Objectives: To get acquainted with the basic aspects of production/ Operations Management Various important concepts of operations management

nt and also to study its interrelationship with other functional areas of management.

Production Management Introduction: Before we discuss about production management, let us discuss about product, production and management. This will give us a rough idea about production Management and with what a production manager has to deal with. 1. PRODUCT Though many authors define the product with Consumer orientation, it is better for us to deal with different angles, because it will be helpful for us to understand the subject of production and Operation Management. (i) For a Consumer: The product is a combination of or optimal mix of potential utilities. This is because every consumer expects some use or uses from the product. Hence he/she always identifies the product in terms of the uses. Say for example-Soap can be identified by complexion, cleanliness of body, freshness, fragrance or health.... etc. Because of this, many producers advertise that they are selling health, or they are selling Cine star Complexion or they are selling freshness and so on. (ii) For a Production Manager: Product is the combination of various surfaces and processes (or operations). This is because the production Manager is solely responsible for producing the product. He has to think of the various surfaces by which the product is made of, so that he can plan for processes by which a particular surface can be made and plan for required capacity of the facility by which the surface is produced. While planning he has to see that the required surface is produced by the best and cheapest method (optimally), so as to make the product to face competition in the market. (iii) For a Financial Manager: For him the product is a mix of various cost elements as he is responsible for the profitability of the product. (iv) For a Personnel Manager: For him the product is a mix of various skills, as he is the person who selects and trains the personnel to meet the demand of the skill to produce the product. In general we can define the product as a bundle of tangible and intangible attributes, which along with the service is meant to satisfy the customer wants.

2. PRODUCTION Production means application of processes. (Technology) to the raw material to add the use and economic values to arrive at desired product by the best method, without sacrificing the desired quality. We have three ways of Production, they are: (i) Production by Disintegration: By separating the contents of Crude oil or a mixture the desired products are produced. For example the crude oil is disintegrated into various fuel oils. Similarly salt production is also an example for product produced by disintegrated. We can use Mechanical or Chemical or both technologies to get the desired product, so that it will have desired use value. (ii) Production by Integration: In this type of Production various Components of the products are assembled together to get the desired product. In this process, Physical and Chemical Properties of the materials used may change. The examples are: Assembly of Two wheelers, Four wheelers and so on. (iii) Production by Service: Here the Chemical and Mechanical Properties of materials are improved without any physical change. The example for this is Heat Treatment of metals. In real world, a combination of above methods is used. In general production is the use of any process or procedure designed to transform a set of input elements into a set of output elements, which have use value and economic value. 3. MANAGEMENT Management can be explained as an art or science, (in fact it is a combination of art and science) of getting things done by the people, by planning, coordinating, organizing, directing and controlling the activities to meet specified goals, with in the frame work of agreed policies. The above explanation put emphasis on getting things done, Planning, Organizing, Coordinating, and controlling and specific objectives and agreed policies. Todays manager needs scientific base as well as personal tactics to manage the people under him to achieve the desired goals. Above discussion about product, production and management will help us to understand what exactly the Production Management or Production, and Operations Management is. Production Management: it means planning, organising, directing and controlling of production activities. Production management deals with converting raw material into finish goods or products. It brings together the 6Ms i.e. Men, Money, Machine, Material ,Methods and Markets to satisfy the wants of the people.

Production management also deals with decision-making regarding the quality, quantity, cost, etc., of production. It applies management principles to production. Production management is a part of business management. It is also called "Production Function." Production management is slowly being replaced by operations management. The main objective of production management is to produce goods and services of the right quality, right quantity, at the right time and at minimum cost. It also tries to improve the efficiency. An efficient organisation can face competition effectively. Production management ensures full or optimum utilisation of available production capacity. Definition: "Production management deals with decision-making related to production processes so that the resulting goods or service is produced according to specification, in the amount and by the schedule demanded and at minimum cost. Importance of Production Management The importance of production management to the business firm: 1. Accomplishment of firm's objectives: Production management helps the business firm to achieve all its objectives. It produces products, which satisfy the customers' needs and wants. So, the firm will increase its sales. This will help it to achieve its objectives. 2. Reputation, Goodwill and Image: Production management helps the firm to satisfy its customers. This increases the firms reputation, goodwill and image. A good image helps the firm to expand and grow. 3. Helps to introduce new products: Production management helps to introduce new products in the market. It conducts Research and development (R&D). This helps the firm to develop newer and better quality products. These products are successful in the market because they give full satisfaction to the customers. 4. Supports other functional areas: Production management supports other functional areas in an organisation, such as marketing, finance, and personnel. The marketing department will find it easier to sell good-quality products, and the finance department will get more funds due to increase in sales. It will also get more loans and share capital for expansion and modernisation. The personnel department will be able to manage the human resources effectively due to the better performance of the production department. 5. Helps to face competition: Production management helps the firm to face competition in the market. This is because production management produces products of right quantity, right quality, right price and at the right time. These products are delivered to the customers as per their requirements. 6. Optimum utilisation of resources: Production management facilitates optimum utilisation of resources such as manpower, machines, etc. So, the firm can meet its capacity utilisation objective. This will bring higher returns to the organisation. 7. Minimises cost of production: Production management helps to minimise the cost of production. It tries to maximise the output and minimise the inputs. This helps the firm to achieve its cost reduction and efficiency objective.

8. Expansion of the firm: The Production management helps the firm to expand and grow. This is because it tries to improve quality and reduce costs. This helps the firm to earn higher profits. These profits help the firm to expand and grow. The importance of production management to customers and society: 1. Higher standard of living: Production management conducts continuous research and development (R&D). So they produce new and better varieties of products. People use these products and enjoy a higher standard of living. 2. Generates employment: Production activities create many different job opportunities in the country, either directly or indirectly. Direct employment is generated in the production area, and indirect employment is generated in the supporting areas such as marketing, finance, customer support, etc. 3. Improves quality and reduces cost: Production management improves the quality of the products because of research and development. Because of large-scale production, there are economies of large scale. This brings down the cost of production. So, consumer prices also reduce. 4. Because other expand. spare The as Spread effect: of production, sectors also Companies making parts will expand. service sector such banking, transport, communication, insurance, BPO, etc. expand. This spread

also effect offers more job opportunities and boosts economy.

5. Creates utility: Production creates Form Utility. Consumers can get form utility in the shape, size and designs of the product. Production also creates time utility, because goods are available whenever consumers need it. 6. Boosts economy: Production management ensures optimum utilisation of resources and effective production of goods and services. This leads to speedy economic growth and wellbeing of the nation. OPERATIONS MANAGEMENT Introduction 'Operations management is about the way organizations produce goods and services. Everything you wear, eat, sit on, use, read or knock about on the sports field comes to you courtesy of the operations managers who organized its production. Every book you borrow from the library, every treatment you receive at the hospital, every service you expect in the shops and every lecture you attend at university - all have been produced. This definition reflects the essential nature of Operations Management: it is a central activity in organizing things. Another way of looking at an operation, is to consider it as a transformation process ..

Operations are a transformation process: they convert a set of resources (INPUTS) into services and goods (OUTPUTS). These resources may be raw materials, information, or the customer itself. These resources are transformed into the final goods or services by way of other 'transforming' resources the facilities and staff of the operation. Raw Materials An obvious example is a cabinet maker, who takes some wood, cuts and planes it, and then polishes it until a piece of furniture is produced. Information A tourist office gathers and provides information to holiday makers, and assists in advising on places to stay or visit. Customers At an airport, you are one of the many resources being processed. The operation you are involved in is about processing your ticket and baggage, moving from ticket desk through the customs and dutyfree areas, to deliver you to the awaiting plane. The next time you stand on a moving walkway, think of yourself as a tin of baked beans moving along a factory conveyor! Operations Management is the conversion of inputs into outputs, using physical resources, so as to provide the desired utility/utilities of form, place, possession or state or a combination there-of to the customer while meeting the other organizational objectives of effectiveness, efficiency and adaptability. Operations managers are the people who are responsible for overseeing and managing the resources that make up the operations function. The operations function is also responsible for fulfilling customer requests through the production and delivery of products and services. Being an operations manager involves overseeing and having responsibility for all the activities in the organisation which contribute to the effective production of goods and services. Depending on the organisational structure, the exact nature of tasks that are classified under the operations function may differ from business to business. However, the following activities are usually applicable to all types of operations: Understanding strategic objectives: Operations managers must clearly understand the goals of the organisation and develop a clear vision of exactly how operations will help achieve them. This also involves translating these goals into implications for the operation's performance, objectives, quality, speed, dependability, flexibility and cost.

Developing an operations strategy: Due to the numerous decision-making involved with operations, it is critical that operations managers have a set of guidelines that are align with the organisation's long term goals. Designing the operation's products, services and processes: Design involves determining the physical form, shape and composition of products, services and processes. Planning and controlling: This involves deciding what the operations resources should be doing and making sure that it is getting done. Improving the performance of operation: Operations managers are expected to continually monitor and improve the overall performance of their operation.

Benefits of Operational Management Operations management can significantly contribute to the success of your business by using your available resources to effectively produce products and services in a way that satisfies customers. To do this you must be creative, innovative and energetic in improving processes, products and services. The four main advantages an effective operation can provide to your business include: Reducing the costs of producing products and services and being efficient Increasing revenue by increasing customer satisfaction through good quality and service Reducing the amount of investment that is necessary to produce the required type and quantity of products and services by increasing the effective capacity of the operation Providing the basis for future innovation by building a solid base of operations skills and knowledge within the business Production Management v/s Operations Management A high level comparison which distinct production and operations management can be done on following characteristics: Output: Production management deals with manufacturing of products like (computer, car, etc) while operations management cover both products and services. Usage of Output: Products like computer/car are utilized over a period of time whereas services need to be consumed immediately Classification of work: To produce products like computer/car more of capital equipment and less labour are required while services require more labour and lesser capital equipment. Customer Contact: There is no participation of customer during production whereas for services a constant contact with customer is required. Production management and operations management both are very essential in meeting objective of an organization.

A Framework for Managing Operations Operation managers are concerned with planning, organizing, and controlling the activities which affect human behaviour through models. PLANNING Activities that establishes a course of action and guide future decision-making is planning. The operations manager defines the objectives for the operations subsystem of the organization, and the policies, and procedures for achieving the objectives. This stage includes clarifying the role and focus of operations in the organizations overall strategy. It also involves product planning, facility designing and using the conversion process.

ORGANIZING Activities that establishes a structure of tasks and authority. Operation managers establish a structure of roles and the flow of information within the operations subsystem. They determine the activities required to achieve the goals and assign authority and responsibility for carrying them out. CONTROLLING Activities that assure the actual performance in accordance with planned performance. To ensure that the plans for the operations subsystems are accomplished, the operations manager must exercise control by measuring actual outputs and comparing them to planned operations management. Controlling costs, quality, and schedules are the important functions here. BEHAVIOUR Operation managers are concerned with how their efforts to plan, organize, and control affect human behaviour. They also want to know how the behaviour of subordinates can affect managements planning, organizing, and controlling actions. Their interest lies in decision-making behaviour. MODELS As operation managers plan, organise, and control the conversion process, they encounter many problems and must make many decisions. They can simplify their difficulties using models like aggregate planning models for examining how best to use existing capacity in short-term, break even analysis to identify break even volumes, linear programming and computer simulation for capacity utilisation, decision tree analysis for long-term capacity problem of facility expansion, simple median model for determining best locations of facilities etc

Scope of Production & Operations Management: Production and operations management concern with the conversion of inputs into outputs, using physical resources, so as to provide the desired utilities to the customer while meeting the other organizational objectives of effectiveness, efficiency and adoptability. It distinguishes itself from other functions such as personnel, marketing, finance, etc., by its primary concern for conversion by using physical resources. Following are the activities which are listed under production and operations management functions: 1. Location of facilities 2. Plant layouts and material handling 3. Product design 4. Process design 5. Production and planning control 6. Quality control 7. Materials management 8. Maintenance management. 1. LOCATION OF FACILITIES Location of facilities for operations is a long-term capacity decision which involves a long term commitment about the geographically static factors that affect a business organization. It is an important strategic level decision-making for an organization. It deals with the questions such as Where our main operations should be based? The selection of location is a key-decision as large investment is made in building plant and machinery. An improper location of plant may lead to waste of all the investments made in plant and

machinery equipments. Hence, location of plant should be based on the companys expansion plan and policy, diversification plan for the products, changing sources of raw materials and many other factors. The purpose of the location study is to find the optimal location that will results in the greatest advantage to the organization. 2. PLANT LAYOUT AND MATERIAL HANDLING Plant layout refers to the physical arrangement of facilities. It is the configuration of departments, work centres and equipment in the conversion process. The overall objective of the plant layout is to design a physical arrangement that meets the required output quality and quantity most economically. According to James Moore, Plant layout is a plan of an optimum arrangement of facilities including personnel, operating equipment, storage space, material handling equipments and all other supporting services along with the design of best structure to contain all these facilities. Material Handling refers to the moving of materials from the store room to the machine and from one machine to the next during the process of manufacture. It is also defined as the art and science of moving, packing and storing of products in any form. It is a specialised activity for a modern manufacturing concern, with 50 to 75% of the cost of production. This cost can be reduced by proper section, operation and maintenance of material handling devices. Material handling devices increases the output, improves quality, speeds up the deliveries and decreases the cost of production. Hence, material handling is a prime consideration in the designing new plant and several existing plants. 3. PRODUCT DESIGN Product design deals with conversion of ideas into reality. Every business organization have to design, develop and introduce new products as a survival and growth strategy. Developing the new products and launching them in the market is the biggest challenge faced by the organizations. The entire process of need identification to physical manufactures of product involves three functions: marketing, product development, manufacturing. Product development translates the needs of customers given by marketing into technical specifications and designing the various features into the product to these specifications. Manufacturing has the responsibility of selecting the processes by which the product can be manufactured. Product design and development provides link between marketing, customer needs and expectations and the activities required to manufacture the product. 4. PROCESS DESIGN Process design is a macroscopic decision-making of an overall process route for converting the raw material into finished goods. These decisions encompass the selection of a process, choice of technology, process flow analysis and layout of the facilities. Hence, the important decisions in process design are to analyse the workflow for converting raw material into finished product and to select the workstation for each included in the workflow. 5. PRODUCTION PLANNING AND CONTROL Production planning and control can be defined as the process of planning the production in advance, setting the exact route of each item, fixing the starting and finishing dates for each item, to give production orders to shops and to follow up the progress of products according to orders.

The principle of production planning and control lies in the statement First Plan Your Work and then Work on Your Plan. Main functions of production planning and control includes planning, routing, scheduling, dispatching and follow-up. Planning is deciding in advance what to do, how to do it, when to do it and who is to do it. Planning bridges the gap from where we are, to where we want to go. It makes it possible for things to occur which would not otherwise happen. Routing may be defined as the selection of path which each part of the product will follow, which being transformed from raw material to finished products. Routing determines the most advantageous path to be followed from department to department and machine to machine till raw material gets its final shape. Scheduling determines the programme for the operations. Scheduling may be defined as the fixation of time and date for each operation as well as it determines the sequence of operations to be followed.

Dispatching is concerned with the starting the processes. It gives necessary authority so as to start a particular work, which has already been planned under Routing and Scheduling. Therefore, dispatching is release of orders and instruction for the starting of production for any item in acceptance with the route sheet and schedule charts. The function of follow-up is to report daily the progress of work in each shop in a prescribed proforma and to investigate the causes of deviations from the planned performance. 6. QUALITY CONTROL Quality Control (QC) may be defined as a system that is used to maintain a desired level of quality in a product or service. It is a systematic control of various factors that affect the quality of the product. Quality control aims at prevention of defects at the source, relies on effective feedback system and corrective action procedure.

Quality control can also be defined as that industrial management technique by means of which product of uniform acceptable quality is manufactured. It is the entire collection of activities which ensures that the operation will produce the optimum quality products at minimum cost. The main objectives of quality control are: To improve the companies income by making the production more acceptable to the customers i.e., by providing long life, greater usefulness, maintainability, etc. To reduce companies cost through reduction of losses due to defects. To achieve inter changeability of manufacture in large scale production. To produce optimal quality at reduced price. To ensure satisfaction of customers with productions or services or high quality level, to build customer goodwill, confidence and reputation of manufacturer. To make inspection prompt to ensure quality control. To check the variation during manufacturing.

7. MATERIALS MANAGEMENT Materials management is that aspect of management function which is primarily concerned with the acquisition, control and use of materials needed and flow of goods and services connected with the production process having some predetermined objectives in view. The main objectives of materials management are: To minimise material cost. To purchase, receive, transport and store materials efficiently and to reduce the related cost. To cut down costs through simplification, standardisation, value analysis, import substitution, etc. To trace new sources of supply and to develop cordial relations with them in order to ensure continuous supply at reasonable rates. To reduce investment tied in the inventories for use in other productive purposes and to develop high inventory turnover ratios.

8. MAINTENANCE MANAGEMENT In modern industry, equipment and machinery are a very important part of the total productive effort. Therefore, their idleness or downtime becomes are very expensive. Hence, it is very important that the plant machinery should be properly maintained. The main objectives of maintenance management are: 1. To achieve minimum breakdown and to keep the plant in good working condition at the lowest possible cost. 2. To keep the machines and other facilities in such a condition that permits them to be used at their optimal capacity without interruption. 3. To ensure the availability of the machines, buildings and services required by other sections of the factory for the performance of their functions at optimal return on investment.

Types of Production Management

Intermittent production system Intermittent means something that starts (initiates) and stops (halts) at irregular (unfixed) intervals (time gaps). In the intermittent production system, goods are produced based on customer's orders. These goods are produced on a small scale. The flow of production is intermittent (irregular). In other words, the flow of production is not continuous. In this system, large varieties of products are produced. These products are of different sizes. The design of these products goes on changing. It keeps changing according to the design and size of the product. Therefore, this system is very flexible. Following are examples on the intermittent production system. Please refer above chart while reading examples given below.

The work of a goldsmith is purely based on the frequency of his customer's orders. The goldsmith makes goods (ornaments) on a small-scale basis as per his customer's requirements. Here, ornaments are not done on a continuous basis. Similarly, the work of a tailor is also based on the number of orders he gets from his customers. The clothes are stitched for every customer independently by the tailor as per one's measurement and size. Goods (stitched clothes) are made on a limited scale and is proportional to the number of orders received from customers. Here, stitching is not done on a continuous basis.

The characteristics of an intermittent production system are listed as follows: The flow of production is not continuous. It is intermittent. Wide varieties of products are produced. The volume of production is small. General purpose machines are used. These machines can be used to produce different types of products. The sequence of operation goes on changing as per the design of the product. The quantity, size, shape, design, etc. of the product depends on the customer's orders. The types of intermittent production system include: Project production flows, Jobbing production flows, and Batch production flows.

Continuous production system Continuous means something that operates constantly without any irregularities or frequent halts. In the continuous production system, goods are produced constantly as per demand forecast. Goods are produced on a large scale for stocking and selling. They are not produced on customer's orders. Here, the inputs and outputs are standardized along with the production process and sequence.

Following chart highlights the concept of a continuous production system.

Following are examples on the continuous production system. Please refer above chart while reading examples given below. The production system of a food industry is purely based on the demand forecast. Here, a large-scale production of food takes place. It is also a continuous production. Similarly, the production and processing system of a fuel industry is also purely based on, demand forecast. Crude oil and other raw sources are processed continuously on a large scale to yield usable form of fuel and compensate global energy demand.

The features of a continuous production system are depicted below.

The characteristics of a continuous production system are listed as follows: The flow of production is continuous. It is not intermittent. The products are standardized. The products are produced on predetermined quality standards. The products are produced in anticipation of demand. Standardized routing sheets and schedules are prepared.

The types of continuous production system include: Mass production flows, and Process production flows.

TYPES OF PRODUCTION SYSTEMS: There are five types of Production Systems1. CONTINUOUS/FLOW PRODUCTION SYSTEM: It is the manufacture of a product through a series of interconnected operations where material moves from one stage to another without interruption. 2. MASS PRODUCTION SYSTEM: Here goods are produced in large quantities using Standardisation, product wise layout and balanced production. 3. PROCESS PRODUCTION SYSTEM: Here production is carried out continuously through uniform and standard sequence of operations using highly sophisticated and automatic machines. 4. JOB PRODUCTION SYSTEM: It means producing goods to meet specific customer requirements or special order, thus this process is always non-standardised. 5. BATCH PRODUCTION SYSTEM: This is the manufacture of a product in batches (small or large) or lots by a series of operations, each operation being carried out on the whole batch before any subsequent operation is undertaken. Types of Operations Management/ Service Operation: Service Factories: Low labor intensity - Low customer interaction. E.g.: airline, hotel. Service Shops: Low Labor intensity - high customer interaction. E.g.: hospital, repair service Mass Service: high labor intensity - low customer interaction. E.g.: Banking, Education Professional Services: both highly labor-intensity and customer interaction. E.g.: Doctors, Lawyer

Capacity Planning: Design of the production system involves planning for the inputs, conversion process and outputs of production operation. The effective management of capacity is the most important responsibility of production management. The objective of capacity management (i.e., planning and control of capacity) is to match the level of operations to the level of demand. Capacity planning is to be carried out keeping in mind future growth and expansion plans, market trends, sales forecasting, etc. It is a simple task to plan the capacity in case of stable demand. But in practice the demand will be seldom stable. The fluctuation of demand creates problems regarding the procurement of resources to meet the customer demand. Capacity decisions are strategic in nature. Capacity is the rate of productive capability of a facility. Capacity is usually expressed as volume of output per period of time. Production managers are more concerned about the capacity for the following reasons: Sufficient capacity is required to meet the customers demand in time. Capacity affects the cost efficiency of operations. Capacity affects the scheduling system. Capacity creation requires an investment. Capacity planning is the first step when an organization decides to produce more or new products
Measurement of Capacity Planning:

The capacity of the manufacturing unit can be expressed in number of units of output per period. In some situations measuring capacity is more complicated when they manufacture multiple products. In such situations, the capacity is expressed as man-hours or machine hours. The relationship between capacity and output is shown in following figure. 1. Design capacity: Designed capacity of a facility is the planned or engineered rate of output of goods or services under normal or full scale operating conditions. For example, the designed capacity of the cement plant is 100 TPD (Tonnes per day). Capacity of the sugar factory is 150 tonnes of sugarcane crushing per day. 2. System capacity: System capacity is the maximum output of the specific product or product mix the system of workers and machines is capable of producing as an integrated whole. System capacity is less than design capacity or at the most equal, because of the limitation of product mix, quality specification, breakdowns. The actual is even less because of many factors affecting the output such as actual demand, downtime due to machine/equipment failure, unauthorised absenteeism.

The system capacity is less than design capacity because of long range uncontrollable factors. The actual output is still reduced because of short-term effects such as, breakdown of equipment, inefficiency of labour. The system efficiency is expressed as ratio of actual measured output to the system capacity. System Efficiency (SE) = Actual output/ System capacity 3. Licensed capacity: Capacity licensed by the various regulatory agencies or government authorities. This is the limitation on the output exercised by the government. 4. Installed capacity: The capacity provided at the time of installation of the plant is called installed capacity. 5. Rated capacity: Capacity based on the highest production rate established by actual trials is referred to as rated capacity.

Process of Capacity Planning

Capacity planning is concerned with defining the long-term and the short-term capacity needs of an organization and determining how those needs will be satisfied. Capacity planning decisions are taken based upon the consumer demand and this is merged with the human, material and financial resources of the organization. Capacity requirements can be evaluated from two perspectiveslong-term capacity strategies and short-term capacity strategies. 1. LONG-TERM CAPACITY STRATEGIES Long-term capacity requirements are more difficult to determine because the future demand and technology are uncertain. Forecasting for five or ten years into the future is more risky and difficult. Even sometimes companys todays products may not be existing in the future. Long range capacity requirements are dependent on marketing plans, product development and lifecycle of the product. Long-term capacity planning is concerned with accommodating major changes that affect overall level of the output in long-term. Marketing environmental assessment and implementing the long-

term capacity plans in a systematic manner are the major responsibilities of management. Following parameters will affect long range capacity decisions. 1. Multiple products: Companys produce more than one product using the same facilities in order to increase the profit. The manufacturing of multiple products will reduce the risk of failure. Having more than one product helps the capacity planners to do a better job. Because products are in different stages of their life-cycles, it is easy to schedule them to get maximum capacity utilisation. 2. Phasing in capacity: In high technology industries, and in industries where technology developments are very fast, the rate of obsolescence is high. The products should be brought into the market quickly. The time to construct the facilities will be long and there is no much time as the products should be introduced into the market quickly. Here the solution is phase in capacity on modular basis. Some commitment is made for building funds and men towards facilities over a period of 35 years. This is an effective way of capitalising on technological breakthrough. 3. Phasing out capacity: The outdated manufacturing facilities cause excessive plant closures and down time. The impact of closures is not limited to only fixed costs of plant and machinery. Thus, the phasing out here is done with humanistic way without affecting the community. The phasing out options makes alternative arrangements for men like shifting them to other jobs or to other locations, compensating the employees, etc. 2. SHORT-TERM CAPACITY STRATEGIES Managers often use forecasts of product demand to estimate the short-term workload the facility must handle. Managers looking ahead up to 12 months, anticipate output requirements for different products, and services. Managers then compare requirements with existing capacity and then take decisions as to when the capacity adjustments are needed. For short-term periods of up to one year, fundamental capacity is fixed. Major facilities will not be changed. Many short-term adjustments for increasing or decreasing capacity are possible. The adjustments to be required depend upon the conversion process like whether it is capital intensive or labour intensive or whether product can be stored as inventory. Capital intensive processes depend on physical facilities, plant and equipment. Short-term capacity can be modified by operating these facilities more or less intensively than normal. In labour intensive processes short-term capacity can be changed by laying off or hiring people or by giving overtime to workers. The strategies for changing capacity also depend upon how long the product can be stored as inventory. The short-term capacity strategies are: 1. Inventories: Stock of finished goods during slack periods to meet the demand during peak period. 2. Backlog: During peak periods, the willing customers are requested to wait and their orders are fulfilled after a peak demand period. 3. Employment level (hiring or firing): Hire additional employees during peak demand period and layoff employees as demand decreases. 4. Employee training: Develop multi-skilled employees through training so that they can be rotated among different jobs. The multi-skilling helps as an alternative to hiring employees. 5. Subcontracting: During peak periods, hire the capacity of other firms temporarily to make the component parts or products. 6. Process design: Change job contents by redesigning the job.

Location Planning:
One of the major production decisions is the choice of plant location. This decision requires careful planning and typically represents a long-term commitment and a substantial investment. A poor location poses severe problems for a firm attempting to compete with better-located competitors. What Constitutes a Good Location? Choosing a location typically involves two decisions: (1) Selecting a community in which the facility will be located and (2) Choosing a specific site within the community. The choice of a location should be made after considering such factors as proximity to raw materials and markets; availability of labor, transportation, and energy; state and local taxes; and community living conditions. Proximity to Raw Materials. When raw materials are large and heavy, manufacturing firms often locate their plants near their input source. Production facilities for sheetrock are usually close to where gypsum, the major ingredient, mined. (Mined gypsum must be dehydrated immediately in order to avoid transporting the water in it.) Trees are processed into wood products near forests, eliminating the cost of transporting those parts of the log that become waste materials. Because 32,000 gallons of water are required to produce one ton of paper, paper mills also must be located in areas where large quantities of clean, low-cost water are available. Proximity to Markets. If transportation costs for raw materials are not a significant part of total production costs, the plant is likely to be located near markets where the final products will be sold. A nearby location allows the manufacturer to provide fast, convenient service for customers. Many manufacturers of automobile components are located in the metropolitan Detroit area so as to provide quick service for auto assembly plants. Some foreign firms with large U.S. markets set up production and service facilities in the United States. They include the Industrial Bank of Japan (New York), Mitsubishi (Bloomington, Illinois), Nissan (Smyrna, Tennessee), Honda (Columbus, Ohio), and Volvo (Norfolk, Virginia). Facilities that provide services, such as dry cleaners, laundromats, banks, hotels, local government offices, and hospitals, must be located near the largest concentrations of their target customers. If a dry cleaner were located too far from where people live, no one would patronize the business.

Availability of Personnel. A third consideration in the location of production or service facilities is the availability of a qualified labor force. One early problem faced by the developers of a giant shipbuilding complex in the little Gulf Coast town of Pascagoula, Mississippi, was the lack of sufficient numbers of skilled workers. Many electronics firms are located in the San Jose, California, and Boston areas, which have high concentrations of skilled technicians. The same is true for Hartford (insurance), Pittsburgh (steel), and Seattle (aircraft). When unskilled workers can be used, the manufacturer can choose from a much greater number of alternative locations. Many manufacturing plants employing unskilled labor have located in the South, where wage rates have historically been below those in the North. In the worldwide search for inexpensive labor, a number of electrical equipment manufacturers have begun to manufacture

parts in the United States, ship them in unassembled form to Taiwan, for assembly there by inexpensive labor, and then ship them back to the United States for inclusion in a finished product. Transportation. Most manufacturing plants use transportation facilities to ship raw materials to the plant and finished products to customers. At most locations, the producer chooses among several alternatives such as trucks, railroads, ships, and airplanes. Availability of numerous alternatives results in increased competition and lower rates for transportation users. Service facilities also must consider available transportation. Customers must be able to get to them by either public transportation or private automobile. If cars are the primary method of transportation, then adequate parking must be provided. Energy. While all production facilities are affected by both the availability of adequate energy resources and their costs, factories producing goods tend to be more affected than service industries. The aluminum industry began in the Tennessee Valley because the manufacture of aluminum requires great amounts of electrical power. The cheap electricity provided by the Tennessee Valley Authority allows aluminum manufacturers to produce their product at lower costs than they could in Baltimore or Philadelphia, where electricity rates are substantially higher. The availability of inexpensive power supplies is a major consideration in plant location for certain industries. Taxes. Another factor to consider in facility location is tax structure for the local and state governements. Local and state governments typically impose real estate taxes on factories, equipment, and inventories. Sales taxes and income taxes may also be imposed. These taxes, which vary considerably from state to state and city to city, should be considered in making the location decision. Some states and cities attempt to entice manufacturers or service businesses into their areas by granting low taxes or temporary exemptions from taxation. However, low taxes may also mean inadequate municipal services. Taxes must be considered together with the availability and quality of needed city services.

Environmental Impact. An increasingly common requirement for firms desiring to locate a production facility in a particular area is an environmental impact study. It analyzes the impact of a proposed plant on the quality of life in an area. Regulatory agencies typically require the study to cover such topics as impact on transportation facilities; energy requirements; water and sewage treatment needs; effect on natural plant life and wildlife; and polution to water quality, air quality, and noise pollution. Community Living Conditions. A final consideration in choosing a location is the quality of the community, as measured by its school system, colleges, cultural programs, fire and police protection, climate, income levels of its residents, and community attitudes toward the new facility. The final decision is likely to result from careful evaluation of all the factors. Since no one location is likely to be superior in every factor, the ultimate choice is likely to involve trade-offs. Choosing a Site Once a community has been selected, a specific site is to be chosen. Before this can be done, a number of factors are considered: zoning regulations; availability of sufficient land; cost of the land; existence of shipping facilities, such as railroad sidings, roads, and dock facilities; and construction costs.

Most cities have at least one industrial park, a planned site location that provides necessary zoning, land, shipping facilities, and waste disposal outlets. These sites are created to entice manufacturers to locate new plants in the area by providing maximum cooperation between the firm and the local governing bodies. Proximity to customers or clients is often the determining factor in the location of service facilities. Such service-oriented organizations as government services, health and emergency services, retailers, and profit-seeking service firms attempt to locate near their customers or clients. Locating near population concentrations allows such facilities as hospitals, fire stations, and ambulance services to provide fast service and minimize loss of life and loss of property.

Layout of Production Facilities :

An efficient production facility is the result of careful consideration of all phases of production and the necessary inputs at each step of the process. The first three designs are common in manufacturing facilities, and the last layout is often used in service facilities. A process layout is designed to accommodate a variety of nonstandard products in relatively small batches. In this layout, workers and equipment performing the same activity, or process, are grouped in one department or location. Custom machine shops are typically organized in this fashion. When a firm produces large quantities of the same or similar products, an efficient design is a product layout. This layout accommodates only a few product variations. Product layouts are frequently used in assembly-line operations, such as those in the automobile industry. In a fixed-position layout, the product stays in one place and workers, materials, and machines are transported to and from that position. This approach is common in such operations as missile assembly, ship construction, large aircraft assembly, and bridge construction, where the product is very bulky, large, heavy, or fragile. A customer-oriented layout is common in service facilities where the facility must be arranged to enhance the interactions of customers and the organization's services. Implementing the Production Plan Once the product or service decisions have been made, the production facilities developed, the necessary machinery purchased, and the most efficient facility layout determined, management must implement the production plan. Raw materials, component parts, and all other goods and services that will serve as production ingredients must be purchased, from paper clips to steel bars and computers. Inventory levels must be determined and controlled, and production schedules must be put into operation. Each of these activities has to be performed efficiently if the production plan is to succeed.

Forecasting Techniques There are numerous methods to forecasting depending on the need of the decision-maker. These can be categorized in two ways: 1. Opinion and Judgmental Methods or Qualitative Methods. 2. Time Series or Quantitative Forecasting Methods.
Opinion and Judgmental Methods Some opinion and judgment forecasts are largely intuitive, whereas others integrate data and perhaps even mathematical or statistical techniques. Judgmental forecasts often consist of (1) Forecasts by individual sales people, (2) Forecasts by division or product-line managers, and (3) Combined estimates of the two. Historical analogy relies on comparisons; Delphi relies on the best method from a group of forecasts. All these methods can incorporate experiences and personal insights. However, results may differ from one individual to the next and they are not all amenable to analysis. So there may be little basis for improvement over time. Time Series Methods A time series is a set of observations of a variable at regular intervals over time. In decomposition analysis, the components of a time series are generally classified as trend T, cyclical C, seasonal S, and random or irregular R. (Note: Autocorrelation effects are sometimes included as an additional factor.) Time series are tabulated or graphed to show the nature of the time dependence. The forecast value (Ye) is commonly expressed as a multiplicative or additive function of its components; examples here will be based upon the commonly used multiplicative model. Yc = T. S. C. R multiplicative model Yc = T + S + C + R additive model Where T is Trend, S is Seasonal, C is Cyclical, and R is Random components of a series. Trend is a gradual long-term directional movement in the data (growth or decline). Seasonal effects are similar variations occurring during corresponding periods, e.g., December retail sales. Seasonal can be quarterly, monthly, weekly, daily, or even hourly indexes. Cyclical factors are the long-term swings about the trend line. They are often associated with business cycles and may extend out to several years in length. Random component are sporadic (unpredictable) effects due to chance and unusual occurrences. They are the residual after the trend, cyclical, and seasonal variations are removed.

Project Management with PERT/CPM

One of the most challenging jobs that any manager can take on is the management of a large-scale project that requires coordinating numerous activities throughout the organization. A myriad of details must be considered in planning how to coordinate all these activities, in developing a realistic schedule, and then in monitoring the progress of the project. Fortunately, two closely related operations research techniques, PERT (program evaluation and review technique) and CPM (critical path method), are available to assist the project manager in carrying out these responsibilities. These techniques make heavy use of networks (as introduced in the preceding chapter) to help plan and display the coordination of all the activities. They also normally use a software package to deal with all the data needed to develop schedule information and then to monitor the progress of the project. Project management software, such as MS Project in your OR Courseware, now is widely available for these purposes. PERT and CPM have been used for a variety of projects, including the following types. 1. Construction of a new plant 2. Research and development of a new product 3. NASA space exploration projects 4. Movie productions 5. Building a ship 6. Government-sponsored projects for developing a new weapons system 7. Relocation of a major facility 8. Maintenance of a nuclear reactor 9. Installation of a management information system 10. Conducting an advertising campaign What is PERT / CPM? PERT (Program Evaluation and Review Technique) is a logical method for organizing the "on-time, on-budget" completion of projects that was originally developed by the Navy in 1958 to manage the Polaris missile project. CPM (Critical Path Method) is a very similar technique that was developed by the RAND Corporation1 in 1957 (and likely 'borrowed' by the Navy). There is not really any major logical difference between PERT and CPM, and most people today consider them to be the same technique. [However, some academics still refer to them as two different techniques since they do have some minor technical differences.] PERT is also logically similar to certain other planning techniques, ie, Gantt Charts and Material Requirements Planning (MRP) as well; the similarity that is easiest to observe is that, in a sense, all three techniques count backwards from the desired finish time to plan task start times.

Basically, PERT / CPM analysis is used for: 1) drawing a diagram that shows the order in which the different tasks will be done, 2) determining the minimum project finish time, and 3) determining the critical path, the sequence of tasks that will make the entire project late if one of the tasks longer than planned. PERT: Before any activity begins related to the work of a project, every project requires an advanced, accurate time estimate. Without an accurate estimate, no project can be completed within the budget and the target completion date. Developing an estimate is a complex task. If the project is large and has many stakeholders, things can be more complex. Therefore, there have been many initiatives, to come up with different techniques for estimation phase of the project, in order to make the estimation more accurate. PERT (Program Evaluation and Review Technique) is one of the successful and proven methods among the many other techniques, such as, CPM, Function Point Counting, Top-Down Estimating, WAVE, etc. PERT was initially created by the US Navy in the late 1950s. The pilot project was for developing Ballistic Missiles and there have been thousands of contractors involved. After PERT methodology was employed for this project, it actually ended two years ahead of its initial schedule. The PERT Basics: At the core, PERT is all about management probabilities. Therefore, PERT involves in many simple statistical methods as well. Sometimes, people categorize and put PERT and CPM together. Although CPM (Critical Path Method) shares some characteristics with PERT, PERT has a different focus. Same as most of other estimation techniques, PERT also breaks down the tasks into detailed activities. Then a Gantt chart will be prepared illustrating the interdependencies among the activities. Then, a network of activities and their interdependencies are drawn in an illustrative manner. In this map, a node represents each event. The activities are represented as arrows and they are drawn from one event to another, based on the sequence.

Next, the Earliest Time (TE) and the Latest Time (TL) are figured for each activity and identify the slack time for each activity. When it comes to deriving the estimates, the PERT model takes a statistical route to do that. We will cover more on this in the next two sections. Following is an example PERT chart.

The Three Chances There are three estimation times involved in PERT; Optimistic Time Estimate (TOPT), Most Likely Time Estimate (TLIKELY), and Pessimistic Time Estimate (TPESS). In PERT, these three estimate times are derived for each activity. This way, a range of time is given for each activity, with the most probable value, TLIKELY. Following are further details on each estimate. 1. TOPT This is the fastest time an activity can be completed. For this, the assumption is made that all the necessary resources are available and all predecessor activities are completed as planned. 2. TLIKELY Most of the times, project managers are asked only to submit one estimate. In that case, this is the estimate that goes to the upper management. 3. TPESS This is the maximum time required to complete an activity. In this case, it is assumed that many things go wrong related to the activity. A lot of rework and resource unavailability are assumed when this estimation is derived.

The PERT Mathematics BETA probability distribution is what works behind PERT. The expected completion time (E) is calculated as below: E = (TOPT + 4 x TLIEKLY + TPESS) / 6 At the same time, the possible variance (V) of the estimate is calculated as below: V = (TPESS - TOPT)^2 / 6^2 Now, following is the process we follow with the two values. 1. For every activity in the critical path, E and V are calculated. 2. Then the total of all Es are taken. This is the overall expected completion time for the project. 3. Now, the corresponding V is added to each activity of the critical path. This is the variance for the entire project. This is done only for the activities in the critical path as only the critical path activities can accelerate or delay the project duration. 4. Then, standard deviation of the project is calculated. This equals to the square root of the variance (V). 5. Now, the normal probability distribution is used for calculating the project completion time with the desired probability. Conclusion The best thing about PERT is, its ability to integrate the uncertainty in project times estimations into its methodology. It also makes use of many assumptions, which can accelerate or delay the project progress. Using PERT, project managers can have an idea of the possible time variation for the deliveries and offer delivery dates to the client in a safer manner.

CPM: Critical path is the sequential activities from start to the end of a project. Although many
projects have only one critical path, some projects may have more than one critical path depending on the flow logic used in the project. If there is a delay in any of the activities under the critical path, there will be a delay of the project deliverables. Most of the times, if such delay is occurred, project acceleration or re-sequencing is done in order to achieve the deadlines. Critical path method is based on mathematical calculations and it is used for scheduling project activities. This method was first introduced in 1950s as a joint venture between Remington Rand Corporation and DuPont Corporation.

The initial critical path method was used for managing plant maintenance projects. Although the original method was developed for construction work, this method can be used for any project where there are interdependent activities. In the critical path method, the critical activities of a program or a project are identified. These are the activities that have a direct impact on the completion date of the project.

Key Steps in Critical Path Method

Let's have a look at how critical path method is used in practice. The process of using critical path method in project planning phase has six steps. Step 1: Activity specification You can use the Work Breakdown Structure (WBS) to identify the activities involved in the project. This is the main input for the critical path method. In activity specification, only the higher-level activities are selected for critical path method. When detailed activities are used, the critical path method may become too complex to manage and maintain. Step 2: Activity sequence establishment In this step, the correct activity sequence is established. For that, you need to ask three questions for each task of your list. a. Which tasks should take place before this task happens. b. Which tasks should be completed at the same time as this task. c. Which tasks should happen immediately after this task.

Step 3: Network diagram Once the activity sequence is correctly identified, the network diagram can be drawn (refer to the sample diagram above). Although the early diagrams were drawn on paper, there is a number of computer software, such as Primavera, for this purpose nowadays. Step 4: Estimates for each activity This could be a direct input from the WBS based estimation sheet. Most of the companies use 3point estimation method or COCOMO based (function points based) estimation methods for tasks estimation. You can use such estimation information for this step of the process. Step 5: Identification of the critical path For this, you need to determine four parameters of each activity of the network. a. Earliest start time (ES) - The earliest time an activity can start once the previous dependent activities are over. b. Earliest finish time (EF) - ES + activity duration. c. Latest finish time (LF) - The latest time an activity can finish without delaying the project. d. Latest start time (LS) - LF - activity duration. The float time for an activity is the time between the earliest (ES) and the latest (LS) start time or between the earliest (EF) and latest (LF) finish times. During the float time, an activity can be delayed without delaying the project finish date. The critical path is the longest path of the network diagram. The activities in the critical path have an effect on the deadline of the project. If an activity of this path is delayed, the project will be delayed. In case if the project management needs to accelerate the project, the times for critical path activities should be reduced. Step 6: Critical path diagram to show project progresses Critical path diagram is a live artefact. Therefore, this diagram should be updated with actual values once the task is completed. This gives more realistic figure for the deadline and the project management can know whether they are on track regarding the deliverables.

Advantages of Critical Path Method Following are advantages of critical path methods. 1. Offers a visual representation of the project activities. 2. Presents the time to complete the tasks and the overall project. 3. Tracking of critical activities. Conclusion Critical path identification is required for any project-planning phase. This gives the project management the correct completion date of the overall project and the flexibility to float activities. A critical path diagram should be constantly updated with actual information when the project progresses in order to refine the activity length / project duration predictions.

Methods of Inventory Control

Conventional inventory management is becoming obsolete due to rise in the global source and contract manufacturing become more dynamic with better product life cycles and, finally, through multi-channel distribution.

Introduction Inventory is classified as idle possessions that possess economic value but still it is very essential to maintain inventory for different kind of manufacturing units, retailers, factories and enterprises. Generally, it is a vital constituent of the investment collection of any generative organization. Approximately up to 60% of the yearly production budget is used up on material and other inventories. It cannot be overstressed that better inventory management would constantly develop organizational productivity, decrease costs, and contribute to responsible use of scarce capital. Other than raw materials, other forms of inventory include in-process, supplies, components, and finished goods inventory. The most important aim of inventory management is to decide how much resources or inputs are to be arranged and when to order so as to reduce production cost, while conforming to the essential requirements. Due to ranging abnormality of the production inventory, no specific inventory model has general relevance to the whole variant inventory situations. As a result, a range of inventory models have appeared which address specific inventory problems.

Deterministic and Probabilistic Methods The classic inventory model is generally used either to forecast optimum inventory or to evaluate two or more inventory systems. Two fundamental techniques are generally employed by industries to develop inventory reserve estimates and they are the deterministic and probabilistic methods. The deterministic method concedes a single best estimation of inventory reserves grounded on recognized engineering, geological, and economic information. The probabilistic method employs the known economic, geologica,l and engineering data to produce a collection of approximate stock reserve quantities and their related probabilities. Each inventory reserve categorization gives a signal of the prospect of revival.

The advantage of a probabilistic approach lies in the fact that by using values lying within a bandwidth and modeled by a defined distribution density, the reality can be modeled better than by using deterministic figures. Deterministic models of inventory control are used to determine the optimal inventory of a single item when demand is mostly largely obscure. Under this model inventory is built up at a constant rate to meet a determined, or accepted, demand. For instance a contract is received in January for 100 model trains and the delivery to be completed by November/holiday shopping. Since the deadline is 10 months so the trains can be produced at a rate of ten per month. Also stochastic one-item models can be used for inventory control. Such models are used when demand is not known. Stochastic models are more realistic, and thus more relevant, since they regard the cost of shortfalls, the cost of arranging and the cost of stacking away, and attempt to formulate an optimal inventory plan.

What is Deterministic and Probabilistic inventory control? To value it better, let us imagine deterministic and probabilistic conditions. A deterministic circumstance is one in which the system parameters can be ascertained precisely. This is also known as a situation of sureness since it is realized that whatever are ascertained, things are sure to occur the same way. Also the information about the system under thought should be whole so that the parameters can be determined with confidence. But this kind of system rarely exists, and it is for sure that some uncertainty is always associated with the system. Deterministic optimization models presume the state of affairs to be deterministic and consequently render the numerical model to optimize on system arguments. Since it conceives the system to be deterministic, it automatically means that one has full information about the system. Probabilistic situation is also known as a situation of uncertainty. Although this is present everywhere, the vagueness always makes us comfortless. So people keep attempting to lessen uncertainty. Probabilistic inventory prototypes consisting of probabilistic demand and supply are more suitable in many real circumstances. But, such models also create larger trouble in analysis and often become uncontrollable.

Conclusion Thus we can conclude by stating that the best inventory plan, in most cases, will be to minimize the cost of holding stock of raw-materials or finished products. Whether to choose deterministic or probabilistic models of inventory control will depend on the type of the industry

Deterministic Versus Probabilistic

Quality Control & Quality Assurance

Quality is an important factor when it comes to any product or service. With the high market competition, quality has become the market differentiator for almost all products and services. Therefore, all manufacturers and services providers out there constantly look for enhancing their product or the service quality. In order to maintain or enhance the quality of the offerings, manufacturers use two techniques; quality control and quality assurance. These two practices make sure that the end product or the service meets the quality requirements and standards defined for the product or the service. There are many methods followed by organizations to achieve and maintain required level of quality. Some organizations believe in the concepts of Total Quality Management (TQM) and some others believe in internal and external standards. The standards usually define the processes and procedures for organizational activities and assist to maintain the quality in every aspect of organizational functioning. When it comes to standards for quality, there are many. ISO (International Standards Organization) is one of the prominent bodies for defining quality standards for different industries. Therefore, many organizations try to adhere to the quality requirements of ISO. In addition to that, there are many other standards that are specific to various industries. As an example, SEI-CMMi is one such standard followed in the field of software development.

Since standards have become a symbol for products and services quality, the customers are now keen on buying their product or the service from a certified manufacturer or a service provider. Therefore, complying with standards such as ISO has become a necessity when it comes to attracting the customers.

Quality Control:
Many people get confused between quality control (QC) and quality assurance (QA). Let's take a look at quality control function in high-level. As we have already discussed, organizations can define their own internal quality standards, processes, and procedures. The organization will develop these over time and then relevant stakeholders will be required to adhere by them. The process of making sure that the stakeholders are adhered to the defined standards and procedures is called quality control. In quality control, a verification process takes place. Certain activities and products are verified against a defined set of rules or standards. Every organization that practices QC needs to have a Quality Manual. The quality manual outlines the quality focus and the objectives in the organization. The quality manual gives the quality guidance to different departments and functions. Therefore, everyone in the organization needs to be aware of his or her responsibilities mentioned in the quality manual.

Quality Assurance:
Quality Assurance is a broad practice used for assuring the quality of products or services. There are many differences between quality control and quality assurance. In quality assurance, a constant effort is made to enhance the quality practices in the organization. Therefore, continuous improvements are expected in quality functions in the company. For this, there is a dedicated quality assurance team commissioned. Sometimes, in larger organizations, a 'Process' team is also allocated for enhancing the processes and procedures in addition to the quality assurance team. Quality assurance team of the organization have many responsibilities. First and foremost responsibility is to define a process for achieving and improving quality. Some organizations comes up with their own process and others adopt a standard processes such as ISO or CMMi. Processes such as CMMi allow the organizations to define their own internal processes and adhere by them.

Quality assurance function of an organization uses a number of tools for enhancing the quality practices. These tools vary from simple techniques to sophisticated software systems. The quality assurance professionals also should go through formal industrial trainings and get them certified. This is especially applicable for quality assurance functions in software development houses. Since quality is a relative term, there is plenty of opportunity to enhance the quality of products and services. The quality assurance teams of organizations constantly work to enhance the existing quality of products and services by optimizing the existing production processes and introducing new processes.

Conclusion:
When it comes to our focus, we understand that quality control is a product-oriented process. When it comes to quality assurance, it is a process-oriented practice. When quality control makes sure the end product meets the quality requirements, quality assurance makes sure that the process of manufacturing the product does adhere to standards. Therefore, quality assurance can be identified as a proactive process, while quality control can be noted as a reactive process.

Maintenance Management
The term maintenance means to keep the equipment in operational condition or repair it to its operational mode. Main objective of the maintenance is to have increased availability of production systems, with increased safety and optimized cost. Maintenance management involves managing the functions of maintenance. Maintaining equipment in the field has been a challenging task since the beginning of industrial revolution. Since then, a significant of progress has been made to maintain equipment effectively in the field. As the engineering equipment becomes sophisticated and expensive to produce and maintain, maintenance management has to face even more challenging situations to maintain effectively such equipments in industrial environment. This brief lecture on maintenance management includes maintenance strategies, functions of maintenance department, maintenance organization and elements of maintenance management.

MAINTENANCE STRATEGIES OR OPTIONS A maintenance strategy or option means a scheme for maintenance, i.e. an elaborate and systematic plan of maintenance action. Following are the maintenance strategies [1] that are commonly applied in the plants. Breakdown Maintenance or Operate to Failure or Unplanned Maintenance Preventive or Scheduled Maintenance Predictive or Condition Based Maintenance Opportunity Maintenance Design out Maintenance

The equipment under breakdown maintenance is allowed to run until it breaks down and then repairing it and putting back to operation. This strategy is suitable for equipments that are not critical and have spare capacity or redundancy available. In preventive or scheduled Maintenance, maintenance actions such as inspection, lubrication, cleaning, adjustment and replacement are undertaken at fixed intervals of numbers of hours or Kilometers. An effective PM program does help in avoidance of accidents. Condition monitoring (CM) detects and diagnoses faults and it helps in planned maintenance based on equipment condition. This condition based maintenance strategy or predictive maintenance is preferred for critical systems and for such systems breakdown maintenance is to be avoided. A number of CM techniques such as vibration, temperature, oil analysis, etc. have been developed, which guide the users in planned maintenance [2]. In opportunity maintenance, timing of maintenance is determined by the procedure adopted for some other item in the same unit or plant. In design out maintenance, the aim is to minimize the effect of failures and in fact eliminates the cause of maintenance. Although it is an engineering design problem, yet it is often a responsibility of maintenance department. This is opted for items of high maintenance cost that are due to poor maintenance, poor design or poor design outside design specifications. It may be mentioned that a best maintenance strategy for each item should be selected by considering its maintenance characteristics, cost and safety. In addition to the above, new strategies concepts such as Proactive Maintenance, Reliability Centred Maintenance (RCM), Total Productive Maintenance (TPM), etc. have recently been evolved to look it from different perspectives and this has helped in developing effective maintenance. In proactive maintenance, the aim is identify what can go wrong, i.e. by monitoring of parameters that can cause failures. In RCM, the type of maintenance is chosen with reliability of the system in consideration, i.e. system functions, failures relating to those functions and effects of the dominant functional

system failures. This strategy in the beginning was applied to critical systems such as aircrafts, nuclear and space applications. At present, this is being extended to critical systems in the plant. TPM, a Japanese concept, involves total participation of all concerned. The aim is to have overall effectiveness of the equipment with participation of all concerned using productive maintenance system. Functions of A Maintenance Department Following are the major functions of a maintenance department [3-4]: Maintenance of installed equipment and facilities Installations of new equipment and facilities PM tasks Inspection and lubrication of existing equipment CM tasks monitoring of faults and failures using appropriate techniques Modifications of already installed equipment and facilities Management of inventory Supervision of manpower Keeping records

Maintenance Organization It concerns in achieving an optimum balance between plant availability and maintenance resource utilization. The two organization structures that are common are: Centralized and Decentralized. A decentralized structure would probably experience a lower utilization than centralized one but would be able to respond quickly to breakdowns and would achieve higher plant availability. In practice, one may have a mix of these two. A maintenance organization can be considered as being made up three necessary and interdependent components. Resources: men, spares and tools Administration: a hierarchy of authority and responsibility for deciding what, when and how work should be carried out. Work Planning and Control System: a mechanism for planning and scheduling the work and feeding back the information that is needed for correctly directing the maintenance effort towards defined objective.

It may be mentioned that maintenance / production system is a continuously evolving organism in which the maintenance organization will need continuous modifications in response to changing requirements. Moreover, it is required to match the resources to workload. Maintenance activities be it preventive or condition monitoring, involve use of resources- men and materials including

documents. This requires coordination amongst the involved personnel so that these are timely undertaken. Work planning and control system under maintenance management in the plant ensures this and provides planning and control of activities associated with maintenance. This means application of general management principles of planning, organizing, directing and controlling to the maintenance functions, e.g. to the establishment of procedures for development of maintenance strategy and to models for describing the flow of work through maintenance work planning department. Control system controls the maintenance cost and plant condition. ELEMENTS OF EFFECTIVE MAINTENANCE MANAGEMENT An effective maintenance system includes the following elements [3-4]: Maintenance Policy Control of materials Preventive Maintenance Condition Monitoring Work Order Job planning Priority and backlog control Data recording system Performance measurement measures or indices

Maintenance performance for a plant or an organization can be assessed through analysis of Reliability, Availability and Maintainability (RAM) plant data. Relevant parameters, measures or indices for specific plants can be identified [5]. The performance over a period of time will show if it is improving, going down or being sustained. This will also help in knowing how well the objectives are being met. In addition, it will guide the areas which are strong and which need to be strengthened. Use of computers and dedicated software will certainly help in implementing this and the maintenance management system in general.