all samples Total no. of samples inspected

78. P- CHART X- Axis Sample no. Y- Axis % Defective  p chart is used where there is data about the number of defectives per sample. It is also called fraction defective chart or percentage defective chart. UCL = p + 3 √ [p(1-p)] LCL = p – 3 √ [p(1-p)] n n Where, P = Total no. of defectives found in the sample Total no. of pieces inspected

79. Sampling  The flow of products is broken into discrete batches called lots.  Random samples are removed from these lots and measured against certain standards.  A random sample is one in which each unit in the lot has an equal chance of being included in the sample.  If a sample is random, it is likely to be representative of the lot.

80. ACCEPTANCE SAMPLING Acceptance Sampling is based on the premise that a sample represents the whole lot from which the former is drawn. It involves extracting a random sample from the lot to determine whether to accept or reject the entire lot based on the quality of the sample.

81. 81 Acceptance Sampling Lot received for inspection Sample selected and analyzed Results compared with acceptance criteria Accept the lot Send to production or to customer Reject the lot Decide on disposition

82. TYPES OF ACCEPTANCE SAMPLING PLANS 1. Single Sampling plan 2. Double Sampling plan 3. Sequential Sampling plan

83. Single-Sampling Plan Lot of N Items Random Sample of n Items N - n Items Inspect n Items c’ > c c’ < c ReplaceDefectives n Nondefectives c’ Defectives Found in Sample Reject Lot Accept Lot

84. Double-Sampling Plan Lot of N Items Random Sample of n 1 Items N – n 1 Items Inspect n 1 Items c 1 ’ > c 2 c 1 ’ < c 1 ReplaceDefectives n 1 Nondefectives c 1 ’ Defectives Found in Sample Reject Lot Accept Lot Continue c 1 < c 1 ’ < c 2 (to next slide)

85. (c 1 ’ + c 2 ’) > c 2 Double-Sampling Plan N – n 1 Items Random Sample of n 2 Items N – (n 1 + n 2 ) Items Inspect n 2 Items ReplaceDefectives n 2 Nondefectives c 2 ’ Defectives Found in Sample Reject Lot Accept Lot Continue (c 1 ’ + c 2 ’) < c 2 (from previous slide)

86. Sequential-Sampling Plan 0 10 20 30 40 50 60 70 80 90 100 110 120 130 3 1 2 Units Sampled (n) 6 Number of Defectiv es 4 5 7 0 Reject Lot Accept Lot Continue Sampling

87. DEMING’S CONTRIBUTION TO QUALITY William Edwards Deming was an American Professor widely credited with improving production in US. He taught that by adopting appropriate principles of management, organizations can increase quality and simultaneously reduce costs.

88. Plan: study current situation Do: implement plan on trial basis Study: determine if trial is working correctly Act: standardize improvements The Deming Cycle

89. Deming’s 14 Points Point 1: Create a Vision and Demonstrate Commitment Point 2: Learn the Philosophy Point 3: Understand Inspection Point 4: Stop Making Decisions Purely on the Basis of Cost Point 5: Improve Constantly and Forever Point 6: Institute Training Point 7: Institute Leadership

90. Deming’s 14 Points Point 8: Drive Out Fear Point 9: Optimize the Efforts of Teams Point 10: Eliminate Exhortations Point 11: Eliminate Numerical Quotas Point 12: Remove Barriers to Pride in Work Point 13: Encourage Education and Self-Improvement Point 14: Take Action