ASSIGNMENT

Subject code: MB0028

(3 credits)

Set 1

SUBJECT NAME: PRODUCTION &

OPERATIONS MANAGEMENT

NAME : PRANAY SRIVASTAVA

MBA 2ND SEM

ROLL N: 510933855

L C CODE: 02782

SIKKIM MANIPAL UNIVERSITY

DDE
ASSIGNMENT
 Subject code: MB0028
(3 credits)
Set 1
Marks 60
SUBJECT NAME: PRODUCTION & OPERATIONS MANAGEMENT

Q1. Explain what is meant by capital productivity?

Ans:

Capital Productivity
Capital deployed in plant, machinery, buildings and the distribution systems as well as working capital
are components of the cost of manufacture and need to be productive. Demand fluctuations, uncertainties
of production owing to breakdowns and inventories being created drag the productivity down. Therefore,
strategies are needed to maximize the utilization of the funds allotted towards capital. Adapting to new
technologies, outsourcing and balancing of the workstations to reduce the proportion of idle times on
equipments are the focus of this section.

1 Outsourcing Strategies

When capacity requirements are determined it will be easy to determine whether some goods or services
can be outsourced so that the capital and manpower requirements can be reduced and the available
capacities are used to augment core competencies thus reducing the cost of the product or service to the
customer. However, the following factors may restrict outsourcing

(a) Lack of expertise – the outsourced firm may not have the requisite expertise to do the job required

(b) Quality considerations Loss of control over operations may result in lower quality. This is a risk that
the firm gets exposed to.

(c) Nature of demand – When the load is uniform and steady, it may not be worthwhile to outsourcing.
Absence of supervision and control may be a hindrance to meet any urgent requirements of the customer.
This affects the business especially if no production facilities are built in the organization

(d) Cost when the fixed costs those go along with making the product does not get reduced considerably

2 Methods Improvement

Methods Improvement starts with Methods analysis focus of this process is how a job is done breaking it
down to elemental tasks so that they are amenable for analysis.. This is done for both running jobs and
new jobs. For a new job, the description becomes the input for analysis. For current jobs, the analyst
depends on observations, records and suggestions of the persons involved in the job. When improved
methods are suggested, they are implemented and records created for assessing the consequences of the
methods improvement procedures. The analyst should involve all concerned persons in the process so that
acceptance becomes possible and opportunities open up for further improvements. Moreover, the people
actually involved would be interested in improving their productivity and will help the analyst in the
process.
3 Balancing of Workstations

Assembly lines necessitate out stringing together workstations which carry out operations in a sequence
so that the product gets completed in stages. Since the workflow has to be uniform and operations may
require different periods for completion the necessity of Line Balancing is felt. Capacities at workstations
and the workforce to man are so adjusted that a product in the process of assembly almost approximately
the same amount of time.
4 Rationalization of Packaging Methods

With logistics becoming an important function of the supply chain and outsourcing becoming the
norm, packaging has become an important aspect, packaging has become important . Space is at a
premium and therefore stacking and storing have to more scientific. Movements inside the
premises from one location to another location are being done with automated systems and they need that
the packaging systems are designed for safe transit, continuous monitoring – both for quantities and
operations. In case of outsourced products the materials used and their design should facilitate reuse of
the same which brings in economy.

5 Quality Circles

Kaoru Ishikawa is generally considered to have promoted the concept of Quality Circles. It is well known
that he is the originator of fishbone diagrams to identify the root cause of any problem. The causes for the
existence of a problem are classified as pertaining to the material, processes or method or any factor that
goes into production. The matter is further investigated and pursued till the exact cause is determined.
Quality circles use these principles in solving problems. The teams select projects selected on the above
basis and implement actions to achieve improvement in the processes with a view to improve quality.
Since these activities are carried out without affecting the regular day to day work and involve little
involvement of the managers, team work gets reinforced and results in continuous improvement in
methods and quality. The capital deployed is minimal, if at all, and therefore productivity is enhanced.

Q2. Write a detailed note on Split case order fulfillment methods and mechanization.
Ans:

Split-case Order Fulfillment Methods and Mechanisation

This system looks at situations when bulk supplies in full cases to one or more destinations are not done.
Fulfillment of orders which need different merchandise in different quantities requires that ‘cases’ will
have to be split, and pieces picked, repacked in cartons and ship to the customer. .Mechanisation helps in
improving identification, pickup and repacking the materials in addition to relieving monotony of the
workers. A few strategies of achieving this objective optimally are discussed here.

1 Order Picking Methods

Items as per customer requirements have to be picked and packed in a logical manner and assigned to
personnel so that their productivity is maximized.
Accuracy of fulfillment of order is ensured by two basic factors

a) Order Extent it is defined as the number of order to be picked simultaneously by a picker in an

assignment. This is categorized as discrete order picking in which case a single order is selected at a time
and Batch order Picking in which case the merchandise requirements of many orders are put together and
selected for pick up in the geographical area which is covered in a single pass.
b) Coverage Extent it is the physical area to be traversed by the picker in selecting merchandise for an
assignment within the picking system. The personnel pick up the merchandise from a zone the zone being
a contiguous area with different picking locations. The boundaries may be fixed or dynamically adjusted
to accommodate either personnel or customers. This zone is identified within the picking area. In the
other method called tour picking the entire picking area is considered for picking merchandise. Either of
the strategies is adopted to meet the constraints or opportunities which maximize employee productivity
and the customers’ needs.

2 Sorting and Routing

Sorting is done for the purpose of easing the operation of matching orders, merchandise and the
customers for whom they are done. This activity can be done as and when orders are picked Sort
Immediate or by merging a number of order and batches are made to consolidate the priorities for
execution. This method is called Merge and Sort. The strategy used depends on the total area of the zone,
the number of orders, and the type of merchandise and the economics of balancing all the above.
When orders are routed among those zones where picks are required we call them routing the picks.
When orders are routed from zone to zone, in a particular order, whether any picks are there or not, we
call them chaining. When multiple zones are covered simultaneously in different
Zones we call them parallel routing. As can be discerned, no one single method is suitable for actual
situations on site. They are formulated as a strategy for optimization of resources in view of the
constraints.

3 Order Packing Methods

Order fulfilling methodology covers one more aspect i.e. the order packing methods. When split-case is
executed it becomes necessary that the merchandise is repackaged for shipment to meet the requirements
of the customers. In the first method they are packed as they are picked. This is applicable in cases where
the merchandise is usable by the customer directly and when the tools and packaging materials are
available with the picker and he can pack them throughout the picking area.

4 Classification Schemes

In this section you will come to know about the coding of various methods of split picking and packing.
The letters will uniquely identify the method intended to be used and all personnel in the process will
know disposition status of the merchandise.
D iscrete Order Picking or B atch Order Picking Letter
D or B is used
Z one Picking or Tour Picking
Pack Immediate or Assemble and Pack
BS Batch Order Picking -Sort Immediate
BM Batch Order Picking – Merge & Sort
ZR Zone Picking with Routing
ZC Zone Picking with Chaining
ZP Zone Picking in Parallel
For example, BSDZCA means Batch Order Picking Sort Immediate Discrete
Order Packing Zone Picking with Chaining and Assemble.
With this type of coding 24 ways of representing the type of split order picking and packing are
identifiable.
5 Choice of Optimal Fulfillment Strategies

The choice of order fulfillment strategy depends upon the predominant order characteristics and category
of distribution. They are determined by General order characteristics such as

a) number of line items;

b) quality of pieces per line item

General order categories are

a) Wholesale Distribution – usually large number of pieces of a few items;

b) Retail Distribution – orders for large quantities for a large number of items;

c) Direct Marketing orders for a small quantity;

d) Consumer Distribution small quantities of different items for purposes of evaluation, promotion and
consumption

The performance measures to be satisfied by the choice of strategy are to minimize the costs involved and
maximize desirable characteristics..

They are

a) Minimise the cost of pick and pack for every order;

b) Minimise the cost of shipping per order,

c) Reduce the time required per cycle;

d) To increase the fill rate

e) Improve Accuracy of the elements of the process

f) Traceability and accountability of all transactions.

Advanced technology involving Bar Coding, feeding on line data, high speed processing and distribution
of information across all nodes of the supply chain help in improving efficiency, reduce costs and
improve customer satisfaction.

Q3. Explain strategic management process and strategic decision making in detail.
Ans:

Strategic Management Process

Most of organizational processes depend upon the structure of the organisation, the hierarchical levels,
decision arrival mechanisms, communication systems, authorization processes, implementation
procedures, feedback and monitoring devices to formulate and implement strategies. It is necessary to
ensure that the process is effective and efficient and avoid loss of control. In essence, the purpose of
strategies is to leverage the company’s advantages, prepare for the eventualities of uncertain external
happenings and maximize the chances of success in its endeavors. Organizational goals necessitate the
adoption of certain strategies, which are converted to functional goals in the areas of finance, marketing
and operations. These goals are achieved by adopting strategies arrived at using organizational processes
mentioned above. When these long term strategies are being implemented tactics may have to be
employed to meet short term challenges depending upon situations. The actual activities which result in
outcomes are called operations.
A business strategy is the result of a decision taken at the highest level. They are specific programme of
action which outlines how the resources are deployed to achieve goals in an environment. A general
framework to guide and activate think tanks in the organisation to come up with proposals. Action plans
with time frames, authority hierarchies and feedback mechanisms are formulated and designed. At this
stage detailed scenarios as to the likely consequences are considered and contingency plans worked out
for implementation, if situations call for the same.
Being in readiness with alternatives is a good way of assuring the success of any plan. For example the
production of a model of motor cycle is to be increased by 25% and possibly reduce the price by 10%.
This decision would have been taken as a strategy to meet the increasing demands which are real to enter
a niche market of the competitor to augment marketing department’s claim after a vigorous sales
campaign or any other reason. The strategy for the marketing function would be many like promising
freebies, make the commission attractive for the dealer, to open more service outlets. The operations
strategy would consider the following additional machinery or subcontracting methods to improve
productivity revamping
assembly lines measures to improve motivation promoting existing employees or hire new ones
identifying and developing new suppliers look for opportunities to reduce costs as scaling up provides
scope. The above measures will be under consideration at all times. When a change is considered,
identification of areas of cooperation and collaboration become visible. Opportunities arise for
understanding and resolution of problems. Setting up visible targets to meet deadlines encourages
application of ‘constancy of purpose’ as Deming. This in itself would be a strategy for improving quality
and productivity.

2 Strategic Decision Making Decision making is the most crucial management function.
Decisions commit the organisation and its members to activities which have financial repercussions and
affect the functioning of others who are connected with those. Therefore decisions are taken after lot of
deliberations which involve data gathering, analysis and predicting outcomes. Accuracy of data, their
relevance for the matter under consideration are matters which affect the quality of decisions. In addition,
the following factors also form the basis of decision making:

a) Environmental Scanning The business environment in which the firm exists and has to compete
continually exhibits potential for opportunities and threats. Becoming aware of those and their impact on
the firm by a process of analysis is called environmental scanning. The environment includes the industry,
the marketplace, the governmental agencies, society, ecology, technology, etc. Competitors may be
gaining edge by diversification, making forays into the firm’s niche market by making new and better
products; Suppliers could be forming cartels and preparing to drive hard bargains; The Government could
be passing laws and issuing orders which could affect the supply of materials or restrictions on import and
export or even employment conditions. Adaptation to these dynamic factors by environment scanning and
basic strategic decisions is vital.

b) Core Competencies Each organisation is started by an entrepreneur or a small group of them who
believed in some unique strengths which would give them a place in the market. Utilizing those strengths
the venture would have succeeded and development and expansion take place either laterally or vertically
or in both ways. However, additional strengths or competences would have been acquired to augment the
existing business built on the core competencies with which the organisation had started. Market
knowhow, the learning of the workforce an d additional facilities created, would be continuously
demanding and satisfying new needs. Investors and suppliers would be willing to back an enterprise, who,
they have, seen grow in strength. The developments and improvements both in knowledge and skills
make the core strengths better. This tends to make these an advantage over the competitors who would
have to grapple with these competencies. Using these advantages would form a part of the decision
strategy of the firm. Core processes of an organisation are determined by the core competencies. Four
main core processes are – customer relationship, new product/service development, supplier relationship
and order fulfillment. The emphasis on these processes depends on the type of industry, the length of its
existence and the consequent strengths built up in certain areas, the way earlier successes have been
achieved and the reinforcement they have given to the organisation. One should remember that the
environment is always dynamic and the strategy formulation needs to be constantly updated for making
implementation effective. Ultimately every organisation depends on the core compete cities which gives
it an advantage over the competitors.

Q4. What is TQM? Explain Quality approaches of Deming Wheel and Jurans Quality Triology.
Ans
:
TQM (Total Quality Management):

TQM is viewed from many angles – as a philosophy, as an approach and journey towards excellence. The
main thrust is to achieve customer satisfaction by involving everybody in the organisation – across all
functions – with continuous improvement driving all activities. TQM systems are designed to prevent
poor quality from occurring. The following steps are implemented to achieve Total Quality.
a) Take all measures to know what the customer wants – voice of the customer. Develop methods that
generate facts which can be used for decision making. Do not ignore the internal customer – the next
person in the process.

b) Convert the wants into design specifications that meet or exceed customer expectations.

c) Processes are to be designed so that they facilitate doing the job right the first time. Incorporate
elements that make it impossible to make mistakes. It is called fail saving or fool proofing. The Japanese
call it Pokayoke.

d) Keeping record of all occurrences, procedures followed and consequences. They help in validating the
processes so that continuous improvement becomes possible. More importantly any gaps can be seen and
rectified immediately. One of the basic tenets of TQM is justbbecause something is working well
improvement is not necessary. The search must be continuous to find ways and means to improve every
aspect of the business process – finance, operations and management. Complacency should never be
allowed to creep in at any time. In this aspect, culture plays an important role. All these require top
management commitment.

Approaches to TQM:

Being practiced worldwide by different organisations, TQM has different approaches towards its
achievement. The basic thrust of each of these is realizing excellence. All the approaches have a lot in
common, but the emphasis shifts from one other. Needless to say, each organisation will use any of these
or even a combination to suit its structure, culture and need. Some emphasise on the philosophy of TQM
and the role of management and employees in being aware, committed and act. Some expect us to use
statistics more intensely. Some give us an ‘integrated approach’.

1 Deming Wheel:

Deming’s approach is summarised in his 14 points.

1. Constancy of purpose for continuous improvement

2. Adopt the TQM philosophy for economic purposes

3. Do not depend on inspection to deliver quality

4. Do not award any business based on price alone

5. Improve the system of production and service constantly

6. Conduct meaningful training on the job

7. Adopt modern methods of supervision and leadership

8. Remove fear from the minds of everyone connected with the organisation

9. Remove barriers between departments and people

10. Do not exhort, repeat slogans and put up posters.

11. Do not set up numerical quotas and work standards

12. Give pride of workmanship to the workmen

13. Education and training to be given vigorously

14. State and exhibit top management’s commitment for quality and productivity
Using the above principles, Deming gave a four step approach to ensure a purposeful journey of TQM.
The slope is shown to indicate that if efforts are let up the programme will roll back.

Plan means that a problem is identified, processes are determined and relevant theories are checked out .

Do – means that the plan is implemented on a trial basis. All inputs are correctly measured and recorded.

Check – means that the trials taken according to the plan are in accordance with the expected results.

Act When all the above steps are satisfactory regular production is started so that quality outcomes are
assured

2 Juran’s Quality Triology :

Juran uses his famous Universal Breakthrough Sequence to implement quality programmes. They are

A – Proof of need there should be a compelling need to make changes

B – Project Identification Here what is to be changed is identified Specific projects with time frames and
the resource allocation are decided.

C Organisation with top management’s commitment is made in terms of assignment of persons,

responsibilities fixed

D Diagnostic journey Each team will determine the problems result from systemic causes or random or
deliberately caused. Root causes are ascertained with utmost certainty.

E Remedial Action – This is the stage when changes are introduced. Inspection, testing and validation are
also included at this point.

F 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 resulted in the benefits derived should
be the norm for establishing standards.
Juran has categorized cost of quality into four categories
(a) Failure costs – Internal These are costs of rejections, repairs etc in terms of materials, labour, machine
time and loss of morale;

(b) Failure costs – External – These are costs of replacement, onsite rework including spare parts and
expenses of the personnel, warranty costs and loss of goodwill;

(c) Appraisal Costs costs of inspection, including maintenance of records, certification, segregation costs,
etc.

(d) Prevention costs: The sequences of three sets of activities Quality Planning, Quality Control and
Quality Improvement form the trio logy to achieve Total Quality Management. His arguments are that

1. 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.

2. 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, etc. They have to be made to follow standards and control exercised to make sure that
mistakes do not occur often and if they are they are corrected at the source.

3. 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 look out for opportunities for improvement.

Q 5. Compare Workflow with BPM. Explain in detail the Project Development process Cycle?
Ans:

Workflow and BPM:

Workflow contains a number of entities in a unidirectional path with nodes. Each of these nodes may
contain a number of elements – material, data, attributes, value. They come together for integration or
even for division and will have transformation going on. The activities that make these transformations
are the sub-processes. So, there are changes taking place along the path and at the end we have a
completed process. Every detail has been worked out, the outcomes verified and corrected brought into
the flow so that nothing untoward occurs. The only thing lacking is flexibility that business situations
demand all the time and because the enterprise has to perform and excel in conditions of uncertainty,
improvement and competition. Fortunately these are exceptions. While majority of the humdrum goes on
smoothly, we need to manage exceptions. Notably, exceptions create new processes, opportunities and
help us get new insights into the processes. It has been found that 80% of process costs arise out of
managing exceptions. These happen at many points in the value chain. Managing these is Business
Process Management. Workflow does not offer options in the way processes are conducted. They have
fixed routes, activities and schedules. Actually, there is not much ‘management’. BPM goes ahead not on
a fixed track, but on bumpy roads, swerving sharply to avoid collisions and overtaking the vehicles that
are ahead. It calls for all management skills.

The Project Management Life Cycle

A life cycle of a project consists of the following

a) Understanding the scope of the project,

b) Establishing objectives of the project,

c) Formulating and planning various activities,

d) Project execution and

e) Monitor and control the project resources.

Phases of Project Management Life Cycle:

1 Analysis and Evaluation Phase

This is the initial phase of any project. In this phase information is collected from the customer pertaining
to the project and the requirements are analyzed. The entire project has to be planned and it should be
done in a strategic manner. The project manager conducts the analysis of the problem and submits a
detailed report to the top management. The report should consist of project justification, details on what
the problem is, methods of solving the problem, list of the objectives to be achieved, project budget and
the success rate of completing the project. The report must also contain information on the project
feasibility, and the risks involved in the project.

The important tasks of this phase are as follows:

Specification Requirements Analysis (SRA): It has to be conducted to determine the essential

requirements of a project in order to achieve the target.

· Feasibility study: To analyze whether the project is technically, economically and practically feasible to
be undertaken.

· Tradeoff analysis: To understand and examine the various alternatives which could be considered

· Estimation: To estimate the project cost, effort required for the project and functionality of various
processes in the project

· System design: choose a general design that can fulfill the requirements

· Project evaluation: evaluate the project in terms of expected profit, cost and risks involved

2 Marketing Phase

A project proposal is prepared by a group of people including the project manager. This proposal has to
contain the strategies adopted to market the product to the customers.

3 Design Phase

This phase involves the study of inputs and outputs of the various project stages. Inputs received, consists
of project feasibility study, preliminary project evaluation details, project proposal and customer
interviews. Outputs produced, consists of system design specifications, functional specifications of the
project, design specifications of the project and project plan.

4 Execution Phase

In this phase the project manager and the teams members work on the project objectives as per the plan.
At every stage during the execution reports are prepared.

5. Control Inspecting,
Testing and Delivery Phase

During this phase, the project team works under the guidance of the project manager. The project
manager has to ensure that the team working under him, implements the project designs accurately. The
project has to be tracked or monitored through its cost, manpower and schedule. The project manager has
to ensure ways of managing the customer, marketing the future work and ways to perform quality control
work

6. Closure and Post Completion Analysis Phase

Upon satisfactory completion and delivery of the intended product or service the staff performance has to
be evaluated. Document the lessons from the project. Prepare the reports on project feedback analysis
followed by the project execution report.What is involved in the above phases?
The preparation stage involves the preparation and approval of project outline, project plan and project
budget. The next stage involves selecting and briefing the project team about the proposals followed by
discussions on the roles and responsibility of the project member and the organization. The feasibility or
research stage will establish whether the project is feasible or not and establishes the risk factors likely to
be faced during the course of the project execution and the related key factors to overcome the problems.
A detailed definition and plan for the project and its execution is prepared by the team and coordinated by
the project manager. The implementation stage involves the execution of the project as per the plan. This
also involves careful monitoring of the project progress and managing the changes if any within the scope
of the project framework.
The final stage involves satisfactory delivery of the product/service to the customers. Upon completion a
project review is to be conducted by the project manager along with team members, sponsors and
customers as the case may be to discuss about the progress, performance, hurdles that were overcome and
problems faced so that such instances could be avoided in future projects.

Q6. What is JIT? Explain Value engineering with examples.

Ans:

JIT : JIT can be considered to be a philosophy of manufacturing founded on the principles of elimination
of all waste and thereby increasing productivity. When the philosophy is applied at workplace, the
approach results in providing parts in just right quantities at the right time. This results in economy of
material and time thus lowering the costs and increasing productivity. Since no extra parts are available,
production of only good parts is forced on the system. JIT has been extended to mean continuous
improvement. These principles are being applied to engineering, purchasing, accounting and data
processing also. We will see how JIT helps in implementing Lean Production systems. In these days
when technology is able to provide us with highly accurate equipments which have high capacities and
the business has become global meaning that both suppliers and customers are widely accessible. To
remain competitive, cost efficiencies have become compulsory. JIT helps in this process. It is extended to
the shop floor and inventory systems of the vendors also. One of the main challenges for JIT is frequent
changes in production schedules owing to the changes in demand. This causes the procurements plans to
change. In the present day scenario where most manufacturing concerns depend upon a number of
suppliers, who in turn may outsource parts and services, disruptions have a cascading effect. However,
there is a limit to the agility that a company can build into the system. Communication right through the
supply chain helps in reducing inventories and keep the flow lines smooth. Success of JIT depends upon a
lot of preparation and committed implementation.

Value Engineering / Value Analysis:

Basically it is a methodology by which we try to find substitutes for a product or an operation. It can be
conducted both internally and externally. The concept took shape during the Second World War. The
thinking process calls for a deep study of a product – the purpose for which it is used, the raw materials
used, the processes of transformation, the equipment needed etc. and question whether what is being used
is the most appropriate and economical. This applies to all aspects of the product. For example, let us
consider a component needs a round brass rod as raw material in size 21.5 mm. Diameter. It has seven
operations – cutting, drilling, chamfering boring. milling, plating and polishing. Value analysis considers
all aspects of each of these and investigates whether any of them can substituted by another material, a
different size, a different tool, a different machine, a different cot sequence, a different tool for an
operation, a different chemical, a different concentration, a different voltage, shorter time or processing.
Studies can be conducted to verify whether any operation can be eliminated.
Simplification of processes reduces the cost of manufacture. Every piece of material and the process
should add value to the product so as to render the best performance. Thus there is an opportunity at every
stage of the manufacturing and delivery process to find alternatives which will increase the functionality
or reduce cost in terms of material, process and time. It should be remembered that we are not seeking a
cost reduction sacrificing quality. It has been found that there will be an improvement in quality when
systematic value engineering principles are employed.