manufacturing and operations management

MANUFACTURING AND OPERATIONS MANAGEMENT NOTES

Contents

1. Introduction to Operations Management

Nature, Scope, Importance and Functions

Evolution from manufacturing to operations management – Evolution of the factory system –

manufacturing systems – Quality – mass customization

(Contribution of Henry Ford, Deming, Cross by, Taguchi)

2. Types of industries – Variety of Business – Integration of Manufacturing and services – scale

of operations. Methods of Manufacturing – Project/ Jobbing, Batch Production, Flow/

continuous production, Process production, Characteristics of each method

3. Facilities Location and Layout – Strategic importance – factors affecting location and layout

– Installation of facilities – Single location, multi-location decisions, Principles and types of

facilities layout.

4. Importance and functions of Production Planning and control - Introduction to PERT/ CPM

Network crashing (Numerical expected for PERT/ CPM)

5. Maintenance Management – Importance and Types of maintenance – Maintenance planning –

Spare parts Management – Concept of TPM

6. Inspection – Cent percent inspection, Sample inspection, Operation characteristics Curves,

statistical Quality control – Construction and Interpretations of Control charts (X-R), n, p, c,

np). Introduction to six sigma, (Numerical expected for control charts). Gap analysis for service

quality assessment.

7. Productivity – Work Study – Objectives, Scope and Uses – Methods study – Flow process

chart, Flow diagram and Process mapping – Work Measurement – Elements – Performance

Rating – Allowances – Standard Time – Synthetic Time standards Work sampling (Numerical

expected for standard Time)


Introduction The production (or manufacturing) management since long has been associated with a factory

situation where goods are produced in physical sense.

Definition of a Factory

Factory is defined as “as any premises in which persons are employed for the purpose of making,

altering, repairing, finishing, cleaning, washing, breaking, demolishing or adopting for sale, any

article”. The above definition restricts the scope of production function.

“Production is the process by which goods and services are produced”

The essential feature of a production function is to bring together people, machines and materials

to provide goods and services thereby satisfying the wants of people. Since both manufacturing

and service organizations involve above mentioned features, the term production management is

gradually being replaced by Operations Management.

Operations Concept of Production The concept of “operations” instead of “production” includes both manufacturing as well as

service organizations. All operations add value to the objectives and thereby enhance their

usefulness. An operation may be defined “as the process of changing inputs into outputs thereby

adding value to some entity.” This can be done in following ways:

Alteration: It refers to the change in form or state of inputs

Transportation: It refers to the movement of the entity from one place to another.

Storage: It refers to the process of keeping an entity in a protected environment for some period

of time. Inspection: It is the verification of entity for its properties.

Production as the Conversion process Since production is the process of changing inputs into outputs, every organization has the

conversion system which can be shown as follows

Fig: A Conceptual model of a production (operations) System

The inputs in above system are raw materials, parts, consumable, energy, engineering details,

production schedules, information technology, capital or management and outputs are the

produced goods, transported goods, delivered messages, and serviced customers.


Productivity of Conversion Process Effectiveness of production (or operations) management may be viewed as the efficiency with

which inputs are converted into outputs. This conversion efficiency can be gauged by the ratio of

the output to the input and is known as productivity of the system.

Productivity = Output

Inputs

Productivity = _______ Goods and Services___________________

Capital, Manpower, Material, Machines, Land and Building

The higher the productivity of production system, more efficient the production function.

Another way of looking at the concept of productivity is to look at the amount of waste

generated in the system.

Productivity of the system can be improved by minimizing/ eliminating the waste occurring in

the system.

Objectives of Production (or operations) management Effectiveness: Producing the right kind of goods and services that satisfy customer’s needs.

Efficiency: Maximizing output of goods and services with minimum resource inputs.

Quality: Ensuring that good & services produced conform to pre-set quality specifications.

Lead Time: Minimize delays, waiting time and idle time in the conversion process.

Capacity Utilization: Maximum utilization of manpower, machines etc.

Cost: Minimizing cost of producing goods or rendering a service.

The above mentioned six important objectives are to be achieved to increase the productivity &

ultimately the profit for the organization.


Components of production (or operations) function Production (or operations) management is essentially planning, organizing and controlling of

production function. Management of production (or operations) can be described in terms of

fourteen components as under:

Production/ Operations as a Co-ordination function Production plays a vital role in coordinating efforts with three other major functions of an

organization, namely Marketing, Finance and Personnel.

Sales department prepares a forecast which includes products and quantities to be sold, price of

each product, profit margin etc. Production departments’ analyses the forecast in terms of

manufacturing capacities, inventory, sub controlling and subcontracting etc. and then they

modify/accept the forecast. Finance department next analyses the modified or accepted forecast

in terms of corporate objectives, profitability, investment etc. Production department then

finalizes the manpower plan with personnel department. Personnel department will arrange

recruitment and Training if required. Proper co-ordination between production and personnel

department thus ensures that adequate skills to meet finalized forecast (sales) are made available.

Production department also discuss investment plans regarding material, machines etc with

finance dept. to meet the required target production. Finance dept. if required will arrange funds

from most economical sources. Production also coordinates with purchase dept. who takes

procurement action for materials required for production.


Manufacturing systems A typical production system comprises of three main components i.e. inputs, transformation

process and outputs.

1) Inputs are men, materials, machines, instructions, drawings, paper work etc.

2) The transformation process involves operations, mechanical or chemical to change/ convert

inputs into outputs. It also includes activities that assist conversions. They are as follows:

1. Planning and control of factors of production

2. Procurement of materials

3. Receipt, storage and issue of materials

4. Material handling

5. Inspection of in-process and parts

6. Assembly and testing of products

7. Storage of finished goods

8. Authorization, retrieval etc

3) Outputs are goods and services (e.g. Products, parts, paper work, served customer etc.)

The combination of operations and activities stated above, employed to create goods and services

is known as manufacturing system, (or method). A manufacturing system is an independent

group of sub-systems, each sub-system performing a distinct function. These systems 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 because changes in later stage are very

expensive to make. The system selected should be such that it can give the desired output,

required quality and is to be cost effective.

Factors influencing choice of manufacturing system

There is no best manufacturing system for any product. The manufacturing system which is

selected must meet two basic objectives namely:

1. It must able to meet the specifications of the final product and

2. It must be cost effective

Various factors which determine the choice of the manufacturing system are as follows:

a) Effect of Volume/ variety

When there are many products in one or few numbers to be produced (i.e. high product variety)

it requires highly skilled labor, general purpose machines, detailed and sophisticated production

planning and control systems. On the other hand when one or few products to be produced in

large volumes (i.e. low product variety) it enables the use of low skilled labor, highly automated

mass production processes using special purpose machines and simple production planning and

control system.


b) Capacity of the plant

Whether the firm should use intermittent or continuous process will depend upon the projected

sales volume. Fixed costs are high for continuous process and variable costs are high for

intermittent process. Intermittent process will be cheaper to install and operate at low volumes

(small capacity) and continuous process will be economical to use at high volumes. (Large

capacity)

c) Flexibility

Flexibility implies the ability of the company to satisfy varied customer’s requirements.

Flexibility and product variety are inter-related. It requires high inventory, large manufacturing

lead times and sophisticated planning and control.

d) Lead Time

Lead time means delivery lead time expected by the customers. It is major influencing factor in a

competitive market. As a general rule, faster deliveries are expected in a competitive market.

e) Efficiency

Efficiency measures the speed and the cost of the manufacturing system. Depending upon the

sales volume, product variety will have to be considered and the process has to be selected which

will give the best efficiency in terms of machines and manpower utilization.

f) Environment

Environment brings in new technologies and forces for the adoption of new process of

manufacturing. Similarly as market preferences change due to fashions or other reasons, the

manufacturing system has to be changes accordingly.

Classification (Methods) of Manufacturing System

Manufacturing systems can basically be classifies into five groups:

1] Project Production: Here a single assignment of complex nature is undertaken for

completion within the given period and within the estimated expenditure.

2] Jobbing Production: In this one or few units of a product are produced as per the customer’s

requirement within the given date and price as per the contract.

3] Batch Production: Where limited quantity of each types of product is manufactured at a time.

4] Mass and flow production: In this system a single or number of machines are arranged

according to the sequence of operations and several number of products are manufactured at a

time and stock in warehouse awaiting sales.

5] Process Production: In this production run is conducted for an infinite period.


Characteristics of Manufacturing System methods

A] Characteristics of Project Production

a) Definite beginning and definite end

b) Non-uniform requirement of sources

c) Involvement of different agencies

d) Fixed position assembly types of layout

e) Over running of project will affect and increase the cost

f) Personal problems

g) Great importance to scheduling and control

B] Characteristics of Jobbing Production

a) Small production runs

b) Discontinuous flows of materials

c) Disproportionate manufacturing cycle time

d) General purpose machines and process layout

e) Highly skilled labor requirement

f) Highly competent knowledgeable supervision required

g) Large work in progress

h) Limited functions of production planning and control


C] Characteristics of Jobbing Production

a) Short production runs

b) Skilled labor in specific trades

c) Supervisor to possess knowledge of a specific process

d) Limited span of control

e) General purpose machines and process type of layout

f) Manual materials handling

g) Large work in progress

h) Flexibility of production schedules

i) Need to have production planning and control

D] Characteristics of Mass and Flow Production

a) Continuous flow of materials

b) Special purpose machines and product type layout

c) Mechanized materials handling

d) Low skilled labor

e) Short manufacturing cycle time

f) Easy supervision

g) Limited work in-progress

h) Less flexibility in production schedules

E] Characteristics of Process Production

a) Special purpose machines with built-in-controls

b) Highly mechanized materials handling

c) Virtually zero manufacturing cycle time

d) Low skilled labor

e) Supervisor to be process specialist

f) Negligible work-in-progress

g) Limited production planning and control functions


Introduction of Facilities Location and Layout Plant location decisions concern both manufacturing and assembly units as well as service

organizations. Ideal plant location is important for business activities both in manufacturing and

service category. Plant location decisions are strategic, long term & non-repetitive. This is

because:

a) Poor location of the plant can be constant source of higher cost, difficult marketing and

transportation, dissatisfaction of employees and customers, frequent disturbance in production,

substandard quality, competitive disadvantage etc.

b) The investment in land and buildings is quite large in case of bigger firms and hence

economics of the locations needs to be evaluated carefully for fair returns on such investment.

Location decisions of large projects like fertilizers, cements, sugar, steel, thermal projects etc.

involve economists, geographers, town planners, marketing experts, accountants, politicians,

ecologists etc. Location decisions generally arise when:

A new manufacturing (or servicing) unit is to be set up

Existing plant operations are difficult to expand

Establishment of additional facilities in new territories because of growth of the business

Emergence of new social (chronic labor problem) political (political instability) problems or

economic conditions which suggest a change in the location of the existing plant.

E.g. Tata Nano plant; New plant requirement for new product developed according to new

technological environment. Changes by Government in Industrial policy which will not permit

expansion of existing plant

Factors affecting location

Plant location factors in general may be grouped under three heads which are as follows:

i. Regional factors (General territory selection)

ii. Community factors (Community selection)

iii. Site factors (Site selection)

i] Regional factors

It will decide the overall area (or region) within the country. It includes proximity to markets,

proximity to sources of raw materials, availability of utilities, transport facilities, climatic

conditions, industrial and taxation laws etc.

ii] Community factors

It influences selection of the plant location within the region. Such factors are, availability of

labor, industrial and labor attitudes, social structure, service facilities etc.

iii] Site factors

It is favorable specific site within the community. Such factors are, availability and cost of the

land, suitability of the land, waste disposal etc.


Fig: Factors influencing three phases of plant location

Location factor

Phase of the study

Territory

Selection

Community

Selection

Site

Selection

1 Proximity to Markets *

2 Proximity to Raw Materials *

3 Infrastructural Facilities * *

4 Transportation Facilities * *

5 Labor and Wages * *

6 Legislation and taxation * *

7 Climatic condition * *

8 Ind & Labor attitude * *

9 Safety Requirements * *

10 Community attitudes *

11 Supporting industries and services *

12 Community attitudes *

13 Waste Disposal * *

14 Availability & Cost of the land * *

15 Suitability of the land * *

Let us discuss these location factors one by one:

1. Proximity to Markets

Every company is in business to market and it can survive only if their product reaches the

consumers on time and at the competitive price.

Location the plant nearer to the market is preferred. If the product is to be exported, location near

ports is desirable. It will reduce the transportation cost; shipment cost etc.

2. Proximity to source of Raw Materials

Since raw materials usually constitute 50 to 60 percent of the total product cost, it is important

that the firm gets its requirements of raw materials at the right time and at the reasonable price

for which the plant must be located nearby to the sources of required raw materials units.

If the raw materials come from a variety of locations, the plant may be situated so as to minimize

total transportation costs.


3. Infrastructural facilities

It considers availability of utilities like power, water, disposal of waste etc.

4. Transportation Facilities

Transportation cost to value added is a key determinant of the plant location. It includes average

distance and medium of transport i.e. Rail, Road or sea and air.

5. Labor and Wages:

Plant location should be such that required labor is easily available in the neighborhood.

Importing labor from outside is usually costly and it causes a lot of administrative problems.

Prevailing wage pattern, living costs and industrial relations are other factors to be taken into

account.

6. Legislation and Taxation

The policies of the State Govt. and Local bodies relating to issue of licenses, building codes,

labor laws etc. are the factors in selecting or rejecting a particular community/ site.

In order to balance economic growth, both central and state Govt. offer a package of incentives

for setting up industries in particular locations.

Exemptions from excise duty, sales tax and octroi, soft loans, subsidy in electricity charges etc.

are some of the incentives offered by Govt. It will affect in minimizing the product cost.

7. Climate conditions

It is an important factor for textile mills which requires high humidity.

8. Industrial and Labor attitudes

Community attitudes towards supporting hostile trade union activities are an important factor.

Frequent labor problems and interruptions are harmful to the plant in the long run. Political

situation in the state and attitude of Govt. towards labor activities also influences selection of the

site for the plant.

9. Safety requirements

It is important for certain industries like

1. Nuclear power plants

2. Explosive factories

3. Location near to border areas is undesirable for such industries.

10. Community facilities (Social infrastructure)

It includes accommodation, education, medical, entertainment and transport facilities. It also

includes communication facilities.


11. Community Attitudes

Community attitudes towards work (people are hardworking or not) as well as their attitudes

towards the incoming entrepreneurs (helpful, cooperative or not) can make or break the industry

in that particular location.

12. Supporting Industries and Services

Service needed by the firm as well as supporting industries to that firm should be as nearer as

possible for saving the time and cost.

13. Suitability of the land

Site selection should also take into account topography and soil structure of the land.

14. Availability and cost of the land:

Site/ Plot size must be large enough to accommodate present required facilities, parking and

access facilities and space for further expansion.

15. Waste Disposal

Proper infrastructure is to be created for the disposal of waste otherwise it will create the

problems like pollution of air, water etc.

Facilities (Plant) Layout Introduction

Plant layout is the disposition of the various facilities and services of the plant within the areas of

the site selected. Plant layout this involves determination of space requirement for the facilities

and arranging them in a manner that ensures steady flow of production with minimum overall

cost.

“Plant layout is the placing of right equipment, coupled with right method, in the right place to

permit the processing of the product in the most effective manner through the shortest possible

distance and through the shortest possible time.”

Plant layout decisions are strategic decisions. A good layout results in comforts, convenience,

appearance, safety, efficiency and profits. A poor layout causes dispersion of material flow,

unnecessary material handling, more scrap and rework, high output time, wasted movements,

frustration and inefficiency.


Principles of a Good layout There are certain criteria which can be used to judge whether layout is good or not. These are as

follows:

a) Overall integration of factors

A good layout is one that integrates men, materials, machines, supporting activities and other in a

way that the best compromise is obtained.

b) Minimum Movement

A good layout is one that permits the minimum movement between the operations.

c) Uni-directional flow

A good layout is one that makes the materials to move only in the forward direction, towards

stage of completion, without any backtracking.

d) Effective use of available space

In good layout available space is effectively used either in horizontal or vertical position.

e) Maximum Visibility

Men, machines and materials are readily observable at all time in good layout.

f) Maximum accessibility

A good layout is one that makes all servicing and maintenance points readily accessible.

g) Minimum Handling

A good layout is one that reduces the materials handling activity to its minimum.

h) Inherent Safety

A good layout is always safe for workmen to work in all respect.

i) Safe and improved environments

Work centers and areas around them always satisfying the workmen.

j) Maximum Flexibility

A good layout is one that can be altered later if required, without much cost.

k) Maximum Security

A good layout safeguards the plant and machinery against fire, theft etc.

Types of layout

Layouts are basically of three types:

a) Process or functional layout

b) Product or line layout

c) Project or fixed position layout


Process or Functional Layout Process layout also called “layout by function” is generally associated with batch production.

In this the factory is divided into process units (or departmental) and within these process units

(or departments) and within these process units (or departments) all similar facilities are grouped

together.

E.g. Presses are kept at one place, milling machines are placed at another place, and drilling

machines are kept at third place, and so on. It is shown in following figure.

This type of layout is suitable when,

1) The products are non-standard and their quantities are small.

2) There is a wide variation in the processing times of individual operations.

Advantages of Process Layout

1. Lower capital investment since general purpose and less number of machines required

2. Higher utilization of available equipment

3. Greater flexibility of equipments and workers

4. Workers attain greater skills since they have to attend to one type of machine and operations

5. Imbalance of work in one section does not affect the working of the other section

6. Variety of the jobs makes the work interesting to the workmen


Disadvantages

1. For the given volume of production, space requirements are higher in this type of layout

2. Materials handling can not be mechanized which adds to extra cost

3. Work in process inventory is higher since jobs have to queue up for each operation

4. Routing and scheduling is difficult

5. Inspection required after each operation. This causes delays in production time

6. Setup costs are high because of frequent changes of jobs

Product or Line Layout Product layout is also called “layout by sequence”. The layout of plant, shape and size of its

buildings, location of services, stores, material handling equipments etc. are in such a way that

materials flows unidirectional and at the steady rate. Special purpose machinery and equipment

with built in-controls to measure output and input are employed. The equipment, if necessary, is

duplicated to avoid backtracking. In these type materials always flows in the forward direction

towards stage of completion.

This type of layout is suitable when:

1. Products are standard and to be produced in large quantity

2. Products have always reasonably stable demand

3. Processing times of each operation is more or less equal; E.g. Automobiles, T.V sets, food

processers, radios, transformers, cement, steel etc. (i.e. for single products)


Advantages of product Layout

1. Manufacturing cycle is small which reduces work in – progress

2. Material handling is minimum (or automatic)

3. Space required is small

4. Work is simplified by breaking into elemental tasks which are mechanized wherever

possible. Hence labor costs are minimized

5. Quality control is easy to exercise and more effective

6. Delivery commitments are reliable

7. Materials requirements can be scheduled easily and more accurately

Disadvantages

1. The changes in the products necessitate the change in the layout of machinery

2. All machines may not be used to their full capacity

3. Manufacturing cost depends upon volume of production

4. Breakdown of any machine will stop the further process till it gets required

5. Expansion of capacity is not possible

Project or Fixed Position Layout Project type of industries such as manufacturers of airplanes, ships, large turbines, heavy

machinery, pressure vessels etc. has this type of layout.

Heavy materials, components, sub-assemblies, under this layout remain fixed at one place.

Men, machines and other tools are brought to the project location to complete the job

This type of layout is suitable when,

1] One or few pieces of an identical product are to be manufactured

2] The cost of transportation of heavy machinery and parts is very high

Combination Layout (Mixed Layout) A mixed layout is the combination of process and product layout. It is generally used when,

1. Product contains lot many components and parts

2. Product requires to be produced in different types and sizes

In this type of layout, the parts are produced on facilities arranged in a process type of layout and

then they are assembled using the product type of layout.

Another concept of mixed layout is called cellular layout in which the facilities are clubbed

together into cells to utilize the concepts, principles and approaches of group technology.

In cellular layout, the facilitates are grouped into cells which are able to perform similar type of

operations for a group of components.


Production Planning and control

Production is defined as transforming inputs into outputs in the form of goods and services

required by society. Planning contains a series of activities that are interrelated and co-ordinate

such as materials planning; process planning, scheduling etc. and which are designed to carry out

manufacturing efforts systematically. Control is nothing but the overall control on the

manufacturing process right from inputs to outputs.

Definition:

According to Gordon “Production planning & control involves generally the organization &

planning of the manufacturing process. Specifically it consists of planning of routing,

scheduling, dispatching & inspection coordination & control of materials, methods, machines,

tooling & operating times.” Thus planning is forward thinking while control is a mechanism for

execution. Planning & control are the two important wheels of the management process.

Objectives of Production Planning & Control

The main objectives of PPC are as follows:

1. To attain maximum utilization of resources

2. To produce quality products

3. To minimize manufacturing cycle time

4. To maintain optimum inventory levels

5. To achieve co-ordination between labor, machine & other supporting departments

6. To maintain flexibility in operations

7. To achieve cost reduction & cost control

8. To prepare & maintain the production schedules

9. To achieve organizational goals at minimum cost

Functions/ Scope of production planning & Control

Production planning & control covers the following activities

1. Procurement of raw materials, components & spare parts in right quantities at right time from

right source at right prices

2. Selecting best methods of processing & finding out the best sequence of operations

3. To determine the nature & magnitude of the output in consultation with marketing

department

4. To plan the layout of operations where different operations are to be performed

5. To prepare & maintain time schedule

6. To ensure continuous inspection over products produced

7. To impose controls over costs & to get work done according to the plan


Importance of Production Planning & Control

Production planning & control is heart of the production/ operations management function

because of several reasons.

a) It coordinates all phases of the production & operating system

b) An efficient system o production planning & control results into better quality, optimum

utilization of resources, lower level of inventories, reduction in production cycle time, faster

delivery, more efficient customer service, lower cost of production, lower capital investment etc.

c) It also results into higher production, economy in production, quality of goods & services,

timely delivery etc.

d) It also results into higher sales, more profits, increase in market share, increase in competitive

advantage etc.

e) Because of systematic planning & control, machinery breakdown are minimized, maintenance

is improved, excess capacity & idle time is minimized.

f) It contributes significantly increasing the Goodwill & image of the organization.

Thus production planning & control are not only complementary to each other but they are so

interrelated that they can be treated as one function. A number of scientific tools are available for

planning but incase of huge projects, the planning of projects is best performed through a well-

known techniques like program Evaluation & Review Techniques (PERT) & Critical Path

Method (CPM).


PERT/ CPM Program Evaluation & Review Techniques (PERT) & Critical Path Method (CPM) are the

network techniques, which are widely used in management of very large projects.

These techniques are useful in planning, scheduling & executing large but time bound projects.

PERT was developed in 1950’s by US Navy for scheduling the research & development work

for the Polaris missiles program whose activities were full of uncertainty.

In 1957 CPM techniques was developed by J. E. Kelly of Remington Raud & M. R. Walker of

Dupont. Now the applications of PERT & CPM are overlapping are both are used in a single

technique.

Similarities of PERT & CPM

1. Basic approach of PERT & CPM is the same

2. Both belong to Network Analysis

3. All the activities & tasks are defined in the project

4. Relationship among the activities is developed to decide which activities must proceed &

follow others

5. Network is drawn connecting all the activities

6. Time & cost estimates are assigned for each activity

7. The longest path is called the critical path & is computed through the network

8. Network is used for planning, scheduling, controlling & monitoring the project

Importance of PERT & CPM to Management

Every project manager is interested in completing the projects in time with minimum costs. So

an attempt is made to schedule the project properly to save it from delays & higher costs.

Hence timely completion of the projects through proper planning & scheduling is essential. This

can be achieved by the use of PERT & CPM is due to their following advantages:

1. During the planning phase all the activities & events are taken into consideration & scientific

approach is developed to complete the project in time without facing any crisis in scheduling

2. These techniques concentrate on the technological relations between different activities,

which enable the project managers to complete the project systematically in scheduled time

3. These techniques help in selecting a plan that minimizes total cost & time required for the

project

4. Responsibilities are clear for everyone to complete the project in time

5. These techniques enable the managers to revise the plan the suit the changes in the

environment


Illustration

The characteristics of a project schedule are given in table. On the basis of this information:

1. Construct a network

2. Find the critical path

Solution:

1. Network for given data:

2.

3. Critical Path

Now there can be three paths to complete the activity from 1 to 10

1––> 2 ––> 4 ––> 9 ––>10 = 17 days

1––> 3 ––> 5 ––> 7––> 8 ––>10 = 22 days

1––> 3 ––> 5 ––> 6 ––> 8 ––>10 = 17 days

Since critical path is the longest path it is:

1––> 3 ––> 5 ––> 7––> 8 ––>10 = 22 days


PERT concept of multiple times

This concept of three times estimate was evolved to reduce the extent of uncertainty

1) Optimistic Time – This indicates the minimum time an activity can take if everything goes

smoothly without any interruptions. It is represented by “a”

2) Pessimistic time – This indicates the minimum time an activity can take if everything goes

wrong. It is denoted by “b”.

3) Most likely time – This indicates the time an activity can take most often is it is repeated again

and again under the same conditions. It is represented by “m”

Three time estimates are not directly entered into the network. They are transformed into an

expected time (t e), using the statistical relation given below:

te = a + 4m + b

6

Critical path in a big Network

In a small network, it is simple process to identify the critical path by tracking and comparing all

the paths in network. As the number of activities increases, it becomes very difficult and time

consuming to find the critical. Therefore, in large networks, a more systematic procedure is

needed to determine the critical path.

The most commonly used method employs two sets of calculations:

1) Forward pass computation

2) Backward pass computation

The forward pass computation begins from the start event and moves towards the end event of

the project network. It determined the earliest expected time for each event, called earliest

expected time for each event, called earliest time (TE).

The backward pass computation begins from the end event and moves backward to the start

event of the project network. It determines the latest allowable time for each event called latest

event time (TL). This can be recorded as shown in the following diagram:


Let us consider the following network to show both forward and backward pass computation

Forward pass computation (earliest event times)

The following basic rules govern the computations of the earliest event times

1) The first activity of the project can be started as soon as the project is undertaken which

implies that the earliest event time of the initial event (first event) is zero. That is TE1 = 0

2) Each activity of the network starts as soon as the activities preceding to it are completed. It

implies that the earliest event time of a plain event equals (TE) of the preceding event plus

duration of activity emanating from the preceding event.

i.e.TEj = TEi + tij

where

TEj = the earliest event time of event j

TEi = the earliest event time of event preceding to event j

TEj = duration of the activity from event i to j

3) The earliest event time TE of a merge event equals largest of the sum of TE of the preceding

event plus duration of the activity emanating from the preceding event.

By applying these rules to our network we will get,

TE1 = 0 (starting event set at zero)

TE2 = TE1 + t12 = 0 + 7 = 7

TE3 = TE2 + t23 = 7 + 7 = 17

TE4 = TE3 + t34 = 14 + 2 = 16

TE5 = TE3 + t35 = 14 + 7 = 21

TE6 = TE4 + t46 = 16 + 4 = 20

TE7 = Max [TE3 + t37, TE5 + t37, TE6 + t67]

= Max [ 14 + 5, 21 + 7, 20 + 7 ]

= Max [19, 28, 27]

Therefore TE7 = 28

TE8 = TE7 + t78 = 28 + 2 = 30


This can be shown as follows

Backward pass Computation (Latest allowable event times)

Latest event time (TL) represents the latest occurrence time of the event. The following simple

rules govern the computation of the latest event times.

1) Latest event time of the end event equals the earliest event time otherwise the project

duration will be affected.

2) The latest event time of a plain event equals latest event time of the succeeding (head) event

less duration of the activity coverging on the head event.

This is ,

TLi = TLj – tij

Where,

TLi = the latest allowable time of the event i

TLj = the latest allowable time of the event j towards which the activity (i, j) is headed

Tij = the latest allowable time of the event i to event j.

3) The latest event time of a “burst” event equals “the smallest of the difference between the

latest event time of the head event less duration of the activity converging on the head

event”.

That is,

TLi = Min (TLij – tij)

For the sample network it can be calculated as follows:

1) Latest event time of the event 8 (TL8) = Earliest event time since it is the end event (TE8)

2) TL7 = TL8 – t78 = 30 – 2 = 28

TL6 = TL7 – t67 = 28 – 7 = 21

TL5 = TL7 – t57 = 28 – 7 = 21

TL4 = TL6 – t46 = 21 – 4 = 17

TL3 = Min (TL4 – t34, TL7 – t37, TL5 – t35)

= Min (17 – 2, 28 – 5, 21 – 7)

= Min (15, 23, 14)


Therefore TL3 = 14

TL2 = TL3 – t23 = 14 – 7 = 7

TL1 = TL2 – t12 = 7 – 7 = 0

This can be shown as follows

Fig: Latest event time of the events

Analysis of activity durations based on computations

1) Earliest starting date (ES) – The earliest start time of an activity equals earliest event time

(TE) of the tail event

Symbolically – ESij = TEj

2) Earliest finishing date – It equals the earliest st

emanating from the tail event

EFij = ESij + tij

3) Latest finishing date – It is the latest event time of the head event

LFij = TLj

4) Latest starting date – It is the latest finishing time minus activity duratio

LSij = LFij – tij

Identify Critical Path based on computations:

Once the activity durations have been worked out, the critical path can be identified by

comparing the “earliest finish times” and “Latest finish times” of the activities. Clearly activitie

whose earliest finish times and latest finish times are equal will constitute the critical path.


Fig: Latest event time of the events

Analysis of activity durations based on computations

The earliest start time of an activity equals earliest event time

It equals the earliest starting time plus duration of the activity

It is the latest event time of the head event

It is the latest finishing time minus activity duration

Identify Critical Path based on computations:


comparing the “earliest finish times” and “Latest finish times” of the activities. Clearly activitie


The earliest start time of an activity equals earliest event time

arting time plus duration of the activity


comparing the “earliest finish times” and “Latest finish times” of the activities. Clearly activities



Activity Float Analysis

Introduction

Float is an important concept in project planning. It will help planner as follows

1. In deciding priorities in allocation of resources

2. It helps in transfer of resources from less pressing areas to more pressing areas

3. It will minimize the requirements of resources

4. It prevent peaks and valleys in requirements of resource

Float of an activity represents the excess of available time over its duration

Types of floats

Float is mainly of three types

a) Total float

b) Free float

c) Independent float

All activities lying on the non-critical paths have total float and some of them may also have free

float

a) Total float (Ft)

Total float signifies the maximum delay that can be permitted in the completion of the activity

without affecting the project completion.

It can be interpreted in two ways

The maximum time available to delay the commencement of an activity

The maximum expansion in the duration of the activity

Total Float = (Latest occurrence time) – (Earliest occurrence time) – (Duration of the activity)

of the succeeding event of the preceding event

Ft = TLj – Tei – tij


b) Free float (Ff)

Free float is the amount of time an activity can be delayed without affecting the commencement

of a succeeding activity at its earliest start time but may affect the float of previous activity.

Free float results when all preceding activities occur at the earliest event times and all succeeding

activities also occur at the earliest event times.

Therefore,

Free Float = (Earliest occurrence time) – (Earliest occurrence time) – (Duration of the activity)

of the succeeding event of the preceding event

Ff = TEj – Tei - tij

c) Independent Float (Fi)

Sometimes, it may be desirable to know what spare time is present in an activity if it is started as

late as possible and finished as early as possible. This characteristic is known as independent

float

Independent = (Earliest occurrence time) – (Latest occurrence time) – (Duration of the activity)

Float of the succeeding event of the preceding event

Fi = TEj – TLi – tij

Network Crashing

In the network system time & cost estimate are worked out for each activity. These are a normal

estimate & a crash estimate.

The normal estimate of time is similar to the most likely time estimate in PERT. The normal cost

is the cost of finishing the project in normal time. The crash time estimate is the reduction in

time achieved by applying more resources to the activity, which is to be speeded up.

The crash cost is the cost of doing the job on a crash basis in order to minimize the completion

time of the project.

E.g. Overtime, working for seven days a week, Extra manpower, machines etc. in night shifts

etc. Crashing is done only when the project is to be completed urgently even at higher costs.

CPM is an attempt of crashing project to its lowest possible time at the minimum possible cost.

The main steps involved in the crashing process are:

1. Locate the critical path of normal network

2. Crash the least expensive activity on the critical path to get a new critical path

3. Repeat the process till we get a critical path on which all activities are at their crash time.

4. Reverse the procedure taking into consideration the non-critical activities.


Start un-crashing by selecting the most expensive activity to reach the least expensive

activity.

Illustration: The following table contains details of activities of a construction project &

other relevant information. On the basis of this information:

1. Draw activity network of the project & find out critical path & total cost

2. Crash the activities step by step until all paths are critical

Solution 1: Network for normal time duration

From this network we observe that,

Critical path: 1 ––> 2 ––> 3 ––> 4 ––> 5 ––> 6 ––>7

Project time = 20 + 10 + 5 + 10 + 10 = 55 days

Total cost = (600 + 200 + 300 + 400 + 300 + 300 + 600 + 500 + 400)

Total cost = 3600/- Rs


Solution 2: Step by Step crashing of activities

In order to shorten the activity time, those activities which are lying on the critical path are

crashed one by one starting with the lowest cost slope.

Step 1:

Activities (1-2) & (3-4) which lye on the critical path has minimum cost slope of Rs. 40/- when

both these activities will be crashed by 3 days each the resulting network will be as follows:

Critical paths:

a) 1 ––> 2 ––> 4 ––> 5 ––> 7 & b) 1 ––> 2 ––> 3 ––> 4 ––> 5 ––> 7

Total cost = 3600 + (40 x 3) + (40 x 3)

= 3600 + 120 + 120

Therefore Total cost = 3600 + 240 = Rs. 3840/-

Step 2:

Activities (4 – 5) & (5 – 7) are lying on critical path & also they have minimum cost slope of Rs.

60/-

Activity (6 – 7) also has a cost slope of Rs. 60 /-


Hence by crashing the activity (4 - 5) by 5 days & (5 – 7) by 5 days & (6 – 7) by 3 days although

it has slack of 5 days, we get the following network.

Critical Paths:

1 ––> 2 ––> 3 ––> 4 ––> 5 ––> 7

1 ––> 2 ––> 4 ––> 6 ––> 7

1 ––> 2 ––> 3 ––> 4 ––> 6 ––> 7

Total cost = 3840 + (60 x 5) + (60 x 5) + (60 x 3)

= 3840 + 300 + 300 + 180

Therefore Total cost = 3840 + 780 = Rs. 4620 / -

Step 3:

The activities (2-4) & (2-3) on the critical path having cost slope of Rs. 50 /- & Rs. 70/-

respectively are crashed by 2 days each. The resulting network will be as follows

All paths are now critical paths

Total cost of the project will be

Total cost = 4620 + (50 x 2) + (70x2)

= 4620 + 100+ 140

Therefore Total cost = Rs. 4860 / -


Maintenance Management

Plant maintenance includes all those activities which are needed to keep the plant, machinery,

tools & equipment services, buildings & all the fittings in standards working conditions.

Maintenance management is defined as “That function of manufacturing management which is

concerned with the day to day problems of keeping the physical plant in good operation

condition.”

It is an essential activity in every manufacturing organization. Maintenance management is such

a function of manufacturing management which will never become obsolete whatever may be

the technological advances. It has remained as important as it was long ago & will not lose its

status even in future.

Importance or Role of Maintenance Management:

Maintenance management is an important service function essential for efficient production

system, because of the several reasons as states below:

1. Plant maintenance on regular basis helps in maintaining & increasing the operational

efficiency of plant facilities.

2. It is useful for reducing the cost of production, improving the quality & quantity of output &

generating maximum sales revenue.

3. It helps organization in establishing a competitive edge & to provide reliable customer service

at fair prices.

4. Proper maintenance policy helps in promoting quality Assurance system of the organization

5. It helps in increasing the efficiency of cost control system in the organization

6. Proper maintenance system is essential & important in big projects like air transport, oil

refineries, heavy & explosive chemical industries etc. to keep all equipments in good working

conditions.

7. Neglect of plant maintenance is not only responsible for dislocation of production process but

also tends to increase the frequency of industrial accidents, which may reduce morale &

productivity of the workers of the organization.

Thus Maintenance management is an important service function in all modern organizations.


Types of Maintenance

There are 5 major types of maintenance which are as follows:

1. Breakdown or Corrective Maintenance

2. Preventive Maintenance

3. Routine Maintenance

4. Predictive Maintenance

5. Planned Maintenance

Let’s discuss these types one by one.

1. Breakdown or Corrective Maintenance

Corrective maintenance is undertaken whenever there is a breakdown of machinery or equipment

leading to the work stoppage. It has been observed that the nature & time of breakdown of any

type of machine is a random phenomenon, hence it cannot be completely eliminated even by

most efficient preventive maintenance.

The breakdown maintenance policy is suitable for those types of equipments which have

relatively less downtime & repair costs. It is easy to administer & needs relatively less staff.

2. Preventive Maintenance

All machines & equipments deteriorate when they are used for the purpose of production. This

will result in changes in dimensions of components of that machine. It will affect the quality of

output. Preventive maintenance is an activity undertaken to prevent breakdowns, reduce

operating costs & improve quality & quantity of the output. It is the policy of “stitch in time” &

implementation of the principle of “Prevention is better than cure”

Preventive maintenance includes:

i. Regular cleaning, greasing & oiling of moving parts

ii. Replacement of worn out parts before they fail to operate

iii. Periodic & regular overhauling of entire machine

iv. Stand by provision for critical or key machines

3. Routine Maintenance

It includes activities such as periodic inspection, lubrication, cleaning, repairs etc. of machinery

& equipments after their service life. It includes tightening of the bolts, recharging of batteries,

replacing light bulbs & tubes in the plant areas etc.

Routine maintenance is classified in two categories:

i. Routine Maintenance, when machine or equipment is running. Here greasing or

lubrication is carried out when machine is in running condition

ii. Shut down Maintenance, where maintenance work is carried out only when the machine

or equipment is out of service e.g. repairing the machine after its complete failure to do

the normal job.


4. Predictive Maintenance

In Predictive Maintenance, the user of the equipment senses that the equipment is going to give

some trouble by hearing to the noise made by the equipment while in operation. Then

immediately the equipment is stopped & maintenance is done to avoid the trouble & breakdown.

Predictive Maintenance extends the service life of the equipment.

If it is neglected, then the equipment may have to face a major repair work which will increase

the operating & production costs.

5. Planned Maintenance

Breakdown or failure of the machine to operate does not occur in a planned manner but the

maintenance work can be systematically planned well in advance.

The planned maintenance is also called as scheduled maintenance or productive maintenance. It

includes inspection of all plant, machinery & equipments, buildings, lubrication, repairs etc

according to a predetermined schedule in order to avoid actual breakdown. Planned maintenance

aims to reducing machine stoppage due to sudden breakdown calling for emergency

maintenance. It helps in reducing machine downtime, reducing cost of maintenance & achieves

significant increase in production & productivity as compared to the unplanned maintenance.

Total Productive Maintenance (TPM)

The TPM is an innovative approach of maintenance developed by Japanese manufactures. The

main objective of TPM is to develop an operational system, which is “maintenance free”.

Under this system maintenance prevention (MP) is achieved through a proper combination of

Preventive Maintenance (PM) & Predictive Maintenance Action (PMA).

In TPM, instead of waiting for a breakdown, a small group carries out preventive maintenance

on a selective basis. This is called as condition based maintenance. This leads to maintenance

free service.

Introduction of Inspection

Inspection is important function although it does not add any values to the product still it adds to

the cost of products. Proper inspection is necessary to get the desired results.

Inspection is an important tool of quality control, which aims at controlling the quality control,

which aims at controlling the quality of the product. Thus inspection is said to be a sorting

process on the basis of which products can be classified into acceptable or non-acceptable ones.

Inspection can be defined as “The process of measuring the qualities of a product or service in

terms of established standards.”


Objectives of Inspection

i. Maintenance of quality as per standard

ii. Improvement in quality of the products

iii. Minimization of the costs

iv. To detect sources of weaknesses

In Inspection process there are certain main steps involved & these steps are to be followed to

get the desired result.

Steps in Inspection

1. To identify most important characteristics of the quality of the items which are to be

inspected i.e. what to inspect?

2. To decide when & where the inspection should take place i.e. When & where to inspect?

3. To find out what size of the sample be selected for detailed inspection so that the sample will

be proper representation of the population under study i.e. Size of Sample?

4. To develop a sampling scheme for actually selecting the items from the lot i.e. How to select

the sample?

5. To define specification limits for the acceptation or rejection of the items i.e.: To fix limits of

tolerance of deviation from the standards.

Functions of Inspection

The main function of inspection department may be stated as follows:

1. To develop & maintain the specified standards of the quality of the product produced

2. To develop methods & techniques to carry out the inspection at minimum cost

3. To separate defective products & send them for re-operation

4. To maintain tools & equipments of inspection in good workable condition

5. To make an attempt to detect the defects at source so as to reduce scraps & defective

products

6. To advise operating workforce whenever difficulties in the production process arise

7. To report top management about the sources of manufacturing problems

Types of Inspection Inspection is of two types:

1. Cent Percent Inspection; 2. Sampling Inspection

Cent Percent Inspection

It is one in which each & every piece is verified against the pre-set specifications. However cent

percent inspection does not mean verification of each & every quality characteristic. Only

important characteristic which is necessary for satisfactory performance are verified.


Weaknesses of Cent Percent Inspection

1. It involves huge costs & expenditure

2. It is time consuming & tedious

3. Not suitable for destructive tests quality specifications

4. It is not foolproof due to human error element

Sampling Inspection

In this method few samples (pieces) are taken out from the lot & they are inspected. Quality of

the lot is decided on the inspection result of these samples.

If the sample conforms to specifications the whole lot is accepted otherwise it is rejected. Since

the acceptance is based on the inference drawn from the sample, the technique is known as

acceptance sampling. Sampling Inspection however is subjected to sampling errors as there is

always a chance that the sample may not be the true representative of the population from which

it is drawn. It results in acceptance of a lot of bad quality or rejection of a lot of good quality.

Sampling errors can be minimized by random sampling method so that every portion of the lot

will have equal representation in the sample.

Sampling Inspection can be conducted on wither of the two basis:

a) Variable Basis

In this inspection of samples is conducted in measurement (variables) basis. E.g. weight of a

packet, Length of component etc.

b) Attribute Basis

In this inspection of sample is carried out on “go” & “no go” basis. E.g. cracks, color,

appearance etc.

Defects

Defects can be broadly classified as follows:

1. Critical defect

A defect that renders the item totally unfit for use

2. Major defect

A defect which is not critical but affects function, effectiveness, life or appearance of the item

3. Minor defect

A defect that does not materially reduce the usability of the product


The Operating Characteristic Curve

The sampling plan is supposed to separate good lots from bad lots but there are bound to be

sampling error. A sampling plan specifies the sample size (n) to be drawn & the number of

defectives (c) associated with it which are to be allowed in a batch of acceptable quality (“C” is

referred as acceptance numbers). The lot is accepted if the number of defectives in the sample is

equal to or below the permissible number of defectives. The lot is rejected if the number of

defectives in the sample exceeds the permissible limit. The capability of the sampling plan to

discriminate between good lots is determined with the help of operating characteristics (OC)

curve.

The construction of the OC curve

The operating characteristic curve gives the probability that a lot with particular percentage

defectives (P) shall be accepted on the basis of sampling inspection.

The curve drawn on a graph indicates percentage defectives (P) in the lot along the X-axis &

probability of acceptance (Pa) of the lot along Y-axis.

The figure below indicate the operating characteristic curve

Fig: The operating characteristic curve

The basic characteristic of an OC curve are:

i. The OC curve is based on the assumption that if the lot is large in comparison to the sample,

the probabilities of the OC curve will follow a binomial distribution

ii. An OC curve drawn for sample size “n” & the associated number of defectives © gives the

probability of acceptance of sampling from the lot.

iii. Zero percentage defectives are always accepted on OC curve

iv. Only two points (sample size & acceptance number) on the curve are sufficient to specify an

OC curve


Parameters of an OC curve

An OC curve has four parameters:

1. Producer Risk ( )

It is the probability that a good lot will be rejected by the sampling plan. It varies in between

0.01 to 10%

2. Consumers Risk ( )

It is the probability that a bad lot will be accepted by the sampling plan

3. Acceptable Quality Level (AQL)

It is the maximum percent defective (or maximum number of defects per hundred) that for the

purpose of sampling inspection can be considered satisfactory as a process average. A good

sampling plan should have a low producer’s risk for quality that is equal to or better than AQL

4. Lot Tolerance Percentage Defective (LTPD)

It is the defect level for which lots are regarded as bad lots & therefore should have very low

probability of acceptance.

Following is the OC curve which gives graphical summary of these four parameters

Fig: OC curve showing its four parameters


OC curve of an Ideal Plan: An operating characteristic curve indicates the ability of the sampling plan to discriminate

between lots of varying quality. An ideal OC curve is a rectangular shaped curve that accepts all

lots with quality equal to or better than AQL & rejects all other lots.

Fig: OC curve of an ideal sampling plan

From the above fig its suggests that

All lots less than 3% defectives have the probability of acceptance of 1.00 (certainty) (i.e.

accepted)

All lots greater than 3% defectives have the probability of acceptance zero (or rejected)

OC curve of a General Plan Only cent percent inspection can perfectly discriminate between lots of good & bad quality.

With a general OC curve, probability of acceptance of lots of good quality is never unity.

Similarly even lots with percent defectives equal to or greater than LTDP, though technically bad

lots have some chance of being accepted.


A general OC curve is divided into three zones:

1. Zone of acceptance

2. Zone of indecision (inspection)

3. Zone of rejection

Fig: A general OC curve divided into three zones

Zone of acceptance & rejection The zone extending up to AQL & beyond LTPD is referred to as the zone of the acceptance &

the zone of rejection respectively.

Nearly all lots within zone of acceptance are accepted quickly & within the zone of rejection

nearly all are rejected.

An OC curve should therefore be chosen in such a way that its zone of acceptance only accepts

those lots which are considered to be satisfactory & its zone of rejection rejects lots which are

considered unsatisfactory.

Zone of indecision or inspection It is the zone in between the zone of acceptance & zone of rejection. Lots having percentage

defectives more than the AQL but less than LTPD fall within this zone.

No decision whether the lot should be accepted or rejected can be taken until cent percent

inspection is carried out. The width of the zone of inspection however can be reduced by taking a

large sample but it will increase the inspection cost.


Statistical Quality Control (SQC) Under modern competitive conditions every producer has to produce quality products, which

will be preferred by the consumers.

In order to maintain quality of the final products quality control has to be applied to the

production process.

The statistical quality control (SQC) is the application of the statistical techniques to decide

whether to accept or reject the product produced or to control the process of production to

maintain product quality while the product is being produced.

Advantages of SQC

1. It helps in preventing the defects & thus reworking, rejection & scrap are avoided

2. It helps in avoiding risk of accepting a bad lot

3. It helps in maintaining high standards of quality & promotes goodwill about the organization

4. SQC reduces the task of inspecting the whole lot

5. It aims at reducing inspection expenses so as to produce the final product at minimum cost

6. As standard quality is maintained it helps in maintaining standard price

7. It promotes feeling of responsibility among the workers

8. SQC concentrates on empowering the quality of the product

Control charts as tool for process control

A fundamental aim of process control is to evolve system of differentiating the variations due to

chance causes & those due to assignable causes so that the latter can be identified & removed

thereby improving the quality of the product. The basic tool used for this purpose is called

control chart.

A control chart is a visual display of the inspection results of the samples of the product.

A control chart consists of three lines a central line, upper control limit & lower control limit.

To construct the chart, time variable is taken along the X-axis & the quality characteristic of the

product is taken along the Y-axis.

The control parameters – central line, upper control line & lower control line are horizontal lines.

Central line denotes the mean value of the quality characteristic. The upper control limit is

located at 3 standard deviations above the central line & the lower control limit is located at 3

standard deviations below the central line.

Samples of fixed size are taken at specified intervals of time. Each sample is inspected for the

given quality characteristic. The values of the samples are plotted on the graph according to the

time variable. The trend of the points in the chart is studied to know the state of process. So long

the sample points lie within the control limits, the process is said to be under control. The falling

of points outside the control limits indicates deterioration in quality & hence the presence of

assignable causes. Such cause are then identified & corrected.


Types of control charts

Control charts are of two types

1. Those drawn for properties which are variables; these are called control charts by variables

2. Thos drawn for properties which are attributes; these are called control charts by attributes

Control charts for Variables

1. The average chart ( - chart), which measures the central tendency of the process

2. The range chare(R – chart), which measures the spread of the process

Since these two charts are used together, they are commonly known as - R charts.

Control charts for attributes

1. The fraction defective chart (P- chart) which records the proportion of defective items in a

sample

2. The number defective chart (np-chart) which records the number of defective items in a

sample

3. The defects chart (c-chart) which records the number of defects in a component/product.

Introduction to Six Sigma Six Sigma as a management standard in product variation (presently even for service variation)

can be treated back to the work during 1920’s when Walter Shewhart showed that three sigma

from the mean is the point where a process requires correction.

Definition

Six sigma is a disciplined data driven approach & methodology for eliminating defects which

amounts to driving towards six standard deviations between the mean & the nearer specifications

limit in any process of products/ services.

Six Sigma level indicates that we are 99.99966% confident that the product/ service delivered by

us is defect free. This means that only 0.00034% of the times the product/ service delivered are

defect prone.

When 0.0000034 is multiplied by one million, it comes to 3.4 defect s per million opportunities.

Actual sigma level = Actual number of defects

––––––––––––––––––––––––––– x 100

Total no. of opportunities for the

organization to make mistakes

from the customer angle

A process is said to be at six sigma level provided that the process is not producing more than 3.4

defects per million opportunities. The fundamental objective of six sigma methodology is the

process improvement & reduction of variation through its application.


At its Core, Six Sigma revolves around the following few concepts

1. It is critical to attributes which are most important to the customers

2. It focuses on the process more specifically what it can deliver

3. It aims for stability of the process i.e. improve product quality which is the utmost

expectation of the customer

4. It focuses on the design for six sigma to meet customer needs & process capability

Approaches for Six Sigma There are two approaches for achieving six sigma which are as follows:

DMAIC & DMADV

DMAIC

DMAIC means Define, Measure, Analyze, Improve & Control.

The six sigma DMAIC process is an improvement system for existing processes falling below

specification & looking for incremental improvement. It is systematic, scientific & fact based.

DMADV

DMADV means Define, Measure, Analyze, Design & Verify. The six sigma DMADV process is

an improvement system used to develop new processes or products at six sigma quality levels.

This can be used even for existing processes if they require more than just incremental

improvement.

Steps of Six Sigma DMAIC Step – 1: Define

This step establishes a leadership team which will decide on the project on which it will work. It

also identifies key considerations like cost benefits, customer expectations, product quality

enhancement & ability of the team to have a positive impact on the process.

1. Define all your products by making a list of them along with corresponding end results

2. Identify your customers of each end product

Step – 2: Measure

In this step, the team examines all aspects of the project, develops a thorough understanding of it

& identifies the critical requirements & processes. The team defines performance measures for

key characteristics & establishes an effective means of measuring them. Then, the measurements

of the process to determine current performances are done.

Following are the sub-steps:

1. Define your needs in terms of essential inputs for projects/ products selected

2. Setup quality measures

3. Define the method of computing errors/ unit, errors/million & actual sigma level

4. Measure the current performance of the process


Step –3: Analyze

In this step, the team analyzes the results of this collected data & work for improvement of the

process if required. It includes identification & quantification of the sources & locations of

defect causing variables within the process.

Step-4: Improve

The following steps are performed

1. Identification of process improvements based on the collected data & analysis

2. Designing a plan of action

3. Performing risk assessments on the potential changes

4. Implementing the plan

5. Monitoring the results for the recommended changes

Step-5: Control

In this step, the team reviews the entire process to ensure that the appropriate changes have been

made & to identify the actions that will permanently maintain those changes.

Further, steps are taken to control future process performance.

Steps of Six Sigma DMADV The first three steps of DMAIC & DMADV are same except last two steps. The steps of

DMADV are as given

Step-1:

Define the project goals & customer (internal & external) deliverables

Step-2:

Measure & determine customer needs & specifications

Step-3:

Analyze the process options to meet the customer needs

Step-4:

Design detailed process to meet the customer needs

Step-5:

Verify the design performance & ability to meet customer needs

Benefits of Six Sigma

1. It ensures enhanced product quality

2. It enables predictable delivery of the products

3. It helps to achieve productivity improvement

4. It helps to have rapid response to changing needs of customers

5. It also facilities the development & introduction of new production in to the marketplace


Gap Analysis for Service Quality Assessment There are certain factors which are very important in case of quality of a service. This is because

of the intangible nature of services.

These factors are as follows:

1. Reliability

2. Responsiveness

3. Competence

4. Access

5. Courtesy

6. Communication

7. Credibility

8. Security

9. Understanding the customer

10. Tangibles

The above factors are very useful for quality improvement in case of services.

Fig: A service Quality Model

The gaps that are shown in the figure indicate the key discrepancies between the firm’s

perceptions & actions & the customer’s expectations. These gaps need to be closed in order to

improve the service quality.


Explanation about these Gaps is given below:

Gap 1: This gap depicts that the management’s perceptions of customer’s expectations are

different from what the customer actually expects. This happens due to :

1. Insufficient market research

2. Inadequate interaction with the customers

3. Communication gaps within the organization

Gap 2: This gap represents the extent to which the service quality standards have gone wrong.

This is due to:

1. Inadequate tasks standardization

2. Absence of Goal- Setting

3. Inadequate management commitment to service quality

Gap 3: This is the gap between what the specifications of the company call for & what is

delivered. It may be called as the service performance Gap.

1. The job or the service task is not clear to the employee

2. Role conflict

3. Poor Employee – Job fit

4. Poor Technology – Job fit

5. Lack of Team- work

6. Inappropriate supervisory control systems

Gap 4: This is the gap between what has been promised to the customer & what is delivered to

him. This can happen because of:

1. Carelessness in terms of promising to the customer more than what can be delivered

2. Inadequacy in communication between the various departments of the service organization

Gap 5: This is the result of all the other gaps. It indicates as to how the customer experiences the

gap between what he expected & what he is perceiving as service received.

These above gaps can be minimized if the following factors can be considered by the service

organization

1. Assurance of providing basic service

2. Reliability of what you promise to deliver

3. Foster two- way communication

4. Customer Relationship Management


Introduction of Work Study

Under modern competitive conditions manufacturing organizations have to strive for achieving

lower production costs, higher quality of the products & attaining optimum utilization of

available resources. Hence to improve labor productivity & reducing costs by improving work

methods & developing simple work procedure needs to be given special attention by the

production managers.

Work study is constituted of two techniques known as:

1] Method Study & 2] Work Measurement

Definition:

ILO defined work study as “The techniques of method study & work measurement employed to

ensure that best possible use of human & material resources in carrying out a specified activity.”

Objectives of Work Study

1) To analyze systematically the present method of doing the job within a view to develop a

new better & efficient method.

2) To recommend & implement the improved work methods to carryout the job most

economically & in minimum time schedule

3) To establish standard time & standard cost for every job

4) To increase productivity of men & machines to produce quality products at minimum cost

5) To improve the efficiency of production processes

6) To emphasize the measurement of work values

7) To initiate & implement effective incentive schemes in the organization

Scope of work study Work study is constituted of the following elements

1. Method Study

It is systematic recording & critical examination of existing & proposed ways of doing the work

so as to develop more effective methods & to reduce costs through optimum use of the resources.

In this new & better methods are suggested to achieve higher efficiency & productivity.

2. Work Measurement

It deals with the application of techniques designed to establish the time for the qualified ideal

worker to carryout a given job at the defined level of performance.

It decides about the time required to carryout the job by using new methods.

Both these elements are inter-related.


Uses of the work study

1. It helps in increasing productivity & efficiency

2. It determines the standards of performance

3. It helps in increasing the output & reducing

4. It enables to develop improved work place layout

5. It helps in achieving better manpower & capacity planning for the organization

6. It provides a standard of performance to measure labor efficiency

7. It helps in maintaining healthy industrial relations

8. It provides job satisfaction to employees

Under method study extensive use of the charts & diagrams is made to record the facts on

account of their simplicity & economy.


Flow process Charts, Flow diagrams & Process Mapping Any job or process can be studied with the help of flow process chart for methods improvement

by recording all the events.

The symbols which are universally accepted for flow process charts are as follows:

Process charts are generally drawn for the material which goes from the raw material stage to the

finished product stage.

Sometimes they may refer to the activities performed by the worker in getting a certain process

done.

This can be shown with the help of following example:

Fig: Simple example of the flow process chart


Process charts do not refer to the material & men or machine simultaneously. Each one of the

activities can be analyzed to find whether it could be:

1. Eliminated or

2. Reduced in time or

3. Substituted by some other activities or

4. Put elsewhere in the sequence etc

The ultimate goal is to simplify the procedure to minimize the process cost.

Men & Machine charts

These charts can be used to study the joint operations & activities of men & machines. These

charts can help in identifying busy & idle time of both men & machines. These charts help in

identifying busy & idle time of both men & machines. They provide basis for the work

measurement & operational analysis.

Work Measurement Work Measurement is mainly concerned with the determination of the total time required to

perform a unit of work.

Definition: The work measurement may be defined as “The techniques applied to determine the

amount of time necessary for a qualified worker to perform a particular task.”

The amount of time required to complete a given job is expressed as time standard, work

standard, labor standard, labor standard, production standard or standard time. The standard time

is the amount of time a qualified worker working at the normal rate of speed, will require to

perform the specified task. It is expressed in terms of minutes per unit or output per hour.

Objectives of Work Measurement

This technique aims at achieving the following objectives

1. To fix standard time for each job scientifically, this will help to workout realistic schedules &

manpower requirements

2. To carry out sound comparison of alternative methods on the basis of time

3. To develop improved planning & control of activities or operations

4. To generate effective incentive scheme by linking them with target times

5. To develop reliable basis for the control of labor costs

6. To achieve proper balancing in work distribution

7. To provide basis for forecasting future manpower & related costs

Elements of Work Measurement

An element is a distinct part of a specified job. On the basis of observation, convenience,

measurement & analysis there are right types of elements which are as follows:

Repetitive Elements:

These are the elements which occur in every cycle of the given task. E.g. Loading & Unloading


Occasional Elements:

These elements which do not occur in every cycle of the task, but may occur at random or at

regular intervals. E.g. breaking of threads in Textile unit

Constant Elements:

These elements which may occur in every cycle or not but they are identified in specification &

time from cycle to cycle. E.g. switching on-off machine

Variable Elements:

These are the elements where the time of performance varies with characteristics of products

such as weight, size etc of the product. E.g. Loading & Unloading time of product

Manual Elements:

It is the element performed by the worker.

Machine Elements:

The element which is automatically performed by machine is the machine element. E.g.

Pressing, Forging etc.

Governing Elements:

When two elements are present at the same time in a given cycle then that element which takes a

longer time is called as Governing elements. E.g. boiling of water while setting out teapot &

cups

Foreign Elements:

Those elements that are observed during the study but do not form the necessary parts of the

given activity of the cycle are known as foreign elements.

E.g. An operator stopping the machine when he wants to talk with his friend.

Thus the study of elements is an important part of the work measurement.

Benefits of Work Measurement:

1) Developing a basis for alternative methods

2) Correcting manpower requirements for different tasks

3) Useful in preparation of accurate work schedules

4) Planning & scheduling to meet delivery dates

5) Estimating production cists accurately

6) Assessment of Labor cost accurately

7) Developing new better & more efficient methods

8) Training new employees for specific elements of job/ task

9) Checking progress of workers & taking necessary steps if required


Performance Rating: All the operators do not work at the same pace as same work at a faster rate while others work at

a slower rate. Hence, while establishing the time standard for the work performance some speed

allowance has to be made in the time values obtained through time study.

The determination of relative speed at which an operator id working is called as “rating”. Rating

the speed of the operator is a matter of subjective judgment of a time study analyst.

Various techniques are used to measure the performance rating such as wasting hour rating,

100% rating etc.

Assessment of Relaxation & other Allowance

When basic times of the various elements of the job added together, we get normal time for the

job as a whole. But it may not be equal to the standard time, because of lack of continuous work

by employees. Hence some extra time has to be added to the normal time to estimate the standard

time. In other words some allowance have to be made for the normal work due to interruption,

fatigue, personal needs etc.

Standard Time Standard time is the total time in which a job should be completed at standard performance i.e.

standard time = Basic time + Allowance

Calculation of standard time of the job Problem: -

The workmen in an engineering company are expected to work for 400 minutes in a shift of 8

hours. The remaining time is meant for rest & other personal needs etc.

a) Determine the standard time per piece of a job whose normal time is 2 minutes

b) Calculate number of pieces to be produced per day

c) If the workmen produced 180 pieces in the shift, what is his efficiency?

Solution: -

a) Standard time per piece

Normal time per piece = 2 minutes

Allowance in a shift of 8 hours = 480 – 400

= 80 minutes

Therefore, % allowance = 80 x 100

400

= 20% of normal time

Therefore, standard time per piece = 2 + 20 x 2 = 2 + 0.20 x 2 = 2 + 0.4 = 2.40 minutes

100


b) Quantity to be produced per day

Time available for the day = 8 hours

= 480 minutes

Standard time per piece = 2.40 minutes

Therefore, Qty to be produced/ day = 480

2.40

= 200 pieces

c) Operator’s efficiency

Qty actually produced = 180 pieces

Qty to be produced = 200 pieces

Therefore, Efficiency = 180 x 100

200

= 90 %

Therefore, Efficiency of operator = 90 %

Synthetic Time standards or Synthesis method of work measurement In some industries the work done is repetitive in nature & the products produced are in large

numbers or in batches of different sizes at irregular intervals. Under such conditions it is tedious

to carry out time studies, hence synthetic techniques are used.

Synthesis is a technique of work measurement adopted to estimate the time required to do a job

at a defined level of performance by totaling or synthesizing the values of elemental times

obtained from earlier time studies on other jobs having similar job elements.

With the help of standard time data the time required for each job element is collected & then by

adding of allowance to it the synthetic time standard for that particular job is prepared.

Advantages:

1. It helps in reducing cost of time studies

2. Time values are reliable as they are based on standard data

3. Can be useful to estimate labor cost for new jobs

Work Sampling/ Activity Sampling Work Sampling is a technique of work measurement which takes samples of the work of

employees randomly at periodic intervals to determine the production of total operations that is

accounted for in one particular activity.

The areas in which the work sampling is useful are as under:

a) Cost reduction & cost control

Work sampling data yields a lot of useful information on delays & interruptions & the causes

underlying them. This is very useful in preparing work specification program which will result in

cost reduction & control.


b) Assessment of Allowances for output Standard:

The output standards besides relaxation allowance include allowances for delays & interruptions

incidental to the work. Such delays can be economically measured with work sampling

technique.

c) Fixation of output standards

Output standards for short-cycle-repetitive-jobs can be set economically with time study & allied

work measurement techniques. Work sampling is useful for setting output standards for long

cycle jobs & operations involving team work. This technique is also useful in measurement of

work load.

d) Testing the accuracy of the output standards

Work sampling is used to check the accuracy of the output standards in combination with work

measurement techniques.

Advantages of Work sampling:

1. Training is not required

2. More than one task can be studied simultaneously

3. More suitable than time study & work measurement

Procedure for conducting a Work sampling study

Following steps are required

1. Decide on the objective of the study

2. Explain to the concerned persons

3. Fix up work & delay elements

4. Decide on the duration of the study

5. Determine the desired accuracy of the final results & confidence level

6. Make the preliminary estimate of percentage occurrence of the activity or delay to be

measured

7. Design the study

8. Make the observations according to the plan

9. Summarize results

10. Check the accuracy of data at the end of the study

11. Prepare report with conclusions & recommendations

manufacturing and operations management

Documents