Production and Operations Management (MB0044)

Set - 1

Name : Sandhya Verma Roll Number : 521036690 Centre Code : 03120 Program Name : Master of Business Administration-MBA Semester II Subject Name : Production and Operations Management Subject Code : MB0044 Set # II

Production and Operations Management (MB0044)

Set - 1

1. Explain Logical Process Modelling and Physical Process Modelling. What are the ingredients of Business Process? Business Process is a total response that a business undertakes utilising the resources and delivering the outputs that create a value for the customer. Business Process Modelling refers to a set of activities undertaken to optimise the business process. Business Process Modelling can be categorised into two parts Logical Processing Modelling and Physical Process Modelling. Logical process modelling Logical process modelling is the representation of putting together all the activities of business process in detail and making a representation of them. The initial data collected need to be arrange in a logical manner so that, links are made between nodes for making the workflow smooth. The steps to be followed to make the work smoother: 1. Capture relevant data in detail to be acted upon 2. Establish controls and limit access to the data during process execution 3. Determine which task in the process is to be done and also the subsequent tasks in that process 4. Make sure that all relevant data is available for all the tasks 5. Make the relevant and appropriate data available for that task 6. Establish a mechanism to indicate acceptance of the results after every task or process. This is to have an assurance that flow is going ahead with accomplishments in the desired path Some of these activities may occur in a sequential order whereas; some of them may run parallel. There may even be circular paths, like re-work loops. Complexities arise when the process activities are not connected together. Logical process model consists of only the business activities and shows the connectivity among them. The process model is a representation of the business activities different from the technology dependent ones. Thus, we have a model that is singularly structured only for business activities. Computer programmes are also present in the total system. This allows the business oriented executives to be in control of the inputs, processes and outputs. The Logical Process Model improves, control on the access to data. It also identifies, who is in possession of data at different nodes in the dataflow network that has been structured. A few of the logical modelling formats are: 1. Process Descriptions with task sequences and data addresses 2. Flow Charts with various activities and relationships 3. Flow Diagrams 4. Function hierarchies 5. Function dependency diagrams Every business activity, when considered as a logical process model, can be represented by a diagram. It can be decomposed and meaningful names can be given to the details. Verb and Noun form combinations can be used to describe at each level. Nouns give the name of the activity uniquely and are used for the entire model meaning the same activity. Physical process modelling Physical process modelling is concerned with the actual design of data base meeting the requirements of the business. It deals with the conversion of the logical model into a relational model. Objects get defined at the schema level. The objects here are tables created on the basis of entities and attributes. A database is defined for the business. All the information is put together to make the database software

Production and Operations Management (MB0044)

Set - 1

specific. This means that the objects during physical modelling vary on the database software being used. The outcomes are server model diagrams showing tables and relationships with a database. Ingredients of Business Process A process is a coordinated set of activities designed to produce a specific outcome. A business process is a type of process designed to achieve a particular business objective. The ingredients that might be used in a business process are: The data which accomplishes the desired business objective Acquisition, storage, distribution, and control of data which undertakes the process across tasks Persons, teams, and organisational units which helps to perform and achieve the tasks Decisions which enhances the value of data during the process We also have some behavioural aspects of the business process, mainly the decision making process where humans are involved. Decision failures are common and research has shown that, the failure of decisions is because of: Biases in perception and fallacies in reasoning Tendency to act on assumptions, even when data are available easily for verification and/or confirmation Tendency to bring out of memory the facts that reinforce our assumptions and biased evaluation Tendency to accept evidence or fact as absolute which support our hypotheses The above listed factors result in faulty decision making. Being aware and avoiding them consciously improves the processes of the business.

Explain Project Management Knowledge Areas. With an example explain Work Breakdown Structure.
2. Project management is chiefly associated with planning and managing change in an organization, but a project can also be something unrelated to business - even a domestic situation, such as moving house, or planning a wedding. Project Management Knowledge Areas is an inclusive term that describes the sum of knowledge within the profession of project management. The PMBOK includes proven, traditional practices that are widely applied as well as innovative and advanced ones that have seen more limited use. The knowledge areas of project management are the following: 1. Project integration management A subset of project management that includes the processes required to ensure that the various elements of the project are properly coordinated. It consists of: Project plan developmentintegrating and coordinating all project plans to create a consistent, coherent document. Project plan executioncarrying out the project plan by performing the activities included therein. Integrated change controlcoordinating changes across the entire project. 2. Project scope management A subset of project management that includes the processes required to ensure that the project includes all the work required, and only the work required, to complete the project successfully. It consists of:

Production and Operations Management (MB0044)

Set - 1

Initiationauthorizing the project or phase. Scope planningdeveloping a written scope statement as the basis for future project decisions. Scope definitionsubdividing the major project deliverables into smaller, more manageable components. Scope verificationformalizing acceptance of the project scope. Scope change controlcontrolling changes to project scope.

3. Project time management A subset of project management that includes the processes required to ensure timely completion of the project. It consists of: Activity definitionidentifying the specific activities that must be performed to produce the various project deliverables. Activity sequencingidentifying and documenting interactivity dependencies. Activity duration estimatingestimating the number of work periods that will be needed to complete individual activities. Schedule developmentanalyzing activity sequences, activity durations, and resource requirements to create the project schedule. Schedule controlcontrolling changes to the project schedule.

4. PROJECT COST MANAGEMENT A subset of project management that includes the processes required to ensure that the project is completed within the approved budget. It consists of: Resource planningdetermining what resources (people, equipment, materials) and what quantities of each should be used to perform project activities. Cost estimatingdeveloping an approximation (estimate) of the costs of the resources needed to complete project activities. Cost budgetingallocating the overall cost estimate to individual work activities. Cost controlcontrolling changes to the project budget.

5. PROJECT QUALITY MANAGEMENT A subset of project management that includes the processes required to ensure that the project will satisfy the needs for which it was undertaken. It consists of: Quality planningidentifying which quality standards are relevant to the project and determining how to satisfy them. Quality assuranceevaluating overall project performance on a regular basis to provide confidence that the project will satisfy the relevant quality standards. Quality controlmonitoring specific project results to determine if they comply with relevant quality standards and identifying ways to eliminate causes of unsatisfactory performance.

6. PROJECT HUMAN RESOURCE MANAGEMENT A subset of project management that includes the processes required to make the most effective use of the people involved with the project. It consists of: Organizational planningidentifying, documenting, and assigning project roles, responsibilities, and reporting relationships. Staff acquisitiongetting the needed human resources assigned to and working on the project. Team developmentdeveloping individual and group skills to enhance project performance.

Production and Operations Management (MB0044)

Set - 1

7. PROJECT COMMUNICATIONS MANAGEMENT A subset of project management that includes the processes required to ensure timely and appropriate generation, collection, dissemination, storage, and ultimate disposition of project information. Communication takes at least 90% of a Project Managers time! It consists of: Communications planningdetermining the information and communications needs of the stakeholders: who needs what information, when they will need it, and how it will be given to them. Information distributionmaking needed information available to project stakeholders in a timely manner. Performance reportingcollecting and disseminating performance information. This includes status reporting, progress measurement, and forecasting. Administrative closuregenerating, gathering, and disseminating information to formalize phase or project completion.

8. PROJECT RISK MANAGEMENT Risk management is the systematic process of identifying, analyzing, and responding to project risks. It includes maximizing the probability and consequences of positive events and minimizing the probability and consequences of adverse events to project objectives. It includes: Risk management planningdeciding how to approach and plan the risk management activities for a project. Risk identificationdetermining which risks might affect the project and document their characteristics. Qualitative risk analysisperforming a qualitative analysis of risks and conditions to prioritize their effects on project objectives. Quantitative risk analysismeasuring the probability and consequences of risks and estimating their implications for project objectives. Risk response planningdeveloping procedures and techniques to enhance opportunities and reduce threats from risks to the projects objectives. Risk monitoring and controlmonitoring residual risks, identifying new risks, executing risk reduction plans, and evaluating their effectiveness throughout the project life cycle.

9. PROJECT PROCUREMENT MANAGEMENT A subset of project management that includes the processes required to acquire goods and services to attain project scope from outside the performing organization. It consists of: Procurement planningdetermining what to procure and when. Solicitation planningdocumenting product requirements and identifying potential sources. Solicitationobtaining quotations, bids, offers, or proposals, as appropriate. Source selectionchoosing from among potential sellers. Contract administrationmanaging the relationship with the seller. Contract closeoutcompletion and settlement of the contract, including resolution of any open items.

Production and Operations Management (MB0044)

Set - 1

Work Breakdown Structure The entire process of a project may be considered to be made up on number of sub process placed in different stage called the Work Breakdown Structure (WBS). A typical example of a WBS of a recruitment process is indicated in figure 8.8. WBS is the technique to analyse the content of work and cost by breaking it down into its component parts. Project key stages form the highest level of the WBS, which is then used to show the details at the lower levels of the project. Each key stage comprises many tasks identified at the start of planning and later this list will have to be validated. WBS is produced by identifying the key elements, breaking each element down into component parts and continuing to breakdown until manageable work packages have been identified. These can then be allocated to the appropriate person. The WBS does not show dependencies other than a grouping under the key stages. It is not time based - there is no timescale on the drawing.

3. Take an example of any product or project and explain Project Management Life Cycle.

Making decisions using Quantitative approach involves complex issues and complex decision makings skills. We try to quantify data, devise some models for predicting the likely consequences, and some techniques to arrive at decisions Solving a problem using the quantitative approach involves three steps: defining the problem, constructing a mathematical model, and testing the model and its solutions. In business we do not have complete or reliable data most of the times. We have formulated the equations with presumptions. So, we can verify whether the solution we have obtained is acceptable by testing the solutions with the help of some known outcomes for known variables. This tests the model, as well as the presumptions we might have made. We may have to change the model or the presumptions if, the results obtained are not right. There are different quantitative models : 1. Linear Programming: Linear programming technique is often used for optimising a given objective like: profit or revenue maximisation, or cost outgo minimisation. Distribution of the resources is the critical issue, when there are limited resources and they have to meet competing demands. 2. Transportation Model: Transportation model is concerned with goods from manufacturing centres or warehouses which have to be supplied to depots or retail outlets. The demand and supply position of the places where they are required or produced and the cost of transportation are considered in the model. We use this model to economise. 3. Assignment Model: Allocating jobs or persons to machines, awarding different projects to contractors is done so that maximum returns occur or less expense are incurred. Hence, calls for the use of this model. 4. Inventory Control Model: Inventory control model considers the: Frequency of placing orders Quantities per order considering the cost of placing an order Number of pieces that are to be kept in reserve Rate of consumption Lead time required for the supplier Costs involved in storage We have different models which give solutions to optimisation depending upon the probabilities of patterns of consumption and supply.

Production and Operations Management (MB0044)

Set - 1

5. Waiting Line Models: Queues are formed when the rate of service is at a variance with the rate of arrival. They are formed when the rate of production is less at particular points compared to the previous ones. Sometimes we see multiple service points and a single queue are formed for feeding them. Number of items which includes the following is studied with some special techniques. People to be serviced Rate of service Type of queue discipline that is intended to be followed Policy of priority Tolerable amounts of waiting Others 6. Simulation Models: Simulation models are used when we will not be able to formulate mathematical models. So, we develop a model which resembles a real life situation. Based on this pattern, we predict and plan our procurement, production, delivery and other actions. 7. PERT (Project Evaluation and Review Technique) and CPM (Critical Path Method) Models: When projects are undertaken with a number of activities, some happens in sequence, with gaps of weeks or months and some happens simultaneously. It is important to estimate the time required for completion of the project. A lot of coordination is needed while supplying the resources. It is also equally important to identify the bottlenecks and smoothen resources so that time schedules are maintained. Delayed completion may entail penalties. In this model, we adopt special methods to make the system efficient. work study is being conducted when analysis of work methods is conducted during the period when a job is done on a machine or equipment. The study helps in designing the optimum work method and standardisation of the work method. This study enables the methods engineer to search for better methods for higher utilisation of man and 4.Explain PMIS. What is the difference between Key Success Factor (KSF) and Knowledge (K) Factor? Explain with example.

Project Management Information System (PMIS) are system tools and techniques used in project management to deliver information.
An information system dealing with project management tasks is the project management information system. It helps in decision making in arriving at optimum allocation of resources. The information system is based on a database of the organisation. A project management information system also holds schedule, scope changes, risk assessment and actual results. The information is communicated to managers at different levels of the organisation depending upon the need. The four major aspects of a PMIS are: 1. Providing information to the major stakeholders 2. Assisting the team members, stakeholders, managers with necessary information and summary of the information shared to the higher level managers 3. Assisting the managers in doing what if analyses about project staffing, proposed staffing changes and total allocation of resources 4. Helping organisational learning by helping the members of the organisation learn about project management

Production and Operations Management (MB0044)

Set - 1

Usually, the team members, develop a good PMIS. Organisations tend to allocate such responsibility by rotation among members with a well designed and structured data entry and analytical format.

5. Explain the seven principles of supply chain management. Take an example of any product in the market and explain the scenario of Bullwhip effect. Supply Chain Management is the practice of coordinating the flow of goods, services, information, and finances as they move from raw materials to parts supplier to manufacturer to wholesaler to retailer to consumer. This process includes order generation, order taking, information feedback and the efficient and timely delivery of goods and services. In the simplest terms, SCM lets an organisation get the right goods and services to the place they are needed at the right time, in the proper quantity and at an acceptable cost. Efficiently managing this process involves overseeing relationships with suppliers and customers, controlling inventory, forecasting demand and getting constant feedback on what is happening at every link in the chain. Seven Principles of SCM are: 1. Group customer by needs: Effective SCM groups customers by distinct service needs, regardless of industry and then tailors services to those particular segments 2. Customise the logistics network: In designing their logistics network, companies need to focus on the service requirement and profit potential of the customer segments identified 3. Listen to signals of market demand and plan accordingly: Sales and operations planners must monitor the entire supply chain to detect early warning signals of changing customer demand and needs. This demand driven approach leads to more consistent forecast and optimal resource allocation 4. Differentiate the product closer to the customer: Companies today no longer can afford to stockpile inventory to compensate for possible forecasting errors. Instead, they need to postpone product differentiation in the manufacturing process closer to actual consumer demand. This strategy allows the supply chain to respond quickly and cost effectively to changes in customer needs 5. Strategically manage the sources of supply: By working closely with their key suppliers to reduce the overall costs of owning materials and services, SCM maximises profit margins both for themselves and their suppliers 6. Develop a supply chain wide technology strategy: As one of the cornerstones of successful SCM, information technology must be able to support multiple levels of decision making. It also should afford a clear view and ability to measure the flow of products, services, and information 7. Adopt channel spanning performance measures: Excellent supply chain performance measurement systems do more than just monitor internal functions. They apply performance criteria to every link in the supply chain criteria that embrace both service and financial metrics Bullwhip effect The Bullwhip effect is the uncertainty caused from distorted information flowing up and down the supply chain. This has its affect on almost all the industries, poses a risk to firms that experience large variations in demand, and also those firms which are dependent on suppliers, distributors and retailers. A Bullwhip effect may arise because of: Increase in the lead time of the project due to increase in variability of demand Increase in the stocks to accommodate the increasing demand arising out of complicated demand models and forecasting techniques

Production and Operations Management (MB0044)

Set - 1

Reduced service levels in the organisation Inefficient allocation of resources Increased transportation cost

6. Explain Jurans Quality Trilogy and Crosbys absolutes of quality. List out the pillars of Total Productive Maintenance. Total Quality Management is a philosophy, an approach and a journey towards excellence. The main thrust is to achieve customer satisfaction by involving everybody in the organization, across all functions with continuous improvement driving all activities. TQM systems are designed to prevent poor quality from occurring. TQM helps to improvise every aspect of the business process such as finance and operations management. Jurans quality triology Juran uses his famous Universal Breakthrough Sequence to implement quality programmes. The universal breakthrough sequences are: Proof of need: There should be a compelling need to make changes. Project identification: Here what is to be changed is identified. Specific projects with time frames and the resource allocation are decided. Top management commitment: Commitment of the top management is to assign people and fix responsibilities to complete the project Diagnostic journey: Each team will determine whether the problems result from systemic causes or are random or are deliberately caused. Root causes are ascertained with utmost certainty. Remedial action: This is the stage when changes are introduced. Inspection, testing, and validation are also included at this point. Holding on to the gains: The above steps result in beneficiary results. Having records or all actions and consequences will help in further improvements. The actions that result in the benefits derived should be the norm for establishing standards. Juran has categorised cost of quality into four categories: 1. Failure costs - Internal: These are costs of rejections, repairs in terms of materials, labour, machine time and loss of morale. 2. Failure costs - External: These are costs of replacement, on-site rework including spare parts and expenses of the personnel, warranty costs and loss of goodwill. 3. Appraisal costs: These are costs of inspection, including maintenance of records, certification, segregation costs, and others. 4. Prevention costs: Prevention cost is the sequence of three sets of activities, Quality Planning, Quality Control, and Quality Improvement, forming the triology to achieve Total Quality Management. Jurans argument says that: Quality is the result of good planning considering the needs of both internal and external customers and develops processes to meet them. The processes are also planned to meet them. Quality is built into the system of manufacture, inputs and processes that are on stream like raw material, spare parts, labour, machine maintenance, training, warehousing, inspection procedures, packaging, and others. All these have to follow standards and control exercises to

Production and Operations Management (MB0044)

Set - 1

make sure that mistake do not occur often and that if mistakes do occur then they are corrected at the source. Quality improvement measures are essential to keep the quality culture alive. Newer methods will be found, some operations can be eliminated, improved technology available. In short, as experience is gained things can always be done better. It is for the management to take the initiative and encourage the employees to be on the lookout for opportunities for improvement.

Crosbys absolutes of quality Crosby lays emphasis on top management commitment and responsibility for designing the system so that defects are not inevitable. He urged that there be no restriction on spending for achieving quality. In the long run, maintaining quality is more economical than compromising on its achievement. His absolutes can be listed as under: Quality is conformance to requirements, not goodness Prevention, not appraisal, is the path to quality Quality is measured as the price paid for non-conformance and as indices Quality originates in all factions. There are no quality problems. It is the people, designs, and processes that create problems Crosby also has given 14 points. His approach emphasises on measurement of quality, increasing awareness, corrective action, error cause removal and continuously reinforcing the system, so that advantages derived are not lost over time. He opined that the quality management regimen should improve the overall health of the organisation and prescribed a vaccine. The ingredients are: 1. Integrity: Honesty and commitment help in producing everything right first time, every time 2. Communication: Flow of information between departments, suppliers, customers helps in identifying opportunities 3. Systems and operations: These should bring in a quality environment so that nobody is comfortable with anything less than the best Total Productive Maintenance (TPM) It is a maintenance process developed for productivity. It is a critical adjunct to lean manufacturing. It is a proactive approach that essentially aims to prevent any kind of slack before occurrence. Its motto is "zero error, zero work-related accident, and zero loss. TPM is based on eight Pillars, they are: 1. Focused Equipment & Process Improvement: Measurement of equipment- or processrelated losses & specify improvement activities to reduce the losses. 2. Autonomous Maintenance: Operator involvement in regular cleaning, inspection, lubrication & learning about equipment to maintain basis conditions & spot early signs of trouble. 3. Planned Maintenance: A combination of preventive, predictive & proactive maintenance to avoid losses & planned responses to fix breakdowns quickly. 4. Quality Maintenance: Activities to manage product quality by maintaining optimal operating conditions. 5. Early Equipment Management :Methods to shorten the lead time for getting new equipment online & making defect-free products. 6. Safety: Safety training; integration of safety checks, visual controls & mistake-proofing devices in daily work. 7. Equipment investment & maintenance prevention design: Purchase & design decisions informed by costs of operation & maintenance during the machine's entire life cycle.

10

Production and Operations Management (MB0044)

Set - 1

8. Training & skill building: A planned program for developing employee skills & knowledge to support TPM implementation.

11