Unit - IV

EVOLUTION OF MARKETING CONCEPT

Since the later part of the 19th century, marketing has gradually evolved through various
marketing orientations. These stages in marketing evolution present a generalized picture
and a sufficiently significant number of companies have adopted the most modern
marketing concepts or philosophy.

The Production concept

This concept, viewed as one of the oldest of managerial orientations, typically aimed at
achieving as high an output as possible. The philosophy assumed that customers would
be more interested in acquiring conveniently available, reasonably priced, and well-made
products. Keeping in view the market behavior prevailing in times when customers did
not have much choice, it was a sound approach. The focus of managers, generally having
backgrounds in manufacturing and engineering, was to concentrate on achieving
increasingly higher efficiency in production, lower production costs, and more intensive
distribution. Even today, this approach seems to be quite sensible in relatively
underdeveloped and developing economies because customers are more interested in
owning a product and not overly concerned about finer features and aesthetic appeal.

In general, one important condition seems to be favorable to adopt production

orientation: when the masses look for a cheaper product and demand far exceeds
production. In India, The National Textile Corporation (NTC) and all its subsidiaries are
sticking to this philosophy while producing textiles for the huge, poverty-stricken
population in this country. Their philosophy and positioning is reflected in their ad,
Clothiers of the nation with affordable prices. In the global scenario, for nearly three
decades Intel Corporation focused on achieving increasingly high production output of its
successive generations of processors so as to bring down the prices of each improved
version. The production concept is unlikely to get discarded for a very long time to come,

because there would always be products and populations of such a nature that some
companies would feel comfortable with this philosophy.

The Selling concept

Sales concept seems to be based on a lurking apprehension that customers will not buy
the product in sufficient quantities unless aggressively pressurized. The selling concept
was the major means of increasing sales and profits during 1920s to 1950s in the
developed countries of that period. Companies believed that the most important
marketing activities were personal selling, advertising, and distribution.

Selling concept is geared towards converting existing product(s) into cash rather than first
finding and then satisfying customer needs. Sales concept is often observed in practice
when companies show heavy reliance on their promotional capabilities based on hard
sell approach. It is obvious that if a companys products do not match the changing
tastes and requirements of customers, with many alternative choices available, managers
might be inclined to go for aggressive promotional efforts to sell enough quantities.
Generally the purpose of marketing is to sell more stuff to more people more often for
more money in order to make profit. Of late, this has been happening in case of some
credit cards in our country. Generally hard sell is often seen in case of products or
services that people buy without giving much thought to the matter, such as non-essential
goods, and tend to postpone such purchases. The consequences of Hard sell might
harm the customer base to the extent that, in some cases, they might even bad-mouth the
product if the product fails to match up to their expectations.

The Marketing Concept

After World War II, the variety of products increased, people had more discretionary
income, and could afford to be selective and buy only those products that more precisely
met their changing needs and wants. However, these needs were not immediately
obvious. Sometime during the mid- 1950s, there was growing recognition among

American business people that merely efficient production and extensive promotion,
including hard selling, did not guarantee that customers would buy products. With the
passage of time, more knowledge, and experience, customers wanted was a must before
making a product, rather than producing products first and then persuading them to buy.
The key questions became:

What do customers really want?

Can we develop it while they still want?

How can we keep our customers satisfied?

Thus, marketing concept era began. Marketing concept proposes that an organization
should focus on customer needs and wants, coordinate its efforts, and endeavour to
accomplish organizational goals. Geraldine E Williams reported that the CEO of Nike
said, For years we thought of ourselves as a production-oriented company, meaning we
put all our emphasis on designing and manufacturing the product. But now we understand
that the most important thing we do is market the product. The major focus of all sets of
organizational activities should be satisfying customer needs.

To embrace the marketing concept as the guiding philosophy, the concerned firm must
accept certain general conditions and manage some problems. Alan Grant and Leonard
Schlesinger are of the view that market-orientation requires organization-wide generation
of market intelligence across departments, and organization wide responsiveness to it. It
means establishing a reliable information system to learn about real needs of customers
and design the right need satisfying solutions. Company-wide coordination may require
restructuring the internal operations and overall objectives in case of one or more
departments.

The marketing concept emphasizes three main principles.

Customer-oriented planning and implementations

Coordination of all organizational activities

Coordinated marketing is critically important to achieve organizational goals

The firm has to earn profits to survive, offer new and better products and services, and be
a meaningful member of society. A company might therefore choose to offer less costly
products and services to unprofitable segments, or even avoid them together. Being
market-oriented pays dividends and has a significant effect on company performance.

Relationship marketing

Companies in developed countries and many businesses in developing countries aim to

satisfy customer needs and build lasting relationships. The issue focuses on reliability and
trust between customer and organization. As a result of this customer focus, a whole new
subject, customer relationship management is now studied in marketing courses.

The new approaches to marketing such as experiential, permission, and one-to-one

marketing can all be seen as means of creating stronger relationships with customers. The
emphasis is on developing long-term bonds with customers by making them feel good
about how the firm interacts or does business with them by giving them some kind of
personal connection to the company.

Relationship marketing is based on the principle that current customers are the key to
long-term business success. According to Frederick F. Reichheld, the importance of
customer retention can be judged by observing some of the following benefits it provides:

(1) Acquiring new customers can be five times more expensive than the costs involved in
satisfying and retaining existing customers.

(2) The average company loses 10 percent of its customers each year.

(3) A decrease of 5 percent in the customer defection rate can increase profits by 25
percent to 85 percent, depending on the industry.

(4) The customer profit rate tends to increase over the life of retained customer.

The Societal Marketing concept

Marketing concept was accepted widely among companies in developed and some
developing countries and continued to evolve and take on new meanings. Not long after
this, criticism started about the nature of its social responsibility. The emphasis shifted to
how marketing affected society as a whole in an age of depleting and increasingly scarce
resources, environmental deterioration, etc. It was good enough to produce what
customers needs or wanted, and for achieving organizational objectives, but in certain
cases the concept could be in conflict with customers and societys best long-run
interests. Societal marketing concept is a management philosophy that takes into account
the welfare of society, the organization, and its customers.

Adoption of this concept requires that marketing decisions be made in an ethical and
socially responsible manner. Companies must pay attention not only to the short-term
needs of customers but also to their long-term well being. This includes, for instance,
excess fat content in ready-to-eat foods, toxic wastes, and environmental issues.

The need is to strike a balance between the interest of customers, the company itself, and
the society in which operations are conducted. Some responsible firms have started using
recyclable packaging materials and products that do not harm the environment. Among
the marketing tasks, de-marketing is an approach that reflects the societal marketing
philosophy.

MARKETING MIX

Marketing mix is a major concept in modern marketing and involves practically

everything that a marketing company can use to influence consumer perceptions
favorably towards its products or services so that consumer and organizational objectives

are attained. Marketing mix is a model of crafting and implementing marketing strategy.
There are virtually dozens of marketing mix tools. However , Prof E.Jerome McCarthy
classified the Marketing Mix Variables in terms of 4 ps: Product, Price,
Place(distribution) and promotion. These 4 Ps represent the tactical controllable factors
and vary in case of different products and target markets.

Product

In the marketing mix, the product or service is the most important element. There is an
old saying in marketing: Without a good product, you have nothing. Product is directly
related to satisfying the customer needs and wants in the target market. Customers
acquire products for the singular reason that they are perceived as the means to satisfying
their needs and wants. According to Philip kotler, A products anything that can be
offered to a market for attention, acquisition, use, or consumption that might satisfy a
need or want. In effect, according to this definition products include physical products,
services, persons, places, organizations and ideas. Various product attributes such as
quality, variety, design, brand, packaging, services, and warranties, etc., can be
manipulated depending on what the target market wants. This may ultimately affect the
product quality that can be kept high or low.

Promotion

Promotion is a key element of marketing programme and is concerned with effectively

and efficiently communicating the decisions of marketing strategy, to favorably influence
target customers perceptions to facilitate exchange between the marketer and the
consumer that may satisfy the objectives of both customers and the company. In reality,
everything that a company does has the potential to communicate something to the target
customers. For instance, the price of a product has the potential to communicate to target
customers a certain range of the product. For example, a low priced designer dress is
unlikely to attract high-profit, well-heeled target customers, while less affluent buyers
may find the designs too avant-garde for comfort. The major elements of promotion mix

include advertising, personal selling, sales promotion, direct marketing, and publicity. A
companys promotion efforts are the only controllable means to create awareness among
publics about itself, the products and services it offers, their features, and influence their
attitudes favorably.

Distribution

Decisions with respect to distribution channel focus on making the product available in
adequate quantities at places where customers are normally expected to shop for them to
satisfy their needs. The aim of the management is also to keep the physical distribution
costs (that would include inventory, transportation, and storage) as low as possible.
Depending on the nature of the product, marketing management decides to put into place
an exclusive, selective, or intensive network of distribution, while selecting the
appropriate dealers or wholesalers. The right choice of these factors can give a company
some competitive advantage. For example, a low-priced product consumed regularly on
an ongoing basis should be available at as many outlets as possible otherwise consumers
would buy any other substitutes that are more conveniently available.

Price

Pricing decisions are almost always made in consultation with marketing management.
Price is the only marketing mix variable that can be altered quickly. Price variable such
as dealer price. Retail price, discounts, allowances, credit terms, etc., directly influence
the development of marketing strategy, as price is a major factor that influences the
assessment of value obtained by customers. Price can be kept as high or low, or at any
level in between these two extremes. Too high would be the point at which any
meaningful sales are not possible because the target customers wont accept the product,
and too low would be the point at which company would incur losses instead of profits.

Price is said to be an important competitive tool, and intense price competition between
rival companies often culminates in a price war and the contestants generally end up

gaining nothing. The customers, however, enjoy the benefit of low prices till such time
that good sense prevails between contestants and prices are brought back to normal. In
case of certain products, price became the indicator of product quality and helps impart
an image to the product.

Marketing Mix elements (4Ps)

Product Decisions

Price Decisions

Place decisions

Promotion Decisions

Brand name

Pricing strategy

Distribution

Push, pull

Functionality

Suggested

Styling

price

Quality

retail Channels

Advertising

Market coverage

Sales promotion

Wholesale price

- Intensive

Personal selling

Safety

Various discounts

- Selective

PR / Publicity

Packaging

Seasonal pricing

- Exclusive

Promotional budget

Repairs & support

Bundling

Inventory

Warranty

Price flexibility

Warehousing

Accessories
Services

& Price discrimination

Order

processing

Transportation

Product Life cycle

Product life cycle (PLC) Like human beings, products also have a life-cycle. From birth
to death, human beings pass through various stages e.g. birth, growth, maturity, decline
and death. A similar life-cycle is seen in the case of products. The product life cycle goes
through multiple phases, involves many professional disciplines, and requires many
skills, tools and processes. Product life cycle (PLC) has to do with the life of a product in
the market with respect to business/commercial costs and sales measures. To say that a
product has a life cycle is to assert three things:

Products have a limited life,

Product sales pass through distinct stages, each posing different challenges,
opportunities, and problems to the seller,

Products require different marketing, financing, manufacturing, purchasing, and

human resource strategies in each life cycle stage.

There are four stages in the Product Life Cycle as depicted below;

(1) Introduction stage

This stage marks the launch of the product in a market. Organizationally, this stage is
characterized by high operational costs arising out of inefficient production levels or
bottlenecks, high learning time, unwillingness of the trade to deal in the product,
demand of higher margins or extended credit terms, and advertising. During this
stage, a firms requirement for cash is very high as all expenses have to be met.
Generally, the suppliers, media, and others are not willing to give credit so all
payments have to be made in cash.

The environment of the firm is characterized by customers who have low or no

awareness of the product. Even those who are aware and are willing to try the
product, do so in small quantities, called trial purchase. The trial demand is limited
both in the quantity bought and the number of customers buying it. Competition

either does not exist or is limited to a few firms who may also not be operating at
efficient levels. Much of the competition is indirect or from substitutes.

The marketing task for a pioneer firm is to stimulate demand for the new product and
also to reduce the break-even time.

(2) Growth Stage

Once a product crosses the introduction stage, it enters the growth stage. More than
95 percent of products fail in the introduction stage. However 5 percent of successful
products that enter the growth phase meet with a more strengthened and increased
competition. This competition now offers greater choice to the customer in the form
of different product types, packaging and prices. The market base expands as more
customers buy the product and one generally observes softening of prices.

Organizationally, the pioneer firm now operates at economical levels. There are lesser
production bottlenecks and hence costs are lower now. To remain competitive over a
period of time, the pioneer firm initiates a product improvement or modification
programme. Sales and profit grow exponentially, but profits taper off at the end of
this phase.

(3) Maturity Stage

Most products that survive the heat of competition and gain customers approval enter
the maturity stage. This stage is characterized by slowing of growth rates of sales and
profits. In fact, a decline in profits seems to appear now. This phase is also marked by
cutthroat competition which often tends to narrow down to a price and promotion
war. It is an irony that when the firm has established its product and generated
customer preferences for its brand, competition intensives and the firm has no other
alternative but to invest resources in service augmentation and also simultaneously
undertake the task of cost reduction and, hence, price reduction. The maturity stage

also sees a boom in market demand as more and more customers are now willing to
accept the product.

Internally, the firm derives benefits of economies of scale in production and

distribution. The product modification programme is at a much higher level and the
firm also introduces a modified product during this stage. Profits and margins are low
now, in fact on the decline, as the firm continues to invest resources to maintain its
competitive position in the market-place.

The marketing task is one of adopting a segmental approach. In fact, carving a niche
even within a specific market segment, service augmentation, image marketing, and
creating a new value image are critical tools to retain the competitive edge.
Strengthening the brand through repositioning or making changes in the channels of
distribution (e.g. moving from indirect to direct or shortening the length of the
channel) now become imperative for while the firm has to fight competition and take
its product nearer to the customer, it has to also make profits to remain in the
business.

(4) Decline Stage

This is the stage when sales decline because customer preferences have changed in
favor of more efficient and better products. The number of competing firms also gets
reduced and generally the industry now has limited product versions available to the
customer. Customers value perception of the product also undergoes a change.
However, the firm may see a rise in its profit curve, largely coming from people who
will be willing to pay a higher price to possess it either for its antique value or
because they resist any change. The marketing task becomes one of diverting and
gradual withdrawal of the product. To cater to a small niche, a firm may consider
generating primary demand for the product rather than the brand demand.
Nonetheless, products having entered a decline stage need to be pruned.

Why do changes occur in the product life cycle?

The most important factors leading to changes in a products life cycle are:
a. Changing customers needs
b. Better, more efficient and user-friendly products

Changing customer needs

The most fundamental of all the environmental factors that shapes the products life cycle
over a period of time is the customers needs. These needs change as customers become
more aware and have higher disposable incomes leading to a change in their lifestyles
and aspirations. Today we are noticing this change occurring all over the country, largely
because of the wider reach of television a single source of mass media that has
revolutionized markets and products. Satellite communication, dish antenna, cable TV,
cell phones, multimedia messaging service and other telecommunication products are
changing customers needs and expectations all over India and consequently many of the
products that saw their sales stagnating now find a spurt in their sales, coming largely
from hitherto unexplored markets.

Better and more efficient product

Today technology offers phenomenal opportunities to firm to develop more user-friendly,

low priced, and attractive products. Computers and user friendly packages in retail
banking. ATM machines. We find that the success of many products, be it agricultural
like nitrogen-based fertilizers or more urban products like credit cards, can be explained
by the technology that has been used to serve customers more efficiently.

PLANT LAYOUT

Plant Layout refers to the arrangement of machinery, equipment and other industrial
facilities for achieving quickest and smooth production.
A Plant layout involves:

Planning and arranging manufacturing machinery, equipment and services for the
first time in completely new plants.

To introduce new methods and improvement in manufacturing procedures.

Objectives of a good layout:

Provide enough production capacity

Reduce material handling costs

Reduce congestion (movement of people material)

Reduce hazards

Utilize labor efficiently

Increase employee morale

Reduce accidents

Utilize available space efficiently & effectively

Provide ease of supervision

Facilitate coordination

Provide for employee safety and health

Allow ease of maintenance

Allow high machine utilisation

Improve productivity

Factors influencing Plant layout

1. Materials

Every factory should levy raw materials economically, when they are available,
they should be stored properly and moved through production centres efficiently
for manual or mechanical operations

Storage and movement of raw materials require properly placed storage rooms
and material movements or handling equipments

It involves initial investment and recurring costs

Type and size of material influence:

i.

Type of raw materials used

ii. Availability or scarcity of materials(affected by seasonal variations

an d market condition)

2. Product:

Layout is designed with the ultimate purpose of producing a product

Type of the product (i.e. big/small, liquid/solid)influences the layout.

In most of the cases the product moves from work station to work station

In some cases, product is stationery, but men and machinery are moved to the
product

In the same way, the size of the product should be considered in planning the
layout of a plant

The sales/demand also influences the plant layout and determines the volume of
production.

The size, quality of the equipment , area of storage space and other facilities
determine the type of layout.

The purpose of plant layout is the efficient and effective production of a product.

3. Worker

The layout designer should also consider the the, position and requirement of
employees

If women workers are employed, the layout must be planned after keeping in
mind their particular requirements

Position of employees (stationery/moving) also influences the layout.

Employee facilities such as healthy and related services, employee safety

influence the layout.

4. Machinery

The type of product, volume of its production type of its process determined the
size and type of the machinery

Production is the combination of men, machines and materials

Before laying out a plan, it is necessary to determine which of these elements are
to be stationary or fixed which will mobile during the process of production

Various alternatives are available in determining which factor to move:

1. Move the product and worker fro0m work station to work station
2. Move the worker and the machine to the product which is held at the
location
3. The layout should be planned to suit the alternative

5. Type of Industry

The type of industry and the method of the manufacturing process exercise a
significant influence on plant layout

Industries may be broadly classified into

1. Synthetic
2. Analytical
3. Conditioning(change in form)
4. Exteractive(separation of one element from another)

6. Location

The size determines the type of building

The location of the plant determines the mode of transportation, depending upon
the source of raw materials and market to the plant.

The layout plan should provide for the exact type of transportation required

Demand for future expansion influences the plant layout.

7. Managerial Policies

Volume of production and provision for expansion

Extent of automation

Making/buying a particular component

Rapid delivery of goods to customers

Purchasing policy

Personnel policies
The layout engineer must have clear and complete understanding of those top
management policies that have a bearing on plant layout objectives.

PLANT LOCATION

A Plant is a place where men, machines, materials, money, equipments etc. are brought
together for manufacturing products. Plant location means selection of suitable site, area,
place etc., where the plant or factory will start functioning. Plant location involves two
main activities
1. General location of a plant
2. Selection of specific site in that region

General Location of a Plant :

1. Availability of Raw Materials: The site is to be selected where plenty of raw

materials are available, so that the transporation costs of raw materials to the site will
be minimum.

2. Nearness to market: if a factory is situated near the market, the cost of

transportation of the finished goods, the chances of finished products getting
damaged will be greatly reduced and also it can catch a big share and the service to
the customers will be quick and easy.

3. Transport facilities: in any factiory , lot of money is spent for transporting the raw
materials and finished goods. Therefore speedy transport facilities are required to
supply the raw materials and deliver the finished products at low transportation cost
in time.

4. Availability of labour : The available labour must be stable, good quality, more skill
and must have right attitude towards work.

5. Availability of power and fuel: Electric power is required for running any industry.
Hence it should be available in proper quantity at reasonable rates. Fuel is essential
for steel plants , foundaries, diesel and gas turbine power plants etc. Therefore most
of the above plants are situated near coal mines and oil refinery stations to cut down
the fuel transportation cost.

6. Availability of water: Large quantities of water is needed for thermal power stations,
paper and chemical industries for their production processes. So these industrioes
should be generally located where abundant water supply is available like rivers,
lakes etc.

7. Climate and atmospheric conditions: Bad climate and atmospheric conditions affect
the human efficiency. Therefore the following conditions are to be considered while
selecting a site for a plant.

1. Humidity 2. Rainfall 3. Atmospheric temperature 4. Wind speed and direction 5.

Possibilities of cyclones, floods etc.

8. Land : The factors to be considered in plant location are topography, shape of the
site, drainage and other facilities, soil conditions etc . The site selected should have
access for waste disposal.

9. Waste disposal: Some industries like leather industry, paper industry, distillaries, etc
give out a large quantity of waste. These wastes are harmful to the environment so
that, they must be disposed off effectively after waste treatment.

10. Availability of capital: The supply of capital is an important factor to run any
industry. The size and capacity of the plant depends on the amount of money
invested.

11. Community attitude: The success of an industry mainly depends on the attitude and
behavior of the local people. Therefore, plant should be located where people want
to work with high morale.

12. Social and recreational facilities: Employees require some social and recreational
amenities to live comfortable and happily.

13. Labour laws and taxation: Labour laws and tax rates differ from state to state.
Therefore, these must be analysed in detail before locating a plant.

14. Existence of related industries: Repair and maintenance are the major problems in
small scale industry. Therefore such facilities should be available nearer to the
industry, so that the repairs are carried out immediately without affecting the
production.

15. Other factors: The factors like political and social environment, secutity local byelaws, taxes, fire proctection facilities for expansion should be considered.
Selection of specific site in that region
1. Availability of cheap and expansion facility of the factory
2. The land should be strong and flat, so that it can withstand heavy machine
installation and shock loading
3. Repair facilities and general maintenance should be available nearer to the factory

4. Facilities for housing the workers and providing transport facilities to the workers
from the residence to the factory
5. Cost of installation of electricity and gas connection facility
6. Cost of providing water supply, sweage and waste disposal etc.
7. Providing social and recreational facilities
8. Taxes, fire protection facilities
9. Postal and telegraph, e-mail, telex and internet failites
10. Any restriction forced by the local town planning department, government, local
bye laws etc.

MATERIAL HANDLING
Introduction and definition
Material enters a factory as raw material and leaves as finished product. In between, the
material is processed in a number of work stations inside the factory.

During the

manufacture of various products, materials move from

1. One operator to another
2. One machine to another
3. One department to another
4. One work station to another
5. Stores to work place
6. Work place to stores etc.
This process of movin g the material from one location to another is called
material handling. it involves the movement of materials either by manually or
mechanically in batches or one at a time within the factory. The movement may
be hgorizontal, vertical or the combination of both.
Definition:
Material handling is the art and science involving the movement, packing and storing of
products in any form.

PRINCIPLES OF MATERIAL HANDLING

1. Eliminate as much handling as possible by arranging the production sequence in

order and the layout.
2. Minimize the distance of each movement by adopting shortest routes.
3. Arrange the sequence of operations so that the movement of material is smooth
and unidirectional
4. To save the power and fuel, make use of gravity for material movement wherever
possible.
5. Minimize the time of each movement.
6. Avoid back tracking and re handling of materials
7. Move the materials in lot rather than individual basis so that it will be economic.
8. Select the appropriate material handling equipments to avoid rehandling and
damage to the material during movement
9. The material handling equipment should be safe and efficient
10. Avoid interference of handling equipment with the production line.
11. Repairing and maintenance of material handling equipment should be carried
periodically to reduce their down time.
12. Reduce the non production time of handling equipments.
13. Locate the stores at the key center to reduce the material handling time.
14. Deliver the material closer to the point of use
15. Select multipurpose handling equipment instead of single purpose to optimize the
investment
16. Conduct method study to avoid the wasteful movement of handling equipments
17. Give proper training to the personnel in the operation of material handling
equipments
18. The handling system should be simple and accident proof
19. Pathways should be well illuminated and should have no obstruction
20. To avoid sudden break down in the production line, provide stand-by facilities.

FACTORS

IN

EQUIPMENTS:

THE

SELECTION

OF

MATERIAL

HANDLING

1. Materials to be moved
The size of material, weight, its shape, strength, nature and its chances of
getting damaged during handling etc., should be considered

2. Plant buildings and layout

Floor load capacity, ceiling heights, strength of trucks, column spacing, door
size and locations of columns etc., influence the choice of material handling
equipment.

3. Types of production machines

Different machines have different outputs per unit time. Therefore the materil
handling equipment should be able to handle the maximum output.

4. Type of material flow pattern

A horizontal flow pattern requires truck, overhead cranes, conveyors etc.,
whereas a vertical flow pattern will require conveyors, pipes, elevators etc.,

5. Type of production
Conveyors are used for mass production system where as powered trucks are
suitable for batch production.

Conveyors can handle more volume of

production per unit time as compared to trucks.

6. Cost : The total cost of material handling must be minimum

7. Load capacity

The material handling equipment should have more loading capacity

8. Handling cost for periodiuc overhauling, repair and maintenance cost etc.,
9. Expected life of the equipment

10. Amount of care and maintenance required for handling the equipments.

PRODUCTIVITY
Productivity is the ratio between output of wealth and input of resources used in
production processes. Output means the quantity of products produced and inputs are the
various resources used in production. The resources may be land, building, equipment,
machinery, materials, labour etc. Productivity can be increased by the following ways.
1. Increasing the output using the same input
2. Reducing the input by maintaining the output as constant
3. Increasing the output to a maximum extent with a smaller increase in input.
Productivity techniques
1. Basic Work Content
It is the time required to produce a product if,

The design and specifications are perfect

Manufacturing method is perfect

There is no idle time from any cause.

2. Defects in design and specification

Defects in the design of product

Lack of standardization

Poor quality of standards

3. Inefficient methods of operation

Selection of wrong machines

Selection of wrong tools.

Bad layout of plant and equipments

Bad working methods of the operator.

4. Ineffective time due to management

Poor production planning

Shortage of raw materials

Poor maintenance of plant and machinery which leads to an accident

Producing variety of products to increase the setup time.

5. Ineffective time due to workers

Poor attitude toward the work

Absence, lateness and illness

accidents

MANAGEMENT TECHNIQUES TO INCREASE PRODUCTIVITY

1. to reduce the excess of any job, the following techniques are used:

market research

product development

process planning

simplification

specialization

standardization

conducting method study

proper training to the employees

2. To reduce the ineffective time of any job, the following techniques are used.

Product development

Production and material control

Standardization and specialization

Proper maintenance

Selection and training to the employees

Safety training

Good layout and good working conditions

Promotion based on results and incentives

FACTORS AFFECTING PRODUCTIVITY

Factors affecting the productivity are the following two types:
1. Factors affecting national productivity

2. Factors affecting productivity in a manufacturing industry

1.Factors affecting national productivity

Human resources:
Their general level of knowledge and education are the important factors
for improving the productivity. The latest equipments and machineries
require a well educated and well trained employees. Government can
motivate the employees to be productive by offering good pay, promotion
and providing safe working conditions.

The employee-employer

relationships should be smooth enough to increase the productivity

Technology and capital investment:

The technological development in the field of engineering will demand to
purchase new machineries and thus increasing capital investment. The
new technology is mainly depends on research and development. The
government should encourage R& D in industries, reduce taxes on profits
to attract capital investment from new investors.

Government regulation:
Government should frame the rules and regulations that must be more
flexible and should have a detrimental effect on productivity.

While

framing governmental regulations the necessary health and safety must be

considered and the unneeded regulations should be eliminated.
2.Factors affecting productivity in a manufacturing industry.

Product design
A product design is simoplified by eliminating unnecessary parts in a
product. Thus it saves the material cost. Value analysis is a tool which is
used in product design and improve the productivity.

R&D,

standardization and group technology are the other product design factors
that improve productivity.

Equipment and machinery

The machine used to produce the products will affect the productivity.
The well maintained machines, tools conveyors, good factory layout etc.

can eliminate the unnecessary work delay , wastage scrap etc.

Thus

increasing the productivity.

Skill and effectiveness of worker

The skilled and experienced worker can do the worker at a faster rate with
greater effectiveness than a new worker.

Therefore the national

productivity council is conducting training and skill development program

to increase the productivity.

Energy
Eneergy conservation in an industry is also an important to be considered
in i9mproving productivity.

Energy is saved by attending proper

maintenance.

Type of production
When the production process is continuous, the manufacturing time is
reduced and thus more volume of production.

This increases the

productivity.
HUMAN FACTORS IN LOW PRODUCTIVITY

Improper training. Lack of experience may promote low productivity

Workers lack of faith on the management

Lack of communication regarding technical details from the management

Improper planning and scheduling of work on the management part

Lack of uni9ty of command and unity of direction on the part of management

Unsolved human conflicts among the workers.

Low morale and poor attitude towards the nature of work

Poor working conditions which results into easy fatigue of the employuees

Absenteesm ofworkers gives a great inconvenience to the supervisors during

allocation of job

Workers may feel insecure while the introduction of automatic machines.

Carelessness, lateness and idleness .

PLANT MAINTENANCE

In industry equipments and machineries are most important parts for any
productionsystem. Since a large amount of money is invested for purchasing the above
equipments and machineries, if they are kept idle it will be a great loss. As far as
possible they should be always in working condition and there should not be any
breakdown.Hence it is very important that the equipments , machineries and plants
should be properly maintained.
Plant maintenance is the process of keeping the equipment and machine in good
operating condition so that the efficiency of the machine is retained and its life increased
OBJECTIVES OF PLANT MAINTENANCE
The main objectives are

To increase the life of the plants, equipments and machineries etc., by minimizing
their wear and tear deterioration.

To maximize the productivity through planned maintenance of equipments and

machineries.

To reduce the idle time or down time of the equipments through proper plant
maintenance so that the cost of production is reduced.

To provide proper information to the management on the cost and effectiveness of

maintenance

To improve the morale of staff and workers

To reduce the accidents and ensure safety of staff through proper inspection and
maintenance.

To get the customers good will through steady supply of quality products.

To get the co-ordination and support from other departments such as design,
research and development, finance, production etc., for increasing the
productivity.

TYPES OF PLANT MAINTENANCE

Plant Maintenance

Unplanned
Maintenance

Planned
Maintenance

Preventive
Maintenance

Running
Maintenanc
e

Scheduled
Maintenance

Productive
Maintenan
ce

Shut down
Maintenanc
e

Corrective
Maintenance

Break down
Maintenance

Emergency
Maintenance

Shut down
Maintenance

Maintenance can be classified into planned and unplanned. In planned maintenance,

maintenance. Work is carried out as per the pre determined plan based on control and
records. Unplanned maintenance is an emergency maintenance Which is done after
failure. No advanced thoughtout has been given for predicting the causes of failure. It is
necessary to take up maintenance action immediately so as to avoid loss of production
and extensive damage to the equipments. Planned maintenance is further classified into
1. Preventive maintenance
2. Scheduled maintenance
3. Corrective maintenance

1.Preventive maintenance:
Preventive maintenance is the maintenance carried out in a machine or equipment at
predetermined level to perform the machine in a satisfactory operating condition . This
method of maintenance prevents major breakdown through periodic inspections.

It

locates weak spots in all machineries and inspection is carried out on these parts
regularly. Minor repairs are done so as to reduce the unanticipated breakdowns This type
of maintenance is used where the breakdown will have serious losses.
preventive maintenance is costly but it is essential.

Generally

The principle of preventive

maintenance is Prevention is better than cure.

Preventive maintenance Is further divided into
a. Running maintenance
b. Shut down maintenance
c. Productive maintenance
Running maintenance
Refers to the maintenance work is carried out when the equipment or the machine is
in service, where as Shut down maintenance refers to the maintenance work is carried
out only when the equipment or the machine is not in service
Productive maintenance refers to the maintenance work is carried out only for the
critical machineries.

Since these machineries are very essential for production

purposes, the failure of these critical machineries will affect the complete production.
The critical machines need not be costly machines.
2. Scheduled Maintenance
This is also known as routine maintenance.
recommeddation of the equipment t supplier.

This is carries out as per the

This is usually done periodically in

predetermined dates. The following work are done in scheduled maintenance

Cleaning of tanks

Overhauling of machines

Periodic inspection

Lubrication

Repairing and replacing or worn out parts

Adjustment of some main parts

This type of maintenance may prevent major breakdown in machines and will not
interfere the production works.

3.Corrective maintenance refers to the maintenance work carried out in a machine after
failure so that its performance is restored. Corrective maintenance involves minor repairs
due to periodical inspections. It is futher classified into
Break down maintenance and
Shutdown maintenance
Breakdown maintenance
Breakdown maintenance is also known as emergency maintenance in which a
machine is allowed to run without any attention. Repair and replacement works
are carried out only when it breaks down.

No action is taken to prevent

breakdown. This type of maintenance is applicable where the breakdown of

machines will not affect the production
Causes of breakdown

Failure to replace worn out parts ion right time

Failure to apply lubrication and cooling system

Due to vibrations, excessive heat and noise etc.,

Due to voltage fluctuations, poor quality oils etc.

Shutdown maintenance under corrective nmaintenance refers to the maintenance work is

carried out only after breakdown.
TECHNIQUES OF PLANT MAINTENANCE
In an unplanned maintenance, the breakdown is unpredictable and it happened accidently.
It leads to increase they down time and thereby cost of maintenance is more. Therefore,
planned maintenance is preferable than the unplanned maintenance in most of the plant.
Hence the various techniques of plant maintenance are applicable to planned
maintenance. These techniques are the scientific methods which are used to carry out the
planned maintenance function effectively.
1. Inventory of facilities and spare parts

Prepare a list of facilities available in an organization. The facilities like plant,

buildings, equipments, machineries, material hadling devices, tools and spare parts
etc., are to be maintained
2. Identification of plant and equipment
The above listed facilities should be positively identified. Generally the typical
identification system has 6 digits. The first two digits indicate the proper location of
the department, the next two digits indicate the type of machine and the machine
number with in the particular group.
3. Marking the machine and equipment
After all allocating the identification symbols to all the equipments and
machineries, marking should be done clearly on these equipments. This aids to
carry out the maintenance work at a faster rate without delay.

4. Facility register
It is a record of all equipments, machineries, plant and buildings which are to be
maintained. To carry out the maintenance work effectively, all the abpve details
should be kept in records. The information contained in the facility register are
i.

Current location

ii.

Conditions

iii.

Spare parts with code numbers

iv.

Serviceability

v.

Breakdowns if any and their dates and reasons

vi.

Size and models etc

5. Maintenance schedule
A maintenance schedule indicates the following:

List and type of maintenance work to be done.

Frequency of maintenance(ie) the time between breakdowns or failures

Which worker is attending the maintenance

Estimated time required to complete the maintenance work.

This maintenance schedule is normally prepared based on the suppliers operating

manual of each equipment and the number of years the machine worked.

6. Job specification
It is a document which described the nature of work to be done. The details of
work to be carried out on each facility are to be communicated to the maintenance
workers clearly. It ensures effective maintenance and im proves the morale of the
workers.
7. Maintenance program
It is list of program which describes when the maintenance work to be carried out
and at what intervals. The techniques used are planning charts, history cards,
inspection register, log books and visible record cards etc. The facilities to be
maintained are listed and marked on the left hand side of the planning chart. The
time (days/weeks/months) required to complete the maintenance s marked on the
right side of the chart
8. Job report
It is the process of recording the work done and preparing a report of the
conditions of facilities. In planned maintenance, there should be a continuous
flow of instructions to and from the workers attending the job.
informations are very much useful for controlling and modifying the plan.

INDUSTRIAL SAFETY
Definition:
Industrial safety is primarily a management activity which is concerned with
reducing, controlling and eliminating hazards from the industries or industrial units.

IMPORTANCE OF INDUSTRIAL SAFETY

The danger of life of human being is increasing with advancement of scientific
development in different fields.

These

The importance of industrial safety was realized because every millions of industrial
accidents occur which result in either death or in temporary disablement or permanent
disablement of employees and involve large amount of losses resulting from danger to
property, wasted man hours and wasted hours.
More ever, from managerial perspective the importance of industrial safety in any
organization may be concluded by following facilitation:

a) Treatment: industrial safety management provides treatment for injuries and

illness at the work place.

b) Medical Examination: it carries out medical examination of staff joining the

organization or returning to work after sickness or accident.

c) Hazards identification.

d) Provision of protective devices.

e) Consultancy: it provides medical advised on other condition potentially affecting

health e.g. works canteen etc.

f) Education: it provides safety and health training.

OBJECTIVES OF INDUSTRIAL SAFETY:

to prevent accidents in the plant by reducing the hazard to minimum.

to eliminate accident caused work stoppage and lost production.

to achieve lower workmens compensation, insurance rates and reduce all other
direct and indirect costs of accidents.

to prevent loss of life, permanent disability and the loss of income of worker by

eliminating causes of accidents.

to evaluate employees morale by promoting safe work place and good working

condition.

to educate all members of the organization in continuous state of safety mindness

and to make supervision competent and intensely safety ninded.

A safety programmed includes mainly following four Es.

Engineering: i.e safety at the design, equipment installation stage.

Education: i.e. education of employees in safe practices.

Enlistment: it concerns the attitude of the employees and management to wards

the programmed and its purpose. Ti is necessary to arouse the interest of
employees in accident prevention and safety consciousness.

Encouragement: i.e. to enforce adherence to safe rules and practices.