MASTER OF BUSINESS ADMINISTRATION - MBA SEMESTER 2 MB 0044-PRODUCTION & OPERATION MANAGEMENT (4 CREDITS) (BOOK ID:B1627 ) ASSIGNMENT- SET 1 (MARKS

60) Note: Assignment Set -1 must be written within 6-8 pages. Answer all questions. Q1. Explain the basic competitive priorities considered while formulating operations strategy by a firm? Ans. Operations strategy reflects the long-term goals of an organisation in its corporate strategy. To achieve good results, a clear understanding of the operating advantages and a good cross functional coordination between functional areas of marketing, production, finance, and human resources departments are required. Operating advantages depend on its processes and competitive priorities considered while establishing the capabilities. The basic competitive priorities are: (a) (b) (c) (d) Cost Quality Time Flexibility

(a) Cost. Cost is one of the primary considerations while marketing a product or a service. Being a low cost producer, the product accepted by the customer offers sustainability and can outperform competitors. Lower price and better quality of a product will ensure higher demand and higher profitability. To estimate the actual cost of production, the operations manager must address labour, materials, scrap generations, overhead and other initial cost of design and development, etc. (b) Quality. Quality is defined by the customer. The operations manager looks into two important aspects namely high performance design and consistent quality. High performance design includes superior features, greater durability, convenience to services, etc where as consistent design measures the frequency with which the product meets its design specifications and performs best. (c) Time. Faster delivery time, on-time delivery, and speedy development cycle are the time factors that operations strategy looks into. Faster delivery time is the time lapsed between the customer order and the delivery. On-time delivery is the frequency with which the product is delivered on time. The development speed is the elapsed time from the idea generation up to the final design and production of products. (d) Flexibility. Flexibility is the ability to provide a wide variety of products, and it measures how fast the manufacturer can convert its process line used for one product to produce another product after making the required changes. The two types of flexibilities are: (i) (ii) Customisation Volume flexibility
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While customisation is the ability of the firm to satisfy the specific needs of each its customer, the volume flexibility is the ability to accelerate or decelerate the rate of production to handle the fluctuations in demand. For example, the production of fertilisers of different specifications and applications. Q2. (a) List the benefits of forecasting.

Ans. Forecasting basically helps to overcome the uncertainty about the demand and thus provides a workable solution. Without the forecast, no production function can be taken up. Hence, it can be stated that forecasting helps to: Q2. (b) Improve employee relations. Improve materials management. Get better use of capital and facilities. Improve customer service. Explain the significance of plant location decision.

Ans. Location identification for an organisation is an important strategic level decision taken by the top management. It involves planning and management of the plant location. Location decisions are strategic decisions that bind the organisation to a certain place. Hence utmost care has to be taken while selecting the location. Location decisions are made on the basis of parameters which make it suitable for various considerations of suppliers and markets. While locating a plant, the following long range forecasting needs are to be considered: The companys expansion plan and policy. Diversification plan for the products. Changing market conditions. The changing sources of raw materials. Many other factors that influence the choice of the location decision. The main concern of the operations manager will be the extent of flexibility he/she has. This can be determined by raising such questions like: What is the volume of production of different products? What operations have to be outsourced? How to deal with surge or decline in demand? What will be the growth potential in that place? Materials need to be stocked and moved to various locations for operations and today it is common to see plants being operated at multiple locations. Since decisions have long term implications, thorough analysis and involvement of senior managers from all departments is essential. Multi- locations for manufacturing and distribution to exploit situations of supplier availability or market requirements are now a common practice among Indian companies. This trend in the recent times has lead to Indian companies being called by a new name, Indian MNCs.

Q3. What do you understand by line balancing? What happens if balance doesnt exist? Ans.1. A simple line (typically set up for the purpose of assembly) consists of a series of work stations, and the total work content of the product, which is expressed in terms of the total time is divided among these workstations equally. For example, consider five operations performed at A, B, C, D, and E. Each one can be a workstation or more than one operation can be combined at a single workstation. In a simple line like this it is easy to visualize the flow and also to make out the work allocation.

2. As the items move along the line, the work is progressed intermittently and leaves the line as a finished product. Typically the objective is, to divide the work content equally among the workstations so that the workstations are loaded as evenly as possible. This is known as balancing. 3. If such a balance is not achieved, a certain amount of inefficiency will arise because some stations will have more work to perform than others, and all the stations are expected to process same number of items per period of time. Secondly, unequal work content at different workstations leads to unequal work distribution and also formation of queue of items. Hence, to ensure a smooth flow, all the workstations are given the same time to process the items. The entire line typically, on a manual or power-driven conveyor moves from workstation to workstation at a constant rate. 4. All these constraints make it very difficult or impossible to achieve perfect line balance and hence, a certain amount of balancing delay or balancing loss is inevitable. Balance delay is defined as the total time available to complete the given job and the total time required. In other words, the balance delay is the difference in time between the service time and the cycle time, expressed as a percentage of the cycle time. 5. The objective of line balancing is that, given a desired cycle time, the attempt is to assign work elements to workstations to: Minimise idle time or balancing delay. Minimise the number of work stations. Distribute balancing delay evenly between stations. Avoid violating any constraints. 6. As it is difficult to achieve all these objectives simultaneously at least one objective has to be satisfied. Based on this premise, several researchers have proposed different heuristic methods to realise the desired goal. Q4. Describe the various approaches to TQM? Ans. Total quality management (TQM) has different approaches towards its achievement. The basic thrust of each of these is realising excellence. All the approaches have a lot in common. Some emphasise on the philosophy of total quality management and the role of management and employees in being aware, committed and active. Some use statistics more intensely. Some use an integrated approach. Following are some of the approaches to TQM:
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(a) Deming wheel Edward Deming is regarded as the American who taught the Japanese about quality improvement. Demings approach is summarised in 14 points: (i) Constancy of purpose for continuous improvement.

(ii) Adopt the total quality management philosophy for economic purposes. (iii) (iv) (v) (vi) (vii) Do not depend on inspection to deliver quality. Do not award any business based on price alone. Improve the system of production and service constantly. Conduct meaningful training on the job. Adopt modern methods of supervision and leadership.

(viii) Remove fear from the minds of everyone connected with the organisation. (ix) (x) (xi) (xii) (xiii) Remove barriers between departments and people. Do not exhort, repeat slogans, and put up posters. Do not set-up numerical quotas and work standards. Give pride of workmanship to the workmen. Education and training to be given vigorously.

(xiv) State and exhibit top managements commitment for quality and productivity. The slope is shown to indicate that if efforts are let up the programme will roll back.

(b) Jurans quality trilogy. Joseph Juran like Edward Deming is considered as a legendary quality guru and is also regarded as a proponent in spreading total quality management culture. According to Juran, the definition of quality is Fitness for use and is considered as most adequa te. Juran uses his famous universal breakthrough sequence to implement quality programmes. The universal breakthrough sequences are: (i) (ii) Proof of need. Project identification.
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(iii) (iv) (v) (vi)

Top management commitment. Diagnostic journey Remedial action Holding on to the gains.

(c) Crosbys absolutes of quality Philip Crosby is internationally known for the Zero Defects concept of quality. Like Deming, Crosby also lays emphasis on top management commitment and responsibility for designing the system, so that defects are not inevitable. He urged that there be no restriction on spending for achieving quality. His absolutes can be listed as follows: (i) (ii) Quality is conformance to requirements, not goodness Prevention, not appraisal, is the path to quality

(iii) Quality is measured as the price paid for non-conformance and as indices. (iv) Quality originates in all factions. It is the people, designs, and processes that create problems (d) Taguchis quality loss function Genichi Taguchi is a Japanese quality guru and unlike other experts sees quality from a perspective of loss. He is not in favour of just meeting the specifications, but contends that the quality characteristics should always be close to the nominal or ta rget value. Taguchis contention is that quality comes from design. He advocated a wide use of design of experiments for experimentation on variables and obtains specifications which will result in high quality of the product. It helps in bringing cost effective improvements in quality. Q5. (a) What is meant by productivity? Explain. (b) What do you mean by operations strategy? What is meant by productivity? Explain.

(a)

Ans.1. Productivity is a measure of the efficiency of the system and looks at the economies achieved during the processes. Every process will have a number of contributors which help in achieving maximum productivity. The processes are: People, Machines, Facilitating goods, Ancillary equipments, and Technology. Each of these elements attempts to enhance the contribution of other elements. 2. Opportunities exist at all stages of the workflow in the entire system to introduce measures for increasing productivity. However in actual manufacturing situations, the inefficiencies will have cascading effect in hampering productivity. Communication, effective review processes and innovative methods will ensure optimisation of resources. Building up reliability into the equipments, managing the supply chain to economise on the cost factors improves productivity. 3. Quality circles are very efficient in incorporating low cost and non-intrusive methods of improving productivity and quality throughout the organisation.

Quality circles. Involve all persons who are actually involved in the production system and the information they elicit and bring about improvements that are highly cost effective. Unveil creativity and encourage team work and bring about improvements almost on a day to day basis. Bring continuous incremental changes in a harmonious way instead of dramatic changes. Encourage identification of possible failures and seek methods of preventing things going wrong. Capital Productivity. Capital deployed in plant, machinery, buildings and the distribution systems as well as working capital are the components of the cost of manufacturing. Demand fluctuations, uncertainties of production owing to breakdowns, and inventories being created drag the productivity down. Therefore, strategies are needed to maximise the utilisation of the funds allotted towards capital. The strategies included are: Outsourcing strategies Methods improvement Balancing of workstations Quality circles Rationalisation of packaging methods b. What do you mean by operations strategy? Ans. Operations strategy is defined as the set of decisions that are warranted in the operational processes in order to support the competitive strategies of the business. Operations strategy is a long-range business plan for the companys products and will provide a road map for the operational functions to be pursued. Therefore, the strategic decisions include the capacity to be built into the production system, the type of processes and manufacturing technology to be adopted, the nature of products to be produced, and the type of material flow and other logistics required to achieve the level of performance. Planning of operations strategy is very essential as it will enable the organisation to respond to the market needs in an effective manner. It also gives the opportunity to align the resources and manufacturing activities to produce and deliver the products and become successful in the market. The operations strategies are evolved based on the business strategies. Some of the business strategies that have a direct bearing to manufacture are: To serve a defined product to the stable market. To provide high product variety and customise the design to meet the specific requirements. To provide rapid response to the market through in-built flexibility and produce different products to keep abreast with the environmental changes.
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Q6. What is logical process modelling? What is physical modelling? Ans. (a) Logical Process Modelling. Logical process modelling is the representation of putting together all the activities of business process in detail and making a representation of them. The initial data collected has to be arranged in a logical manner so that, links are made between nodes for making the workflow smooth. The steps to be followed to make the work smoother are given as follows: (i) (ii) Capture relevant data in detail to be acted upon. Establish controls and limit access to the data during process execution.

(iii) Determine which task in the process is to be done and also the subsequent tasks. in that process. (iv) (v) Make sure that all relevant data is available for all the tasks. Make the relevant and appropriate data available for that task.

(vi) Establish a mechanism to indicate acceptance of the results after every task or process. 2. Logical process model consists of only the business activities and shows the connectivity among them. The process model is a representation of the business activities and is different from the technology dependent ones. Thus, we have a model that is singularly structured only for business activities. Computer programmes are also present in the total system. This allows the business oriented executives to be in control of the inputs, processes and outputs. The logical process model improves control on the access to data. A few of the logical modelling formats are as follows: Process descriptions with task sequences and data addresses Flow charts with various activities and relationships Flow diagrams Function hierarchies Function dependency diagrams

3. Every business activity, when considered as a logical process model, can be represented by a diagram. It can be decomposed and meaningful names can be given to the details. Verb and noun form combinations can be used to describe each level. Nouns give the name of the activity uniquely and are used for the entire model meaning the same activity.

Ways of Representing Logical Process Modelling

(b) Physical Modelling. Physical process modelling is concerned with the actual design of database meeting the requirements of the business. Physical modelling deals with the conversion of the logical model into a relational model. Objects get defined at the schema level. The objects here are tables created on the basis of entities and attributes. A database is defined for the business. All the information is put together to make the database software specific. This means that the objects during physical modelling vary on the database software being used. The outcomes are server model diagrams showing tables and relationships with a database.