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IMTS (ISO 9001-2008 Internationally Certified) ENTERPRISE RESOURCE PLANNING

ENTERPRISE RESOURCE PLANNING

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ENTERPRISE RESOURCE PLANNING CONTENTS: UNIT – I 01-23 Production management- Definition- Production system – Difference between source and goods production – Historical development of production management – Product design – Steps – Designing for the customer – Quality Functions Deployment (QFD) – Value analysis – UNIT – II 24-59 Facility location – Factors affecting plant location – Plant location selection methods – Process analysis – Types of processes – Process selection – Methods – Production layout techniques – Process Payout – Product layout – Assembly lines – Fixed position layout – Cellular layout – Retail service layout. UNIT – III 60-83 Capacity planning – Concepts – Economics of scale – The experience curve – determining capacity requirements – Enterprise resource planning – Production scheduling- Priority rules – Johnson’s method of scheduling – Techniques – Nature and importance of work centers.

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UNIT – I PRODUCTION MANAGEMENT MEANING AND DEFINITION OF PRODUCTION MANAGEMENT Introduction: According to the Peter Drucker on the practices of management, “Production is not the application of tools to materials but is the application of logic to work” Production is the process by which the goods and services are produced. Production consists of a series of operations that transforms materials from a given form to the desired form. Production is an organized process of manufacturing/ producing goods and services through the use of inputs resources of men, materials, money, machines, minutes and methods.

Production is the foundation on which every organisation is built. The organisation may be a manufacturing unit or a service organisation. In a manufacturing unit, production involves producing something (goods) in an organised manner.

Similarly, in a service organisation, production means

providing some function which has some utility eg. Hospitals, hotels, banks etc. Hence it is to be noted that after the inclusion of services into the scope of production, it is broadly known as “Operations Management”.

Thus it is clear that production includes creation of both tangible goods as well as

intangible services.

In simple terms, Production is transformation of a set of inputs into goods and services (output).

Production process as a System Production system receives inputs in the form of material, labour, capital, utilities, information etc. These inputs are transformed or changed Into designed products and services which are called the output.

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TRANSFORMATION INPUT

OUTPUT

MEN MATERIALS MONEY MACHINE LAND CAPITAL etc

LAYOUT TOOLS MATERIALS HANDLING

GOODS & SERVICES

FEEDBACK

Thus, the basic objective of production is to make the products/services to satisfy the needs of the customers by giving right quality products at right place at right time and at right price.

In simpler terms, Objective of Production is -

Maximising the value of the product

Minimizing the cost involved

(Note: If the management activities are extended to services, then it is called as Operations management.) Examples: For Production: Standardised products like car, bus, motor-cycle, radio etc And Customised products like Flats, Apparels etc For Operations: Medical facilities, travels, hotels, bank services etc

. What is the meaning of Production? Production is a process which transforms a set of inputs into a set of output to achieve the objectives of an enterprise. . Define Production. E. S. Buffa, defines production as “a process by which goods and services are created”. . Explain about the Production system. 

Production as a System: A system is understood as a whole which cannot be taken apart. It must be studied as such. Looking from this perspective, three systems emerge.  Production System  Conversion Sub-System

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 Control Sub-System 

Production System: 

Production system is a system whose function is to convert a set of inputs into a set of designed outputs.

Input

Men, Materials, Money, Machines, Methods, Market, Matter, Minute, Milieu

Transformation

Layout Tools Materials Handling

Output

Goods Services

Comparison Actual Vs. Planned (Feed Back) 

Conversion Sub-System: Conversion Sub-System is a sub-system of the larger production system where inputs are converted into outputs.



Control Sub-System: Control Sub-System is a sub-system of the larger production system where a portion of the output is monitored for feedback to provide remedial action, if required.

. What is the meaning of Production Management? Production management is the process of planning, organizing, directing and controlling production activities of an organizing for the actual transformation of elements of inputs in to finished goods.

Production Management Meaning: Production management refers to the application of management principles to the production function in a factory. In other words, production management involves application of planning, organizing, directing and controlling to the production process, Definition: “Production Management deals with decision making related to production processes so that the resulting goods or service is produced according to specifications, in the amounts and by the schedule demanded and at minimum cost”

- E.S. Buffa

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According to this definition, design (planning) and control of production system are the two main characteristics of production management. The definition given by E.S.Buffa is simple, clear and exhaustive. It explains the following important aspects of production management. 

It is a decision making managerial function



The decisions are made regarding the production processes required for converting the raw material into finished products used



The production or output should be according to specifications, in the specified quantities, as per the schedule and at minimum cost.

Define Production Management. 

In the words of E.L. Brech “Production management is a process of effective planning and regulating the operations of that section of an enterprise which is responsible for the actual transformation of materials in to finished products”.



E.S. Buffa defines “Production management deals with decision making related to the production process so that the resulting goods and services are produced according to specifications in amounts and by the schedules demanded and at a minimum cost”.



H.A. Harding “production management is concerned with those processes which convert the inputs into outputs. The inputs are various resources like Raw Materials, Men, Methods etc., and outputs are the goods and services”.

. Explain the types of production. Or Explain the Manufacturing system. There are fundamentally three types of production system. 

Continuous Production System.



Intermittent Production System.



Combined or Mixed Production System.

Production Systems

Continuous or Flow Production

Intermittent Production

Combined Or

Mixed Mass Production

Process Production

Analytical

Assembly Production

Job

Batch

Production

Production Production

Synthetic

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 Continuous Production: Involves continues or almost continuous physical flow of materials using special purpose machines and produces the standardized items in large quantities. Example: Petrochemical, Sugar, Fertilizer Industries, Assembly lines, chemical plants, cement manufacturing, bottling plants of liquors. The continuous production can be further divided in to two more categories as  Mass and Flow line production  Process Production and  Assembly Production.  Mass and Flow line production: o

In this types of continuous production, only one type of product or a maximum of two or three

types are manufactured in large quantities. o

In mass production, the factory is tuned to large scale and continuous production where the

machineries are also designed for range of products.  Process Production: o

In these methods of production, the entire factory is completely integrated at all stages without

any isolated items of equipments to produce a certain rate of a specific product, the flow which is continuous through the factory. o

This system is used for the manufacture of those items whose demand is continuous and high.

Here single raw material can be transformed into different kinds of products at different stages of

the production process. o

Example: Processing of Crude oil in refinery- we get kerosene, gasoline etc., at different stages

of production.  Assembly Production: o

In assembly process, two or more components are combined to manufacture a finished product.

Manufactured parts are joined into sub-assemblies or final assemblies. Such process is employed

in assembling automobiles, radio sets, television sets, bicycles, watches and cameras etc., o

Assembly line is a flow production which was developed in the automobile industry in the U.S.A. a

manufacturing unit prefers to develop and employ the assembly line because it helps to improve the efficiency of production.  Advantages: 

Reduce the labour cost



Reduced material handling



Minimum wastage



Higher return on investments

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

High accuracy



Simple control process.



Heavy loss during slack demand period



Rigid maintenance and upkeep of machines



Customers’ tastes cannot be met as only one standard product is

 Disadvantages:

manufactured. 

Difficult to adjust to new situations and specification



Special purpose machine tools are required.

 Intermittent Production: 

In this system the goods are manufactured specially to fulfill orders placed by customers rather than to stock. Here the flow of materials is intermittent.



Facilities are flexible enough to handle a wide variety of product and sizes



Example: Manufacture of large turbo-generators, turbines, boilers, construction of bridges etc.,

 Job Production or Unit Production: o

Job production is the production of single complete unit by pne operator or a group of operators.

In this type, project is considered as one operation and work is complete on each product before proceeding on to next.

Example: Dam Construction, Ship Building etc.,

 Batch Production: o

In batch production, items are processed in lots or batches and a new batch is undertaken for production only when the work on all items of a previous batch is completed.

In fact, batch type production can be considered as an extension of the job production.

o 



Best example for batch production is Chemical industry, Printing press etc.,

Advantages: 

Demand can be discontinuous



All operational stages may not be balanced



Adjusting to new situations and specifications is possible



Item can be manufactured according to order.



Cost per unit of production is more



Elaborate sequencing and scheduling is required

Disadvantages:

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High investment is required.

 Combined or Mixed Production: The high volume multiple product situations are likely to employ a mixed production strategy that combines both continuous and intermittent production systems. Example: In manufacturing parts fabrication is often organized on line or continuous basis.

Define Productivity. Productivity is the efficiency in industrial production to be measured by some relationship between outputs and inputs. Relationship between the results and means employed or to be more specific, between the product and the factors used for obtaining it P=O/I Where, P= Productivity, I=Input, O=Output Productivity is also defined as the ration between O/P and I/P.

. Explain about the function of production management. Or Explain the components of Production function in detail. Production management is essentially Planning, Controlling of production function. The functions of a production management even though vary with the nature of the products can typically have following commodities. Management of production can be described in terms of eleven components as follows.  Production Planning:  It is the main concern of the production manager. It facilities the supply of goods at the appropriate time to execute orders received by the company. It also helps to control over the production process.  The function of production planning involves the decision when, what, how and why to produce the goods.  Production Control:  After planning, the next responsibility of the production managers is to control the  Manufacturing  After production Planning and Control, the next important function of a production manger is to ensure manufacturing or production of finished goods in conformity with the plans.  Plant Layout and Material Handling:  The physical arrangement of manufacturing components and the equipments of handling the materials during production process have considerable effect on cost of production.

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 Plant layout pertains to the arrangements of the machines and the equipments in such a manner so as to maintain the smooth flow of production without any interruption.  An effective plant layout aims at efficient material handling which in turn reduces wastages of men and materials.  Industrial engineering:  Production manager is also responsible to carry out the periodic work study, following method study or work measurement technique for systematic investigation of activities in order to ensure effective use of human and materials resources.  Manufacturing or production activity also needed to be supported by design and development, which not only includes designing tools, Jugs, Fixtures (this is done by independent tool department in large organization) but also involves R & D activities for innovative product design and changes.  Inter department coordination:  A production manager is also required to maintain contacts with other departments like marketing department with regards to production plan, personal department for man power availability and training and material department for procurement of raw materials and other components.  Maintenance and Replacement:  Production manager is also responsible for time maintenance of plant and machineries to minimize machines down time and consequent loss of the production.  Instead of break down maintenance i.e. to attend plant and machineries only, when they become functional, we presently use modern concept “total productive maintenance” i.e. present breakdown totally.  Maintenance and replacement involves selection of optimal maintenance policy to ensure higher equipment availability at minimum maintenance and repair cost.  Material Management:  A production department is responsible for the control over the cost of production which he achieves through reducing wastage of materials.  To achieve this, he is to determine the economic lot size, EOQ, Order Level, so that the problems of over and under stock of materials may not arise.  Productivity Improvement:  It is one of the important functions of production management. It has to apply various productivity tools focusing on men, machines and materials or even on a combination of these so as to enable him to study, analyze and improve their (man, machine, materials) productivity.  To achieve the excellence in manufacturing: To achieve excellence in manufacturing to gain competitive edge over the others, production managers should keep in mind then follow the five goals.

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1. Through amount of work to be done in a particular time 2. Inventory should come down 3. Cycle time should come down 4. Yield should go up 5. Operating expenses should come down. . Explain the scope of Production Management. The scope of Production Management includes 

Activities relating to analysis and controlling of product system



Activities relating to analysis and controlling of production operations after the production system has been activated.

Activities related to the production system designing: 

The activity concerns the production of tools and designs, development and installation of the equipments and the selection and optimization of the size of the firm.



Selection of plant location, Plant Layout, Materials Handling System are the functions of production engineering. Besides, the human factor problems and research and development are also considered.



The scope of production management is very wide. It companies all activities right from design and layout of production facilities till finishing the product for dispatch to ware house or customers.



Production management looks after each and every step in the process of production. Also it establishes a harmonious relation ship between the products, the plant the conversion process and the people so as to achieve predetermined targets.



The scope of product management can be explained thorough production decision also. An efficient and successful production manager has to make important decisions in the following areas. 

Plant location and layout



Product design and development



Plant engineering-equipment and tool design, manufacturing techniques and process design.



Industrial engineering-work study, job design, methods engineering etc.,



Capacity management demand forecasting, delivery schedule, resources allocation



Production planning and control input planning, scheduling, dispatching and expediting.



Quality control-specifications, standards, inspection and testing.

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Inventory management – purchasing, store keeping, recording, and inventory control.



Maintenance, servicing, replacement, preventive checking.

Activities relating to analysis and control of production: The main activities related to analysis and control of production system is production planning and control.  Production planning: It includes preparation of short tem production schedules, a plan for manufacturing the finished and semi finished stock, specifying hoe the production resources of the concern are to be employed over some future time in response to the predicted demand for the products and services.  Production control: After planning, the next managerial production function is to control the production according to the production plan, because production plan cannot be activated unless they are promptly guided and controlled. The production manager has to assign work review work progress and check and remove discrepancies, if any, in the actual and planned performances. The production manager has to look after the control activities at three levels. 

Control of static inventory such as raw materials, purchased parts, finished goods and supplies through the inventory control techniques.



Control flow of work in progress through production control. Importance of Productions and Operations Management

In the past, the motive behind the production/operations was only ‘profit’. But, the scenario has changed slowly. The customers, now enjoys a good position and is said to be the ‘king’. This change can be attributed to the following factors: -

Growth of technology

Availability of variety of products

Quality consciousness

Globalisation

These factors have made the manufacturers to frame careful policies and procedures to add value to the product at lower cost. Production Function Production Management is essentially planning, organizing, and controlling of Production function. The production function depends on various factors affecting production namely Land and natural resources, labour, capital and enterprise. The Production function establishes relationship between the quantity of various inputs and the quantity of the output. Algebraically, a production function can be represented as

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Y = f (C1, C2, C3, ……Cn) where Y = Output which depends on C1, C2, C3…….Cn = Quanitities of inputs Thus, Production function involves a wide range of activities from plant location to the packing of products to be distributed by the marketing divisions. Following are the components/activities of production function: Planning Product selection and design Process selection and Planning process Facility location Factory layout and Material handling Capacity Planning Forecasting Production Planning Organising (viii) Work study and job design Controlling (ix) Production Control (x) Inventory control (xi) Quality control (xii) Maintenance and replacement (xiii) Stores and Maintenance 1. The Product: The Organisation must be capable of producing the product to

customers satisfaction

with quality. 2. The Plant: Plant means both buildings & equipment required to manufacture a product 3. The Process: Process includes the technical, Organisational needs of the product and the people within the organization. 4. The Programme: Programme means scheduling the entire process of production like setting timetable 5. The people: Production depends upon people. Production Manger should socially try to bring better communication in organization, Workers participation, work conditions, environment, motivation, training etc. 6. The Policy: Production is an integral part of Corporate Policy that deals with framing production policies. The 14 Components/Functions of Production in detail 1. Product selection and design: Right kind of product should be selected and proper designing is very essential for the success of an organization. Techniques like value analysis can be used in achieving good design.

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ENTERPRISE RESOURCE PLANNING 2. Process Selection and Planning:

Process selection includes decisions regarding choice of

technology, equipment, machines, materials handling systems, mechanization, automation etc. Process planning involves detailing of processes of conversion of resources and their sequences. 3. Facilities Location: Suitable plant location will result in continuous production. 4. Capacity Planning: Capacity planning means assessing the availability of resources and environment in order to meet/match future demand. Inadequate capacity will lead to poor service while excess capacity results in low productivity. Both these situations should be avoided. 5. Production Planning: Production planning involves the decision of when, what, how and why to produce the goods. Production planning will direct the organization to achieve its predetermined goals. 6. Production control: Planning is to be followed by control. While planning helps to achieve the goal, control helps to achieve the same in an efficient manner. Production control is accomplished by scheduling, routing, dispatching, inspection, checking, Maintenance etc. 7. Quality control: Quality control is responsible for producing goods as per specification by preventing defects. It relies on feedback and corrective measures. 8. Method Analysis: It is the study of various methods (Ways of doing works), analyzing them and choosing the best one.

Method analysis helps to improve productivity by minimizing cost of

production. 9. Inventory control: Inventory control means the control over the stock (raw materials, work-inprogress and finished products). It involves determination of Economic ordering quantity (EOQ) , reorder levels, stock issues etc. 10. Plant Layout and Materials Handling: Plant Layout deals with arrangement of facilities ( Personnel, equipment, machines) in a manner to encourage smooth flow of production without any interruption. Materials handling deals with proper handling of materials during movement, Packaging and storing. 11.Work Measurement: Work measurement is the application of techniques like Time Study and Motion study to establish standard time required to carry out a Specific job at a defined level of performance by a qualified worker. 12.Maintenance and Replacement: Maintenance means the act of retaining the

plant/items in

good operating conditions. It may be preventive maintenance or Breakdown maintenance. Replacement means replacing the worn-out items/machineries so that production is carried out efficiently & Smoothly 13. Cost reduction and Cost control: Production management should aim to reduce cost of production at all times. 14. Stores and Warehousing: Production Management also deals with the physical storage of goods called as storage Maintenance which is vital for achieving the goals of the organization. Stores may be centralized or decentralized. Warehousing performs both physical storing and distribution functions. It also maintains goods in proper condition until it is delivered to customers.

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Production Management also deals with other functions like Industrial Engineering, Safety Measures, and Incentive Plans to workers, Codification of products etc.

Thus, the functions of

Production Management are varied in nature and it represents all the purposeful/valuable activities in the organization. Scope of Production Production Management, in the earlier days was associated only with factory related activities. But as Competition arose, the scope of Production Management extended to Quality Control, Maintenance and Replacement, Mechanization, Automation and so on. The various activities that form scope of Production function can be studied in two broad areas â&#x20AC;&#x201C; (i) designing or formulation of production system and (ii) analyzing and controlling of production operation after production system has been activated. I) Activities relating to designing of Production

This includes activities like designing of tools,

development and installation of equipment, selection of optimum size of the firm, use of techniques concerned with work environment, motion study process analysis, layout of plant, material handling and time study. Also importance has to be provided to two main factors (i) human factors and (ii) Research and development activities. II) Activities relating to Analysis and control of activities: This includes all decisions regarding production administration. The activities are (i)

Production Planning:

Production Planning includes preparation of short-term production

schedules, plan for raw materials, deciding as to how the resources are employed etc. (ii)

Production Control:

Production plans have to be properly guided and controlled.

For this

purpose, there is some review of work, checking of deviations and rectifying mistakes. Production control activity is done at three levels (i) Inventory control (ii) Control of flow of materials (control over purchasing) (iii) Control of work â&#x20AC;&#x201C;inprogress (iii)

Quality control: Quality Control can be ensured through techniques of

inspection and

statistical

control. Brief history of Production management The Histo-Map: A Timeline of OM Developments

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In the same time zone: The U.S. is supplier to the world and the leader in batch production systems in France, Servan-Schreiber wrote that American managerial dominance was a serious threat.12 Quality control standards were established by the U.S. government for military acquisitions. Management Science (MS)-Solving complex problems-1950s-1990s: Operations Research (OR) and Management Science (MS) quantitative methods for solving resource allocation problems: OR and MS introduce major extensions of scientific management. The methods include linear programming, queuing theory, and inventory theory.

International linkages for sourcing, fabrication, assembly and marketing, as well as managing currencies; information systems based on networks of computers and global telecommunications alter the way that work is done. The systems approach is extended to all functions within the fIrm and to all partners along the supply chain, including suppliers and customers.

THE HISTORY OF P/OM (P/OM - Production and operations management) The capability of P/OM processes to deliver goods and services has changed in steps or - stages over time. The study of the history of OM production transformation processes allows us to determine which events triggered these stages of production theory. The ultimate goal is to learn the theory, understand it, and possess the advantages that accrue for being literate.

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THE HISTORY: OF THE IMPROVEMENT '-- OF P/OM TRANSFORMATIONS Literacy in OM requires an understanding of how the OM field has developed with respect to the transformation process and, thereby, productivity, quality, and variety. The stages of history have moved production and operations capabilities from custom work through high-speed continuous output systems. Attention shifts from custom crafts, which are art-based, to the theory of production, which has evolved over time. This theory consists of six steps and a potential seventh one. There is an emphasis on manufacturing because the theory evolved from the production of goods, but it lends itself to service operations. Figure 2-3 depicts OM history in a timeline chart. Dates mentioned are approximate because it is not possible to pinpoint exactly when each contribution was made.

The flexibility concept joins computers and equipment in the bank, plant, pr plane. This revises the way that machines operate.

Overview of Production Management

Production management Strategies For sustained growth and maintaining market leadership, long-range production plans and strategies are essential. Competition ITom abroad has upgraded the status of manufacturing as a strategic weapon to achieve comparative ;ompetitiveness in India. There is a significant development in this regard since 1980s. The key result areas identified in manufacturing are those of flexibility, quality, rapid changeover by core standardisation alld process trade-offs.

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Advancement made in electronics and information technologies have introduced new capabilities in the manufacturing operations. This has also altered the traditional meaning of concepts such as learning curve, etc. The success stories of several small but high-technology firms in less advanced countries like Sweden, Holland and Switzerland have shown that these firms neither depended on traditional strategic planning staff nor on huge Research & Development. Japan, Taiwan and Korea have exhibited the importance of entrepreneurship in business strategy. Koreans have also shown the advantage of mobilising institutional support. The Japanese experience I has clearly highlighted the necessity of innovation not only in Research & I Development but also in production management.

PRODUCTION MANAGEMENT AND ITS IMPACT ON INFORMATION TECHNOLOGY AND GLOBALIZATION â&#x20AC;&#x201C; INFORMATION SYSTEMS Information systems provide the necessary data about customer needs so that operations management can supply the required services. Both services and manufacturing are increasingly responsive to-and controlled by information systems.

Therefore,

knowledge

computers,

computer

programming,

networking,

and

telecommunications is essential in both the manufacturing and service environment. Schools of business include both goods and services under the term operations, whereas industrial engineering departments are still inclined to teach "production" courses. Nevertheless, there is inevitable convergence of both to an information dominated workplace. Operations is the familiar management term for an information systems environment, so the word "operations" fits nicely. Programming and maintenance (both service functions) have become increasingly important to manufacturing. Further. distinguished service industries as transportation, banking, entertainment, education, and health care. In that regard, note the following trends for manufacturing: 1. The labor component (the input of blue-collar workers) has been decreasing as a per cent of the cost of goods at an accelerating rate for over 50 years. 2. The technological component as a percent of the cost of goods has been increasing for many years. In the past 20 years, this effect has become multiplicative, with computers controlling sophisticated and costly equipment across vast distances via satellites and networks. programmers (sometimes called gold-collar workers) and white-collar supervisors add to growing sales and administrative (overhead) costs, which have to be partitioned into the cost of goods. These costs are an increasing percent of the cost of goods. Traditional methods for assigningthese-c6sts can lead to detrimental OM decisions. New accounting methods, called activity-based costing (ABC), should be used to improve overhead accounting. 4. The systems approach requires communication between functions and the sharing of what used to be (and still are, in many traditional firms) mutually exclusive databases.

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5. The technology of the twentieth century is moving rapidly into retirement along with a lot of executives who grew up with its characteristics. It's a neW ball game with new players who feel free to deal with the distinction between services and manufacturing as well as between operations and production in their own way. lTm:ritioners now have stepped into the twenty-first century, but they have yet to get accustomed to it. It is a good bet that the taxonomy of the twenty-first century will categorize production as a subheading under operations, and services will be an integral part of manufacturing. When a discussion applies equally well to both manufacturing and services, it is often referred to as P/OM. As explained earlier, it is increasingly common to call it OM. In this text, OM will be used to describe both manufacturing and services. P/OM will be used only in situations where the manufacturing component is critical and conclusions are

The databases of marketing and sales, OM, R & D, engineering, and finance are cross linked when advantageous. That sharing is crucial to enabling the systems approach to work. There are many examples of both manufacturing and service industries where shared databases have been installed and utilized successfully.

PRODUCTION STRATEGY AND COMPETITIVENESS - DEVELOPING BUSINESS STRATEGY – COMPETITIVE PRIORITIES LONG RANGE STRATEGIES 

An imaginative and pragmatic national policy



A strategic goal of manufacturing with emphasis on flexibility, quality,



rapid change-over and process trade offs



An effective leadership to give quick response to changing market



conditions.



Emphasis on technological excellence and entrepreneurial skills.



Innovation in production management and process technology.



Globalisation of industry.



Effective management of technology



An aggressive marketing strategy and risk-taking ability



Goodwill inside and outside the organisation.

MEDIUM RANGE STRATEGIES 

1. Location and layout



2. Product selection and technology

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3. Capital selected and investment



4. Capital investment and planning



5. Flexible strategy overproduction



6. Standardisation of design



7. Rationalisation of product line



8. Economy of size and variety



9. Aggregate production planning



10. Inventory policy and planning

Production and Materials Management 1. Codification and standardisation of components 2. Work study and ergonomics 3. Value analysis and cost controls 4. Indigenisation and self reliance 5. Organisation development 6. Performance budgeting 7. Flexible organisation structure and effective co-ordination

Short range Tactics 1. Production scheduling 2. Make or buy decisions 3. Purchase, stock control and verification 4. Quality control and audit 5. Value analysis and cost reduction steps 6. Maintenance, safety and replacement 7. Vendor rating and evaluation 8. Stress and time management 9. Incentive and motivation

WORLD CLASS MANUFACTURING Artisans, Apprentices, and Trainees - The Beginning The Renaissance 'period (1300s-1600s) signaled a surge of intellectual and productive vitality in Europe, That surge swept away the dark ages and fostered accomplishments in the arts and sciences centered around artisans, apprentices, and craft guilds. Production transformations were by hand, and output volumes were very small. Before the Industrial Revolution began (around 1770), craft guilds emphasized pride of workmanship

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and training for basic manual operations with appropriate hand tools. The shoemakers' children learned from their fathers and mothers. Process techniques were handed down from generation to generation. From a transformation point of view, this was good management of the labor inputs. The use of apprentices improved productivity in the artisans' shops because the less skilled (and lower paid) apprentices did much of the preliminary work. This freed the master craftsmen to devote their time to the activities requiring higher skills. On-the-job training produced a continuous stream of greater skills. Apprenticeship still has significance for many service functions. Great chefs almost always are the pupils of great chefs. The formula would seem to reside in the balance of art and science. When the important knowledge resides in the minds and hands of skilled workers, then the percent of art is high and the percent of science is low. Over time, this percentage has shifted in manufacturing so that engineering, technology, and computer programming play an increasing role. The art element is disappearing, which means d at the valuable know-how now resides mostly in the minds, not in the hands, of the critical workers. It used to be that the tool and die department was crucial to the success of metal-working companies, and the best die makers were considered artists. (Tools and dies are the shape formers in the Metal working businesses.) Now, computer-aided design (CAD) and computer-aided manufacturing (CAM) are primarily science, and the old industrial arts are giving way to the new programming arts. This Also is happening in service industries and is an effect that can be expected to accelerate in the future. )

Interchangeable Parts (lP) - Production Theory's First Step Eli Whitney invented the concept of interchangeable parts fot the fabrication of rifles around 1780, which coincides with the dates usually given forrhe beginning of the Industrial Revolution. The notion of interchangeable parts was the catalyst around which new methods for production transformation began to develop. These methods spawned and supported the Industrial Revolution. Whitney was not the sole inventor of interchangeable parts. In France, Nicolas LeBlanc had invented the same OM concept. Neither Whitney nor LeBlanc knew about each other's ideas. Whitney obtained government contract for "ten thousand stand of arms." The contract was awarded because of his newly developed production capabilities. The concept of interchangeable parts is defined as follows: It allows batches of parts to be made, anyone of which will fit into the assembled product. For example, headlights, fenders, tires, and windshield wiper blades are not specially made for each car. One 60watt bulb is like another and does not have to be fitted to each socket. The reason that the parts are interchangeable is that each one falls within the design tolerances. Machines that could produce parts to conform to the designer's tolerances were the keystone. Hand labor, better suited to custom work, began to be replaced by machinery. The effects of this change hastened the Industrial Revolution. Within a short time, IP was I an accepted

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part of the production transformation process being applied to the manufacture of rifles, sewing machines, clocks, and other products. 1776, Adam Smith saw that the use of the division of labor as a means of increasing productivity was market volume dependent. The pin factory that he studied had sufficient production volume to warrant specialization. The production transformation process was revolutionized-combining worker specialization with interchangeable parts changed all of the productivity standards. Expectations were raised to new levels.

Scientific Management (SM) - Production Theory's Second Step Frederick Winslow Taylor (1865-1915) introduced scientific management, the numerical measurement and analysis of the way work should be done. One of his landmark studies dealt with the speed and feed rates of tools and materials for metal cutting. Other studies focused on how to lay bricks and how to move iron castings. Taylor's testimony at hearings concerning the setting of rational railroad fees for shipments in interstate commerce brought national prominence to his analytic methodology. This step in production theory added the idea that the transformation processes could be improved by studying and simplifying operations. This view required rationalizing the job, the workplace, and the workers. Strangely, it had been overlooked until the turn of the twentieth century. Finding economies of motion and putting materials near at hand These industrial engineering ideas, often called methods engineering, have proved to be as useful for service applications as for manufacturing. Called the father of "scientific management,"

Sequenced Assembly (SA) Production Theory's Third Step In 1912, Henry Ford developed sequenced assembly, which allows assembly to tenuous flow shop process. Timing must be perfect so that what is needed for a arrives on time. Ford developed the sequenced assembly process as a continuous function line for automobiles, changing the pace from batch to continuous set assembly. he serialized flow shop was born. The key was learning to achieve synchronal control of the process flows. The moving assembly line required a high level potent interchangeability. Ford succeeded in achieving complete synchronization process flows. By means of the principles of interchangeability, division of labor, and flow synchronization, Ford altered the production transformation process. He changed the perception of productivity standards and goals in a conclusive way. In so doing, he built an industrial emptive that helped the United States become the world leader in productivity. The United States continues to maintain its lead,12 although other nations-especially those considered to be less developed countries-have been improving their productivity consistently. Ford's contribution to production theory and to the revision of the transformation process had a major impact on the Japanese automobile industry. It also affected other industries of many kinds all

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over the world. There was a new rhythm to the transformation process. Contrast U.S. and Japanese production processes in the 1980s. The major portion of production and operations activities in the United States utilized batch processes. Batch the small lots does not lend itself to the kind of synchronization that applies to the automobile industry or the continuous flows of chemical processes. When the Japanese export industry began to compete aggressively in global markets, they chose to shun batch-type production systems. Instead they elected to specialize in high-volume, serialized flow shops, which extended the concept and application of assembly synchronization to manufacturing and assembly systems.

Statistical Quality Control (SQC) - Production Theory's Fourth Step Interchangeable parts required manufacturing methods bat made batches of parts conforming to tolerance limits. Shewhart developed the theory of statistical quality control (SQC) that enabled manufacturing to design and control processes that could achieve these objectives. SQC was focused on the producer's ability to control the variability of the process that was making the parts that had to fit within the specified tolerance limits. For the first time, the output of the transformation process could be stabilized and controlled. This was a major contribution to production theory. Walter Shewhart's major work, which was published in 1930, described his concepts about why SQC works and how to apply it.13 Deming and Juran also participated in the development of SQC theory and later on played a crucial role in its implementation and dissemination. 14 The United States was the first country that consistently used SQC, which it did through the 1940s and the early 1950s., but by 1960 the majority of SQC users were in Japan. U.S. organizations reported that they had dropped SQC to make cost reductions. Quality was considered good enough to replace costly staff departments with inspectors at the end of the production line. By the 1980s, however, under great competitive pressure from quality-driven Japanese organizations, many U.S. companies restored SQC and enhanced it with broader concepts into total quality management (TQM) activities. Organizations like Motorola and Xerox are considered to be pioneers leading the development of TQM within the framework of the systems approach. The total quality management approach applied to the production transformation system integrates the goals of productivity and quality. It represents a major step forward in the theory of production and an organizational feat to have gained broad acceptance at all levels. The next three steps are in formative stages, and their impact on productivity cannot be fully evaluated at this time.

Lean Production Systems (LPS) - Production Theory's Fifth Step Outing the 1970s~1990s, Japanese organizations spearheaded by Toyota, Mazda, Nissan, Honda, and Mitsubishi developed a new kind of production methodology called lean provocation systems. These systems combine a deep understanding of quality with a desire to be fastest and a fanatical distaste for

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all kinds of waste. The flexibility concept joins computers and equipment of many other kinds, including assembly-line processes and office machines. It also is possible and often desirable to include human beings in the network. Flexibility can be applied to information systemsâ&#x20AC;&#x2122; flexible information systems (PIS) and to flexible office systems (FOS) as well as to FMS. The capability to produce small numbers of many varieties includes extensive application of systems thinking to integrate marketing needs and OM scheduling abilities. Using marketing forecasts, OM managers decide what to make, but the decisions are constrained by the FMS menu, which was predetermined at the planning stage. The need to produce increased variety is market-driven. The transformation process has to be able to change over from making one thing to another, quickly and inexpensively. A great deal of effort is going into altering the transformation process so it can deal with the goal of increased variety. Technology and methodology must enable nearly instant setups and changeovers from one model to another to satisfy market demands. The payoff will be increased productivity of the joint production-marketing system, as exemplified by customized jeans. Levi Strauss has put the customer directly in touch with the factory. "Sales clerks at an original Levi's store can use a personal computer and the customer's vital statistics to create what amounts to a digital blue jeans blueprint. When transmitted electronically to a Levi's factory in Tennessee, this computer file instructs a robotic tailor to cut a bolt of denim precisely to the customer's measurements.

Global Competition: Year 2007 Plus-Production Theory's Seventh Step It is conjectured that in the future the transformation process will continue increasing in complexity and productivity. On a worldwide scale, a broad range of goods should be within the spending capabilities of more people. More management will be needed to plan and control the systems. More operations managers will be required with far fewer workers on the prouction line. More people will be sharing services-such as education and health care-that are mutually rewarding. Onerous service tasks will be relegated to service robots. Hopefully, people will have more time to spend their money as they wish. The input-output production transformation model will be internationalized. The costs of the inputs and the values of the outputs will be affected by dozens, if not hundreds, of different currencies. Managing currencies will be part of the transformation process. The euro is a good model for other regional currencies.

Information systems will be based on international networks of computers. Global telecommunication systems will transmit conversations. that are spoken in 80 different languages. Translation will be accomplished by language-capable computers with voice language recognition. Voice response in the appropriate language will be the norm.

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The systems approach will extend to all functions within the organization and all partners along the supply chain, including suppliers and customers. Production transformation processes will require the best of management while decreasing burdensome labor components. Substantial productivity increases will be required. CAD (computer-aided design) terminals communicate design specifications for the construction of planes and ships to an integrated computer-aided manufacturing (CAM) network that reaches throughout the manufacturing system. Time wasted was singled out. Every effort was made to use pre-engineering of products and process design to maximize quality achievements, minimize variability, and do it all as rapidly as possible. Part of being lean was being fast-in production. The Japanese were not fast in reaching decisions. For the most part, the export industries became lean producers with high-output volume targets, minimum cycle times, and rapid new product development. The Japanese auto industry has been leading in the development of bin and fast production systems. Toyota's production planners, who were architects of the revised production system, stated that Toyota's ideas were a continuation of the concepts that Henry Ford

Flexible Production Systems {FPS} Computer technology and production machinery technology are two distinct areas of technological development. There developments were quite primitive in the 1960s and 1970s. The step is predicted by many; rejected by few. The real issue is how long it will take to co The initial thrust was in manufacturing. Flexible manufacturing systems (FMS) designed to produce a high variety of outputs at low cost. CAD/CAM technology is used to design and manufacture many different such as semiconductors, automobile grills, and aircraft parts. John Deere has invent lions of dollars in the creation of CAD/CAM systems for the manufacture of tract

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UNIT – II PLANT LOCATION Introduction: Proper and well planned industrial location and plant layout is an important managerial decision. It is a long term decision making it almost impossible to consider any changes in the location later on. As such, the performance of an enterprise is considerably affected by its location. The location of an industry is as important as the choice for the location of an office or a shop in a city or locality.

. Define Plant. Plant is any factory or workshop where a company manufactures its products.

. Define Plant Location. It is generally concerned with comparison, evaluation and selection of a suitable physical place for setting up a suitable factory or workshop to carry out manufacturing activities to produce goods and services.

. Explain about the importance of the Plant Location. Plant location is of paramount importance, both for a new enterprise as well as for the existing ones. The fundamental objectives of an organization are to maximize its profits. Profits can be increased either by increased sales or by decreasing cost of production is possible. When the firm is of optimum size and when the industry is located at an appropriate site where all kinds of production economics are available. Selection of the suitable location is very important due to the following reasons.  Location of plant partially determines the operating and capacity cost. It determines the nature of investment costs to be incurred and also the level of many operating costs.  Each prospective location implies a new allocation of capacity to respective market area.  Location fixes some of the physical factors of the overall plant design etc., heating and ventilation requirements, storage capacity for raw materials, taking into consideration their local availability, transportation needs for raw materials and finished goods, power needs, cost of labour, taxes, land construction, fuel etc.,  Location helps to deliver the product at a cheaper price and thus helps to combat competition. The existing firms seek new locations in order to expand their capacity or to replace the existing facilities. The increase in demand for the company’s products can given rise to the following decisions.

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 Whether to expand the existing capacity and facilities.  Whether to look for new locations for additional facilities  Whether to close down the existing facilities to take advantages of new location. 

Location of Plant of an organization is an important Operations management decision.



Plant location means “deciding a suitable location, area, place etc where the Plant or factory will start functioning”



A Plant is a place, where men, materials, money, equipment, machinery etc are brought together for manufacturing products.



It is a long-term decision making and it is almost impossible to consider any changes in the location later on. Also the performance of an enterprise is considerably affected by its location.



The degree of significance for the selection of location for any enterprise mainly depends on its size and nature.



Plant location involves three major activities (iii)

Selection of proper geographic region (regional factors)

(iv)

Selection of appropriate locality within the region (community factors)

(v)

Selection of specific site within the locality (Site factors)

. Write about the objective of the Plant Location.  Reduced capital investment and operating cost: o

An ideal location should have the objective of reducing capital investment. For instance, if location is at a place where raw, materials are readily and conveniently available in the quantity.

So desired, the plant can operate with minimum inventories on hand, requiring lesser investment in storage buildings and lesser amount of investment in inventories.

 Ensuring effective plant layout: o

Plant layout and plant location are interdependent and influence each other. The facilities available in the near by areas, the topography of the land, the climate and geographical conditions and several other factors influence the plant location.

An ideal location should reduce the inconvenience and cost. For instance, if the subcontracting and repair facilities are readily and cheaply available in the area, the managers may decide to get some of the parts manufactured by these sub-contracts and may not establish any elaborate repair shop, resulting in lesser investment in buildings and equipment and causing lesser problems in plant layout.

 Coordination with government policies: o

While selecting location managers should first consider whether the government will issue license to start a factory at proposed location.

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Moreover, what will be the policy of the government regarding establishment of factories in a particular region should also be considered.

 Employee welfare and public needs: o

The non-economic objectives of enhancing employee welfare and catering to public needs should also be served by plant location.

If a place is selected, where educational, recreational, medical, and religious and such other needs of employees are met properly, the employees will be contended and will have high morale.

If an area is selected for plant location, it will throw open employment opportunities to the local public who will welcome such a decision.

Selection of the site, in a highly congested area will be resented by the public.

 Security: o

It is one of the important objectives. The plant should be free from the foreign attack, anti social elements and should not be prone to floods, earth quakes etc.,

A location with any one of the above factors will be regarded as extremely poor, even though other social and economic factors may be very favourable in establishing a factory there.

Concept of Facility Location 

Traditionally, location theorists have dealt with industrial plant/factory location.



However, the concept of plant location has now been generalized into that of facility location, since the facility could include a production activity or service system.



The term ‘plant’ has been traditionally used as synonymous to a factory, manufacturing or assembly unit. This could include fertilizer, steel, cement, rice milling plants, textiles, sugar mills, rubber factories, breweries, refineries, thermal or hydro-electric nuclear power stations etc



However, with the enlarged scope of a facility, this term can now be used to refer to banks, hospitals, blood banks, fire stations, police stations, warehouses, godown, depot, recreation centers, central repair workshop etc.



At a lower level order, facility would mean machines, equipment, desks, workshop, canteen, emergency etc



Thus, it can be stated that a facility could mean almost any physical object relevant to location analysis.

FACTORS INFLUENCING/AFFECTING PLANT LOCATION 

Hardly any location can be ideal or perfect. Hence one has to strike a balance between various factors affecting plant location which are discussed below:



These factors can be qualitative as well as quantitative.

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Qualitative factors can be measured in terms of some qualitative criteria namely adequate, good, significant etc.



Quantitative factors can be measured on cost or some other quantitative basis like labour, material, housing, land, transport etc.



In general, “a plant should be located at a place where the inhabitants are interested in its success, the product can be sold profitable and the production cost is minimum”



In particular, the choice of plant location should be based on following considerations.

. Explain about the factors influencing Industry or Plant location. One of the early decision that an entrepreneur has to make is the choice of a location fro his/her business. The governing principle is that the organization should sell goods most profitably and manufacturing them with the least expenses. The various types of factors associated with the location of an enterprise have a significant impact on the operations of an enterprise and its costs structure. These factors can be qualitative as well as quantitative. Quantitative factors can be measured in terms of some qualitative criteria namely, adequate, good, significantly viz, types of labour, Union activity, recreation facilities, climate etc., Quantitative factors can be measured on cost or some other quantitative basis viz, labour, materials, housing, land, transport etc., The fundamental factors which have to be considered in deciding the location of a plant for functioning profitably are given below. Factors relating to Buying:  Nearness to the raw materials: o

The cost of obtaining raw materials is an influencing factor on location. The importance of nearness to raw materials varies greatly wit the nature of the business. Two sub-divisions of this factor are to be considered in this regard. 

One is the assurance of a constant and immediate supply, with out dependence on transport or weather conditions.



The other is the fact that the cost of transporting bulky raw materials from a long distance may add so much to the cost of production as to make the business unprofitable.

For example, the location of the cotton textile industry in Mumbai, jute in Calcutta, iron and steel in Jamshedpur, was influenced by this factor.

 Accessibility to raw materials: o

The presence in abundance of any material is not sufficient in itself for finalizing the location.

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The location must also be easily accessible. The climate should be moderate and adequate transport facilities should be available. The workers who are engaged in getting the raw materials should have sufficient supplies of food and water.

Factors related to manufacturing:  Availability of labours: o

Labour supply refers to the number of skilled and unskilled person who are available for the kind of work to be done. Labour supply is perhaps the most important of all the factors, especially the supply of the skilled labour.

The important points under this heading can be summarized as follows. 

What kinds of skills are required?



Will a large number of people be needed?



What are the likely levels of competition with others firms in the vicinity?

 Nearness to the potential market: o

Marketing of its product efficiently is also an important of an enterprise. If the plant is located near the market then the management can be keep close touch with the changes in market environment and formulate its production policies accordingly. But the reduction in marketing costs still remains an important consideration for location to be near the market.

Also in case of factory being nearer to the market the risk of damage in transportation, loss of the demand due to change in fashion etc., is also reduced. 

Example: Glass, Chemical and Drug factories are mainly affected by this consideration.

 Near to the source of power: o

The source of energy for turning the wheels of industry has a decisive influence in plant location and the development of industrial centers.

 Transport and communication facilities: o

Transport is very important for bringing raw materials, fuel from different places. Also transport is required to supply the finished products to markets.

The region well connected with rail, road, water and air transport system is considered to be more appropriate.

The economic factors governing plant location, transport costs are very important. It is possible to obtain the materials and market finished goods only with the help of an effective transport net work.

 Availability of services: o

Service includes 

(a)Gas, (b)Electricity, (c)Water (d)Drainage (e)Disposal of wastes (f) Communication.

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Certain industries use considerable quantity of water, e.g. industries of food preparations, laundry, chemical and metal plating etc.,

 Ready accessibility to repair shop: o

This factor is important mainly in the case of small-scale industries with plenty of orders on hand and a breakdown of its machinery will incur loss in business and bring down its image.

Hence, repairs have to be carried out immediately and work completed at the stipulated time.

 Availability of amenities: o

A location which provides good extern amenities – housing, shops, community services, communication services, communication system- is often more attractive than one which is more

 Safety requirements: o

Some important production units may present or may be believed to present potential dangers to the surrounding neighbourhood.

For example, nuclear power stations, chemical and explosives factories are often considered dangerous. Location of such palnts in remote areas is desirable.

 Adequate fire fighting facilities: o

Fire may originate from within or outsider the plant. Internal fire can be controlled with fire fighting appliances but it is difficult to control agencies causing fire from outside. A site with adequate fire fighting facilities is, therefore desirable.

 Availability of educated personnel and research facilities: o

New industries as well as the development and expansion of those already established hinge on research and investigation to develop products and improve methods.

More over, the profitable operation of industry is dependent on a constant supply of educated and trained personnel.

To provide both, existence of educational institutions and research agencies is essential.

 Integration with other group of companies: o

New enterprise owned or operated by a single group of companies should be located that its work can be integrated with the work of the associated establishments.

 Suitability of land and climate: o

Soil and climate have direct bearing upon the type of activity that can be undertaken in any area in its early development. Climate has a great influence on the industry activity.

A cool invigorating climate develops the best type of industrial workers. Inhabitants of very hot climate are less efficient as industrial workers.

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 Labour building and planning regulations: o

A plant has to build in such a way that the manufacturing processes are carried on with minimum expenditure of time and material.

Also, there must be ample scope for addition or rearrangement, so that they can be carried out without stoppage of work. Availability of low cost land is most desirable for putting up a factory.

 Specific plant site-selection factors: o

The specific site cannot be selected until both region and community have already been chosen.

Only then can management turn to selecting a specific site. The following factors should be considered in this respect. 

Plot of land: 

Must be large enough to hold the present plant.



Leasing- long term lease must be available



Cost price is very important



Topography, soil mixture and drainage must be suited.



Transportation facilities



Proximity to police and fire stations



Adequacy of water and power supply.

Primary Factors i) Availability of Raw Materials: An ideal location is one where the main raw materials required to manufacture the product is adequately available. This will ensure regular supply of raw materials and also reduce transportation costs. Also some industries by nature will be forced to locate themselves near raw materials sources. Ex. Iron & Steel industries at Jamshedpur have been located close to coal fields since it uses coal in large quantities. Sugar industries are located near to sugar cane growing places as sugarcane loses its weight during transportation. ii) Nearness to the Potential Market: All producers wanted to sell their products in the market. If the plant is located very close/near to the potential market, it can reduce transportation cost and also reduce damages and wastages. Also it can ensure prompt supply of finished products to consumers. Nearness to market is thus an important factor in the case of industries producing light, delicate and perishable goods:- ex. Glass, chemicals, drug factories, food products, fashionable goods having changing demand etc. iii) Transport Facilities: Transport is very important for bringing raw materials, fuel from different places and for distributing finished products etc. Hence any region, which is well connected with rail,

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roadways, waterways and air transport system, should be selected for plant location. The producer has to choose a speedy and cost effective means of transportation. It should be remembered that transportation cost should remain fairly small in proportion to the total cost. Also if the raw materials are bulky and their value is low, then greater importance has to be given to transportation. In such cases plant should be located near to raw materials. Ex. Bricks, cement, wood etc. An industry tends to be alive located at places which have developed means of transport. Faridabad in Haryana is an excellent example. It is well served by both rail and road transport. It lies on the mainline between Mumbai and Delhi. iv) Supply of Labour: Location depends on availability of productive labour force also because it is one of the most important inputs in an industrial enterprise. Stable labour force of right kind, of adequate size (number) and at reasonable rates (cheap labour) are few factors which govern plant location. If the supply of labour is not regular, manhours and machine hours are lost forever. The importance of labour supply has been reduced due to mechanization. But still machines cannot do anything without the skilled labourers.

Hence producers should try to regularize the supply of

rawmaterials by reducing strikes or lockouts, absenteeism, labour turnover etc. They should try to achieve lower labour cost per unit of production. Ex. Crackers industries at Sivakasi Glass industries at Firozabad v) Power: Power is an essential for the process of production. Coal, electricity, oil and natural gas are the sources of power. All industries must have sufficient and regular supply of power if continuity in production is to be maintained. Usually heavy industries like machine tools, coal mining, iron & steel are located near sources of power. Ex. Iron & Steel industries at Jamshedpur are located near to coalfields. Aluminium extraction industries are located where electric power is available. vi) Supply of capital:

Industries require capital for initial promotion and expansion.

Therefore

capital market must be well developed in industrial centers. The capital market mobilizes small savings of the people for the purpose of industrialization. Hence developmental banks and financial institutions must be looked for near industries Secondary Factors vii) Facilities/Services/Amenities: Availability of the following services will also influence location: Gas, Water, Drainage, Disposal of Waste, Communication, Good Housing Facility, Theatres, Restaurants etc. viii) Natural Factors: land, water, climate, source of raw materials are some of the natural factors to be considered for some industries like cotton textiles, sugar and jute. The climatic conditions (humidity, temperature and atmosphere) play a vital role in location of certain industries like cotton, jute which requires humid climate. Likewise agricultural

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products like tea, coffee, rubber, jute etc requires a particular type of soil and climate. Topography also exercises an important influence on location. For instance, mountains and plateaus have a retarding influence on industrial development ix) Political Factors: Government influence the development of industry by providing political stability and also subsidies. Lack of political stability affects location of industries. The government may give such facilities as development rebate, tax exemptions, price subsidies, banking, insurance etc. By giving these facilities, the government may bring about development of industries in backward areas. x) Government Support: The Government of India has been influencing plant location in a number of ways. Some of these are licensing policy, Freight Rate policy, establishing a unit in the public sector in a remote area and developing it to attract other industries, institutional finance and government subsidies xi) Historical and Religious Facilities /Factors: Some industrial cities are of historical importance. Some capital cities have religious importance â&#x20AC;&#x201C; ex. Benares, Prayar, Kolhapur, Nasik etc. Industries grow at these regions due to their historical importance. xii) Initial Start and Goodwill: Some industries get located at that place at their earlier stages. Ex. Jamshedpur â&#x20AC;&#x201C; has now developed into industrial city (iron & steel industry) xiii) Personal Factors: There are entrepreneurs specially small industrialist, who locate their plants purely on personal grounds disregarding other factor. For ex. Mr.Ford started manufacturing cars at Detroit because it was his native town and at present it is the biggest car manufacturing center in India. xiv) Other Factors: The following factors also affect the location of industrial unit: -

strategic factors like dangers of air attacks

availability of free fire fighting facilities

availability of recreational, medical & educational facilities

Quality of life because of facilities like schools, hospitals, post office etc enjoyed by the community

Community attitudes.

Ecological and environmental considerations

Regional aspirations of people and their political satisfaction

Integration with other group of companies

Regional restrictions

Competition between states

Research facilities

Factors Influencing Industry Or Plant Location A) Selection of Region - Availability of Raw materials - Nearness to Market

B) Selection of Community - Availability of Labour - Civic amenities to workers

C) Selection of Site - Soil, Size & Topography - Disposal of Waste

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ENTERPRISE RESOURCE PLANNING - Availability of power

- Existence of complementary

- Transport facilities

& competing industries

- Suitability of Climate

- Finance & Research facilities

- Government policy

- Availability of water & fire

- Competition among states

fighting facilities - Local taxes & restrictions - Momentum of early start - Personal Factors

SELECTION OF SITE (URBAN, RURAL OR SUB URBAN) There are broadly three possible alternatives for the selection of site in a locality. (i)

City/Urban area (ii) Rural area (iii) Sub urban area

City/Urban area: Urban area enjoys some typical advantages against rural/suburban areas. Advantages: 1. Good transportation facilities available for movement of raw materials and finished products by rail, road, air & water 2. Good communication facilities 3. Banking, credit, insurance facilites are available 4. Sufficient storage facilities like cold-storage are available 5. Ample availability of skilled and unskilled workers 6. Facility of ancillary and service units around industrial areas. 7. Availability of potential market 8. Developed training institutes 9. Educational, medical & recreational institutes 10. Availability of several research institutes 11. Certain specific municipal service facilities are available only in city areas like water supply, drainage, fire fighting facilities etc Disadvantages: 1. Cost of land is very high when compared to rural areas 2. even at high cost, sufficient land is not available 3. Cost of labour is relatively high due to high standard of living 4. Rate of labour turnover is very high due to more number of competitors in the urban area 5. Trade union movement is very strong in city area. Hence there are sre more strikes, lockouts in urban areas. 6. Various types of taxes are levied in city areas. Also the rates are relatively high. For ex. Octroi is only levied in urban area.

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7. Certain municipal restrictions put constraints and they involve extra costs due to height of building, waste disposal, elimination of air pollution etc 8. The industrialization in the city area gives birth to slums and dirty residences that creates the typical problems of sanitation and health. Rural area: some industrialist also prefers rural area. Advantages: 1. Comparing to city area, the land is available at cheaper rates 2. Large plots of land are available which can be developed for factory site, office building etc 3. Horizontal arrangement of plant is possible 4. Provisions can be made for further expansion 5. Due to lower standard of living, the rates of labour are relatively lower 6. The industrial relations between labour and management are relatively amicable 7. The local taxes found in city areas are practically non-existent in rural areas 8. Slums and dirty residences are not found in rural areas. Rural are offers good healthy work environment to workers. 9. Due to lack of congestion, there is no danger of fire caused by surrounding units. 10. Rural area does not become a target area for attacks during war time. Disadvantages: 1. Transportation facilities are not good. 2. Better means of communication like post & telegraph, internet, fax etc are not available 3. Banking, credit, insurance facilities are not available 4. Storing & warehouse facilities are also not available 5. Advantage of ancillary & service units is not available 6. Rural areas are far from market areas. So distribution cost is high. 7. Absence of developed training institute 8. Not easy to get skilled workers in rural areas 9. Municipal facilities like water supply, drainage, fire fighting facilities not available 10. Absence of recreation facilities, good educational institution, medical facilities etc.

Suburban area: Both city and rural area are the two extremes for location. The better choice in such circumstances may be suburban area that is in the outskirts of City area. Advantages: 1. Land is available at cheaper rates as compared to urban areas 2. Adequate land area is available 3. Infrastructure facilities like transport, banking, water supply are developed 4. As city and rural areas are nearby, both skilled and unskilled labour is available.

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5. It is possible to tap the advantages of training institutes, research institutes etc which are available in nearby area 6. Nearby city area provides market for the goods produced. Also the ancillary facilities can be made use of from city area 7. Educational institutions, medical, recreational facilities are available in suburban area itself. Disadvantages: Suburban area may be converted into city area in the development process with all the merits and demerits of city area.

PLANT LOCATION TRENDS Presently, the traditional factors like nearness to Raw material, labour supply etc have no significant say in the location of industries. This change in location trend is due to the following 

Substitution of raw materials



Network of electrification



Development in transportation & communicaton



Mobility of labour



Persuasive policies of government for balanced regional development The recent trends in the selection of industrial location can be described as follows:

(1) Priority for the suburban areas: Sub-urban areas are preferred for industrial location nowadays because sufficient land will be available at cheaper rates when compared to cities. Also industrial policy of the government does not permit the establishment of a new unit or expansion of existing unit in city area. Moreover transportation, communication and other infrastructural facilities are developed in the suburban areas. (2) Establishment of Industrial Estates: Several factories are concentrated in one area for sharing a common benefit and is known as industrial estates. The government of India has planned National policies separately for development of industrial estates. The development of industrial estates is the responsibility of state government. In each state, the State industrial development corporation (SIDCO) has developed many industrial estates. Also private entrepreneurs and chamber of commerce also developed many industrial estates. The state government offers so many facilities to industries that start in such areas and hence industrial estates also affect location (3) Industrial development in Backward areas: Both the central government and state government have notified certain areas as backward areas. In order to develop these areas, both the governments offer various assistance like tax holidays, financial support, cheaper land and power, cash subsidies etc., in order to improve these areas. Such developmental activities will also affect the location of industry. (4) Decentralisation of industries:

The industrial policy of the government does not support

concentration of industrial units in one area. Hence location has to be decentralized thereby reducing congested industrial environment.

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(5) Increased role of government in the decision of location of industries: Presently both state and central government concentrates in regional & backward area development. OBJECTIVES IN PLANT LOCATION 

Reduced capital investment and operating costs



Ensuring effective plant layout



Coordination with government policies



Employee welfare and public needs



Security

When a Location Decision arise? The existing firms seek new locations inorder to expand their capacity or to replace existing facilities. The increase in demand for company’s product may give rise to the following factors: -

whether to expand the existing capacity and facilities

whether to look for new locations for additional facilities

whether to close down the existing facilities to take advantage of new locations.

Relocation: The shift of the location of plant to some other place is known as relocation.

TYPES OF LOCATIONAL DECISIONS 1. Location of production units or plants for the conversion of inputs into finished products 2. Location of service units which provides assistance to production units 3. Location of distribution and retail units for dispersion of production to market 4. Location of procurement centers to assemble necessary inputs in the selected site 5. Location of ware house facilities.

COST FACTOR IN LOCATIONAL ANALYSIS The fundamental objective of locational analysis is to maximize the profits by minimizing the total cost of production associated with production process. Total cost = Fixed costs + Operational costs Fixed cost = Land, Building, Machines etc Operational cost = Expenditures on inputs, transformation process and distribution of output

The total cost of location will vary from place to place.

Selection of Lowest Cost Site

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R1 M

R1, R2 = Two available sources of raw material supply M = One place of Market or Consumption L = Location of Factory

Suppose if L is at M, only freight on raw materials will be paid If L is at R1,R2 there will be distribution charges If intermediate place is selected for location , both incoming & outgoing freight will be paid.

Hence in actual practice, a comparison should be made of each element of total cost as if location is done at each of these alternative places. Then, site which gives minimum total cost per unit, in the absence of any other important consideration should be chosen.

The location analysis can be divided into two categories I)

Involving Quantitative factors a) Comparitive cost chart b) Least cost center analysis c) Break Even Analysis d) Dimensional Analysis

II) Comparison of Qualitative factors I)

QUANTITATIVE FACTORS The economic objective of locational analysis can be summarized as follows Profits = Revenue â&#x20AC;&#x201C; Total costs

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a) Comparitive cost chart: A comparitive chart of total costs involved in setting up a plant of desired size is prepared.

Total cost

Locations Consider 4 locations A,B,C,D and five factors 1,2,3,4,5 on which choice of location depends. Some unit of output is chosen and cost per unit of output associated with various factors at each location is listed. The total cost for each location is then added and is represented by the height of the column for each location. The location for which the total cost is minimum is selected. The cost summary chart has the advantage of clarity in presentation and comprehensibility. However, the analysis is restricted to certain specified factors only. b) Least cost center analysis:

Here we consider the transport costs associated with

various locational alternatives. The limitations of this analysis is that -

the choice of plant location is assumed to be entirely dependent upon the minimization of transport cost.

transport costs are assumed to be linearly related to distance involved.

C) Break even analysis: this analysis can be done numerically as well as graphically. The procedure for lcoational breakeven analysis graphically involves the following: i)Determination of fixed costs and the variable costs associated with each locational alternative ii) plotting the total cost lines for all locational alternatives on the same graph. iii) Determining which location has the lowest total cost for the expected level of output. Assumptions of this Analysis: a) Fixed cost remains constant for a range of probable output b) The required level of output can be closely estimated and c) Only one product is involved

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Mathematically, BEP = Fixed

Cost / contribution per unit

d) Dimensional Analysis: Dimensional analysis is a technique for comparing the merits of several available locations. It does this comparison by assigning them rating from 1 to 100 as per the desirability For ex.

Factors

Location A

Land

Location B

Building

Labour

Community Relations

Cost of Transportation

------------

---------

215

170

Location B is better than A as it scores are less meaning less cost (from cost point of view) If costs and relative weightages are given the analysis can be done as given below: Factor

Costs

Weight WLA

WLB

Location A Location B Land

20000

30000

20000

30000 Building 50000 Labour

40000

100000

150000 30000

30000

80000 60000

---------------

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40 150000 170000

Here location A is attractive than location B

Let us consider n factors in our analysis and two sites A and B. Dimensional analysis is then comparision of alternatives sites on the basis of both tangible and intangible costs. Thus if

CA1,CA2,CA3,……….., CAn are the different cost associated with site A CB1,CB2,CB3,………..,CBn are the different cost associated with site B W1,W2,W3,……..,Wn are weightages given to cost items

Then the relative merit is given by

CA1

CA2

CA3

CAn

CB1

CB2

CB3

CBn

If relative merit is greater than unity (one), then location B is better than A.

II)

COMPARISION OF QUALITATIVE FACTORS Qualitative factors related to location analysis are also known as intangible factors. These are factors for which cost cannot be assigned ex. Lack of good schools, union activity, community attitude etc. These factors can be injected values like adequate or inadequate, significant or insignificant, good, excellent etc. However, it assumes a good deal of knowledge about each site and so it is not useful in all situations. This can be done by a) Drawing a comparitive chart for various locations Factors

Location A

Location B

Labour supply

Adequate

Excellent

Recreation

Good

Very Good

Union Activity

Significant

Not Significant

Education

Good

Very Good

Here location C appears to be attractive. b) Ranking and Weight Method: here various factors are assigned weights according to their importance in locational analysis. Also ranking are given. Then weights are multiplied with the corresponding rank and total of these products over all the factors for each location is calculated. The location having maximum total is considered to be most suitable. (Note: It is observed that location selected on the basis of quantitative factors may not tally with that based on comparison of qualitative factors. In case both the choices agree then the final selection is made otherwise the management may make a subjective choice. Generally cost criterion is given preference.)

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MULTI PLANT LOCATION ANALYSIS: In a single plant location problem we are concerned with the selection of location with minimum cost. Whereas in the multi-plant-location problem, we must select the location which, when added to existing locations, should minimize the cost of entire system. Each of the potential must be assessed not on its own merits alone but in the context of a multiplant situation.

PLANT LAYOUT INTRODUCTION: Plant layout is one of the most important factors for a new industrial enterprise, after deciding the location of the plant. It pertains to planning of the space available for all the activities and facilities associated with manufacturing with a view to enable the plant to function effectively. 

The word layout is used to indicate the physical disposition of the facilities of plant and of the various parts of the plant.



Proper arrangement of facilities is necessary to achieve a smooth flow of products.



Once location of plant is decided, the next step is to design the layout.



Layout pertains to planning of the space available for all activities and facilities associated with manufacturing with a view to enable the plant to function effectively.



Definition: In the words of James Lundy, “It identically involves the allocation of space and the arrangement of equipment in such a manner that overall operating costs are minimized”



Development of proper layout requires proper planning.



Plant layout is a joint work of both disciplines, namely engineering and management.



Planning the layout is a continuous process



A good layout results in comforts, convenience, safety, efficiency, compactness and profits.



A poor layout results in congestion, waste, frustration and efficiency.



Development of good layout depends on a series of decisions taken on location, capacity, facility, manufacturing methods and material handling.



Layout begins with location and continues through three further levels, namely i)

layout of departments within the site

ii)

layout of items within the department

layout of individual work places

Write do you mean by Plant Layout? The word ‘Plant Layout’ is an amalgam of two words: Plant and Layout. The term ‘Plant’ refers to machinery, equipments, and physical facilities for production. The term ‘layout’ denotes the arrangement of facilities in a particular work station.

. Definition of Plant Layout.

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 In the words of James Lundy, “It identically involves the allocation of the space and the arrangement of equipment in such a manner that overall operating costs are minimized”.  “Any arrangement of machines and facilities is a layout. Just as any house plan is a plan.”  “Plant layout involves the arrangements development of physical relationship among building, equipment and production operations which will enable the manufacturing process to be carried on efficiently”.  “Plant layout the arrangement of machines work areas and service area with in a factory”

WRITE ABOUT THE OBJECTIVES OF THE PLANT LAYOUT. The principle of the objectives of a proper plant layout is to maximize the production at the minimum cost. The objectives should be kept in mind while designing a layout for a new plant as well as while making necessary changes in the existing layout it should be planned with the following objectives in mind.  Economy in materials handling: o

Economy in handing of materials work-in-progress and finished stock.

 Optimum utilization of resources: o

Ensuring optimum utilization of men, materials, equipment and space available.

 Better inventory control: o

Minimizing work-in-progress and maximizing inventory turnover. The material should move rapidly through the plant and the points of congestion should be eliminated to have low levels f inventory.

 Good work flow: o

Minimizing changes of delay and eliminating bottle necks in the production system. Ensure a good work flow avoiding accumulation of work at vital points.

 Efficient control: o

Ensuring efficient supervision and production control.

 Avoidance of changes: o

Avoiding frequent changes so that production programme is not upset, causing the cost of production to rise.

 Safety: o

Ensuring safety for the workers by eliminating or atleast minimizing the chances of accidents.

 Better services: o

Providing adequate services centers at convenient locations.

 Higher morale: o

Boosting up of the employees morale by providing incentives and also comforts while at work.

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 Flexibility: o

Ensuring flexibility of the layout for future changes and requirements. 

To achieve these objectives, a close co-ordination between him/her with the production manager is very important.

Write about the characteristics of an efficient Plant Layout. The designing of a plant layout should be such that it should maximize the return and minimize the cost of production. The following are the characteristics of plant layout.  Smooth flow of production: o

There must be a smooth flow of production. Raw materials and workers must have access to each machine with out any difficulty and delay.

 Maximum utilization of available space: o

An efficient plant layout, such that may utilize the maximum of the space available.

 Facilities the movement of men, materials and machines etc., o

There must be sufficient space left in between different machine so that raw materials, workers and machines move very easily from one place to another, with out the fear of accident.

 Involves minimum handling: o

The various machines in a good layout must be arranged in such a manner that the product of one operation may pass in to the next operation with a minimum of handling. It will reduce wastage of raw materials and labour hours.

 Provides better working conditions: o

A good plant layout must have facilities such as water, ventilation, retiring room etc, in the plant. It should also safe guard the health of the workers.

 Flexibility: o

A good layout must be flexible enough so as to incorporate any change in the management policies. It must be capable of incorporating, with out major changes, new equipment to meet technological progress or increase the production requirements or to eliminate waste.

 Location of stores: o

Te stores in a plant must be located in such a place from where raw materials, tools, equipment and other materials may be supplied to the departments concerned easily, with out and delay.

 Facilities supervision and control: o

The position of the workers must be arranged in such a way that it facilities supervision, coordination and control.

 Provision of safety:

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There must be complete safety for workers engaged on a machine. Necessary instruction must be given to them about the risks involved while working in certain type of machines. Provisions of factories act must be followed in real spirit.

 Coordination and Integration: o

There must be an efficient coordination and integration among men, materials and machines, so that their maximum could become a possibility.

. Write about the characteristics of poor Layout. Or Write about the symptoms of poor layout. The symptoms of bad or poor layout are as follows. 

Congestion of the machines, materials, part assemblies and even workers.



Excessive number of work-in-process



Poor utilization of space



Long material flow lines



Excessive handling by skilled workers and increased handling costs



Increase in maintenance time



Long production cycles



Delay in delivery schedules



Increase in handling costs



Difficulty experienced in supervision and control



Increase in breakage of materials and products.

Write about the advantages of good layout. The advantages of a good layout can be studied from the stand point of the worker, labour cost, other manufacturing costs, production control, supervision and capital investment.  To the worker: o

Reduction in the effort of the worker.

Fewer material handing operations

Extension of the process of specialization

Ensuring maximum efficiency

Better working condition and reduction in the number of accidents.

 In labour cost: o

Reduction in the number of workers

Increase in production per man-hour.

Reduction in the length of haul

Minimum lost motion between operations

 In other manufacturing costs: o

Maintenance and tool replacement costs are reduced

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Spoilage and scrap is minimized

Greater saving in the waste of raw materials consumption

Saving motive power

Effective cost control

 In production control: o

Provision of adequate and convenient storage facilities

Increased pace for production

Achievement of production targets unfailingly

 In supervision: o

Helps in easing the burden of supervision

Reduces the level of inspection and this minimizing the cost of inspection.

 In capital investment: o

Investment in machinery and equipment is reduced because of 

Increase in production per machine



Utilization of idle machine time



Reduction in the number of operation per machine.

Permanent investment is kept at the minimum

Floor space and shop areas required for manufacturing are reduced.

OBJECTIVES OF GOOD LAYOUT i)

Facilitates the manufacturing process

ii)

Reduce material handling

iii)

Maintain flexibility of operations

iv)

Maintain high turnover of work in process

Improves productivity

vi)

Make economical use of floor area

vii)

Efficient control (supervision)

viii)

To provide safety from accidents

ix)

Better services

Better Inventory control

xi)

Optimum utilization

xii)

minimization of waste

PRINCIPLES /CRITERIA/FACTORS AFFECTING PLANT LAYOUT The main objective of an enterprise is to maximize the production. What exactly is an efficient or perfect layout cannot be defined precisely. However, the following criteria should be satisfied for an effective plant layout.

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Maximum Flexibility: A good layout is one which is flexible (i.e) it can be modified to meet the changing circumstances. It must be capable of alteration without much cost, time or wastages.



Maximum Co-ordination: layout should co-ordinate all operations (i.e) it should integrate men, materials, machines etc to achieve effectiveness.



Maximum use of volume(cubical space): A good layout should use the space effectively (i.e) horizontal, vertical space should be used. Also third dimensional (height) has to be used. For ex. Conveyors can be made run on top (height above personnel) to use space effectively.



Maximum Visibility: There should not be any hiding places in the layout. Visibility of raw materials and finished goods will account for good supervision and control.



Maximum Accessibility: All servicing and maintenance points should be easily accessible without causing any difficult to production process. Machines and workers should move easily from one place to another.



Minimum distance) movement: (The layout should be planned in such a way that there must be least movement of goods and workers. Movement which add to the cost of the product without adding to its value should be avoided



Minimum Discomfort: The layout must be designed in such a manner that it causes minimum discomfort to the working force. Poor lighting, excessive sunlight, heat, noise, bad odour(smell) etc to be avoided. The statutory (legal) requirements of Factories Act, 1948 should be followed.



Minimum Handling: Handling should be minimized by using conveyors, lifts, trucks etc. Materials being worked on should be kept at working height.



Efficient Process Flow: Efforts should be taken to ensure that materials flow in one direction only. The use of gravitational force in certain type of processing can lead to substantial savings in energy and time.



Safety, Security and Satisfaction: A good layout should give due considerations to worker’s safety, security and should provide him better satisfaction



Identification:

Wherever possible, working groups should be provided with their ‘own’ working

space. The need for a defined space with which a person can identify himself can enhance one’s morale and job satisfaction 

Sequence: Machinery and operations should be arranged in a sequential order.



Minimum Investment: The layout should result in savings in fixed capital investment, not by avoiding installation of necessary facilities but by proper use of available facilities

Write about the principle and criteria of plant layout. The main objective of an enterprise is to maximize the production and minimize the cost. The process of plant layout may be said to be an effective one in so far as to help minimize movement of machine and personnel, facilities the manufacturing process and reduces the cost of production.

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 Maximum flexibility: o

A good layout will be one which can be modified to meet the changing circumstances. It must be capable of incorporating with out major changes, new equipment to meet technological requirements or to eliminate waste.

 Maximum coordination o

Layout must be considered as a whole and not in parts. It should be the bluest print for coordinating all operations.

 Maximum use of volume: o

Maximum use f volume available should be made. For an example, converters can be run above the height of personnel at work and tools and equipment can be suspended from the ceiling. This principle is particularly true in stores where goods can be stocked at considerable height without any inconvenience.

 Maximum visibility: o

The position of workers should be so arranged that there is no difficulty in supervision, coordination and control. There should not be any no ‘hiding places’ in to which goods can be mislaid. Raw materials and finished goods must be visible at all times, which will help in reducing pilferage.

 Maximum accessibility: o

All servicing and maintenance points should be readily accessible without causing any hindrance to the production process. There must be sufficient space between different machines and workers should move easily and comfortably from one place to another.

 Minimum (Distance) Movement: o

The layout should be so planned that there must be the least movement of goods and workers. Movements which add to the cost of the product with out adding to its value should be avoided.

 Minimum Discomfort: o

The layout must be designed in such a manner that may causes minimum discomfort to the working force. Poor light, excess sunlight, heat, noise, vibration and bad odour should be avoided or minimized. The statutory requirements of eth Factories Act 1948 should be followed.

 Minimum handling: o

The best handling is no handling but however, it should be reduced to minimum by the use of the conveyors, lifts, chute, hoists and truck.

 Safety aspects: o

A layout should be free from causing any danger to machine operators working on the machines. Care must also be taken for the safety of passers-by. Adequate precaution

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against fire, moisture, theft and general deterioration should be taken in the original layout.  Efficient process flow: o

Work flow and transport flow should not cross. Every effort must be made to ensure that materials flows in now directions only and a layout which does not conform to this will experience considerable difficulties.

 Identification: o

Where ever possible, working groups should be provided with their ‘own’ working space. The need for a defined ‘territory ‘ i.e., provision of a space with which a person can identify himself/herself enhances ones morale.

. Explain about the steps or the procedures involved in planning layout. The following steps are necessary for developing a layout plan for a new enterprise.  Fixing of objectives: o

The first step in designing a layout plan is to set the goals with regard to capacity, production, flexibility and plan for future expansion.

 Collection and compilation of data: o

The second step is collection of necessary data regarding operations to be carried out to make a product, space available, dimensions of the space, the machines to be used or processes to be employed, nature of manufacturing operations and the sequence to be followed.

Collection of data must be followed by the preparation of operation process chart, machine data cards and templates of production machinery and materials handling equipment.

 Formulation of an over all plan: o

The next step in the development of layout will be to prepare an overall plan, including the flow of production, arrangement of service activities and the most suitable type of building.

A floor plan may be prepared for grouping the machines either on the basis of product or line pattern or on functional pattern.

Then the type of building needed must be considered keeping in view of the layout plan and the location of the plant.

This should be followed by a tentative plot plan arrangement suited to the plant layout of the building and long run utilization of the sites should be prepared.

 Service activities: o

The next step in planning a layout is to decide the location of service activities keeping in view the facility of the manufacturing process and the convenience of workers.

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This includes decisions about development of material handling system, location of shipping and receiving areas, the maintenance shop, power plant, office and facilities for employee and convenience.

 Building specification: o

The next step will be to fix the building specification i.e floor space required, load capacity of the floor, ceiling heights, location of partitions, size and location of doors and windows.

 Layout for individual machines: o

The planning for individual machine work stations or plans should also be prepared in relation to the access or work in process for repair and maintenance of plant and for services such as electricity, gas, high pressure air etc

 Preparation of layout Drawings and Test run: o

The last step in designing a layout plan is to prepare layout drawings and necessary supporting charts developed by the engineer should be submitted to the management.

If the plan id approved by the management, the preparation for trial production should be made on acquiring or constructing the building and after installing the plant and a machinery.

If the management does not approve the plan, it should be revised in the light of suggestions made by the management or if the test run requires certain modifications in the model, necessary adjustments should be made in it.

. Explain about the factors influencing the plant layout. The following are some important factors which influence the planning of an effective layout to a significant level. 

Nature of the product: o

The nature of the products to be manufactured will significantly affect the layout of the plant.

Stationary layout will be most suitable for heavy products while a line layout will be best for the manufacture of light products because small and light products can be moved from one machine to mother very easily and therefore, more attention can be paid to machine locations and handling of materials.



Volume of the production: o

Volume of production and the standardization of the product also affect the type of layout.

If standardized commodities are to be manufactured on a large scale, line type of layout may be adopted.

If the production is made on the order of the customers, the functional layout is a better option.

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Basic Managerial policies and decision: o

The type of layout depends very much on the decision and policies of the management to be followed in producing a commodity with regard to size of the plant, type and quality of the product, scope for expansion to be provided for the extent to which the plant is to be integrated, amount of stocks to be carried at any time, type of facilities to be provided for employees, etc.



Nature of the plant location: o

The size, shape and topography of the site at which plant is located will naturally affect the type of layout to be followed in view of the minimum utilization of space available.



Type of Industry Process: o

This is one of the most important factors influencing the choice of type of plant layout. Generally, the type of layout, particularly the arrangement of machines and work centre and the location of workmen vary according to the nature of the industry to which the plant belongs.



For the purpose of layout, industries may be classified in to two broad categories: 

Intermittent



Continuous.

Types or methods of production: o

Layout plans may be different according to the methods of production proposed to be adopted. Any of the following three methods may be adopted for production.



Job order production



Batch production



Mass production.

In job production, goods are produced according to the orders of the customer and the production cannot be standardized. The machines and equipment can be arranged in a manner to suit the need of all types of customer.

Batch production carries the production of goods in batches or groups at intervals. In this type of manufacturing, the product is standardized and production is made generally in anticipation of sales.

In mass production of standardized goods line layout is the most suitable form of plant layout.



Nature of the machines: o

Design and specifications of materials, physical and chemical properties of materials, quantity and quality of materials and combination of the materials are probably the most important factors to be considered in planning a layout.

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Climate: o

Sometimes, temperature, illumination and air are the deciding factors in deciding the location of machines and their establishment.



Nature of materials: o

Design and specification of materials, physical and chemical properties of materials, quantity and quality of materials and combination of the materials are probably the most important factors to be considered in planning a layout.



Type of machine and equipment: o

Machines and the equipment may be either general purpose or special purpose. In addition, certain tools are used. The requirements of each machine and equipment are quite different in terms of their space, speed and material handling process and these factors should be given proper consideration.



Human factor and working conditions: o

Man is the most important factor of production and therefore special consideration for his safety and comforts should be given while planning a layout.

Specific safety aspects such as obstruction-free floor, not exposing workmen to hazards, emergency exit points etc., should be provided for.

The layout should also provide for the comforts to the workers such as provision of rest rooms drinking water, lavatory, and other services etc.

o 

Sufficient space is also to be provided for free movement of workers.

Service centers: o

Every layout must have a provision for the men and equipment to lubricate, repair or even replace the parts of the machine to avoid plant deterioration.

Other service facilities which require attention includes steam lines, water pipelines, electricity wires, sewage and waste disposal.



Characteristics of the building: o

Shape of a building, covered and open areas, number of stores, facilities of elevators, storing place, parking area and so on also influence the layout plan.

In most of the cases, where a building is hired, layout is to be adjusted with in the space available in the building.

EXPLAIN ABOUT THE TYPES OF PLANT LAYOUT. Or What are the types of plant layout? What are the advantages and disadvantages of each plant layout? There are three basic types of plant layout.  Product or Line Layout.  Functional or Process Layout

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 Stationary Layout and  Combined or Mixed Layout (Group Layout). Plant Layout

Product or

Functional or

Line Layout

Process Layout

Stationary Layout

Combined or Mixed Layout

 Product or Line Layout: 

Product or Line layout is the arrangement of machines and equipment in a line or a sequence in which they would be used in the process of manufacture of the product or group of related product or group of related products.



In this layout, materials are worked out in to finished stock through a series of integrated operations that is arranged in a line.



The machines under this plan may be arranged either in ‘U’ shape or in shape of a line.



Suitability: This layout is best suited to manufacturing carrying out continuous mass production where raw materials are fed at one end and the finished products are taken out at the other end. There may be a separate product line for each type of product using different types of machines or using machines of the same type.



Advantages: The advantages of product layout may be summarized as follows: 

Smooth flow of production: o

This plan ensures steady flow of production with economy because bottlenecks or stoppage of work at different points of production is eliminated.



Mechanization of material handling: o

Since machines are arranged in sequence of operations, the continues flow of materials in a line through mechanical devices like conveyors is ensured.



Economy in manufacturing time: o

Since materials are fed at one end of the machines and finished product is collected at the other end, there is no transportation of raw materials backward and forward.



Saving in material handling: o

Since machines are arranged in sequence of operations, materials move from one machine to another automatically and hence no transportation costs for machine to another automatically and hence no transportation costs for movement of materials are involved till the process of manufacture is completed.



Lesser work-in-progress: o

The work-in-progress is minimum and negligible under this type of layout because the process of production is direct and uninterrupted.

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Easy inspection: o



Because the production process is integrated and continuous.

Introduction of production control: o

The continuous nature of production enables the management to introduce and enforce production process of production is direct and uninterrupted.



Maximum utilization of available space: o

Under this type of layout, machines are arranged in sequence of operations and it makes the maximum utilization of men, machines and materials.



Effective utilization of available resources: o

This type of layout provides for effective utilization of men, materials, machines because of (i) Minimum possible movement of workers from one place to another



(ii) lesser work in progress

Mechanization of materials handling.

Production control greatly simplified: o

Visual control replaces much of paper work because of which fewer forms and records are used. As the work is checked on and off the production line, fewer work orders, inspection tickets, time tickets are issued, reducing clerical costs.



Disadvantages: o

Expensive: this type of layout is costly because machines under this system are arranged in sequence of operations and not according to functions.

Inflexible: This system is quite inflexible as the operations are performed in sequence; adjustment in the course of production cannot be made with out much difficulty.

Difficulty in Supervision: Since there are no separate department for various types of work, specialization in supervision is also difficult.

Stoppage of work through breakdown: Any break down in any of the machines along the line can disrupt the entire operations.

High labour cost: under this system, labour cost is high as: 

Absenteeism may create problems because every worker is a specialist of his/her own work or specialists on a particular machine.



By performing activities of repetitive nature along assembly line.



As machine play a dominant role in production under this system.

product layout involves the arrangement of machines in one line, depending upon the sequence of operations.

Materials are fed into first machine and finished product comes out of the other end.

Ex. Motor –Car production Sugar cane production

This layout is in shape of straight line or U

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Machine A

Machine B

Machine C

Once a machine is in line, it cannot perform any operation which is not designated in the sequence of operations.

All machines required to balance the particular product line are arranged in a sequential line but not necessarily in the straight line.

To make this layout successful, the work-load on various machines must be balanced

This process of getting even loading at each stage of production is called line balancing

In this type of layout, product is dominating over the process

Suitability o

continuous flow of production with few items of production

items should not require frequent changes

for standardized products

operation time for different process are almost equal

Uninterrupted supply of materials

Reasonably stable product demand

Advantages: o

reduced material handling cost

mechanization of material handling is possible due to handling between fixed points.

Line balancing may eliminate idle capacity

Facilitates better production control

Requires less floor area per unit of production

Shorter operating cycle due to shorter and speedier movement of materials

Effective quality controlâ&#x20AC;&#x2122;

Facilitates implementation of group incentive scheme for workers

Disadvantages o

highly inflexible

breakdown of one single machine in the line interrupt the entire production flow

expansion is difficult

benefits of specialized supervision is not possible

it is difficult to implement individual incentive schemes

expensive layout.

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ď&#x201A;Ľ Functional or Process Layout: o

This system is based on the functions performed by a department. Under this system of layout, machines or equipment of the same functions are grouped together in a separate department.

In other words, separate department is established for each specialized operation of production and machines relating to such functions are assembled there.

The specialized department works for all the lines of production. For example, welding equipment may be placed in one place.

All machines performing similar type of operations are grouped at one location. For ex. All lathes, all drilling, all welding etc., in the shop will be clustered in their like groups.

In this layout, the process rather than the product has the dominating role

Separate department is established for each specialized operation of production and machines relating to such functions are assembled there.

These specialized

departments works for all the lines of production. Suitability o

Continuous type of production

Products are not standard ones

Machines are expensive

Job order type of production

Small quantities are to be produced

Advantages: o

Flexibility: The process layout is known foe its flexibility. Changes in operations as well as their order can be made at any time without distributing the existing layout.

Scope for expansion: the capacities of different lines can be expanded under this type of layout by adding new machines and labour.

Maximum utilization of equipment: Process layout necessitates fuller utilization of machines and equipment because general purpose machines are used commonly for all departments.

Lower financial investment: this type of layout requires lesser financial investment in machines and equipment because the general purpose machines, which are usually of low costs, are used.

Better working conditions: Process layout facilities installation of machines and equipment in different areas without any dependence on other operations sequences.

High output rate: Process layouts are less vulnerable to breakdown. Machine breakdown in a process layout holds up production only on that particular machine and the whole process does not come to a standstill.

Enhances the over all skill of workers: workers are highly skilled as they are aware of operating all machines â&#x20AC;&#x201C; small or big in the group.

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Disadvantages: o

Inefficient materials handling: Efficient material handling is difficult to practice in process layout because fixed path material handling equipment such as conveyer belts, chutes etc., cannot be put to use.

Dis-economy to floor space: This type of layout requires more floor space than the product layout because a distinct department is established for each operations.

High inventory investment: Compared to line layout, inventory investments are usually higher in case of process layout.

High cost of Supervision: Under process layout, cost of supervision is high because 

The number of employees per supervision is less which results in reduced supervisory span of control.

 o

The work is checked only after each operation is completed.

Other disadvantages: The manufacturing process has a longer duration under process layout because of strict inspection after each operation.

 Stationary Layout: o

Under this type of layout, materials remain at a fixed place and the complete job is done at a fixed station.

Men and machines are moved to the place of materials for the necessary operations. This type of layout is suitable for big industrial machines, ship buildings etc.,

Advantages: o

Flexible: This layout is fully flexible and is capable of absorbing any sort of changes in product and process. The project can be completed according to the needs of the customers and as per their specifications.

Lower labour cost: People are drawn from functional departments. They move back top their respective departments as soon as the work is over.

Saving time: The sequence of operations can be changed if some materials do not arrive or if some workers are absent, since the job assignment is so long,

Different sets of people can operate simultaneously on the same assignment performing different operations.

Occupation of lesser floor space: it requires less floor space because machines and equipment are in moving positions and there is no need of fixing them. This arrangement is the most suitable way of assembling large and heavy products.

Disadvantages: o

Nature of product: Compared to product or process layout, capital investment is higher in this type of layout. Since a number of assignments are taken, investment is heavy in materials, men and machines.

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Preliminary investment: Higher initial amount for investment in machines and equipment is required in product or line type of layout whereas in process layout, comparatively, lower initial investment is sufficient.

Volume of production: Process layout is used for a large number of products where similar machines and equipment are used for the manufacturing of each product, so the volume per product is low.

Flexibility: Process layout is flexible because necessary alteration or change in sequence of operations can easily be made as and when required without upsetting the existing layout plan. 

Effect of breakdown



Floor space



Manufacturing time



Materials handlings equipment and costs



Supervision



Control and coordination

 Combined or Mixed Layout (Group Layout): o

A mixed layout is a combination of process and product layout. Mixed layout is generally used



When the company’s product contains a lot of components and parts



When the product requires to be produced in different types and sizes.

In mixed type of layout, the parts are produced on facilities arranged in process type of layout and they are assembled using the product type of layout.

Another concept of mixed type of layout is called cellular in which the facilities are clubbed together in to cells to utilize the concepts, principles and approaches of group technology.

The layout makes it possible to adopt high degree of automation even if the product demands are not stable. In this layout, the facilities are grouped into cells which are able to perform similar type of operations for a group of products.

Group technology: concept of group technology is the replacement of traditional job shop practice. In group technology, operations of the job and the sequence are analyzed to form certain families of jobs.

Group technology is the out come of the realization that many problems are similar and that by grouping them, a single solution can be found to a set of problems, thus saving time and effort.

iii) Fixed Layout -

Also called as Stationary/static/project layout

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In this type of layout, the material or major components remains in a fixed location and tools, machinery, men are brought to this location.

Complete job is done at fixed station.

Generally few input tends to be static (fixed) while others are moving.

Suitability -

big industrial machines

Hydro electric turbines

Ship building

Locomotive industry

Aircraft/spacecraft assembly etc

Raw materials

Aircraft Assembly

Advantages -

men and machines can be used for a wide variety of operations

lower labour cost

least movement of materials

flexible

saves time

occupies less floor space

worker identifies himself with the product & takes pride in it when the work is completed.

Disadvantages -

higher capital investment

not suitable for small products in large quantities

. Explain about the importance of Plant Layout. The following are the importance of the plant layout  Maximum utilization of the available space.  Facilities the movement of men, materials and machines etc.,  Location of stores.  Provision of safety.  Facilities supervision and control  Coordination and integration.  Provides better working conditions.

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 Better inventory control etc., SPACE REQUIREMENTS/ AREA ALLOCATION Plant layout deals with the allocation of the total floor area for various facilities and departments. Space is required in each work station for equipment, tools, loading work, machines, temporary material storage etc According to James Lundy, “overall plant areas are generally about 150 to 200 sq.ft per employee for light/small manufacturing operations, 500 sq.feet for medium manufacturing and as high as 1000 sq.ft for process industries”. This is just a guideline. In fact modern production systems require separate solutions with regard to space requirements. There are a number of factors/guidelines that should be considered for area allocation: i)

Area should be allocated after considering the need for future expansion and required flexibility.

ii)

Maximum use of 3-D space to allocate area

iii)

Area allocation is done for point of use storage and centralized storage

iv)

Area should be allocated for aisles

Also provision has to be done for column spacing

Space Determination/Space Calculation In the layout planning process the space is allocated to different activities. The requirement of space by a facility has a close relationship to equipment, material, personnel and activites. Two major methods that are being used for space calculations (i) Space based on present layout and (ii) production center method. i) Space based on present layout:

This approach is suitable when the proposed layout is to be

developed for an existing product. While determining the space consideration has to be given for * Operating equipment * Storage * Service facilities

*Operators

Allowance must be made for space between machines for operator movement, work-in-process, maintenance etc. ii) Production Centre Method: The space for each production center is determined including the space for machines, tools, access to aisle, maintenance etc. In this method, actual arrangement of equipment is considered for space calculation. The departmental space is then calculated by multiplying it with the number of production centers in that department.

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UNIT –III PRODUCTION PLANNING AND CONTROL (PPC) . Define Planning: Planning may be defined as the determination of a course of action to achieve the desired result. It involves the determination of objectives and planning of operations in terms of policies, plans and budgets, which will establish the most advantageous course for the organization.

. Define Control. Control may be defined as the monitoring of performance through a feed back by comparing the result achieved with the planned targets so that performance can be improved through proper corrective action.

. Define Planning. Production planning is a predetermined activity. It is predetermination of manufacturing requirements such as manpower, materials, machines and Manufacturing process.

. Define Product Planning. Ray wild defines “Production planning is the determination, acquisition and arrangement of all facilities necessary for future production of products. It represents the design of production system. Apart from planning the resources, it is going to organize production based on the estimated demand for company’s products and establish the production programme to meet the targets set using the various resources”.

. What are the characteristics of the production planning?  Production planning is a universal production activity.  Production planning is the basis and pre requisite of production control.  Production planning includes routing of a production activities and layout production facilities such as building, machines etc.,  Production planning may be short term or medium term or long term  Production planning can be done t three levels viz., factory planning, process planning and operation planning. . What are the importances of planning for production process?  The necessity for careful planning of production operations arises from importance factors:

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Modern production has become increasingly complex, requesting systematic “thinking through” of the process in advance.

Production processes always involve the element of time in varying degrees. In the initiation of production anticipation of probable future utilizes and calculation of probable future costs of probable changes must always be taken in to account.

Successful production aims at the most economical combination of resources, which requires planning as a means of effecting cost control.

. Write the meaning of Production Control. The production control is the function of management which plans, directs and controls the materials supply and processing activities of an enterprise. So that specified products are produced by specified methods to meet an approved sales programme. . Define Production Control. The British standards institute defines the term production control to include the following: o

The production plan or planning and Scheduling

Machine or labour utilization or dispatching

Stock control

Manufacturing control or routing and

Progress

. Write about the objectives of production control.  Issuing the necessary orders to the proper personnel through the prescribed channels for affecting the plan.  To ensure availability of the means of carrying out the orders- the materials, machines, tools, equipments and manpower in the required quality at the required time.  To ensure carrying out of the orders by the personnel so that goods are produced in the required quantities of the specified quality at the predetermined time. FUNCTIONS . What are the functions involved in production control? The following factors are involved in the practice of production control.  Control activities: o

This is done by releasing manufacturing orders through dispatching. Thus, plans are set in motion at the assigned time.

 Control of materials movement: o

The time at which material is received from the supplier, and issued to the plant is observed and a close watch is kept on its movement from one plant to another to ensure that this movement is in accordance with the production cost.

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 Availability of tools in controlled: o

Steps are to be taken to ensure that tools specified in the production plan are available as and when required.

 Quantity produced is controlled: o

Work-in-process at pre determined stages of production is observed to determine that right quantity of specified quality work is processed.

 Control of replacement: o

Quantity of raw materials and work-in-process which fails to pass each stage of inspection is observed. Provision is made to issue replacement orders for each material for work.

 Labour efficiency and control: o

Time taken on each unit of work-in-process is observed and recorded. Comparison of time is made with the time allowed in scheduling.

. Define Production Planning and Control. According to Gordon B. Carson, “Production planning and control consists of the organization and the planning of the manufacturing processes routing, scheduling, dispatching and inspection, coordination and the control of materials, methods machines, tooling and operating time. The ultimate objective is the organization of the supply and movement of materials and labour, machine utilization and related activities in order to bring about the desired manufacturing results in the term of quality, time and price”.

. Write the Production Planning and Control. Production planning and control is the direction of the coordination of the firm’s materials and physical facilities towards the attainment of pre-specific production goals in the most efficient available way. . What are the main elements of Production Planning and Control? Or Explain about the functions of production planning and control. During the course of planning and controlling the production process, the following elements or techniques should be followed in phased manner. We may also call them production planning and control functions. These are  Routing  Loading  Scheduling  Dispatching  Follow up or expediting

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. Write about the objectives of Production Planning and Control The principal objectives of the production planning and control are as follows:  Quality of the output: o

The most important objectives of production planning and control is to ensure the safe and economical manufacture of desired products in required quantity and in quality.

 Plant utilization: o

To ensure maximum plant utilization so that productivity of highest degree can be achieved.

 Process efficiency: o

To maintain maximum process efficiency by proper coordination

 Delivery of goods: o

To deliver the products to the customers whenever they are needed.

 Maintenance of inventories: o

To maintain an adequate supply of finished goods and having sufficient work in progress ensure that deliveries are made to the customers who may want the product in less than the manufacturing time.

 Flexibility: o

To maintain flexibility in manufacturing operations so that an occasional rush job can be taken care of.

 Effectiveness of work: o

Production planning and control ensures the right man for the right job, at the right place, at the right time on right wages and salaries so that maximum effectiveness is obtained.

 Absenteeism: o

Production planning and control can be introduced to minimize and regulate the absenteeism.

 Team spirit: o

To develop the team spirit and feeling of brother hood among workers is another aim of production planning and control.

 Ideas for new methods: o

Production planning and control aims at giving encouragement to the workers for new idea and new methods.

 Reduced Supervision: o

The other objectives of Production planning and control is to reduce supervision by creating interest in work amongst workforce.

 Reduced Waiting time: o

Production planning and control aims at reducing waiting time arising due to want of materials, tools, equipment, supervision, inspection deliveries etc.,

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

Planning and Control are two basic interrelated managerial functions.



Planning is pre-operation activity while control is post-operation function.



Planning sets the objectives, goals, targets on the basis of available resources and constraints.



For translation of these objectives, goals and targets into reality, it is necessary to install control.



Such assessment can be made effectively only when some standards of performance are set in advance while planning.



Controlling is made by comparing the actual performance with these preset standards and deviations are ascertained and analysed.



Effective control presupposes some sort of planning.



Thus planning and controlling are intimately related. Both of them are so closely related that they are treated as Siamese twins.

Production Planning: Production planning is an essential prerequisite to production control. It involves management decisions on the resources that the firm requires and the selection of these resources. This sort of planning is necessary so that the goods are produced at the appropriate time and at least possible cost.

Production Control: Production control is a facilitating service to manufacturing. It co-ordinates all the production operations by collecting the relevant information about various types of inputs and outputs and by making necessary adjustments in them. It directs and checks the progress of work.

Production Planning and Control ( PPC ) 

PPC may be defined as the direction and co-ordination of the firm’s material and physical facilities towards the attainment of pre-specific production goals in the most efficient available way.



According to Gordon B. Carson, “PPC consists of the organization and the planning of the manufacturing processes, routing, scheduling, dispatching and inspection, co-ordination and the control of materials, methods, machines, tooling and operating time. The ultimate objective is the organization of the supply and movement of materials and labour, machine utilization and related activities inorder to bring about the desired manufacturing results in the terms of quality, time and price”

Objectives of PPC 

Determine the nature and magnitude of various inputs to manufacture the desired output



To ensure safe and economical manufacture of desired products



To ensure maximum plant utilization so high productivity is achieved.

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

To maintain maximum process efficiency by proper co-ordination.



To deliver products to customers whenever needed



To maintain sufficient inventory



To maintain flexibility in manufacturing operations



To minimize and regulate absenteeism



To develop team spirit among workers



To reduce supervision



To reduce waiting time



To ensure smooth production by removing bottlenecks(problems) in production process



To minimize cost of production



To ensure maximum utilization of all resources



To establish routes and schedules for all work



The ultimate objective is to ensure profit for the enterprise

PPC Functions /Elements of PPC

Routing Product development & design

Dispatching

Materials

Inspection

Sales forecasting & Estimating

Estimating

Methods Factory layout, Equipment policy

Expediting Pre-planning production

Machines & Equipment Manpower

Loading & Scheduling

Evaluation

Pre planning

Planning

Control

1) MATERIALS: Planning for the procurement of raw materials, components and spare parts in the right quantities and at right time. The function includes specification of materials, delivery dates, standardization, procurement and make or buy decisions.

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ENTERPRISE RESOURCE PLANNING 2) METHODS: Choosing the best method of processing from several alternatives.

66 It also includes

determining the best sequence of operations (process plans). 3) MACHINES & EQUIPMENTS:

This function involves analysis of available production facilities,

equipment down time, maintenance policy, maintenance schedules, tools, maintenance of tools etc 4) MANPOWER: Planning for appropriate manpower having appropriate skills and expertise.

5) ROUTING (PROCESS PLANNING) : -

Routing means determining the selection of path route through which raw material should follow to get transferred into finished product.

Routing will also provide the sequence of operations to be adopted while manufacturing

In other words, routing means determination of most advantageous path to be followed from department to department and from machine to machine till raw material gets its final shape.

Thus routing determines, what work must be done, where and how the work has to be done.

Definition: Kimball and Kimball defines routing as “the selection of paths or route over which each piece is to travel is being transformed from raw material into finished product”

The practice of routing rose out of the demand for a more systematic method to carry out the work.

The objective of routing is to determine the best and cheapest sequence of operations and to ensure that the sequence is followed

To be successful, routing requires that Route Clerk should have thorough knowledge of the product and the manufacturing equipment. He should also have complete knowledge of capacity and characteristics of every machines and process.

Routing Function: The routing function includes -

fixation of path to travel, giving due consideration to appropriate layout

Temporary storage locations for raw materials, components, semi finished goods etc

Breaking down operations into small jobs

Deciding set up time and process time for each operation.

Routing Procedure i)

The finished products are analysed from manufacturing view in order to decide how many components can be made in the plant and how many can be purchased from outside ( Make Or Buy decision)

ii)

Parts list and Bill of Materials are prepared showing the name of the part, quantity, material specifications, amount of material required etc. The necessary materials can thus be preserved.

iii)

Machine’s capacities, their characteristics and operations that must be performed at each stage of manufacturing are established. Then they are listed in proper sequence on the Operations Sheet and Route Sheet.

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Route Sheet -

A Route sheet is a document providing information and instructions for converting the raw materials into finished products.

A route sheet contains complete description of the item to be manufactured, the details of each operation required in the manufacturing process, the set up time and standard operation time etc.

The route sheet also specifies the machines to be used and the possible alternatives also.

It also indicates stage wise inspection to be performed

It specifies tools requires for operation

It gives detailed drawings of parts, sub parts and final assemblies

It contains specifications of raw materials to be used

It also gives cutting speed, depth of cut etc

More precise specifications of manufacturing methods are given in the Operations Sheet which tells in greater detail about how the operation has to be accomplished.

Advantages of Routing -

Efficient use of available resources

Reduction in manufacturing cost

Improvement in quantity and quality of the output

Provides a basis of scheduling and loading

6) ESTIMATING: Once the overall method and sequence of operations are fixed and process sheet for each operation is available, then the operation times are estimated. Establishing operation times leads to fixation of performance standards both for workers and machines.

7)LOADING AND SCHEDULING Loading: -

Loading is the process of assigning specific jobs to men, machines and work stations on the basis of their capacities

Loading requires the following information : Total work load, capacity of each worker and machines, availability of raw materials, labour and machines, due date specified by customers

A loading chart is prepared showing the planned utilization of men and machines.

The purpose of loading is to achieve maximum possible utilization of productive features and to avoid bottlenecks in production.

Overloading and underutilization of capacity are to be avoided

Machine loading is the assignment of specific jobs to specific machines keeping in view the priorities and machine utilization.

Loading also helps to complete each operation by the specified date.

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EXPLAIN THE FUNCTIONS OF PRODUCTION PLANNING AND CONTROL. The main functions of production planning and control are explained below.  Materials: o

Raw materials, finished parts and bought out components should be made available in required quantities and at required time to ensure the correct beginning and end for each operation resulting in uninterrupted production.

 Methods: o

This function is concerned with the analysis of alternatives and selection of the best method with due consideration to constraints imposed.

Developing specification and determination of sequence of operations for the processes are important aspects of production planning and control.

 Machines and Equipment: o

This function is related with the detailed analysis of available production facilities, equipment down time, maintenance policy, procedure and schedule.

 Manpower: o

To maintain the availability of appropriate man power on appropriate machines at the right time.

 Process Planning (Routing): o

It is concerned with selection of path route which the raw materials should follow to get transferred into finished product.

 Estimating: o

Once the overall method and sequence of operations are fixed and process sheet for each operation is available, then the operations times are estimated.

 Loading and Scheduling: o

Scheduling is concerned with preparation of machine loads and fixation of starting and completion date for each of the operations. Machines have to be loaded according to their capability of performing the given task and their capacity.

 Dispatching: o

This is the execution phase of planning. It is the process of setting production activities in motion through release of orders and instructions. It authorizes the start of production activities by releasing materials, components, tools, fixtures and instruction sheets to the operators.

 Expediting: o

This is the control tool that keeps a close observation on the progress of the work. It is a logical step after dispatching which is called follow up or progress.

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 Inspection: o

It is a major control tool. Though the aspects of quality control are elements of a separate function, it is important to production planning and control, both for the execution of the current plans and its scope for future planning.

 Evaluation: o

This stage is crucial to the improvement of production efficiency. A thorough analysis of all the factors influencing the production planning and control helps to identify the weak spots and the corrective actions with respect to pre planning and planning will be effected by a feedback.

. Explain the principles of production planning and control.  Type of production determines the kind of production planning and control system needed.  Number of parts involved in the product affects expenses of operating production planning and control department.  Complexity of production planning control functions varies with the number of assemblies involved.  Time is a common denominator for all scheduling activities.  Size of the plant has relatively little to do with the type of the production planning control system needed.  Production planning control permits “Management by Exception”.  Cost control should be a by product of the production planning and control function.  The highest efficiency in production is obtained by manufacturing the required quantity of the product, at the required time by the best and cheapest method. Production planning and control is a tool to coordinate all manufacturing activities in a production system.

. Explain the steps or process in production planning and control. The steps or process in production planning and control are  Routing: o

Routing determines in advance what will be done on product part as well as where and how it will be done. It establishes the paths sequence of operations. It gives us the list of operations. It gives us the list of operations required to manufacturer each item.

 Routing process: o

The article is analyzed to find out which parts or components can be made or bought.

The article is analyzed to find out what materials are needed.

The manufacturing operations and their sequence will be determined.

The quantity to be manufactured in any one lot or order will be found out.

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Production control forms e.g.: production order, route sheets, job cards, inspection cards, tool tickets etc., will be prepared.

 Scheduling: o

Involves fixing priorities for each job and determining the starting and finishing time for each operation, the starting and finishing dates for each part.

 Objectives of scheduling: o

Ensure maximum utilization of the plant at minimum cost.

Ensure that requirement of power and its distribution.

Possess up to date information regarding availability of materials expected date of delivery.

 Dispatching: o

The previous two steps, namely – routing and scheduling represents the planning activities. 

The real production starts when permission is granted to commence the operations. The dispatching function involves the actual granting of permission to proceed according to plans already laid down.



In dispatching, order are issued in term of their priority a determined in scheduling and work is assigned to operations.

The dispatch section of the production planning and control department is responsible for the following. o

Checking the availability of materials and then taking appropriate action to have it transferred from the man stores to the point at which it is first needed.

Ensuring that all production aids are ready when required and then having them issued to the manufacturing department.

Informing the process section that production is commencing.

Informing the production supervision when manufacture is to be started.

 Expediting: o Once production has been set in motion. It is necessary to check that is it proceeding according to the plan. o

The follow up function of the production planning and control ensures that production proceeds along expected lines.

o Follow-up might be considered either that this is unnecessary or that it is a admission of inefficiency. o Generally speaking, production is assumed to progress as expected. But there may be a difference between what is expected and what has happened. o The difference may be due t o any of the following reasons: 

Materials may be delivered late or may not be delivered at all.

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Associated departments may have fallen behind in their own production



Strike and acts of god may completely hold up the manufacturing process.



Machine and tool break down be more frequent or more extensive than anticipated.



There may be errors in drawings.

. Explain about the objective s of the plant maintenance. 1. The objective of plant maintenance is to achieve minimum breakdown and to keep the plant in good working conditions at lowest possible cost. 2. Machines and other facilities should be kept in such a condition which permits them to be used at their optimum capacity without any interruption. 3. Maintenance division of the factory ensures the availability of the machine, buildings and services required by other section of the factory for the performance of their function at optimum return on investment. 4. To ensure that the there is no interruption between or in the work flow process.

. Explain about the functions of plant maintenance: 1. Inspect buildings and fixed equipment at such intervals that will insure detection of deterioration and the need for repairs. 2. Keep systematic records of inspection and records. 3. Inspect machinery and equipment in such intervals. 4. Make sure the repairs, renewals or replacements. 5. Making emergency repairs. 6. Suggest the updates, changes and improvements, etc.

. Explain about the types of Maintenance: Maintenance can be classified into the following categories 1. Planned maintenance 2. Predictive maintenance 3. Routine maintenance 4. Breakdown maintenance 5. Preventive maintenance 1. Planned Maintenance: In planned maintenance work can be well planned in advance. It undertakes maintenance of all machineries, equipments, tools in a plant in a systematic manner. Planned maintenance can be undertaken when the operations are running or after the operations are stopped. In general planned maintenance forecast the work contained in future job, determines the best method to be adopted and skills required for its execution.

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Estimate the time, material and cost involved in jobs and programmes the specific time periods on basis of priority.

2. Predictive Maintenance: Predictive maintenance is a new type of preventive maintenance. It involves the use of sensitive instruments to predict trouble. It goes by the principle prevention is better than cure. Some of the sensitive instruments are vibration analysis, amplitude meters, audio gauge, pressure temperature and resistance gauge are used to predict trouble. Protective maintenance is used to measure condition periodically and this enables maintenance people determine the need for and time for over all.

Maintenance system

Planned Maintenance

Unplanned maintenance

Preventive maintenance Corrective maintenance

Running Maintenance

Shutdown maintenance

Breakdown maintenance

Emergencey maintenance

Shutdown maintenance

3. Routine Maintenance: Routine maintenance can be also called as scheduled maintenance. This includes activities such as periodic inspection, cleaning, lubrication and repairs of production equipments after their service life. Routine maintenance can also be classified as a) Running maintenance

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b) Shutdown maintenance a) Running maintenance: Here the maintenance work carried out while the equipment is in the operating condition. Eg. Greasing, lubrication, the bearings cleaning the dust accumulated in the machinery, etc. b) Shutdown maintenance: Here the maintenance work is carried out only when the machine is out of service. Eg. In sugar manufacturing industries, the maintenance will be done only when the machines are shutdown due to non-availability of raw material during some seasons.

4. Breakdown or corrective maintenance: The repair work undertaken after the failure of machine or equipment. Eg. An electric motor will not start; a belt is broken, etc. The replacement of the torn belt in case of breakdown maintenance, we call the technicians to correct the problem. It includes, 1. Failure of lubrication 2. Minor faults 3. Sounds, heating 4. Failure to replace worn out parts 5. Neglected cooling systems

Preventive maintenance: . Definition preventive maintenance. Preventive maintenance consists of routine actions taken in a planned manner to prevent breakdowns. Lubrication and inspection are the two constituents of preventive maintenance. Lubrication ensures long and safe working of the equipment without mishaps.

Preventive maintenance activities

Direct activities

Indirect activities

1) Cleaning of the equipment 1) Condition monitoring 2) Lubrication to prevent water 2) Failure statistics 3) Programmed replacement

3) Adjustment to limit wear

. Explain about the functions and forms of preventive maintenance.

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The functions of the preventive maintenance is sub-divided as i)

Preventive maintenance of production department

ii)

Preventive maintenance of plant services

Forms of preventive maintenance: a) Time based preventive maintenance: It refers to conducting maintenance at regular intervals. b) Eg. Every two months, etc. c) Work based preventive maintenance: Maintenance performed after a set number of operating hours of volume of work produced. d) Opportunity based preventive maintenance e) Condition based preventive maintenance

. Explain about the objectives and limitations of preventive maintenance: 1. To minimize the possibility of unanticipated production interruptions by locating or uncovering any condition which may lead to it. 2. To make plant equipment and machines always available and ready for use. 3. To maintain the value of the equipment and machinery by conducting periodic inspection repairs, over hauling, etc. 4. To reduce the work content of maintenance jobs 5. To ensure safety of life and limbs of the workmen. 6. It may appear to be expensive. 7. But it is highly beneficial 8. The data for preventive maintenance will have to be built up gradually and the system should be refined depending on the data collected.

Scheduling: -

Scheduling may be called as the time phase of loading

Scheduling determines the programme for the operations.

In scheduling, order of sequence of each operation and their starting time and finished time is decided so the required materials, machines etc may be kept ready as personnel schedule.

Scheduling is the process of prescribing ‘when’ each operation in a production process is to be executed.

In other words it involves designing the timetable of manufacturing activities indicating the time required for the production of units at each stage.

Definition: In the words of Kimball & Kimball “Scheduling is the determination of the time that should be required to perform each operation and also the time necessary to perform the entire series as routed making allowance for all factors concerned”

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Scheduling depends upon a number of factors ex. Routing, the method of production, quantity of production, transportation of raw materials, production capacity, probable date of delivery specified by customers etc.

SCHEDULING Routing and Scheduling can be easily understood by the example on Railways: A railway map shows the route for passengers that the trains follow and the stations on that route. This is what is known as ‘Routing’. Similarly, railway timetable gives the exact timing at which all the trains start and the time they take to reach at various stations and how long they halt there. It is known as ‘scheduling’.

Information required to draw production schedules: a) Date of delivery as mentioned by customers in his order b) Past production records c) Production capacity of the plant and d) Availability of equipment, materials and specialized skills.

Procedure for Scheduling i)

Preparation of job schedules which specify the time required for each operation

ii)

Assign ‘start’ and ‘finish’ dates to each of the operation on the job schedule.

iii)

Post each schedule into the load chart

iv)

Setting delivery date for an item

Kinds of Scheduling: There are three types of Scheduling: a) Master Schedule b) Operation Schedule c) Detailed operation schedule

Master Schedule shows the dates on which production items are to be completed. It is a weekly or monthly break-up of production requirements for each product. Whenever any order is received, it is accommodated first in the master schedule considering the availability of the machines and labour. Thus, it helps production manager for advance planning and to have check over the production rate and efficiency.

After preparing the master schedule, Operation schedule is prepared which assigns definite time period to a particular operation.

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Detailed operation scheduling is still an elaborate operation schedule breaking the operation into various processes and specifying the time required for each operation.

Techniques used in scheduling: The scheduling uses various techniques like Gantt chart, CPM & PERT techniques etc Maintenance scheduling . Definition Maintenance scheduling: Scheduling refers to the timings and sequence of operations. It is an important segment of production planning and control activity (about which we have studied already). Scheduling of a maintenance job basically deals with answering the following two questions: 1) Who should do the job 2) When the job is to be done or started.

. Explain about the reasons for scheduling of maintenance: The scheduling of the plant maintenance is desirable for the following reasons. 1) Scheduling facilities the optimum use of the highly paid maintenance staff. Proper scheduling reduces the illness of maintenance crew. 2) The plant maintenance equipment can be utilized effectively through scheduling their use. 3) It eliminated undue interruptions in the production flow. 4) Maintenance works scheduled during night, week-end day, holiday, etc can ensure smooth flow of production operations. 5) Proper scheduling of maintenance services eliminates the chances of abrupt breakdowns and equipment failure. 6) It is sometimes necessary to maintain the sequence in providing the plant maintenance service. 7) Eg. Clearance of clogged pipes and waste disposal, scheduling of activities in the proper sequence in the maintenance schedule.

. Explain about Information required for scheduling: The schedule must obtain the knowledge about the following aspects. i.

Man power availability

ii.

Man hour backlog on current and unfinished jobs

iii.

Availability of the equipment or area where the work has to be performed.

iv.

Availability of special tool, special equipments, jobs and fixtures, special facilities and handling or lifting equipments and cranes.

Availability of external manpower and their capabilities.

vi.

Date of commencement and expected date of completion of the job.

vii.

Past schedules and charts for reference.

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. Explain about Principles of scheduling: a)

Scheduling should be based upon pre-planned methods and scientifically determined time standards

Scheduling system should be clear, precise and simple

Maintenance schedules should have the concurrence of production staff

Scheduling should be prepared in two stages, master schedule and production schedule.

The major schedules are prepared much in advance to intimate all the departments concerned and to meet the production targets. The production schedules are maintained to record day –to-day events.

Schedule should be kept flexible by incorporating sufficient non-priority jobs.

ROUTING ROUTING (PROCESS PLANNING) : -

Routing means determining the selection of path route through which raw material should follow to get transferred into finished product.

Routing will also provide the sequence of operations to be adopted while manufacturing

In other words, routing means determination of most advantageous path to be followed from department to department and from machine to machine till raw material gets its final shape.

Thus routing determines, what work must be done, where and how the work has to be done.

Definition: Kimball and Kimball defines routing as “the selection of paths or route over which each piece is to travel is being transformed from raw material into finished product”

The practice of routing rose out of the demand for a more systematic method to carry out the work.

The objective of routing is to determine the best and cheapest sequence of operations and to ensure that the sequence is followed

Routing Function: The routing function includes -

fixation of path to travel, giving due consideration to appropriate layout

Temporary storage locations for raw materials, components, semi finished goods etc

Breaking down operations into small jobs

Deciding set up time and process time for each operation.

Routing Procedure

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The finished products are analysed from manufacturing view in order to decide how many components can be made in the plant and how many can be purchased from outside ( Make Or Buy decision)

ii)

Parts list and Bill of Materials are prepared showing the name of the part, quantity, material specifications, amount of material required etc. The necessary materials can thus be preserved. Machine’s capacities, their characteristics and operations that must be performed at each

iii)

stage of manufacturing are established. Then they are listed in proper sequence on the Operations Sheet and Route Sheet. Route Sheet -

A Route sheet is a document providing information and instructions for converting the raw materials into finished products.

A route sheet contains complete description of the item to be manufactured, the details of each operation required in the manufacturing process, the set up time and standard operation time etc.

The route sheet also specifies the machines to be used and the possible alternatives also.

It also indicates stage wise inspection to be performed

It specifies tools requires for operation

It gives detailed drawings of parts, sub parts and final assemblies

It contains specifications of raw materials to be used

It also gives cutting speed, depth of cut etc

More precise specifications of manufacturing methods are given in the Operations Sheet which tells in greater detail about how the operation has to be accomplished.

Advantages of Routing -

Efficient use of available resources

Reduction in manufacturing cost

Improvement in quantity and quality of the output

Provides a basis of scheduling and loading

Routing and Scheduling can be easily understood by the example on Railways: A railway map shows the route for passengers that the trains follow and the stations on that route. This is what is known as ‘Routing’. Similarly, railway timetable gives the exact timing at which all the trains start and the time they take to reach at various stations and how long they halt there. It is known as ‘scheduling’.

Information required to draw production schedules: e) Date of delivery as mentioned by customers in his order f)

Past production records

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g) Production capacity of the plant and h) Availability of equipment, materials and specialized skills.

Procedure for Scheduling v)

Preparation of job schedules which specify the time required for each operation

vi)

Assign ‘start’ and ‘finish’ dates to each of the operation on the job schedule.

vii)

Post each schedule into the load chart

viii)

Setting delivery date for an item

Kinds of Scheduling: There are three types of Scheduling: a) Master Schedule b) Operation Schedule c) Detailed operation schedule

Detailed operation scheduling is still an elaborate operation schedule breaking the operation into various processes and specifying the time required for each operation.

Techniques used in scheduling: The scheduling uses various techniques like Gantt chart, CPM & PERT techniques etc

7) Dispatching: This is the execution phase of planning. Dispatching is the process of setting production activities in motion through release of orders and instructions that are already planned under routing and scheduling. Definition: Dispatching is “release of orders and instructions for the starting of production or any item in accordance with the route sheet and schedule charts” Functions of Dispatching i)

To check the immediate availability of materials

ii)

To ensure that all production and inspection aids are available

iii)

To assign different work to particular machines, work centers and men

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To issue required material from stores

Release necessary work order, time tickets etc to authorize timely start of operation

vi)

To record start and finish time of each job on each machine or by each manufacturer

vii)

To obtain the appropriate drawing, specification or material list

viii)

Processing information or inspection schedule

ix)

To return the acquired materials and other aids to the correct location

Maintain all production records

xi)

To issue inspection orders

Forms used in Dispatching

a) Work Order: While starting the production, work orders are issued to departments to commence the desired lot of products. The work order consist of the following i)

Name of the product: code number, quantity to be produced

ii)

Description of various operations: machine to be used, special instructions in operating the machine

iii)

Departments involved

b) Time cards: Each operator is supplied with this card in which he mentions the time taken by each operation c) Inspection tickets: These tickets are sent to the inspection departments which shows the quality of work required and stages at which inspection is to be carried out. Afterwards these are returned with the inspection report and the quantity rejected. d) Move tickets: These tickets are used for authorizing over the movement of the material from store to shops and from operation to operation. e) Tools and Equipment ticket: It authorizes the tool department that new tools, gauges etc and other equipments may be issued to shops. f)

Material Requisition form: This form is used to request for materials from stores.

8) Expediting/Follow up/Progressing: After dispatching, it is necessary to have a close observation on the progress of the work. It is called as follow up or progress. The function of follow up section is to report daily the progress of work in each shop in a prescribed proforma and to investigate the causes of deviation from the planned performance. This section sees that production is being performed as personnel schedule. It also rectifies errors. Progressing function can be divided into three parts (i.e) follow up of materials, follow up of workin-progress and follow up of assembly.

Functions of Expediting:

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Follow up of materials: Material should reach to shops in required time so that production could be started as per the schedule.

ii)

Follow up of Work in progress: For this follow up section sees that a particular product is passing through all its operations from raw materials to final shape as personnel schedule

iii)

Follow up of Assembly: Assembly shops are responsible for assembling the various components. Follow up section sees that all the parts should remain ready for assembling purpose in actual quantities at required time.

9) Inspection: it is a major control tool. It is carried out for confirming that quality is as personnel predetermined standard. During inspection, defective parts are rejected so that only products of good quality should reach to the customers. To reduce rejections, inspection is done at various stages starting from raw materials to final shape (called quality control). To produce products of good quality, machines and tools are also inspected.

10) Evaluation: This stage is crucial to the improvement of productive efficiency. A thorough analysis of all the factors influencing the PPC helps to identify the weak spots. Then the corrective actions with respect to pre planning and planning will be effected by a feedback. The success of this step depends on the communication, data and information gathering and analysis.

Information Requirements of PPC

* The effectiveness of PPC depends to a greater extent upon the accuracy of information it gets from other departments *The following information is vital to the success of PPC function in any organization. Information

Sources of Information

Department

1) Production Programme:

Sales orders or any order accepted

Marketing

- Quantity to be produced,

by the marketing department

- Delivery date, -Variety, models, features etc 2) Quality Standards:

Engineering, design who translates

Engineering, purchase and

Specifications and tolerance

customers needs into specifications

stores

3) Production Materials:

Drawing and Bill of Material (BOM),

PPC / prodcution

- Type of materials,

Material stock cards

- Quality and quantity, - Procurement lead time, - Stock position

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4) Tool

Standard and special tools

PPC/ Prodcution

5) Operation Details:

Process sheets,

Industrial

- Sequence of operations,

Load charts,

engineering/production

- Process capability of machines

Process capability studies

and equipments, - Process parameters 6) Standard time for operation

Work measurement data

PPC/Production

Machine load charts

Production

and set up time 7) Starting and finishing date

Schedule charts 8) Progress of work (status of

Production reports

Production

work) Re-engineering: . Definition Re-engineering: Michael Hammer defines re-engineering as the fundamental rethinking and radical redesign of the business process to achieve dramatic improvement in critical contemporary measures of performance such as cost, quality, service and speed. . Write about the characteristics of Re-engineering: i) It is a process: Re-engineering offers process based approach to strategy rather than market based approach. The tool concentrates on process activities that convert inputs to output for the customer. ii) It is Redesign Governed: It will not believe in minor improvement through modification. It is going to strike the very few aspect of design. iii) It is Radical: The entire form of the process management change during the re-engineering and this process may not resemble the old one. iv) It is dramatic: The tool is not most useful for marginal improvement of business programme. v) It is customer oriented: The entire process of re-engineering revolves around how to give the customers what they want at the right time and in most efficient manner. . Explain about the needs of Re-engineering: There is universal need to subject all the process of re-engineering. At the macro level, because of the environmental situations and globalization of the economies, the following factors become crucial for survival and development of economies. a. Crisis of energy

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b. Crisis of conflict c.

Crisis of confusion

d. Crisis of stress e. Crisis of culture At the organization level or micro the factors the re-engineering that process are 1. Intense competition 2. Environmental demands 3. Technological advancement 4. Sinking profitability and market share 5. Declining share prices . Explain about the process of re-engineering: The following procedural can be followed for re-engineering process: 1) Developing a process vision and determining process objectives 2) Defining process to be re-engineered 3) Understanding the current process and critically examining the current process for all aspects 4) Designing the prototype and implementing the new process 5) Stabilization of the new process . Explain about the benefits of re-engineering: 1. Improvements in entire organization as a whole. 2. Better systems and management improvement in the areas or production and service 3. Taxes advantages of improved technology 4. Improved application of industrial engineering in the areas of a. Organization strategy b. Management functions c.

Plant utilization

d. Quality improvement e. Confidence in competition f.

Creativity in innovation

g. Improvement in customer satisfaction

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