PRODUCTION OPERATION MANAGEMENT

FINAL HANDOUTS

DESIGN OF PROCESS LAYOUT

The analysis involved in the design of production lines and assembly lines relates primarily to
timing, coordination, and balance among individual stages in the process.

For process layouts, the relative arrangement of departments and machines is the critical
factor because of the large amount of transportation and handling involved.

PROCEDURE FOR DESIGNING PROCESS LAYOUTS

Process layout design determines the best relative locations of functional work centres. Work
centres that interact frequently, with movement of material or people, should be located close
together, whereas those that have little interaction can be spatially separated. One approach of
designing an efficient functional layout is described below.

1. List and describe each functional work centre.

2. Obtain a drawing and description of the facility being designed.

3. Identify and estimate the amount of material and personnel flow among work centres

4. Use structured analytical methods to obtain a good general layout.

5. Evaluate and modify the layout, incorporating details such as machine orientation,
storage area location, and equipment access.

SERVICE LAYOUT

Service facility layout will be designed based on degree of customer contact and the service
needed by a customer. These service layouts follow conventional layouts as required.

The major factors considered for service providers, is an impact of location on sales and
customer satisfaction. Customers usually look about how close a service facility is,
particularly if the process requires considerable customer contact. Hence, service facility
layouts should provide for easy entrance to these facilities from the freeways. Well-organized
packing areas, easily accessible facilities, well designed walkways and parking areas are
some of the requirements of service facility layout.

ORGANIZATION OF PHYSICAL FACILITIES

The following are the most important physical facilities to be organized:

1. Factory building
2. Lighting
3. Climatic conditions
4. Ventilation
5. Work-related welfare facilities

1
PRODUCTION OPERATION MANAGEMENT
FINAL HANDOUTS

I. FACTORY BUILDING

Factory building is a factor which is the most important consideration for every industrial
enterprise. A modem factory building is required to provide protection for men, machines,
materials, products or even the company’s secrets.

Following factors are considered for an Industrial Building:

A. Design of the Building

The building should designed so as to provide a number of facilities—such as lunch rooms,

cafeteria, locker rooms, crèches, libraries, first-aid and ambulance rooms, materials handling
facilities, heating, ventilation, air-conditioning, etc. Following factors are considerations in
the designing of a factory building:

• Flexibility: Flexibility is one of the important considerations because the building is

likely to become obsolete and provides greater operating efficiency even when processes and
technology change.

• Product and equipment: The type of product that is to be manufactured, determines

column-spacing, type of floor, ceiling, heating and air-conditioning. A product of a temporary
nature may call for a less expensive building and that would be a product of a more
permanent nature. Similarly, a heavy product demands a far more different building than a
product which is light in weight.

• Expansibility: Growth and expansion are natural to any manufacturing enterprises.

They are the indicators of the prosperity of a business.

The following factors should be borne in mind if the future expansion of the concern is
to be provided for:

(i) The area of the land which is to be acquired should be large enough to provide for the future expansion needs of
the firm and accommodate current needs.

(ii) The design of the building should be in a rectangular shape. Rectangular shapes facilitate expansion on any side.

(iii) If vertical expansion is expected, strong foundations, supporters and columns must be provided.

(iv) If horizontal expansion is expected, the side walls must be made non-load-bearing to provide for easy removal.

• Employee facilities and service area: Employee facilities must find a proper place in
the building design because they profoundly affect the morale, comfort and productivity. The
building plan should include facilities for lunch rooms, cafeteria, water coolers, parking area
and the like.

2
PRODUCTION OPERATION MANAGEMENT
FINAL HANDOUTS

Service areas, such as the tool room, the supervisor’s office, the maintenance room, receiving
and dispatching stations, the stock room and facilities for scrap disposal, should also be
included in the building design.

B. Types of Buildings

Industrial buildings may be grouped under three types:

1. Single-storey buildings,
2. Multi-storey buildings
The decision on choosing a suitable type for a particular firm depends on the manufacturing
process and the area of land and the cost of construction

1. SINGLE-STOREY BUILDINGS

Most of the industrial buildings manufacturing which are now designed and constructed are
single storeyed, particularly where lands are available at reasonable rates.

Advantages of single-storey building are:

1. There is a greater flexibility in layout and production routing.

2. The maintenance cost resulting from the vibration of machinery is reduced
considerably because of the housing of the machinery on the ground.
3. Expansion is easily ensured by the removal of walls.
4. The cost of transportation of materials is reduced because of the absence of materials
handling equipment between floors.
5. All the equipment is on the same level, making for an easier and more effective layout
supervision and control.
6. Greater floor load-bearing capacity for heavy equipment is ensured.
7. The danger of fire hazards is reduced because of the lateral spread of the building.
Limitations

Single-storey buildings suffer from some limitations. These are:

1. High cost of land, particularly in the city.

2. High cost of heating, ventilating and cleaning of windows.

3. High cost of transportation for moving men and materials to the factory which is
generally located far from the city.

2. MULTI-STOREY BUILDINGS

Schools, colleges, shopping complexes, and residences, and for service industries like
Software, BPO etc. multi-storey structures are generally popular, particularly in cities. Multi-
storey buildings are useful in manufacture of light products, when the acquisition of land
becomes difficult and expensive and when the floor load is less.

Advantages

3
PRODUCTION OPERATION MANAGEMENT
FINAL HANDOUTS

When constructed for industrial use, multi-storey buildings offer the following advantages:

1. Maximum operating floor space (per sq. ft. of land). This is best suited in areas where land is
very costly.

2. Lower cost of heating and ventilation.

3. Reduced cost of materials handling because the advantage of the use of gravity for the flow of
materials.

Limitations

Following are the disadvantages of multi-storey building:

1. Materials handling becomes very complicated. A lot of time is wasted in moving them between floors.

2. A lot of floor space is wasted on elevators, stairways and fire escapes.

3. Floor load-bearing capacity is limited, unless special construction is used, which is very expensive.

4. Natural lighting is poor in the centres of the shop, particularly when the width of the building is
somewhat great.

5. Layout changes cannot be effected easily and quickly.

Generally speaking, textile mills, food industries, detergent plants, chemical industries and software industry
use these types of buildings.

II. LIGHTING

It is estimated that 80 per cent of the information required in doing job is perceived visually.

CONTROL OF LIGHTING

In order to make the best use of lighting in the work place, the following points should be
taken into account:

1. For uniform light distribution, install an independent switch for the row of lighting
fixtures closest to the windows. This allows the lights to be switched on and off depending on
whether or not natural light is sufficient.

2. To prevent glare, avoid using highly shiny, glossy work surfaces.

3. Use localized lighting in order to achieve the desired level for a particular fine job.

4. Clean light fixtures regularly and follow a maintenance schedule so as to prevent

flickering of old bulbs and electrical hazards due to worn out cables.

5. Avoid direct eye contact with the light sources. This is usually achieved by
positioning them property. The use of diffusers is also quite effective.

4
PRODUCTION OPERATION MANAGEMENT
FINAL HANDOUTS

III. CLIMATIC CONDITIONS

Control of the climatic conditions at the workplace is paramount importance to the workers
health and comfort and to the maintenance of higher productivity. With excess heat or cold,
workers may feel very uncomfortable, and their efficiency drops. In addition, this can lead to
accidents.

• WORKING IN A HOT ENVIRONMENT

• WORKING IN A COLD ENVIRONMENT

IV. VENTILATION

Ventilation is the dynamic parameter that complements the concept of air space. For a given
number of workers, the smaller the work premises the more should be the ventilation.

Ventilation differs from air circulation. Ventilation replaces contaminated air by fresh air,
whereas as the air-circulation merely moves the air without renewing it. Where the air
temperature and humidity are high, merely to circulate the air is not only ineffective but also
increases heat absorption. Ventilation disperses the heat generated by machines and people at
work. Adequate ventilation should be looked upon as an important factor in maintaining the
worker’s health and productivity.

V. WORK-RELATED WELFARE FACILITIES

Work-related welfare facilities offered at or through the workplace can be important factors.
Some facilities are very basic, but often ignored, such as drinking-water and toilets. Others
may seem less necessary, but usually have an importance to workers far greater than their
cost to the enterprise.

• drinking water
• sanitary facilities
• first-aid and medical facilities
• rest facilities
• feeding facilities
• recreational facilities
• child-care facilities
CHAPTER 3 MATERIAL HANDLING

3.1 INTRODUCTION AND MEANING

Haynes defines “Material handling embraces the basic operations in connection with the
movement of bulk, packaged and individual products in a semi-solid or solid state by
means of gravity manually or power-actuated equipment and within the limits of individual
producing, fabricating, processing or service establishment”.

Following are the objectives of material handling:

5
PRODUCTION OPERATION MANAGEMENT
FINAL HANDOUTS

1. Minimize cost of material handling.

2. Minimize delays and interruptions by making available the materials at the point of
use at right quantity and at right time.
3. Increase the productive capacity of the production facilities by effective utilisation of
capacity and enhancing productivity.
4. Safety in material handling through improvement in working condition.
5. Maximum utilization of material handling equipment.
6. Prevention of damages to materials.
7. Lower investment in process inventory.

3.3 MATERIAL HANDING EQUIPMENTS

Material Handing Equipment may be classified in five major categories.

1. CONVEYORS
Conveyors are useful for moving material between two fixed workstations, either
continuously or intermittently. They are mainly used for continuous or mass production
operations—indeed, they are suitable for most operations where the flow is more or less
steady.

2. INDUSTRIAL TRUCKS

Industrial trucks are more flexible in use than conveyors since they can move between
various points and are not permanently fixed in one place. They are, therefore, most suitable
for intermittent production and for handling various sizes and shapes of material.

3. CRANES AND HOISTS

The major advantage of cranes and hoists is that they can move heavy materials through
overhead space. However, they can usually serve only a limited area. Here again, there are
several types of crane and hoist, and within each type there are various loading capacities.
Cranes and hoists may be used both for intermittent and for continuous production

4. CONTAINERS

These are either ‘dead’ containers (e.g. Cartons, barrels, skids, pallets) which hold the
material to be transported but do not move themselves, or ‘live’ containers (e.g. wagons,
wheelbarrows or computer self-driven containers). Handling equipments of this kind can
both contain and move the material, and is usually operated manually.

5. ROBOTS

Many types of robot exist. They vary in size, and in function and maneuverability. While
many robots are used for handling and transporting material, others are used to perform
operations such as welding or spray painting. An advantage of robots is that they can perform

6
PRODUCTION OPERATION MANAGEMENT
FINAL HANDOUTS

in a hostile environment such as unhealthy conditions or carry on arduous tasks such as the
repetitive movement of heavy materials.

RELATIONSHIP BETWEEN PLANT LAYOUT AND MATERIAL HANDLING

There is a close relationship between plant layout and material handling. A good layout
ensures minimum material handling and eliminates rehandling in the following ways:

1. Material movement does not add any value to the product so, the material handling should be
kept at minimum though not avoid it. This is possible only through the systematic plant layout. Thus a
good layout minimizes handling.

2. The productive time of workers will go without production if they are required to travel long
distance to get the material tools, etc. Thus a good layout ensures minimum travel

for workman thus enhancing the production time and eliminating the hunting time and travelling time.

3. Space is an important criterion. Plant layout integrates all the movements of men, material
through a well designed layout with material handling system.

4. Good plant layout helps in building efficient material handling system. It helps to keep
material handling shorter, faster and economical. A good layout reduces the material backtracking,
unnecessary workmen movement ensuring effectiveness in manufacturing.

Thus a good layout always ensures minimum material handling

CHAPTER 4

MATERIALS MANAGEMENT

Materials management is a function, which aims for integrated approach towards the
management of materials in an industrial undertaking. Its main objective is cost reduction and
efficient handling of materials at all stages and in all sections of the undertaking.

SCOPE OR FUNCTIONS OF MATERIALS MANAGEMENT

From the definition it is clear that the scope of materials management is vast. The functions
of materials management can be categorized in the following ways: (as shown in Fig. 4.1.)

1. Material Planning and Control

2. Purchasing
3. Stores Management
4. Inventory Control or Management
5. Standardization
6. Simplification
7. Value Analysis
8. Erogonomics
9. Just-in-Time (JIT)

7
PRODUCTION OPERATION MANAGEMENT
FINAL HANDOUTS

1. Materials planning and control: Based on the sales forecast and production plans,
the materials planning and control is done. This involves estimating the individual
requirements of parts, preparing materials budget, forecasting the levels of inventories,
scheduling the orders and monitoring the performance in relation to production and sales.

There are many factors, which influence the activity of material planning. These factors can
be classified as macro and micro systems.

a. Macro factors: Some of the micro factors which affect material planning, are price
trends, business cycles Govt. import policy etc.

b. Micro factors: Some of the micro factors that affect material planning are plant
capacity utilization, rejection rates, lead times, inventory levels, working capital, delegation
of powers and communication.

2. Purchasing: This includes selection of sources of supply finalization in terms of

purchase, placement of purchase orders, follow-up, maintenance of smooth relations with
suppliers, approval of payments to suppliers, evaluating and rating suppliers.

The objectives of the purchasing department can be outlined as under:

1. To avail the materials, suppliers and equipment’s at the minimum possible costs:
These are the inputs in the manufacturing operations. The minimization of the input cost
increases the productivity and resultantly the profitability of the operations.

2. To ensure the continuous flow of production through continuous supply of raw

materials, components, tools etc. with repair and maintenance service.

3. To increase the asset turnover: The investment in the inventories should be kept
minimum in relation to the volume of sales. This will increase the turnover of the assets and
thus the profitability of the company.

4. To develop an alternative source of supply: Exploration of alternative sources of

supply of materials increases the bargaining ability of the buyer, minimization of cost of
materials and increases the ability to meet the emergencies.

5. To establish and maintain the good relations with the suppliers: Maintenance of good
relations with the supplier helps in evolving a favorable image in the business circles. Such

8
PRODUCTION OPERATION MANAGEMENT
FINAL HANDOUTS

relations are beneficial to the buyer in terms of changing the reasonable price, preferential
allocation of material in case of material shortages, etc.

6. To achieve maximum integration with other department of the company: The

purchase function is related with production department for specifications and flow of
material, engineering department for the purchase of tools, equipment’s and machines,
marketing department for the forecasts of sales and its impact on procurement of materials,
financial department for the purpose of maintaining levels of materials and estimating the
working capital required, personnel department for the purpose of manning and developing
the personnel of purchase department and maintaining good vendor relationship.

7. To train and develop the personnel: Purchasing department is manned with varied
types of personnel. The company should try to build the imaginative employee force through
training and development.

8. Efficient record keeping and management reporting: Paper processing is inherent

in the purchase function. Such paper processing should be standardised so that record keeping
can be facilitated. Periodic reporting to the management about the purchase activities justifies
the independent existence of the department.

3. Stores management or management: This involves physical control of materials,

preservation of stores, minimization of obsolescence and damage through timely disposal and
efficient handling, maintenance of stores records, proper location and stocking. A store is also
responsible for the physical verification of stocks and reconciling them with book figures. A
store plays a vital role in the operations of a company.

The most important purpose served by the stores is to provide uninterrupted service to the
manufacturing divisions. Further, stores are often equated directly with money, as money is
locked up in the stores.

FUNCTIONS OF STORES

The functions of stores can be classified as follows:

1. To receive raw materials, components, tools, equipment’s and other items and account
for them.
2. To provide adequate and proper storage and preservation to the various items.
3. To meet the demands of the consuming departments by proper issues and account for
the consumption.
4. To minimize obsolescence, surplus and scrap through proper codification,
preservation and handling.
5. To highlight stock accumulation, discrepancies and abnormal consumption and effect
control measures.

9
PRODUCTION OPERATION MANAGEMENT
FINAL HANDOUTS

6. To ensure good house keeping so that material handling, material preservation,

stocking, receipt and issue can be done adequately.
7. To assist in verification and provide supporting information for effective purchase
action.
4. Inventory control or management: Inventory generally refers to the materials in stock.
It is also called the idle resource of an enterprise. Inventories represent those items, which are
either stocked for sale or they are in the process of manufacturing or they are in the form of
materials, which are yet to be utilized.
Objectives of Inventory Control

1. To ensure adequate supply of products to customer and avoid shortages as far as

possible.
2. To make sure that the financial investment in inventories is minimum (i.e., to see that
the working capital is blocked to the minimum possible extent).
3. Efficient purchasing, storing, consumption and accounting for materials is an
important objective.
4. To maintain timely record of inventories of all the items and to maintain the stock
within the desired limits.
5. To ensure timely action for replenishment.
6. To provide a reserve stock for variations in lead times of delivery of materials.
7. To provide a scientific base for both short-term and long-term planning of materials.
5. Standardization: Standardization means producing maximum variety of products from
the minimum variety of materials, parts, tools and processes. It is the process of establishing
standards or units of measure by which extent, quality, quantity, value, performance etc. may
be compared and measured.

Advantages of Standardization
All the sections of company will be benefited from standardization as mentioned below.
Benefits to Design Department
1. Fewer specifications, drawings and part list have to prepared and issued.
2. More time is available to develop new design or to improve established design.
3. Better resource allocation.
4. Less qualified personnel can handle routine design work.

Benefits to Manufacturing Department

1. Lower unit cost.

2. Better quality products.
3. Better methods and tooling.
4. Increased interchangeability of parts.
5. Better utilization of manpower and equipment.
6. Accurate delivery dates.
7. Better services of production control, stock control, purchasing, etc.
8. More effective training.
Benefits to Marketing Department

1. Better quality products of proven design at reasonable cost leads to greater sales
volume.

10
 PRODUCTION OPERATION MANAGEMENT
FINAL HANDOUTS

2. Increased margin of profit.

3. Better product delivery.
4. Easy availability of sales part.
5. Less sales pressure of after-sales services.
Benefits to Production Planning Department

1. Scope for improved methods, processes and layouts.

2. Opportunities for more efficient tool design.
3. Better resource allocation.
4. Reduction in pre-production activities.
Benefits to Production Control Department

1. Well proven design and methods improve planning and control.

2. Accurate delivery promises.
3. Fewer delays arise from waiting for materials, tools, etc.
4. Follow-up of small batches consumes less time.
Benefits to Purchase and Stock Control Department

1. Holding of stock of standard items leads to less paper work and fewer requisitions and
orders.
2. Storage and part location can be improved.
3. Newer techniques can be used for better control of stocks.
4. Because of large purchase quantities involved, favourable purchase contracts can be
made.
Benefits to Quality Control Department

1. Better inspection and quality control is possible.

2. Quality standards can be defined more clearly.
3. Operators become familiar with the work and produce jobs of consistent quality.
6. Simplification: The concept of simplification is closely related to standardization.
Simplification is the process of reducing the variety of products manufactured. Simplification
is concerned with the reduction of product range, assemblies, parts, materials and design.

Following are the advantages of simplification:

1. Simplification involves fewer, parts, varieties and changes in products; this reduces
manufacturing operations and risk of obsolescence.
2. Simplification reduces variety, volume of remaining products may be increased.
3. Simplification provides quick delivery and better after-sales services.
4. Simplification reduces inventory and thus results in better inventory control.
5. Simplification lowers the production costs.
6. Simplification reduces price of a product.
7. Simplification improves product quality.
8. Value analysis: Value analysis is concerned with the costs added due to inefficient or
unnecessary specifications and features. It makes its contribution in the last stage of product

11
 PRODUCTION OPERATION MANAGEMENT
FINAL HANDOUTS

cycle, namely, the maturity stage. At this stage research and development no longer make
positive contributions in terms of improving the efficiency of the functions of the product or
adding new functions to it.

Value Analysis Framework

The basic framework for value analysis approach is formed by the following questions, as
given by Lawrence D. Miles:
1. What is the item?
2. What does it do?
3. What does it cost?
4. What else would do the job?
5. What would the alternative cost be?
Value analysis requires these questions to be answered for the successful implementation of
the technique.

Steps in Value Analysis

In order to answer the above questions, three basic steps are necessary:

1. Identifying the function: Any useful product has some primary function which must
be identified—a bulb to give light, a refrigerator to preserve food, etc. In addition it may have
secondary functions such as withstanding shock, etc. These two must be identified.

2. Evaluation of the function by comparison: Value being a relative term, the

comparison

approach must be used to evaluate functions. The basic question is, ‘Does the function
accomplish reliability at the best cost’ and can be answered only comparison.

3. Develop alternatives: Realistic situations must be faced, objections should overcome

and effective engineering manufacturing and other alternatives must be developed. In order to
develop effective alternatives and identify unnecessary cost the following thirteen value
analysis principles must be used:

1. Avoid generalities.
2. Get all available costs.
3. Use information only from the best source.
4. Brain-storming sessions.
5. Blast, create and refine: In the blast stage, alternative productive products, materials,
processes or ideas are generated. In the ‘create’ stage the ideas generated in the blast stage are
used to generate alternatives which accomplish the function almost totally. In the refining
stage the alternatives generated are sifted and refined so as to arrive at the final alternative to
be implemented.

6. Identify and overcome road blocks.

7. Use industry specialists to extend specialised knowledge.

12
PRODUCTION OPERATION MANAGEMENT
FINAL HANDOUTS

8. Key tolerance not to be too light.

9. Utilize the pay for vendors’ skills techniques.
10. Utilize vendors’ available functional products.
11. Utilize specialty processes.
12. Utilize applicable standards.
13. Use the criterion ‘Would I spend my money this way?’

9.Ergonomics (Human Engineering): The human factors or human engineering is

concerned with man-machine system. Ergonomics is “the design of human tasks, man-
machine system, and effective accomplishment of the job, including displays for presenting
information to human sensors, controls for human operations and complex man-machine
systems.” Each of the above functions are dealt in detail.

Human engineering (ergonomics) has two broader objectives:

1. To enhance the efficiency and effectiveness with which the activities (work) is carried
out so as to increase the convenience of use, reduced errors and increase in productivity.

2. To enhance certain desirable human values including safety reduced stress and fatigue
and improved quality of life.

JUST-IN-TIME (JIT) MANUFACTURING

Introduction

Just-In-Time (JIT) Manufacturing is a philosophy rather than a technique. By eliminating

all waste and seeking continuous improvement, it aims at creating manufacturing system that
is response to the market needs.

The phase just in time is used to because this system operates with low WIP (Work-In-
Process) inventory and often with very low finished goods inventory. Products are assembled
just before they are sold, subassemblies are made just before they are assembled and
components are made and fabricated just before subassemblies are made. This leads to lower
WIP and reduced lead times. To achieve this organizations have to be excellent in other areas
e.g. quality. According to Voss, JIT is viewed as a “Production methodology which aims to
improve overall productivity through elimination of waste and which leads to improved
quality”.

JIT provides an efficient production in an organization and delivery of only the necessary
parts in the right quantity, at the right time and place while using the minimum facilities”.

CHAPTER 5 QUALITY CONTROL

INTRODUCTION
In any business organization, profit is the ultimate goal. To achieve this, there are several
approaches. Profit may be maximized by cutting costs for the same selling price per unit. If it

13
PRODUCTION OPERATION MANAGEMENT
FINAL HANDOUTS

is a monopolistic business, without giving much of importance to the cost reduction

programs, the price may be fixed suitably to earn sufficient profit. But, to survive in a
competitive business environment, goods and services produced by a firm should have the
minimum required quality.

QUALITY

Different meaning could be attached to the word quality under different circumstances. The
word quality does not mean the quality of manufactured product only. It may refer to the
quality of the process (i.e., men, material, and machines) and even that of management.
Where the quality manufactured product referred as or defined as “Quality of product as the
degree in which it fulfills the requirement of the customer. It is not absolute but it judged or
realized by comparing it with some standards”.

Fundamental Factors Affecting Quality

The nine fundamental factors (9 M’s), which are affecting the quality of products and
services, are: markets, money, management, men, motivation, materials, machines and
mechanization. Modern information methods and mounting product requirements.

1. Market: Because of technology advancement, we could see many new products to

satisfy customer wants. At the same time, the customer wants are also changing dynamically.
So, it is the role of companies to identify needs and then meet it with existing technologies or
by developing new technologies.

2. Money: The increased global competition necessitates huge outlays for new
equipments and process. This should be rewarded by improved productivity. This is possible
by minimizing quality costs associated with the maintenance and improvements of quality
level.

3. Management: Because of the increased complex structure of business organization,

the quality related responsibilities lie with persons at different levels in the organization.

4. Men: The rapid growth in technical knowledge leads to development of human

resource with different specialization. This necessitates some groups like, system engineering
group to integrate the idea of full specialization.

5. Motivation: If we fix the responsibility of achieving quality with each individual in

the organization with proper motivation techniques, there will not be any problem in
producing the designed quality products.

6. Materials: Selection of proper materials to meet the desired tolerance limit is also an
important consideration. Quality attributes like, surface finish, strength, diameter etc., can be
obtained by proper selection of material.

14
PRODUCTION OPERATION MANAGEMENT
FINAL HANDOUTS

7. Machines and mechanization: In order to have quality products which will lead to
higher productivity of any organization, we need to use advanced machines and mechanize
Modern information methods: The modern information methods help in storing and
retrieving needed data for manufacturing, marketing and servicing.

8. Modern information methods: The modern information methods help in storing and
retrieving needed data for manufacturing, marketing and servicing.

9. Mounting product requirements: Product diversification to meet customers taste leads to

intricacy in design, manufacturing and quality standards. Hence, companies should plan
adequate system to tackle all these requirements.

CONTROL

The process through which the standards are established and met with standards is called
control. This process consists of observing our activity performance, comparing the
performance with some standard and then taking action if the observed performance is
significantly too different from the standards.

The control process involves a universal sequence of steps as follows:

1. Choose the control object

2. Choose a unit of measure
3. Set the standard value
4. Choose a sensing device which can measure
5. Measure actual performance
6. Interpret the difference between actual and standard
7. Taking action.
9. various operations.
Need for Controlling Quality

In the absence of quality, the following will result:

1. No yardstick for comparing the quality of goods/services.

2. Difficulty in maintaining consistency in quality.
3. Dissatisfied customers due to increased maintenance and operating costs of
products/services.
4. Increased rework cost while manufacturing products/providing services.
5. Reduced life time of the products/services.
6. Reduced flexibility with respect to usage of standard spare parts.
7. Hence, controlling quality is an essential activity.
INSPECTION

Inspection is an important tool to achieve quality concept. It is necessary to assure confidence

to manufacturer and aims satisfaction to customer. Inspection is an indispensable tool of
modern manufacturing process. It helps to control quality, reduces manufacturing costs,
eliminate scrap losses and assignable causes of defective work.

15
PRODUCTION OPERATION MANAGEMENT
FINAL HANDOUTS

Purpose of Inspection
1. To distinguish good lots from bad lots.
2. To distinguish good pieces from bad pieces.
3. To determine if the process is changing.
4. To determine if the process is approaching the specification limits.
5. To rate quality of product.
6. To rate accuracy of inspectors.
7. To measure the precision of the measuring instrument.
8. To secure products-design information.
9. To measure process capability
QUALITY CONTROL

Quality Control (QC) may be defined as a system that is used to maintain a desired level of
quality in a product or service. It is a systematic control of various factors that affect the
quality of the product. It depends on materials, tools, machines, type of labour, working
conditions etc.

Types of Quality Control

1. Off-line quality control: Its procedure deal with measures to select and choose
controllable product and process parameters in such a way that the deviation between the
product or process output and the standard will be minimized. Much of this task is
accomplished through product and process design.

2. Statistical process control: SPC involves comparing the output of a process or a

service with a standard and taking remedial actions in case of a discrepancy between the two.
It also involves determining whether a process can produce a product that meets desired
specification or requirements.

3. Acceptance sampling plans: A plan that determines the number of items to sample
and the acceptance criteria of the lot, based on meeting certain stipulated conditions (such as
the risk of rejecting a good lot or accepting a bad lot) is known as an acceptance sampling
plan.

Objectives of Quality Control

Following are the objectives of quality control:

1. To improve the companies income by making the production more acceptable to the
customers, i.e., by providing long life, greater usefulness, maintainability etc.
2. To reduce companies cost through reduction of losses due to defects.
3. To achieve interchangeability of manufacture in large scale production.
4. To produce optimal quality at reduced price.
5. To ensure satisfaction of customers with productions or services or high quality level,
to build customer goodwill, confidence and reputation of manufacturer.
6. To make inspection prompt to ensure quality control.

16
PRODUCTION OPERATION MANAGEMENT
FINAL HANDOUTS

7. To check the variation during manufacturing.

The broad areas of application of quality control are incoming material control, process
control and product control.

Seven Tools for Quality Control

To make rational decisions using data obtained on the product, or process, or from the
consumer, organizations use certain graphical tools. These methods help us learn about the
characteristics of a process, its operating state of affairs and the kind of output we may
expect from it. Graphical methods are easy to understand and provide comprehensive
information; they are a viable tool for the analysis of product and process data. These tools
are effect on quality improvement. The seven quality control tools are:

1. PARETO CHARTS

Pareto charts help prioritize by arranging them in decreasing order of importantce. In an environment
of limited resources these diagrams help companies to decide on the order in which they should
address problems. The Pareto analysis can be used to identify the problem in a number of forms.

2. Check sheets facilitate systematic record keeping or data collection observations are recorded
as they happen which reveals patterns or trends. Data collection through the use of a checklist is often
the first step in analysis of quality problem. A checklist is a form used to record the frequency of
occurrence of certain product or service characteristics related to quality. The characteristics may be
measurable on a continuous scale such as weight, diameter, time or length.

3. CAUSE AND EFFECT DIAGRAM

It is sometimes called as Fish-bone diagram. It is first developed by Kaorv Ishikawa in 1943

and is sometimes called as Ishikawa diagram. The diameter helps the management trace

17
PRODUCTION OPERATION MANAGEMENT
FINAL HANDOUTS

customer complaints directly to the operations involved. The main quality problem is referred
to Fish-head; the major categories of potential cause structural bones and the likely specific
causes to ribs. It explores possible causes of problems, with the intention being to discover
the root causes. This diagram helps identify possible reasons for a process to go out of control
as well as possible effects on the process.

Fig. 6.3 Fishbone diagram

4. SCATTER DIAGRAM (SCATTER PLOTS)

It often indicates the relationship between two variables. They are often used as follow-ups to
a cause and effect analysis to determine whether a stated cause truly does impact the quality
characteristics.

1. HISTOGRAM (OR) BAR CHARTS

It displays the large amounts of data that are difficult to interpret in their raw form. A

histogram summarizes data measured on a continuous scale showing the frequency

18
PRODUCTION OPERATION MANAGEMENT
FINAL HANDOUTS

distribution of some quality characteristics (in statistical terms the central tendency and the
dispersion of the data).

1. FLOW CHARTS (OR) GRAPHS

It shows the sequence of events in a process. They are used for manufacturing and service
operations. Flow charts are often used to diagram operational procedures to simplify the
system. They can identify bottlenecks, redundant steps and non-value added activities. A
realistic flow chart can be constructed by using the knowledge of the person who are directly
involved in the particular process. The flow chart can be identifies where delays can occur.

2. CONTROL CHARTS

It distinguish special causes of variations from common causes of variation. They are used to
monitor and control process on an ongoing basis. A typical control chart plots a selected
quality characteristic found from sub-group of observations as a function of sample number.

ISO 9000 SERIES

ISO stands for International Organization for Standardization. It is an international body,

which consists of representatives from more than 90 countries. The national standard bodies
of these countries are the members of this organization.

ISO 9000 standards expect firms to have a quality manual that meets ISO guidelines,
documents, quality procedures and job instructions, and verification of compliance by third-

19
PRODUCTION OPERATION MANAGEMENT
FINAL HANDOUTS

party auditors. ISO 9000 series has five international standards on quality managements.
They are:

1. ISO 9000 — Quality management and Quality assurance standards

2. ISO 9001 — Quality systems: Quality in design
3. ISO 9002 — Quality systems: Production and Installation
4. ISO 9003 — Quality systems: Final inspection and test
5. ISO 9004 — Quality management and systems

Benefits of ISO 9000 Series

ISO 9000 series provides several tangible and intangible benefits which are listed below:

1. This gives competitive advantage in the global market.

2. Consistency in quality, since ISO helps in detecting non-conformity early which
makes it possible to take corrective action.
3. Documentation of quality procedures adds clarity to quality system.
4. ISO 9000 ensures adequate and regular quality training for all members of the
organization.
5. ISO helps the customers to have cost effective purchase procedure.

6. The customers while making purchases from companies with ISO certificate need not
spend much on inspection and testing. This will reduce the quality cost and lead-time.
7. This will help in increasing productivity.
8. This will aid to improved morale and involvement of workers.
9. The level of job satisfaction would be more.

APPLICATION ISO 9000: ISO 14000 SERIES

The ISO 14000 series of environmental management standards are intended to assist
organizations manage the environmental effect of their business practices. The ISO 14000
series is similar to the ISO 9000 series published in 1987. The purpose of the ISO 9000 series
is to encourage organizations to institute quality assurance management programs. Although
ISO 9000 deals with the overall management of an organization and ISO 14000 deals with
the management of the environmental effects of an organization, both standards are
concerned with processes, and there is talk of combining the two series into one.

20