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management
Definition
POM incorporates many tasks that are interdependent, but which can be
grouped under five main headings:
PRODUCT
- Performance
- Aesthetics
- Quality
- Reliability
- Quantity
- Production costs
- Delivery dates
PLANT
To make PRODUCT, PLANT of some kind is needed. This will comprise the
bulk of the fixed assets of the business. In determining which PLANT to
use, management must consider areas such as:
- Future demand (volume, timing)
- Design and layout of factory, equipment, offices
- Productivity and reliability of equipment
- Need for (and costs of) maintenance
- Heath and safety (particularly the operation of equipment)
- Environmental issues (e.g. creation of waste products)
PROCESSES
- Available capacity
- Available skills
- Type of production
- Layout of plant and equipment
- Safety
- Production costs
- Maintenance requirements
PROGRAMMES
The production PROGRAMME concerns the dates and times of the products
that are to be produced and supplied to customers. The decisions made
about programme will be influenced by factors such as:
PEOPLE
Definition
Introduction
Job Method
Batch Method
Batch methods require that the work for any task is divided into parts or
operations. Each operation is completed through the whole batch before
the next operation is performed. By using the batch method, it is possible
to achieve specialisation of labour. Capital expenditure can also be kept
lower although careful planning is required to ensure that production
equipment is not idle. The main aims of the batch method are, therefore,
to:
This technique is probably the most commonly used method for organising
manufacture. A good example is the production of electronic
instruments.
Batch methods are not without their problems. There is a high probability
of poor work flow, particularly if the batches are not of the optimal size
or if there is a significant difference in productivity by each operation in
the process. Batch methods often result in the build up of significant
"work in progress" or stocks (i.e. completed batches waiting for their turn
to be worked on in the next operation).
Flow Methods
Flow methods are similar to batch methods - except that the problem of
rest/idle production/batch queuing is eliminated.
no movement off the flow production line. In theory, therefore, any fault
or error at a particular stage
In order that flow methods can work well, several requirements must be
met:
Flow methods are inflexible - they cannot deal effectively with variations
in the product (although some "variety" can be accomplished through
applying different finishes, decorations etc at the end of the production
line).
(3) Materials used in production must be to specification and delivered
on time
(5) The output from each stage of the flow must conform to quality
standards
Since the output from each stage moves forward continuously, there is no
room for sub-standard output to be "re-worked" (compare this with job or
batch production where it is possible to compensate for a lack of quality
by doing some extra work on the job or the batch before it is completed).
Common examples where flow methods are used are the manufacture of
motor cars, chocolates and televisions.
Introduction
The capacity of a production unit (e.g. machine, factory) is its ability to produce or do that which the
customer requires. In production and operations management, three types of capacity are often referred
to:
Measuring capacity
For example, consider a factory that has a capacity of 10,000 " machine
hours" in each 40 hour week. This factory should be capable of producing
10,000 "standard hours of work" during a 40-hour week. The actual
volume of product that the factory can produce will depend on:
Constraints on capacity
Production Scheduling
A schedule is a representation of the time necessary to carry out a
particular task.
A job schedule shows the plan for the manufacture of a particular job. It
is created through "work / study" reviews which determine the method
and times required.
Most businesses carry out several production tasks at one time - which
entails amalgamating several job schedules. This process is called
"scheduling". The result is known as the production schedule orfactory
schedule for the factory/plant as a whole.
(2) The large number of possible schedules - often caused by too much
complexity or variety in the production needs of the business.
Introduction
Fixed Costs
Fixed costs are those business costs that are not directly related to the
level of production or output. In other words, even if the business has a
zero output or high output, the level of fixed costs will remain broadly
the same. In the long term fixed costs can alter - perhaps as a result of
investment in production capacity (e.g. adding a new factory unit) or
through the growth in overheads required to support a larger, more
complex business.
Variable Costs
Variable costs are those costs which vary directly with the level of
output. They represent payment output-related inputs such as raw
materials, direct labour, fuel and revenue-related costs such as
commission.
Direct variable costs are those which can be directly attributable to the
production of a particular product or service and allocated to a particular
cost centre. Raw materials and the wages those working on the
production line are good examples.
Semi-Variable Costs
One of the most important issues that businesses have focused on in the
last 20-30 years has been quality. As markets have become much more
competitive - quality has become widely regarded as a key ingredient for
success in business. In this revision note, we introduce what is meant by
quality by focusing on the key terms you will come up against.
What is quality? You will comes across several terms that all seem to relate to the
concept of quality. It can be quite confusing working out what the difference is
between them. We've defined the key terms that you need to know below:
Term Description
Quality Quality is first and foremost about meeting the needs and
expectations of customers. It is important to understand that
quality is about more than a product simply "working properly".
Why focus on these stages? The idea is that - if the processes and
procedures used to produce a product or service are tightly
controlled - then quality will be "built-in". This will make the
production process much more reliable, so there will be less need
to inspect production output (quality control).
quality control
Quality control is the more traditional way that businesses have used to
manage quality. Quality control is concerned
with checking and reviewing work that has been done. But is this the
best way for a business to manage quality?
The problem with this sort of inspection is that it doesn't work very well!
There are several problems with inspection under traditional quality control:
1 The inspection process does not add any "value". If there were any guarantees
that no defective output would be produced, then there would be no need for an
inspection process in the first place!
2 Inspection is costly, in terms of both tangible and intangible costs. For
example, materials, labour, time, employee morale, customer goodwill, lost
sales
3 It is sometimes done too late in the production process. This often results in
defective or non-acceptable goods actually being received by the customer
4 It is usually done by the wrong people - e.g. by a separate "quality control
inspection team" rather than by the workers themselves
5 Inspection is often not compatible with more modern production techniques
(e.g. "Just in Time Manufacturing") which do not allow time for much (if any)
inspection.
6 Working capital is tied up in stocks which cannot be sold
7 There is often disagreement as to what constitutes a "quality product". For
example, to meet quotas, inspectors may approve goods that don't meet 100%
conformance, giving the message to workers that it doesn't matter if their work
is a bit sloppy. Or one quality control inspector may follow different
procedures from another, or use different measurements.
"Inspection with the aim of finding the bad ones and throwing them out is
too late, ineffective, costly. Quality comes not from inspection but from
improvement of the process."
Customers
• Who are my customers?
• What are their real needs and expectations?
• How can I measure my ability to meet their needs and expectations?
• Do I have the capability to meet their needs and expectations? (If not,
what must I do to improve this capability?)
• Do I continually meet their needs and expectations? (If not, what
prevents this from happening when the capability exists?)
• How do I monitor changes in their needs and expectations?
Suppliers:
• Who are my internal suppliers?
• What are my true needs and expectations?
• How do I communicate my needs and expectations to my suppliers?
• Do my suppliers have the capability to measure and meet these needs
and expectations?
• How do I inform them of changes in my needs and expectations?
One of the reasons for the challenge of introducing TQM is that it has
significant implications for the whole business.
TQM also focuses the business on the activities of the business that are
closest to the customer - e.g. the production department, the employees
facing the customer. This can cause resentment amongst departments
that previously considered themselves "above" the shop floor.
So why the use of the term Kaizen? Kaizen is a system for generating and
implementing employee ideas developed in Japan. The Kaizen
suggestion scheme helped many Japanese companies
improve quality and productivity, which allowed them to offer better
products at lower prices and therefore increase their market share.
- Voluntarily
- Regularly
- In normal working time
- Under the leadership of their supervisor
- To identify, analyse and solve "work-related" problems
- To recommend solutions to management
Evidence of successful Quality Circles suggests that there are no formal rules about how to organise
them. However, the following guidelines are often suggested:
The circle should not get too large - otherwise it becomes difficult for some
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circle team members to contribute effectively
Meetings should be help away from the work area - so that team members are
-
free from distraction
The length and frequency of quality circle meetings will vary - but when a new
circle is formed, it is advised to meet for about one hour, once per week.
-
Thereafter, the nature of the quality problems to be solved should determine
how often the circle needs to meet
Quality circles should make sure that each meeting has a clear agenda and
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objective
- The circle should not be afraid to call on outside or expert help if needed