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CMRIT Redefining Quality

UNIT I

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Definition of Management

Management (from Old French management the art of conducting, directing, from

Latin manu agere to lead by the hand) characterizes the process of leading anddirecting all or part of an organization, often a business, through the deployment and

manipulation of resources (human, financial, material, intellectual or intangible).

This definition is interesting because it traces the root meaning back to the atin !hrasemeaning "to lead by the hand#. eading by the hand im!lies gi$ing direction that isstronger than %ust a !assing suggestion yet still fairly gentle in a!!roach. eading by thehand also im!lies that the !erson doing the leading is first going &here the follo&er isbeing lead. The leader is not asking the follo&er to do something he is not &illing to dohimself.

!he guidance and control of action re"uired to e#ecute a program. $lso, the indi%iduals

charged &ith the responsibility of conducting a program.

This definition of management refers to a "!rogram#. This im!lies that' for managementto be effecti$e there needs to be some ty!e of defined a!!roach or system in !lace. Thissystem becomes the !lan and management is guiding others in follo&ing that !lan. This isoften the do&nfall of managers. They ha$e no !lan or system. (s a result their actionsseem random to the !eo!le they are managing and this leads to confusion anddisa!!ointment. This is &hy it is so im!ortant for business managers to ha$e an em!loyeemanual. )ithout the em!loyee manual !ro$iding direction' managers &ill struggle to befair and balanced in their dealings &ith em!loyees.

's the organizational process that includes strategic planning, setting obecti%es,

managing resources, deploying the human and financial assets needed to achie%eobecti%es, and measuring results. Management also includes recording and storing facts

and information for later use or for others &ithin the organization. Management

functions are not limited to managers and super%isors. *%ery member of the organizationhas some management and reporting functions as part of their ob.

This definition is more in de!th and tailored to&ard business management. *otice that itconsists of three !rimary acti$ities. +irst' management establishes a !lan. This !lan

becomes the road ma! for &hat &ork is going to be done. Second' management allocatesresources to im!lement the !lan. Third' management measures the results to see ho& theend !roduct com!ares &ith &hat &as originally en$isioned. Most management failingscan be attributed to insufficient effort occurring in one of these three areas.

The definition goes on to talk about ho& management is res!onsible for measuringdetails that may not be re,uired !resently' but may be useful later on. Thesemeasurements often hel! determine the ob%ecti$es in the !lanning stage.

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)hen management is follo&ing this ty!e of se,uence' it becomes a continuing cycle.lan' e/ecute' and measure. The measurements become the basis for the ne/t !lanningstage and so on.

's the acti%ity of getting things done &ith the aid of people and other resources.

This definition of management focus on management as the !rocess of accom!lishing&ork through the efforts of others. Skilled managers can accom!lish much more throughothers than they can through their o&n single efforts.

*ffecti%e utilisation and coordination of resources such as capital, plant, materials, and

labor to achie%e defined obecti%es &ith ma#imum efficiency.

This definition of management looks at not only the !eo!le but the entire range of

resources necessary to follo& a !lan. *otice ho& it focuses on efficiency. Managementisn0t %ust getting from !oint ( to !oint B. It is getting there by choosing the best !ossible!ath.

!he process of getting acti%ities completed efficiently &ith and through other people +.!he process of setting and achie%ing goals through the e#ecution of fi%e basic

management functions planning, organizing, staffing, directing, and controlling that

utilize human, financial, and material resources.

The first definition looks at the fact that management is getting &ork done through other

!eo!le. The second definition di$ides management u! into fi$e com!onents. Thesecom!onents are all !arts of the three com!onents !lan' e/ecute' measure2 that &e lookedat abo$e. 3o&e$er the more detailed definition hel!s sho& the acti$ities that occur ineach of the three !hase definition.

!he process of planning, leading, organizing and controlling people &ithin a group in

order to achie%e goals also used to mean the group of people &ho do this.

4nce again' this definition of management addresses accom!lishing &ork through other!eo!le. This definition stresses the acti$ities that are necessary for reaching !articular

goals.

!he process of achie%ing the obecti%es of the business organization by bringing together

human, physical, and financial resources in an optimum combination and ma-ing the

best decision for the organization &hile ta-ing into consideration its operatingen%ironment.

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This definition talks about the different com!onents that managers need to control inorder to achie$e ob%ecti$es. 4ne differentiator of this definition is the &ay it considers theo!erating en$ironment as !art of &hat a manager must understand.

Management and Administration

(ccording to !heo aimann' "(dministration means o$erall determination of !olicies'setting of ma%or ob%ecti$es' the identification of general !ur!oses and laying do&n ofbroad !rogrammes and !ro%ects#. It refers to the acti$ities of higher le$el. It lays do&nbasic !rinci!les of the enter!rise. (ccording to *e&man' "(dministration meansguidance' leadershi! 6 control of the efforts of the grou!s to&ards some common goals#.

)hereas' management in$ol$es concei$ing' initiating and bringing together the $ariouselements7 coordinating' actuating' integrating the di$erse organi8ational com!onents&hile sustaining the $iability of the organi8ation to&ards some !re9determined goals. Inother &ords' it is an art of getting things done through 6 &ith the !eo!le in formally

organi8ed grou!s.

The difference bet&een Management and (dministration can be summari8ed under -categories: 9

1. Functions-. Usage / Applicability

On the Basis of Functions:

Basis Management Administation

Meaning Management is an art of getting thingsdone through others by directing theirefforts to&ards achie$ement of !re9determined goals.

It is concerned &ith formulationof broad ob%ecti$es' !lans 6!olicies.

*ature Management is an e/ecuting function. (dministration is a decision9making function.

rocess Management decides &ho should as it 6ho& should he dot it.

(dministration decides &hat isto be done 6 &hen it is to bedone.

+unction Management is a doing function becausemanagers get &ork done under theirsu!er$ision.

(dministration is a thinkingfunction because !lans 6!olicies are determined under it.

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The +igure abo$e clearly sho&s the degree of administration and management !erformedby the different le$els of management

"oncepts of management

Natue and impotance of management

Management is concerned &ith human beings &hose beha$ior is highly un!redictable.E$er since !eo!le began forming grou!s to achie$e goal' they could not achie$e asindi$iduals. Managing has been essential to !ro$ide the coordination of indi$idual0s

efforts. Management is found in e$ery &alk of life.

Management does not !erform s!ecific %obs. It moti$ates other !eo!le to !erform s!ecific%obs. Management is not doing the &ork but getting the &ork done through the effort ofothers.

Management brings together basic resources !o!ularly kno&n as > M0s < Men' Material'Machines' Methods' Money and Market.

This hel!s to achie$e the e/!ected results ,uickly and economically in terms ofa2 roduction

b2 Salesc2 rofit andd2 ?ood&ill in the Market

Im!ortance of Management

The im!ortance of management in business is uni$ersally acce!ted. It acts as a dri$ingforce in business. Modern business is highly com!etiti$e and need efficient and ca!ablemanagement. It is through management that business acti$ities are organi8ed and

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conducted efficiently and ob%ecti$es are achie$ed.

The follo&ing !oints &ill suggest the im!ortance of management

12 4!timum use of resources: management facilities o!timum utili8ation of a$ailable

human and !hysical resources' &hich leads to !rogress and !ros!erity of a businessenter!rise. E$en &astage of all ty!es are eliminated or minimi8ed.

-2 Com!etiti$e strength: Management de$elo!s com!etiti$e strength in an enter!rise.This enables an enter!rise to de$elo! and e/!and its assets and !rofits.

52 Cordial industrial relations: Management de$elo!s cordial industrial relation' ensuresbetter life and &elfare to em!loyees and raises their morale through suitable incenti$es.

;2 Moti$ates em!loyees: It moti$ates em!loyees to take more interest and initiati$e in the&ork assigned and contributes for raising !roducti$ity and !rofitability of the enter!rise.

=2 *e& techni,ues: Management facilities the introduction of ne& machines and ne&methods in the conduct of business acti$ities. It also brings useful technologiesde$elo!ments and inno$ation in the management of business acti$ities.

>2 Effecti$e management: Society gets the benefits of efficient management in terms ofindustrial de$elo!ment' %ustice to different social grou!s' consumer0s satisfaction and&elfare and !ro!er discharge of social res!onsibilities.

@2 E/!ansion of business: E/!ansion gro&th and di$ersification of a business unit are!ossible through efficient management. It creates good cor!orate image to a businessenter!rise.

A2 Stability and !ros!erity: Efficient management brings success stability and !ros!erityto a business enter!rise through coo!eration and team s!irit among em!loyees.

2 Team s!irit: Management de$elo!s team s!irit and raises o$erall efficiency of abusiness enter!rise.

12 Effecti$e use of managers: Management ensures effecti$e use of managers so that thebenefits of their e/!erience' skills and maturity are a$ailable to enter!rise.

112 Smooth functioning: Management ensures smooth' orderly and continuousfunctioning of an enter!rise o$er a long !eriod. It also raises the efficiency' !roducti$ityand !rofitability of an enter!rise.

1-2 Reduces turno$er and absenteeism: It reduces abour turno$er and absenteeism andensures continuity in the business acti$ities and o!erations.

152 Sound organi8ation: ( dynamic and !rogressi$e management guaranteesde$elo!ment of sound organi8ation' &hich can face any situation < fa$orable or

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unfa$orable &ith ease and confidence.

Management is not only !racticed in organi8ation and business entities but management!lays an im!ortant role in our daily li$es and is !racticed by e$ery indi$idual is some orthe other &ay.

Importance of Management

Ithelps in Achie#ing $oup $oals It arranges the factors of !roduction' assemblesand organi8es the resources' integrates the resources in effecti$e manner to achie$e goals.It directs grou! efforts to&ards achie$ement of !re9determined goals. By definingob%ecti$e of organi8ation clearly there &ould be no &astage of time' money and effort.Management con$erts disorgani8ed resources of men' machines' money etc. into usefulenter!rise. These resources are coordinated' directed and controlled in such a manner thatenter!rise &ork to&ards attainment of goals.4!timumUtili%ation of &esouces Management utili8es all the !hysical 6 human

resources !roducti$ely. This leads to efficacy in management. Management !ro$idesma/imum utili8ation of scarce resources by selecting its best !ossible alternate use inindustry from out of $arious uses. It makes use of e/!erts' !rofessional and these ser$icesleads to use of their skills' kno&ledge' and !ro!er utili8ation and a$oids &astage. Ifem!loyees and machines are !roducing its ma/imum there is no under em!loyment ofany resources. &educes "osts It gets ma/imum results through minimum in!ut by !ro!er !lanningand by using minimum in!ut 6 getting ma/imum out!ut. Management uses !hysical'human and financial resources in such a manner &hich results in best combination. Thishel!s in cost reduction. 'stablishes (ound Ogani%ation *o o$erla!!ing of efforts smooth and

coordinated functions2. To establish sound organi8ational structure is one of the ob%ecti$eof management &hich is in tune &ith ob%ecti$e of organi8ation and for fulfillment of this'it establishes effecti$e authority 6 res!onsibility relationshi! i.e. &ho is accountable to&hom' &ho can gi$e instructions to &hom' &ho are su!eriors 6 &ho are subordinates.Management fills u! $arious !ositions &ith right !ersons' ha$ing right skills' training and,ualification. (ll %obs should be cleared to e$eryone. 'stablishes ')uilibium It enables the organi8ation to sur$i$e in changingen$ironment. It kee!s in touch &ith the changing en$ironment. )ith the change ise/ternal en$ironment' the initial co9ordination of organi8ation must be changed. So itada!ts organi8ation to changing demand of market D changing needs of societies. It isres!onsible for gro&th and sur$i$al of organi8ation.

'ssentials fo *ospeity of (ociety Efficient management leads to bettereconomical !roduction &hich hel!s in turn to increase the &elfare of !eo!le. ?oodmanagement makes a difficult task easier by a$oiding &astage of scarce resource. Itim!ro$es standard of li$ing. It increases the !rofit &hich is beneficial to business andsociety &ill get ma/imum out!ut at minimum cost by creating em!loyment o!!ortunities&hich generate income in hands. 4rgani8ation comes &ith ne& !roducts and researchesbeneficial for society.

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Objectives of Management

The main ob%ecti$es of management are:

1. $etting Ma+imum &esults ,ith Minimum 'ffots The main ob%ecti$e of

management is to secure ma/imum out!uts &ith minimum efforts 6 resources.Management is basically concerned &ith thinking 6 utili8ing human' material 6financial resources in such a manner that &ould result in best combination. Thiscombination results in reduction of $arious costs.

-. Inceasing the 'fficiency of factos of *oduction Through !ro!er utili8ationof $arious factors of !roduction' their efficiency can be increased to a great e/tent&hich can be obtained by reducing s!oilage' &astages and breakage of all kinds'this in turn leads to sa$ing of time' effort and money &hich is essential for thegro&th 6 !ros!erity of the enter!rise.

5. Ma+imum *ospeity fo 'mploye - 'mployees Management ensuressmooth and coordinated functioning of the enter!rise. This in turn hel!s in

!ro$iding ma/imum benefits to the em!loyee in the sha!e of good &orkingcondition' suitable &age system' incenti$e !lans on the one hand and higher!rofits to the em!loyer on the other hand.

;. .uman bettement - (ocial ustice Management ser$es as a tool for theu!liftment as &ell as betterment of the society. Through increased !roducti$ity 6em!loyment' management ensures better standards of li$ing for the society. It!ro$ides %ustice through its uniform !olicies.

Management as a Process

(s a !rocess' management refers to a series of inter < related functions. It is the !rocess

by &hich management creates' o!erates and directs !ur!osi$e organi8ation throughsystematic' coordinated and co9o!erated human efforts' according to ?eorge R. Terry'"Management is a distinct !rocess consisting of !lanning' organi8ing' actuating andcontrolling' !erformed to determine and accom!lish stated ob%ecti$e by the use of humanbeings and other resources#. (s a !rocess' management consists of three as!ects:

1. Management is a social pocess Since human factor is most im!ortant amongthe other factors' therefore management is concerned &ith de$elo!ing relationshi!among !eo!le. It is the duty of management to make interaction bet&een !eo!le


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Management as an Activity

ike $arious other acti$ities !erformed by human beings such as &riting' !laying' eating'cooking etc' management is also an acti$ity because a manager is one &ho accom!lishesthe ob%ecti$es by directing the efforts of others. (ccording to oont8' "Management is

&hat a manager does#. Management as an acti$ity includes


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o$erla!!ing of efforts and this hel!s in bringing smoothness in a concern0s&orking.

;. "o!odination bet,een authoity and esponsibility ! Relationshi!s areestablished among $arious grou!s to enable smooth interaction to&ard theachie$ment of the organi8ational goal. Each indi$idual is made a&are of his

authority and heDshe kno&s &hom they ha$e to take orders from and to &homthey are accountable and to &hom they ha$e to re!ort. ( clear organi8ationalstructure is dra&n and all the em!loyees are made a&are of it.

Importance of Organi,ing Function

(peciali%ation !4rgani8ational structure is a net&ork of relationshi!s in &hich the&ork is di$ided into units and de!artments. This di$ision of &ork is hel!ing in bringings!eciali8ation in $arious acti$ities of concern. ;ell defined obs !4rgani8ational structure hel!s in !utting right men on right %ob&hich can be done by selecting !eo!le for $arious de!artments according to their,ualifications' skill and e/!erience. This is hel!ing in defining the %obs !ro!erly &hich

clarifies the role of e$ery !erson. "laifies authoity !4rgani8ational structure hel!s in clarifying the role !ositions toe$ery manager status ,uo2. This can be done by clarifying the !o&ers to e$ery managerand the &ay he has to e/ercise those !o&ers should be clarified so that misuse of !o&ersdo not take !lace. )ell defined %obs and res!onsibilities attached hel!s in bringingefficiency into managers &orking. This hel!s in increasing !roducti$ity. "o!odination !4rgani8ation is a means of creating co9 ordination among differentde!artments of the enter!rise. It creates clear cut relationshi!s among !ositions andensure mutual co9 o!eration among indi$iduals. 3armony of &ork is brought by higherle$el managers e/ercising their authority o$er interconnected acti$ities of lo&er le$elmanager.

(uthority res!onsibility relationshi!s can be fruitful only &hen there is a formalrelationshi! bet&een the t&o. +or smooth running of an organi8ation' the co9 ordinationbet&een authority9 res!onsibility is $ery im!ortant. There should be co9 ordinationbet&een different relationshi!s. Clarity should be made for ha$ing an ultimateres!onsibility attached to e$ery authority. There is a saying' "(uthority &ithoutres!onsibility leads to ineffecti$e beha$iour and res!onsibility &ithout authority makes!erson ineffecti$e.00 Therefore' co9 ordination of authority9 res!onsibility is $eryim!ortant.

'ffecti#e administation The organi8ation structure is hel!ful in defining the %obs

!ositions. The roles to be !erformed by different managers are clarified. S!eciali8ation isachie$ed through di$ision of &ork. This all leads to efficient and effecti$e administration. $o,th and di#esification !( com!any0s gro&th is totally de!endant on ho&efficiently and smoothly a concern &orks. Efficiency can be brought about by clarifyingthe role !ositions to the managers' co9ordination bet&een authority and res!onsibility andconcentrating on s!eciali8ation. In addition to this' a com!any can di$ersify if its!otential gro&. This is !ossible only &hen the organi8ation structure is &ell9 defined.This is !ossible through a set of formal structure.

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(ense of secuity !4rgani8ational structure clarifies the %ob !ositions. The rolesassigned to e$ery manager is clear. Co9 ordination is !ossible. Therefore' clarity of!o&ers hel!s automatically in increasing mental satisfaction and thereby a sense ofsecurity in a concern. This is $ery im!ortant for %ob9 satisfaction.

(cope fo ne, changes !)here the roles and acti$ities to be !erformed are clear ande$ery !erson gets inde!endence in his &orking' this !ro$ides enough s!ace to a manager

to de$elo! his talents and flourish his kno&ledge. ( manager gets ready for takinginde!endent decisions &hich can be a road or !ath to ado!tion of ne& techni,ues of!roduction. This sco!e for bringing ne& changes into the running of an enter!rise is!ossible only through a set of organi8ational structure.

Principles of Organi,ing

The organi8ing !rocess can be done efficiently if the managers ha$e certain guidelines sothat they can take decisions and can act. To organi8e in an effecti$e manner' the follo&ing

!rinci!les of organi8ation can be used by a manager.

1. rinciple of Speciali6ation

(ccording to the !rinci!le' the &hole &ork of a concern should be di$idedamongst the subordinates on the basis of ,ualifications' abilities and skills. It isthrough di$ision of &ork s!eciali8ation can be achie$ed &hich results in effecti$eorgani8ation.

2. rinciple of 0#nctional Definition

(ccording to this !rinci!le' all the functions in a concern should be com!letelyand clearly defined to the managers and subordinates. This can be done by clearlydefining the duties' res!onsibilities' authority and relationshi!s of !eo!le to&ardseach other. Clarifications in authority9 res!onsibility relationshi!s hel!s inachie$ing co9 ordination and thereby organi8ation can take !lace effecti$ely. +ore/am!le' the !rimary functions of !roduction' marketing and finance and theauthority res!onsibility relationshi!s in these de!artments shouldbe clearlydefined to e$ery !erson attached to that de!artment. Clarification in the authority9res!onsibility relationshi! hel!s in efficient organi8ation.

3. rinciples of Span of Control7S#pervision

(ccording to this !rinci!le' s!an of control is a s!an of su!er$ision &hich de!ictsthe number of em!loyees that can be handled and controlled effecti$ely by asingle manager. (ccording to this !rinci!le' a manager should be able to handle&hat number of em!loyees under him should be decided. This decision can betaken by choosing either froma &ide or narro& s!an. There are t&o ty!es of s!anof control:9

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a.;ide span of contol!It is one in &hich a manager can su!er$ise andcontrol effecti$ely a large grou! of !ersons at one time. The features of thiss!an are:9

i. ess o$erhead cost of su!er$isionii. rom!t res!onse from the em!loyees

iii. Better communicationi$. Better su!er$ision$. Better co9ordination

$i. Suitable for re!etiti$e %obs

(ccording to this s!an' one manager can effecti$ely and efficiently handlea large number of subordinates at one time.

b. Nao, span of contol!(ccording to this s!an' the &ork andauthority is di$ided amongst many subordinates and a manager doesntsu!er$ises and control a $ery big grou! of !eo!le under him. The manager

according to a narro& s!an su!er$ises a selected number of em!loyees atone time. The features are:9i. )ork &hich re,uires tight control and su!er$ision' for e/am!le'

handicrafts' i$ory &ork' etc. &hich re,uires craftsmanshi!' therenarro& s!an is more hel!ful.

ii. Co9ordination is difficult to be achie$ed.iii. Communication ga!s can come.i$. Messages can be distorted.$. S!eciali8ation &ork can be achie$ed.

0actors infl#encing Span of Control

a7Manageial abilities!In the concerns &here managers are ca!able',ualified and e/!erienced' &ide s!an of control is al&ays hel!ful.

b7"ompetence of subodinates!)here the subordinates are ca!able andcom!etent and their understanding le$els are !ro!er' the subordinates tendto $ery fre,uently $isit the su!eriors for sol$ing their !roblems. In suchcases' the manager can handle large number of em!loyees. 3ence &ide s!anis suitable.

c7Natue of ,o3!If the &ork is of re!etiti$e nature' &ide s!an of

su!er$ision is more hel!ful. 4n the other hand' if &ork re,uires mental skillor craftsmanshi!' tight control and su!er$ision is re,uired in &hich narro&s!an is more hel!ful.

d70elegation of authoity!)hen the &ork is delegated to lo&er le$els inan efficient and !ro!er &ay' confusions are less and congeniality of theen$ironment can be maintained. In such cases' &ide s!an of control issuitable and the su!er$isors can manage and control large number of sub9ordinates at one time.

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e70egee of decentali%ation!Fecentrali8ation is done in order to achie$es!eciali8ation in &hich authority is shared by many !eo!le and managers atdifferent le$els. In such cases' a tall structure is hel!ful. There are certainconcerns &here decentrali8ation is done in $ery effecti$e &ay &hich resultsin direct and !ersonal communication bet&een su!eriors and sub9 ordinates

and there the su!eriors can manage large number of subordinates $eryeasily. In such cases' &ide s!an again hel!s.

@7rinciple of Scalar C$ain

Scalar chain is a chain of command or authority &hich flo&s from to! to bottom. )ith achain of authority a$ailable' &astages of resources are minimi8ed' communication isaffected' o$erla!!ing of &ork is a$oided and easy organi8ation takes !lace. ( scalar chainof command facilitates &ork flo& in an organi8ation &hich hel!s in achie$ement ofeffecti$e results. (s the authority flo&s from to! to bottom' it clarifies the authority!ositions to managers at all le$el and that facilitates effecti$e organi8ation.

C7rinciple of )nit! of Command

It im!lies one subordinate9one su!erior relationshi!. E$ery subordinate is ans&erable andaccountable to one boss at one time. This hel!s in a$oiding communication ga!s andfeedback and res!onse is !rom!t. Gnity of command also hel!s in effecti$e combinationof resources' that is' !hysical' financial resources &hich hel!s in easy co9 ordinationand 'therefore' effecti$e organi8ation.

Authority Flo(s from op to -ottom

Managing Director

Mar.eting Manager

Sales/ Media Manager

Salesmen

(ccording to the abo$e diagram' the Managing Firector has got the highest le$elof authority. This authority is shared by the Marketing Manager &ho shares hisauthority &ith the Sales Manager. +rom this chain of hierarchy' the official chainof communication becomes clear &hich is hel!ful in achie$ement of results and

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case. 4n the other hand' in delegation the managers remain ans&erable e$en for the actsof subordinates to their su!eriors.

mplications of Decentrali6ation

1. There is less burden on the Chief E/ecuti$e as in the case of centrali8ation.

-. In decentrali8ation' the subordinates get a chance to decide and act inde!endently&hich de$elo!s skills and ca!abilities. This &ay the organi8ation is able to!rocess reser$e of talents in it.

5. In decentrali8ation' di$ersification and hori8ontal can be easily im!lanted.;. In decentrali8ation' concern di$ersification of acti$ities can !lace effecti$ely since

there is more sco!e for creating ne& de!artments. Therefore' di$ersificationgro&th is of a degree.

=. In decentrali8ation structure' o!erations can be coordinated at di$isional le$el&hich is not !ossible in the centrali8ation set u!.

>. In the case of decentrali8ation structure' there is greater moti$ation and morale ofthe em!loyees since they get more inde!endence to act and decide.

@. In a decentrali8ation structure' co9ordination to some e/tent is difficult tomaintain as there are lot many de!artment di$isions and authority is delegated toma/imum !ossible e/tent 'i.e.' to the bottom most le$el delegation reaches.Centrali8ation and decentrali8ation are the categories by &hich the !attern ofauthority relationshi!s became clear. The degree of centrali8ation and de9centrali8ation can be affected by many factors like nature of o!eration' $olume of!rofits' number of de!artments' si8e of a concern' etc. The larger the si8e of aconcern' a decentrali8ation set u! is suitable in it.

4rganisations are structured in a $ariety of &ays' de!endant on their ob%ecti$es andculture. The structure of an organisation &ill determine the manner in &hich it o!eratesand it0s !erformance. Structure allo&s the res!onsibilities for different functions and!rocesses to be clearly allocated to different de!artments and em!loyees.

The &rong organisation structure &ill hinder the success of the business. 4rganisationalstructures should aim to ma/imi8e the efficiency and success of the 4rganisation. (neffecti$e organisational structure &ill facilitate &orking relationshi!s bet&een $arioussections of the organisation. It &ill retain order and command &hilst !romoting fle/ibilityand creati$ity.

Internal factors such as si8e' !roduct and skills of the &orkforce influence theorgani8ational structure. (s a business e/!ands the chain of command &ill lengthen andthe s!ans of control &ill &iden. The higher the le$el of skill each em!loyee has the morethe business &ill make use of the matri/ structure to ma/imi8e these skills across theorgani8ation.

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(pan of "ontol

This term is used to describe the number of em!loyees that each managerDsu!er$isor isres!onsible for. The s!an of control is said to be &ide if a su!erior is in charge of manyem!loyees and narro& if the su!erior is in charge of a fe& em!loyees.

Types of ogani%ations

0iffeent (tuctues

The most common organisation structures are:

1. Tall

-. +lat

5. 3ierarchical

;. Centralised and decentrali8ed

67 Tall (tuctue Oganisation

In its sim!lest form a tall organisation has many le$els of management and su!er$ision.There is a "long chain of command# running from the to! of the organisation eg ChiefE/ecuti$e do&n to the bottom of the organisation eg sho! floor &orker. The diagrambelo& neatly ca!tures the conce!t of a tall structure.

0iagam: Tall (tuctue

3o&e$er' tall structures rarely e/ceed A le$els of management. This is firstly because thenumber of layers i.e. management le$els2 decreases the s!an of control. Secondly thedisad$antages of the tall structure begin to out&eigh the ad$antages of a tall structure.

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Ad#antages of tall Oganisations 0isad#antages of tall Oganisations There is a narro& s!an of control ie

each manager has a small number ofem!loyees under their control. Thismeans that em!loyees can be closelysu!er$ised.

The freedom and res!onsibility of

em!loyees subordinates2 isrestricted.

There is a clear management

structure.

Fecision making could be slo&ed

do&n as a!!ro$al may be needed byeach of the layers of authority.

The function of each layer &ill be

clear and distinct. There &ill be clear

lines of res!onsibility and control.

Communication has to take !lace

through many layers of management.

Clear !rogression and !romotionladder.

3igh management costs becausemanagers are generally !aid morethan subordinates. Each layer &illtend to !ay it0s managers moremoney than the layer belo& it.

87 Flat (tuctue Oganisation

In contrast to a tall organisation' a flat organisation &ill ha$e relati$ely fe& layers or %ust

one layer of management. This means that the "Chain of Command# from to! to bottomis short and the "s!an of control is &ide#. Fue to the small number of managementlayers' flat organisations are often small organisations.

0iagam: Flat (tuctue

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Ad#antages of flat Oganisations 0isad#antages of flat Oganisations

MoreD?reater communication

bet&een management and &orkers.

)orkers may ha$e more than one

managerDboss. Better team s!rit. May limitDhinder the gro&th of the

organisation. ess bureaucracy and easier

decision making.

Structure limited to small

organisations such as !artnershi!s'co9o!erati$es and some !ri$atelimited com!anies.

+e&er le$els of management&hich includes benefits such aslo&er costs as managers aregenerally !aid more than &orker.

+unction of eachde!artmentD!erson could beblurred and merge into the %obroles of others.

1%2ine and Staff Organi,ation

ine and staff organi8ation is a modification of line organi8ation and it is more com!le/than line organi8ation. (ccording to this administrati$e organi8ation' s!eciali8ed andsu!!orti$e acti$ities are attached to the line of command by a!!ointing staff su!er$isorsand staff s!ecialists &ho are attached to the line authority. The !o&er of command al&aysremains &ith the line e/ecuti$es and staff su!er$isors guide' ad$ice and council the linee/ecuti$es. ersonal Secretary to the Managing Firector is a staff official.

MANA$IN$0I&'"TO& DDDDDDDDDDDDDDDDDDDDDDDDD

E E Eroduction Manager Marketing Manager +inance Manager

E E Elant Su!er$isor Market Su!er$isor Chief (ssisstant

E E E+oreman Salesman (ccountant

0eat#res of Line and Staff 'rgani6ation

1. There are t&o ty!es of staff :a. Staff (ssistants9 .(. to Managing Firector' Secretary to Marketing

Manager.b. Staff Su!er$isor9 4!eration Control Manager' Quality Controller' R4

-. ine and Staff 4rgani8ation is a com!romise of line organi8ation. It is morecom!le/ than line concern.

5. Fi$ision of &ork and s!eciali8ation takes !lace in line and staff organi8ation.;. The &hole organi8ation is di$ided into different functional areas to &hich staff

s!ecialists are attached.=. Efficiency can be achie$ed through the features of s!eciali8ation.

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>. There are t&o lines of authority &hich flo& at one time in a concern :a. ine (uthorityb. Staff (uthority

@. o&er of command remains &ith the line e/ecuti$e and staff ser$es only ascounselors.

Merits of Line and Staff 'rgani6ation

1. &elief to line of e+ecuti#es! In a line and staff organi8ation' the ad$ice andcounseling &hich is !ro$ided to the line e/ecuti$es di$ides the &ork bet&een thet&o.The line e/ecuti$e can concentrate on the e/ecution of !lans and they getrelie$ed of di$iding their attention to many areas.

-. '+pet ad#ice!The line and staff organi8ation facilitates e/!ert ad$ice to the linee/ecuti$e at the time of need. The !lanning and in$estigation &hich is related todifferent matters can be done by the staff s!ecialist and line officers canconcentrate on e/ecution of !lans.

5. Benefit of (peciali%ation!ine and staff through di$ision of &hole concern into

t&o ty!es of authority di$ides the enter!rise into !arts and functional areas. This&ay e$ery officer or official can concentrate in its o&n area.

;. Bette co!odination!ine and staff organi8ation through s!eciali8ation is able to!ro$ide better decision making and concentration remains in fe& hands. Thisfeature hel!s in bringing co9 ordination in &ork as e$ery official is concentratingin their o&n area.

=. Benefits of &eseach and 0e#elopment!Through the ad$ice of s!eciali8ed staff'the line e/ecuti$es' the line e/ecuti$es get time to e/ecute !lans by taking!roducti$e decisions &hich are hel!ful for a concern. This gi$es a &ide sco!e tothe line e/ecuti$e to bring inno$ations and go for research &ork in those areas.This is !ossible due to the !resence of staff s!ecialists.

>. Taining!Fue to the !resence of staff s!ecialists and their e/!ert ad$ice ser$es asground for training to line officials. ine e/ecuti$es can gi$e due concentration totheir decision making. This in itself is a training ground for them.

@. Balanced decisions!The factor of s!eciali8ation &hich is achie$ed by line staffhel!s in bringing co9 ordination. This relationshi! automatically ends u! the lineofficial to take better and balanced decision.

A. Unity of action!Gnity of action is a result of unified control. Control and itseffecti$ity take !lace &hen co9 ordination is !resent in the concern. In the line andstaff authority all the officials ha$e got inde!endence to make decisions. Thisser$es as effecti$e control in the &hole enter!rise.

Demerits of Line and Staff 'rgani6ation

1. 5ac3 of undestanding!In a line and staff organi8ation' there are t&o authorityflo&ing at one time. This results in the confusion bet&een the t&o. (s a result' the&orkers are not able to understand as to &ho is their commanding authority.3ence the !roblem of understanding can be a hurdle in effecti$e running.

-. 5ac3 of sound ad#ice!The line official get used to the e/!ertise ad$ice of thestaff. (t times the staff s!ecialist also !ro$ide &rong decisions &hich the linee/ecuti$e ha$e to consider. This can affect the efficient running of the enter!rise.

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5. 5ine and staff conflicts!ine and staff are t&o authorities &hich are flo&ing atthe same time. The factors of designations' status influence sentiments &hich arerelated to their relation' can !ose a distress on the minds of the em!loyees. Thisleads to minimi8ing of co9 ordination &hich ham!ers a concern0s &orking.

;. "ostly! In line and staff concern' the concerns ha$e to maintain the high

remuneration of staff s!ecialist. This !ro$es to be costly for a concern &ithlimited finance.=. Assumption of authoity!The !o&er of concern is &ith the line official but the

staff dislikes it as they are the one more in mental &ork.>. (taff steals the sho,! In a line and staff concern' the higher returns are

considered to be a !roduct of staff ad$ice and counseling. The line officials feeldissatisfied and a feeling of distress enters a concern. The satisfaction of lineofficials is $ery im!ortant for effecti$e results.

@7 .ieachical Oganisation

In a hierarchical organisation em!loyees are ranked at $arious le$els &ithin theorganisation' each le$el is one abo$e the other. (t each stage in the chain' one !erson hasa number of &orkers directly under them' &ithin their s!an of control. ( tall hierarchicalorganisation has many le$els and a flat hierarchical organisation &ill only ha$e a fe&.

The chain of command ie the &ay authority is organi8ed2 is a ty!ical !yramid sha!e.

0iagam:3ierarchical 4rgani8ation

(bo$e: ( traditional hierarchy' senior managers make u! the board of directors and areres!onsible for establishing strategy and o$erall business direction' &hilst middlemanagers ha$e res!onsibility for a s!ecific function such as finance or marketing.

( traditional hierarchical structure clearly defines each em!loyee0s role &ithin theorganisation and defines the nature of their relationshi! &ith other em!loyees.3ierarchical organisations are often tall &ith narro& s!ans of control' &hich gets &ider as

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&e mo$e do&n the structure. They are often centralised &ith the most im!ortantdecisions being taken by senior management.

In the t&entieth century as organisations gro& bigger' hierarchical organisations &ere!o!ular because they could ensure command and control of the organisation. 3o&e$er

&ith the ad$ent of globalisation and &ides!read use of technology' in the 10s tallhierarchical organisations began to do&nsi8e and reduce their &orkforce. Technology&as able to carry out many of the functions !re$iously carried out by humans.

Ad#antages of .ieachical

Oganisations

0isad#antages of .ieachical

Oganisations

(uthority and res!onsibility and

clearly defined

Clearly defined !romotion !ath.

The organisation can be bureaucratic

and res!ond slo&ly to changingcustomer needs and the market&ithin &hich the organisation

o!erates. There are s!ecialists managers and

the hierarchical en$ironmentencourages the effecti$e use ofs!ecialist managers.

Communication across $arious

sections can be !oor es!eciallyhori8ontal communication.

Em!loyees $ery loyal to their

de!artment &ithin the organisation.

Fe!artments can make decisions

&hich benefit them rather than thebusiness as a &hole es!ecially ifthere is Inter9de!artmental ri$alry.

C7 "entalised and 0ecentalised Oganisation

In a centralised organisation head officeor a fe& senior managers2 &ill retain the ma%orres!onsibilities and !o&ers. Con$ersely decentralised organisations &ill s!readres!onsibility for s!ecific decisions across $arious outlets and lo&er le$el managers'including branches or units located a&ay from head officeDhead ,uarters. (n e/am!le of adecentralised structure is Tesco the su!ermarket chain. Each store of Tesco has a storemanager &ho can make certain decisions concerning their store. The store manager isres!onsible to a regional manager.

4rganisations may also decide that a combination of centralisation and decentralisation ismore effecti$e. +or e/am!le functions such as accounting and !urchasing may becentralised to sa$e costs. )hilst tasks such as recruitment may be decentralised as unitsa&ay from head office may ha$e staffing needs s!ecific only to them.

Certain organisations im!lement $ertical decentralisation &hich means that they ha$ehanded the !o&er to make certain decisions' do&n the hierarchy of their organisation.Hertical decentralisation increases the in!ut' !eo!le at the bottom of the organisationchart ha$e in decision making.

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3ori8ontal decentralisation s!reads res!onsibility across the organisation. ( goode/am!le of this is the im!lementation of ne& technology across the &hole business. Thisim!lementation &ill be the sole res!onsibility of technology s!ecialists

Ad#antages of "entalised (tuctue Fo

Oganisations

Ad#antages of 0ecentalised (tuctue

Fo Oganisations

Senior managers en%oy greater

control o$er the organisation.

Senior managers ha$e time to

concentrate on the most im!ortantdecisions as the other decisions canbe undertaken by other !eo!le do&nthe organisation structure.

The use of standardised !rocedures

can results in cost sa$ings. Fecision making is a form of

em!o&erment. Em!o&erment can

increase moti$ation and thereforemean that staff out!ut increases. Fecisions can be made to benefit the

organisations as a &hole. )hereas adecision made by a de!artmentmanager may benefit theirde!artment' but disad$antage otherde!artments.

eo!le lo&er do&n the chain ha$e a

greater understanding of theen$ironment they &ork in and the!eo!le customers and colleagues2that they interact &ith. Thiskno&ledge skills and e/!erience mayenable them to make more effecti$edecisions than senior managers.

The organisation can benefit from

the decision making of e/!eriencedsenior managers.

Em!o&erment &ill enable

de!artments and their em!loyees tores!ond faster to changes and ne&challenges. )hereas it may takesenior managers longer to a!!reciatethat business needs ha$e changed.

In uncertain times the organisation

&ill need strong leadershi! and !ullin the same direction. It is belie$edthat strong leadershi! is often bestgi$en from abo$e.

Em!o&erment makes it easier for

!eo!le to acce!t and make a successof more res!onsibility.

7 Mati+ G o poect!basedH oganisations

( Matri/ structure organisation contains teams of !eo!le created from $arious sections ofthe business. These teams &ill be created for the !ur!oses of a s!ecific !ro%ect and &ill beled by a !ro%ect manager. 4ften the team &ill only e/ist for the duration of the !ro%ect andmatri/ structures are usually de!loyed to de$elo! ne& !roducts and ser$ices. Thead$antages of a matri/ include

Indi$iduals can be chosen according to the needs of the !ro%ect.

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The use of a !ro%ect team &hich is dynamic and able to $ie& !roblems in a

different &ay as s!ecialists ha$e been brought together in a ne& en$ironment. ro%ect managers are directly res!onsible for com!leting the !ro%ect &ithin a

s!ecific deadline and budget.

)hilst the disad$antages include

( conflict of loyalty bet&een line managers and !ro%ect managers o$er the

allocation of resources. If teams ha$e a lot of inde!endence can be difficult to monitor.

Costs can be increased if more managers ie !ro%ect managers2 are created

through the use of !ro%ect teams.

3% Functional Organi,ation

Functional ogani%ation has been di$ided to !ut the s!ecialists in the to! !osition

throughout the enter!rise. This is an organi8ation in &hich &e can define as a system in&hich functional de!artment are created to deal &ith the !roblems of business at $ariousle$els. +unctional authority remains confined to functional guidance to differentde!artments. This hel!s in maintaining ,uality and uniformity of !erformance of differentfunctions throughout the enter!rise.

The conce!t of +unctional organi8ation &as suggested by +.). Taylor &ho recommendedthe a!!ointment of s!ecialists at im!ortant !ositions. +or e/am!le' the functional headand Marketing Firector directs the subordinates throughout the organi8ation in his!articular area. This means that subordinates recei$es orders from se$eral s!ecialists'managers &orking abo$e them.

0eat#res of 0#nctional 'rgani6ation

1. The entire organi8ational acti$ities are di$ided into s!ecific functions such aso!erations' finance' marketing and !ersonal relations.

-. Com!le/ form of administrati$e organi8ation com!ared to the other t&o.5. Three authorities e/ist9 ine' staff and function.;. Each functional area is !ut under the charge of functional s!ecialists and he has

got the authority to gi$e all decisions regarding the function &hene$er thefunction is !erformed throughout the enter!rise.

=. rinci!le of unity of command does not a!!ly to such organi8ation as it is !resentin line organi8ation.

Merits of 0#nctional 'rgani6ation

1. (peciali%ation!Better di$ision of labour takes !lace &hich results ins!eciali8ation of function and it0s conse,uent benefit.

-. 'ffecti#e "ontol!Management control is sim!lified as the mental functions arese!arated from manual functions. Checks and balances kee! the authority &ithincertain limits. S!ecialists may be asked to %udge the !erformance of $arioussections.



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5. 'fficiency!?reater efficiency is achie$ed because of e$ery function !erforming alimited number of functions.

;. 'conomy!S!eciali8ation com!iled &ith standardi8ation facilitates ma/imum!roduction and economical costs.

=. '+pansion!E/!ert kno&ledge of functional manager facilitates better control and

su!er$ision.

Demerits of 0#nctional 'rgani6ation

1. "onfusion!The functional system is ,uite com!licated to !ut into o!eration'es!ecially &hen it is carried out at lo& le$els. Therefore' co9 ordination becomesdifficult.

-. 5ac3 of "o! odination!Fisci!linary control becomes &eak as a &orker iscommanded not by one !erson but a large number of !eo!le. Thus' there is nounity of command.

5. 0ifficulty in fi+ing esponsibility!Because of multi!le authority' it is difficult tofi/ res!onsibility.

;. "onflicts!There may be conflicts among the su!er$isory staff of e,ual ranks.They may not agree on certain issues.

=. "ostly!Maintainance of s!ecialist0s staff of the highest order is e/!ensi$e for aconcern.

4% Matri$ Organi,ation

The mati+ ogani%ationis an attem!t to combine the ad$antages of the !ure functionalstructure and the !roduct organi8ational structure. This form is identically suited forcom!anies' such as construction' that are "!ro%ect9dri$en#. The figure belo& sho&s aty!ical Matri/ organi8ation.

In a matri/ organi8ation' each poect managere!orts directly to the $ice !resident andthe general manager. Since each !ro%ect re!resents a !otential !rofit centre' the !o&er andauthority used by the !ro%ect manager come directly from the general manager.

Infomation shaingis mandatory in such an organi8ation' and se$eral !eo!le may bere,uired for the same !iece of &ork. 3o&e$er' in general' the !ro%ect manager has thetotal res!onsibility and accountability for the success of the !ro%ect. The functionalde!artments' on the other hand' ha$e functional res!onsibility to maintain technicale/cellence on the !ro%ect. Each functional unit is headed by a de!artment manager &hose!rime res!onsibility is to ensure that a unified technical base is maintained and that all

a$ailable information can be e/changed for each !ro%ect.

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Typical Matrix organization

The basis for the mati+ ogani%ation is an endea$or to create synergism through sharedres!onsibility bet&een !ro%ect and functional management. 4ther ad$antages of a !urematri/ organi8ational form' to !ro%ect management' include:

Because key !eo!le can be shared' the !ro%ect cost is minimi8ed

Conflicts are minimal' and those re,uiring hierarchical referrals are more easily

resol$ed

There is a better balance bet&een time' cost and !erformance (uthority and res!onsibility are shared

Stress is distributed among the team

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UNIT III

*lant lay out

( !lant layout study is an engineering study used to analy8e different !hysicalconfigurations for an industrial !lant.

lant ayout is the !hysical arrangement of e,ui!ment and facilities &ithin a lant. Thelant ayout can be indicated on a floor !lan sho&ing the distances bet&een differentfeatures of the !lant. 4!timi8ing the ayout of a lant can im!ro$e !roducti$ity' safetyand ,uality of roducts. Gnnecessary efforts of materials handling can be a$oided &henthe lant ayout is o!timi8ed.

This is $alid for:9 Fistances Material has to mo$e

9 Fistances E,ui!ment has to mo$e9 Fistances 4!erators ha$e to mo$e9 Ty!es of 3andling E,ui!ment needed9 Energy re,uired to mo$e items against resistance i.e. gra$ity2

Ty!es of lant ayout

The follo&ing are the !o!ular ty!es of !lant layout:

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12 Fue to lack of straight line se,uence of !roduction' it is im!ossible to maintain the linebalancing in !roduction. So the !roblems of bottleneck and &aiting and idle ca!acityarise.-2 The cost of material handling increases due to long routing and back tracking bet&eenthe !rocesses.

52 The !rocessing time is !rolonged &hich reduces the in$entory turno$er and increasethe in$estments in in$entories.;2 The ins!ection cost increases. Fue to fre,uent changes in the machine set9u!ins!ection is re,uired at each stage of the !rocess.=2 The cost of su!er$ision increase due to s!ecialist su!er$isors and more number ofsu!er$isors are re,uired at each !rocess unit.>2 The !roduction !lanning and control becomes difficult due to com!le/ities arising inrouting' scheduling' dis!atching and follo& u!.@2 It is not !ossible to im!lement the grou! in$enti$e schemes on the basis of ,uantity ofthe !roducts manufacturingMore s!ace is re,uired for internal storing' reser$oir of materials and !ro$ision for the

e/!ansion of the !articular !rocess section.

-. roduct layout:

In this ty!e of layout' the machines are arranged in the se,uence as re,uired by the!articular !roduct. (ll machines as re,uired to balance the !articular !roduct the !roductline layout. In this layout' one !roduct goes through all the machines lined u!' in theorder re,uired by its manufacture. The best kno&n e/am!le of this ty!e of layout is seenin motor car !roduction. To make this layout successful' the &ork load on the $ariousmachines must be balanced. The !rocess of getting e$en loading at each stage of!roduction is called line balancing.

In this ty!e of layout' the !roduct is dominating o$er the !rocess' in the sense that the!roduct is gi$en the !rimary im!ortance and the !rocess machine must remain !resent ata !oint &here the !roduct needs its ser$ices. Thus' unlike the !rocess layout' the !rocessis gi$en secondary im!ortance in relation to the !roduct. roduct layout suitable forcontinuous flo& !roduction &ith fe& items of !roduction:

It does not re,uire fre,uent changes in machine set u!. The ty!ical arrangement of themachines in the !roduct &ith the se!arate inde!endent !roduct lines for the roduct (0and roduct B0 &ill be as sho&n.

(d$antages: The !roduct layout is ad$antageous as under:

12 Reduced material handling cost due to straight line !roduction flo&.-2 Mechani8ation of material handling is !ossible due to handling bet&een fi/ed !oints.52 ine balancing may eliminate bottlenecks an idle ca!acity.;2 Shorter o!erating cycle due to shorter and s!eedier mo$ement of materials.=2 Ma/imum utili8ation of machine and labor ca!acity through de$elo!ing !ro!erbalance bet&een them.>2 Effecti$e control o$er !roduction &ith reduced su!er$ision by generalist su!er$isors.

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By reducing the manufacturing to sim!le ste!s &e can often use less skilled labor.@2 Effecti$e ,uality control &ith reduced ins!ection !oints. It does not re,uire fre,uentchanges in machine set9u!.Effecti$e !roduction !lanning and control. Gnlike !rocess layout' the routing' scheduling'dis!atching and follo& u! are relati$ely easier.

2 Ma/imum use of s!ace due to straight !roduction flo& and reduced need of interimstoring.12 It facilitates the im!lementation of the grou! in$enti$e schemes for the &orkers.112 It is relati$ely easy to control

Methods of *oduction

1. Kob !roduction-. Batch roduction

5. Mass !roduction

67ob poduction

Kob !roduction in$ol$es firms !roducing items that meet the s!ecific re,uirements of thecustomer. 4ften these are one9off' uni,ue items such as those made by an architect or&edding dressmaker. +or an architect' each building or structure that he designs &ill bedifferent and tailored to the needs of each indi$idual client.

)ith %ob !roduction' a single &orker or grou! of &orkers handles the com!lete task. Kobscan be on a small9scale in$ol$ing little or no technology. 3o&e$er' %obs can also be

com!le/ re,uiring lots of technology.

)ith lo& technology %obs' !roduction is sim!le and it is relati$ely easy to get hold of theskills and e,ui!ment re,uired. ?ood e/am!les of the %ob method include:

3airdressers

Tailoring

ainting and decorating

lumbing and heating re!airs in the home

3igh technology %obs are much more com!le/ and difficult. These %obs need to be $ery

&ell !ro%ect9managed and re,uire highly ,ualified and skilled &orkers. E/am!les of hightechnology D com!le/ %obs include:

+ilm !roduction

arge construction !ro%ects e.g. the Millennium Fome2

Installing ne& trans!ort systems e.g. trams in Sheffield and Manchester2

(d$antages

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The ad$antage of %ob !roduction is that each item can be altered for the s!ecific customerand this !ro$ides genuine marketing benefits. ( business is likely to be able to add$alue0 to the !roducts and !ossibly create a uni,ue selling !oint GS2' both of &hichshould enable it to sell at high !rices.

Fisad$antages

)hether it is based on lo& or high technology' Kob !roduction is an e/!ensi$e !rocess asit is labour intensi$e uses more &orkers com!ared to machines2. This raises costs tofirms as the !ayment of &ages and salaries is more e/!ensi$e than the costs of runningmachines.

87 Batch poduction

(s businesses gro& and !roduction $olumes increase' the !roduction !rocess is oftenchanged to a "batch method#. Batch methods re,uire that a grou! of items mo$e through

the !roduction !rocess together' a stage at a time.

+or e/am!le &hen a bakery bakes loa$es of &holemeal bread' a large ball of &holemealdough &ill be s!lit into se$eral loa$es &hich &ill be s!read out together on a large bakingtray. The loa$es on the tray &ill then together be cooked' &ra!!ed and dis!atched toshel$es' before the bakery starts on a se!arate batch of' for e/am!le' crusty &hite bread.*ote that each loaf is identical &ithin a batch but that loa$es can $ary from batch tobatch.

Batch !roduction is a $ery common method of organising manufacture. ?ood e/am!lesinclude:

roduction of electronic instruments

+ish and chi! sho!s

aint and &all!a!er manufacturers

Cereal farming

(d$antages

The batch method can be an ad$antage for businesses that !roduce a range of !roducts. Itis chea!er to !roduce a number of each item in one go because machines can be usedmore effecti$ely' the materials can be bought in bulk and the &orkers can s!ecialise in

that task. There are t&o !articular ad$antages of &orkers being able to concentrate theirskills.

They should become more e/!ert at their tasks' &hich &ill in turn increase

!roducti$ity out!ut !er &orker2. This &ill lo&er costs' as fe&er &orkers areneeded to !roduce a set amount.

Better ,uality !roducts should be !roduced as &orkers are more familiar &ith the

task and so can find &ays of im!ro$ing it.

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Fisad$antages

Batch !roduction re,uires $ery careful !lanning to decide &hat batch &ill be !roduced&hen. 4nce a batch is in !roduction it is difficult to change' as s&itching to another batchtakes time and &ill mean a loss of out!ut. Batch methods can also result in the build u! of

significant "&ork in !rogress# or stocks i.e. com!leted batches &aiting for their turn tobe &orked on in the ne/t o!eration2. This increases costs as it takes u! s!ace and raisesthe chance of damage to stock.

Mass poductiondefinition 9 businessThe automated !roduction of large ,uantities of identical !roducts on a continuous basis.Mass !roduction is used to !roduce a homogeneous !roduct at lo& cost.

;o3 (tudy

)ork Study is the systematic e/amination of the methods of carrying out acti$ities suchas to im!ro$e the effecti$e use of resources and to set u! standards of !erformance for theacti$ities carried out.

)ork Study

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)ork measurement )ork measurement is the a!!lication of techni,ues designed to establish the time

for a ,ualified &orker to carry out s!ecified %obs at a defined le$el of!erformance.

)ork measurement )M2 is concerned &ith in$estigating' reducing andeliminating ineffecti$e time' &hate$er may be the cause. )M is the means of measuring the time taken in the !erformance of an o!eration

or series of o!erations in such a &ay that the ineffecti$e time is sho&n u! and canbe se!arated out.

In !ractice' !ro$ing e/istence of the ineffecti$e time is the most difficult task.

)ork measurement is the careful analysis of a task' its si8e' the method used in its!erformance' and its efficiency. The ob%ecti$e is to determine the &orkload aborca!acities.

)ork measurement can be e/tremely effecti$e at informing su!er$isors of the &orkingtimes and delays inherent in different &ays of carrying out &ork. The !ur!ose of ameasurement method is to achie$e full co$erage of the &ork to be measured.

( good &ork measurement system has many benefits. It hel!s to reduce labor costs'increase !roducti$ity' and im!ro$e su!er$ision' !lanning' scheduling' !erformancea!!raisal' and decision making.



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There are four &ork measurement methods' each of &hich has strengths and &eaknesses.The historical datamethod sho&s the time it actually took to com!lete a task. Such dataha$e the ad$antages of being easy to collect' understand' and communicate' but they!ro$ide no information for future im!ro$ement. +or the &or- samplingmethod' a largenumber of random obser$ations are made of the task to determine the ste!s in its normal

!erformance. This method is easy to learn and use' and it !ro$ides more o!erationaldetail than historical data. The disad$antage of &ork sam!ling is that it re,uiresthousands of sam!les to establish an accurate measure for each ste!.

The time studymethod uses continuous and sna!back a!!roaches to record the ela!sedtime of a task. The sna!back a!!roach re,uires a sto!&atch &ith a reset button thatallo&s the obser$er to read and record the time at the end of each &ork element then resetsna!back2 the &atch to 8ero. (lthough !o!ular' the time9study method is sub%ecti$e andrelies hea$ily on the e/!erience of the time9study analyst. ( com!uteri8ed data collector!ro$ides more accurate timing than the sto!&atch. 3o&e$er' con$erting actual time tothe e/!ected or normal time remains a !roblem.

Thepredetermined motion=time systemsmethod is based on the !remises that all &orkconsists of basic human motions and that times can be assigned to these motions ifthey are defined and classified in a systematic &ay. ( film or $ideota!e records &hata %ob entails and ho& long it takes. This techni,ue is used most fre,uently in studyinghigh9$olume settings such as a &orkstation or an assembly line. (n obser$ermeasures a %ob by &atching and analy8ing it into its basic constituent motions. Thismethod re,uires substantial training and !ractice to ac,uire and maintain accuracy. Itenables all ty!es of tasks to be assigned timeDduration $alues that can then bee/tended into cost $alues. The results are not easy to communicate' but &hen !ro!erlye/ecuted' this method yields $ery accurate times.

Method (tudy

Method study is the systematic recording and critical e/amination of e/isting and!ro!osed &ays of doing &ork' as a means of de$elo!ing and a!!lying easier and moreeffecti$e methods and reducing costs.

4BKECTIHES 4+ MET34F STGFP

Im!ro$ement of !rocesses and !rocedures

-. Im!ro$ement in the design of !lant and e,ui!ment

5. Im!ro$ement of layout

;. Im!ro$ement in the use of men' materials and machines

=. Economy in human effort and reduction of unnecessary fatigue

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>. Im!ro$ement in safety standards

@. Fe$elo!ment of better &orking en$ironment.

Time (tudy

Time study is a &ork measurement techni,ue for recording the times of !erforming acertain s!ecific %ob or its elements carried out under s!ecified conditions' and foranaly8ing the data so as to obtain the time necessary for an o!erator to carry it out at adefined rate of !erformance.

Gses of Time Study

1. Fetermining schedules and !lanning &ork.

-. Fetermining standard costs and as an aid in !re!aring budgets.

5. Estimating the cost of a !roduct before manufacturing it.

;. Fetermining machine effecti$eness' the number of machines &hich one !erson cano!erate.

=. Fetermining time standards to be used as a basis for the !ayment of a &age incenti$eto direct labor and indirect labor.

>. Fetermining time standards to be used as a basis for labor cost control.

Time study e,ui!ment

a sto!9&atch

a study board

time study forms

(tatistical uality contol

( system for ensuring the maintenance of !ro!er standards in manufactured goods'es!ecially by !eriodic random ins!ection of the !roduct.

Quality control QC2 is a !rocedure or set of !rocedures intended to ensure that amanufactured !roduct or !erformed ser$ice adheres to a defined set of ,uality criteria ormeets the re,uirements of the client or customer. QC is similar to' but not identical &ith',uality assurance Q(2. Q( is defined as a !rocedure or set of !rocedures intended to

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ensure that a !roduct or ser$ice under de$elo!ment before &ork is com!lete' as o!!osedto after&ards2 meets s!ecified re,uirements. Q( is sometimes e/!ressed together &ithQC as a single e/!ression' ,uality assurance and control Q(DQC2.

In order to im!lement an effecti$e QC !rogram' an enter!rise must first decide &hich

s!ecific standards the !roduct or ser$ice must meet. Then the e/tent of QC actions mustbe determined for e/am!le' the !ercentage of units to be tested from each lot2. *e/t'real9&orld data must be collected for e/am!le' the !ercentage of units that fail2 and theresults re!orted to management !ersonnel. (fter this' correcti$e action must be decidedu!on and taken for e/am!le' defecti$e units must be re!aired or re%ected and !oorser$ice re!eated at no charge until the customer is satisfied2. If too many unit failures orinstances of !oor ser$ice occur' a !lan must be de$ised to im!ro$e the !roduction orser$ice !rocess and then that !lan must be !ut into action. +inally' the QC !rocess mustbe ongoing to ensure that remedial efforts' if re,uired' ha$e !roduced satisfactory resultsand to immediately detect recurrences or ne& instances of trouble.

*!chat

( !9chart is an attributes control chart used &ith data collected in subgrou!s of $aryingsi8es. Because the subgrou! si8e can $ary' it sho&s a !ro!ortion on nonconforming itemsrather than the actual count. 9charts sho& ho& the !rocess changes o$er time. The!rocess attribute or characteristic2 is al&ays described in a yesDno' !assDfail' goDno goform. +or e/am!le' use a !9chart to !lot the !ro!ortion of incom!lete insurance claimforms recei$ed &eekly. The subgrou! &ould $ary' de!ending on the total number ofclaims each &eek. 9charts are used to determine if the !rocess is stable and !redictable'as &ell as to monitor the effects of !rocess im!ro$ement theories.

In statistical ,uality control' the p!chatis a ty!e of control chart used to monitor the!ro!ortion of nonconforming units in a sam!le' &here the sam!le !ro!ortionnonconforming is defined as the ratio of the number of nonconforming units to thesam!le si8e' n.

The !9chart only accommodates L!assLDLfailL9ty!e ins!ection as determined by one ormore go9no go gauges or tests' effecti$ely a!!lying the s!ecifications to the data beforetheyre !lotted on the chart. 4ther ty!es of control charts dis!lay the magnitude of the,uality characteristic under study' making troubleshooting !ossible directly from thosecharts.

The binomial distribution is the basis for the !9chart and re,uires the follo&ingassum!tions.The !robability of nonconformity is the same for each unit and that eachunit is inde!endent of its !redecessors or successors

The ins!ection !rocedure is same for each sam!le and is carried out consistently

from sam!le to sam!le

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The control limits for this chart ty!e are &here is the estimate ofthe long9term !rocess mean established during control9chart setu!. *aturally' if the lo&ercontrol limit is less than or e,ual to 8ero' !rocess obser$ations only need be !lotted

against the u!!er control limit. *ote that obser$ations of !ro!ortion nonconformingbelo& a !ositi$e lo&er control limit are cause for concern as they are more fre,uentlye$idence of im!ro!erly calibrated test and ins!ection e,ui!ment or inade,uately trainedins!ectors than of sustained ,uality im!ro$ement. Some organi8ations may elect to!ro$ide a standard $alue for !' effecti$ely making it a target $alue for the !ro!ortionnonconforming. This may be useful &hen sim!le !rocess ad%ustments can consistentlymo$e the !rocess mean' but in general' this makes it more challenging to %udge &hether a!rocess is fully out of control or merely off9target but other&ise in control2.

Sam!ling re,uires some careful consideration. If the organi8ation elects to use 1ins!ection on a !rocess' the !roduction rate determines an a!!ro!riate sam!ling rate&hich in turn determines the sam!le si8e. If the organi8ation elects to only ins!ect afraction of units !roduced' the sam!le si8e should be chosen large enough so that thechance of finding at least one nonconforming unit in a sam!le is highother&ise thefalse alarm rate is too high. 4ne techni,ue is to fi/ sam!le si8e so that there is a =chance of detecting a !rocess shift of a gi$en amount for e/am!le' from 1 defecti$e to= defecti$e2. If U is the si8e of the shift to detect' then the sam!le si8e should be set to

.(nother techni,ue is to choose the sam!le si8e large enough so

that the !9chart has a !ositi$e lo&er control limit or .

In the case of 1 ins!ection' $ariation in the !roduction rate e.g.' due to maintenanceor shift changes2 cons!ires to !roduce different sam!le si8es for each obser$ation !lottedon the !9chart. There are three &ays to deal &ith this:

Techni,ue Fescri!tion Gse $ariable9&idth control limits.Each obser$ation !lots against

its o&n control limits: ' &here niis the si8e of the sam!le that!roduced the ith obser$ation on the !9chart Gse control limits based on an a$erage

sam!le si8e.Control limits are ' &here is the a$erage si8e of all the

sam!les on the !9chart' Gse a standardi8ed control chart.Control limits are V5

and the obser$ations' ' are standardi8ed using ' &here niis the si8e ofthe sam!le that !roduced the ith obser$ation on the !9chart.

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Techni,ue Fescri!tion

Gse $ariable9&idth control limits Each obser$ation !lots against its o&n

control limits: ' &hereniis the si8e of the sam!le that !roducedthe ith obser$ation on the !9chart

Gse control limits based on an a$eragesam!le si8e

Control limits are '&here is the a$erage si8e of all the

sam!les on the !9chart'

Gse a standardi8ed control chart Control limits are V5 and the obser$ations'

' are standardi8ed using

' &here niis the si8e of thesam!le that !roduced the ith obser$ation onthe !9chart

* "hat "alculations

lotted statisticThe !ercent of items in the sam!le meeting the criteria of interest

&here n% is the sam!le si8e number of units2 of grou! %."ente 5ine

&here n% is the sam!le si8e number of units2 of grou! %' and m is the number of grou!sincluded in the analysis.U"5 4 5"5 GUppe and 5o,e "ontol 5imitH

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&here n% is the sam!le si8e number of units2 of grou! %' !9bar is the ($erage !erce

Acceptance (ampling

( statistical methodology for %udging &hether batches of !roducts or data meet anacce!table standard of ,uality. ( random sam!le of a gi$en si8e is e/amined in order to

determine if the sam!le is acce!table.

a statistical !rocedure for acce!ting or re%ecting a batch of merchandise or documents7in$ol$es determining the ma/imum number of defects disco$ered in a sam!le before theentire batch is re%ected

(cce!tance sam!ling in$ol$es testing a batch of data to determine if the !ro!ortion ofunits ha$ing a !articular attribute e/ceeds a gi$en !ercentage. The sam!ling !lan in$ol$esthree determinations: 12 batch si8e7 -2 sam!le si8e7 and 52 ma/imum number of defectsthat can be unco$ered before re%ection of the entire batch. This techni,ue !ermitsacce!tance or re%ection of a batch of merchandise or documents under !recisely s!ecified

circumstances.

(cce!tance sam!ling is an im!ortant field of statistical ,uality control that &as!o!ulari8ed by Fodge and Romig and originally a!!lied by the G.S. military to thetesting of bullets during )orld )ar II. If e$ery bullet &as tested in ad$ance' no bullets&ould be left to shi!. If' on the other hand' none &ere tested' malfunctions might occur inthe field of battle' &ith !otentially disastrous results.

Fodge reasoned that a sam!le should be !icked at random from the lot' and on the basisof information that &as yielded by the sam!le' a decision should be made regarding thedis!osition of the lot. In general' the decision is either to acce!t or re%ect the lot. This

!rocess is calledLot $cceptance /ampling or %ust$cceptance /ampling.

(cce!tance sam!ling is Lthe middle of the roadL a!!roach bet&een no ins!ection and1 ins!ection. There are t&o ma%or classifications of acce!tance !lans: by attributesLgo' no9goL2 and by %ariables. The attribute case is the most common for acce!tancesam!ling' and &ill be assumed for the rest of this section.

( !oint to remember is that the main !ur!ose of acce!tance sam!ling is to decide&hether or not the lot is likely to be acce!table' not to estimate the ,uality of the lot.

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(cce!tance sam!ling is em!loyed &hen one or se$eral of the follo&ing hold: Testing is destructi$e

The cost of 1 ins!ection is $ery high

1 ins!ection takes too long

0emings contibution to )uality

;illiam 'd,ads 0eming4ctober 1;' 1 < Fecember -' 152 &as an (mericanstatistician' !rofessor' author' lecturer' and consultant. Feming is &idely credited &ithim!ro$ing !roduction in the Gnited States during the Cold )ar' although he is !erha!sbest kno&n for his &ork in Ka!an. There' from 1= on&ard he taught to! managementho& to im!ro$e design and thus ser$ice2' !roduct ,uality' testing and sales the lastthrough global markets2 through $arious methods' including the a!!lication of statisticalmethods.

Feming made a significant contribution to Ka!ans later re!utation for inno$ati$e high9

,uality !roducts and its economic !o&er. 3e is regarded as ha$ing had more im!act u!onKa!anese manufacturing and business than any other indi$idual not of Ka!anese heritage.Fes!ite being considered something of a hero in Ka!an' he &as only %ust beginning to &in&ides!read recognition in the G.S. at the time of his death.

Feming ad$ocated that all managers need to ha$e &hat he called a System of rofoundno&ledge' consisting of four !arts:

1. "ppreciation of a s!stem: understanding the o$erall !rocesses in$ol$ingsu!!liers' !roducers' and customers or reci!ients2 of goods and ser$icese#plained belo&27

-. 8nowledge of variation: the range and causes of $ariation in ,uality' and use ofstatistical sam!ling in measurements7

5. T$eor! of 9nowledge: the conce!ts e/!laining kno&ledge and the limits of &hatcan be kno&n

;. 8nowledge of ps!c$olog!: conce!ts of human nature.

Feming e/!lained' L4ne need not be eminent in any !art nor in all four !arts in order tounderstand it and to a!!ly it. The 1; !oints for management in industry' education' andgo$ernment follo& naturally as a!!lication of this outside kno&ledge' for transformationfrom the !resent style of )estern management to one of o!timi8ation.L

LThe $arious segments of the system of !rofound kno&ledge !ro!osed here cannot bese!arated. They interact &ith each other. Thus' kno&ledge of !sychology is incom!lete&ithout kno&ledge of $ariation.

L( manager of !eo!le needs to understand that all !eo!le are different. This is notranking !eo!le. 3e needs to understand that the !erformance of anyone is go$ernedlargely by the system that he &orks in' the res!onsibility of management. ( !sychologistthat !ossesses e$en a crude understanding of $ariation as &ill be learned in the

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e/!eriment &ith the Red Beads Ch. @2 could no longer !artici!ate in refinement of a !lanfor ranking !eo!le.

The$ppreciation of a systemin$ol$es understanding ho& interactions i.e.' feedback2bet&een the elements of a system can result in internal restrictions that force the system

to beha$e as a single organism that automatically seeks a steady state. It is this steadystate that determines the out!ut of the system rather than the indi$idual elements. Thus itis the structure of the organi8ation rather than the em!loyees' alone' &hich holds the keyto im!ro$ing the ,uality of out!ut.

The>no&ledge of %ariationin$ol$es understanding that e$erything measured consists ofboth LnormalL $ariation due to the fle/ibility of the system and of Ls!ecial causesL thatcreate defects. Quality in$ol$es recogni8ing the difference to eliminate Ls!ecial causesL&hile controlling normal $ariation. Feming taught that making changes in res!onse toLnormalL $ariation &ould only make the system !erform &orse. Gnderstanding $ariationincludes the mathematical certainty that $ariation &ill normally occur &ithin si/ standard

de$iations of the mean.

0eming he &as a&arded a medal by the Ka!anese Em!erorfor his ser$ices to that countrys industry.

Feming returned to the GS and s!ent some years in obscurity before the !ublication ofhis book L4ut of the crisisL in 1A-. In this book' Feming set out 1; !oints &hich' ifa!!lied to GS manufacturing industry' &ould he belie$ed' sa$e the GS from industrialdoom at the hands of the Ka!anese.

(lthough Feming does not use the term Total Quality Management in his book' it iscredited &ith launching the mo$ement. Most of the central ideas of TQM are contained inL4ut of the crisisL.

The 1; !oints seem at first sight to be a rag9bag of radical ideas' but the key tounderstanding a number of them lies in Femings thoughts about $ariation. Hariation &asseen by Feming as the disease that threatened GS manufacturing. The more $ariation 9 inthe length of !arts su!!osed to be uniform' in deli$ery times' in !rices' in &ork !ractices9 the more &aste' he reasoned.

+rom this !remise' he set out his 1; !oints for management' &hich &e ha$e !ara!hrasedhere:

1.LCreate constancy of !ur!ose to&ards im!ro$ementL. Re!lace short9term reaction &ith

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long9term !lanning.

-.L(do!t the ne& !hiloso!hyL. The im!lication is that management should actually ado!this !hiloso!hy' rather than merely e/!ect the &orkforce to do so.

5.LCease de!endence on ins!ectionL. If $ariation is reduced' there is no need to ins!ectmanufactured items for defects' because there &ont be any.

;.LMo$e to&ards a single su!!lier for any one item.L Multi!le su!!liers mean $ariationbet&een feedstocks.

=.LIm!ro$e constantly and fore$erL. Constantly stri$e to reduce $ariation.

>.LInstitute training on the %obL. If !eo!le are inade,uately trained' they &ill not all &orkthe same &ay' and this &ill introduce $ariation.

@.LInstitute leadershi!L. Feming makes a distinction bet&een leadershi! and meresu!er$ision. The latter is ,uota9 and target9based.

A.LFri$e out fearL. Feming sees management by fear as counter9 !roducti$e in the longterm' because it !re$ents &orkers from acting in the organisations best interests.

.LBreak do&n barriers bet&een de!artmentsL. (nother idea central to TQM is theconce!t of the internal customer' that each de!artment ser$es not the management' butthe other de!artments that use its out!uts.

1.LEliminate slogansL. (nother central TQM idea is that its not !eo!le &ho make mostmistakes 9 its the !rocess they are &orking &ithin. 3arassing the &orkforce &ithoutim!ro$ing the !rocesses they use is counter9!roducti$e.

11.LEliminate management by ob%ecti$esL. Feming sa& !roduction targets asencouraging the deli$ery of !oor9,uality goods.

1-.LRemo$e barriers to !ride of &orkmanshi!L. Many of the other !roblems outlinedreduce &orker satisfaction.

15.LInstitute education and self9im!ro$ementL.

1;.LThe transformation is e$eryones %obL.

Feming has been critici8ed for !utting for&ard a set of goals &ithout !ro$iding any toolsfor managers to use to reach those goals %ust the !roblem he identified in !oint 12. 3isine$itable res!onse to this ,uestion &as: LPoure the manager' you figure it out.L

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The 0eming )uality cycle

). Ed&ards Feming in the 1=s !ro!osed that business !rocesses should be analy8edand measured to identify sources of $ariations that cause !roducts to de$iate fromcustomer re,uirements. 3e recommended that business !rocesses be !laced in a

continuous feedback loo! so that managers can identify and change the !arts of the!rocess that need im!ro$ements. (s a teacher' Feming created a rather o$ersim!lified2diagram to illustrate this continuous !rocess' commonly kno&n as the FC( cycle forlan' Fo' Check' (ctW:

*5AN: Fesign or re$ise business !rocess com!onents to im!ro$e results

0O: Im!lement the !lan and measure its !erformance

".'"2: (ssess the measurements and re!ort the results to decision makers

A"T: Fecide on changes needed to im!ro$e the !rocess

Femings FC( cycle can be illustrated as follo&s:

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UNIT I1

MAT'&IA5 MANA$'M'NT

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Materials management is the branch of logistics that deals &ith the tangible com!onentsof a su!!ly chain. S!ecifically' this co$ers the ac,uisition of s!are !arts andre!lacements' ,uality control of !urchasing and ordering such !arts' and the standardsin$ol$ed in ordering' shi!!ing' and &arehousing the said !arts.

Obecti#esof Materials Management: The ob%ecti$es of integrated materials management can be classified in t&o

categories 7 rimary and

Secondary.

These are discussed belo& 7

rimary 4b%ecti$es+ollo&ing may be identified as !rimary ob%ecti$es &hich are to beachie$ed.

a2 To !urchase the re,uired materials at minimum !ossible !rices by follo&ing the

!rescribed !urchase !olicies and encouraging healthy com!etition.

b2 To achie$e high in$entory turno$er i.e. to meet materials re,uirement of theorgani8ation by kee!ing lo& a$erage stocks so that the ca!ital locked u! in materials isturned o$er a large no of times.

c2 To incur minimum !ossible e/!enditure on administrati$e and other allied acti$itiesrelated to !urchase of materials and also to kee! the materials in stock till they are finallydeli$ered to the users.

d2 To ensure that continuity of su!!ly of materials to the users is maintained by a$oiding

out of stock situation.

e2 To su!!ly materials of consistent ,uality i.e. of ,uality &hich meets user s!ecificationand is fit for ser$ice.

f2 To kee! the &age bill of the de!artment lo& by ensuring !ro!er distribution of &orkamong staff and not em!loying sur!lus staff.

g2 To maintain good relationshi! &ith the su!!liers of materials and also de$elo! ne&su!!liers for the !roducts for &hich reliable s

MS Final Material

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