PGDBA- SEMESTER-II ASSIGNMENT Set 1- (0044) Name Registration No Learning Center Learning Center Code Course Subject Semester

r Module No. Date of Submission Marks Awarded : : : : : : : : : :

Production and operation Management 2nd Assignment Set 1 19 February 2013

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Winter/November 2012)

Master of Business Administration - MBA Semester 2 MB 0044 - Production and Operation Management (4 credits) (Book ID: B1627) ASSIGNMENT- Set 1

Q1. Explain the basic competitive priorities considered while formulating operations strategy by a firm?
Ans.Operations Strategy: -Operations strategy is the collective concrete actions chosen, mandated, or stimulated by corporate strategy.

Competitive Priorities: - Operating advantages depend on its processes and competitive

priorities considered while establishing the capabilities. The basic competitive priorities are as follows;

PRICE/COSTA firm competing on a price/cost basis is able to provide consumers with an indemand product at a price that is competitively lower than that offered by firms producing the same or similar good/service. QUALITY
Quality is defined by customer. The operations manager looks into two important aspects namely high performance design and consistent quality.

TIME Faster delivery time, on time delivery, and speedy development cycle are the time factors that operations strategy looks into. Faster delivery time is the time lapsed between the customer order and the delivery. SERVICEService can be defined in a number of ways. Superior service can be characterized by the term customer service or it could mean rapid delivery, on-time delivery, or convenient location. FLEXIBILITY Firms may compete on their ability to provide either flexibility of the product or volume. Firms that can easily accept engineering changes (changes in the product) offer a strategic advantage to their customers. This can also apply to services. Q2. a. List the benefits of forecasting

Ans. Benefits of Forecasting:-Good forecast of material, labor and other resources for operation are essentially needed by the managers. If good projection of future demand is available, the management may take suitable action regarding inventory. Similarly, if production activities are accurately forecasted, then balanced work-load may be planned. Good labor relations may be maintained, as there would be lesser hiring and firing activities by the management with better manpower planning. Therefore, forecasting is useful due to following benefits: 1. 2. 3. 4. 5. 6. 7. 8. 9. Effective handling of uncertainty Better labor relations Balanced work-load Minimization in the fluctuations of production Better use of production facilities Better material management Better customer service Better utilization of capital and resources Better design of facilities and production system.

b. Explain the significance of plant location decision Ans. Plant location decision is important for three reasons; They require substantial investments of both money and effort They involve long term commitments which make mistakes difficult to overcome They have a significant impact on the cost and efficiency of short - term operations

The location of facilities involves a commitment of resources to a long-range plan. Thus, predictions of the size and location of markets are of great significance. Given these predictions, we establish facilities for production and distribution that require large financial outlays. In manufacturing organizations, these capital assets have enormous value, and even in service organizations, the commitment of resources may be very large. Location and distribution take on even greater significance because these plans represent the basic strategy for accessing markets and may have significant impacts on revenue, costs, and service levels to customers and clients.

Q3. What do you understand by line balancing? What happens if balance doesnt exist? Ans.A productionstrategy that involves setting an intended rate of production for requiredmaterials to be fabricated within a particular time frame. In addition, effective line balancing requires assuring that every line segment's production quota can be met within the time frame using the available production capacity.Line and work cell balancing is an effective tool to improve the throughput of a s s e m b l y l i n e s a n d w o r k c e l l s w h i l e r e d u c i n g m a n p o w e r r e q u i r e m e n t s a n d c o s t s . Assembly Line Balancing, or simply Line Balancing (LB), is the problem of assigning operations to workstations

along an assembly line, in such a way that the assignment be optimal in some sense. Ever since Henry Fords introduction of assembly lines, LB has b e e n a n o p t i m i z a t i o n p r o b l e m o f s i g n i f i c a n t i n d u s t r i a l i m p o r t a n c e : t h e e f f i c i e n c y difference between an optimal and a sub-optimal assignment can yield economies (or waste) reaching millions of dollars per year. Significance of line balancing Many of the OR approaches implicitly assume that the problem to be solved involves a new, yetto-be-built assembly line, possibly housed in a new, yet-to-be-built factory. To our opinion, this is the gravest oversimplification of the classic OR approach, for in practice, this is hardly ever the case. The vast majority of real-world line balancing tasks involve existing lines, housed in existing factories in fact, the target line typically needs to be rebalanced rather than balanced, the need arising from changes in the product or the mix of models being assembled in the line, the assembly technology, the available workforce, or the production targets

Q4. Describe the various approaches to TQM? Ans.

Approaches to TQM:-

Deming's Theory Deming's theory of Total Quality Management rests upon fourteen points of management he identified, the system of profound knowledge, and the Shewart Cycle (Plan-Do-Check-Act). He is known for his ratio - Quality is equal to the result of work efforts over the total costs. If a company is to focus on costs, the problem is that costs rise while quality deteriorates The fourteen points of Deming's theory of total quality management are as follows: 1. Create constancy of purpose 2. Adopt the new philosophy 3. Stop dependencies on mass inspections 4. Don't award business based upon the price 5. Aim for continuous production and service improvement 6. Bring in cutting-edge on the job training 7. Implement cutting-edge methods for leadership 8. Abolish fear from the company 9. Deconstruct departmental barriers 10. Get rid of quantity-based work goals 11. Get rid of quotas and standards 12. Support pride of craftsmanship 13. Ensure everyone is trained and educated 14. Make sure the top management structure supports the previous thirteen points. Plan-Do-Check-Act (PDCA) is a cycle created for continuous improvement. In the planning phase, objectives and actions are outlined. then, you do your actions and

implement the process improvements. Next, you check to ensure quality against the original. finally acting requires that you determine where changes need to occur for continued improvement before returning to the plan phase.

Crosby's Theory

Philip Crosby is another person credited with starting the TQM movement. He made the point, much like Deming, that if you spend money on quality, it is money that is well spent. Crosby based on four absolutes of quality management and his own list of fourteen steps to quality improvement. Crosby's four absolutes are:

We define quality as adherence to requirements Prevention is the best way to ensure quality Zero Defects (mistakes) is the performance standard for quality Quality is measured by the price of nonconformity

Joseph Juran's Theory Joseph Juran is responsible for what has become known as the "Quality Trilogy." The quality trilogy is made up of quality planning, quality improvement, and quality control. If a quality improvement project is to be successful, then all quality improvement actions must be carefully planned out and controlled. Juran believed there were ten steps to quality improvement Q5. a. What is meant by productivity? Explain. Ans. The term productivity can be used to examine efficiency and effectiveness of any activity conducted in an economy, business, government or by individuals. For example, learning or studying methods used by students that include reading and/or writing the content of a topic and revising the topic by saying out aloud or rewriting. The efficiency and effectiveness of the studying methods can be determined by the marks obtained by a student during exams. The marks obtained could be considered as a tangible result. Whether the student has understood the topic may however, not be reflective of the marks obtained during exams. Nevertheless, a student can evaluate an appropriate studying method that enables good marks as well as develop proper understanding of a topic and continuously strive towards improvement in studies. In the context of the real world, productivity is mostly examined and evaluated with reference to businesses or an economy. Accordingly, it is essential to study productivity in order to:-

Understand the processes of a business Control the business processes Continuously improve processes

Assess performance of a business Determine a business ability to sustain in the long-run

Productivity = Output / Input, wherein Output refers to anything generated from production or provided through services and Input refers to any one or more resources utilized to create the output. The definition implies that productivity is related to efficient utilization of one or more input resources used for producing required output.

b. What do you mean by operations strategy? Explain in brief. Ans. Companies and organisations making products and delivering, be it for profit or not for profit rely
on a handful of processes to get their products manufactured properly and delivered on time. Each of the process acts as an operation for the company. To the company this is essential. That is why managers find operations management more apealing. We begin this section by looking at what operations actually are. Operations strategy is to provide an overall direction that serves the framework for carrying out all the organizations functions.

According to Slack and Lewis, operations strategy holds the following definition:

Operations strategy is the total pattern of decisions which shape the long-term capabilities of any type of operations and their contribution to the overall strategy, through the reconciliation of market requirements with operations resources.

Operations strategy is the tool that helps to define the methods of producing goods or a service offered to the customer. Operations is, after all, about the day-to-day creation and delivery of products and services. So how can it be strategic? In fact, the issue is one of distinguishing between two words which are similar but have different meanings. These are operations and operational. Operations refers to those parts of the business which are concerned with producing products and services. Operational is the opposite of strategic in the sense that it means shortterm and limited in its influence. Other functions of the business such as marketing or finance have both strategic and operational activities. For example, marketing strategy covers the overall long-term approach to how the organization wants to position itself in its markets. The operational side of marketing refers to the day by day tactics of how to manage things like advertising, pricing, and so on. It is just the same with operations. Operations strategy looks at the long-term issues of how to manage the resources which produce products and services. The more operational subject of operations management looks at the more detailed and shop floor issues of designing, planning and controlling, and improving the resources which produce products and services.

Q6. What is logical process modelling? What is physical modelling? Ans. Logical Process Modeling is the representation of putting together all the activities of business process in detail and making a representation of them. The initial data collected need to

be arranged in a logical manner so that links are made between nodes for making the workflow smooth. The steps are as under: (a) Capturing relevant data in detail to be acted upon; (b) Establishing controls and limiting access to the data during process execution; (c) Determining as which task in the process to be done and subsequent tasks in that process; (d) Making sure that all relevant data are available for all the tasks that need to be in the order determined; (e) Making available the relevant and appropriate data for that task; (f) Establishing a mechanism to indicate acceptance of the results after every task or process to have the assurance that flow is going ahead with accomplishments in the desired path. Some of the activities may occur in sequential order whereas some of them may run parallel. There may be circular paths, like rework loops. Complexities arise out of the manner in which process activities are connected together. Logical Process Model consists only of the business activities and shows the connectivity among them. The process model is a representation of the business activities different from the technology dependent ones. Thus we have a model that is singularly structured only for business activities. Since computer programs are also present in the total system, to allow the business oriented executives to be in control of the inputs, processes and outputs, this unique model is helpful. Logical Process Model improves control on the access to data and identifies who is in possession of data at different nodes in the dataflow network that has been structured. A few of the logical modeling formats are given below a) Process Descriptions with task sequences and data addresses b) Flow Charts with various activities and relationships c) Flow Diagrams d) Function hierarchies e) Function dependency diagrams. Physical Modeling Physical modeling is concerned with the actual design of data base meeting the requirements of the business. Physical modeling deals with the conversion of the logical model described above into a relational model. Objects get defined at the schema level. The objects here are tables created on the basis of entities and attributes. Here the database is defined for the business. All the information is put together to make the database software specific. This means that the objects during physical modeling vary on the database software

being used. The outcomes are server model diagrams showing tables and relationships with a database.

The ingredients the ingredients that go into a business process can be briefly outline as under: (i) The data that are needed to accomplish the desired business objective; (ii) Acquisition, storage, distribution, and control of data across tasks in the process; (iii) Persons, teams and organizational units that perform and responsible for tasks; (iv) Decisions that modify and enhance the value of data during the process; We have some behavioral aspects of the business process mainly the decision making process Where humans are involved, Decision failures are common and research has shown that it is because of biases in perception and fallacies in reasoning. Another reason is a tendency to act on assumptions even when data are available easily for verification and/or confirmation. Selective recall a means tendency to bring out of memory the facts that reinforce our assumptions and biased evaluation and tendency to accept evidence or fact as absolute which support our hypotheses. These factors result in faulty decision making and being aware and avoiding them consciously improves the processes.

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