POM Notes

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PRODUCTION AND OPERATIONS MANAGEMENT

SYLLABUS
UNIT 1: Introduction to production and operations management (12 hrs)
Introduction- meaning and definition – classification- objectives and scope of POM.
Automation: introduction- meaning & definition- need- types- advantages and disadvantages.
UNIT 2: Plant location and layout (08 hrs)

Introduction – meaning and definition – factors affecting location, theory and practices, cost
factor in location- plant layout principles- space requirements, different types of facilities,
organization of physical facilities- building, sanitation, lighting, air conditioning and safety.
UNIT 3: Materials management (08 hrs)

Introduction – meaning and definition – purchasing, selection of suppliers, inventory
management, material handling principles and practices, economic consideration, criteria for
selection of materials handling equipment, standardization, codification, simplification,
inventory control, techniques of inventory control- value analysis, value engineering- human
engineering- Inter- relationship of plant layout and materials handling, SCM
UNIT 4: Production planning and quality control (16 hrs)

Objectives and concepts, capacity planning, corresponding production planning, controlling,
scheduling , routing- quality control- statistical quality control, quality management, control
charts and operating characteristic curves, acceptance sampling procedures, quality circle,
Meaning of ISO and TQM.
Productivity- factors influencing productivity- concept of standard time, method study, time
and motion study, charts and diagrams, work measurements.
UNIT 5: Maintenance and waste management (12 hrs)

Introduction – meaning- objectives- types of maintenance, breakdown, spares planning and
control, preventive routine, relative advantages, maintenance scheduling, equipment
reliability and modern scientific maintenance methods- waste management- scrap and surplus
disposal, salvage and recovery.
Production and Operations Management (AJ)

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Assignments:
1. What is automation and explain its merits. (pg 2.2, 2.8-2.10)
2. Explain the factors influencing plant location decisions. (pg 3.12-3.20)
3. Give the meaning of material handling. Discuss the principles of material
handling.(pg 8.1, 8.6- 8.10)
4. Bring out the factors influencing productivity. (pg 13.2, 13.6- 13.8)
5. What is equipment reliability? What are the modern scientific maintenance methods?
(pg15.8, refer notes for modern scientific maintenance methods pg 71 & 72)
Text book:
Production and operations management by C.N Sontakki, Neeti Gupta and Anuj Gupta.
(Kalyani publishers)

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UNIT 1: INTRODUCTION TO POM
PRODUCTION
 Production is the process by which raw materials and other inputs are converted into
finished products with the help of machines, men, tools and so on.
 MANUFACTURING involves only tangible goods
 PRODUCTION involves both tangible and intangible goods
Types of production
Job production
Batch production
Flow production
Job production
 Job production involves the procedure of manufacturing a product according to a

specific customer order.
 The products manufactured are generally non- standardised and heterogeneous in

nature.
 Examples- bridges, ships, book printing etc.
Advantages and disadvantages
 Advantages
1. Because of general purpose machines and facilities variety of products can be

produced.
2. Operators will become more skilled and competent, as each job gives them learning
opportunities.
3. Full potential of operators can be utilized.
4. Opportunity exists for creative methods and innovative ideas.

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 Limitations
1. Higher cost due to frequent set up changes.
2. Higher level of inventory at all levels and hence higher inventory cost.
3. Production planning is complicated.
4. Larger space requirements.
Batch production
 Batch production pertains to repetitive production.
 Under batch system the work is divided into operations and one operation is done at a
time. After completing the work on one operation it is passed on the next operation
and so on till the product is complete.
 Thus batch production may be defined as the manufacture of a product in small or

large batches or lots by a series of operations.
 Examples- manufacture of different colour pens
 Advantages
1. Better utilization of plant and machinery.
2. Promotes functional specialization.
3. Lower investment in plant and machinery.
4. Job satisfaction exists for operators.
 Limitations
1. Material handling is complex because of irregular and longer flows.
2. Production planning and control is complex.
3. Work in process inventory is higher compared to continuous production.
4. Higher set up costs due to frequent changes in set up.
Mass/ flow production
 Flow production is continuous manufacturing process used in large scale business
 Flow production is the manufacture of a product by a series of operations, each article

going on to a succeeding operation as soon as possible.

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 The product completed at one operation is automatically passed on to the next till it is
complete.
 Advantages
1. Higher rate of production with reduced cycle time.
2. Higher capacity utilization due to line balancing.
3. Less skilled operators are required.
4. Low process inventory.
5. Manufacturing cost per unit is low.
 Limitations
1. Breakdown of one machine will stop an entire production line.
2. Line layout needs major change with the changes in the product design.
3. High investment in production facilities.
4. The cycle time is determined by the slowest operation
Production management
 Production management refers to the application of management principles such as

planning, organizing, directing & controlling the production function in a factory.
 According to El Wood S.Buffa, “ Production Management deals with decision

making related to production process, so that the resulting goods or services are
produced according to specification in amounts & by the schedules demanded at
minimum cost”.
SCOPE/ OBJECTIVES OF PRODUCTION MANAGEMENT
ULTIMATE OBJECTIVES
 Controlling manufacturing cost
 Proper quality of products
 Keeping manufacturing schedule
INTERMEDIATE OBJECTIVES
 Maintaining proper machinery and equipment
 Proper manpower planning

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 Adequate manufacturing services
 Materials
 Methods
Functions of production management/ different aspects of production
i. Manufacturing function- selection of factory, location, design & layout, types of

products to be produced, research & development & design of the product
ii. Ancillary function- planning & control, maintenance , purchasing, store-keeping &
materials handling
iii. Advisory function- work study, method study, operational research, inspection &
quality control.
Five P’s of production management
 Product
 Plant
 People
 Process
 Programme
Merits of production management
 Planning helps in supply of goods at proper time & execute the order
 Control cost & cost of production
 Control on the quality of products
Demerits of production management
 Possibility of more than one location
 Disadvantage in plant layout
 Selection of design of the product
 Controlling the labour force
Operation management
 It is the process whereby resources or inputs are converted into more useful products
or intangible services.

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Objectives of operation management
 Customer Service: It is the prime objective to provide the customer with a specific
product that satisfies in terms of cost and timing. In other words, it may be defined as,
providing the customer with the 'right thing at a right price at the right time'. To
achieve this objective, it also involves the functions such as manufacturing,
transportation, supply chain, and service. In general, any organization would always
put its best efforts to achieve the standards as mentioned above.
 Resource Utilization: To achieve the customer satisfaction, an organization has to

use their resources effectively and efficiently. Operations management's focus is more
on resource utilization to reduce their losses, under utilization of waste in order to
make the maximum benefits. The other functions that are also equally important are
time utility, space, and activities in the process.
Production and operation management
 It is the management of the conversion process which converts land, labour, capital
and management inputs into desired outputs of goods & services
Need to study POM
 Helps to understand & appreciate the role played by people in producing goods &
services
 To know how goods and services are produced
 Helps to understand how important it is to the nation
 It has strategic use to executives to increase revenue and reduce cost
Responsibilities of POM
 Production planning
 Production control
 Plant layout
 Materials handling
 Maintenance policy
 Method analysis –simplification, standardization
 Work measurement
 Quality control
 Motivating workers

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Automation
 According to Ruddlerl Read, “ Automation is nothing more than the extension of

principles of mechanisation to the integration of machines, one with another in such a
manner as to have the group operate as an individual processing and controlling unit”.
Need for automation
 Increase in productivity( less time)
 Increase in cost of labour leads to more automation
 Storages of labour (back up)
 High safety
 Fast work
 Less wastage of time
 Improve in quality of products ( uniformity)
Process of automation
Comparator (
Input (actual Sensor difference between
Output
output required) (measures) actual and desired
output)
Controller (shows error Human operative (

signal) fixes the error)
Forms of automation
 Automatic processing/ integrated processing system
 Automatic control/ feedback automation/ servomechanism

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 Automatic management
 Robots
 Others
Automatic processing/ integrated processing system
 This is the simplest form of automation.
 All activities are integrated. The material continuously moves from one process to
another from machine to machine.
 Transfer devices care for loading, unloading, transferring, positioning and even
discard materials.
 Finished products are ready with minimum need of human control.
 One worker multiple machine concept
Automatic control/ feedback automation/ servomechanism
 Automatic control devices feel, sense, inspect and rectify the processing carried on by
other machines.
 They are built in alarms which check & correct any devices in the standardised
procedures.
Automatic management
 It resorts to computer technology. Electronic computers are man made brains, which
have decision making capacity when rightly programmed.
 In factories they control the entire manufacturing process which is called Computer
Aided Manufacturing (CAM).
 In offices they take over accounting, tabulating & other statistical function that will
help even in programming which can be called as Computer Aided Designing (CAD)
Robots
 They are human like machines that perform jobs that are too boring, difficult or
dangerous to people
 Example: automobile welding, drilling, painting etc.
Others
 Automatic identification system (AIS)

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 Comprises of bar codes , radio frequencies, magnetic strips, optical character

recognition etc.
 Flexible manufacturing system (FMS)
 FMS is a computer controlled system which contains several workstations,

each geared to do different operations.
 Once a machine has finished one batch, the computer signals the next quantity
or component & the machine automatically repositions & retools accordingly
 Computer integrated manufacturing (CIM)
 They are digital computers which provide shared database for 4 primary
manufacturing functions:
 Engineering design
 Manufacturing engineering
 Factory production
 Information management
Scope of automation
 Manufacturing
 Banking
 Transportation
 Construction
Advantages of automation
 Increased output & enhanced productivity
 Improved and uniform quality
 Reduced cost (less wastage)
 Fewer accidents
 Better production control
 Making complex decisions (eg: traffic lights, lifts)
 Handle routine & boring jobs(eg: assembling, inspecting, packaging etc)
 Reduced unsafe environments (dust, high pressure pipes, toxic spray paints, boilers
etc)

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Disadvantages of automation
 Heavy capital investment
 Displacement of labour (unemployment)
 Slump season is disastrous (no demand)
 Dehumanisation (machines taking place of human beings)
 Stricter specifications are needed
 Danger of supply failure
 Threat to small business
 Limited scope ( taste and preferences changes)

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UNIT II
Plant location and layout
Plant Location
• Plant location refers to the area or a place where the plant will operate to produce
goods & services. Goods can be produced at a location away from the market.
Services, however are produced and consumed simultaneously, in the presence of the
consumers.
Definition of plant location
• “The function of determining where the plant should be located for maximum
operating economy & effectiveness”.
Prof. R.C.Davis
Need for plant location
• When a new plant is to be established
• Expansion, diversification & decentralisation of manufacturing activities
• Non- renewal of lease of land or other assets
• Doing away with undesirable location (change in rules and regulation, restrictions
etc.)
• Meeting socio- economic needs
• Changes in resources
• Changes in demand of product
• Changes in technology
• Changes in transport & warehouse facility
• Ever expanding market for products ( new branches)
Significance/ importance of plant location
• It avoids wastage of physical & human resources
• It has an impact on success and failure of a product
• It guarantees economy & efficiency of resources
• The problems in relocation
• Size or area of location

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• Pre & post shifting problems
• Strong opposition by employees
• It has an impact on socio- economic structure of the nation ( changes in technology,

demand etc.)
• Economic & social insecurity (insecurity of jobs, income)
• It is a long- term decision
Errors in location selection
• Lack of through investigation & consideration of factors involved
• Personal likes & prejudices of key executives or owners overriding impartially

established facts
• Reluctance of key executives to move from traditional established home ground to

new & better locations
• Moving to congested areas already or about to be over industrialised
• Preference for acquiring an existing structure that is improperly located or not

designed for the most efficient production
• Choice of community with low cultural & educational standards, so they key
administrative & technical personnel eventually accept employment elsewhere
Theories of Location
Theory of Alfred Weber
New Theory of Industrial Location
Theory of Alfred Weber
• Cost depends on factors such as :
• Primary factors such as transport and labour cost decided the regional distribution of
industry

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• Secondary factors such as existence of skillfull labour in the region, development of

auxiliary industries, better technical research facilities, aids to trade like banking,
insurance, warehousing, transport & security decide the redistribution of industry
• Transport cost:
• If the raw material is more expensive to carry towards the factory as compared
to carry the finished products to the market plant will be located near the
centre of supply of raw materials.
• Raw materials:
• Ubiquitous- materials available everywhere such as clay, sand, bricks, pebbles

& soil- they have no influence on location
• Localised- materials such as coal, iron ore, manganese, lead, sandalwood have
influence on location
• Location material index= weight of localised markets÷ weight of finished products
• If the index is
• 0.01 to 0.99-location is nearer to market
• 1- transport cost is irrelevant
• More than 1- location is nearer to the source of supply of raw materials
• Labour cost:
• In case of cheap labour, the labour intensive industrial units move to the places
of cheaper & abundant supply of such labour
Factors to be considered while selecting a suitable site for a plant/ steps in plant
location/ New Theory of Industrial Location
• According to Bethel, Atwater and Smith, the vital managerial decision on location
involves the major steps namely:
• Deciding on domestic or international location
• Selection of a region
• Selection of a community
• Selection of the site
Deciding on domestic or international location
• The choice of a particular country depends on such factors as:

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• Political stability
• Export & import quotas
• Currency & exchange rates
• Cultural & economic peculiarities
• Natural or physical conditions
Selection of the region
• Availability of raw materials
• Nearness to the market
• Availability of power (coal, electricity, natural gas)
• Transport facilities
• Suitability of climate
• Government policy
• Licensing policy
• Freight rate policy
• Institutional finance & government subsidies
• Competition between states
• Exemption in sales tax
• Investment subsidies
Selection of community
• Availability of labour
• Civic amenities for workers
• Existence of complementary & competing industries such as assembling, specialised

centre, bank loans, repairs, spare parts etc.
• Finance and research facilities
• Availability of water & fire fighting facilities
• Local taxes & restrictions
• Personal factors

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• Momentum of an early start
• Transport facilities
• Repair & maintenance
• Banking facilities
Selection of the site
• Soil, size & topography
• Disposal of waste
• The site should be well connected by road, rail & if possible, water transport
• There should be facilities for housing the workers
• Village, suburban or city sites
Village site
• Advantages
• Land is available at cheaper rate
• Spacious layout available & open spaces are possible
• Fewer labour troubles
• Absence of restrictions on smoke & disposal of waste
• The rates & taxes are negligible
• Disadvantages
• Lack of supply of skilled workers
• Lack of civic amenities for employees
• Lack of transport facilities
City site
• Advantages
• Transport facility
• Municipal services for water, sewage disposal, public health & education are
available
• Banking, repairs & related services are available

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• A large local market is available
• Facilities for contracting out a portion of work is possible
• Disadvantages
• The cost of land is exorbitant
• House taxes, water taxes, sanitation taxes & other similar taxes & rates are
fairly high
• Labour unions are many and labour unrest is frequent
• The cost of labour is high
• Because of limited space, factory buildings are awkwardly shaped, ill-lighted

& ill- ventilated
• Several restrictions have been imposed in regard to smoke and disposal of

effluents.
Plant Layout
• A plant layout refers to the arrangement of machinery, equipment & other industrial
facilities- such as receiving & shipping departments, tool rooms, maintenance rooms,
employee amenities etc,. For the purpose of achieving the quickest & smoothest
production at the least cost.
Definition of plant layout
• “Plant layout involves the development of physical relationships among building,

equipment and production operations, which will enable the manufacturing process to
be carried on efficiently”
- Morris E.Hurley
Objectives/Advantages/ Essentials of plant layout
• Provide enough production capacity
• Reduce material handling cost
• Reduce hazards & accidents to personnel
• Utilize labour efficiently
• Utilize available space efficiently & effectively
• Allow ease of maintenance
• Improve productivity

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• Better quality of products
• Better customer service
Cost of plant layout
• Cost associated with the movement of raw material from one place to another.
• Cost of labour
• Cost of space
• Cost of spoilage, wear & tear
• Cost associated with customer dissatisfaction
Factors influencing the layout
• Policies of the management- with regard to size of plant, scope of future expansion,
volume of production, the quality of products etc
• Location of plant- influences size, shape of the plant
• Nature of products- heavy, small & light items etc
• Availability of floor space
• Type of industry – continuous process, interrupted process
• Nature of manufacturing process- extractive, synthetic, analytical
• Volume/ type of production – job, mass, batch
Principles of plant layout
• Principle of minimum handling of material
• Principle of minimum distance – movement of materials & manpower
• Principle of utilization- maximum utilization of capacity of all facilities including

men, materials, space etc.
• Principle of flow/ orderliness – free & sequential flow of materials from the stage of
raw materials to the stage of finished goods
• Principle of safety – safety & healthy working conditions of employees
• Principle of expansion- future expansion & diversification
• Principle of integration- integration of all factors like men, machines, materials, space

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Types of layout
Product layout
Process layout
Hybrid layout
Fixed static layout
Product/ line layout/straight-line layout/ unit arrangement/ production grouping

methods
• This refers to the arrangement of machines or equipments in a line or sequence of

operations.
• It has 4 types:
• Straight line type
• ‘U’ shaped product layout
• Circular product layout
• Odd angle product layout
Straight line
• As the title suggest the machines are arranged in a straight line sequence of
operations. These machines are installed as near as possible because the output of one
machine becomes the input for the next machine
U’ shaped product layout
• It brings about economy in floor space and allows closer supervision span than
straight line
Circular product layout
• The operation is carried out inside or outside the circular or circle.
• If the production is carried on outside the circle the inner portion can be used for
storage of raw materials and finished goods
Odd angle product layout

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• It is “odd” in the sense that there is no fixed pattern for arranging the machines but is
designed to suit the available space.
Advantages & Disadvantages of product layout
• Advantages
• Economies in material handling
• Eliminates bottlenecks
• Saving in manufacturing time
• Optimal use of floor space
• Economy in inspection
• Disadvantages
• Inflexibility
• Huge capital investment
• Stoppage of entire production line
• Difficult to expand
Process/ functional/one type/ process grouping method
• This refers to an arrangement whereby similar machines are placed in one department
for one distinct operation. It leads to specification.
• This type of layout is suitable for job- order involving non- repetitive process
Advantages & Disadvantages
• Advantages
• Flexibility
• Maximum utilization of machines
• Low initial investment
• specialization
• Disadvantages
• Requires more floor area
• Higher cost of material handling
• Longer production time

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Combined/ hybrid layout
• It refers to a combination of product & process layout.
• Under this type of plant layout, some of the machines may be grouped in accordance
with process layout, to be integrated into the line later on.
Fixed static position based layout
• In this type of layout, needed machines, tools, man-power & supporting appliances &
services are bought to a particular point at which production work progresses.
• This type of layout is very common in case of products like ship building, air- crafts,
heavy machines & installation.
Advantages and Disadvantages
• Advantages
• Mechanical handling of manufacturing facilities
• Quality work, as there is close supervision, strict quality control & inspection
• Greatest flexibility- changes in technology, design
• A must for quality & costly products
• Disadvantages
• It is time consuming
• More space consuming
• Strict supervision & security
Organization of Physical Activities

I. Building
II. Sanitation
III. Lighting
IV. Air conditioning
V. Industrial safety
I. Plant Building
A ideal plant building is the one which is built to house the most efficient layout that can be
provided for the process involved, and artificially attractive and of such standard shape and
design which is flexible its use and expansive units construction

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Objectives of Plant building
• Proper and sufficient accommodation for business activity

• Conserve land areas
• Protect from damage by theft, fire etc.
• Provide suitable lighting, air conditioning & noise control facilities
• Provide amenities of service facilities to the employees
Factors are considered for an Industrial Building
• Design of the building

• Types of building
Design of the Building
The building should designed so as to provide a number of facilities—such as lunch rooms,

cafeteria, locker rooms, crèches, libraries, first-aid and ambulance rooms, materials handling
facilities, heating, ventilation, air-conditioning, etc.
Factors governing Ideal Building Designs
• Shape of the building

• Nature of product and its manufacturing technique
• Overcome problems of natural calamities
• Land and construction cost
• Adaptability to future requirements
• Raw material storage
• Employee facility and service area
Other Factors
• Shape of the building – E,F,H,I,L,T,U

• Ceiling or the roof
• Floor –light reflecting
• Fire protection- sprinklers
• Service areas – maintenance, tool rooms, waste disposal, offices
• Employee facilities – cafeteria, rest rooms, lockers
Types of Buildings
1. Single-storey buildings,

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2. Multi-storey buildings
SINGLE-STOREY BUILDINGS
• Most of the industrial buildings manufacturing which are now designed and
constructed are single storeyed, particularly where lands are available at reasonable
rates.
• A single-storey construction is preferable when materials handling is difficult
because the product is big or heavy, natural lighting is desired, heavy floor loads are
required and frequent changes in layout are anticipated.
Advantages of single-storey building are:
1. There is a greater flexibility in layout and production routing.

2. The maintenance cost resulting from the vibration of machinery is reduced considerably
because of the housing of the machinery on the ground.
3. Expansion is easily ensured by the removal of walls.
4. The cost of transportation of materials is reduced because of the absence of materials

handling equipment between floors.
5. All the equipment is on the same level, making for an easier and more effective layout
supervision and control.
6. The danger of fire hazards is reduced because of the lateral spread of the building.
Limitations
1. High cost of land, particularly in the city.

2. High cost of heating, ventilating and cleaning of windows.
3. High cost of transportation for moving men and materials to the factory which is generally
located far from the city
MULTI-STOREY BUILDINGS
Schools, colleges, shopping complexes, and residences, and for service industries like
Software, BPO etc. multi-storey structures are generally popular, particularly in cities. Multi-
storey buildings are useful in manufacture of light products, when the acquisition of land
becomes difficult and expensive and when the floor load is less.
Advantages
1. Maximum operating floor space (per sq. ft. of land). This is best suited in areas where land
is very costly.
2. Lower cost of heating and ventilation.

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3. Reduced cost of materials handling because the advantage of the use of gravity for the flow
of materials
Limitations
1. Materials handling becomes very complicated. A lot of time is wasted in moving them
between floors.
2. A lot of floor space is wasted on elevators, stairways and fire escapes.
3. Floor load-bearing capacity is limited, unless special construction is used, which is very
expensive.
4. Natural lighting is poor in the centres of the shop, particularly when the width of the
building is somewhat great.
5. Layout changes cannot be effected easily and quickly.
Types of building material
• Aluminum- window frame

• Brick (clay)- floor, wall
• Concrete- floor, wall, support
• Glass- windows
• Wood frame- Floors, walls, supports and roof frames
• Steel- Frames, supports
II. Lighting
• A good illumination or lighting has its own standard quality in terms of elusion of
color direction, diffusion, brightness, steadiness and absence of glare and quality.
Features of good lighting
• Emission of adequate light

• Standard intensity of light (per square feet)
• Correct diffusion – spread of light evenly so that eyes need not adjust.
• Eradication of glare
• Direction and reliability
• Cool and soothing
• Economical
Significance of good lighting
• Clear vision

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• Reduced eye stress and strain

• Refined quality of work
• Multiplied output
• Reduced accident rates
• Improved supervision
Sources of light
Natural
Artificial
Natural light
• Light which is obtained from the sun through factory roofs, doors, window- openings.
• Advantages
• Available in plentiful in the tropical regions
• Free of cost
• No maintenance
• No effects of load- shedding and power failure
• Disadvantages
• Light variability during different seasons
• Intensity cannot be changed or controlled
• Uniformity, brightness depend on the position of windows and roof
openings
Artificial lighting
• Artificial lighting is the illumination through artificial or man made means such as use
of bulbs, and tubes.
• Advantages
• Uniformity
• Controlled intensity
• Guarantees shift and overtime work
• Supports natural light
• Reduces the number of windows
• Disadvantages

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• High cost
• Threat of power cuts
• Not reliable
STEPS INVOLVED IN INSTALLING ARTIFICAL LIGHTING
Determine the Decide the

Calculate the
number of suitable
light points
lights required source of light
Continuous Install the Calculate

monitoring system total wattage
Difference
Natural lighting
• Inexpensive
• Not dependable
• Less maintenance cost
• No harm to eyes
• Special effort to ensure uniformity
• Intensity cannot be controlled
Artificial lighting
• Expensive
• Dependable in all weather
• High maintenance cost
• Heat produced by bulbs is harmful to the eyes

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• Even distribution
• Intensity can be controlled
III. Ventilation
• “Ventilation is concerned largely with engineering techniques for controlling air
currents within the plant and for introducing outdoor air in a pattern and on a scale
that is just adequate to maintain satisfactory air purity”
Aspects of ventilation
• Control of ventilation- eliminate the excess heat and noxious gases

• Control temperature
• Control of humidity
Significance of good ventilation
• It meets legal clause of law

• Provides adequate supply of fresh air
• It reduces odours, impurities and noxious gases
• It removes dust bacteria and suspending particles
• It prevents excessive heat generation in premises
• It maintains required degree of humidity.
Sources of ventilation
Natural
Artificial
Natural ventilation
• Cross ventilation
• Slack effect – warm air rises and passes out the ventilations provided on the upper
part of the factory building.
Methods of artificial ventilation
• Exhaust system
Hot air
• Supply system- fan
• Balanced system – fan + exhaust
• Air conditioning
Cool air

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Air conditioning
Air conditioning is the simultaneous control of the temperature, humidity, motion and purity
of the atmosphere in a confined space.- Jordon and Priester
Difference
Ventilation
• Circulation of air
• It is from natural sources like windows, ducts and grills
• Low cost
• Not always dependable
• Cannot be controlled or regulated
Air- conditioning
• Heating and cooling

• It is from mechanical sources like fan, exhaust etc.
• High cost
• Dependable except during power cuts.
• Can be controlled and regulated
IV. Industrial Sanitation

Sanitation refers to control of the spread of infection and other insults to the health of the
employees. Occupational disease caused by the industrial process leads to employee’s
dissatisfaction and turnover
Elements of sanitation
I. Supply of portable water.

II. Disposal of waste and effluents.
III. Provision of food which is free from contamination.
IV. Elimination of insects and rodents.
V. Provision of personal services.
VI. Good housekeeping.
VII. Air pollution
Significance of industrial sanitation
• Quality and quantity of output

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• Employee efficiency
• Employer and employee impact
• Health education and training
• Employee hygiene and health programs
• Growing importance and attention
Methods to control noise
• Control at source
• Control through enclosures
• Control by absorption
• Control through ear protection
• Control by isolating noise producing equipments
V. Industrial safety
 Safety is freedom from occurrence or risk of injury or loss. Industrial safety refers to
protection of the workers from the dangers of industrial accidents.
Principles of safety
 Tracing out the factors responsible for industrial accidents.

 Identify potential hazards, provide effective safety facilities and equipment and to
take prompt remedial actions.
 The management and the supervision must be made fully accountable for safety
performance in the working areas they control.
 Top management commitment in determining policy, monitoring and taking remedial
actions.
 Create awareness among employees about safety method
Significance of industrial safety
• Prevention of personal injury and death

• Reduction in cost
• Building up employee morale
• Building public- relations
• Improvement in efficiency
• Promote public safety
Safety provisions in the Factories Act, 1948
• Fencing the machinery

• Work on or near machinery in motion

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• Employment of young person in dangerous machinery

• Installation of machinery
• Hoists and lifts
• Lifting machines, chain ropes
• Pressure plants
• Floor, stairs and means of access
• Pits, sumps, opening in floor
• Excessive weights
• Protection of eyes
• Precautions against dangerous fumes
• Explosive or inflammable dust gas
• Precaution against fire.
Industrial safety
Safety is freedom from occurrence or risk of injury or loss. Industrial safety refers to
protection of the workers from the dangers of industrial accidents.
Principles of safety
• Tracing out the factors responsible for industrial accidents.

• Identify potential hazards, provide effective safety facilities and equipment and to
take prompt remedial actions.
• The management and the supervision must be made fully accountable for safety
performance in the working areas they control.
• Top management commitment in determining policy, monitoring and taking remedial
actions.
• Create awareness among employees about safety method
Significance of industrial safety
• Prevention of personal injury and death

• Building up employee morale
• Building public- relations
• Improvement in efficiency

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• Promote public safety

Safety provisions in the Factories Act, 1948
• Fencing the machinery

• Work on or near machinery in motion
• Employment of young person in dangerous machinery
• Installation of machinery
• Hoists and lifts
• Lifting machines, chain ropes
• Pressure plants
• Floor, stairs and means of access
• Pits, sumps, opening in floor
• Excessive weights
• Protection of eyes
• Precautions against dangerous fumes
• Explosive or inflammable dust gas
• Precaution against fire.

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Materials Management
UNIT III
Material
• It refers to all commodities that are consumed in the process of manufacture.

• It can be
• direct material (raw materials, components etc.)
• indirect material (consumable stores- soap, oil;
maintenance materials- spare parts; tools)
Material Management
• Material management is the integrated functioning of various sections of an
organization dealing with the supply of materials and allied activities in order to
achieve maximum co-ordination.
- N.K. Nair
Importance of material management

• Total cost is kept at a reasonable rate
• Indirect materials is kept under check
• Equipment's are properly utilized as there no delay in supply of materials
• Loss of direct labour is avoided
• Wastage of material is kept under control
• Supply of material is prompt and late delivery instances are very less
• Investment on material is kept under control and overstocking is avoided
• Congestion in the stores and at different stages of manufacturing is avoided
Scope of materials management
• Purchasing
• Store keeping
• Inventory control
• Issue of materials – delay, damage
• Material handling
• Disposal of scrap and surplus
OBJECTIVES
PRIMARY
1. Low purchase price

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2. High inventory turnover

3. Uninterrupted supply
4. Good quality material
5. Low payroll cost
6. Cordial supplier relations
7. Personnel development
8. Proper records
9. Material and cost control
SECONDARY
1. Favourable reciprocal relations (dept)
2. Assisting production department in new developments
3. Make or buy decisions
4. Standardization
5. Inter departmental harmony
Functions of material management
• Production and material control
• Purchasing
• Non-production stores- office supplies, tools
• Transportation
• Material handling- no wastage during movement
• Receiving – unloading, counting, checking quality
Purchasing
• Purchasing the procuring of materials, supplies, tools and services required for
equipment, maintenance and operations of a manufacturing unit.
- Alford and Beatty
Objectives of purchasing
• To avail the materials, suppliers and equipment's at the minimum possible costs:
These are the inputs in the manufacturing operations. The minimization of the input
cost increases the productivity and resultantly the profitability of the operations.
• To ensure the continuous flow of production: through continuous supply of raw
materials, components, tools etc. with repair and maintenance service.

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• To increase the asset turnover: The investment in the inventories should be kept
minimum in relation to the volume of sales. This will increase the turnover of the
assets and thus the profitability of the company.
• To develop an alternative source of supply: Exploration of alternative sources of
supply of materials increases the bargaining ability of the buyer, minimization of cost
of materials and increases the ability to meet the emergencies.
• To establish and maintain the good relations with the suppliers:
• Maintenance of good relations with the supplier helps in evolving a favorable image
in the business circles. Such relations are beneficial to the buyer in terms of changing
the reasonable price, preferential allocation of material in case of material shortages,
etc.
• To achieve maximum integration with other department of the company: The
purchase function is related with production department for specifications and flow of
material, engineering department for the purchase of tools, equipment's and machines,
marketing department for the forecasts of sales and its impact on procurement of
materials, financial department for the purpose of maintaining levels of materials and
estimating the working capital required, personnel department for the purpose of
manning and developing the personnel of purchase department and maintaining good
vendor relationship.
• To train and develop the personnel: Purchasing department is manned with
variedtypes of personnel. The company should try to build the imaginative employee
force through training and development.
• Efficient record keeping and management reporting: Paper processing is inherent
in the purchase function. Such paper processing should be standardized so that record
keeping can be facilitated. Periodic reporting to the management about the purchase
activities justifies the independent existence of the department.
Purchasing procedure
• Determining purchase budget
• Receipt of purchase requisition
• Determining sources of supply
• Placing order
• Follow up of purchasing order
• Receipt of material
• Inspection
• Return of rejected material
• Checking invoices and passing of bills for payment
Types of purchasing
• Centralized purchasing

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• Decentralized purchasing
Centralized purchasing
• When all types of purchase is done at one level.
• Purchase department is set up for this purpose.
Advantages
• Economy in buying in bulk
• Uniform purchasing policy
• Specialization of purchasing department
• Records maintained at one place
• Minimizes the possibility of duplication
Disadvantages
• Supply of materials is delayed to different departments
• Possibility of purchasing wrong materials
• In case of an organization where different types of
materials are required it becomes difficult.
Decentralized (localized) purchasing
• Every department of plant is authorized to make its
own purchases.
• Suitable for firms with more than one plant located in
different places
Advantages
• Requirements of various departments are met quickly
• Departmental head can give more importance to purchasing function
• No possibility of purchasing wrong type of goods
Disadvantages
• Lack of uniformity in purchasing policies and procedures
• Every department head may not be an expert in purchasing
• Lack of coordination among departments and may lead to unplanned purchasing
• Economies of bulk purchasing and trade discount will not be available
Principles of right purchasing
• Right quality
• Right quantity

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• Right time
• Right source
• Right price
• Right place
Selection of supplier
• Financial soundness of the supplier
• Flexibility
• Size of the supplier
• Past association
Material handling
• Material handling is the art of involving movement, packaging and storing of

materials in any form by means of gravity, manual effort or power actuated
machinery.
- American Materials Handling Society
Activities of material handling

• Material handling management- production planning and control, buying storage
and distribution
• Material handling technology and engineering - technical and mechanical means
of handling and movement of the commodity be it in solid, liquid or gaseous form.
Features of material handling
• It is both arts and science
• Handling of inputs
• Use of mechanical and mechanical devices
• Coverage of establishment
• Nature of movement of materials- horizontal, vertical
• Nature of products handled- solid, liquid
Objectives of a good material handling system
• Minimization of processing time- M1-M2-M3
• Minimization of material handling cost
• Preventing damages to goods and materials
• Preventing accidents
• Improved productivity
• Elevated plant efficiency- optimum utilization

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• Greater utilization of material handling equipment

• Better housekeeping (clean, well lit, non- slippery)
• Efficient store keeping
• Lower investment in work- in- progress
• Better planned layout
Principles of material handling
• Planning principles
• Operating principles
• Equipment principles
• Costing principles
• General principles
Planning principles
• Principle of plant layout
• Principle of delegation of responsibility
• Principle of minimization of re- handling of materials
• Principle of space saving
Operating principles
• Principle of unit load handling – packaging of several units into one unit
• Principle of gravity- roll, slide down
• Principle of flow of materials- no interruptions and delay
Equipment principle
• Principle of mechanization
• Principle of terminal time- loading and unloading
• Principle of dead weight- equipment weight
• Principle of standardization
• Principle of maintenance
• Principle of speed
• Principle of versatility- one equipment performing various functions
Costing principles
• Principle of equipment selection
• Principle of replacement

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• Principle of handling cost appraisal – upgrading

General principles
• principle of safety
• Principle of sound training
• Principle of identification- labelling
• Principle of location of equipment
• Principle of material treatment- equal treatment to all materials whether low value
bulky material or high value compact materials
Selection of material handling equipment
• Suitability for the type of material
• Movement direction
• Speed of movement
• Path followed
• The power required for the operation of the equipment
• Supervision needed
Types of material handling equipment
• Group One equipment
• Group Two equipment
• Group Three equipment
Group One equipment
• Hand barrow
• Two wheel barrow
• Two wheel truck
• Hand trolleys
• Sliding wheel trucks
• Lift trucks
• Stillage trucks
• Pallet trucks
Group Two equipment
• Belt conveyors
• Roller conveyors
• Screw conveyors

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• Mono- rail conveyors

• Vibrating conveyors
Group Three equipment
• Hand operated trucks
• Fork- lift trucks
• Hoists and cranes
• Ropeway
• Ramps and chutes
• Lifts
• Tractors
Store keeping
Methods of store keeping

• classification
• Codification
• Simplification
• Standardization
Classification of material
• Raw materials
• Work in progress
• Finished goods
• Spares
• Consumable stores – materials which can be used only once
• Scrap material
Advantages of classification
• Easy identification and location of material
• Avoids duplicity
• Record keeping becomes easier
• Easier to inspect
Codification of materials
• Codification implies assigning some symbol- numeric or alphabet to materials
Methods of codification

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• Alphabetic method- A,B,C,D

• Mnemonic method- BU, JU, R
• Numerical method- 1,2,3,4
• Decimal method- 1.2,1.3,1.4
• Alpha- Numeric method- D1,C4,S7
Simplification
• It is the practice of reducing the variety of components and or final products
• Simplification is related to:
1. Product design
2. Production methods
3. Machines used
Standardization
• Fixed sizes, types, qualities etc.,
• Interchange ability with any unit
Inventory Control
• Inventory control is a planned approach of determining what to order, when to order
and how much to order and how much to stock so that costs associated with buying
and storing are optimal without interrupting production and sales
Objectives of inventory control
• Continuous supply of material
• Avoid over-stocking and under-stocking
• Eliminate duplication
• Keep material cost under control
• Right quality at reasonable prices
Tools & techniques of inventory management and control
1. Determination of stock levels
2. Determination of safety stock
3. Selecting a proper system of ordering for inventory
4. Determination of EOQ
5. ABC Analysis
6. VED Analysis
7. Inventory turnover ratio

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8. Aging schedule of inventories

9. FNSD Analysis
10. Perceptual inventory control system
11. JIT control system
1. Determination of stock levels
a) Minimum level- minimum quantity that must be maintained at all times
Factors considered while fixing Minimum Stock Level
• Lead time- time taken to process and execute the order
• Rate of consumption- average consumption of material
• Nature of material
• Minimum Stock Level
=(Normal consumption * Normal re- order period)
b) Re- ordering Level
Re- ordering Level
= maximum consumption * maximum re- order period
c) Maximum level- maximum level of stock
Maximum Stock Level

=Re- ordering level + Re- order quantity - (minimum consumption * minimum
re- order period)
d) Danger level- level beyond which materials should not fall
Danger Level
=Average consumption * maximum re- order period for emergency purchases
e) Average stock level
Average Stock Level
= Minimum stock level + ½ of re- order quantity
2. Determination of safety stock
Safety stock is buffer to meet some anticipated increase in usage
 Demand may fluctuate
 Delivery may be delayed
3. Selecting a proper system of ordering for inventory
• Fixed order quantity system generally known as economic order quantity (EOQ)

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• Fixed period order system

• Single order and scheduled part delivery system
4. Determination of Economic Order Quantity (EOQ)
• Quantity of material purchased at minimum cost
 Ordering cost- transport, inspection
 Carrying cost- cost of holding inventories like storage,
insurance, spoilage etc.,
• EOQ= √2AS/ I
where, A= annual consumption in units
S= Cost of placing an order
I= inventory carrying cost of one unit
5. A B C Analysis
• A-Item: Very tight control, the items being of high value. The control need be
exercised at higher level of authority.
• B-Item: Moderate control, the items being of moderate value. The control need be
exercised at middle level of authority.
• C-Item: The items being of low value, the control can be exercised at gross root level
of authority, i.e., by respective user department managers.
6. V E D Analysis
• Used for spare parts
• V- Vital
• E- Essential
• D- Desirable
7. Inventory turnover ratio
Inventory turnover ratio = cost of goods sold
average inventory cost
8. Aging schedule of inventories
Period / age
• Slow/fast moving inventories
9. FNSD Analysis
• F- fast moving
• N- normal moving

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• S- slow moving
• D- dead items
10. Perpetual inventory control system
• Work of one person is checked by another person
• Maintenance of bin card &stores ledger
• Comparing actual stock with bin card & stores ledger
• Report – store audit note
11. Just in time
• All inventories are received JIT
• E.G., Raw materials are received JIT to go to production,
manufactured parts are completed JIT to be assembled into products,
products are completed JIT to be shipped to the customers
Value analysis & engineering
• Value analysis is the systematic, organized technique to identify unnecessary costs

associated with the product or service and eliminating the same without impairing
the quality
• Value is the relationship between what someone wants and what he is willing to pay
for it.
Types of value
• Cost value
• Exchange value
• Use value
• Esteem value
Techniques to test value
• EKC
• MISS
EKC
• Eliminate
• Keep
• change
MISS
• Modify

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• Incorporate
• Subdivide
• Substitute
Procedure of value analysis
Orientation Informati Creativ

phase on phase e phase
Analysis &
Recommend
evaluation
ation phase
phase
Implementa
tion phase
Advantages of value analysis
• Cost reduction
• Increased productivity
• Introduction of new products & design
• Improvement in the quality of the product
• Increase in the value of the product
• Increased profits
Human engineering (ERGONOMICS)
• Greek word –(ERGO- work), (NOMICS- law)
• it is the study of man in relation to his working environment with special relation to
his physical posture

P a g e | 45
Objectives
• To enhance the efficiency and effectiveness with which the activities (work) is
carried out so as to increase the convenience of use, reduced errors and increase in
productivity
• To enhance certain desirable human values including safety reduced stress and
fatigue and improved quality of life
Areas covered by Ergonomics
• Work place – layout of equipment, the display of information controls
• General environment- heat, light, noise
• Other related factors- mental & physical stress, fatigue, vigilance & inspection
Relationship between plant layout & material handling
• A good layout minimises handling
• A good layout ensures minimum travel for workman thus enhancing the production
time and eliminating the hunting time and travelling time
• Plant layout integrates all the movements of men, material through a well designed
layout with material handling system
• It helps to keep material handling shorter, faster and economical
Supply Chain Management
“A supply chain consists of all stages involved, directly or indirectly, in fulfilling a customer
request. The supply chain not only includes the manufacturer and suppliers, but also
transporters, warehouses, retailers, and customers themselves.”
Decision making in supply chain management

• Product
• Inventory
• Location
• Transportation
• Information

P a g e | 46
Production planning & quality control
UNIT IV
Production planning
 The planning of industrial operations involves for consideration, namely, what work
shall be done, how the work shall be done & lastly, when the work shall be done
-Kimball & Kimball Jr.
Objectives of production planning
 To determine the requirements of men, materials & equipment

 Arranging production schedules according to the needs of marketing demand
 Arranging various inputs at right time in right quantity
 Making most economical use of various inputs
 To achieve coordination among various departments relating to production
Production control
 Activities involved in handling materials, parts , assemblies, and subassemblies, from

their raw or initial stage to the finished product stage in an organized and efficient
manner. It may also include activities such as planning, scheduling ,routing ,
dispatching, storage, etc.
Objectives of production control
 To ensure that various inputs like men, machines, materials etc are available in the
required quantity & quality
 making efforts to adhere to the production schedule
 To ensure goods are produced according to the prescribed standards & quality
 To introduced a proper system of quality control
Factors determining production control procedure
 Nature of business
 Scale of operations
 Degree of mechanization
 Type of manufacturing
 Types of controls
Production planning & control

P a g e | 47
 Production planning and control helps to achieve uninterrupted flow of materials

through production line by making available the materials at right time and required
quantity
Characteristics of production planning & control
 5W1H
 Efficiency of production
 Integrated factors of production
 No over-work or under- work
 Regulation of production
Objectives of production planning & control
 Systematic planning of production activities to achieve the highest efficiency in

production of goods/services.
 2. To organize the production facilities like machines, men, etc., to achieve stated
production objectives with respect to quantity and quality time and cost.
 3. Optimum scheduling of resources.
 4. Coordinate with other departments relating to production to achieve regular
balanced and uninterrupted production flow.
 . To conform to delivery commitments.
 6. Materials planning and control.
 7. To be able to make adjustments due to changes in demand and rush orders.
Need & importance of production planning & control
 Increasing production
 Coordinating plant activity- based on sales forecast
 Cost control
 Rationalization of production activities- regulate flow of inputs, quality standard
 consumers
Limitation of production planning & control
 Based on assumption
 Rigidity in the behaviour of employees
 Difficult for small firms
 Costly

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 Dependence on external factors like natural calamities, change in technology, change

in fashion etc
Techniques & Control of production planning & control
Routing
Scheduling
Loading
Dispatching
Expediting
Routing
 Routing may be defined as the selection of paths or a route over which each piece is
to travel as it is being transformed from raw material to finished goods
Routing Procedure
Deciding Determining
Determining
what part to manufacturin Determining
materials
be g operations of Lot sizes
required
manufactures & sequences
Preparation Analysis of Determining

of production cost of the of scrap
control forms product factors
Deciding what part to be made or purchased
 Cost involved
 Purchase policy
 Technical consideration
 Availability of equipment & personnel
Determining materials required
 Right type of quality

P a g e | 49
 Right quantity
 Time
Determining manufacturing operations & sequences
 Technical experience
 Layout of machines
Determining of Lot sizes
 Number of units to be produced in one lot

 Possible rejections
Determining of scrap factors
 Possible scrap
 Normal scrap value is 5% at every stage of production
Analysis of the cost of the product
 Direct material
 Direct labour
 Direct & indirect expenses
Preparation of production control forms
 Making a report
 Job cards- It contains the name of the product, quantity, scheduling and any
additional instruction. It is usually used to authorize production people in a certain
production plant.
 Inspection cards
 Labour cards
 Tool tickets
Route sheet
 No. or identification of order

 No. of units of pieces to be made
 No. of units to be made in a lot
 Operation date
 Rate at which the job is to be completed
Scheduling

P a g e | 50
 Scheduling is the determination of time & date when each operation is to be

commenced & completed
Objectives of scheduling
 To meet the pre determined demand

 To keep the inventory at optimum level
 To minimize production cost
 To eliminate delay’s in production
 To work out a schedule
Types of schedules
Master scheduling
Manufacturing or operation scheduling
Detail operation scheduling
Master Schedule
 It is the break up of production requirements

 It is prepared for a week, fortnight, month etc
 It is adjusted as per new order
Manufacturing or operational scheduling
 It is used where production process is continuous

 Name, No. of units, quantity, quality, color, weight, types etc., is mentioned
Detail operation scheduling
 Scheduling devices – department charts

 Utility of charts –bar chart (fixed quantity scale), Gantt chart (time scale), machine
record chart, order charts, man charts etc.,
Difference
Routing
 Determination of sequence of operation

P a g e | 51
 Determines men, material, machine

 Before scheduling
 Most economic route
 Considers ‘where’ aspect
Scheduling
 Determination of time & task

 Allocates men, material and machine
 After routing
 It acts as time table
 Considers ‘when’ aspect
Loading
 Assigning work to machine & operators

 Availability of machines, speed, capacity etc.,
Dispatching (implementing)
 Granting permission to proceed according to plans already laid down

 Routing & scheduling which is done earlier is put into practice
Procedure or steps followed in dispatching
 Moving of materials from one process to another

 Assigning work of machines
 Issuing required tools & equipment
 Issuing job orders
 Issuing time tickets & instruction cards
 Recording of time taken
 Returning of tools & equipments
 Ensuring necessary changes in scheduling
Dispatching types
 Centralized
 Decentralized
Expediting (progressing)
 Follow up action undertaken to check the success of the plan

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Procedure of expediting
 Checking the progress continuously

 Determining the cause of deviation
 Removal of difficulties
 Supplying tools & equipment's
 Authorizing & signing requisition
 Preparation of shortage list
Capacity planning
 Capacity planning is the process of estimating the requirements of machines & men
to meet the targets of production
 Capacity planning matches resources to demand
Concepts of capacity
 Potential capacity: long term decision of the top level management

 Immediate capacity: short term decision to meet demand
 Effective capacity: capacity that is actually achievable
Factors influencing effective capacity
 Demand forecast
 Labour efficiency against standard output
 Plant efficiency
 Multiplicity of the shift
 Sub- contracting
 Policies of the management
Quality control & management
 Quality control includes techniques and systems for the achievement of the required
quality in the articles produced & for the elimination of sub-standard goods.
Objects of quality control
 Establishing quality standards

 Ensure smooth production
 Find out deviations in production process

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 Find out causes for low productivity

 Segregation of defective products
Principles or essentials of quality control system
 Set standard
 Quality control must be responsibility of a competent personnel
 Measuring quality standards at every step
 Unanimity among workers to maintain quality
 Maintaining records of quality
Steps to exercise effective quality control
 Setting the Standards of quality

 Control over raw materials
 Control over production operation
 Inspection of machinery & equipment's
 Promptness in inspecting quality
 Quality consciousness
 Application of statistical methods of quality control
- sampling
- standard deviation
- probability
Factors affecting the quality of goods
 Cost of production
 Requirements of customers
 Equipment's & tools used
 Utility of products
 Attitude of workers
 Scale of operations
Functions of quality control
 Determining requirements of the factory

 Keeping records of quality standards

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 Determining sampling limits

 Better quality devices developed
Advantages of quality control
 Consumer satisfaction
 Quality consciousness
 Better utilization of resources
 Increased sales
 Uniform products
Methods of quality control
Inspection
Statistical quality control
Inspection
 Inspection is the process of measuring the qualities of a product or service in terms of

established standards
- W. R. Spriegel
Objectives of inspection
 Segregate products which do not conform to the standards

 Finding out reasons for low quality or rejection of goods
 Maintaining reports
Forms of inspection
 Inspection of raw materials

 Inspection of work in progress
 Process control – temperature, humidity
 Running tests

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Statistical quality control (SQC)
Quality control charts
Acceptance sampling
Quality control charts
 A control chart is the graphic presentation of expected variations in quality

 Two lines on each graph indicate tolerance limits within which the variations of
quality will be permitted
 Upper control limit (UCL)
 Lower control limit (LCL)
 Sample is rejected if it falls outside the tolerance limits
Acceptance sampling
 A sample is taken from the manufactured products and quality of these products is
inspected.
 If the quality of the sample conforms to the pre-determined standards then it is
presumed that the quality of the whole lot is good.
Limiting levels of quality
 Acceptable quality level (AQL) – producer’s risk

 Lot percentage tolerance defective (LPTD) –consumer’s risk
Types of sampling plan
 Single sampling plan

 Double sampling plan
 Multiple sampling plan
Advantages of statistical quality control
 Inspecting a sample instead of the whole lot

 Increases profits

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 Simplifying quality control

 Creating quality consciousness among employees
 Improves the goodwill of the products among consumers
Total Quality Management (TQM)
 TQM is a corporate business management philosophy which recognizes that customer

needs and business goals are inseparable.
- British Quality Association
Elements of TQM
 Commitment to quality
 Customer satisfaction
 Measurement of quality
 Prevention rather than detection
 Proper training
 Continuous improvement
 benchmarking
Fundamentals of TQM
 Focuses on customer
 Management by fact
 Focus on prevention
 Principle of PDCA cycle – plan-do-check-act
 Employee involvement
Deming’s 14 point management principles
1. Create constancy for the purpose for improvement of products & services
2. Adopt the new philosophy
3. Cease dependence on mass inspection
4. End the practice of awarding business on price tag alone
5. Constantly and forever improve the systems of production & service
6. Institute modern methods of training on the job
7. Institute modern methods of supervision & leadership
8. Drive out fear

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9. Break down barriers between departments

10. Eliminate numerical goals for the work force
11. Eliminate work standards and numerical quotas
12. Remove barriers to pride of workmanship
13. Institute a vigorous program of education & training for everyone
14. Create a structure in top management that will push every day on the above 13 points
Quality system standards
 International Organization for Standardization (ISO)

 Bureau of Indian Standards (BIS)
Steps in registration of ISO 9000
 Existing quality procedures are evaluated against ISO 9001 to ISO 9003
 Corrective actions to conform to ISO 9000 requirements
 Certifiable quality management system is prepared
 New procedure is defined, documented & implemented
 Quality manual is prepared
 Pre- assessment meeting with registrar to analyse quality manual
 Actual assessment of system is held
 System is certified and registration is done
Benefits of ISO 9000
 Internationally accepted series of quality standard

 It helps in achieving consistency, economy & cost effectiveness through
standardization
 Paves way to TQM
 It reduces the need for inspection by buyers
Documentation of quality system
 Quality manual- description of quality management system

 Quality procedures- procedure to instruct workforce
 Work instructions- specify who should do the work, how should the work be done
 Forms & records
 Documents approval

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Quality Circles (QC)
 Quality circle is a small group of people who voluntarily perform quality

improvement activities at the work place
 Ishikawa recognized the significance of shifting responsibility for problem
identification and problem solving to those on the factory floor
Objectives of quality circles
 To aid self & mutual development

 To increase quality &cost awareness
 To utilize the creativity of the work force
 To develop managerial ability & leadership
 To improve productivity
Benefits of QCS
 Improves human relations

 Develops participative culture
 Workers take interest in solving problems
 Reduces defects of products/ services
 Helps in improving productivity
 Helps in leadership development
PRODUCTIVITY
• Productivity means the balance between all the factors of production that will give the
greatest output for the smallest efforts
- Peter F Drucker
• P= o/I
• P= productivity
• O= output
• I= input
Measurement of productivity
1. Quantification of Data – price, sales

2. Inter-dependence of Factoral Productivities – factors affecting production
3. Measurement of Input

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Input Factors
• Labour
• Material
• Power
• Plant & machinery
• Shop expenses
Units of measurement
• Man hours, man days, man shifts, wages, idle time etc.
• Physical units of quantity, weight, volume, cost of material
• Kilowatt hours
• Capacity, usage, money value
• Machine hours, labour hours, money value
Factors influencing productivity
1. External Factors-natural resources, economic condition

2. Internal Factors:
• Technological Factors
• Human Factors
• Managerial Factors
• Financial Factors
• Natural Factors
• Government Policies and Regulations
Causes of low productivity
1. Wastage of resources
2. Poor planning of plant layout
3. Unscientific selection and training of workers.
4. Poor working conditions

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5. Low motivation of workers

6. Absence of mutual co-operation between employers and employees
7. Complex procedures of work.
8. Poor design of product and machines.
9. Poor management.
10. Improper material handling.
11. Monotonous methods of work.
12. Inaccurate quality control and production planning.
13. Idle capacity of plant, etc.
Tools of productivity/ methods to increase productivity
1. Organization- responsibility & authority, structure

2. Personnel – recruitment, selection, training, wages
3. Product – design, quality, standardization
4. Productivity- SQC, human engineering
5. Production – planning, cost control
6. Physical Facilities – location, layout, maintenance
7. Proper plant layout
8. Application of simplification ,standardization and specialization
9. Proper design of product and machines
10. Optimum nature and size of plant and machinery
11. Scientific selection and training of workers
12. Application of scientific management
13. Integration of processes
14. Effective material handling
15. Proper quality of raw material
16. Production planning and control
Importance/ Benefits of increased productivity
• Better utilization of resources

• Better quality goods at reduced prices

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• Increases the volume of production

• Increases wages to workers
• Increases wealth of the nation
Productivity movement in India
• International Labour Organization

• National Productivity Council
• Five- Year Plans- organization like Central Statistical Organization, Indian Technical
Institute, National Sample Survey
Work study & measurement
 Work study embraces the technique of method study and work measurement study
which are employed to ensure the best possible use of human & material resources in
carrying out a specified activity
- International Labour Organization
 “Method study is the systematic recording and critical examination of existing and
proposed ways of doing work, as a means of developing and applying easier and
more effective methods and reducing costs.”
 “Work measurement is the application or techniques designed to establish the time for
a qualified worker to carry out a specified job at a defined level or performance.”
Objectives/ need of work study
• Analyze present method of doing job and develop new & better methods
• Measure the work content of a job
• Increase productivity
• Improve operational efficiency
Benefits of work study
• Reduced manufacturing costs

• Improved work place layout

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• Better working conditions to employees

• Provides a standard of performance to measure labour efficiency
• Provides better job satisfaction
Work study procedure
• Select the job to be studied

• Record all relevant facts about the job
• Examine critically all the recorded facts
• Develop the new method
• Measure the work content and establish the standard time
• Define the new method
• Install the new method
• Maintain the new method
Techniques of work measurement study
Time study
Pre- determined motion time system (PMTS)
Synthesis
Analytical estimating
Activity sampling
Time study
• Time study is the analysis and determination of the time necessary to perform a given
task
- John A Shubin
Objectives of time study
• Fix standard time

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• Fix fair incentive wage plan

• Avoid abnormal idle time & delay in production
• To control & reduce costs
• Improve working conditions
Motion study
• Motion study is part of method study where analysis of the motion of an operator or
work will be studied by following the prescribed methods.
• Principles of Motion study
• (a) Use of the human body.
• (b) Arrangement of workplace.
• (c) Design of tools and equipment
Pre-Determined Motion Time System (PMTS)
• PMTS is a work measurement technique by which normal or basic times are

established for basic human motions and these time values are used to build up the
time for a job at defined level of performance
• Suitable for repetitive jobs
Advantages of PMTS
• Short cycle jobs can be timed accurately

• An estimate of work content can be obtained even before the task is carried out
• Results obtained are consistent
• It helps in setting targets
Synthesis
• Synthesis is a technique of work measurement for building up the time required to do

a job at a defined level of performance based on the data derived from large number
of time studies
Advantage of synthesis
• Helps in reduction of unnecessary time studies of work similar in nature

• Reduction in delays for setting time standards for a job

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• Consistency in time standards
Analytical estimation
• Technique of work measurement when the timing of the new job cannot be
synthesized as previous data is not available
• It is suitable for long & non repetitive operation
Advantages of analytical estimating
• Helps in planning & scheduling the operations

• Provides a basis for fixing the labour rate for non- repetitive jobs
• Steps to control labour control
Activity sampling/ work sampling
• Random sampling theory

• Laws of probability
• P= number of observations of the activity
--------------------------------------------------
total number of observations
Advantages of activity sampling
• Economical
• Single observer can conduct several work sampling
• Requires less time
• Less tedious
METHOD STUDY
• Method study is the systematic recording and critical examination or existing and
proposed ways or doing work as a means of developing and applying easier & more
effective methods & reducing cost
-British Standard Institution(BS3138)
Objectives of method study

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• Improve the individual & inter- linked process

• Suggest more efficient use of man, material & machine
• Improve the layout
• Introduce better working conditions
Procedure involved in method study
Select Record Examine Develop
Maintain Install Define Evaluate
Charts used in method study
1. Process charts & flow diagram

2. Multiple activity chart
3. Motion charts
4. Simultaneous motion charts (SIMO)
5. Layout models & templates
6. String diagram
7. Films & still cameras
1.Process charts & flow diagram
• Operation -
• Inspection-
• Transport-
• Storage-

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• Delay- D
• Flow diagram is a drawing indicating the paths of men, material & machine in a
factory
• R.M – machines- inspection – delay – machines – inspection- packaging- dispatch
2.Multiple activity chart
• This chart is used to record the time relationships between 2 or more workers,
machines or material
• It helps to study idle time
• Determines number of machines handled by 1 operator
• Determines number of operators required to perform a task
3.Motion Charts
• Indicates movements of operative.

• Helps in elimination of unnecessary movements
4.Simultaneous Motion Charts(SIMO)
• SIMO chart is a chart based on film analysis, used to record simultaneously on a

common time scale the thebligs (micro-motion) or a group of therbligs performed by
different parts of the body of one or more operators
5. Layout models & templates
• It is the model of particular machine, tools, tanks, storage etc., are laid on the floor
plan to give a clear cut picture of the layout plan
6. String diagrams
• The string diagram is a scale layout drawing on which, length of a string is used to
record the extent as well as the pattern of movement of a worker working within a
limited area during a certain period of time
• Helps to identify better layout

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• Convenient work station
7. Films & still cameras
• Recording the data

• Examination of the existing method
Standard time
• Standard time is the time required by an average skilled operator, working at a normal
pace, to perform a specified task using a prescribed method
Objectives of standard time
• Staffing
• Line balancing
• Material requirement planning
• Wage payment
• Cost accounting
• Employee evaluation
Techniques to establish a standard time
• Time study
• PMTS
• Standard data system
• Work sampling

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Maintenance & waste management
Unit V
Maintenance
Maintenance is the set of activities performed to keep an equipment in the specified

condition.
Maintenance management
• Maintenance management applies the functional approach namely planning,

organizing, controlling of all activities relating to maintenance of plant efficiency.
Objectives of maintenance
• Customer satisfaction
• Maximize the useful- life of the equipment
• Prevent safety hazards
• Minimize total production/ operation cost
• Minimize the frequency & severity of interruptions to operating processes
• Maximize production/ operation capacity from given equipment resources
Cost of maintenance
Tangible cost
Intangible cost
Tangible cost
• Down-time cost- machine break down

• Idle wages
• Loss of materials
• Cost of repairs
• Opportunity cost

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• Impact on other machines- repairs, break down

• Expediting costs- not anticipated cost
• Accident cost
• Added set-up cost
• Tool breakage
• Premium paid on spare parts – urgency/ demand
Intangible cost
• Reduced life of equipment

• Failure to meet delivery schedule
• Lowered employee morale
• Increased investment in spare parts
• Cost of stand-by equipment
Types of maintenance
Breakdown/ corrective maintenance
Preventive maintenance
Predictive maintenance
Break down/ corrective maintenance
• Breakdown maintenance is basically the ‘run it till it breaks’ maintenance mode.

• No actions or efforts are taken to maintain the equipment as the designer originally
intended to ensure design life is reached.
Advantages
• Involves low cost investment for maintenance.

• Less staff is required.
Disadvantages
• Increased cost due to unplanned downtime of equipment.

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• Increased labour cost, especially if overtime is needed.

• Cost involved with repair or replacement of equipment.
• Increased accidents
• Inefficient use of staff resources.
Preventive Maintenance
• Preventive maintenance involves the adoption of a planned maintenance giving

different machines specific maintenance at specific intervals, instead of waiting for
them to break down completely.
Advantages
• Cost effective in many capital intensive processes.

• Flexibility allows for the adjustment of maintenance periodicity.
• Increased component life cycle.
• Energy savings.
• Reduced equipment or process failure.
Disadvantages
• Catastrophic failures still likely to occur.

• Labour intensive.
• Includes performance of unneeded maintenance.
• Potential for incidental damage to components in conducting unneeded maintenance.
Predictive Maintenance
• Predictive maintenance can be defined as “Measurements that detect the onset of a

degradation mechanism, thereby allowing causal stressors to be eliminated or
controlled prior to any significant deterioration in the component physical state.
Results indicate current and future functional capability”.
Maintenance scheduling
• Scheduling is the function of coordinating all of the logistical issue around the issues
regarding the execution phase of the work. Scheduled of maintenance jobs basically
deals with answering two questions—‘Who’ and ‘When’ of job, i.e., “who would do
the job” and “when the job would be started and done”.
Maintenance schedule techniques
• Weekly general schedule is made to provide weeks worth of work for each employee
in an area.

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• Daily schedule is developed to provide a day’s work for each maintenance employee
of the area.
• Gantt charts are used to represent the timings of tasks required to complete a project.
• Bar charts used for technical analysis which represents the relative magnitude of the
values.
• PERT(program evaluation & review technique)/CPM are used to find the time
required for completion of the job and helps in the allocation of resources.
Total productive maintenance(TPM)
• Preventive maintenance
• Predictive maintenance
• Zero defectives
• zero breakdowns
• zero accidents
Modern Scientific Maintenance Methods
Reliability centered maintenance
Six Sigma Maintenance
Enterprise Asset Management (EAM)
Lean Maintenance
Computer Aided Maintenance
Reliability centred maintenance
• Reliability centred maintenance (RCM) is defined as “a process used to determine the

maintenance requirements of any physical asset in its operating context”.
Reliability in Maintenance
• Reliability is the probability of survival under a given operating environment.

• The time between failures is called mean time between failures(MTBF)
Classification of reliability
• Component reliability
• System reliability

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Six Sigma Maintenance
• Sigma is the Greek symbol used by statisticians to refer to the six standard deviations
• Six sigma is a maintenance process that focuses on reducing the variation in business
production processes. By reducing variation, a business can achieve tighter control
over its operational systems, increasing their cost effectiveness and encouraging
productivity breakthrough.
Enterprise Asset Management (EAM)
• It is the organized and systematic tracking of an organization’s physical assets i.e., its
plant, equipment and facilities. EAM aims at best utilization of its physical assets.
• It ensures generation of quality data and timely flow of required data throughout the
organization.
Lean Maintenance
• Lean system recognizes seven forms of waste in maintenance. They are over
production, waiting, transportation, process waste, inventory, waste motion and
defects. In lean maintenance, these wastes are identified and efforts are made for the
continuous improvement in process by eliminating the wastes. Thus, lean
maintenance leads to maximize yield, productivity and profitability.
Computer Aided Maintenance
• For optimal maintenance scheduling, large volume of data pertaining to men, money
and equipment is required to be handled. This is a difficult task to be performed
manually.
• Here programs are prepared to have an available inputs processed by the computer.
Waste management
Waste
• Waste can be defined as discarded substance having no value.

• Waste may arise due to nature of material, evaporation, shrinkage, chemical reaction,
drying etc.,
Types of waste
• Normal waste- it occurs due to the nature of materials. It is unavoidable

• Cost per unit= total cost-normal loss scrap
_________________________
total quantity- normal loss quantity
• Abnormal loss- any loss occurred due to theft, fire, careless handling etc., it can be
controlled.

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• Value of abnormal waste

normal cost
= ______________ * units of abnormal waste
normal output
scrap
• Scrap is discarded material which has some value.

• Scrap is always physically available
• Scrap can be sold
Defectives
• Defectives are products that do not meet the quality standards

• Reasons for defectives are:
 sub- standard material
 Poor workmanship
 Faulty design
 Lack of supervision
Spoilage
• Spoiled products cannot be economically rectified and are sold for a disposal value
• Spoilage arises due to poor workmanship, poor quality of material etc.
• Types of spoilage- normal, abnormal
Control of wastage, scrap, defectives & spoilage
• Timely preparation of reports relating to the wastage, scrap, defectives & spoilage
• Proper quality control
• Assigning trained employees
• Periodic review of production process
• Use of latest technology
Steps in waste management
• Fixing tolerable limits

• Actual measurement of the losses
• Finding out the difference

P a g e | 74
• Analyzing the difference and taking remedial measures

Obsolete materials
• Obsolete materials are those which are no longer required for production due to
change in technology, design, fashion etc.

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Page |1

PRODUCTION AND OPERATIONS MANAGEMENT

UNIT 2: Plant location and layout (08 hrs)

UNIT 3: Materials management (08 hrs)

UNIT 4: Production planning and quality control (16 hrs)

UNIT 5: Maintenance and waste management (12 hrs)

Production and Operations Management (AJ)

Production and Operations Management (AJ)

UNIT 1: INTRODUCTION TO POM

 MANUFACTURING involves only tangible goods

 PRODUCTION involves both tangible and intangible goods

 Job production involves the procedure of manufacturing a product according to a

 The products manufactured are generally non- standardised and heterogeneous in

 Examples- bridges, ships, book printing etc.

Advantages and disadvantages

1. Because of general purpose machines and facilities variety of products can be

3. Full potential of operators can be utilized.

4. Opportunity exists for creative methods and innovative ideas.

Production and Operations Management (AJ)

1. Higher cost due to frequent set up changes.

3. Production planning is complicated.

4. Larger space requirements.

 Batch production pertains to repetitive production.

 Thus batch production may be defined as the manufacture of a product in small or

 Examples- manufacture of different colour pens

Advantages and disadvantages

1. Better utilization of plant and machinery.

2. Promotes functional specialization.

3. Lower investment in plant and machinery.

4. Job satisfaction exists for operators.

1. Material handling is complex because of irregular and longer flows.

2. Production planning and control is complex.

3. Work in process inventory is higher compared to continuous production.

4. Higher set up costs due to frequent changes in set up.

Mass/ flow production

 Flow production is continuous manufacturing process used in large scale business

 Flow production is the manufacture of a product by a series of operations, each article

Production and Operations Management (AJ)

Advantages and disadvantages

1. Higher rate of production with reduced cycle time.

2. Higher capacity utilization due to line balancing.

3. Less skilled operators are required.

4. Low process inventory.

5. Manufacturing cost per unit is low.

1. Breakdown of one machine will stop an entire production line.

3. High investment in production facilities.

4. The cycle time is determined by the slowest operation

 Production management refers to the application of management principles such as

 According to El Wood S.Buffa, “ Production Management deals with decision

SCOPE/ OBJECTIVES OF PRODUCTION MANAGEMENT

 Controlling manufacturing cost

 Proper quality of products

 Keeping manufacturing schedule

 Maintaining proper machinery and equipment

 Proper manpower planning

Production and Operations Management (AJ)

 Adequate manufacturing services

Functions of production management/ different aspects of production

i. Manufacturing function- selection of factory, location, design & layout, types of