MB 0044 Production and Operation Management (4 credits) (Book ID:B1627 ) Q1.

Explain the basic competitive priorities considered while formulating operations strategy by a firm? Ans :- Operation 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, 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: 1. Cost 2. Quality I. 3. Time 4. Flexibility

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. Computation of cost refers to estimation of the actual cost of production, wherein the operations manager has to address labour, materials, scrap generations, overhead and other initial cost of design and development, etc. Quality: - Quality is either appreciated or disapproved by the customer. The operations manager values for high performance design as well as sturdy & consistent quality. High performance design includes superior features, greater durability convenience to services, etc. whereas consistent design measures the frequency with which the product meets its design specifications and performs best. Time: - Faster delivery time i.e. on-time delivery, and speedy development cycle are the time factors that operation strategy looks into. Faster delivery time is the time elapsed between the customer order and the delivery. The product delivery so made is called on time and is appreciated. The development speed is the elapsed time form the idea generation up to the final design and production of products. 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 a. Customisation b. Volume flexibility

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While customisation is the ability of the firm to satisfy the specific needs of each its customer whereas the volume flexibility is the ability to accelerate or decelerate the rate of production to handle the fluctuations in demand.

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. Following are the important points to be addressed at in this regard: Improve employee relations, improve materials management, Get better use of capital and facility, Improve customer service, Effective handling of uncertainty, Minimization in the fluctuations of production and Better design of facilities and production system. However following are the three main categories of benefits of forecasting are Direct cost saving saving in expenditure other than in labour, paper, print telephone ,travel cost etc that can be directly attributed to the introduction of the intranet . These can be usually can be calculated in three steps (1) the number of incidences of expenditure in time period (2) the cost of each incidence(3) the proportion of these incidences that could be eliminated by using intranet.

Labour saving-savings is the amount of time required to carry out a task as a result of introducing the intranet .these can be expressed as a minutes per person per day. To calculate saving divide the numbers of minutes saves by the number of minutes in a day and multiply by the size of the production and the average salary. Productivity increase- Increase in output per person attributable to the introduction of the intranet expressed as a percentage. Because personal productivity has such a wide range of implication from job to job organization to organization, probably it is easier to convert these into simple labour savings. Q2) b. Explain the significance of plant location decision Ans: Location identification of an organization is an important strategic level decision taken by the top level management. It involves planning and forecasting by the management. Facilities management is an important strategic level decision taken by an organization. Plant location cannot be changed frequently since large capital needs to be invested. Therefore before selecting a plant location, a long range forecasting is to be made to foresee the future needs of the company location decision are made on the basis of the parameter which makes it suitable for various considerations of suppliers and markets. While locating a plant the following long range forecasting needs to be considered (1) Companys expansion plan and policy (2) changing market conditions (3) diversification plans for the products (4) changing sources for the raw materials. Planning is the most important function of management that basically deals with proper location lands, buildings, and machineries are costly and once fixed cannot be easily moves. In addition to this availability of labour, water supply, electricity, modes of transportation and prospective scope for expansion are also very important factors to be covered in the planning stage. Planning, therefore, requires a lot of thought, data gathering, and estimates for the future. These considerations are vital for the success of any firm. Q3. What do you understand by line balancing? What happens if balance doesnt exist? Ans :-Assembly line refers to a special arrangement of facilities typically along a straight line or a u-shaped line, exclusively to produce assemblies or finished products. The assembly starts in the form of a skeleton at one end and passes through several work stations where; different operations are performed in proper sequence and components are fitted to give final assembly i.e. end product, after passing through successive stages. The line is arranged so as to produce a specified number of products over a certain time period with a facility of easy mounting of components and fast operations, the assembly moves at certain speed and rolls over at the end of the line. 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 visualise the flow and also to make out the work allocation. Following diagram shows straight line assembly ABCDE Above Figure depicts a simple line flow indicating the work stations. The diagram indicates work begins at work station A and progresses through subsequent work stations like B, C etc. for progressive development to achieve 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. Imbalance in workstations work allocation leads to inefficiency and spoil the production time period. 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 time required to complete the work allotted to each station is known as the service time and the time available at each station is known as the cycle time, normally longer than the service time. The cycle time includes both the productive as well as the non-productive time along with idle time if any. Non productive time includes time for movement, handling and inspection time. The manner in which the work content is allocated to the station is influenced

by the technological sequence of the assembly and expressed by precedence requirements, that is, one operation must be completed before the other operation can start. Such constraints limit the ability to achieve complete or perfect balance while allocating work to stations. The allocation of work elements to a workstation may also be influenced by zoning constraints which occurs in two ways: positive zoning constraint demands that certain operations have to be clubbed together because of certain sharing of resources, and negative zoning which insists that certain operations should be clubbed together because of interference or conflict. 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. 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. Discussing all the different approaches is beyond the scope of this topic and hence a few methods are illustrated. Several calculations are involved in line balancing. The different terms and corresponding calculations are stated here as follows: Cycle time, C C=1/1Where, c = cycle time in hours r = desired output rate in units per hour Theoretical minimum number of workstations: TM= t/C (to be rounded up) Where, t = total time required to assemble each unit, and c = cycle time Idle time nc t Where, n = number of stations, and c = cycle time Total time required to assemble one unit t (%) Efficiency = t/c(100) Balance delay (%) = 100 Efficiency Assigning the operations or tasks to workstations is based on heuristics as given here: 1.Longest task time Choose the available task with the longest task time Choose the available task with the largest number of following tasks Choose the available task for which the sum of following task times is the longest Choose the available task with the shortest task time - Choose the available task with the least number of the following task 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; however, the emphasis shifts from one to other. Needless to say, each organisation will use any of these or even a combination to suit its structure, culture, and need. Some emphasis, on the philosophy of total quality management, 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: (A) Deming wheel (B) Jurans quality trilogy (C) Crosbys absolutes of quality (D) Taguchis quality loss function

Deming wheel :- Williams Edwards Deming was an American statistician, professor, author, lecturer and consultant best known for his work in Japan. Deming made a significant contribution to Japans later reputation for innovative high quality products. He is regarded as having had more impact upon Japanese manufacturing and business than any other individual not of Japanese heritage. Despite being a hero in Japan, he was only just beginning to win wide-spread recognition in the US at the time of his death. He gave fourteen points to improve total quality management as follows 1.Create constancy of purpose for the improvement of products and services with the aim to become competitive, stay in business and provide jobs. 2. Adopt a new philosophy of co-operation (win-win) in which everybody wins and put it into practice by teaching it to employees, customers and suppliers. 3. Cease dependency on mass inspection to achieve quality. Instead, improve the

process and build quality into the product in the first place. 4. End the practice of awarding business on the basis of price tag alone. Instead minimize total cost in the long run. Move towards a single supplier for any one item, based on a long term relationship of loyalty and trust 5. Improve constantly, and forever, the system of production, service, planning, of any activity. This will improve quality and productivity and thus constantly decrease costs. 6. Institute training for skills on the job. 7. Adopt and institute leadership for management of people recognizing their different abilities, capabilities and aspiration. The aim of leadership is to help people, machines and gadgets do a better job. 8. Drive out fear and build trust so that everyone can work more effectively. 9. break down barriers between departments abolish the competition and build the win win system of co-operation within the organization. 10. Eliminate slogans, instigation and targets asking for new zero defects or new levels of productivity. 11. Eliminate numerical goals, numerical quotas management by objectives and substituting leaders. 12. Remove barriers that take away the joy of the people at work it means to remove the system of rating or giving ranks to avoid conflicts. 13. Institute a vigorous a program of education and self improvement. 14. Transformation is everybodys job as it include each and everyone. Using the above principles, Deming gave a four step approach to ensure a purposeful journey of the total quality management these steps have to performed in the sae sequence repeatedly to sustain and improve quality. The slope is shown to indicate that if efforts are let up the programme will roll back. Plan: means that a problem is identified, processes are determined and relevant theories are checked out. Do: means that the plan is implemented on a trial basis. All inputs are correctly and recorded. measured

Check: means that the trials taken according to the plan are in accordance with the expected results. Act: means when all the above steps are satisfactory, regular production is started so that quality outcomes are assured.

Jurans quality trilogy: - Joseph Moses Juran was a 20th Century management consultant who is principally remembered as an evangelist for quality and quality management. According to Juran, the definition of quality is Fitness for use and is considered as most adequate. Joseph Jurans belief that quality does not happen by accident gave rise to the quality trilogy: (1) Quality planning (2) Quality control (3)Quality improvement The key steps in implementing company-wide strategic goals are: Identify customers and their needs both internal and external and work to meet those needs. Create measures of quality, establish optimal quality goals and organise to meet them. Create processes capable of meeting quality goals in real operating conditions. He believes quality must start at the top, irritating senior managers who believe training is for junior workers. For this he gave his famous universal breakthrough sequence to implement quality programmes. The universal breakthrough sequences are: Proof of need: There should be a compelling need to make changes. Project identification: Here what is to be changed is

identified. Specific projects with time frames and the resource allocation are decided. Top management commitment: Commitment of the top management is to assign people and fix responsibilities to complete the project. Diagnostic journey: Each team will determine whether the problems result from systemic causes or are random or are deliberately caused. Root causes are ascertained with utmost certainty. Remedial action: This is the stage when changes are introduced. Inspection, testing, and validation are also included at this point. Holding on to the gains: The above steps result in beneficiary results. Having records or all actions and consequences will help in further improvements. The actions that result in the benefits derived should be the norm for establishing standards.

Juran has categorised cost of quality into four categories: 1. Failure costs Internal: These are costs of rejections, repairs in terms of materials, labour, machine time and loss of morale. 2. Failure costs External: These are costs of replacement, on-site rework including spare parts and expenses of the personnel, warranty costs and loss of goodwill. 3. Appraisal costs: These are costs of inspection, including maintenance of records, certification, segregation costs, and others. 4. Prevention costs: Prevention cost is the sequence of three sets of activities, Quality Planning, Quality Control, and Quality Improvement, forming the trilogy to achieve Total Quality Management Crosbys absolutes of quality: - Philip Crosby is an American who promoted the phrases like zero defects and right first time. Zero defects doesnt mean m istakes never happen rather it means that they are never allowable number of errors built into product or process ,that you get right for the first time. He believes management should take prime responsibility for quality as well as workers of the organization. He urged that are no restriction for spending for achieving quality. In long run maintaining quality is more economical than compromising on ones achievements. His absolutes can be listed as follows: 1.Quality is conformance to requirements, not goodness, 2. Prevention, not appraisal, is the path to quality, 3. Quality is measured as the price paid for non-conformance and indices 4.Quality originates in all factions. There are no quality problems. It is the people, designs, and processes that create problems. Like Deming and Philip Crosby has developed 14 steps for an organization to follow in building an effective quality program: 1. Management is committed to quality and this is clear to all: Clarify where management stands on quality. It is necessary to consistently produce conforming products and services at the optimum price. The device to accomplish this is the use of defect prevention techniques in the operating departments: (1) Engineering (2) Manufacturing (3) Quality Control (4) Purchasing and (5) Sales and others. 2. Create quality improvement teams with representatives from all workgroups and functions: These teams run the quality improvement program by together participating in producing good quality output .However everyone has the opportunity to improve. 3. Measure processes to determine current and potential quality issues: Communicate current and potential non-conformance problems in a manner that permits objective evaluation and corrective action. 4. Calculate the cost of (poor) quality: Define the ingredients of the COQ and explain its use as a management tool. 5. Raise quality awareness of all employees: Provide a method of raising the personal concern felt by all personnel in the company towards the product or service and the quality

reputation of the company. 6. Take actions to correct quality issues: Provide systematic resolutions to solve problems permanently that are identified. 7. Monitor progress of quality improvement The quality improvement task team should list all the individual action steps that build up to Zero Defects day in order to make the most meaningful presentation of the concept and action plan to personnel of the company 8. Train supervisors in quality improvement: Define the type of training supervisors need in order to actively carry out their part of the quality improvement program. 9. Hold zero defects days: Create an event that will let all employees realize through personal experience, that there has been a change. Zero Defects is a revelation to all involved that they are embarking on a new way of corporate life. Working under this discipline requires personal commitments and understanding. Therefore, it is necessary that all members of the company participate in an experience that will make them aware of this change. 10. Encourage employees to create their own quality improvement goals:Turn pledges &commitments into action by encouraging individuals to establish improvement goals for themselves and their groups. 11. Encourage employee communication with management about obstacles to quality (Error-Cause Removal): Give the individual employee a method of communicating to management the situations that make it difficult for the employee to fulfil the pledge to improve. 12. Recognise participants effort: Appreciate those who participate by recognizing their contribution publicly and noisily, but dont demean them by applying a price tag to everything. 13. Create quality councils: Bring together the professional quality people for planned communication on a regular basis. It is vital for the professional quality people of an organization to meet regularly just to share their problems, feelings, and experiences, with each other. 14. Do it all over again quality improvement does not end: Emphasize that the quality improvement program never ends. There is always a great sign of relief when goals are reached. If care is not taken, the entire program will end at that moment. According to Crosby, five characteristics of an highly successful organisations are: (1) People routinely do things right first time (2) Change is anticipated and used to advantage (3) Growth is consistent and profitable (4) New products and services appear when needed IV. 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 target 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. He believed that, designers should make robust designs so that, product can withstand the variability which tends to be persistent and give quality for longer periods. His objective in giving the loss function is to make manufacturers realise that it is the target value of the specification that should be sought to be achieved and not the permissible deviations. The loss caused is the square of the deviation multiplied by a cost constant. L = C(X T)2 Where, L = Total loss C= Cost constant X = Average value of the quality characteristic T = Target value of the characteristic Taguchi also talks about losses to society because of a dent in quality both the manufacturers and users in society will have to endure the consequences of reduced performance as long as the product is used.

Q5. a. What is meant by productivity? Explain. Ans: - Productivity is generally expressed as the ratio of outputs to inputs. Productivity = While the above ratio may imply efficiency, productivity is the value added for every unit of investment. Thus, it is value added upon cost. Enhancement of productivity is achieved by either reducing the inputs for the same output or increasing the output by using the same input. Productivity can be calculated for: (1) A single operation, (2) A functional unit, (3)A department or division and (4) A plant 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 the 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. Opportunities exist at all stages of the workflow in the entire system to introduce measures for increasing the productivity. However in actual manufacturing situations, the inefficiencies will have a cascading effect in hampering the productivity. Communication, effective review processes, and innovative methods will ensure optimisation of resources. Building up reliability into the equipments and managing the supply chain to economise on the cost factors improves productivity.Quite often, productivity may suffer because of several problems associated with different elements of production. In such cases, quality circles are very efficient in executing low cost projects by using non-intrusive methods of improving productivity and quality throughout the organisation. Q5) b. What do you mean by operations strategy? Explain in brief. Ans:-Operations management is one of the major functions of any business organisation. Marketing discovers the destination for the product or service that is produced. Operations provide the deliverables by utilising the resources and producing the same. All equipments, facilities, technology, Information, human resources, and finance should be tuned to make operations most efficient to derive the maximum advantage and be competitive. Operations function should, therefore, be guided by strategies which are consistent with the organisation strategy. For example, Intel Corporation, USA, has superior computer chip design. This is because of its technological expertise in producing microchip. Wal-Mart emphasises on everyday low prices and thus focuses on inexpensive outsourcing for products. Competitiveness is at the core of all strategies. Even among them, priorities tend to bring the organisations focus on the areas to be dealt with in terms of allocation of resources people, money, and time. This means that different functional areas with their own capabilities and constraints have to be integrated for the overall corporate strategy. Flexible strategies and an adaptive production process help to achieve high productivity and also to satisfy the needs of customers, thereby improving the deliverables. Innovation should occur at all stages. For example, one-hour paper printing and one-hour screen printing services on the cover and same-day flexprinting and binding services. Corporate strategy, functional area strategies, market analysis, competitive priorities, competitive capabilities, and new service/product design are the main operations strategies in any organisation. Operations strategy is formulated to leverage the advantages, absorb the consequences of the variable nature of various functions, and provide a dependable implementation programme. Effective and timely communication is a vital factor to involve and coordinate people at various stages and monitor the progress. Formulation of a strategy depends on the following: (1) Assessment of strengths, (2) Understanding of the weaknesses (3) Nature of external environment (4) Resilience of the internal environment Strategy formulation and development has been historically analysed and debated in different fields of study. While strategy formulation is largely influenced by the situational forces, the core practices like value addition, customer focus, total quality, and concern for environment will always be followed. A business strategy is the result of a decision taken at the

highest-level. This outlines how the resources are deployed to achieve the goals in an environment. A general framework to guide and activate the think-tanks in the organisation is to come up with proposals. Action plans with time frames, authority hierarchies, and feed-back mechanisms are formulated and designed. At this stage, detailed scenarios as to the likely consequences are considered and contingency plans are worked out for implementation, if situations call for the same. Being in readiness with alternatives is a good way of assuring the success of any plan. Q6. What is logical process modelling? What is physical modelling? Ans:-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: 1. Capture relevant data in detail to be acted upon 2. Establish controls and limit access to the data during process execution 3. Determine which task in the process is to be done and also the subsequent tasks in that process 4. Make sure that all relevant data is available for all the tasks 5. Make the relevant and appropriate data available for that task 6. Establish a mechanism to indicate acceptance of the results after every task or process. This is to have an assurance that flow is going ahead with accomplishments in the desired path Some of these activities may occur in a sequential order whereas; some of them may run parallel. There may even be circular paths, like re-work loops. Complexities arise when the process activities are not connected together. 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. It also identifies, who is in possession of data at different nodes in the dataflow network that has been structured. A few of the logical modelling formats are as follows: (1) Process descriptions with task sequences and data addresses (2) Flow charts with various activities and relationships (3)..Flowdiagrams (4) Function hierarchies (5) Function dependency diagrams 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. depicts the ways of representing logical process modelling.

Process Descriptions

Flow chart

Flow Diagrams

Function Hierarchies

Functions Dependency Diagrams

Fig. : Ways of Representing Logical Process Modelling Physical process 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.