Summer / May 2012

Master OF Business Administration

Second Semester

Production and Operations Management - (MB0044) Assignment Set- 2 (60 Marks)

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Q1. Explain briefly the Computer Integrated Manufacturing.Ans: Computer-integrated manufacturing(CIM) is themanufacturingapproach of usingcomputersto control the entire productionprocess.

[1][2] This integration allows individualprocesses to exchange information with each other and initiate actions. Through the integrationof computers, manufacturing can be faster and less error-prone, although the main advantage isthe ability to create automated manufacturing processes. Typically CIM relies onclosed-loopcontrol processes,based on real-time input from sensors. It is also known as flexible design and manufacturing .The term "computer-integrated manufacturing" is both a method of manufacturing and the nameof a computer-automated system in which individual engineering, production, marketing, andsupport functions of amanufacturingenterprise are organized. In a CIM system functional areassuch as design, analysis, planning, purchasing, cost accounting, inventory control, anddistribution are linked through the computer with factory floor functions such as materialshandling and management, providing direct control and monitoring of all the operations.As a method of manufacturing, three components distinguish CIM from other manufacturingmethodologies:

Means for data storage, retrieval, manipulation and presentation; Mechanisms for sensing state and modifying processes;

Algorithms for uniting the data processing component with the sensor/modificationcomponent.CIM is an example of the implementation of information and communication technologies(ICTs) in manufacturing.CIM implies that there are at least two computers exchanging information, e.g. the controller of an arm robot and a micro-controller of a CNC machine.Some factors involved when considering a CIM implementation are the production volume, theexperience of the company or personnel to make the integration, the level of the integration intothe product itself and the integration of the production processes. CIM is most useful where ahigh level of ICT is used in the company or facility, such as CAD/CAM systems, the availabilityof process planning and its data. Key challenges There are three major challenges to development of a smoothly operating computer integrated manufacturing system

1. Integration of components from different suppliers: When different machines, such asCNC, conveyors and robots, are using different communications protocols. In the case of AGVs,even differing lengths of time for charging the batteries may cause problems.

2. Data integrity:The higher the degree of automation, the more critical is the integrity of the data used to control the machines. While the CIM system saves on labor of operatingthe machines, it requires extra human labor in ensuring that there are proper safeguardsfor the data signals that are used to control the machines.

3. Process control:Computers may be used to assist the human operators of themanufacturing facility, but there must always be a competent engineer on hand to handlecircumstances which could not be foreseen by the designers of the control software.

4. Computer

Q2. What is meant by Total Quality Management? Mention the 14 points of Demings approach to management. A2. Total quality management or TQM is an integrative philosophy of management for continuously improving the quality of products and processes. TQM functions on the premise that the quality of products and processes is the responsibility of everyone who is involved with the creation or consumption of the products or services offered by an organization. In other words, TQM capitalizes on the involvement of management, workforce, suppliers, and even customers, in order to meet or exceed customer expectations. Considering the practices of TQM as discussed in six empirical studies, Cua, McKone, and Schroeder (2001) identified the nine common TQM practices as cross-functional product design, process management, supplier quality management, customer involvement, information and feedback, committed leadership, strategic planning, cross-functional training, and employee involvement The TQM concept was developed by a number of American management consultants, including W. Edwards Deming, JoesephJuran, and A.V. Feigenbaum.[3] Originally, these consultants won few converts in the United States. However, managers in Japan embraced their ideas enthusiastically and even named their premier annual prize for manufacturing excellence after Deming.

The 14 Points 1. Constancy of purpose for continuous improvement 2. Adopt the TQM philosophy for economic purposes 3. Do not depend on inspection to deliver quality 4. Do not award any business based on price alone 5. Improve the system of production and service constantly 6. Conduct meaningful training on the job 7. Adopt modern methods of supervision and leadership 8. Remove fear from the minds of everyone connected with the organisation 9. Remove barriers between departments and people 10. Do not exhort, repeat slogans, and put up posters 11. Do not set-up numerical quotas and work standards 12. Give pride of workmanship to the workmen 13. Education and training to be given vigorously 14. State and exhibit top managements commitment for quality and productivity

The 14 points are a guide to the importance of building customer awareness, reducing variation, and fostering constant continuous change and improvement throughout organizations

Q3. Describe briefly the Project Monitoring and control. A3. Any project aimed at delivering a product or a service has to go through phases in a planned manner, in order tomeet the requirements. It is possible to work according to the project plan only by careful monitoring of the projectprogress. It requires establishing control factors to keep the project on the track of progress. The results of any stage in aproject, depends on the inputs to that stage. It is therefore necessary to control all the inputs and the correspondingoutputs from a stage. A project manager may use certain standard tools to keep the project on track. The project managerand the team

members should be fully aware of the techniques and methods to rectify the factors influencing delay of theproject and its product.To analyze the project, methodologies such as, PERT (Program Evaluation Review Technique) and CPM (Critical PathMethod) may be used. In the PERT method, one can find out the variance and use the variance to analyze the various probabilistic estimatespertaining to the project.

Using the CPM, one can estimate the start time and the finish time for every event of the project in its WBS (WorkBreakdown Structure).The analysis charts can be used to monitor, control, track, and execute a project. The various steps involved in monitoringand controlling a project from start to end are listed below. (See Figure 9.3 Steps for monitoring and controlling a project

Preliminary work: The team members must understand the project plans, project stage schedule, progress controls, tracking schedules, summary of the stage cost and related worksheets. All the members have to understand the tolerances in any change and maintain a change control log. They must realize the need and importance of quality for which they have to strictly follow a quality review schedule and frequently discuss the quality agendas. They must understand the stage status reports, stage end reports, stage end approval reports.

Project progress: The members must keep a track of the project progress and communicate the same to other related members of the project. They must monitor and control project progress, through the use of regular check points, quality charts, and statistical tables; control the quality factors which are likely to deviate from expected values as any deviation may result in changes to the stage schedule. The project manager ensures that these changes are made smoothly and organizes review meeting with the project management group. Thus all the members are aware about the progress of the project at all times. This helps them to plan well in advance for any exigency arising due to deviation from planned schedule.

Stage control: The project manager must establish a project check point cycle. For this, suitable stage version control procedures may be followed. The details are to be documented stage wise. Project files have to be

frequently updated with suitable version control number and revision status should be maintained for each change. Team members are identified who will exercise controls at various points of the project.

Resources: The project manager has to plan the resources required for various stages of the project. He has to brief both the project team and the key resources about the objectives of every stage, planned activities, products, organisation metrics, and the project controls. This increases the visibility into the project performance and hence a quality control can be achieved. Allocating a right resource at the right place and the right time will significantly enhance the efficiency and effectiveness of the resource.

Quality control: Quality control is very important in any project. Quality control is possible if the project members follow the quality charts and norms very strictly. The following lists the possible ways to control quality.

Schedule quality review: Project members are recommended to schedule the quality review at the beginning and alsothe end of every stage. This helps the project manager and team members to plan well in advance for any unforeseendeviation.

Agenda for quality review: The project manager should create and distribute a quality review agenda specifying theobjectives, products, logistics, roles, responsibilities, and time frames. This increases the effectiveness of the reviewand also reduces the time gap.

Conduct quality review: The quality review is to be conducted in a structured and formal manner. Quality reviewshould focus on product development and its quality factors. The project members should check whether the reviewmeets the prescribed quality standards.

Progress control: The progress control of a project can be achieved by considering the following:

Monitor performance: The first step for any project control mechanism is to monitor the progress. There arenumerous ways to monitor and measure various project parameters. For example, the team members log indetails of actual start date, actual finish date, actual hours worked per task, estimated hours to complete the task,elapsed time in hours to complete the task, any miscellaneous costs incurred during a stage. These inputs becomethe base to monitor the performance of the project and its stages.

Update schedule: Update the schedule for:

Actual start date for tasks started

Actual finish date for tasks finished Actual hours worked per task

Latest estimated work in hours to complete the task

Update costs: Update the stage cost summary worksheet with actual costs incurred during the period andestimated remaining costs. Miscellaneous costs will be automatically updated from the scheduler, since they arecalculated from actual work.

Re-plan stage schedule:

Review the tracking Gantt and Cost workbook and identify any deviation from thebaseline. Analyse the cause of the deviation. Refer back to the project control factors to help determine theappropriate corrective action and adjust the schedule accordingly. Determine if the stage has exceeded theprogress, cost and quality tolerance levels agreed with the project management team. Review status of openissues and determine any further action required on these issues. Review the status of any outstanding qualityreviews. Review any new change requests.

Conduct team status review: Conduct a status meeting with the project team. This is important to bring everyoneon the same page of the project progress.

Create status report: The status report provides a record of current achievement and immediate expectations of the project. The status has to be effectively communicated to all concerned parties.

Create flash report: Summarize the accomplishments for the month, schedule status, upcoming tasks for themonth and any major issues. Distribute the same to all project team members and stakeholders.

Project status reports: As discussed earlier, the status report provides a record of current achievements andimmediate expectations of the project. This is generated on a regular basis depending upon the type,requirements and phase of the project. Typically it is generated for a week.

Approvals: In any project, it is important to have top management or project sponsors into confidence about allthe aspects of the project. This project stage reviews the decisions taken and actions planned and get it approvedby the top management. The goals of such review are to improve quality by finding defects and to improveproductivity by finding defects in a cost effective and timely manner. The group review

process includes severalstages like planning, preparation, overview of a group review meeting, rework recommendations and follow-up.

Q4. What is value engineering? Explain its significance.Answer: A.4 Value Engineering (VE) or Value Analysis is a methodology by which we try to find substitutes for a product or anoperation.The concept of value engineering originated during the Second World War. It was developed by the General ElectricCorporations (GEC). Value Engineering has gained popularity due to its potential for gaining high Returns on Investment (ROI).This methodology is widely used in business re-engineering, government projects, automakers, transportation anddistribution, industrial equipment, construction, assembling and machining processes, health care and environmentalengineering, and many others. Value engineering process calls for a deep study of a product and the purpose for which it isused, such as, the raw materials used; the processes of transformation; the equipment needed, and many others. It alsoquestions whether what is being used is the most appropriate and economical. This applies to all aspects of the product.

Value Engineering helps your organization in: Lowering O & M costs Improving quality management Improving resource efficiency Simplifying procedures Minimizing paperwork Lowering staff costs Increasing procedural efficiency Optimizing construction expenditures Developing value attitudes in staff Competing more successfully in marketplace

Value Engineering helps you to learn how to: Improve your career skills

Separate "Symptoms" from "problems" Solve "root cause" problems and capture opportunities Become more competitive by improving "benchmarking" process Take command of a powerful problem solving methodology to use in any situation.

Q5. What is meant by Supply Chain Management (SCM)? What are the objectives of SCM?Answer: A5. Supply chain management (SCM) is the management of a network of interconnected businesses involved in theultimate provision of product and service packages required by end customers (Harland, 1996). Supply chain managementspans all movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to pointof consumption (supply chain).

Another definition is provided by the APICS Dictionary when it defines SCM as the "design, planning, execution, control, andmonitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveragingworldwide logistics, synchronizing supply with demand and measuring performance globally."SCM is required by an enterprise as a tool to enhance management effectiveness with the following organizational objectives:

1. Reduction of inventory 2. Enhancement of participation level and empowerment level 3. Increase in functional effectiveness of existing systems like Enterprise Resource Planning (ERP), Accounting Software,and Documentation such as Financial reports/ Statements/ISO 9000 Documents 4. Effective integration of multiple systems like ERP, communication systems, documentation system and security 5. Design / Research & Development (R&D) systems 6. Better utilization of resources like men, material, equipment, and money 7. Optimization of money flow cycle within the organization as well as from external agencies 8. Enhancement of value of products, operations, and services. These enhancements will consequently enhance theprofitability of organization 9. Enhancement of satisfaction level of customers and clients, supporting institutions, statutory control agencies,suppliers and vendors, employees and executives

10. Enhancement of flexibility in the organisation to help in easy implementation of schemes involving modernisation,expansion and diversificatiONeven divestments, mergers and acquisitions 11. Enhancement of coverage and accuracy of management information systems

Q6. Write short notes on automated flow lines. ANS When several automated machines are linked by a transfer system which moves the parts by using handlingmachines which are also automated, we have an automated flow line. After completing an operation on a machine, thesemi-finished parts are moved to the next machine in the sequence determined by the process requirements and a flow line is established. The parts at various stages from raw material to ready for fitment or assembly are processedcontinuously to attain the required shapes or acquire special properties to enable them to perform desired functions. Thematerials need to be moved, held, rotated, lifted, and positioned for completing different operations. Sometimes, a few of the operations can be done on a single machine with a number of attachments. They are moved further to other machinesfor performing further operations. Human intervention may be needed to verify that the operations are taking placeaccording to standards. When these can be achieved with the help of automation and the processes are conducted withself-regulation, we will have automated flow lines established. (See Figure 4.2 Automated flow lines)The main consideration is to balance times that different machines take to complete the operations assigned to them. It isnecessary to design the machines in such a way that, the operation times are the same throughout the sequence in theflow of the martial. In fixed automation or hard automation, where one component is manufactured using severaloperations and machines, it is possible to achieve this condition. We assume that product life cycles are sufficiently stableto invest heavily on the automated flow lines to achieve reduced cost per unit.The global trends are favoring flexibility in the manufacturing systems. The costs involved in changing the set up of automated flow lines are high. So, automated flow lines are considered only when the product is required to be made inhigh volumes over a relatively long period. Designers now incorporate flexibility in the machines which will take care of small changes in dimensions by making adjustments or minor changes in the existing machine or layout. The change inmovements needed can be achieved by programming the machines. Provisions for extra pallets or tool holders orconveyors are made in the original design to accommodate anticipated changes. The logic to be followed is to find outwhether the reduction in cost per piece justifies the costs of designing, manufacturing, and setting up automated flowlines. Group Technology and Cellular Manufacturing

along with conventional Product and Process Layouts are still resortedto, as they allow flexibility for the production system. As the methodologies of JIT and Lean Manufacturing have become important and relevant in manufacturing, manycompanies have realized that well designed flow lines suit their purpose well. Flow lines compel engineers to put in placeequipments that balance their production rates. It is not possible to think of inventories (Work In Process) in a flow line.Bottlenecks cannot be permitted. By necessity, every bottleneck gets focused upon and solutions found to ease them.Production managers see every bottleneck as an opportunity to hasten the flow and reduce inventories. However, it isimportant to note that setting up automated flow lines will not be suitable for many industries