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    Master of Business Administration

    Semester II (November / Winter 2011)

    MB0044 Production & Operations Management

    SET I & II

    LEARNING CENTRE CODE: ____________________________

    STUDENT NAME: VINAYAK M.SHETYE_ _______

    RAGISTRATION (ROLL) NO. :___________________________

    SUBMISSION DATE: __________________________________

    TOTAL PAGES: _________ _ 23__________ _______ _ __

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    Master of Business Administration

    Semester II (November / Winter 2011)

    MB0044 Production & Operations Management

    SET I

    Q1. Explain in brief the origins of Just In Time. Explain the different types of wastes that can beeliminated using JIT.

    Answer:

    Just in time (JIT) is a production strategy that strives to improve a businessreturn on investment byreducing in-process inventory and associated carrying costs. Just-in-time production method is also called

    the Toyota Production System. To meet JIT objectives, the process relies on signals orKanban betweendifferent points in the process, which tell production when to make the next part. Kanban are usually 'tickets'but can be simple visual signals, such as the presence or absence of a part on a shelf. Implementedcorrectly, JIT focuses on continuous improvement and can improve a manufacturing organization'sreturn oninvestment, quality, and efficiency. To achieve continuous improvement key areas of focus could be flow,employee involvement and quality.Quick notice that stock depletion requires personnel to order new stock is critical to the inventory reductionat the center of JIT. This saves warehouse space and costs. However, the complete mechanism for makingthis work is often misunderstood.For instance, its effective application cannot be independent of other key components of aleanmanufacturing system or it can "...end up with the opposite of the desired result."[1] In recent yearsmanufacturers have continued to try to hone forecasting methods such as applying a trailing 13 weekaverage as a better predictor for JIT planning; however, some research demonstrates that basing JIT on thepresumption of stability is inherently flawed.

    Over production: Over production is to manufacture products before it is actually needed. If the demand forthat product decreases, the extra parts or products produced may not be useful or needed. Also over

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    http://en.wikipedia.org/wiki/Return_on_investmenthttp://en.wikipedia.org/wiki/Inventoryhttp://en.wikipedia.org/wiki/Carrying_costhttp://en.wikipedia.org/wiki/Toyota_Production_Systemhttp://en.wikipedia.org/wiki/Kanbanhttp://en.wikipedia.org/wiki/Return_on_investmenthttp://en.wikipedia.org/wiki/Return_on_investmenthttp://en.wikipedia.org/wiki/Lean_manufacturinghttp://en.wikipedia.org/wiki/Lean_manufacturinghttp://en.wikipedia.org/wiki/Just_in_time_(business)#cite_note-0http://en.wikipedia.org/wiki/Return_on_investmenthttp://en.wikipedia.org/wiki/Inventoryhttp://en.wikipedia.org/wiki/Carrying_costhttp://en.wikipedia.org/wiki/Toyota_Production_Systemhttp://en.wikipedia.org/wiki/Kanbanhttp://en.wikipedia.org/wiki/Return_on_investmenthttp://en.wikipedia.org/wiki/Return_on_investmenthttp://en.wikipedia.org/wiki/Lean_manufacturinghttp://en.wikipedia.org/wiki/Lean_manufacturinghttp://en.wikipedia.org/wiki/Just_in_time_(business)#cite_note-0
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    production results in high storage costs and is also difficult to detect defects. So, over production isconsidered a waste.

    2. Inventory: Excess procurement or production builds up stock of materials which are not immediatelyused, thus locking space and funds carrying heavy costs. Illustrates the inventories at different levels of anorganisation Supplier distribution, Production, and Customer distribution.

    Inventories in an organization

    3. Waiting time: Waste of time happen when goods are not moving or being processed. The operator, themachine or the part will either be not working or be worked upon. The duration of waiting is can be said to beunproductive and may create more serious consequences.

    4. Movement:Any unnecessary movement is a waste of energy; it causes blockages, disrupting movementsand delaying the flow of other items creating delays.

    5. Effort: The people, who work, do not make a study as to how the products on which they are making areutilised and do not realise the purpose for which they are made. This lack of education will lead to waste ofresources. Finally, they end up in shortage of resources when needed.

    6. Defective products: The defective products lead to a tremendous loss to the company. This is becausethey use up the same equipments, workmen and the time that would be used to make good products. Thusdefective products use up resources and result in losses.

    7. Over Processing: Some steps like unnecessary processing or production do not add value to the finaloutput. As a result, it is waste of all the inputs that go into the process.

    Since these wastes have to be eliminated, a thorough study of how they occur and what steps would resultin their elimination is of paramount importance. The next section focuses on some of them.

    Q2.What is Value Engineering or Value Analysis? Elucidate five companies which have incorporatedVE with brief explanation.

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    Answer:

    Value engineering (VE) is a systematic method to improve the "value" of goods or products and services byusing an examination of function. Value, as defined, is the ratio of function tocost. Value can therefore beincreased by either improving the function or reducing the cost. It is a primary tenet of value engineering thatbasic functions be preserved and not be reduced as a consequence of pursuing value improvements.

    In the United States, value engineering is specifically spelled out in Public Law 104-106, which states Eachexecutive agency shall establish and maintain cost-effective value engineering procedures and processes.Value engineering is sometimes taught within theproject management orindustrial engineering body ofknowledge as a technique in which the value of a systems outputs is optimized by crafting a mix ofperformance (function) and costs. In most cases this practice identifies and removes unnecessaryexpenditures, thereby increasing the value for the manufacturer and/or their customers.VE follows a structured thought process that is based exclusively on "function", i.e. what something "does"not what it is. For example a screw driver that is being used to stir a can of paint has a "function" of mixingthe contents of paint can and not the original connotation of securing a screw into a screw-hole. In valueengineering "functions" are always described in a two word abridgment consisting of an active verb andmeasurable noun (what is being done - the verb - and what it is being done to - the noun) and to do so in themost non-prescriptive way possible. In the screw driver and can of paint example, the most basic functionwould be "blend liquid" which is less prescriptive than "stir paint" which can be seen to limit the action (bystirring) and to limit the application (only considers paint.) This is the basis of what value engineering refersto as "function analysis. Value engineering uses rational logic (a unique "how" - "why" questioning

    technique) and the analysis of function to identify relationships that increase value. It is considered aquantitative method similar to the scientific method, which focuses on hypothesis-conclusion approaches totest relationships, and operations research, which uses model building to identify predictive relationships.Value engineering is also referred to as "value management" or "value methodology" (VM), and "valueanalysis" (VA).[4]VE is above all a structured problem solving process based on function analysisunderstanding something with such clarity that it can be described in two words, the active verb andmeasurable noun abridgement. For example, the function of a pencil is to "make marks". This then facilitatesconsidering what else can make marks. From a spray can, lipstick, a diamond on glass to a stick in thesand, one can then clearly decide upon which alternative solution is most appropriate.

    Case 2

    In implementation of VA, Ashok Leyland changed gear material from phosphorbronze to a less expensive cast iron and eliminated frequent field complaint of gear seizure in trucks.

    Case 3

    T.V. Sundaram Iyenger & Sons (TVS) Limited is one of the largest automobile distributioncompanies in India. During the mid of 1940s to 1960s, TVS based in Madurai was ranked as the best bustransportation system in India. It could manage to run the fleets for about 96% of the time.TVS used the VE approach to restore the mobility of buses that had broken down. They stocked theirgarage with some critical assemblies of a bus. Whenever, a part or an assembly failed of a bus, theyreplaced it immediately with a new one, thus restoring mobility within a couple of hours.When compared to the traditional method, this approach has gained much more benefits to the company. Ithelped to save time, reduce cost, efficient, quicker, and competitive.Case 4

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    http://en.wikipedia.org/wiki/Costhttp://en.wikipedia.org/wiki/Costhttp://en.wikipedia.org/wiki/Project_managementhttp://en.wikipedia.org/wiki/Industrial_engineeringhttp://en.wikipedia.org/wiki/Optimization_(mathematics)http://en.wikipedia.org/wiki/Value_engineering#cite_note-3http://en.wikipedia.org/wiki/Value_engineering#cite_note-3http://en.wikipedia.org/wiki/Costhttp://en.wikipedia.org/wiki/Costhttp://en.wikipedia.org/wiki/Project_managementhttp://en.wikipedia.org/wiki/Industrial_engineeringhttp://en.wikipedia.org/wiki/Optimization_(mathematics)http://en.wikipedia.org/wiki/Value_engineering#cite_note-3
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    The Six Sigma quality is deployed in Motorola to enhance value tocustomers.

    Case 5

    Sundaram Fastener incorporated Zero defect approach to enhance productquality. This approach also enhanced to achieve zero deviation from delivery schedules

    Case 6

    In order to provide customers with exceptional handling, fuel economy,majestic style and easy maintenance, Maruti Zen employed the Value-for-Money approach.

    Case 7

    Titan Watches introduced new designs by adopting a strategy of innovation.

    Q3.Explain different types of Quantitative models. Differentiate between work study and motionstudy.

    Answer:

    Types of quantitative models

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    1. Linear Programming: Linear programming technique is often used for optimising a given objective like:profit or revenue maximisation, or cost outgo minimisation. Distribution of the resources is the critical issuewhen there are limited resources and they have to meet competing demands..2. Transportation Model: Transportation model is concerned with goods from manufacturing centers orwarehouses which have to be supplied to depots or retail outlets. The demand and supply position of theplaces where they are required or produced and the cost of transportation are considered in the model. We

    use this model to economise.

    3.Assignment Model:Allocating jobs or persons to machines, awarding different projects to contractors isdone so that maximum returns occur or less expense are incurred. Hence, calls for the use of this model.

    4. Inventory Control Model: Inventory control model considers the:

    Frequency of placing orders

    Quantities per order considering the cost of placing an order

    Number of pieces that are to be kept in reserve

    Rate of consumption

    Lead time required for the supplier

    Costs involved in storage

    We have different models which give solutions to optimisation depending upon the probabilities of patternsof consumption and supply.

    5. Waiting Line Models: Queues are formed when the rate of service is at a variance with the rate of arrival.They are formed when the rate of production is less at particular points compared to the previous ones.Sometimes we see multiple service points and a single queue are formed for feeding them. Number of itemswhich includes the following is studied with some special techniques.

    People to be serviced

    Rate of service

    Type of queue discipline that is intended to be followed

    Policy of priority

    Tolerable amounts of waiting

    Others

    6. Simulation Models: Simulation models are used when we will not be able to formulate mathematicalmodels. So, we develop a model which resembles a real life situation. Based on this pattern, we predict andplan our procurement, production, delivery and other actions.

    7. PERT (Project Evaluation and Review Technique) and CPM (Critical Path Method) Models: Whenprojects are undertaken with a number of activities, some happens in sequence, with gaps of weeks ormonths and some happens simultaneously. It is important to estimate the time required for completion of theproject. A lot of coordination is needed while supplying the resources. It is also equally important to identifythe bottlenecks and smoothen resources so that time schedules are maintained. Delayed completion mayentail penalties. In this model, we adopt special methods to make the system efficient.

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    Work practices are ways of doing any work which has been in vogue and found to be useful. These aredetermined by motion and time study conducted over years and found to be efficient and practiced. Anymethod improvement that is conducted may be adopted to change the practice, but only after trials theyhave shown that, they increase the comfort of the worker and get the job done faster.

    Work study: We say that work study is being conducted when analysis of work methods is conductedduring the period when a job is done on a machine or equipment. The study helps in designing the optimumwork method and standardisation of the work method. This study enables the methods engineer to searchfor better methods for higher utilisation of man and machine and accomplishment of higher productivity. Thestudy gives an opportunity to the workmen to learn the process of study thus making them able to offersuggestions for improved methods. This encourages workmen participation and they can be permitted tomake changes and report the advantages that can be derived from those. This course is in alignment withthe principle of continuous improvement and helps the organisation in the long run. Reward systems may beimplemented for recognising contributions from the workmen.Work study comprises of work measurement and method study. Work measurement focuses on the time

    element of work, while method study focuses on the methods deployed and development of better methods.Work measurement: Work measurement can be defined as a systematic application of various techniquesthat are designed to establish the content of work involved in performing a specific task.The task is performed by a qualified worker. With this we arrive at the standard time for a task. This will beused to fix performance rating of other workers. It forms the basis of incentives, promotion, and training forworkmen and assessment of capacity for the plant. Hence, training the workers is very important.ILO defines a qualified worker as one who is accepted as having the necessary physical attributes,possessing the required intelligence and education, and having acquired the necessary skill and knowledgeto carry out the work in hand to satisfactory standards of safety, quantity, and quality.Training workers

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    Methods study: Method study focus is on studying the method currently being used and developing a newmethod of performing the task in a better way. OperationFlow charts, Motion Charts, Flow Process charts, which are the elements of the task, are studied to find thepurpose of each activity, the sequence in which they are done, and the effect of these on the work. Thestudy may help in changing some of them and even eliminate some of them to effect improvements. Thenew method should result in saving of time, reduced motions, and simpler activities.Machine worker interaction: Machine worker interaction study consists of studying the amount of time an

    operator spends on the machine before it is activated and the time he has nothing to do. In many modernmanufacturing centers, where we have automated systems of manufacturing, the role of the worker is limitedto, observing various screens, dials, indicator lamps to see that the process is going on smoothly. In somecases, his job may be to load the jobs on the machines and check the settings. What is of concern to us, isto see whether the operations permit for enabling an operator to look after two or three machines, withoutaffecting of the performance of the machine or man.

    Q4. What is Rapid Prototyping? Explain the difference between Automated flow line and Automatedassembly line with examples.

    Answer: Rapid Prototyping (RP) can be defined as a group of techniques used to quickly fabricate a scalemodel of a part or assembly using three-dimensional computer aided design (CAD) data. What is commonlyconsidered to be the first RP technique, Stereo lithography, was developed by 3D Systems of Valencia, CA,USA. The company was founded in 1986, and since then, a number of different RP techniques have

    become available.Rapid Prototyping has also been referred to as solid free-form manufacturing; computer automatedmanufacturing, and layered manufacturing. RP has obvious use as a vehicle for visualization. In addition,RP models can be used for testing, such as when an airfoil shape is put into a wind tunnel. RP models canbe used to create male models for tooling, such as silicone rubber molds and investment casts. In somecases, the RP part can be the final part, but typically the RP material is not strong or accurate enough.When the RP material is suitable, highly convoluted shapes (including parts nested within parts) can beproduced because of the nature of RP.There is a multitude of experimental RP methodologies either in development or used by small groups ofindividuals. This section will focus on RP techniques that are currently commercially available,including Stereo lithography (SLA), Selective Laser Sintering (SLS), Laminated ObjectManufacturing (LOM), Fused Deposition Modeling (FDM), Solid Ground Curing (SGC), and Ink Jet printingtechniques.

    Automated flow lines: When several automated machines are linked by a transfer system which moves theparts by using handling machines which are also automated, we have an automated flow line. Aftercompleting an operation on a machine, the semi finished parts are moved to the next machine in thesequence determined by the process requirements a flow line is established. The parts at various stagesfrom raw material to ready for fitment or assembly are processed continuously to attain the required shapes

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    or acquire special properties to enable them to perform desired functions. The materials need to be moved,held, rotated, lifted, positioned etc. for completing different operations.Sometimes, a few of the operations can be done on a single machine with a number of attachments. Theyare moved further to other machines for performing further operations. Human intervention may be neededto verify that the operations are taking place according to standards. When these can be achieved with thehelp of automation and the processes are conducted with self regulation, we will have automated flow linesestablished. One important consideration is to balance times that different machines take to complete the

    operations assigned to them. It is necessary to design the machines in such a way that the operation timesare the same throughout the sequence in the flow of the martial. In fixed automation or hard automation,where one component is manufactured using several operations and machines it is possible to achieve thiscondition or very nearly. We assume that product life cycles are sufficiently stable to invest heavily on theautomated flow lines to achieve reduced cost per unit. The global trends are favouring flexibility in themanufacturing systems. The costs involved in changing the set up of automated flow lines are high. So,automated flow lines are considered only when the product is required to be made in high volumes over arelatively long period. Designers now incorporate flexibility in the machines which will take care of smallchanges in dimensions by making adjustments or minor changes in the existing machine or layout. Thechange in movements needed can be achieved by programming the machines. Provision for extra pallets ortool holders or conveyors is made in the original design to accommodate anticipated changes. The logic tobe followed is to find out whether the reduction in cost per piece justifies the costs of designing,manufacturing and setting up automated flow lines. Group Technology, Cellular Manufacturing along withconventional Product and Process Layouts are still resorted to as they allow flexibility for the productionsystem. With methodologies of JIT and Lean Manufacturing finding importance and relevance in the

    competitive field of manufacturing, many companies have found that well designed flow lines suit theirpurpose well. Flow lines compel engineers to put in place equipments that balance their production rates. Itis not possible to think of inventories (WorkIn Process) in a flow line. Bottlenecks cannot be permitted. By necessity, every bottleneck gets focusedupon and solutions found to ease them. Production managers see every bottleneck as an opportunity tohasten the flow and reduce inventories. However, it is important to note that setting up automated flow lineswill not be suitable for many industries

    Automated Assembly Lines: All equipments needed to make a finished product are laid out in such a wayas to follow the sequence in which the parts or subassemblies are put together and fitted. Usually, a frame,body, base will be the starting point of an assembly. The frame itself consists of a construction made up ofseveral components and would have been assembled or fabricated in a separate bay or plant and broughtto the assembly line. All parts or subassemblies are fitted to enable the product to be in readiness to performthe function it was designed to. This process is called assembly.Methodologies of achieving the final result may vary, but the basic principle is to fit all parts together and

    ensure linkages so that their functions are integrated and give out the desired output. Product Layouts aredesigned so that the assembly tasks are performed in the sequence they are designed. You will note thatthe same task gets repeated at each station continuously. The finished item comes out at the end of the line

    The material goes from station 1 to 5 sequentially. Operation 2 takes longer time, say twice as long. To seethat the flow is kept at the same pace we provide two locations 2a and 2b so that operations 3, 4 an 5 neednot wait. At 5, we may provide more personnel to complete operations. The time taken at any of thelocations should be the same. Otherwise the flow is interrupted. In automated assembly lines the movingpallets move the materials from station to station and moving arms pick up parts, place them at specifiedplaces and fasten them by pressing, riveting, screwing or even welding. Sensors will keep track of theseactivities and move the assemblies to the next stage. An operator will oversee that the assemblies arehappening and there are no stoppages. The main consideration for using automated assembly lines is thatthe volumes justify the huge expenses involved in setting

    Q5.Explain Break Even Analysis and Centre of Gravity methods. Explain Product layout and processlayout with examples.

    Answer: Break Even Analysis refers to the calculation to determine how much product a company must sellin order to break even on that product. It is an effective analysis to measure the impact of different marketingdecisions. It can focus on the product, or incremental changes to the product to determine the potentialoutcomes of marketing tactics. The formula for a break even analysis is:

    Break even point ($) = (Total Fixed Costs + Total Variable Costs).Total Variable Costs = Variable cost per unit x units sold

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    Unit contribution (contribution margin) = Price per unit Variable cost per unit.

    When looking at making a change to the marketing program, one can calculate the incremental break evenvolume, to determine the merits of the change. This determines the required volume needed such

    That there is no effect to the company due to the change.If making changes to fixed costs (changing advertising expenditure etc.):

    Incremental break even volume = change in expenditure / unit contribution.Thus if a company increased its advertising expenditure by $1 million, and its unit contribution for thespecific product is $20, then the company would need to sell an additional 50,000 units to break even on thedecision.If making changes to the unit contribution (change in price, or variable costs):Incremental break even volume = (Old Unit Volume x (Old Unit Contribution New Unit Contribution)) / NewUnit ContributionThus if a company increased its price from $15 to $20, and had variable costs of $10, it is increasing its unitcontribution from $5 to $10, assume also an old unit volume of 1 million. It could therefore reduce its volumeby 500,000 to break even on the decision.When making changes to a specific product, cannibalization of other products may occur. To calculate theeffect of cannibalization, the Break Even Cannibalization rate for a change in a product is:New Product Unit Contribution / Old Product Unit Contribution.New Product is the planned addition to a product line (or change to a product within a product line), OldProduct is the product that loses sales to the new product (or the product line that loses sales). The

    cannibalization rate refers to the percentage of new product that would have gone to the old product; thismust be lower than the break even cannibalization rate in order for the change to be profitable.

    In manufacturing, facility layout consists of configuring the plant site with lines, buildings, major facilities,work areas, aisles, and other pertinent features such as department boundaries. While facility layout forservices may be similar to that for manufacturing, it also may be somewhat differentas is the case withoffices, retailers, and warehouses. Because of its relative permanence, facility layout probably is one of themost crucial elements affecting efficiency. An efficient layout can reduce unnecessary material handling,help to keep costs low, and maintain product flow through the facility.

    Firms in the upper left-hand corner of the product-process matrix have a process structure known as ajumbled flow or a disconnected or intermittent line flow. Upper-left firms generally have a process layout.Firms in the lower right-hand corner of the product-process matrix can have a line or continuous flow. Firmsin the lower-right part of the matrix generally have a product layout. Other types of layouts include fixed-position, combination, cellular, and certain types of service layouts.

    PROCESS LAYOUT

    Process layouts are found primarily in job shops, or firms that produce customized, low-volume products thatmay require different processing requirements and sequences of operations. Process layouts are facilityconfigurations in which operations of a similar nature or function are grouped together. As such, theyoccasionally are referred to as functional layouts. Their purpose is to process goods or provide services thatinvolve a variety of processing requirements. A manufacturing example would be a machine shop. Amachine shop generally has separate departments where general-purpose machines are grouped togetherby function (e.g., milling, grinding, drilling, hydraulic presses, and lathes). Therefore, facilities that areconfigured according to individual functions or processes have a process layout. This type of layout givesthe firm the flexibility needed to handle a variety of routes and process requirements. Services that utilizeprocess layouts include hospitals, banks, auto repair, libraries, and universities.

    Improving process layouts involves the minimization of transportation cost, distance, or time. To accomplishthis some firms use what is known as a Muther grid, where subjective information is summarized on a griddisplaying various combinations of department, work group, or machine pairs. Each combination (pair),represented by an intersection on the grid, is assigned a letter indicating the importance of the closeness ofthe two (A = absolutely necessary; E = very important; I = important; O = ordinary importance; U =unimportant; X = undesirable). Importance generally is based on the shared use of facilities, equipment,workers or records, work flow, communication requirements, or safety requirements. The departments andother elements are then assigned to clusters in order of importance.

    Advantages of process layouts include:

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    Flexibility. The firm has the ability to handle a variety of processing requirements.Cost. Sometimes, the general-purpose equipment utilized may be less costly to purchase and less costlyand easier to maintain than specialized equipment.Motivation. Employees in this type of layout will probably be able to perform a variety of tasks on multiplemachines, as opposed to the boredom of performing a repetitive task on an assembly line. A process layoutalso allows the employer to use some type of individual incentive system.System protection. Since there are multiple machines available, process layouts are not particularly

    vulnerable to equipment failures.Disadvantages of process layouts include:

    Utilization. Equipment utilization rates in process layout are frequently very low, because machine usage isdependent upon a variety of output requirements. Cost. If batch processing is used, in-process inventorycosts could be high. Lower volume means higher per-unit costs. More specialized attention is necessary forboth products and customers. Setups are more frequent, hence higher setup costs. Material handling isslower and more inefficient. The span of supervision is small due to job complexities (routing, setups, etc.),so supervisory costs are higher. Additionally, in this type of layout accounting, inventory control, andpurchasing usually are highly involved.Confusion. Constantly changing schedules and routings make juggling process requirements more difficult.

    PRODUCT LAYOUT

    Product layouts are found in flow shops (repetitive assembly and process or continuous flow industries).

    Flow shops produce high-volume, highly standardized products that require highly standardized, repetitiveprocesses. In a product layout, resources are arranged sequentially, based on the routing of the products. Intheory, this sequential layout allows the entire process to be laid out in a straight line, which at times may betotally dedicated to the production of only one product or product version. The flow of the line can then besubdivided so that labor and equipment are utilized smoothly throughout the operation.

    Two types of lines are used in product layouts: paced and unpaced. Paced lines can use some sort ofconveyor that moves output along at a continuous rate so that workers can perform operations on theproduct as it goes by. For longer operating times, the worker may have to walk alongside the work as itmoves until he or she is finished and can walk back to the workstation to begin working on another part (thisessentially is how automobile manufacturing works).

    On an unpaced line, workers build up queues between workstations to allow a variable work pace. However,this type of line does not work well with large, bulky products because too much storage space may berequired. Also, it is difficult to balance an extreme variety of output rates without significant idle time. A

    technique known as assembly-line balancing can be used to group the individual tasks performed intoworkstations so that there will be a reasonable balance of work among the workstations.

    Product layout efficiency is often enhanced through the use of line balancing. Line balancing is theassignment of tasks to workstations in such a way that workstations have approximately equal timerequirements. This minimizes the amount of time that some workstations are idle, due to waiting on partsfrom an upstream process or to avoid building up an inventory queue in front of a downstream process.

    Advantages of product layouts include:

    Output. Product layouts can generate a large volume of products in a short time.Cost. Unit cost is low as a result of the high volume. Labor specialization results in reduced training timeand cost. A wider span of supervision also reduces labor costs. Accounting, purchasing, and inventorycontrol are routine. Because routing is fixed, less attention is required.Utilization. There is a high degree of labor and equipment utilization.

    Disadvantages of product layouts include:

    Motivation. The systems inherent division of labor can result in dull, repetitive jobs that can prove to bequite stressful. Also, assembly-line layouts make it very hard to administer individual incentive plans.Flexibility. Product layouts are inflexible and cannot easily respond to required system changesespeciallychanges in product or process design.System protection. The system is at risk from equipment breakdown, absenteeism, and downtime due topreventive maintenance.

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    Product Layout Example: Let consider an example of Work allocation at an airport

    Activity Average time, seconds

    1. Deplane 20

    2. Immigration 16

    3. Baggage claim 40

    4. Customs 245. Check baggage 18

    6. Board domestic flight 15

    Q6. Explain Jurans Quality Trilogy and Crosbys absolutes of quality. List out the pillars of TotalProductive Maintenance.

    Answer: JURANs Quality Triology Juran uses his famous universal Breakthrough Sequence to implementquality programmes. The universal breaks through sequences are;

    Proof of need: there should be a compelling need to make changes.Project identification: here what is to be changed is identified. Specific projects with time frames and theresource allocation are decided.

    Top management commitment: Commitment of the top management is to assign people and fixresponsibilities to complete the project.Diagnostic journey: Each team will determine whether the problems result from systemic causes or arerandom or are deliberately caused. Root causes are ascertained with utmost certainty.Remedial Action: This is the stage when changes are introduced. Inspection, testing, and validation arealso included at this point.Holding on to the gains: the above steps results in beneficiary results. Having records or all actions andconsequences will help in further improvements. The actions that results in the benefits derived should bethe norm for establishing standards

    JURAN has categorized cost of quality in to four categories:1. Failure CostsInternal: These are cost of rejections, repairs in terms of materials, labour, machine timeand loss of morale.2. Failure Costs-External: These are cost of replacement, on-site rework including spareparts and expensesof the personnel, warranty costs and loss of goodwill.

    3. Appraisal Costs: These are cost inspection, including maintenance of records, certification, segregationcosts, and others.4. Prevention costs: Prevention cost is the sequence of three sets of activities, Quality planning, Qualitycontrol, and Quality improvement, forming the trilogy to achieve

    TOTAL QUALITY MANAGEMENT.

    JURANs argument says that;

    Quality is the result of good planning consideration the needs of both internal and external customers anddevelops processes to meet them. The processes are also planned to meet them.Quality is built into the system of manufacture, inputs and processes that are on stream like raw material,spare parts, labour, machine maintenance, training, warehousing, inspection procedures, packaging, andother. These entire have to follow standards and control exercises to make sure that mistake do not occuroften and that if mistakes do occur then they are correct data the source.Quality improvement measures are essential to keep the quality culture alive. Newer methods will be found,some operations can be eliminated, improved technology available. In short, as experience is gained thingscan always be done better. IT is for the management to take the initiative and encourage the employees tobe on lookout for opportunities for improvement.

    CROSBYS Absolutes of Quality

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    Like Deming, Crosby also lays emphasis on top management commitment and responsibility for designingthe system so that defects are not inevitable. He urged that there be no restriction on spending for achievingquality. In the long run, maintaining quality is more economical than compromising on its achievement. Hisabsolutes can be listed as under:Quality is conformance to requirements, not goodnessPrevention, not appraisal, is the path to quality.

    Quality is measured as the price Paid for non-conformance and as indicesQuality originates in all factors. There are no quality problems. It is the people designs and processesthat create problems.

    Crosby also has given 14 points similar to those of Deming. His approach emphasizes on measurement ofquality, increasing awareness, corrective action, error cause removal and continuously reinforcing thesystem, so that advantages derived are not lost over time. He opined that the quality management regimenshould improve that overall health of the organization and prescribed a vaccine. The ingredients are.

    1. Integrity: Honesty and commitment help in producing everything right first time, every time.2. Communication: Flow of information between departments, suppliers, customers helps in identifyingopportunities.3. Systems and operations: These should bring in a quality environment so that nobody is comfortable withanything less than the best.

    Total Production Maintenance (TPM)

    Maintenance is a function in any operations system. Maintenance keeps the equipments in good condition.Generally equipments deteriorate because usage wear to the parts introducing inaccuracies on the productsmade on them. When the deterioration produces a component which exceeds the permitted deviationsrendering them unacceptable, maintenance is undertaken to bring back the machine to produce acceptablecomponents. Sometimes the failure is sudden and serious and the equipment stops working. Disruption ofproduction and emergency repairs works are costly and schedules are missed causing delays in suppliesand consequent losses. These breakdowns occur because the equipment was carrying hidden defectswhich were not apparent. All theses are attended to by the maintenances department. Historical recordsindicate the probability of failures over different periods thus enabling us to plan to attend to them. Withprogress in automation, we have costly equipments. We have flow lines and any one machine breakingdown causes a series of machine to beadle. So, we have to move towards zero breakdowns like we want tomove towards zero defects by implementing TQM Tools. TPM puts the responsibility of maintenance whereit belongs to and the operator who uses the equipment. It is a companywide activity which involves all the

    people. The main thrust is eliminating all break downs. The focus is on the operating personnel becausethey would know about malfunctioning earlier and more than anybody else. They work on the machine andare aware of the slightest variations that occur and thus should be able to plan to remove the cause before itbecomes serious. So every planned maintenance activity reduces the probability of a breakdown,Ownership of the operation and machine increases the commitment of the workmen. Autonomy is thestarting point for learning and excellence. The worker can suggest better ways of improving quality,productivity, and design. This help in continuous improvement, Team work and participation improves thequality culture. The principles of 5S- the housekeeping activities which improve efficiency at workplace isconsidered a measurable standard to aid the implementation at TPM even in the office rooms.

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    Master of Business Administration

    Semester II (November / Winter 2011)

    MB0044 Production & Operations Management

    SET II

    Q1.Explain Logical Process Modeling and Physical Process Modeling. What are the ingredients ofBusiness Process?

    Answer: Logical data models represent the abstract structure of some domain of information. They areoften diagrammatic in nature and are most typically used in business processes that seek to capture thingsof importance to an organization and how they relate to one another. Once validated and approved, thelogical data model can become the basis of a physical data model and inform the design of a database.Logical data models should be based on the structures identified in a preceding conceptual data model,

    since this describes the semantics of the information context, which the logical model should also reflect.Even so, since the logical data model anticipates implementation on a specific computing system, thecontent of the logical data model is adjusted to achieve certain efficiencies.The term 'Logical Data Model' is sometimes used as a synonym of 'Domain Model' or as an alternative tothe domain model. While the two concepts are closely related, and have overlapping goals, a domain modelis more focused on capturing the concepts in the problem domain rather than the structure of the dataassociated with that domain.

    Logical data model topics

    Reasons for building a logical data modelHelps common understanding of business data elements and requirementsProvides foundation for designing a databaseFacilitates avoidance ofdata redundancy and thus prevent data & business transaction inconsistency

    Facilitates data re-use and sharingDecreases development and maintenance time and costConfirms a logical process model and helps impact analysis.Modeling benefitsFacilitates business process improvementFocuses on requirements independent of technologyFacilitates data re-use and sharingIncreases return on investmentCentralizes metadataFosters seamless communication between applicationsFocuses communication fordata analysis and project team membersEstablishes a consistent naming scheme

    Logical & Physical Data Model

    A logical data model is sometimes incorrectly called a physical data model, which is not what the ANSIpeople had in mind. The physical design of a database involves deep use of particular databasemanagement technology. For example, a table/column design could be implemented on a collection ofcomputers, located in different parts of the world. That is the domain of the physical model.People often get confused with the fact that logical and physical data models are very different in theirobjectives, goals and content. Following are some key differences.

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    Logical Data Model Physical Data Model

    Includes entities (tables),attributes (columns/fields) andrelationships (keys)

    Includes tables, columns, keys, data types, validation rules, database triggers,stored procedures, domains, and access constraints

    Uses business names for

    entities & attributes

    Uses more defined and less generic specific names for tables and columns,

    such as abbreviated column names, limited by the database managementsystem (DBMS) and any company defined standards

    Is independent of technology(platform, DBMS)

    Includes primary keys and indices for fast data access.

    Is normalized to fourth normalform(4NF)

    May be de-normalized to meet performance requirements based on the natureof the database. If the nature of the database is Online TransactionProcessing (OLTP) or Operational Data Store (ODS) it is usually not de-normalized. De-normalization is common in Data warehouses.

    The ingredients The ingredients that go into a business process can be briefly Outline as under:

    (i) The data that are needed to accomplish the desired business objective;(ii) Acquisition, storage, distribution, and control of data across tasks in the process;

    (iii) Persons, teams and organizational units that perform and responsible for tasks;(iv)Decisions that modify and enhance the value of data during the process; We have somebehavioral aspects of the business process mainly the decision making processWhere humans are involved. Decision failures are common and research has shown that it isbecause of biases in perception and fallacies in reasoning. Another reason is a tendency to actOn assumptions even when data are available easily for verification and/or confirmation. SelectiveRecall a means tendency to bring out of memory the facts that reinforce our assumptions andBiased evaluation and tendency to accept evidence or fact as absolute which support ourHypotheses. These factors result in faulty decision making and being aware and avoiding themConsciously improve the processes.Business Analyst His main responsibility is to collect in detail business problemsThe requirements of the business people who have business problems and present them in aFormat that technology people understand and facilitate both in obtaining best solutions. He hasTo liaise between them to break down data, see through the logical steps that need to be takenAnd fill the gaps to enable the experts in technology to provide solutions. His skills. Knowledge

    And functions are given under in brief:a) Lead the team members to a consensus;b) Identify or gather the requirements of the business process that are critical; He needs toQuestion concern people, verify the statements that are made, locate any gaps and arrange thein the logical process for creating uninterrupted dataflow.c) Identify the core requirements;d) Question business area experts and seek relevant information;e) Make sure that the requirements can be subjected to tests and the results are verifiable;Analysts most important skill will be in his capacity to separate the grain from the chaff to knowWhich are critical, vital and important b its of information from a huge mass of data he is confronted with

    Q2.Explain Project Management Knowledge Areas. With an example explain Work BreakdownStructure.

    Answer: The knowledge areas of project management are the following: Project integration management, cost management, communications management

    Project scope management, quality management, risk management

    Project time management, human management, procurement management

    For a project to be successful, it is necessary to understand its relationship with other managementdisciplines. Other management supporting disciplines are business legal issues, strategic planning, logistics,human resource management, and domain knowledge.

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    Work Breakdown Structure (WBS)The entire process of a project may be considered to be made up on number of sub process placed indifferent stage called the Work Breakdown Structure (WBS). A typical example of a WBS of a recruitmentprocess is indicated in figure 8.8.WBS is the technique to analyse the content of work and cost by breaking it down into its component parts.Project key stages form the highest level of the WBS, which is then used to show the details at the lowerlevels of the project. Each key stage comprises many tasks identified at the start of planning and later this

    list will have to be validated.WBS is produced by identifying the key elements, breaking each element down into component parts andcontinuing to breakdown until manageable work packages have been identified. These can then beallocated to the appropriate person. The WBS does not show dependencies other than a grouping under thekey stages. It is not time based - there is no timescale on the drawing.

    Example of work breakdown structure

    Q3.Take an example of any product or project and explain Project Management Life Cycle.

    Answer: Phases of project management life cycle

    Project management life cycle has six phases:

    Analysis and evaluation phase

    Marketing phase

    Design phase

    Execution phase

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    Control inspecting, testing, and delivery phase

    Closure and post completion analysis phase

    Projects too have to chore through their life-cycles adhering to a system. Every project irrespective of itssize, scope has to adapt a system. A system in the project management refers to the existence ofinterrelationship of activities in a project. The absence of a system makes a project die.

    No matter what project it is that youre preparing for, the project management life cycle can assist you innarrowing your focus, keeping your objectives in order and finishing said project on time, on budget and witha minimum of headaches. Every project management life cycle contains five steps: Initiation, Planning,Execution, Monitoring/Control and Closure. No one step is more important than the other and each stepplays a crucial role in getting your project off the ground, through the race, down the stretch and across thefinish line.

    Phases of Project management life cycle

    1) Initiation: In this first step you provide an over-view of the project in addition to the strategy you plan onusing in order to achieve the desired results. During the Initiation phase youll appoint a project managerwho in turn will -- based on their experience and skills -- select his team members. And lest you think youneed to be a Bill Gates or Donald Trump in order to see your project take on a life of its own, fear not: thereare some great technological tools available to get you through the Initiation phase of the projectmanagement life cycle.

    2) Planning: The all-important second step of any successful project management life cycle is planning andshould include a detailed breakdown and assignment of each task of your project from beginning to end.The Planning Phase will also include a risk assessment in addition to defining the criteria needed for thesuccessful completion of each task. In short, the working process is defined, stake holders are identified andreporting frequency and channels explained.

    3 & 4) Execution and Control: Steps Three and Four take you into deeper water. When it comes to theproject management cycle, execution and control just may be the most important of the five steps in that itensures project activities are properly executed and controlled. During the Execution and Control phases,the planned solution is implemented to solve the problem specified in the project's requirements. In productand system development, a design resulting in a specific set of product requirements is created. Thisconvergence is measured by prototypes, testing, and reviews. As the Execution and Control phasesprogress, groups across the organization become more deeply involved in planning for the final testing,production, and support.

    5) Closure: By the time you reach Step Five -- Closure -- the project manager should be tweaking the littlethings to ensure that the project is brought to its proper conclusion. The Closure phase is typicallyhighlighted by a written formal project review report which contains the following elements: a formalacceptance of the final product (by the client), Weighted Critical Measurements (a match between the initialrequirements laid out by the client against the final delivered product), lessons learned, project resources,and a formal project closure notification to higher management. The Project Management Cycle saves timeand keeps everyone on the team focused. Fortunately, modern technology provides a variety of templatesthat will take you from A-to-Z (or in this case from Start-to-Finish) making the Project Management Cycleuser friendly no matter what your level of management experience!

    Q4.Explain PMIS. What is the difference between Key Success Factor (KSF) and Knowledge (K)Factor? Explain with example.

    Answer: Project Management Information System (PMIS)

    An information system is mainly aimed at providing the management at different levels with informationrelated to the system of the organisation. It helps in maintaining discipline in the system. An information system dealing with project management tasks is the project management informationsystem. It helps in decision making in arriving at optimum allocation of resources. The information system isbased on a database of the organisation. A project management information system also holds schedule,scope changes, risk assessment and actual results.The information is communicated to managers at different levels of the organisation depending upon theneed. Let us find how a project management information system is used by different stakeholders.

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    Who needs information and why?

    Upper managers To know information on all projects regarding progress, problems, resource usage,costs and project goals. This information helps them take decisions on the project.They should review the projects at each milestone and arrive at appropriate decision

    Project manager anddepartment managers

    To see each project schedule, priority and use of resources to determine the mostefficient use across the organisation.

    Project teammembers

    To see schedule, task lists and specification so that they know what needs to be donenext.

    The four major aspects of a PMIS are:

    1. Providing information to the major stakeholders2. Assisting the team members, stakeholders, managers with necessary information and summary of theinformation shared to the higher level managers3. Assisting the managers in doing what if analyses about project staffing, proposed staffing changes andtotal allocation of resources4. Helping organisational learning by helping the members of the organisation learn about projectmanagement

    Usually, the team members, and not the systems administrators of the company, develop a good PMIS.Organisations tend to allocate such responsibility by rotation among members with a well designed andstructured data entry and analytical format.

    Key Success Factors

    A key success factor is a performance area of critical importance in achieving consistently high productivity.There are at least 2 broad categories of key success factors that are common to virtually all organizations:business processes and human processes. Both are crucial to building great companies. Our focus isprimarily on the human processes.To some extent, every human process is a key success factor. We talk about organizational performance,but in truth, its people who produce results. Human processes are constantly evolving to fit newtechnologies and changing circumstances, but every once in a while, major shifts occur that dramaticallychange what's required in each of the key success areas. Were experiencing such a shift right now

    moving from the industrial age to a knowledge-based economy in a global marketplace.Globalization and information technology are placing different, challenging demands on leaders andorganizations in virtually every key success area. Here are some highlights of these changes:

    Leadership"Command and control" leadership carried many organizations to very high levels of financial performanceduring periods when competition was not so great and things didn't change very fast, but its time haspassed. The demands on the total organization are too great for a few people at the top to call all the shots.More

    VisionA compelling vision is one of a company's greatest assets. It can be a magnet for attracting talented people.It can serve as a beacon when people temporarily lose their way. It can be a source of energy andinspiration when people are encountering difficult obstacles. The CEO has a primary responsibility to shape,communicate and sustain the vision, but this need not be a solitary task. In fact the more people who can beinvolved in shaping the vision, the better. More

    CommunicationIn most organizations, there have been 3 pervasive patterns that will no longer work in knowledge-basedorganizations: (1) the primary flow of information was verticalwithin departmental walls that were oftenimpermeable, (2) information was hoarded and used as a source of power over others, and (3) people at thetop often withheld crucial strategic information from those lower in the organization in the belief they couldn'thandle it. More

    Teamwork

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    Teamwork is more crucial to producing results today than ever before, and at the same time, the very natureof teams and their functions are changing rapidly. In the past it was typical to go for long periodseven anentire careeras the member of one functional team. Today, membership on more than one team is thenorm, and it is unlikely that anyone entering the work force will remain on the first team they join for morethan a year at most. More

    Strategic Alignment

    Process reengineering and systems thinking are moving strategic alignment back to the top of manycorporate agendas. It has become crystal clear that many of the greatest opportunities for productivityimprovement lie at the interfaces of the processes used to produce products and serve customersand it isfruitless to excel in one process while lagging in others. In fact, it's counterproductive. More

    Conflict ResolutionThe new economy increases the potential for conflict in virtually every area of organizational life.Stakeholders are more informed and frequently more demanding. Employees are being asked to do morewith lesswithout the promise of job security that existed in the past. Aligning self-interests with corporateinterests is not as simple as it used to be. Alliances, mergers, and acquisitions bring together differentcultures and set the stage for major internal conflicts and power struggles. Developing good conflict skillsneeds to be high on everyone's personal and corporate agendas. More

    Embracing ChangeIndividuals and organizations that change before they have to will be the winners in global competition.

    People vary a lot in their tolerance of change and in the degree to which they actively seek change in theirlives. It is difficult to grasp the potential for the continuing acceleration of change on a global scale. Withmore people having more access to more information, it is reasonable to expect more innovation and morecompetition on a daily basis. Merely accepting change and learning to tolerate it will not be enough tosuccessfully compete in the next century. We must welcome change as our friend. More

    Learning OrganizationLeaders and managers have always given lip service to the notion of people being their most importantasset and to the need for continuous training and development. In most companies, however, it has been nomore than a notion. Most have not been consistent in this crucial area. The same company that will spend$5,000 a year to maintain a machine will not spend $500 to develop an employee. Of all the key successareas, this one is changing the most. The future belongs to learnersto individuals that take responsibilityfor updating their skills and knowledge, to teams that consciously develop the deep dialogue that enablesteam members to learn from one another, and to organizations that continuously improve their ability totransform data into value-added, actionable information to serve customers. More

    Rediff.com Business Secrets of Wal-Mart's successSecrets of Wal-Mart's success

    August 22, 2007 08:46 IST

    Ptolemy, the ancient astronomer, believed that planets rotated around the earth and developed a theory toexplain and calculate that motion. As humankind's understanding of the heavens expanded, Ptolemy'stheory of planetary physics had to become more complicated to explain observed motion. Then, in thesixteenth century, Copernicus advanced a theory that the planets rotated around the sun, not the earth. Thismodel of planetary physics triumphed because it explained the motion of the planets much more accuratelyand simply.

    In a similar way, the productivity loop reveals a remarkable simplicity behind Wal-Mart's success. The loopexplains the "motion" of Wal-Mart. But the physics behind Wal-Mart, and the management chemistry of

    strong process that goes along with it, do not fully explain Wal-Mart's success. There is something else thatdrives the company with equally compelling power: its biology.

    Why haven't other companies in the Wal-Mart world been able to triumph like Wal-Mart? What is thedifference that makes the difference -- beyond cost-cutting physics and strong-process systems? It's Wal-Mart's "genetic" makeup, what I call its DNA. Most other companies miss this key factor. They fail torecognize that they cannot replicate Wal-Mart's success without replicating its DNA.

    The DNA of an organization refers to its internal, hard-wired character. This is in contrast to its externaltraits. Many executives trying to duplicate the success of Wal-Mart think that they can do so by duplicatingvisible competitive advantages such as Wal-Mart's everyday-low-price (EDLP) position, its low cost

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    structure, its streamlined logistics and distribution network, its information systems prowess, and itspartnerships with vendors. Yet most of these fast-follower efforts fail because they miss the genetic code.

    In biology, we describe people by referring to such traits as blonde hair, blue eyes, fair skin, high cheekbones, long legs, and small feet. But we know full well that these traits are simply the manifestation of aninternal code, our genes. Modern medicine, science, and cosmetics offer many ways to modify our traits --dyeing our hair, smoothing our complexion with plastic surgery, and coloring our eyes with contact lenses.

    Altering traits does not endow us with the underlying genes, however, and over time, our gray roots showand our crow's feet come back.

    The same is true in business. Companies that replicate Wal-Mart's competitive advantages often end upwith just a corporate "dye job." They find that the change often doesn't work or doesn't work well, and even ifit does work, they have to reapply the fix to sustain the change. To replicate Wal-Mart's enduing operationalstrengths successfully, we need to start with the DNA.

    Wal-Mart executives believe that perpetuating the company's DNA is one of their chief jobs. They dedicatethe first Saturday meeting of every month to culture, asking one or two managers to give a prepared talk onwhat the culture means. They also lead mandatory culture training for all new managers. During trainingsessions at the Walton Institute, they teach trainees about everything from expense control to continuousimprovement.

    Wal-Mart's DNA includes some potent genes that encode the leadership and work attitudes lying at the root

    of its competitive advantages. Of the many genes of this kind, five deserve special attention: focus,correction of errors, constructive paranoia, thrift, and a "we can make it better" attitude.

    Excerpted from: Wal-Smart by William H Marquard

    Q5.Explain the seven principles of supply chain management. Take an example of any product in themarket and explain the scenario of Bullwhip effect.

    Answer: The Seven Principles of SCM are:

    1. Group customer by needs: Effective SCM groups customers by distinct service needs, regardless ofindustry and then tailors services to those particular segments2. Customise the logistics network: In designing their logistics network, companies need to focus on theservice requirement and profit potential of the customer segments identified3. Listen to signals of market demand and plan accordingly: Sales and operations planners must monitorthe entire supply chain to detect early warning signals of changing customer demand and needs. Thisdemand driven approach leads to more consistent forecast and optimal resource allocation4. Differentiate the product closer to the customer: Companies today no longer can afford to stockpileinventory to compensate for possible forecasting errors. Instead, they need to postpone productdifferentiation in the manufacturing process closer to actual consumer demand. This strategy allows thesupply chain to respond quickly and cost effectively to changes in customer needs5. Strategically manage the sources of supply: By working closely with their key suppliers to reduce theoverall costs of owning materials and services, SCM maximises profit margins both for themselves and theirsuppliers6. Develop a supply chain wide technology strategy: As one of the cornerstones of successful SCM,information technology must be able to support multiple levels of decision making. It also should afford aclear view and ability to measure the flow of products, services, and information7. Adopt channel spanning performance measures: Excellent supply chain performance measurement

    systems do more than just monitor internal functions. They apply performance criteria to every link in thesupply chain criteria that embrace both service and financial metrics

    Procter & Gamble: The Power of Partnership

    Who says you can't please customers and achieve profitable growth from doing so? Certainly not Procter &Gamble. But even this consumer products giant recognizes the need for continuous change in order to enjoycontinued success.Since early in the century, P&G had based its strategy on delivering superior products to consumers. "Sellso that we will be filling the retail shelves as they are empty," said CEO Richard Deupree in 1911. By thelate 1970s, this single-minded focus on consumers had earned P&G a reputation among wholesalers and

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    retailers for being inflexible and dictatorial. Perceiving the growing power of these trade customers in theearly 1980s, P&G revised its strategy to maintain a constant focus on reinventing the customer interface inpursuit of sustained competitive advantage.The first step was a series of merchandising and logistics initiatives launched throughout the 1980s underthe banner of "total system efficiency." Such efforts as implementing more flexible promotional policies and adamaged goods program signaled a new emphasis on trade customers. These efforts paid off. In 1990,P&G ranked 15th among the Fortune 500, up from 23rd in 1979.

    In the early 1990s, P&G took the next big step--a sales reorganization creating multifunctional teams withkey customers, notably Wal-Mart, to address issues in such key areas as category management andmerchandising, logistics, information technology, and solid waste management. P&G simultaneouslydeveloped partnerships with suppliers to reduce cycle times and costs.The results have been impressive. For example, the Just-in-Tide marketing initiative uses point-of-sale scandata to determine how and when to replenish product. Warehouse inventory turns have almost doubled;factory utilization has grown from 55 percent to more than 80 percent; and overall costs have dropped to1990-1991 levels.P&G more recently introduced the Streamlined Logistics program to improve customer service and supplychain efficiency. The first phase consolidated ordering, receipt, and invoicing of multiple brands, harmonizedpayment terms, and reduced bracket pricing categories. The implications for customers? As Steven David,vice president of sales, explained: "Now they'll be able to mix a load of soap or paper or food products on afull truck to get the best possible pricing. We're going to make available common-quantity pricing bracketsacross all our sectors. We're going to have multi sector ordering for the first time."To ensure customer satisfaction, P&G instituted a scorecard last year to enable both distributors and

    vendors to evaluate P&G's efficiency in such key areas as category management, assortment, efficientproduct introduction, promotion, and replenishment.In the last six months, P&G has undertaken Streamlined Logistics II to reduce unloading time in food-retailerwarehouses. By combining such tools as activity-based costing and Electronic Data Interchange with drop-and-hook programs and elimination of pallet exchanges, P&G expects to remove non-value-added costsand improve consumer value...in the process saving $50 million, which P&G intends to pass on tocustomers.

    6. Time taken by three machines on five jobs in a factory is tabulated below in table below. Find outthe optimal sequence to be followed to minimise the idle time taken by the jobs on the machines.

    Job Machine 1 (M1) Machine 2 (M2) Machine 3 (M3)

    A 6 8 7

    B 4 5 3C 5 5 7

    D 3 4 6

    E 4 3 4

    Answer:

    Steps to be taken to solve the algorithm are as follows:

    1. Take column M1, ignoring M2 and M3. Get the sequence by applying Johnsons rule.2. Next Combine M1 and M2 Make it as one machine MX and combine M3 and call it MY. Get thesequence.3. Next Combine M1 and M2 and M3 and call it MC. Similarly combine M2 and M3. Call it MD. Find thesequence.4. Calculate the total time taken to process all jobs A, B C, D and E. Choose whichever given the total time.5. According to the steps mentioned above the job order sequence of machines 1 and 2, that is, MA can bederived with the help of the following table

    Sequence of MA

    Machine1

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    Job (M1)

    A 6

    B 4

    C 5

    D 3

    E 4

    Using Johnsons algorithm, the job order sequence obtained is:

    MA =

    JOB

    Processing Time

    Machine 1 Machine 2 Machine 3

    Time-in Time-out Time-in Time-out Time-in Time-out

    B 0 4 4 9 9 12

    E 4 8 9 12 12 16

    A 8 14 14 22 22 29

    C 14 19 22 27 31 36

    D 19 22 27 31 36 42

    The time taken (TA) to complete the sequence obtained above is 44.The job order sequence of machines (1, 2) and (3, 4), that is, MB can be derived with the help of thefollowing table (Table 12.7).

    Sequence of MB Job M1+M2 M3

    A 14 11

    B 9 9

    C 10 10

    D 7 8

    E 7 11

    MB =

    The time taken (TB) by sequence MB is now calculated as shown below table

    Time taken (TB) by sequence MB

    JO

    B

    Processing Time

    Machine 1 Machine 2 Machine 3

    Time-in Time-out Time-in Time-out Time-in Time-outD 0 3 3 7 7 13

    E 3 7 7 10 13 17

    B 7 11 11 16 17 20

    C 11 16 16 21 21 28

    A 16 22 22 30 30 37

    The time taken (TB) to complete the sequence obtained above is 41.

    B E A C D

    D E B C A

    22

  • 8/2/2019 Mb44 Production Process

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    The job order sequence of machines (1, 2, 3) and (2, 3, 4), that is, MC can be derived with the help of thefollowing table

    Sequence of MC Job M1+M2+M3 M2+M3

    A 21 19

    B 12 14

    C 17 15D 13 12

    E 11 14

    MC = E B A C D

    The time taken (TC) by sequence MC is now calculated as shown in tableTime taken (TC) by sequence MC

    JOB

    Processing Time

    Machine 1 Machine 2 Machine 3

    Time-in Time-out Time-in Time-out Time-in Time-out

    E 0 4 4 7 7 11

    B 4 8 8 13 13 16

    A 8 14 14 22 22 29

    C 14 19 22 27 29 36

    D 19 22 27 31 36 42

    The time taken (TC) to complete the sequence obtained above is 44.Thus, we get values: TA = 44, TB = 41 and TC = 44.From the three values, TB is the minimum. Therefore, the optimal sequence for the given 5 jobs under the 4machines is MB.

    MB = D E B C A