THE QUESTIO

S WHICH ARE EXPECTED FOR THE EXAM HAVE BEE

HIGHLIGHTED.
THEY MAY OR MAY
OT COME. I AM O
LY DOI
G THESE QUESTIO
S.

1. What is the role of Operations Management in any organisation? Is this a significant role? If
so, why do you think so?

• Operation is the creation of physical

Object through – Men, machine, material, and equipment

Services to – target related to discharge of a function with some utility

• Operation consists of a sequence of operation that transform materials/services from a given to a

desired form
– Transformation by disintegration (steel bars from cast ingots, oil cracking etc )
– Transformation by integration or assembly (household appliances & automobiles)
– Transformation by service
Basic Responsibilities –

To Produce firms products/Services in a way such that

• Quantity requirement will be satisfied

• Quality /specs are must
• Cost – most economical
I.e. required quantity /volume, at required time, of required quality & in the most economical manner.

Consists of Three highly interdependent levels

• Collection of machinery & building etc, combined with labor,& material to build processes that
change the form of materials & information in a way to add value for customers
• Orchestra of systems and routines which coordinate processes and marshal the flow of work,
resource & knowledge in the operation
• Operation is a community of people. It can have all manner of process routines & systems and yet
if a sense of common purpose & community is absent, it can fail to improve against competition.

Significant due to
Challenges due to fast changing;

- Technologies
- Customer Requirements/Tastes
- Design changes – features/miniaturization
- Materials
- Machines and equipment
- Processes
- Entry of new entrepreneurs
• Ultimate purpose is to focus on organizations resources, capabilities & energies on building a
sustainable advantage over its competitors along one or more dimensions of performance
– Lower cost, higher product performance, innovative products, superior service
– E.g. Rolls Royce – Luxurious, Ferrari – High Performance, Toyota – Dependable, HP –
Innovative Products, IBM – Superior Service, Caterpillar – Product Design.
 • Once we decide on type of competitive advantage we are going to seek (Cost Quality,
dependability, Flexibility, innovativeness), we have to configure to achieve. This requires strategy
with coordinated decisions and actions.
This is done by operation management team which makes it important
2. What is the role of Marketing in defining a Product? How is the Product defined? Why the
definition of product is critical for the success of the product for any organisation?

Marketing is a critical contributor for the success of any

ew Product in the market;

- Product definition is conceptualized through market lead

Will be suicidal, if the conceptualization of the Product definition on the basis of customer
need/want is insufficient/incorrect and/or

The Product designed on the basis of market lead fails to meet the customer need/want and/or
inefficient vis-à-vis competition and/or is not cost effective (capital costs and operating costs) or any
other reason that may hinder sales of the Product.

eed:

- Marketing orientation attuned to the voice of the customer

- Regular interaction of the Development personnel with customers.

- Customer inputs at the Development stages

Product Definition: The end result of the manufacturing process to be offered to the market place to
satisfy a need or a want.

Product Definition Process

• Who are our customers and what are their needs

• How will the Product solve their needs?
• What advantages will our product offer vs competition and vice versa?
• What is most important to Customers in making a buying decision?
Will it create demand “Pull” rather than product “Push”

3. Define Product. How does a product get evolved? What are the steps for product
Development exercise? What reasons can be contributed to Product failure/non acceptance
in the market?

Product Definition: The end result of the manufacturing process to be offered to the market place to
satisfy a need or a want.

Product development is the process of designing, creating, and marketing an idea or product. The product
can either be one that is new to the marketplace or one that is new to your particular company, or, an
existing product that has been improved. In many instances a product will be labeled new and improved
when substantial changes have been made

All product development goes through a similar planning process. Although the process is a continuous
one, it is crucial that companies stand back after each step and evaluate whether the new product is worth
the investment to continue. That evaluation should be based on a specific set of objective criteria, not
someone's gut feeling. Even if the product is wonderful, if no one buys it the company will not make a
profit.

Brainstorming and developing a concept is the first step in product development. Once an idea is
generated, it is important to determine whether there is a market for the product, what the target market is,
and whether the idea will be profitable, as well as whether it is feasible from an engineering and financial
standpoint. Once the product is determined to be feasible, the idea or concept is tested on a small sample
of customers within the target market to see what their reactions are.

The process

Idea Generation is often called the "fuzzy front end" of the

PD process

o Ideas for new products can be obtained from basic research using a SWOT analysis
(Strengths, Weaknesses, Opportunities & Threats), Market and consumer trends,
company's R&D department, competitors, focus groups, employees, salespeople, corporate
spies, trade shows, or Ethnographic discovery methods (searching for user patterns and
habits) may also be used to get an insight into new product lines or product features.

Idea Screening
o The object is to eliminate unsound concepts prior to devoting resources to them.
o The screeners must ask at least three questions:

Will the customer in the target market benefit from the product?

What is the size and growth forecasts of the market segment/target market?

What is the current or expected competitive pressure for the product idea?

What are the industry sales and market trends the product idea is based on?

Is it technically feasible to manufacture the product?

Will the product be profitable when manufactured and delivered to the customer at
the target price?

Concept Development and Testing

o Develop the marketing and engineering details

Who is the target market and who is the decision maker in the purchasing process?

What product features must the product incorporate?

What benefits will the product provide?

How will consumers react to the product?

How will the product be produced most cost effectively?

Prove feasibility through virtual computer aided rendering, and rapid prototyping

What will it cost to produce it?
o Testing the Concept by asking a sample of prospective customers what they think of the
idea

Business Analysis
o Estimate likely selling price based upon competition and customer feedback
o Estimate sales volume based upon size of market
o Estimate profitability and breakeven point

Beta Testing and Market Testing

o Produce a physical prototype or mock-up
o Test the product (and its packaging) in typical usage situations
o Conduct focus group customer interviews or introduce at trade show
o Make adjustments where necessary
o Produce an initial run of the product and sell it in a test market area to determine customer
acceptance

Technical Implementation
o New program initiation
 o Resource estimation
o Requirement publication
o Engineering operations planning
o Department scheduling
o Supplier collaboration
o Logistics plan
o Resource plan publication
o Program review and monitoring
o Contingencies - what-if planning

Commercialization (often considered post-NPD)

o Launch the product
o Produce and place advertisements and other promotions
o Fill the distribution pipeline with product
o Critical path analysis is most useful at this stage

Will be suicidal, if the conceptualization of the Product definition on the basis of customer need/want is
insufficient/incorrect and/or

The Product designed on the basis of market lead fails to meet the customer need/want and/or
inefficient vis-à-vis competition and/or is not cost effective (capital costs and operating costs) or any
other reason that may hinder sales of the Product.

shortcomings in its process of defining.

- An incomplete, ambiguous or overly ambitious Marketing Requirements Specifications (MRS).

- Engineering involvement inadequate at Development stages

- A MRS – completion after the product is underway

- Product requirements development, without adequate customer inputs.

- Lack of formal requirements as a basis for initiating Product Design.

4. Define the processes usually considered for setting up a new facility? Provide the suitability
of each of the process for any enterprise together with specific examples and reason for
selecting the process for the example.

Process Selection

• Process selection is based on five considerations

– Type of process; range from intermittent to continuous
– Degree of vertical integration
– Flexibility of resources
– Mix between capital & human resources
– Degree of customer contact
• Process types can be:
– Project Process( customer job shop , customer tailoring, construction) {low
standardization, low volume} intermittent
Characteristics

1. Makes a one-of-a-kind product (volume = 1)

2. Uses general purpose equipment
 3. Has informal relationships with many vendors
4. Very little vertical integration
5. Flexible layout often with factors of production moving to job

– Batch Process (Education class, printing, bakery)intermittent

Characteristics

1. Makes several families of products in moderate volume

2. Uses general purpose equipment often fixtured
3. Little vertical integration
4. Hybrid layout with flow lines

– Line Process (Assembly lines, cafeteria) repetitive

Characteristics

1. Makes few products in large volume

2. Uses specialized high-volume equipment
3. Has formal relationships with vendors
4. May use vertical integration
5. Product-based layout with linear flow

– Continuous Process? Job shop? (oil refinery, water treatment plant) repetitive
Characteristics

1. Makes many products in small volume

2. Uses general purpose equipment
3. Has informal relationships with vendors
4. Very little vertical integration
5. Departmentalized layout with chaotic flow

5. Suggest a process for setting up a manufacturing facility for 200000 cars of a specific model
by an existing manufacturer, having four other models with capacity of 1Mn cars.

6. What is meant by capacity of a plant? How does one decide the capacity of a plant to be set
up?

 Capacity is the maximum output rate of a facility

 Capacity planning is the process of establishing the output rate that can be achieved at a facility:

Capacity is usually purchased in “chunks”

Strategic issues: how much and when to spend capital for additional facility & equipment

Tactical issues: workforce & inventory levels, & day-to-day use of equipment

Measuring Capacity Examples

 There is no one best way to measure capacity

 Output measures like kgs per day are easier to understand
 With multiple products, inputs measures work better
Measuring Available Capacity

 Design capacity:

Maximum output rate under ideal conditions

A bakery can make 30 custom cakes per day when pushed at holiday time
 Effective capacity:

Maximum output rate under normal (realistic) conditions

On the average this bakery can make 20 custom cakes per day

How Much Capacity Is Best?

 The Best Operating Level is the output that results in the lowest average unit cost
 Economies of Scale:

Where the cost per unit of output drops as volume of output increases

Spread the fixed costs of buildings & equipment over multiple units, allow bulk
purchasing & handling of material
 Diseconomies of Scale:

Where the cost per unit rises as volume increases

Often caused by congestion (overwhelming the process with too much work-in-process)
and scheduling complexity

 Alternative 1: Purchase one large facility, requiring one large

initial investment
 Alternative 2: Add capacity incrementally in smaller chunks as
needed

Other Capacity Considerations

 Focused factories:

Small, specialized facilities with limited objectives
 Plant within a plant (PWP):

Segmenting larger operations into smaller operating units with focused objectives
 Subcontractor networks:

Outsource non-core items to free up capacity for what you do well

7. Define Plant layout. What are the types of layout and the suitability of each of the same?
When does one go for a Product layout from Process layout? When does one consider going
for automation in a layout?

Plant Layout-Definition & Objectives

• Planning the optimum arrangement of facilities, personnel, equipment, storage space, material
handling equipment and all supporting services, along with the design of the best structure to
contain all these facilities
• Economic handling of all material; better supervision; faster production; better product quality;
flexible plant & workspace design for expansion; Improved work conditions; unidirectional
workflow
Layout plays an important role in production system. Layout not only affects the allocation of machines
& other resources to perform given tasks but it may also become an important factor at the design stage in
selection of production process

Types of Layouts

• Product Layout or Line Production

• Process Layout
• Layout by Fixed position (Static Product layout, Project layout)

Project/Fixed Position Layout

 • Raw material placed in fixed positions; also called fixed position layout
• Advantages: Reduces movement of m/c & equipment; Minimizes damage/cost of movement;
continuity of assigned work force
• Disadvantages: Skilled & versatile workers needed due to multiple operations; skill combination
may be difficult to obtain; higher pay; movement of people/material may be expensive; equipment
utilization low as they are left at location for subsequent usage instead of being moved as & where
needed

Product Layout or Line Production

• Machines and auxiliary services are located along the product flow line.
• Suitable for continuous type of production and can employ, one of the basic Horizontal flow lines.
• Equipment placed in usage sequence; also called line layout; useful in assembly work such as
cars, m/cycles
• Advantages: Small mfg cycle; low wip; min material handling; lower labour cost; effective quality
control; easy to schedule; easy prodn control; low variety
• Disadvantages: Change in work nature needs change in layout; m/c utilisation may not be
optimum; m/c breakdown delays work; work area expansion/m/c addition not possible

Process Layout

• Machines & Services are grouped according to their characteristics functional purpose.
• Turning, Welding, Painting, Presses etc.
• Suitable for Job and Batch Systems.
• Similar equipment & tasks grouped; also called functional layout; useful for low volume, high
variety jobs
• Advantages: low capital investment, fewer m/c; higher space utilization; flexibility in equipment
allocation; workers gain expertise; problems localized; job variety
• Disadvantages: needs more space; no mechanization; High WIP; work scheduling problems; High
set-up & inspection costs
Automation on layout

• Fully Automated plant or individual sections or production lines

- Automated lines provide for:

> Constant flow of materials through the system

> Automatic loading, positioning & unloading
> Inspection after certain predetermined operations
> Automatic sorting for rejections
- Results in:
> Lower WIP
> Lesser temporary storages –space and costs
>Reduced material handling costs
- Involves:
> Major Capital expenditure
> Reduced flexibility
> Reduced adaptability to variations in designs
 - Flexibility is achieved, if adopted to batch production & integration of these lines into one
layout.

8. How does one determine the facility requirements for a plant? What considerations go into
the identification of a location for facilities to be setup? What are the most common methods
for evaluation of the locations for setting up a plant and the limitations thereof?

Determination of the facility required for a plant:-

The objective is to determine how n activity’s tangible fixed assets best support achieving the
Organisation’s objectives.

Goals:

To Maximise:

- Operations’ efficiency, flexibility and quality

To Minimise:

- Operating costs, Work in process and the Project cost

 Facility location problem involves the evaluation of various sites for a new facility.
 There are several factors that influence the Facility Location Decision:

Factors Affecting Location Decisions

 Proximity to source of supply:

 Reduce transportation costs of perishable or bulky raw materials
 Proximity to customers:
 E.g.: high population areas, close to JIT partners
 Proximity to labour:
 Local wage rates, attitude toward unions, availability of special skills (e.g.: silicon valley)

Factors Related to Resources

 Labour availability, Labour cost, Labour Skills;

 Materials Availability, Material cost, material quality;
 Equipment availability, Equipment Cost;
 Land availability, Land suitability, Land cost;
 Energy availability, energy cost;
 Water availability, water quality, water cost.
Factors Related to the

Proximity to the firm’s market, size of the market, potential needs of the market.

Factors Related to the Infrastructure

 Availability of Financial Institutions, Strength of Financial Institutions

 Government Stability, Government taxes, Import and Export restrictions.
 Quality of life, Cultural issues,
  Environmental regulations, Transportation availability, Transportation cost
 And finally, Competitors’ size, strength and attitude in that region.
 Community considerations:
 Local community’s attitude toward the facility (e.g.: prisons, utility plants, etc.)
 Site considerations:
 Local zoning & taxes, access to utilities, etc.
 Quality-of-life issues:
 Climate, cultural attractions, commuting time, etc.
 Other considerations:
 Options for future expansion, local competition, etc.

Making Location Decisions

 Analysis should follow 3 step process:

 Step 1: Identify dominant location factors
 Step 2: Develop location alternatives
 Step 3: Evaluate locations alternatives
 Procedures for evaluation location alternatives include
 Factor rating method
 Load-distance model
 Centre of gravity approach
 Break-even analysis
 Transportation method
Method of Factor Rating

 In factor rating method, first we must identify the Most Important Factors in evaluating alternative
sites for the new facility.
 Then we should assign a weight between 0 and 100 to each of these factors.
Each alternative location will then be rated based on these factor weights.

The most weighted alternative is selected as the best alternative.

Cost-Profit-Volume Analysis

When the fixed and variable costs for each site differ, Cost-profit-volume analysis can be used to
identify the location with the lowest cost.

Centre of Gravity Method

 The centre of gravity method is used to find a location that minimizes the Sum of Transportation
Cost in between new facility and old facilities.
 Transportation cost is assumed to be a linear function of the Number of Units Shipped AND the
Travelling Distance.
Simulation Models

Firms often consider many variables and Factors when they choose a facility location.

These variables are often difficult to estimate and they also change in time.

In these kinds of Dynamic Situations, Simulation may be the best modelling technique.

The Transportation Method

 The transportation method of linear programming can be used to solve specific location problems
 It could be used to evaluate the cost impact of adding potential location sites to the network of
existing facilities
  It could also be used to evaluate adding multiple new sites or completely redesigning the network

9. Explain concepts of MRP and ERP and limitations thereof?

10. What are the functions of Production Planning and Control? Explain the importance of
Scheduling and most common methods followed for the same.

It is the direction and coordination of the firm’s resources towards the attainment of pre-specified
production goals in the most efficient available way.

The functions of PPC are:

a. Materials
b. Methods
c. Machines & Equipment
d. Routing
e. Estimating
f. Loading & Scheduling
g. Expediting
h. Inspection
i. Evaluating

Scheduling is the final stage of PPC, where all the production activities are coordinated and projected on
a time scale. It tells what resource should be doing what and when.

Importance of scheduling:

a. Meet due dates

b. Minimize late completion of jobs or tardiness
c. Minimize completion time
d. Minimize response time
e. Minimize idle time
f. Minimize overall costs
g. Minimize WIP and other inventories
h. Maximize resource utilization

Methods of scheduling are:

a. PERT (Project Evaluation & Review Technique)

b. CPM (Critical Path Management)

11. What is meant by a Project? Give examples. Explain basics of PERT and CPM and advise
the application of these for projects. What is the importance of Critical Path?
12. What is meant by Quality? Why it is important for survival and growth of any
organisation?
What are the common stages in Quality Control?
. QUALITY CONTROL

Quality:

• The development & realisation of specification necessary to produce economically and in

adequate degree, the appearance, efficiency, interchange ability and life, which ensures the
products’ present and future markets.
• It is the total of features of a product or service that bear on its ability to satisfy the stated or
implied needs;
> Actual & perceived

• Functions :
• To satisfy the customer by endeavouring to comply with the declared specs of the Product
• To ensure that the work may proceed to the next operation
• To be instructive, so that recurrence of mistake could be eliminated
• To compare quality levels obtained with desirable level – process control for determination of
trends & process adjustment procedures.
• To determine the optional quality obtainable for available process and to provide useful guides for
specifications at Design stage.
• To minimise scrap to an economical level.
• To facilitate process of incentive payments.
• To be able to identify faulty outputs with operations.
• To evaluate existing inspection methods & design better/more effective procedure.

• Quality Objectives:

• Definable:
- Physical dimensions

- Physical & Chemical properties of materials – strength, weight, composition etc.

For which:

- Design comparatively simple and quick testing techniques with which these attributes can be
measured

- Define “good” & “bad” –“acceptable” and “non acceptable”

• Quality Objectives:

Not Definable:

- Brightness, whiteness

- Surface textures

- Smell etc.

These are subjective and in some cases can be measured indirectly, eg light, surface
finish etc.

• Total Quality Management:

 > To excel on all dimensions of products & services that is important to the customers.

> Quality must be ensured in all the areas:

> Marketing, design, purchase, production or operations & distribution

Fundamental Goals:

- Careful design of the product or service

- Ensure the systems consistently produce the design specs/features

Quality of Design:

- Incorporates features & attributes that satisfy customer needs/expectations.

- Design quality is a major contributor for the value of the product in the market. Most

Important feature of design with regard to quality is “specification”.

- Describes in a comprehensive statement of all its aspects which are needed to fulfil the
requirements.

- The maximum tolerable variation in the requirement/attribute should be defined.

• Dimensions of design quality are:

> Performance, Primary operating characteristics

> Features, Influence perception of the customers

> Reliability, Failures within the specified time period

> Durability, Life of the Product

> Serviceability, ease with which product can be repaired/availability of standard

spares etc.

> Response, Speed to solve customer’s problems

> Aesthetics, to satisfy sensory needs- sound, look, feel, aroma, colour etc.

> Reputation, past performance, other intangibles

• Service Quality:

> Timeliness

> Completeness

> Courtesy

> Consistency

> Accessibility and convenience

• Cost of Quality:
 Product to be made ‘Right, the first time, every time”

> To avoid defectives rather than repairing or replacements

> With an aim to prevent any additional cost

Costs associated with Quality:

> Failure Costs

> Prevention Costs

• Failure Costs:
Relate to production below the quality standard, resulting into,

> Scrapping defective items

> Reworking defective items

> Re-inspecting

> Down grading as seconds

> Wastage costs – holding etc.

> Repairing and servicing after sales

> Warranty claims

> Complaints from customers

> Returned Products

> Liabilities/litigations

> Loss of Goodwill

> Non payments/bad debts

• Prevention Costs:
Costs associated with design, implementation and maintenance of quality system, to ensure right,
first time. These include:

> Product or Service requirements – Determination of Quality requirements and laying

down specifications of incoming materials, processes, intermediateries and finished products and
services.

> Quality Planning & Assurance – Creating systems & procedures to ensure quality

> Appraisal Equipment- Costs of designing and procuring instruments, tools and
accessories required to carry out quality appraisals.
 > Training – Development, preparation and conduct of Quality training programmes for
Operators, supervisors and managers.

• Stages of Quality Control:

Inspection of incoming materials & bought out

> Sample Inspection

> Process and Operation conditions at Vendor’s place to ensure that these confirm to
methods agreed upon.

Inspection of failures

‘First’ of Inspection

Inspection by self control

Final inspection

Post Sales Quality Evaluation/audit

• Acceptance Sampling:

> Decisions based on comparatively small samples

> Helps saving costs/time/monotony

> Inspection with great care & reliable

> Involves risks, as sample taken is at Random and results may not be true
reflections of the lot.

• Sampling Plan:
Two major factors in acceptance sampling are:

>Sample size

> Sampling plan (no. of successive samples taken in the process)

Single Sampling Plan:

> One Sample of certain numbers

> Accept/Reject the lot

Double Sampling Plan:

> A sample is inspected & if defects below acceptable level – Accept

> If defects level high, but within a second acceptance limit, takes another sample &
if the results within acceptable limits for two lots combined –Accept

Multiple or Sequential Sampling plan:

> Similar to double sampling

 > Repeated till decision comes out

13. What is Statistical Quality Control? What are some of the methods followed under SQC for
ascertaining process and product quality?

14. What are the basic features of ISO9000 and ISO14000? How does any organisation get
certified for ISO9000 or ISO14000? What are the benefits and limitations of these
standards?

BASIC FEATURES:

The ISO 9000 family is primarily concerned with "quality management". This means what the
organization does to fulfill:

a. the customer's quality requirements, and

b. applicable regulatory requirements, while aiming to
c. enhance customer satisfaction, and
d. Achieve continual improvement of its performance in pursuit of these objectives.

The ISO 14000 family is primarily concerned with "environmental management". This means what the
organization does to:

a. minimize harmful effects on the environment caused by its activities

b. achieve continual improvement of its environmental performance.

The vast majority of ISO standards are highly specific to a particular product, material, or process.
However, the standards that have earned the ISO 9000 and ISO 14000 families a worldwide reputation
are known as "generic management system standards".

Getting an ISO certification

1. Companies need to define, document and implement the requirements of the standard ISO
9001:2000 in order to get certified
2. Companies that decide to go for an ISO certification first need to consult an individual quality
auditor or a firm of quality consultants who are well versed in ISO matters.
3. The top brass of an organization planning to go in for ISO certification should first identify under
what ISO category their organization falls viz: ISO 9001, 9002 or 9003. They need to share the
commitment to seeking ISO certification with all levels of management, choose an ISO
representative and also decide whether to use a consultant or not.
4. The organization then has to review the existing oral/documented Quality System, identify
procedural areas for modification, change or deletion, and decide on what needs to be
implemented and how to format the ISO 9000 required Quality Manual.
5. Once that is done, different members of the organization involved in the procedure need to agree
on a feasible deadline for a date for inviting the certification body for conducting the
necessary audit for getting the ISO certification. They have to then make a documented report
on Planning and Implementation of Procedures for ISO Certification.
6. With the help of the report on Planning and Implementation, they require to identify the
appropriate personnel/ departments for working on the procedures required to have a
compliant Quality Manual to review and update the QA Manual(s) in order to achieve
thoroughness, completeness, cohesion and compliance with the ISO standard.
 7. The company also has to arrange for training the appropriate personnel at all levels of the
organization on the procedures, detailed in the Quality Manual and the quality concepts of ISO
9000 and could use external training for the internal auditor.

Benefits of ISO 9000:

1. Create a more efficient, effective operation

2. Increase customer satisfaction and retention
3. Reduce audits
4. Enhance marketing
5. Improve employee motivation, awareness, and morale
6. Promote international trade
7. Increases profit
8. Reduce waste and increases productivity

Disadvantages of ISO 9000:

1. the amount of money, time and paperwork required for registration.

2. ISO 9001 promotes specification, control, and procedures rather than understanding and
improvement.
3. ISO 9000 is effective as a guideline, but promoting it as a standard tends to mislead companies
into thinking that certification means better quality, thereby [undermining] the need for an
organization to set its own quality standards
4. Reliance on the specifications of ISO 9001 does not guarantee a successful quality system.

15. What is meant by Planning? What are the planning horizons and significant thereof? What
is aggregate planning and how does it help in managing dynamic market conditions?

Planning is to analyze given data and devise scheme for the best utilization of resources.

The planning horizon & significance thereof are as follows:

* Operations

To perform action as per the plan

* Control

To supervise operations with appropriate control mechanism that feeds backs information about the
progress of the work. The mechanism is also responsible for subsequent adjusting, modifying and
redefining plans and targets to attain the goal.

Aggregate Planning is the planning that concerned with the overall operations over a specified time
horizon.

It helps in managing dynamic market conditions as follows:

* Effective allocate system capacity (plant, equipment and manpower) over designated period.

* A good production plan should

> be consistent with organisation policy

> meet demand requirements

 > be within capacity constraints

16. Short notes on:

a. Value Engineering and its potential benefits:

Value Engineering is an approach to cost reduction in product design that examines the purpose of a
product or a service, its basic functions and its secondary functions.

a) to reduce costs; b) to prevent any unnecessary costs

Value Engineering tries to eliminate any cost that does not contribute to the value and performance of the
product or service.

Achieve equivalent or better performance at a lower cost while maintaining all functional requirements
defined by the customer.

1. Does the item have any design features that are not necessary?

2. Can two or more parts be combined into one?

3. How can we cut down the weight?

4. Are there nonstandard parts that can be eliminated?

Value Engineering programmes are usually conducted by project teams consisting of designers,
purchasing specialists, operations managers and financial analysts. Techniques such as Pareto analysis is
generally used for identification of the parts of the package worthy of attention. The chosen elements are
then subjected to rigourous scrutiny and the functions and cost of these elements are then analysed. The
team then tries to find any similar components that can do the job at lower cost. Generally, the number of
components are reduced, cheaper materials are used and the process is simplified.

Value Engineering requires innovative and critical thinking, but it can also be carried out using a
formal procedure. The procedure examines the purpose of the product or service, its basic functions and
its secondary functions. Team members would then propose ways to improve the secondary functions by
combining, revising or eliminating them. All ideas would then be checked for feasibility, acceptability,
vulnerability and their contribution to the value and purpose of the product or service.

b. At what stages the Value Engineering is undertaken:

c. Total Quality Management:

The origins of TQM go back to the 40s and 50s, but the term was coined by Feigenbaum in 1957.

> To excel on all dimensions of products & services that are important to the customers.

TQM is a holistic approach to the management of quality that emphasizes the role of all parts of
an organization and all people within an organization to influence and improve quality.

Important Elements of TQM

1. Meeting the needs and expectations of customers

2. Covering all parts of the organization
 3. Including every person in the organization
4. Examining all costs which are related to quality, especially failure costs
5. Getting things 'right first time', i.e. Designing in-quality rather than inspecting in it
6. Developing the systems and procedures which support quality and improvement
7. Developing a continuous process of improvement

Factors influential in ensuring the success of TQM

1. The existence of a fully worked-out quality strategy

2. Top Management's support
3. A steering group to guide the initiative
4. Group-based improvements
5. An adequate rewards and recognitions scheme
6. An emphasis on appropriate training

d. Just in Time:

Just In Time (JIT) is a method of planning and control and an operations philosophy that aims to meet
demand instantaneously with perfect quality and no waste. Just in time (JIT) as the name suggests is to
work towards getting parts at a workstation just when they are required and move through the operations
quickly. JIT aims to meet demands instantaneously, with perfect quality and no waste.

• JIT is an integrated set of activities designed to achieve high volume production using minimal
inventories of raw materials, work in progress and finished goods.
• JIT works on a pull system-when an item is sold, the market pulls a replacement from the last
work station, that is finished goods, the last workstation in turn pulls parts from the earlier station
and so on.
• The process keeps getting repeated to meet market requirements
JIT is dependent upon the the balance between the supplier's and the user's flexibility. It is
accomplished through the application of elements which require total employee involvement and
teamwork. A key philosophy of JIT is simplification.

 Essentials for JIT System to succeed:

− High quality and strong vendor relationship
− Vendor reliability
− Plant reliability
− Adequate Vendor and Captive plant capacities
− Strong back ups
− Fairly steady demand

e. Importance of Materials Management:

Importance

 Materials form major part of the Product cost – 60% or so

 With contribution at say 15%, every % saved in materials is equal to approx 4% increase in sales.
 Has direct bearing on the profitability
 Timely and right quality of materials availability decides the overall productivity of any
organisation.
 Cannot afford too much or too little – both dangerous for survival and growth.
 Materials Management includes the functions of purchasing, expediting, inventory management,
stores management, production planning and control and physical distribution management. Materials
Management was originally seen as a means of reducing 'total costs associated with the acquisition and
management of materials'.

f. Capacity design
g. Competitive Advantages
h. Operational effectiveness
i. Productivity
j. Time and Motion Study

k. Work Measurement:

 Work Measurement is a branch of work study (alternatively called time and motion study) that is
concerned with measuring the time that should be taken for performing jobs.
 Work Measurement relates to establishing standard times for the various operations in the process
of estimating function in production planning. Scheduling cannot be performed without such data.
 When a qualified worker is working on a specified job at standard performance, the time he/she
takes to perform the job is called basic time for the job.
 A qualified worker is 'one who is accepted as having the necessary physical attributes,
intelligence, skill, education and knowledge to perform the task to satisfactory standards of safety,
quality and quantity.'
 A specified job is one for which specifications have been establishedto define most aspects of the
job.
 Standard performance is 'the rate of output which qualified workers will achieve without over-
exertion as an average over the working-day provided they are motivated to apply themselves to
their work.'

Work Management Techniques

1. Synthesis from elemental data

2. Predetermined motion-time systems (PMTS)
3. Analytical estimating
4. Activity sampling

l. Slacks and the significance in Project scheduling

m. Routing:

Routing means determination of path or route over over which each piece is to travel in being transformed
from raw material into finished product. Routing prescribes the flow of work in the plant and is related to
considerations of layout, of temporary storages, location of raw materials and components and of material
handling system. Routing is a fundamental production function on which all subsequent planning is
based.

Routing consists of seven decisions -

i) Whether to make/buy
ii) The form and shape of the material
iii) The division of work to be done into operations
iv) The choice of machines/work centres on which each operation should be done
v) The sequence in which operations are to be performed
vi) The division of operations into work elements
 vii) The choice of special tooling

Advantages of Routing -

1. Efficient use of available resources

2. Reduction in manufacturing costs
3. Improvement in quality and quantity of output
4. Provides a basis for scheduling and loading

n. Evaluation:
o. Estimation:

p. Quality Assurance:

Quality assurance refers to the assurance too customers that the products, parts, components, tools, etc
contain specified characteristics and are fit for the intended use. Quality assurance is concerned with
determining the procedures to be used and frequency of checks or tests to be made within the system so as
to ensure that the system is meeting the specification incorporated in the product/service design.

Previously, only the inspection department and its personnel were responsible for quality
assurance but now, all the departments in the organization including design engineering department,
purchasing department, inspection department, materials handling department, maintainence and repairs
department, stores department, production department, etc are all equally responsible for assuring the
quality.

Steps Taken for Quality Assurance

1. Quality specifications for the product should be established.

2. Quality standards for raw materials, parts, components, tools and equipments, production process
etc should be determined in advance.
3. Proper inspection and testing procedures and methods should be evolved
Periodical evaluation of methods and procedures of inspection as well as quality control is a must
to measure their efficiency and effectiveness.

q. Fixed location layout:

r. Horizontal flow in a layout:
s. Human resource, a key factor in Operations:
t. Automation fails when: