1.

6 Operations Management

1. Operations Management: product strategies – Product life cycle – Productive system types – Impact
of technology and organization of the operations function – Requirements of forecasting for operations.

2. Plant Location and Types of Plant Layout: product planning and control – Inventory planning and
control – Materials requirements planning – Planning production in aggregate terms.

3. Job Designing: work study and time study – Statistical quality control methods – Japanese
manufacturing systems – Flexible manufacturing system – Operations systems of the future.

4. Total Quality Management: trends in quality management benchmarking and business process
reengineering, Kaizen – Six Sigma Motorola systems – Quality criteria based on Deming prize – Malcolm
Baldrige Award. Quality Management Systems, ISO Standards.

5. Supply Chain Management: concept of SCM. Operating model for supply chain. Managing the
external and internal supply chain. Global SCM and sourcing.

References:

 Modern Production Management – Buffa Elwood. S, and Rakesh K. Saren, John Wiley and Sons, 2003.

 Production and Operation Analysis – Steven Nahmas

 Cases in Production / Operations Management – K.N. Krishnaswamy

 The Benchmarking Management Guide – American Productivity and Quality Center, Productivity Press,
USA, 1993.

 Total Quality Management – Dale H. Besterfield and others – Pearson Education, New Delhi, 2003.

 Total Quality Management – Poornima Choudhary – Pearson Education – New Delhi, 2002.

 Total Quality Management – Sridhar Bhatt.

 Supply chain Management theory and practices – Mohanty and Deshmukh, Biztantra 2005.
Unit 1
1. Operations Management: product strategies
– Product life cycle – Productive system types –
Impact of technology and organization of the
operations function – Requirements of
forecasting for operations.
Introduction

Operations Management is the management of processes or systems that create

goods and/or provide services.
According to Everett E Adam and Ronald J Ebert, “Operation Management is that the
management of the conversion method, that converts land, labor, capital and management input
into desired outputs of products and services.”

According to Chase-Jacobs-Aquilano, “Operation Management is defined because the style

operation and improvement of the system that crate and deliver the company’s primary product
and services.”

According to W. J. Stevenson, “Operation Management is that the management of systems or

method that makes merchandise and provides services.”

What is Operations Management -The term operations management refers to the direction and
management of the processes that remodel input into product and services. broadly speaking
understood, operations management underlines all purposeful areas, as a result of processes are
found all told business activities. Narrowly understood, an operation refers to a specific
department or additional possible many departments. The operations space manages the
processes that produce the first services or product for the external customers however is closely
committed the opposite areas of a firm. With either the broad or slender read, managing
operations is crucial to every of a company as a result of only through prosperous management
of individuals, capital, info and materials will it meet its goals. As tomorrow’s manager, you need
to perceive the basics of operations, despite your talent space, current major or future career path.
As you study operations management keep 2 principles in mind. Operations Management
Definition, Meaning of –

What is Operations Management

Each a part of a company has its own identity and however is connected with operations.
Production and Operation Management is concerning the transformation of production and
operational inputs into outputs that once distributed meet the wants of shoppers.

Operation Management is called Transformation Process

Operations Management transforms inputs labor, capital, equipment, land, buildings, materials
and data into outputs goods and services that give supplemental worth to customers. Figure
summarizes the transformation method. The arrow labeled Transformation System is that the
crucial component within the model that may confirm however well the organization produces
goods and services that meet client wants it doesn’t matter whether or not the organization may
be a for profit company, a non-profit organization spiritual organizations, hospitals etc. or a
agency all organizations should try to maximize the standard of their transformation processes to
fulfill client wants.

A service example of the strategic importance of the transformation method is ING Bank, a
financial organization that conducts all banking transactions through the web, Phone and Email.
ING maintains no ancient bank facilities, aside from the buildings that house the staff that
execute remote transactions with ING’s customers. This strategy ends up in tremendous price
savings and competitive advantage to ING by not having to pay capital resources toward land
and buildings that traditional banks should pay. Consequently, ING can give its customers higher
interest rates on savings accounts and lower interest rates on loans.

Differentiate between Operations Management and Production Management

Operations Management: The study of set of activities comprising management, planning and
designing of business operations within the field of producing of products and services is termed
as operations management. The aim of operations management is to create sure that the
operations of a business are economical and effective and lead to minimum of wastage.
Operations management tries to chop down resources concerned in operations whereas at a
similar time creating operations more practical and productive. Actually operations management
is a lot of involved on processes than folks or product. Operations management during an
exceedingly in a very shell is using physical resources in an optimum manner, changing input
into output, thus on provide to the market the specified and finished product.

Production Management: Production management on the opposite hand focuses specifically on

the assembly of products and services and is changing rated upon churning output from input.
It’s a broad add of activities that move into mathematician material into final, finished product.
One might feel that production management may be a set of operations management, however
production management is itself may be a broad subject that includes production planning and
management, inventory management and operations management. Production management
includes all management activities spanning choice. Designing, operating, dominant and change
production system.

Source: http://thebizmanagementguide.com/

Operations strategy/Product strategy

A plan specifying how an organization will allocate resources in order to support

infrastructure and production. An operations strategy is typically driven by the
overall business strategy of the organization, and is designed to maximize the
effectiveness of production and support elements while minimizing costs.
Operations strategy is a long range business plan for the company's products and
will provide a road map for the operational functions to be pursued. Therefore, the
strategic decisions include the capacity to be built into the production system the
types of processes and manufacturing technology to be adopted the nature of
products to be produced, and the type of material flow and other logistics required
to achieve the level of performance.
Productive system types

The combination of operations and activities stated above employed to

create goods and services are known as manufacturing system. A
manufacturing system therefore may be looked upon as an independent
group of sub-systems, each sub-system performing a distinct function.
Different sub-systems may perform different functions, yet they are
inter-related and require to be unified to achieve overall objectives of the
organization.

Manufacturing system needs to interact with both internal and external

environment. The internal environment is the combination of
engineering, marketing, personnel and accounts activities whereas
external environment comprises of customers, competitors, suppliers,
labor unions etc.
The selection of the manufacturing system is a strategic decision for
most organizations since changes at a later date arc very expensive to
make. The systems selected should be such that it can give the desired
output, required quality and is cost-effective.
FACTORS INFLUENCING CHOICE OF MANUFACTURING
SYSTEM
There is no best manufacturing system for any product. The choice of
the system depends on various circumstances but it must meet two basic
objectives, namely -
(i) It must be able to meet the specifications of the final product, and
(ii) It must be cost effective
The product specifications can be met by choosing the right technology
but that is not always an easy task. Since stricter specifications add to
the cost of the product, there is always a trade off between the desired
specifications and the cost to achieve such specifications. For example,
sophisticated injection moulding machines and high quality plastics can
produce excellent dolls cheaply provided they are produced in volume.
However, if their demand is limited, they may not be able to compete
with “home made” dolls produced in small quantities and sold at a
fraction of the price of the moulded version.
Various factors which determine the choice of the manufacturing process
are as follows:
(a) Effect of volume/variety
One of the major considerations in the process selection is the
volume/variety of the products.
Relationship between degree of repetitiveness & transformation Process
High product variety require highly skilled labour, general purpose
machines, detailed production planning and control system.
On the other hand low product variety (i.e. one or few products
produced in large volumes) enables the use of low skilled labor, highly
automated mass production processes using special purpose machines
and simple production planning and control systems.
Fig. exhibits the relationship between output and the transformation
process. The horizontal axis shows the degree of repetitiveness
represented in terms of batch size, one end showing the products
produced in batches of one and other end representing products
produced in very large batch sizes.
The vertical axis represents the transformation process, the top
representing the project form where each project is followed by another
(no two projects being alike) and the bottom representing the process
form where the single product with highly continuous material flow (e.g.
as in refinery, sugar mill) is produced.
Shaded area in each bar suggests the manufacturing system desirable for
the indicated volume. Unshaded area in the lower portion of the column
implies that it is inadvisable to use the continuous form when the batch
is really small. Similarly, when the batch is really large, it is not at all
advisable to use the project form.
For these reasons, decisions involving process selection must be taken
while formulating the corporate strategy of the firm

(b) Capacity of the plant

The projected sales volume is a major influencing factor in determining
whether the firm should go in for intermittent or continuous process.
Fixed costs are high for continuous process and low for intermittent
process while variable costs are more for the intermittent process and
less for continuous process. Intermittent process therefore will be
cheaper to install and operate at low volumes and continuous process
will be economical to use at high volume.
Effect of volume on manufacturing process selection

(c)Flexibility
Flexibility implies the ability of the company to satisfy varied customers
requirements. Flexibility and product variety are inter-related. If more
variety is to be manufactured, the manufacturing facilities will have to
be commonised and depending upon the volume, the extent of
commonalities will require to be justified. Greater commonalities
demands intermittent manufacturing which is associated with higher
inventories, large manufacturing lead times and elaborate planning and
control.

(d) Lead time

Lead times more appropriately called delivery lead times expected by
the customers (i.e. how soon the demand has to be met without losing on
sales) is another major influencing factor in a competitive market. As a
general rule, faster deliveries are expected in a competitive market. The
product, therefore, may require to be produced to stock using principles
of batch production/mass product

(e)Efficiency
Efficiency measures the speed and the cost of the transformation
process. Efficiency is the greatest when the product is mass producted.
But to mass produce a product, greater sales volumes are required.
Therefore, depending upon the sales volume, product variety will have
to be considered and the process which will give the best efficiency in
terms of machine and manpower utilization will have to be selected.

(f)Environment
Environment brings in new technologies and forces the adoption of new
process of manufacturing. For example, wooden furniture is gradually
being replaced by metals and plastic. A furniture manufacturing unit will
have to change its technology (i.e. change from one off production to
batch production) to fall in line with changing times. Similarly, as
market preferences change due fashions or other reasons, the
manufacturing process has to be changed accordingly.
CLASSIFICATION OF MANUFACTURING SYSTEMS

Classification of manufacturing system

INTERMITTENT SYSTEM

In this system, the goods are manufactured specially to fulfill orders

made by customers rather than for stock. Here the flow of material is
intermittent. Intermittent production systems are those where the
production facilities are flexible enough to handle a wide variety of
products and sizes. These can be used to manufacture those products
where the basic nature of inputs changes with the change in the design of
the product and the production process requires continuous adjustments.
Considerable storage between operation is required, so that individual
operations can be carried out independently for further utilization of men
and machines. Examples of intermittent system are: machine shops,
hospitals, general office etc.

Chief characteristics of intermittent system are: -

(i) Most products are produced in small quantities
(ii) Machines and equipment are laid out by process.
(iii) Workloads are generally unbalanced.
(iv) Highly skilled operators are required for efficient use of machines
and equipment.
(v) In-process inventory is large.
(vi) Flexible to suit production varieties.

Planning and Control Mechanism for Intermittent System : -

Organization of production planning and control operations in

intermittent systems needs estimation of jobs, routing, scheduling,
preparation of manufacturing orders, dispatching and production control.
Here customer provides the blue print and other specification regarding
the product to be manufactured. Then the organization formulates their
production strategy to suit the needs of the customer.
(i) This type of manufacturing system covers specialties of every type
and sub assemblies or parts which are required to manufacture the
product. Due to this there is continuous planning at each fresh order.
(ii) Due to variety of orders and different lot sizes, the system needs wise
and careful sequencing of operations which makes routing and
scheduling operations elaborate and complex.
(iii) Proper regulation and close inspection is required at different stages
of production.
(iv) Storage facilities are to be provided at each operational stage.
So the job of stock control of raw materials, semi-finished goods and
finished goods should be entrusted to competent personnel, who can
regulate the operations and flow of material smoothly.

Intermittent systems can be further classified into two categories,

namely

(a) Project production

Project production where a single assignment of complex nature is
undertaken for completion within the given period and within the
estimated expenditure.
(b) Job production
Jobbing production where one or few units of a product are produced to
customer’s requirement within the given date amid within the price fixed
prior to the contract.
(c) Batch production
Batch production where limited quantity of each type of product is
authorized for manufacture at a time.

CONTINUOUS SYSTEM
In this system the items are produced for the stocks and not for specific
orders. Before planning manufacturing to stock, a sales forecast is made
to estimate likely demand of the product and a master schedule is
prepared to adjust the sales forecast according to past orders and level of
inventory. Here the inputs are standardized and a standard set of
processes and sequence of processes can be adopted. Due to this routing
and scheduling for the whole process can be standardized.
After setting of master production schedule, a detailed planning is
carried on. Basic manufacturing information and bills of material are
recorded. Information for machine load charts, equipment, personnel and
material needs is tabulated. In continuous manufacturing systems each
production run manufactures in large lot sizes and the production
process is carried on in a definite sequence of operations in a pre-
determined order. In process storage is not necessary which in turn
reduces material handling and transportation facilities. First in first out
priority rules are followed in the system. In short, here the input-output
characteristics are standardized allowing for standardization of
operations and their sequence.

Production Control Mechanism for Continuous manufacturing system: -

In this system the control mechanism is not as elaborate and complex as
for intermittent system. In continuous system large quantities of
standardized products are produced using standardized production
process.

Following points of control mechanism are worth noting for such a

system

(i) This system does not involve diverse work, due to which routing
standardized route and schedule sheets are prepared.

(ii) In case of standard products meant for mass production, master route
sheets are prepared for more effective co- ordination of various
departments.

(iii) Scheduling is required to rate the output of various standard

products in their order of priority, operations and correct sequence to
meet sales, requirements.

(iv) Work relating to dispatching and follow-up is usually simple.

Dispatch schedules can be prepared well in advance in such systems.
Continuous system can be divided into two types of production, namely

(A) Mass & (B) Process production.

 Mass and flow production where a production run is conducted either
on a single machine or on a number of machines, arranged according to
the sequence of operations and several number of a product are
manufactured at a time and stocked in warehouse awaiting sales.

INTERMITTENT PRODUCTION SYSTEM

PROJECT PRODUCTION

Project production is characterized by complex sets of activities that

must be performed in a particular order within the given period and
within the estimated expenditure. Where output of a project is a product,
such products are generally characterized by immobility during
transformation. Operations of such products are carried out in “fixed
position assembly type of layout” which can be observed in production
of ships, locomotive and aircraft, construction of roads, buildings, etc.

Characteristics of Project Production : -

(A) Definite beginning and definite end

Each project has a definite beginning and a definite end.
(B) “Fixed position” layout
Where the output of a project is a product, such products are generally
characterized by immobility during transformation. Operations on such
products are carried out in “fixed position assembly type of layout”
which can be observed in production of ships, locomotive, aircraft,
construction of roads/ buildings, etc.

(C) High cost overruns

Often delays take place in the completion of the projects. Such delays
are generally very expensive due to escalation in the cost of factors of
production and incident of penalties.

(D) Personnel problems

Project production has many personnel related problems namely:
• When there is a fast build up, staff is either borrowed from other
departments or hired for short duration. Therefore, personnel involved in
the project have limited (or short lived) interest in the project.
• Since each project has a limited duration, the staff starts spending more
time forgetting prepared for the next project.
•Site for the project may be in the underdeveloped region and it may
change from project to project which causes dislocation of the normal
life.
Importance of Project Production: -

(A) Non -uniform requirement of resources

Requirement of resources for project production is not uniform. At the
end of the project, resources from the project are redeployed elsewhere
in other projects. Even during the life of the project, requirement of
resources is not uniform. Generally resource requirement (men,
materials, money, etc.) in the beginning of the project is low which
builds up fast with the progress of the project as more and more
resources are absorbed, and then it levels off until there is gradual
cutback as the project approaches completion.

(B) Involvement of different agencies

A project generally involves many tasks, each having its own
specialization to be performed by different agencies. The tasks generally
have strict precedence (i.e. certain tasks must be completed before the
next begins) amid as such co-ordination between agencies is of utmost
importance.

(C) Scheduling and control

Because of large number of activities, involvement of different agencies
and strict precedence requirements, scheduling and control assumes
great importance. Some network planning techniques like PERT and
CPM have been found to be very useful to overcome the problems
mentioned above.
JOB PRODUCTION

Jobbing production is characterized by the manufacture of one or few

numbers of a single product designed and manufactured strictly to
customer’s specifications, within, the given period and wit/tin the price
fixed prior to tile contract. Some typical examples of industries engaged
in jobbing production are: general repair shops; special purpose machine
tool manufacturers; workshops to manufacture jigs and fixtures for other
units; building contractors; tailoring shops manufacturing made-to-
measure suite of clothes; manufacturers of ships, cranes, furnaces, turbo-
generators, pressure vessels; and others manufacturing articles made to
customers orders.
Characteristics of Job production

(A) Disproportionate manufacturing cycle time

A considerable amount of pre-planning and organization is necessary in
such a venture. Relatively long delays occur at the assembly as well as at
the materials processing stages due to lack of materials or components,
imbalanced work flow, design changes, design errors detected during
manufacture, inaccurate work measurements, etc. which tend to lengthen
the manufacturing cycle time. At times, tile time needed to design the
product exceeds its manufacturing time.

(B) Large work-in-progress

The work-in-progress inventory in a jobbing production is generally
very large as detailed scheduling and progress control in this type of
production is economically infeasible. For various reasons, jobs get
delayed causing temporary work shortages. To overcome work shortages
and keep men and machines busy, more work is released to the shops
which in turn increases work-in-progress.

(C) Limited functions of production planning and control

The success of jobbing production mainly depends on the ability of the
engineer incharge of the contract.

(D) Materials are indented and purchased on receipt of orders unlike in

batch or mass production where material requirements are planned well
in advance.

(E) Process planning activity is almost absent. Drawings and

specifications are directly given to the supervisor who is expected to
decide work methods, select optimum process, fix up machine tools to
be used and estimate time required completing an operation.

Importance of Job production: -

(A) Small production runs

Jobbing production is characterized by the manufacture of one or few
pieces of a product at a time under a separate contract, the production is
made strictly to customers’ specifications.
(B) Discontinuous flow of materials
The flow of materials and components between different stages of
manufacture is highly discontinuous due to imbalance in operation wise
work content.
(C) General purpose machines and process layout
Plant and equipment is designed or procured and arranged to obtain
maximum flexibility. General purpose machines and handling
equipments capable of performing variety of operations with minimum
set-tip times are installed in lie of variety in products. Tile machines are
arranged to give process layout - layout by function. Similar machines,
capable of doing similar type of operations, are grouped together.
Presses, for example are kept at one place; milling machines are placed
at another place; drilling machines are kept at third place; and so on and
so forth. Each group of machines is usually designated as a work centre
or a section or a shop.
The grouping of machines gives a lot of flexibility in loading and
scheduling. Temporary machine breakdowns and operator’s absenteeism
can be taken care of by shifting jobs to another machine or shifting
operators from less important jobs to important jobs.
(D) Highly skilled labour
The labor force is usually highly skilled-highly qualified trade
apprentices who are expected to work from minimum instructions.
Instructions regarding “what to make” are issued in the form of
specifications while instructions as to “how to manufacture” are usually
oral. The workmen being highly skilled are expected to work
independently and display a great deal of initiative and judgment. They
are required to set up their own machines and prepare their OW special
tools or production aids in order to further the manufacture of a part or a
assembly.
(E) Highly competent knowledgeable supervision
Highly competent general engineers are engaged as foreman in the base
workshop and a group of site engineers, practical men, with thorough
training, capable of taking independent charge of each contract are
employed to work at site. Therefore, these engineers (supervisors) in a
jobbing production are the reservoir of job knowledge. The supervisor
besides being able administrator is expected to improvise and determine
best work methods, determine tool requirements, select the best process
and provide management with reliable estimates of labor and materials
for specific orders. The span of control - the number of workmen to be
supervised by a supervisor - is kept low because of technical nature of
the job.
(F) Simple Mechanism
Tools control function is simple. Standard tools are stocked while special
tools are either made on the shop floor by the operators or purchased on
request from supervisor.
(G) Decentralized Process
The scheduling activity is more or less decentralized. A schedule is
prepared to show the start and completion date of each major component
of the product. Job tickets giving completion date of each component are
raised and given to the shop. The activity of day to day scheduling is left
to the individual shop supervisor.
EXAMPLE OF JOB PRODUCTION SYSTEM
Job production involves firms producing items that meet the specific
requirements of the customer. Often these are one-off, unique items such
as those made by an architect or wedding dressmaker. For an architect,
each building or structure that he designs will be different and tailored to
the needs of each individual client.
With job production, a single worker or group of workers handles the
complete task. Jobs can be on a small-scale involving little or no
technology. However, jobs can also be complex requiring lots of
technology.
With low technology jobs, production is simple and it is relatively easy
to get hold of the skills and equipment required. Good examples of the
job method include:
Hairdressers
Tailoring
Painting and decorating
Plumbing and heating repairs in the home
High technology jobs are much more complex and difficult. These jobs
need to be very well project-managed and require highly qualified and
skilled workers. Examples of high technology / complex jobs include:
Film production
Large construction projects (e.g. the Millennium Dome)
Installing new transport systems (e.g. trams in Sheffield and
Manchester)
ADVANTAGES
The advantage of job production is that each item can be altered for the
specific customer and this provides genuine marketing benefits. A
business is likely to be able to ‘add value’ to the products and possibly
create a unique selling point (USP), both of which should enable it to
sell at high prices.
DISADVANTAGES
Whether it is based on low or high technology, Job production is an
expensive process as it is labour intensive (uses more workers compared
to machines). This raises costs to firms as the payment of wages and
salaries is more expensive than the costs of running machines.
BATCH PRODUCTION

Batch production is characterized by the manufacture of a limited

number of product (but many such, quantities of different products)
produced at regular intervals and stocked in warehouses as finished
goods (or finished parts,) awaiting sales (or withdrawal for assembly).
Typical examples of batch production are : Process industries such as
pharmaceuticals, paints, chemicals; medium and heavy engineering
industry engaged in the manufacture of electric motors, switch gears,
heavy motor vehicles, internal combustion engines; manufacturers of
ready made garments; manufacturing and assembly shops such as
machine tools; sub-contractors which take on machining of batches of
components to the drawings of a large manufacturer.
Batch production is used to produce or process any product in groups
that are called batches, as opposed to a continuous production process,
or a one-time production. An example of batch production can be found
in a bakery. The products, for example bread, are made in batches of
however many will fit in the baker's oven at a time. When that batch is
made, the baker will start the process again with a new batch. Batch
production techniques are used in the manufacture of specialty
chemicals such as active pharmaceutical ingredients, inks, paints and
adhesives.
In the manufacture of inks and paints, a technique called a color-run is
used. A color-run is where one manufactures the lightest color first, such
as light yellow followed by the next increasingly darker color such as
orange, then red and so on until reaching black and then they start over
again. This minimizes the cleanup and reconfiguring of the machinery
between each batch. White (by which is meant opaque paint, not
transparent ink) is the only color that cannot be used in a color run due
to the fact that a small amount of white pigment can adversely affect the
medium colors.
There are inefficiencies associated with batch production. The
production equipment must be stopped, re-configured, and its output
tested before the next batch can be produced.
Time between batches is known as 'Down Time' where the factory would
make seasonal items or consumables such as toasters where no one can
predict the quantity needed.
There are several advantages of batch production; it can reduce initial
capital outlay because a single production line can be used to produce
several products. As shown in the example, batch production can be
useful for small businesses who cannot afford to run continuous
production lines. Also, companies can use batch production as a trial
run. If a retailer buys a batch of a product and people do not buy them
then the producer can cease production without having to sustain huge
losses. Other types of production include: assembly line, job production,
continuous, cell, and project.

Characteristics of batch production: -

(A) Supervisor to possess knowledge of a specific process
The supervisors have considerable knowledge of a specific process.
Supervisor in the grinding section for example, may not know about
turning and drilling work but is expected to P055C55 a fund of
knowledge of different types of grinding operations. Similarly, a
supervisor in the gear shop is expected to have sound knowledge in
working of different types of gear cutting machines.
(B) General purpose machines and process type of layout
Plant and equipment is procured and arranged to obtain maximum
flexibility. General purpose machines and handling equipments capable
of performing variety of operations with minimum set-lip tunes are
installed in lieu of variety of products. The machines are arranged to
give process layout- layout by function. Similar machines capable of
doing similar types of operations are grouped together and kept at one
place. Presses, for example, are put together and kept at one place,
milling machines are placed together at another place, drilling machines
are kept at the third place, and gear cutting machines are located at the
fourth place and so on. Each group of machines is usually designated as
a work centre or a section or a shop.
(C) Manual materials handling:
Materials handling in batch production as compared to jobbing
production are small. Individual components and parts arc placed in
trolleys or in bins and are transported as unit loads. Materials handling
may be mechanized by deploying power driven trucks.

(D) Manufacturing cycle time affected due to queues

The manufacturing cycle time is comparatively smaller than jobbing
production but is much more than mass and flow production. The
batches of work tend to queue up at different machines due to differing
cycle times, batch sizes and sequence of operations.
(E) Large work-in-progress
Work in progress is comparatively large due to varying work content of
different components, imbalances in manufacturing times, formation of
queues between the machines.
(F) Need to have production planning and control
Functions of production planning and control in a batch production unit
are more complex than those in jobbing production or mass and flow
production.
• Materials control and tools control functions are important. Scientific
stock-control system needs to be used to ensure routine replenishment.
• Detailed operational layouts and route sheets are prepared for each part
of the product.
• Lo and scheduling needs to be more detailed and more sophisticated
since
every machine requires to be individually scheduled.
• Progressing function is very important to collect information on
progress of work.
A separate progress card needs to be maintained to record progress of
each component.
• Expediting is generally necessary since quite often jobs, due to
imbalances in work content, tend to lag behind.

Importance of Job production: -

(A) Short runs
Batch production is also characterized by short production runs and
frequent changes of set up. The equipment and the assembly set up is
used for a limited number of parts or assemblies and is then changed to
make. a different product. The production is generally made to stock.
(B) Skilled labor in specific trades
The labor force is expected to possess skill in one specific
manufacturing process turning, milling, drilling, welding, grinding,
hobbing, filling etc. Simpler machine set-ups may be performed by the
operator but those involving complex operations arc set by the separate
machine setter.
(C) Limited span of control
The amount of supervision required in batch production is lower than
that of jobbing production and is dependent of the batch size. The ratio
of direct workmen to supervisors is more or less a function of batch size.
The smaller the batches, the lower are the ratio of direct workers to
supervisors, and vice-versa. This is because smaller lots require each
supervisor to spend a great deal of their time in allocating new work,
giving instructions, follow up n the shop floor for proper movement of
materials from and to the machines, identifying delays and interruptions,
and arranging, in consultation with planning, work load in his section to
keep his men busy.
(D) Flexibility of production schedules
Disruptions due to machine breakdowns or absenteeism do not seriously
affect production as another machine can be used or another operator
from another machine can be shifted.

EXAMPLE OF BATCH PRODUCTION SYSTEM

As businesses grow and production volumes increase, the production
process is often changed to a “batch method”. Batch methods require
that a group of items move through the production process together, a
stage at a time.
For example when a bakery bakes loaves of wholemeal bread, a large
ball of wholemeal dough will be split into several loaves which will be
spread out together on a large baking tray. The loaves on the tray will
then together be cooked, wrapped and dispatched to shelves, before the
bakery starts on a separate batch of, for example, crusty white bread.
Note that each loaf is identical within a batch but that loaves can vary
from batch to batch.
Batch production is a very common method of organising manufacture.
Good examples include:
Production of electronic instruments
Fish and chip shops
Paint and wallpaper manufacturers
Cereal farming
ADVANTAGES
The batch method can be an advantage for businesses that produce a
range of products. It is cheaper to produce a number of each item in one
go because machines can be used more effectively, the materials can be
bought in bulk and the workers can specialize in that task. There are two
particular advantages of workers being able to concentrate their skills.
They should become more expert at their tasks, which will in turn
increase productivity (output per worker). This will lower costs, as fewer
workers are needed to produce a set amount.
Better quality products should be produced as workers are more familiar
with the task and so can find ways of improving it.
DISADVANTAGES
Batch production requires very careful planning to decide what batch
will be produced when. Once a batch is in production it is difficult to
change, as switching to another batch takes time and will mean a loss of
output. Batch methods can also result in the build up of significant
“work in progress” or stocks (i.e. completed batches waiting for their
turn to be worked on in the next operation). This increases costs as it
takes up space and raises the chance of damage to stock.

CONTINUOUS PRODUCTION SYSTEM

MASS PRODUCTION
Standardization is the fundamental characteristic of this system. Here
items are produced in large quantities and much emphasis is not given to
consumers orders. In fact the production is to stock and not to order.
Standardization is there w.r.t. materials and machines. Uniform and
uninterrupted flow of material is maintained through pre determined
sequence of operations required to produce the product. The system can
produce only one type of product at one time.
These days, mass production system is generally used to manufacture
sub-assemblies or particular parts/components of an item. These parts
are assembled together by the enterprise to get the final product. One
distinct advantage of this approach is that different combinations of sub-
assemblies or parts can be used to manufacture different kinds of
products. Specialization and standardization in manufacturing single
component also leads to economies in production and product
diversification to meet specific demands of consumers.
Mass production is the name given to the method of producing goods in
large quantities at low cost per unit. But mass production, although
allowing lower prices, does not have to mean low-quality production.
Instead, mass-produced goods are standardized by means of precision-
manufactured, interchangeable parts. The mass production process itself
is characterized by mechanization to achieve high volume, elaborate
organization of materials flow through various stages of manufacturing,
careful supervision of quality standards, and minute division of labour.
To make it worthwhile, mass production requires mass consumption.
Until relatively recent times the only large-scale demand for
standardized, uniform products came from military organizations. The
major experiments that eventually led to mass production were first
performed under the aegis of the military.
Machine tools and interchangeable parts The material basis for mass
production was laid by the development of the machine-tool industry--
that is, the making of machines to make machines. Though some basic
devices such as the woodworking lathe had existed for centuries, their
translation into industrial machine tools capable of cutting and shaping
hard metals to precise tolerances was brought about by a series of 19th-
century innovators, first in Britain and later in the United States. With
precision equipment, large numbers of identical parts could be produced
at low cost and with a small work force.
The system of manufacture involving production of many identical parts
and their assembly into finished products came to be called the
American System, because it achieved its fullest maturity in the United
States. Although Eli Whitney has been given credit for this development,
his ideas had appeared earlier in Sweden, France, and Britain and were
being practiced in arms factories in the United States. During the years
1802-08, for example, the French émigré engineer Marc Brunel, while
working for the British Admiralty in the Portsmouth Dockyard, devised
a process for producing wooden pulley blocks by sequential machine
operations. Ten men, in place of 110 needed previously, were able to
make 160,000 pulley blocks per year. British manufacturers, however,
ignored Brunel's ideas, and it was not until London's Crystal Palace
exhibition of 1851 that British engineers, viewing exhibits of machines
used in the United States to produce interchangeable parts, began to
apply the system. By the third quarter of the 19th century, the American
System was employed in making small arms, clocks, textile machinery,
sewing machines, and a host of other industrial products.
The assembly line. Though prototypes of the assembly line can be traced
to antiquity, the true ancestor of this industrial technique was the 19th-
century meat-packing industry in Cincinnati, Ohio, and in Chicago,
where overhead trolleys were employed to convey carcasses from
worker to worker. When these trolleys were connected with chains and
power was used to move the carcasses past the workers at a steady pace,
they formed a true assembly line (or in effect a "disassembly" line in the
case of meat cutters). Stationary workers concentrated on one task,
performing it at a pace dictated by the machine, minimizing unnecessary
movement, and dramatically increasing productivity.
Drawing upon observations of the meat-packing industry, the American
automobile manufacturer Henry Ford designed an assembly line that
began operation in 1913. The result was a remarkable reduction of
manufacturing time for magneto flywheels from 20 minutes to five
minutes. This success stimulated Ford to apply the technique to chassis
assembly. Under the old system, by which parts were carried to a
stationary assembly point, 12 1/2 man-hours were required for each
chassis. Using a rope to pull the chassis past stockpiles of components,
Ford cut labour time to six man-hours. With improvements--a chain
drive to power assembly-line movement, stationary locations for the
workmen, and work stations designed for convenience and comfort--
assembly time fell to 93 man-minutes by the end of April 1914. Ford's
methods drastically reduced the price of a private automobile, bringing it
within the reach of the common man. (see also Index: automotive
industry ) Ford's spectacular feats forced both his competitors and his
parts suppliers to initiate his technique, and the assembly line spread
through a large part of U.S. industry, bringing dramatic gains in
productivity and causing skilled workers to be replaced with low-cost
unskilled labour. Because the pace of the assembly line was dictated by
machines, the temptation arose to accelerate the machines, forcing the
workers to keep up. Such speedups became a serious point of contention
between labour and management, while the dull, repetitive nature of
many assembly-line jobs bored employees, reducing their output.
Effects on the organization of work. The development of mass
production transformed the organization of work in three important
ways. First, tasks were minutely subdivided and performed by unskilled
workers, or at least semiskilled workers, since much of the skill was
built into the machine. Second, manufacturing concerns grew to such
size that a large hierarchy of supervisors and managers became
necessary. Third, the increasing complexity of operations required
employment of a large management staff of accountants, engineers,
chemists, and, later, social psychologists, in addition to a large
distribution and sales force. Mass production also heightened the trend
toward an international division of labour. The huge new factories often
needed raw materials from abroad, while saturation of national markets
led to a search for customers overseas. Thus, some countries became
exporters of raw materials and importers of finished goods, while others
did the reverse.
In the 1970s and '80s some countries, particularly in Asia and South
America, that had hitherto been largely agricultural and that had
imported manufactured goods began industrializing. The skills needed
by workers on assembly-line tasks were easily acquired, and standards
of living in these developing countries were so low that wages could be
kept below those of the already industrialized nations. Many large
manufacturers in the United States and elsewhere therefore began
"outsourcing"--that is, having parts made or whole products assembled
in developing nations. Consequently, those countries are rapidly
becoming integrated into the world economic community.

Mass production (also called flow production or repetitive flow

production) is the production of large amounts of standardized products
on production lines. It was popularised by Henry Ford in the early 20th
Century, notably in his Ford Model T. Mass production is notable
because it permits very high rates of production per worker and therefore
provides very inexpensive products. Mass production is capital
intensive, as it uses a high proportion of machinery in relation to
workers. With fewer labour costs and a faster rate of production, capital
is increased while expenditure is decreased. However the machinery that
is needed to set up a mass production line is so expensive that there must
be some assurance that the product is to be successful so the company
can get a return on its investment. Machinery for mass production such
as robots and machine presses have high installation costs.
One of the descriptions of mass production is that the craftsmanship is in
the workbench itself, not the training of the worker; rather than having a
skilled worker measure every dimension of each part of the product
against the plans or the other parts as it is being formed, there are jigs
and gauge blocks that are ready at hand to ensure that the part is made to
fit this set-up. It has already been checked that the finished part will be
to specifications to fit all the other finished parts - and it will be made
quicker, with no time spent on finishing the parts to fit one another. This
is the specialized capital required for mass production; each workbench
is different and each set of tools at each workbench limited to those
necessary to make one part.
Use of assembly lines in mass production
Mass production systems are usually organized into assembly lines. The
assemblies pass by on a conveyor, or if they are heavy, hung from an
overhead monorail.
In a factory for a complex product, rather than one assembly line, there
may be many auxiliary assembly lines feeding sub-assemblies (i.e. car
engines or seats) to a backbone "main" assembly line. A diagram of a
typical mass-production factory looks more like the skeleton of a fish
than a single line.
This is also used in food manufacturer to produce foods continuously.
Characteristics of mass & flow production

(A) Special purpose machines and product type layout:

Special purpose machines are used and the plant assembly stages are laid
out on the basis of product layout, the layout-by-sequence.
(B) Lesser flexibility in production schedules
Interruptions due to breakdowns and absenteeism seriously affect
production as stoppage of one machine usually disturbs the working of
other machines. Systematic maintenance and “provisioning of stand-by
operators” are, therefore, two major management functions.

Importance of Job production: -

(A) Continuous flow of material

The flow of materials is continuous and there is little or no queuing at
any stage of processing.
(B) Mechanized materials handling
Materials handling is comparatively less firstly because materials move
through a short distance between stages and secondly the materials
handling activity is mostly mechanized by conveyors and transfer
machines.
(C) Low skilled labor
Relatively low skilled labor is employed.
(D) Short manufacturing cycle time
The manufacturing cycle time is very short. The machine capacities are
balanced by duplicating machines wherever necessary.
(E) Easy supervision
Supervision is relatively easier as only few instructions are necessary
and that too at the start of the job.
(F) Limited work- in- progress
Work-in-progress is comparatively less since the manufacturing line is
balanced.
EXAMPLE OF MASS PRODUCTION SYSTEM
Flow production involves a continuous movement of items through the
production process. This means that when one task is finished the next
task must start immediately. Therefore, the time taken on each task must
be the same.
Flow production (often known as mass production) involves the use of
production lines such as in a car manufacturer where doors, engines,
bonnets and wheels are added to a chassis as it moves along the
assembly line. It is appropriate when firms are looking to produce a high
volume of similar items. Some of the big brand names that have
consistently high demand are most suitable for this type of production:
Heinz baked beans
Kellogg’s corn flakes
Mars Bars
Ford cars
ADVANTAGES
Flow production is capital intensive. This means it uses a high
proportion of machinery in relation to workers, as is the case on an
assembly line. The advantage of this is that a high number of products
can roll off assembly lines at very low cost. This is because production
can continue at night and over weekends and also firms can benefit from
economies of scale, which should lower the cost per unit of production.
DISADVANTAGES
The main disadvantage is that with so much machinery it is very difficult
to alter the production process. This makes production inflexible and
means that all products have to be very similar or standardized and
cannot be tailored to individual tastes. However some “variety” can be
achieved by applying different finishes decorations etc at the end of the
production line.
PROCESS PRODUCTION

Process production is characterized by tile manufacture of a single

product produced and stocked in the warehouses awaiting sales. The
flexibility of such plants is almost zero as only one type of product can
be produced in such plants. Typical examples of such plants are sugar,
steel, cement, paper, coke, refineries, etc.

Characteristics of process production: -

(A) Special purpose machines with built-in controls

The layout of plant, shape and size of its buildings, location of services
and storage yards, position of cranes and conveyors is such that material
flow is unidirectional and at the steady rate. Special purpose machinery
and equipment with built-in controls to measure output and regulate
input are employed to suit the needs.

(B) Highly mechanized materials handling

Materials handling is highly mechanized. Conveyor system and

automatic transfer machines move materials from one stage to another.

JUST-IN-TIME PRODUCTION SYSTEM

(JIT)
Introduction: Just in Time manufacturing is a systems approach to
developing and operating a manufacturing system. It is based on the
total elimination of waste. JIT is not a new concept. It has been part and
parcel of the Japanese manufacturing industry adopted approach for
quite some time. It requires that equipment, resources and labor are
made available only in the amount required and at the time required to
do the job. It is based on producing only the necessary units in the
necessary quantities at the necessary time by bringing production rates
exactly in line with market demand. In short, JIT means making what the
market wants, when it wants it. JIT has been found to be so effective that
it increases productivity, work performance and product quality, while
saving costs.
Critical Elements in JIT manufacturing
Partnerships
Commitments
Contracts Supporting Partnerships
Developing JIT Suppliers
Partnerships - A Mutually Beneficial System
Customer-Supplier proximity
Partnerships
In the past companies were capable of remaining independent and
competitive when they had the capability and resources necessary to
produce a product. This is no longer possible. As technology increases in
complexity, companies overcome capital limitations or labor intensive
requirements by becoming dependent on suppliers to provide services.
Many services and Original Equipment Manufacturing (OEM) suppliers
have evolved as the result. Companies now appreciate that long-term
success relies on the quality of the customer-supplier relationship
established so that they will develop successful partnerships. Hence,
successful partnerships require the development of mutually beneficial
programs.

Contracts Supporting Partnerships

By ensuring fair and equitable contracts, many of the problems in
developing customer-supplier relationships are overcome by JIT
manufacturers. The goal of JIT is to make long-term contracts with
suppliers. Long-term contracts usually extend for one or more years and
can consist of one or more part requirements
Integrated Process Control (IPC)
In most cases, the typical goals of manufacturing consist of meeting
production schedules, cost projections, and product specifications.
However, two key points are usually overlooked: optimizing the
production process and meeting customer requirements concurrently.
The company must be aware of changes in requirements and continually
improve the production process. Integrated Process Control (IPC)
achieves the goals of JIT manufacturing by optimizing production to
meet both manufacturer and customer requirements. In IPC, two
concepts control the process of continual improvement.
Goals
Secure a steady flow of quality parts.
Reduce the lead time required for ordering product.
Reduce the amount of inventory in the supply and production pipe lines.
Reduce the cost of purchased material.
Objectives
Improve purchasing efficiency.
Improve quality and delivery performance of suppliers.
Isolate factors that influence the cost of material.
Remove unnecessary cost factors in the materials supply system.
Tactics
Regard suppliers as an extension of the internal manufacturing process
and cultivate them as long term business partners.
Establish long term purchasing and supply commitments.
Improve communication with suppliers.
Involve suppliers in early stages of new product planning.
Use supplier expertise to improve design manufacturability and reduce
product cost.
Quality for JIT
Quality is an integral part of a JIT program. Quality control concentrates
on quality at every stage of manufacture including the purchase of raw
material. To increase the supplier quality two methods are used in a JIT
system; supplier quality engineering (SQE) and receiving inspection
(RI).
Supplier quality engineering is used to evaluate supplier capability, help
suppliers develop process control, resolve quality issues with suppliers,
and certify that suppliers qualify for JIT production. Receiving
inspection provides an inspection service for purchasing.
Planning the production process
A valuable tool in planning the production process is to isolate and
define the elements that make up a production system as building
blocks.
Performance measures
To achieve continued improvement, a company must measure the
performance levels of its smallest processes against its optimum values.
This is accomplished by having performance measures visible to all
levels in a company. The use of control charts is one of the best ways to
show the collected performance measures.