Production and Operations Management

Production & Operations
Management
Production: Action of Manufacturing
Especially in large quantities
: Things that have been produced esp film, theatre etc
: Quantities produced
example : increase in production by more efficient
methods
: Go in to / out of production
start / stop product being manufactured
The old vehicle model went out of production last year
: Showing , presenting
On production of Membership card , you will get discount
Management
• Productivity : Ability to produce
e.g goods or crops.Crop would depend
upon the productivity of the soil
: Efficiency , especially in industry
Measured by comparing amount produced
with the time taken or the resources used
to produce it
: Management are looking for ways of
improving productivity
example : Productivity bonus for workers
Productivity agreement
Production & Operations Management
• Operation : Way in which something is working

: Activity often involving several people
and /or spread over a period of time
: Medical
:Business , Company
Company involved in banking , building,
business operations
Management : People , who organise, control the business
of an enterprise
; organise and control
• Operations Management
Any organisation would consist of :--
--Marketing
--Production
--Human Resources
-- Finance
Finance
Marketing
Production
Human Resource
• Marketing : Promote product to the customers

:Get Substantial , large orders
Production : Manage physical resources for the
production of an item or of a service
:Manage facilities to meet to meet customer
or market requirement
: To manufacture product as per specs and
customer’s requirement ,
: Production function needs to organise resources of raw
materials, equipment , labour, and workicapital,according
to production plans.
• Human Resources : Provide persons to support all the functions

: Providing manpower to all other subsystems of
the management
In the Management functions of an organisation , all the systems are

interwoven , interlinked , as no function can work in isolation
All functions need to be well synchronised and they need to function

as an integral unit
• Products or services are outputs of an organisation

• All outputs need Inputs
• All inputs undergo a transformation process to generate
an output --which could be a Product or Service
Every organisation would have its own goal and its own
objectives, which are achieved when the inputs are
passed through various processes so as to get the
desired results.
• Organisations need to achive critically following

--Effectiveness
--Efficiency
Effectiveness : This is achieved when the output of transformation system satisfies customers
expectation and at the same time achieve and at the same time achieve objective of the
company
Note : When the Customers are evaluating product or service of

company – they are actually evaluating the Operation
Management of the company
Effectiveness – Measures value generated by the product for the

customers
Efficiency -- Management measures costs incurred in achieving that desired output
--Work Efficiency –cost incurred to obtain desired output as compared to

the effectiveness
• Efficiency : Any organisation would measure efficiency

in terms of following :--
: in terms of labour
: in terms of cost
which are incurred to obtain output as
compared to value of cost of input
Efficiency ; pretty important for short term operation and
survival of the company
Effectiveness: important for long term survival of the
company
• Production / Operations Management
Production / Operation Management can be defined as

the process which combines and transforms
various resources used in production /operation into
value added products or services in a controlled manner
as per objectives of the organisation
• Production Management
• Inter related management functions / activities involved
in manufacturing is referred to as Production Management
If the same concept is applied to services management

then the corresponding set of management activities
are referred to as Operations Management
Management activities provided for –for production/ services

–called as Production /Operation Management
Production& Operations Management
• Production : manufacturing custom made products such as

machines with specific capacities, appliances, etc
Services : Custom made services such as clinical testing,
insurance, couriers etc
Characteristics of Services
--Products intangible items
--Quality of output highly variable
-- production and consumption occurs simultaneously
--No inventory is accumulated or gathered
Management
• Management Decisions
--strategic
--tactical
--operational
Production and Operations Management
Strategic Decisions
( Top Management)
Technical Decisions
( Middle Management)
Operations Management
(Bottom Level)
• Owing to Globalisation and competition arising out and competition

arising out of same It is very important for the organisation to
proivde goods and services at globally competitive prices
If the market does not have high competition then the organisation
can work out the cost of products by taking into account the cost
incurred during the production administration and then add the
required profit for reaching at the selling price
However in case of high competition Company first needs to fix up

the competitive prices then try to plan so as to cut out the
unnecessary expenses till the required profit level is attained
That means “ working backward approach “
• System Concept of Production
System is by and large a collection ,interlinking of all related activites.
Operations Management is the management of transformatierials

systems which converts inputs into goods and or services
Inputs : raw materials, labour , equipment, and capital

Inputs are combined and converted by a process using technology
into finished goods and or services
During Conversion Process there are usually deviations in the product quality
size ,shape and overall quantity of production etc so it is important to apply correction to these deviations in
the initial stage in the form of feed back
These could be , qualtiy check on incoming raw materials

, machine settings
, toolings and changes
, allocation of operators as per their technical skills
, Change in production plans ,( Increase and decrease)
, Tight Quality control so as to stop wastage and reworking
Input Operations Management Output
Capital Goods/ Services

Labour Transformation
( Conversion Process)
Equipment
Materials
Feed Back
Production and Operation Management
• System operates in an environment

Internal and external environment
Top management considered as internal envrionment, their

instructions to change , modify ,feed back are to be responded
by the system and achieve the profits , better results
Also the external environment –Uncertain,

--Political
--Economical
-Social
--Technological
--Legal
Production and Operation Systems
• Production Systems
Corporate objectives of an organisation are achieved
by adopting right kind of production systems
This would depend on :--
--Market Demand
-- size of operation
--technological status of organisation
-- What are the kind of targets and objective
company has like, Return on investment
growth, survival , service etc etc
Production and Operation Systems
• Marketing strategy would is influenced by-----
---- Product Market

--- Segments to be serviced
--- Product range
---- Product Volume
--- Whether the product is standard product or customized product
--- Whether the demand is likely to be one time or repetitive
regular demand
Above would decide to great extent which is type of production
system which is appropriate for the company
Production and Operation System
• Also the type of technology would to a great

extent determine the selection of production
system .
This would be again influenced by
-- Size or volume of operation so whether go for general
machines or automated special versions or combination of
both
-- Traditionally automation requires would require less product
variety
--Critical and important factor for selection of

Production systems would include cutting edge
factors , that would mean, those factors which
would lead to getting the order i.e price,
quality, lead time, committed maintenance and
technical support offered to the customers
• Production system : it is the integration of men , machinery, raw
material, information system adopted by the organization.
Employee enthusiasm , motivation etc depend greatly on the type of
production system which has been adopted by the organization
In many situations , the soft ware for management control etc is
more costly than the machines ,as this
requires quite a bit of training and experience to achieve
the required efficiency and productivity in the organisation
So as to select the right type of production system ,trade off

between various factors would be required
• Production Systems
These are broadly classified under ;--
-- Project
-- jobbing
-- Batch Production
-- Line Production
-- Continuous flow process
• Projects
Projects are are carried out to complete a single
job at a place which is located at different location than
the company’s facilities
Projects require people with different skills and expertise
in large numbers, for completion
Project duration and depend on the size and nature of the
project,availability of resources,
Project are different from other production systems
but one thing common that is there is a product at the
end of the project
Production and Operation Managemen
• Project
Application : Projects can be small, medium, or of large size depending
upon the number of tasks involved
Projects require combination of different resources whose requirements are
to scheduled for timely completion of project
and for cost effectiveness, As and when the project is completed
the resources which were depolyed there can be redeployed
at other places
Machine Selection and utilization
Here usually generally purpose machines are procured for projects
so that they may be utilised in other projects for multipurpose
Special purpose machines are obtained ,if there are special requirements for
them and they are also required later on , in other
projects. The special purpose machines can also be obtained on rent ,lease
etc
• Lay out : lay out of the project vary from project to project
and would depend on the final product.
Inventory Management: In projects ,the inventory has to
be kept ready in advance so that there is no delay in execution
for want of stocks. There would be usually a huge “ Work in
progress Inventory “.
Since the materials are kept in open therefore there is likelyhood
of theft etc for same.Also the materials do get spoiled or damaged due
to adverse storage envrionment
Project does not have any finished goods inventory as the
project completion in itself is a final product.
• Projects
• Man power Requirements and Utilisation
• Manpower during the project execution is specially trained and
they are to be selected keeping in mind that they are professional
and are able to solve the problems without looking up to supervisors
The difference between the project man power and the assembly
line power is that the later usually work under daily close supervision
where as the project people have to be competent to solve the
usual problems of their own
The manpower in a project work in an independent manner and
carry quite a bit of responsibility .The project team needs to be
efficient, problem solving, reliable, enthusiastic
• Planning and Scheduling

Detailed planning and proper scheduling are
important for proper implementation of the project
Since the projects are usually are at remote areas
therefore it is important that proper planning is done
in advance.Even a small problem can cause much
delay and heav ycosts.
Management tools such as PERT and CPM are often
used in project planning
• Quality Control
Strict quality control is very much necessary in case
of project , As to rectify any defect or to attend after
completion of the project may turn out to be very
costly .Any problem left unattended can cause
large costs later during production etc
Specialist agencies are to be used for measurement

and evaluation of the project work
• Project information System

Three important elements ;--
a) Details of the project and their updates must be
provided to everybody involved on daily basis
b) Progress tracking and any deviation
c) Upto date information about actual expenditure relating
to labour, material ,services , and comparison with
planned expenditure should be provided
More important where payment has to be made on
basis of work progress in different stages
• Flexible system : should have ability

to absorb any changes, Ability to adjust
and readjust according to changed situations
should be there
Other factors : Cost of project, Estimated time of
completion, nature of the project,
and technical know how are important
in the selection of projects
JOBBING Manufacturing process in which comparatively
;; ::
few units are producedin as and when required

: small lots produced in single lots or by flexible
machines and skilled workers, irregularly
are the special characteristics of jobbing
Application: jobbing carried out in small shops or small facilities
like garage etc for carrying out one or two jobs.
various tasks carried out to complete a single order
Job shop : When various small jobs are performed simultaneously at

the same time , the process is referred to as Job-shop
: Two categories under Job shop
--a) Make to stock
--b) Make to order
Make to stock jobs shops: They produce more jobs which
are to be stocked for present and future use
Make to order :These products are not required on regular
basis. Demand are for these items is unpredictable and
these are not stocked in inventory also.
• Job shops are able to carry out small orders more

economically as compared to regular manufacturing
process
Machine selection and utilisation
-- Job shops usually have general purpose
machines rather than the special purpose machines
and these are less costly .Although they can do more
jobs but their production rate is always lower than
the special purpose machines.
• Layout considerations :Flexible lay out is essential

for job shops
Inventory Management : owing to flexible and
unpredictable type of flow of work. The inventory
has to wait for processing or for transportation.
Work in process inventory constitutes large
inventory of a job shop
A make to order has low finished goods inventory.
The raw materials inventory would depend upon the
lead time..Quantity of raw materials would depend
on the capability to produce quickly
• Manpower requirements and utilisation : Highly skilled manpower
capable of working on multiple machines is required . Need close
supervision and utilisation of manpower is very high
Planning and Scheduling : Supervisors would need to keep a

close tracking of each and every job. In case of large size , then
proper planning would be required .Planning and Scheduling would
vary from one job to other job..
Quality control : Supervisors need to control , Usually no separate

quality control deptt
• Information Management : Normally in a small set up
an informal kind of information systems is required where a
manager can keep track of all the activities
However in case of a big job shop a systematic information set up is
required where under
--progress status of each job can be known
--History of the costs of previous jobs and costing
of new jobs
--evaluate the work load on each work centre
( on each machine and on each worker)
Above would enable the manager to plan properly and remploy
the workers on idle machines etc
• Flexible system: Job shops are suitable for development of new

products because of its flexibility in , layout, machines , utilization of
man power
Also in case any new toolings are required these can be easily
arranged in job shops. Operators are flexible and can easily adjust
to meet the demands and requirements for new product
development.
Adaptible to change : highly adaptable to chaging needs of the
market demand situations .Also suitable in case production volume
required is low
Job shops are better to get orders at low profit margins and can
provide better customer satisfaction
• Batch Production : Here production is of moderate volume
Usually larger quantities than the job shops
production volume would depend on the capacity of the
processing equipment
Advantages of Batch Production
-- Since the production volume is larger than job shop, cost of
set up and production per unit is very low
-- special purpose machines used increase efficiency and
output therefore reducing the per unit cost
-- Man power requirement is comparatively less as special
purpose machines are used
-- Less over head expenses
• Batch Production
• Batch production is quite suitable when orders are of repetitive nature.
• Batch production is preferable to large scale production as this
flexibility in production schedules and helps in producing different
goods variety
Application : Medical disposable products, automotive batteries,
vehicles of different models (cars etc) confectionary biscuits
Machine selection and utilization
Equipments are generally general purpose machines .
Special purpose machines can be used for faster production
of batches
• Lay out : Usually product lay out is followed , Machines are arranged
according to flow of the work .
raw material components enter at one stage and products come out
of the other end . Usually a U shape kind of layout is used.
Arrangement of machines are closer to each other which provides
for better communication and understanding among the operators.
Inventory Management :
Normally there is a substantial amount of “work In progress” inventory ,as in
various stages , special purpose machines can
be used . So high level of scheduling is required to cut down
the waiting time of the job to be done subsequently
Also there is increase in investment of “ work in progress inventory”
area of the floor occupied is more due to “work in progress inventory”
More cost to manage additional inventory
• Manpower requirement and utilization
Batch production processes normally would require
simple set up which does not require very high
trained or skilled workers , In case of the highly
skilled workers are required , they can be hired for
that particular time.
Batch production requires very close cooperation
between various operators and the managers
team work is very important
Planning and Scheduling : Due to volume of production, lay out

plan of machines, scheduling has to be done very carefully so
as to avoid built up in work in progress inventory
Quality control : Highly skilled quality controllers are needed control

quality. It is more important so as to avoid large
rejection of the batch etc at later stage
Information system : comparatively simple as the data to be handled is

smaller than jobbing
Flexibility : this can be low or high
In case lay out is of specialized machines than the flexibility
becomes rigid ,compared to the job production .
As compared to the line production system Batch production is
much flexible
• Line Production
Here special purpose machinery is arranged in
rigid sequence to perform repetitive tasks which are
of large volumes.
A large volume of standard products are manufactured at
comparatively cheaper in a line production system
The ability and strenght of line production is to produce to standard
products for a competitive market in a quantity
and at a high speed.
Application of line production : Mainly used in standard products

such as fride, scooters , cars , airconditioners , assembly lines
for automotvie engines etc.
Layout : follows a product layout

:Special purpose machines ,tools,fixtures are arranged in a rigid
sequence which enable the fixed flow of parts over pre
planned route
: Material handling devices could be automated
Inventory Management : small need for work in progress\
inventory due to good line balancing
: The need for holding the inventory is also minimized due to
high quality and extensive worker knowledge
: In case of lower demand , the work in process and finished
goods inventory are likely to increase
• Manpower requirement and utilization
: Worker with proper and multiple task training are employed
:Skilled workers are required for quality and controlling
rejection fo work
: However owing to repetitive nature of job , it might become
boring for the worker and therefore this can lead to quality
decline
: Planning and scheduling
Relatively simple . Changes in demand are easily managed
with assistance of database for time taken to complete the job
Quality control : Quality control by a special team is necessary
to avoid rejection of products in large volumes
• Information system
focusses on two functions
-- tell the details fo task to do on each sub-assembly that comes down
the assembly line
-- Coordinate with procurement group and upstream manufacturing
process about components needs of final assembly line.
Information system provides information on labour hours , materials
and components used and compare the information
against total out put produced .
Flexibility
-- No flexibility
-- rate of production is increased by rate of production time
-output is reduced by by removing workers from line and relocating them
• Adaptability : Adaptability to change is limited
Other factors : Line production offers good prices, good quality

prodcuts and better delivery schedules
suited for automation.
• Continuous Flow Process
Continuous flow process produces streams of exactly similar
materials like oil , gas , milk ,cement
etc
Continuous process is a production line of connected work
stations as one unit and is highly
efficient
Application :Fertilisers, newspapers, cement
Machine Selection and utlization
Employs highly specialzed equipment that could achieve
balanced output from the specified inputs
• Layout considerations
Layout that arranges equipment to enable smooth flow of raw
materials, through processing steps until the finished product
is formed.
Inventory : Work in process inventory is important so as to

keep
process in continuation without interruption .
Depending upon procurement lead time and sources of supply
work in process inventory is decided
• Work Measurement and Method of Study
Every organisation has to enusre that its customers are satisfied
Customer satisfaction in turn would depend upon
--Quality of the product
-- Cost of the product
--Customer Service
Cost of the product further depends upon to great extent on

the --time taken for producing the product
--Cost of labour
this further depends upon the work method
and machines used for production and working
conditions
• Customer service to great extent would depend also on
timely delivery of the products
So as supplier the manufactuerer’s image depends on sticking to
its committed delivery schedule
In fact the future orders would also depend on the past performance
about honouring agreed delivery schedules
To ensure above the production managers have to accurately

plan the work and time required in completing the work
All of above are connected with the work measurement and method
study
• Management is faced with questions related to particular
work measuerment and method adopted to compele the work
such as :----
-- What is the right amount of the work expected from a worker
in a given time ?
-- How much time could be required to complete the work
--What could be the strength i.e number of workers required
to be engaged to meet the work load ?
-- How much pay compensation has to be given to the workers
-- How to further improve the out put and still maintain the quality
of the product
• Work Measurement
Work measurement refers to different ways of finding out
how long a job or part of job should take to complete
It is process of finding determining the time that a given task
would take when performed by a qualified worker working at
a defined level of performance
Here both physical and mental works are determined for
completing a specified task that use various techniques
• Work Measurement Plan
The objectives of a work measurement plan are:
-- To analyze the labour needs of an operation
-- Tp develop labour standards for that operation
-- To measure and analyze deviations from the standards and
--To work for continuous improvement in the labour standards
The activities under the work measurement plan are:---

Tp develop a methodology for establishing and maintaining
standard accuracy
To improve operations by carrying out engineering analysis
Revising standards and related system data and
To assist in budgeting , estimating , production planning and
performance using labour standards
• Work Measurement Process
There are many ways and techniques to measure work
The basic procedure consists of three stages
a) The analysis phase

here job is divided into convenient and discrete elements
b) The measurement phase
A specific measurement technique is used to establish
the time required by a qualifed worker working at a defined
level of performance to complete each element of work
c) Synthesis phase
various elements of times are added together with appropriate
allowances to work out the standard time for the compelete job
• Work Measurement Techniques
Two types of techniques are used for mesurements of work
--Time Study
-- Use of predetermined time standards
Factors affecting the choice of a suitable measurement technique

Selection of an appropriate measurement technique include
the following factors :--
-- purpose of measurement
--availability of database
-- Extent to which details are required
-- Availabe time for the measurement
-- Cost of measurement
• Time Study
Time Study is carried out by direct observations of the work
Purpose : to set normal times and then standard times to carry out
a specified work
Time study aims at establishing the time for a qualified
worker to perform a specified work under stated conditions and at
a defined rate of working
This study is done by a qualifed persons who observe the work

then record the work being done , and then note down the
time with help of time measuring devices (stop clock etc)
At the same time he decides on rating by assessing the pace of
work being done by the worker
• Time Study
There after the qualfied person observes the number of cycles
of the task depending on the variability of task , the level
of accuracy required
The total number of observations are made over a range of
working conditions,more so in cases where working conditions
are variable and are subject to change during the day or over
a period
The observations should also cover a range of workers to
neutralize the individual effect .
once normal time for each element of the work is determined
allowances are added to arrive at a standard time
• Requirements of Time study
The essential requirements for a time study are :--
--Time study should be carried out be qualified persons

-- The person carrying out the the time study should be
trained and experienced in the work
-- The work must be clearly defined and the method of doing
work shold be efficient
-- The working conditions should be defined
• There are two elements of the normal time for a spedified work
--The first element is timing
--The second element is the rating
Timing : It is the actual time recorded by the observer for doing

the element of work or operation
: The time recorded with help of stopwatch or computerised
study board and is measured in centi minutes
(0.01 minutes)
• Rating
The method of working of one worker usually differs from
the method of working of another worker. The result in different
observed times for each worker for the same work carried
The difference is due to
--difference is speed of movement or the pace of work
-- Efforts being put in by the worker
--Dexterity, consistency and training
Note : worker doing task for first time would take more time
than the experienced worker
• Rating
The rating is on a scale with 100 as its standard rating
Rating is direct observation technique to convert the observed time
required for a qualified worker working at a defined level of
performance.
During the observation a trained observer makes an assessment of
the worker’s rate of working relative to his concept of rate
corresponding to standard rating
thus on scale of 0-100 the observer makes a judgement
of the worker’s rate of working as a percentage of the standard rate
of working (100).The rating is then used to convert the observed
time to normal time by using the following formula
Normal time = (observed time x observed rating)
standard rating
• Allowances
Since the worker is unable to work with the same efficiency
throughout his shift ( or the day ) . He suffers from fatigue
both by the work undertaken and the conditions under which
he works
Time taken to complete job could also vary from conditions
example : In middle east it is very hot
: In cold country is very cold
Some body who is used to work in normal
environmental conditions would find it pretty difficult
to work with same efficiency.
Also the worker has to attend to his personal needs, medicine
call of nature or something to eat therefore normal times needs to be
adjusted to compensate for this additional requirements of time
Normal practice is to make an addition to normal time by a suitable
amount which is commonly referred to as an “Allowance” to allow the
worker to recover from fatigue and to attend the personal needs
Additonal allowance ar to be added to normal time to arrive at a
standard time
• Standard Time
Knowledge of standard time for activity is very important plan
of work
It is necessary to know the standard time for each work activity
so that we are able to do the work as per required schedule
The time taken by a qualified worker to perform a particular

operation is referred to as the standard time
Standard time = Normal time + Allowances
• Need for standard Times
Standard time helps business in many ways .
-- For work planning
-- Man power planning as the number of workers have to be determined
accurately to complete the work
--Production scheduling with exact knowledge of the time required for the job
-- Preparing cost estimates for contract bidding
--- Determinning the productivity of the workers by comparing their performance
with standard time for tasks
--Finalizing the pay compensation and the incentive schemes
for the workers
---Establishing accurate delivery schedule for the products
--- Reviewing the working conditions and environment for any
modificaitons needed
--- Identifying the reasons for excessive rejection and quality deterioration
• Use of predetermined Time standards
Available database can be used for computing standard time
from the techniques like “predetermined motion time systems”
( PMTS) , simulation studies or visualisation of work
labout times are set from times in in published tables

To compute the standard time,
-- the mannual work is divided into basic elements
--the time for each basic element is obtained from the table
-- The time for basic elements are summed up to work out the
standard time for the task
this is very fast way of working out the standard time for the work and could be
used for planning purposes
The other advantage of working out the standard time for the work from tables
are that the times are established in laboratory setting and are widely accepted
by the unions .The drawback in using the data from database is that the data is
based on earlier studies and the conditions could be different at that time
• Steps in Conducting Time Study
Study is conducted by following some systematic steps

that inculde
Analysis of the task ,
Identifying the various elements of the taks
Computing the normal time for each task element and
ultimately
Working out the standard time
• 1. Define the task to be studied after analysing the method of doing work
• 2. Idenfify various elements of the task precisely
• 3. Decide the number of measurements to be made for each element of
• the task
4.Measure and record the observed times and record ratings of performance for the
various elements of the task
5. Calculate the average element time
Average element time = ( ∑ Element times) / Number of Cycles
6. Calculate the normal time for each task element
Normal time- = (Average acutal cycle time )x (Rating factor)
Rating factor is the assessed rate of performance ,usually indicated
as percentage of standard rating
7. Develop a total Normal time for the task by adding the normal time for each
element
8. Calculate the standard time
Standard time = (Total Normal time) / (1- allowance factor )
where allowance factor = Non working itme / total time
• Appropriate Method for Work Measurement
• A job may take few seconds in a highly repetitive
works such as assembly of electronic items or
it might take days or months to complete a large
project or a major shut down for plant etc
Work measurement used in two cases differ.
In first case a stopwatch is required to measure time
where as in second case estimation of time is required
Therefore different methods of work measurement
are used in different applications
• Following methods of measurements are used as appropriate to
an individual job:--
-- Predetermined Motion Time System (PMTS)
-- Estimation
-- Timing
-- Models
• Predetemined Motion time System (PMTS)
The measurement units used in this method is in ten

thousandth (0.0001) of a minute or hundered thousandth of
an hour (0.0001)
The method is suitable for a very short cycle work of around
on minute of total duratioin such as assembly work .
the examples of such works are assembling or dissembling
nuts and bolts , using a screw driver or doing spot welding on
a small job
• Estimation
This method is suitable for a long cycle works or
project works where some estimation of time is
required for completing the job
Estimation is divieded into three categories :--
-- Analytical Estimation
-- Category Estimation
-- Comparative Estimation
• Analytical Estimation
The estimator evaluates the work content and decides on the
probable time to be taken for the work by using his experience
According to his estimation the job might take about 3 days
to complete, The experience and judgement of the estimator
plays an important role in analytical situation
• Category Estimation
• Here estimator prefers to give a range estimate such as
“ the job is expected to take between 4 days and 6 days
to complete “
this provides a margin for error in estimation . Such
ranges are usually calculated using statistical methods
and are based on theory of probability
• Comparative Estimation
This is another example of range estimation and
depends on the experience of the estimator about
the work in order to produce the estimates . He
compares the time ranges with a few typical
descriptive jobs that would be very close to the case
under consideration.The estimator selects the most
appropriate range
• Timing
The observer measures the time taken by worker for each element
of the work . Each timing is rated by assessing the rate at which the
worker was working . This provides the normal time for the elements
and hence for the whole job which are independent of the worker
and could be used as the time for a trained , experienced worker to
carry out the same element
Another method of assessing the works is by using activity sampling
, In this method snap observations are made at random or systematic
sample times, He observes the worker and notes down what the
worker or workers are dong at the time of those observations
• Models
Models are generated as mathematical formulae
to which the observed data are inserted to compile
time for completion fo the task or project
It is an easy and efficient method for recycling time
standards for elements of repetitive work over and
over again,The volumes of the variables are changed
to suit each project
• Labour Standards
• These are used to measure and control the time required to perform a
particular task or group of task.
They can also be used in estimating and managing the cost
of vast varietyof activities including engineering drafting, clerical
administration and other services
These are well accepted by unions and become base for various industrial
activities ,management decisions, estimating
, production planning and performance evaluation
Also used as to negotiate the contract price with contractors
• Labour standards are commonly grouped into two categories
-- Engineering Standards
-- Non Engineering Standards
Engineering Standarads
These standards are developed with the assitance of work measure ment
techniques .The time in the engineered stanadards is the
time arrived at after sytematic time studies following conditions to
avoid any individual difference .The conditions to be satisfied
in the development of the stanadad time are .:---
-The work is carried out by qualified worker
-- The qualified worker works at a pace ordinarilly used
-- The worker works imder capable supervision
-- The worker experiences normal fatigue and delays durnig the period of
performing task
--Amount of work produced is of specified quality
--The qualfied worker follows a prescribed method
• Engineering standards have three components
-- Normal time also referred as leveled time.
-- Personal fatigue and delay allowance
-- Any applicable allowance
Non Engineering Standards

these area developed without performing a detailed
analysis but by using the best available information
historical data is normally used for development of non
engineered standards
Special Allowance
Normal time -Machine Start up
--Initial set up time Standard Time --Job cycle &complexity,
--Operation time -- Power failures
PF&D Allowance
Fatigue Allowance Daily Allowance

Personal Allowance Set up & Clean up
Mental work
Handling heavyweight Diffiicult person hazarad Minor machine
Excessive Heating Maintnenance
Smoking time Supervisor Checks
Lighting on the job site
Natural Calls time Use of safety Devices Referring to orders & files
Air conditioning Non availability of materials
Water or drinks Delay in management
Noise at Job site
Break Time Decisions
Rejection of non standard
Telephone, parts
Medicine Minor repairs on equipment
• Work Sampling
Work Sampling involves observing a portion of the work activity . A worker is
observed at random times over a long period.
Time standard based on statisitically determined observation of a workeror
process is developed by using work sampling .
In work sammpling analysis is based on a large n umber of random , rather than
continuous observations.
Estimates are based on the proportion of time spent by one or
persons on given activity . Work sampling does not use a stopwatch as in the
case of time study . It is based on a simple
random sampling techniques of statistical sampling theory
Non Engineered standards are developed by work sampling .Work
Sampling cannot be used alone to develop engineered standards. However it is
used to supplement or check standards developed by
other definitive technique
• Application of work Sampling
Work sampling is used to determine the job content
and assess the productive vs non productive time
The technique is suitable for jobs with irregular components
that vary in the amount of time per unit of out put .
Work measurement using work sampling is particularly used in
service sectors like banks, health care, insurance companies,
airlines, railservices ,water supply services,electricity services
and telephone services
Accuracy in this techniques depends on the sample size.
The number of observations in a work sampling study are very
large , ranging from several hundereds to several thousands
depending on the activity and degree of accuracy aimed at.
• The Procedure of Work Sampling
The main issue in work sampling are
-- The dedcide on desired level of statistical confidence
- To decide on the number of observation to be made
-- To decide on the schedule of obeservations
The number of observation is uniformly spread over the period

of study .
Normal time per part and standard time per part are computed
by work sampling .
Standard time is calculated by following formula
Standard time /Piece =
(Total time in minutes )x (Working time proprotion) x( Performance index) x 1
total number of pieces produced (1-allowance)
• Steps in Conducting Work and sampling Study
1. Identify and define activities in the work sampling throught discussions with the
workers and premliminary observations .Define conditions to be taken as working and
as non working
2. Develop the methods for observing and recording activities
3.Compute sample size ( number of observations)
4 Work out a schedule for observing the worker at appropriate /random times.
5. Observe and record the activities and rate of performance of worker
6. Record the number of units produced during the period of study
7.Compile and analyze the data
8. Calculate the ratio of the number of observations of the worker worked to
total number of observations by using the formula below
Proportion of the time (p) a worker is working on the work (P) is given by
the formula p= Number of observations with working /Total number of observations
9. Compute the normal time by formula
Normal =( Total time of study ) x (% of time the worker found working )x( pertotmsnce
Time rating factor ) / number of pcs produced
10 Compute the standard time
• Advantages of Work Sampling
There are several advantages of work sampling which are:
--One observer could conduct more than one work sampling study
at the same time .This requires lesser resouces when compared with
other techniques
-- An untrained or semi trained person could conduct the work sampling study except in
case where standard time is required to be
worked out
-- Even a long cycle work needs fewer hours of observer
-- It is less expensive than time study
--work sampling eliminates the effects of short period variations as the
duration of the work sampling study is usually long enough
--It does not need any timing device such as stop watch
-- work study is interrupted or delayed temporarily without any adverse effect
on the final results.
-- Influence on the change in method adopted by the worker during the period
of study is not significant
-- It is simple , easily adapted to services sectos and indirect laobur jobs
• Disadvantages of Work Sampling
-- Accuracy of work sampling studies are based on the subjective
assessment and perception of the analyst
-- Results could be uneven from study to study
-- Difficult to conculde if the worker is working or not.This brings in inaccuracy
in the result
--Study is limited to few workers
-- It is ineffective with short cycles
--It does not provide a complete breakdown of elements as in time study
--Observers tend to follow a repetitive route of travel rather than follow a
random sequence of operations. The time of observations are predicted in
a way to influence the results
--Work sampling gives misleading results if the system is in the process
of change .the basic assumption in the work sampling technique is that all
the observations are made to pertain to same static system
• Numerical
The number of observations of a payment counter found busy
out of the observatons made on six days are given below
Day Number of observations Number of times (observations the counter

was found busy}
Day one 50 40
Day two 30 20
Day three 45 38
Day four 48 40
Day five 25 12
Day six 35 24
Calculate the proportion of the time the counter was found busy .Does it
call for an additional counter .If it is assumed that an additional counter is permitted
when the workload is 90% or above of the total time.
• Total numberof observations made on six days =
(50+30+45+48+25+35) = 233
Total number of times ( observations) for which the counter
was found busy = 40+20+38+40+12+24 =174
Portion of the time counter was found busy = 174/233 =74.7%
Since the counter was busy at 74.7 % of the times therefore

additional counter is not required as the proportion of the counter
found busy is less than the set limits of 90%
• Method of Study
• Method of study is an important area in production to plan
various elements of production deciding on the type of machine
to be used for a specific task, establishing the capacity of the
machine and planning the number of people to be deployed to
complete the task
Time study measures the time and planning the number of
people to be deployed to complete the task whereas method
of study focuses on the method adopted for completing the task
In method study an attempt is made to look for alternate actions

to complete the task in an efficient manner and economic way
• Method Study
• It is the process by which a method is developed
to do a work in the best way in a given situation
In method study, the work is subjected to systematic
and critical scrutiny in order to make it more effective
and more cost efficient
Also if examines whether two or more tasks can be done

simultaneously without affecting the quantity and quality of the
work
There is a trade off between the benefits to arrive at an improved
method and saving additional cost and time .
• Following questions are adddressed in study :--
--If the particular element of the task is essential to complete
the work
-- If the element of the task could be eliminated
-- if the element of the task could be modified
-- if the element of task could be done more efficiently
and economically by the use of another device , technique,
, technology or skill
-- Which element of the work could be done parallel
-- If the work could be done with the same elements but with
modified sequence ?
• Applications of Method Study
Method study was originally designed for the analysis and
improvement of repetitive and manual works.
However it could be used in all types of applications
example :--
-- serving food in the canteen
--processing files in the office
-- issuing materials from store
-- carrying out repair and maintenance jobs
• Process of Method Study
1. select the work to be studied
2. Record all the relevant information about the work
3. Analyse the recorded information
4. Examine the alternate ways of doing work
5. Decide the improved way of doing the work
6. Implement the new method as standarad practice
7. Evaluate the peformance and standardise the method
• Advantages of method study
Provides better understanding of the work
Improved planning the work and control
waiting time or in process inventory is reduced
Better delivery schedules to customers
Reduction in manpower requirements
Results in reduced production time
Cost reductioin
Improves quality of the product and better customer
satisfaction
Method of Work and Machine Design
One of the main objectives of the method of study is to find if the
method adopted for doing the work is correct and if there is another
method to reduce the time taken by the work
Technological difference and machine design greatly affect the
method of doing as well the time taken in completing the work
• Man , human engineering, Machine design and method of Doing work
-- Human Engineering plays an important part in machine design
and the method of doing work .
Machines are designed keeping in view the requirements of operator .
Machine’s controls knobs, buttons, and monitors etc are arranged in such
a manner that results in minimum fatigue
and maximum comfort to the operator .The arrangement of various
elements of the machine should be such that the
chances of making mistakes or missing steps is reduced
Machine design should take care arranging various elements
that helps the operator and in easy operations with less fatigue
and without waste of time
• Egonomics
The science of designing the machine according to human needs is
referred to as Ergonomics
An ergonomically designed product implies that the product has
been designed to get integrated with a person’s body or actions that
provide efficient operations, safe, working environment and less
fatigue in doing the job. The relationship between man and machine
is of great importance in manufacturiing process . Automatic
manufacturing technology has greatly influenced this relationship
Ergonomics in manufacturing is very much concerned with the

design of the products and the design of the process that make
them
• Maintenance Management
Objectives : Equipment is an important resource which is constantly
used for adding value to products . So it must be kept at the
operating condition. Other wise there will be excessive breakdowns
and interruption of production,if it is used in a mass production
Poor working condition of equipment will lead to qualtiy related
problems.
therefore it is an absolute necessary to maintain equipments in good
operating conditions with economical cost
Need is to have integrated approach to minimize the cost of
maintnenance
• Breakdown Maintenance
• Preventive Maintenance
• Corrective Maintenance
• Predictive Maintenance
• Proactive Maintenance
• Total Productive Maintenance
• Comupterised Maintenance
• World Class Maintenance
• Breakdown Maintenance
The sudden stoppage of a machine due to some failure or problem is
termed as breadown of the machine. In some organisation the
machines are attended only when they stop
functioing .The maintenance carried out in this manner is referred toas
Breakdown maintenance
Here repair and corrective action is taken only after the problem
has actually happened
Breakdown maintenance normally is the outcome of
-- Negliegence
-- Ignorance
-- Lack of training\
--- Shortage of resources
--- Poor management
• Preventive Maintenance
Preventive maintenance --- to prevent the breakdown
of the machine
Checklist concepts are developed .
Checklist are developed for each equipment or machine so that
the machine parts are checked for any likely problems, Once
the problem is identified
in advance the required corrective action is taken
before the machine stops functioing
Backbone of preventive maintenance is the trained
manpower,who can identify by visual inspection,
or by hearing the sound of the operating machine or by touching
the machine.
• Predictive maintenance
It is based on the measurement of certain parameters representing
some characteristics , for example velocity, acceleration are measured
for study of the type of severity of vibrations
They do not have fixed frequency of checks , The frequency
of checks is adjusted based on the condition of machine
example condition of ball bearing ..if good no need , if condition
is not good then the checks are carried out more frequently
and the measurement of parameters is done with special instruements
to provide accurate information about the condition of machine and
predict the duration for which machine could be further used without
any problem
• Preventive and predictive maintenance do not compete
with each other .Both the systems are required to
effective maintenance and are complimentary to each
other .Any investment on the procurement of equipment
required for predictive maintenance check is good
investment and would give much more returns in short
time.
Information obtained from predictive check reduces the
need on frequent checks for preventive maintenance
This reduces total maintenance cost .Those who have
practiced preventive and predictive maintenance checks
never think of discontinuing them once they have started
• Corrective maintenance
During preventive maintenance checks certain problems
are noticed about the condition of the machine , the
machine might be operating in a condition that could
cause damage to the machine if continued to operate
Therefore the machine is to be stopped without delay to
correct the situation
The steps for corrective the situation are termed as
corrective maintenance
• Proactive maintenance
Two terms are often used in the context of
maintenance
1. Reactive maintenacne
2. Proactive maintenance
Reactive maintenance concerns with the maintenance
actions that are required once the need
for the same arisen.
Break down of maintenance of a machine or
emergency repairs are such conditions -- Reactive
maintenance.
• Proactive maintenance
Opposite to the reactive maintenance strategy
is the proactive maintenance strategy .The
maintenance staff does not wait for the need to
maintain and takes such actions as a normal proces
that is necessary to maintain the machine in high
order. All those activities or oppurtunities that allow
machine to work without an y problem are looked
after
Proactive maintenance
•
Preventive Corrective Planned

Predictive maintenance maintenance
Maintenance maintenance
others
Scheduled -- Repairs of the
Preventive Defects noticed
Check list Oil Analysis ---Reconditioning of
-- lubrication Vibration Analysis Components
-- Cleaning --Manufacturing of
Spaces -- programmed
-- Adjustments
--Construcition overhauls
-- Testing
-- Modifications
-- Replacements
-- Salvage operations
-- Painting
• Total Productive Maintenance(TPM)
It is an equipment maintenance based system involving all employees in
the organisation from top
management to production line workers and building custodians
Japanese developed concept of TPM in 1971
TPM basically integrates three concepts
--Equipment effectiveness
-- Maintenance systems
-- Employees Participation
The word Total has three featues which are
-- total equipment effectiveness TEE
-- total maintenance systems
--total participation of all employees
• Execution of works under TPM
The works of TPM are organised and carried out
through the following methodologies
-- Operators are organised into zonal teams
-- They are trained and certified to perform particular tasks in
their zone as the need arises
Higher level of maintenance by operators is usually
voluntary
Individuals who notice problem put themselves to
solve the problem and restore the equipment into
operation thus reducing time
Centralised maintenance teams attend to major maintenance
works requiring high craft skills
objective : Zero Defects , Zero Breakdown
• Computerized Maintenance
• Computerized maintenance enables online
information support for management of maintenance
work
Essential Elements of computer information Systems
-- Work order information
-- planning and work measurement
-- Scheduling and work assignment
-- Equipment history sheet
--- Reports
-- Financial Control
• World Class Maintenance

• It is based on an organizaiton ability to compete with any
other competitor anywhere in the world with product , price
quality, and timely delivery.
Steps to world Class maintenance
--- Evaluate the status of maintenance
-- Prepare a blue print for the future
-- Involve employees in the change process through
prototyping
-- Roll out successes across the organisation
-- System audits to avoid backsliding
-- Automation of the systems
• Maintenance planning
--Elements of maintenance planning
Maintenance planning assumes great importance in a competitive
world , where it plays a very important role to shape the organization
as a profitable one or a loosing venture
-- Organizational structures for maintenance
-- Functions and responsibilities of key functionaries
--Facilities equipment and tools planning
--Space planning for the maintenance shops
--Settiing up a preventive and productive maintenance program
--Computerization of maintenance activities
-- Reporting and information systems
Management of Spare parts
Spare parts are required for the repair and maintenance of mother unit
throughout its life time.
There is no certainity as to when a part would fail and would
require replacement .Regularly used parts are kept in the inventory for
replacement to keep machine downtime low
The parts kept in the inventory are called spare parts
The Need for keeping the spares in Inventory
Essential to keep spare parts for following reasons ;--
--To make parts available for replacement when needed
--To avoid undue long shutdown in the absence of spare parts
especially when these spare parts are to be imported
-- To avoid high cost of purchase of spare parts and freight in case of
emergency purchases
-- To avoid stock out of spares especially in cases of machine which are likely
to be phased out of production by the machinery manufacturers
• Elements of Management of Spare parts
management of spare parts is not limited to
storage of spare parts in the warehouse but has many aspects
which include following, :--
-- Maintain an upto date list of spare parts
-- Maintain complete specs of spare parts
-- Arrange drawing of spare parts
-- Analyze spare parts from various considerations
--Review of spare parts at regular intervals
-- Appropriate maintenace approach
-- Appropriate procedures for storing spare parts
-- Review of requirement of spare parts
-- Use of reconditioned and overhauled parts
-- Obselete spare parts
-- Proper selection of machine
• Classification of Spare Parts
ABC : Value of annual consumption of the item
VED : Vital Essential and Desirable
FSN : Fast moving, slow moving, Non moving
(trend of usage)
SDE :Scarce ,Difficult and Easy to obtain
GOLF : Govt , ordinary, local and foreign
(Source of Supply)
SOS : Seasonal, off seasonal (seasonal availability)
HML : High medium and low
( unit pricing)
XYZ : Inventory value of the item stored
• Categories of Inventory
-- Finished goods inventory
-- In process inventory
-- Regular inventory items for production activities
• Advantages of Classification of Inventory
--- Review of stock items such as rawmaterials ,spares.
consumables, etc is easily done separately for each class
-- Classification helps to keep similar items together
in the store.Recpts and issues are posted correctly
-- Classification of items under various heads helps in budgetory
control ,
--- Clasification helps in logical codification of all items of
inventory
----Material requisitions are prepared separately for different
classes of items .Similarly enquiries are issued separately
for different classes of items
• Inventory Control Concept
Inventory control is a management function to maintain inventory
items in such a quantity that the items in the inventory do not
remain in stock for long
and do not block the usable financial resources.
At the same time items should be in sufficient quantity so that they
are available when needed
and donot result in loss of production or delay in repair and
maintenance of the machines
High inventory turnover

Stocking of materials as per requirements
controlling excessive inventory are part of inventory control
• Inventory Control Model
Elements of the inventory control model

-- Minimum Stock level
-- Maximum Stock level
-- Reorder level
--- Lead time
--- Safety Stock level
• Minimum Stock Level
It is the level below which the inventory is not allowed to fall
If the inventory is below this level , then there are chances that
plant operations are adversely affected
Maximum Stock level

It is the inventory level beyond which the stock is not allowed
to exceed. The maximum level is used as a control point to
avoid any extra stocks. Order quantity for material is controlled
in such a way that when the material is received the inventory
level is below maximum
• Safety Stock level
• Safety stock is the level of inventory which is always
maintained to take care of unforeseen factors such as delay in
ordering , delay in supplier,
delay in transportation, or hinderance in execution
of orders by the supplier which are beyond his control like war,
flood or strike
Lead Time
Lead time is the time from the point the requisition
for the material is prepared to the point when the material is
received ,inspected and ready for use
• Role of Lot size in on lead time management
lot size is the amount of particular item that is
ordered from plant or a supplier or issued as a
standard quantity to the production process,
Lot sizes are to be kept as low as possible as it
affects the size of the queue, which ultimately
determines the actual lead time of an order
• Types of lot Sizes
following four types of lot sizes are considered for
control of the lead time
-- Fixed order quantity (FOQ)

-- Economic Order Quantity (EOQ)
-- Lot for Lot
-- Period Order Quantity (POQ)
• Materials Requirement Planning (MRP)

MRP Process includes planning and control of materials
Data inputs in MRP system are obtained from
-- Master production Schedule
-- Bill of Materials
-- Inventory status file
Master production Schedule (MPS)
MPS works out the quantity and timing of the requirement
of end items
• Bill of Materials
A list of all items to produce the product , indicating
the quantity of each item is called the “bill of
materials” . A separate bill of materials is prepared
for each product .
Inventory Status file
A computerised system provides information such
as inventory on hand, lead time, lot size, and
scheduled receipts etc
• Factors Influencing the Requirement of Materials
-- Production plans
-- Installed Capacity
-- Market Demand
-- Nature of the Market
-- Political Scenario
-- Organizational resources
-- Reliable delivery schedule from vendors
-- Relaibilty of records and store keeping
• Fixed Order Quantity (FOQ)
In this case the order quantity remains fixed but the time of ordering\
varies ,This may be due to various restrictions in the process such
as tool life , storage , restrictions on capactiy of the transportation
facility like a truck , trailer, tanker ,rail wagon
Economic Order Quantity (EOQ)
It is most economic order quantity where in two costs are
considered i.e inventory carrying cost( ICC) and the cost of
a purchase item, the acquisition cost (AC) of a purchase,
The sum of the two costs i.e inventory carrying cost and
Acquisition cost (AC) or set up cost is lowest at the economic
order quantity
• Economic Order Quantity (EOQ)
The economic order quantity is the quantity which minimizes the sum
of acquisition cost and inventory cost I.e the quantity is related to
minimum variable costs
Following symbols are used in EOQ formula
q : Order quantity
Q :Economic Order Quantity
U :Daily rate usage
n : Number of working days in the forecasted period
Ac :Ordering cost per order (Rs per order)
Ic : Inventory cost (Rs per order )
Pc: Unit cost of items (Rs / unit of measurement
q = 2nUAc
√ Pc Ic
• Lot for Lot
Planned orders are generated in quantities equal to
the net requirement in each period
Period Order Quantity (POQ)

In this case the lot size will be equal to the net requirement for
specific number of periods ,
• Factors affecting Inventory Control
--Change in rate of consumption

-- Change in Delivery Schedule
-- Shift in Reorder point
--Bulk Purchasing
-- Quantity Discounts
-- Forward Buying
-- Staggered Deliveries
-- Other External factors
• Objectives of Inventory Control
--To ensure that items are needed are available
items of regular use are kept in inventory as stock
so that production process is not affected for want of them
--Economic Buying
Reduction in procurement cost is one of the important objectives of economic
buying
--Ensure availability of materials
-- Avoid overstocking of materials
-- To keep inventory carrying cost as low as possible
-- Provide flexibility to purchase department to apply apporpriate
purchasing policies such as ;
To avail quantity discounts for lower unit prices
To decide on forward buying if cost of matriel islikey to increase in future
To adjust quantity to match with economiclots
To reduce tramsportation costs as much as possilbe by deciding on appropriate
quantity
To keep packaging cost as low as possible by adjusting the quantity suitable for
the standard packaging
• ABC analysis
--Normally inventory items are classified into categories to facilitate
attention according to importance of each category.
All items cannot be given equal attention by the invenory manager
One of the most important considerations of control is the value
of annual consumption of inventory items in a year .
However it is found that only a samll number of inventory items
consume a very large share of the inventory consumption duing the
year ,Moreoverlittle larger number covers a moderate share of the
annual inventory consumption and very large number of inventory
items just cover a very small share of annual inventory consumption
These gave rise to concept of ABC analysis
It has been observed that 10% of items have 70 % share of annual
inventory consumption (deserve high attention –A class)
20% items have 20%annual inventory consumption( (---B class)
70% items have 10% annual inventory consumption(--C class)
• Steps in ABC analysis
-- Determine the annual usage of units for each item
in the past one year
-- Multiply the annual usage quantity with the average
unit price of each item to calculate the annual usage
in Rs for each item
-- item with highest Rs usage annually is ranked first ,Then
the next lower annual usage item is listed till the lowest item is
listed at the last.
-- Arrange the items in the inventory by cumulative annual usage
and by cumulative percentage .Categorise items in A,B C
categories
• Codification
Codification plays an important role in inventory control and is
useful in following
-- Identification of the item in the inventory ,Creation of unique
codes for each item helps everyone understand the item with
the same meaning
-- Codification eliminates the possibility of duplication in names
-- Items of similar application but with different features can be
differentiated easily with the help of codes
-- Codes avoid long descriptions in the material requistions
,thus saving a lot time in reviewing and processing of inventory
item during review of stock levels
--Codes are necessary in inventory control activities using
computer
• JIT ( just in time)
The importance of just in time concept was realised in the context of the objective of
reducing inventory level and yet to maintain the schedule of repairs without loss of
time and carry out other related production activities
The main focus of JIT Is towards waste and the linkage between
waste and variance .Waste refers to any activity or action that does
not add to the value There are various types of wastes in manufacturing operations
such as
-- Excess production than demanded production
-- Waiting time in any operation results in waste
-- Unproductive movement of materials
-- Unnecessary process or operation
-- Excessive inventory
--Reduction in rates of rejecrtion
• Objectives of Just in time production process
-- To gain competitve advanatage
-- Improve resposiveness to the customer
-- Production planning
-- To achieve perfect quality
-- Minimum lead time
-- No waiting time
--Avoid Waste
-- Flexibility
-- Human resource development
• Principles of just in time
-- Continuous improvement
-- Quality at Source
-- Waste management
-- Develop and motivate people
-- Teamwork
-- Process Simplification
-- Visual control
--Take care of customers needs
-- Production to customer’s demand
• GANTT Chart
Gantt chart is a graphical representation of a series
activities drawn to a time scale . Horizontal axis , X axis represents time
and vertical axis Y axis shows the activities to be peformed.The Gantt
chart shows
the activities to specific jobs at individual /work centers by horizontal
bars. Also known as bar chart because of the graphic presentation of
the information the position and the length of the horizontal bar
indicate the chart and completion date of the activity.
Initially certain symbols were used but over a peroid only bars
used to show the start and duration of the activity, When
When the Gantt chart is used as a controlling technique the planned
and actual performances of the activities are presented on the same
chart by two horizontal bars with different colours or by different
presentation
Hours
Task
1 2 3 4 5 6 7 8 9 10
1
2
3
4
B chart indicating Planning time for each operation

Bar
• Strengths of Gantt Charts
-- Very simple to understand by everyone: supervisors, managers
top management
-- useful information in a format that is simple to develop and
interpret
-- Good tool for planning as well as monitoring the progress of
the work. It helps the planners to evaluate the progress of a
project at various levels
--Helps in loading the work centre in relation to the available
capacity
-- It provides the user with a quick visual indication of the actual
status of each order and its anticipated or planned status
-- The Schedule could easily incorporate changes in timing,
machine loads, and current status
• Strengths of Gantt Charts
• Flexible to apply, It indicates the need for reassessing the resources
incase the load at one work station becomes too much
Work force could be temporarity adjusted to meet the high demand
of heavily loaded workstation by shfiting manpower from a relatively
less loaded work center .
Gantt charts suit the requirement of a wide range of media from a

ruled paper to mechanical devices and computer systems
• Limitations
It does not convey the variability of the task duration ,
equipment performance ( including breakdowns) and human
potential , any one of which could influence the accuracy of
loading of work centers.
It does not clearly indicate the details regarding progress of the
activities
The chart is static and has to be updated periodically
in account for new job arrivals and revised time estimates for
existing jobs
• Program Evaluation and Review Technique (PERT)
It is a network technique used for a project scheduling
Developed by US Navy
Application of PERT to plan and control the project helped them
project completion ahead of schedule time and with in budget
Now PERT chart has become an essential component of project

execution , expecially in large size projects where the number of
acitivities are very largeand lot of competition are faced in
execution of projects.
PERT has the ability to cope with uncertain activity completion
times .( if an activity is most likely to be completed in 4 weeks
It could be completed anywhere between 3 weeks to 8 weeks
• Program Evaluation and Review Technique (PERT)
Expected average activity time (tc) is worked out based on three
terms ,
-- the most optimistic (t 0 ) ,

---- the most pessimistic ( tp)
---- the most likely time ( tm )
t c= t 0 +t m+ t p
6
Note that most likely time ( tm ) is given four times weight than the
most optimistic and most pessimistic time
High Most likely time
Probability Expected
Average time
Probability of occurence
Lower
Optimistic time
probability
Time T
• Terms used in PERT
Activity :
Activity is a time consuming effort needed to perform
a part of the network . It has a definite beginning and ending point
Event : o
Event is represented by a circle, which is a node in the network. Nodes
are points in time , which one or more activities start or finish
Expected time of an activity
Expected time of activity
The expected time in which an activity is expected to completed (Tc)
Optimistic time
time taken in most favourable conditions (to)
Pessimistic time
time taken in most adverse conditions (tp)
• Slack time : Time difference between latest time and
earliest time of an event is the slack time for the event
(ts)
• Dummy activity :
An imaginary activity with zero time
• Steps in PERT
1. Breaking of the project to various activities depends on the
extent of the details of the work to be planned.
2. Identify sub activities under each activity
3. Determine the sequencing of the relationship between
activities and sub activities
4.Determine the estimated time ( tc )
by using the formula
5. Draw network diagram
Calculate the critical path for the project / work .Determine
the project time .
• Applications of PERT
PERT is useful in following situations
--The project should have identifiable activities
-- The activities should have clear starting and ending points
-- Project is complicated and consists of many inter related
goods
-- Technique is good for projects where alternative options
of activities and time period involved
• Critical Path Method
A key part of the PERT / CPM is the critical path for
completing the project . The critical path is the subset of
activities that are performed exactly as planned in order to
complete the project on time
Critical path is the sequence of activities and events where
there is no slack i.e zero slack . Critical path is the longest
through a project and takes minimum completion time
Here emphasis is to trade off between cost of the project and
overall completion time. It is used as control and monitoring
tool.
• Acitvity on Arc Vs Activity on Node Network Diagram
Project networks works on two conventions
--- Activity –On the Arc (AOA)
--- Activity – On the Node (AON)
AOA : Salient points of AOA convention are

--Each activity is represented by an arc in the network
--If activity A precedes activity B it means that A leads the
arc B .Thus Nodes represent events or milestones
It is more popular as it is close to Gantt charts used in
scheduling
• AON : Salient points of the AON convention are

: Each activity is represented by a node in the network
: A precedence relationship between two activities is
represented by an arc or link between the two
: Node is represented by a circle and indicates an “event”
a point where one or more activities start and / or finish
• Benefits of PERT and CPM
• -- PERT and CPM compel the planners to think of varous activities
in the project , their time estimates and sequencing , It develops
a very good understanding of the project and its requirements
--Sequencing of activities , information of the earliest and latest times
helps to work out the slack time , if available at any event
-- Helps in resouce planning , both in terms of quality and time
when required
-- Helps in planning of manpower requirements and the requirements
of expertise. In case of some disturbance in the project executiion
, the project manager could ue the manpower more effectively
--Highlights the resource constraints and helps in timely project execution ,
with in budget provisions
--Useful at many stages of project management
• --Give critical path and slack time at various points,
In case of emergencies or change of situations they help in
crashing the project activiities time and thereby controlling the project
time
-- It is mathematically simple
computers can do the work of analysis much faster with accuracy
-- Helps in trade of between the project cost and project completion
time
--Provides project documentation which is easily understandable
by all at different levels
--very useful in monitoring project cost
• The Project manager gets answer to the following questions
-- When is the completion date
-- on what schedul it can be completed
-- What is the budget of each project ?
-- What are the critical activities?
-- which are the dependent and independent
activities?
-- Which activities have positive slack ?
-- How the project could be finished early at the least cost?
• Preparation of a network
The following steps are to be taken to produce a network
1. List the main acitivities to be performed and identify them by a code
letter or numbering them
2. Establish the sequence of activities stating which activity is to be
completed before starting the next activity
3.Start from left to right .Draw an arrow for the first activity to be
carried out
4. At each end of the arrow , a circle is drawn and the information is
recorded .The circle is used to provide information of an event or
or node. The circle has three segements . The top portion is used
to number the event . The two. lower segments are used for recording
activity start and completion times
• Node Numbering
Node position
(number)
Earliest
Start date Latest start
(forward pass) Date
(Backward pass)
• Compression of Project Duration
compression of the project schedule without changing the project
scope is known as compression of the project .This is needed to meet
the imposed dates or other schedule objectives In real time there
could be situations where it is required to shorten the project
scheduled time
Approaches in shortening the Duration of the project
various approaches are adopted for crashing the project
duration .All approaches or some of them could be adopted
to achieve the desired objective and target .
These approaches include the following
-- Crashing
-- Fast Tracking
--Simulation
• Crashing : In case of crashing the trade off is analyzed to

determine how, if at all, to obtain the greatest amount of
compression for the least incremental cost
• Fast tracking :here activities that are normally done in sequence

they are done in parallel .This can lead to increased cost
Simulation : Simulation modelling involves calculations of different

sceanrios . The most preferred scenario that meets the objective
is selected for execution
• Methods of Shortening the Project Duration
Utilization of extended work hours

Weekends working
Multiple shifts
increasing productivity
• Aspects to be considered in crashing program
• -- Which activities could be crashed

-- What is the maximum extent of crashing for each
activity
-- Which activity should be crashed first and what
principles are adopted in crashing the activities
-- How to select the activities to be crashed to meet
the objective of reducing the project duration by
a specified time period
• Quality as an international Business language
• Quality for customer satisfaction
• Quality for Business Effectiveness
• Quality as competitive connector
• Quality in partnership
• Quality in leadership
• Quality in Modern Managerial Activity based
accounting
• Quality in Time Management
• Total Quality Management
TQM refers to to management of all organizational activities with the
objective to improve the quality of product and services to the customers.
The main objective of TQM is to design , develop,
and deliver qualtiy products and services to customer
It is a program that directs and redirects the corporate culture to achieve
higher levels of quality and use management and statisitical tools in the
implementation of the quality program.
TQM improves the corporate practices , procedures and policies and

thereby the performance of the whole organization
• TQM stresses on each and every activity that helps
improves quality. These include price,delivery after
sales service , prompt response, favourable terms
and condtions, good packaging ,training to customers,
updating the customers with latest developments and
facilitate customer satisfaction
Customer satisfaction is the cardinal point in Total Qualtiy
management.
• Elements of total Quality Management
Involvement of all at every level
Employees
Commitment Continuous efforts
& attitude
TQM for improvement
Use of Management and statistical tools

• Modular approach to Quality Management
TQM is a continuous process , Improvement of quality is never ending .More the
number of reviews and implementation of quality program better the quality that
emerges in each attempt
Quality planning , decision for improvements , control and monitoring

the process or design and reviewing the detection of variances are
a continuous process, which determine the quality level. Interaction
and improvements at different levels , and control and monitoring
of quality to bring it back to conformance , result in the next higher
level of quality,There could be unlimited numbers of attempts to bring
qualty improvements.
Hence the process process of TQM is termed as “Modular approach”
• High Quality through TQM
• There are various factors , which affect the quality of product and services , which
affect the quality of product
and services .These factors need continuous examination and review . A program for
TQM includes
various aspects which are listed below
--Improve product design and services as and when needed
-- Select the right material for contradiction of the product
-- Improve the production process
-- Select efficient plant and machinery of appropriate capacities
--Adopt the latest technology and technological developments
--Adopt automation and computerization
--Select and employ human resources of right specialization for the job . Quality of
manpower is more important than the number of employees
--Organizational structure should be given proper attention
-- Develop efficient and short procedures, Red tapism and bureucracy should be
avioded
-- Effective warehousing and inventory control improves productivity and contributes
to higher quality
• Reward and Punishment system should encourage and
motivate employees to do a high qualtiy work
• Motivate employees towards quality
• Develop a culture of participation of all in the
organization.
• Work for high standards
• Employees should feel pride in their work .
• ISO 9000 – A Tool for total quality Management
ISO is the international organization for standardization and is
based at GENEVA
ISO has 91 member countries , each represented by
a standard body.There are about 200 technical commitees
covering many sectors and products
ISO 9000 is a program for process quality certification . It was
developed on behalf of European Economic Community and is
becoming
a worldwide standard for external process verification , ISO
9000 is an accreditation to indicate that company operates with
in laid down quality standards and in certain cases it further
certifies that the regulated products must meet defined
minimum standards. ISO 9000 is important because EC
companies requiring their vendors, suppliers to be ISO 9000 for
cross border trading between the countries.
• ISO supports TQM concept to assist companies to identify areas
that needs improvement . ISO 9000 is the international standard
for systems for 20 areas of business processes
ISO 9000 serires has been subdivided into five series starting from
9000 to 9004 which are :
-- ISO 9000 is an overview and explains the requirements for 9001 to
9004
-- ISO 9001 idenftifies 20 qualitiy elements . According to ISO 9001
companies must take their certification for their quality systems
from an independent quality auditor.This covers all aspects
of quality from product design to customer service
• ISO 9002 focusses on the production and installation functions
identifying 18 of the quality elements
ISO 9003 confines to the certification to product inspection and
testing process identifying 12 quality standards
ISO 9004 specifies the recommended standards
A company who wishes to be an ISO 9000 company needs to be

registered .The retistration is done after the company has been
audited by an independent agency authorized to give certificate for
quality adherence The certificate issued by such an agency is valid
for a period of 3 years . However company is to be audited once in
every year by external auditor as well as by internal auditors who
have been trained for the purpose.
• Benefits of ISO 9000

Two benefits are seen by registration as ISO 9000 company they
are
(i) It is a tool implementing an improved methodology
in running the company. It provides the management
a tool to identify areas requiring improvements and ensures an
overall discipline through the company . It has become a tool for self
improvement and to make the company more competitive
(ii) It has become a requirement to be registered as many
customers insist that their suppliers to be ISO 9000 companies
to ensure quality supplies from them.
• Six Sigma
• Six sigma is a quantitative approach for improvement
in the manufacturing ,services, or financial process.
The approach is to achieve overall improvement through
selection of right projects based on the potentials and merits for
performance improvements
Results are achieved by selecting and training the right
people to get the business results
The key focus of all Six Sigma programs is to optimize
the overall business results by balancing cost, quality,
features, and availability of products as a best business
strategy.Six sigma combines most effective statistical and non
statistical methods to achieve overall business improvements
In statistical terms ,Six sigma strategy means that there should not be
more than 3 defects per million oppurtunities in any process or
services
Elements of Six Sigma Improvement Programs

Six Sigma improvement programs have five phases , which are
-- Define
-- Measure
--- Analyze
---Improve
--Control

Production and Operations Management

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Production and Operations Management

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Production & Operations

• Operation : Way in which something is working

• Marketing : Promote product to the customers

• Human Resources : Provide persons to support all the functions

In the Management functions of an organisation , all the systems are

All functions need to be well synchronised and they need to function

• Products or services are outputs of an organisation

• Organisations need to achive critically following

Note : When the Customers are evaluating product or service of

Effectiveness – Measures value generated by the product for the

--Work Efficiency –cost incurred to obtain desired output as compared to

• Efficiency : Any organisation would measure efficiency

• Production / Operations Management

Production / Operation Management can be defined as

If the same concept is applied to services management

Management activities provided for –for production/ services

• Production : manufacturing custom made products such as

• Owing to Globalisation and competition arising out and competition

However in case of high competition Company first needs to fix up

System is by and large a collection ,interlinking of all related activites.

Operations Management is the management of transformatierials

Inputs : raw materials, labour , equipment, and capital

These could be , qualtiy check on incoming raw materials

Input Operations Management Output

Capital Goods/ Services

• System operates in an environment

Top management considered as internal envrionment, their

Also the external environment –Uncertain,

• Marketing strategy would is influenced by-----

---- Product Market

• Also the type of technology would to a great

--Critical and important factor for selection of

So as to select the right type of production system ,trade off

• Planning and Scheduling

Specialist agencies are to be used for measurement

• Project information System

• Flexible system : should have ability

few units are producedin as and when required

Job shop : When various small jobs are performed simultaneously at

• Job shops are able to carry out small orders more

• Layout considerations :Flexible lay out is essential

Planning and Scheduling : Supervisors would need to keep a

Quality control : Supervisors need to control , Usually no separate

• Flexible system: Job shops are suitable for development of new

Planning and Scheduling : Due to volume of production, lay out

Quality control : Highly skilled quality controllers are needed control

Information system : comparatively simple as the data to be handled is

Application of line production : Mainly used in standard products

Layout : follows a product layout

Other factors : Line production offers good prices, good quality

Inventory : Work in process inventory is important so as to

Cost of the product further depends upon to great extent on

To ensure above the production managers have to accurately

The activities under the work measurement plan are:---

a) The analysis phase

Factors affecting the choice of a suitable measurement technique

This study is done by a qualifed persons who observe the work

The essential requirements for a time study are :--

--Time study should be carried out be qualified persons

--The first element is timing

--The second element is the rating

Timing : It is the actual time recorded by the observer for doing

The time taken by a qualified worker to perform a particular