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MBA Semester 2 Subject Code MB0044 Assignment Set -1

Name Enrollment No. Course Subject

Senthil Kumar M 511113665 MBA Production & Operations Management

Learning Centre Sampoorna Academy of Management & Science 1. Date No of Pages 29-Oct-2011 13

Q.1 Explain in brief the origins of Just In Time. Explain how JIT is implemented.
Just-In-Time is a Japanese manufacturing management method developed in 1970s. It was first adopted by Toyota manufacturing plants by Taiichi Ohno. The main concern at that time was to meet consumer demands. Because of the success of JIT management, Taiichi Ohno was named the Father of JIT. (Cheng,2) After the first introduction of JIT by Toyota, many companies followed up and around mid 1970s, it gained extended support and widely used by many companies. One motivated reason for developing JIT and some other better production techniques was that after World War II , Japanese people had a very strong incentive to develop a good manufacturing techniques to help them rebuilding the economy. They also had a strong working ethnic which was concentrated on work rather than leisure, seeked continuous improvement, life commitment to work, group conscious rather than individualism and achieved common goal. These kind of motivation had driven Japanese economy to succeed. (Cheng, 3) Because of the natural constraints and the economy constraints after World War II, Japanese Manufacturers looked for a way to gain the most efficient use of limited resources. They worked on "optimal cost/quality relationship". (Cheng, 4) Before the introduction of JIT, there were a lot of manufacturing defects for the existing system at that time. According to Hirano, this included inventory problem, product defects, risen cost, large lot production and delivery delays. The inventory problems included the unused accumulated inventory that was not only unproductive, but also required a lot of effort in storing and managing them. Other implied problems such as parts storage, equipment breakdowns, and uneven production levels.(4-5) For the product defects, manufacturers knew that only one single product defects can destroy the producers creditability. They must create a "defect-free" process. Instead of large lot production - producing one type of products, they awared that they should produce more diversified goods. There was also a problem of rising cost, the existing system could not reduce cost any further but remember improvement always leads to cost reduction. Lastly, the existing system did not manage well for fast delivery request, so, there was a need to have a faster and reliable delivery system in order to handle customers needs. Thus, JIT manufacturing management was developed based on this problems. Just in time were developed to minimize wastage across the organization. If a firm is optimistic about the demand, then that firm increases their planned inventories. On the other hand if the demand is weak when compared to the expectations, then that firms unplanned inventories are high. That means companies dont keep a lot of excess inventory, and then manufacture a product as an order comes in. It is management philosophy of continuous and forced problem solving. The principle of Just in time (JIT) is to eliminate sources of manufacturing waste by getting right quantity of raw materials and producing the right quantity of products in the right place at the right time. The main purpose of this project is to provide informations to the people who is interesting in knowing JIT. ( Of course, the main intend users are students in this course.)

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The seven types of wastes to be eliminated according to JIT are: 1. Over production Over production is to manufacture products before it is actually needed. If the demand for that product decreases, the extra parts or products produced may not be useful or needed. Also over production results in high storage costs and is also difficult to detect defects. So, over productions is considered a waste. 2. Inventory. Excess procurement or production builds up stock of materials which are not immediately use, this locking space and fund carrying heavy cost. 3. Waiting time. Waste of time happen when goods are not moving or being processed. The operator, the machine or the part will either be not working or be worked upon. The duration is can be said to be unproductive and may create more serious consequences. 4. Movement Any unnecessary movement is a waste of energy; it causes blockages, disrupting movements and delaying the flow of other items creating delays. 5. Effort: The people, who work, do not make a study as to how the products on which they are making are utilized and do not realize the purpose for which they are made. This lack of education will lead to waste of resources. Finally, they end up in shortage of resources when needed. 6. Defective products. The defective products leads to a tremendous loss to the company. This is because they use up the same equipments, workmen and the time that would be used to make good products. Thus defective products use up resources and result in losses. 7. Over Processing Some steps like unnecessary processing or production do not add value to the final output. As results, it is waste of all the inputs that go into the process.

Q.2 Bring out the historical background of Value Engineering. Elucidate three companies which have incorporated VE with brief explanation.
Value Engineering (VE) is a systematic method to improve the "value" of goods or products and services by using an examination of function. Value, as defined, is the ratio of function to cost. Value can therefore be increased by either improving the function or reducing the cost. It is a primary tenet of value engineering that basic functions be preserved and not be reduced as a consequence of pursuing value improvements.

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In the United States, value engineering is specifically spelled out in Public Law 104-106, which states Each executive agency shall establish and maintain cost-effective value engineering procedures and processes. Value engineering is sometimes taught within the project management or industrial engineering body of knowledge as a technique in which the value of a systems outputs is optimized by crafting a mix of performance (function) and costs. In most cases this practice identifies and removes unnecessary expenditures, thereby increasing the value for the manufacturer and/or their customers. VE follows a structured thought process that is based exclusively on "function", i.e. what something "does" not what it is. For example a screw driver that is being used to stir a can of paint has a "function" of mixing the contents of a paint can and not the original connotation of securing a screw into a screw-hole. In value engineering "functions" are always described in a two word abridgment consisting of an active verb and measurable noun (what is being done - the verb - and what it is being done to - the noun) and to do so in the most non-prescriptive way possible. In the screw driver and can of paint example, the most basic function would be "blend liquid" which is less prescriptive than "stir paint" which can be seen to limit the action (by stirring) and to limit the application (only considers paint.) This is the basis of what value engineering refers to as "function analysis". Value engineering uses rational logic (a unique "how" - "why" questioning technique) and the analysis of function to identify relationships that increase value. It is considered a quantitative method similar to the scientific method, which focuses on hypothesisconclusion approaches to test relationships, and operations research, which uses model building to identify predictive relationships.

Incorporate VE with brief explanation.


Value of engineering (VE) or value Analysis is a methodology by which we try to find substitutes for a product or an operation. The concept of value engineering originated during the Second World War. It was developed by the General Electric corporations (GEC). Value Engineering has gained popularity due to its potential for gaining high Returns on investment (ROI). This methodology is widely used in business re-engineering, government projects, construction, assembling and machining processes, health care and environmental engineering, and many others. Value engineering process calls for a deep study of a product and the purpose for which it is used, such as the raw materials used; the processes of transformation; the equipment needed, and many others. It is also questions whether what is being used is the most appropriate and economical. This applies to all aspects of the products. 1. GENERAL ELECTICALS CORPORATION (GEC) The concepts of value engineering originated in 1947 in General Electricals corporation (GEC) When a substitute for asbestos for flooring had to be found. Specialized dealers could provide an equally good material at a lesser price. Initially, the practioners were the people in charge of purchasing who tried to locate substitute material which would be equally good, if not better, at a lower price. This the first and basic approach to value engineering. A the concept percolated to the manufacturing departments, engineers applied the same principles and found that, they
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could use alternate materials, which were cheaper giving the same performance. It was also fund that dimensions and tolerance could be altered without affecting the performance of the part or the product. The investigations took them on the path of eliminating some operations. The focus was on the value of each bit materials, each operation. This approach led to the design stage. 2. ASHOK LEYLAND. In implementation of VA, Ashok Leyland changed gear material from phosphor bronze to a less expensive cast iron and eliminated frequent field complaint of gear seizure in trucks. 3. TVS. T.V. Sundaram Lyenger (TVS) Limited is one of the largest automobile distribution companies in India. During the mid 1940 to 1960s, TVS based in Madurai was ranked as the best bus transportation system in India. It could manage to run the fleets for about 96% of the time. TVS used the VE approach to restore the mobility of buses that had broken down. They stocked their garage with some critical assemblies of a bus. Whenever, a part or an assembly failed of a bus, they replaced it immediately with a new one, thus restoring mobility within a couple of hours. When compared to the traditional method, this approach has gained much more benefits to the company, it helped to save time, reduce cost, efficient, quicker, and competitive. 4. MODI XEROX. Modi Xerox designed the VE-d low cost copier 1025 ST, which uses a single tray. The advantage of new design is that it is easy to operate and the cost is also very low. 5. TITAN Titan watches introduced new designs adopting a strategy of innovation.

Q.3 Explain the key elements of Quantitative modeling. What is work study and motion study.
In production and operations management, models refer to any simple representation of reality in different forms such as mathematical equations, graphical representation, pictorial representation, and physical models. Thus a model could be the well known economic order quantity (EOQ) formula, a PERT network chart, a motion picture of an operation, or pieces of strings stretched on a drawing of a plant layout to study the movement of material. The models help us to analyze and understand the reality. These also help us to work determine optimal conditions to for decision making. For example, the EOQ formula helps us to determine the optimum replenishment quantities that minimize the cost of storing plus replenishing. The number of different models we use in production and operations management run into hundreds, or even more than a thousand. These are really too many to enumerate in a place like these. I am listing below a random list of broad categories of models used in production and operations model. Operations research models. This is

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actually a very broad classification and covers many of the other categories in the list given here. Inventory models Forecasting models Network models Linear programming models Queuing models Production planning and control models Engineering drawings Photographs and motion pictures used in time and motion studies. Material movement charts Process flow diagrams Systems charts Statistical process control charts. Variance analysis Regression analysis Organization chart Fishbone chart

Some of the Models are discussed below: 1. LINEAR PROGRAMMING: Linear programming technique is often used for optimizing a given objective like; profit or revenue maximization, or cost outgo minimization. Distribution of the revenues is the critical issue, when there are limited resources and they have to meet competing demands. 2. TRANSPORTATION MODEL: Transportation model is concerned with goods from manufacturing centres or warehouses which have to be supplied to depots or retails outlets. The demand and supply position of the places where they are required or produced and the cost of transportation are considered in the model. We use this model to economize. 3. ASSISGNMENT MODEL: Allocating jobs or persons to machines, awarding different projects to contractors is done so that maximum returns occur or less expenses are incurred. Hence, calls for the use of this model.

4. INVENTORY CONTROL MODEL: Inventory control model considers the:


Frequency of placing orders. Quantities per order considering the cost of placing an order. Number of pieces that are to be kept in reserve. Rate of consumption. Lead time required for the supplier. Cost involved in storage. We have different models which give solutions to optimization depending upon the probabilities of consumption and supply.
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5. WAITING LINE MODELS:


Queues are formed when the rate of services is at a variance with the rate of arrival. They are formed when the rate of production is less at particular points compared to the previous one. Sometimes we see multiple service points and a single queue are formed for feeding them. Number of items which includes the following is studied with some special techniques. People to be serviced Rate of service Type of queue discipline that is intended to be followed. Policy of priority Tolerable amounts of waiting Others

6. SIMULATION MODELS: Simulation models are used when we will not be able to formulate mathematical model. So, we develop a model which resembles a real life situation. Based on this pattern, we predict and plan our procurement, production, delivery and other actions. 7. PERT (PROJECT EVALUATION AND REVIEW TECHNIQUE) AND CPM (CRTICAL PATH METHOD) MODELS: When projects are undertaken with a number of activities, some happens in sequence, with gaps of weeks or months and some happens simultaneously. It is important to estimate the time required for completion of the project. A lot of coordination is needed while supplying the resources. It is also equally important to identify the bottlenecks and smoothen resources so that time schedules are maintained. Delayed completion may entail penalties. In this model, we adopt special methods to make the system. Work study We can say that work study is being conducted when analysis of work methods is conducted during the period when a job is done on a machine or equipment. The study helps in designing the optimum work method and standardization of the work method. The study enables the methods engineer to search for better methods for higher utilization of man and machine and accomplishment of higher productivity. The study gives an opportunity to the workmen to learn the process of study thus making them able to offer suggestions for improved methods. Motions study Method study is on studying the method currently being used and developing a new method of performing the task in a better way. Operation flow charts, motion charts, flow process charts, which are the elements of the task are studied to find the purpose of each activity, the sequences in which they are done, and the effect of these on the work. The study may help in changing some of them and even eliminate some of them to effect improvements.

The new method should result in saving of time, reduced motions and simpler activities.

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Q.4 What is Rapid Prototyping? Explain the difference between Automated flow line and Automated assembly line with examples.
Rapid prototyping is still the most common name given to a host of related technologies that are used to fabricate physical objects directly from CAD data sources. These methods are unique in that they add and bond materials in layers to form objects. Such systems are also known by the names additive manufacturing, additive fabrication, three dimensional printing, solid freeform fabrication (SFF) and layered manufacturing. Today's additive technologies offer advantages in many applications compared to classical subtractive fabrication methods such as milling or turning: Objects can be formed with any geometric complexity or intricacy without the need for elaborate machine setup or final assembly; Rapid prototyping systems reduce the construction of complex objects to a manageable, straightforward, and relatively fast process.

This has resulted in their wide use by engineers as a way to reduce time to market in manufacturing, to better understand and communicate product designs, and to make rapid tooling to manufacture those products. Surgeons, architects, artists and individuals from many other disciplines also routinely use the technology.

Automated flow lines : When several automated machines are linked by a transfer system
which moves the parts by using handling machines which are also automated, we have an automated flow line. After completing an operation on a machine, the semi finished parts are moved to the next machine in the sequence determined by the process requirements a flow line is established. The parts at various stages from raw material to ready for fitment or assembly are processed continuously to attain the required shapes or acquire special properties to enable them to perform desired functions. The materials need to be moved, held, rotated, lifted, positioned etc. for completing different operations. Sometimes, a few of the operations can be done on a single machine with a number of attachments. They are moved further to other machines for performing further operations. Human intervention may be needed to verify that the operations are taking place according to standards. When these can be achieved with the help of automation and the processes are conducted with self regulation, we will have automated flow lines established. One important consideration is to balance times that different machines take to complete the operations assigned to them. It is necessary to design the machines in such a way that the operation times are the same throughout the sequence in the flow of the martial. In fixed automation or hard automation, where one component is manufactured using several operations and machines it is possible to achieve this condition or very nearly. We assume that product life cycles are sufficiently stable to invest heavily on the automated flow lines to achieve reduced cost per unit. The global trends are favouring flexibility in the manufacturing systems. The costs involved in changing the set up of automated flow lines are high. So, automated flow lines are considered only when the product is required to be made in high volumes over a relatively long period. Designers now incorporate flexibility in the machines which will take care of small changes in dimensions by making adjustments or minor changes in the existing machine or layout. The change in movements needed can be achieved by programming the machines. Provisions for extra pallets or tool holders or conveyors are made in the original design to accommodate anticipated changes. The logic to be followed is to find out whether the reduction in cost per piece justifies the costs of
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designing, manufacturing and setting up automated flow lines. Group Technology, Cellular Manufacturing along with conventional Product and Process Layouts are still resorted to as they allow flexibility for the production system. With methodologies of JIT and Lean Manufacturing finding importance and relevance in the competitive field of manufacturing, many companies have found that well designed flow lines suit their purpose well. Flow lines compel engineers to put in place equipments that balance their production rates. It is not possible to think of inventories (Work In Process) in a flow line. Bottlenecks cannot be permitted. By necessity, every bottleneck gets focused upon and solutions found to ease them. Production managers see every bottleneck as an opportunity to hasten the flow and reduce inventories. However, it is important to note that setting up automated flow lines will not be suitable for many industries Automated Assembly Lines: All equipments needed to make a finished product are laid out in such a way as to follow the sequence in which the parts or subassemblies are put together and fitted. Usually, a frame, body, base will be the starting point of an assembly. The frame itself consists of a construction made up of several components and would have been assembled or fabricated in a separate bay or plant and brought to the assembly line. All parts or subassemblies are fitted to enable the product to be in readiness to perform the function it was designed to. This process is called assembly. The material goes from station 1 to 5 sequentially. Operation 2 takes longer time, say twice as long. To see that the flow is kept at the same pace we provide two locations 2a and 2b so that operations 3, 4 and 5 need not wait. At 5, we may provide more personnel to complete operations. The time taken at any of the locations should be the same. Otherwise the flow is interrupted. In automated assembly lines the moving pallets move the materials from station to station and moving arms pick up parts, place them at specified places and fasten them by pressing, riveting, screwing or even welding. Sensors will keep track of these activities and move the assemblies to the next stage. An operator will oversee that the assemblies are happening and there are no stoppages. The main consideration for using automated assembly lines is that the volumes justify the huge expenses involved in setting up the system. The advanced Rapid Prototype Modeling Processes are: Computer Aided Design (CAD) Selective Laser Sintering (SLS) Fused Deposition Modelling (FDM) Lamination Object Manufacturing (LOM) Electronic Beam Melting (EBM)

Q.5 List different methods for selecting a suitable plant location and explain any two.
Planning is the most important function of management. It is important especially, when we have to deal with lands, buildings, and machineries. Lands, buildings and machineries are costly and once fixed cannot be moved easily. Planning therefore a lot of thought, data gathering, and estimates for the future. These considerations are vital for the success of any firm.

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We consider planning into two parts. Planning the location of the plant. Planning the manufacturing facility layouts.

Factors influencing Plant Location can be broadly divided into two types namely; General Factors and Special Factors.

Factors influencing plant location

General Factors
1. General Factors

Special Factors

The general factors that influence the plant location are listed below. 1.1 Availability of Land: availability of land plays an important role in determining the plant location. Many-a-time, our plans, calculations and forecasts suggest a particular area as the best to start an organization. However availability of land may be in question. In such cases, we will have to choose the second best location. Availability of inputs: while choosing a plant location, it is very important for the organization to get the labour at the right time and raw materials at good qualities. The plant should be located: a. Near to the raw materials source when there is no loss of weight. b. At the market place when there is a loss of weight in the material c. Close to the market when universally available, so as to minimize the transportation cost. 1.3 Transport: Transport facility is a must for facility location and layout of location of the plant. Timely supply of raw materials to the company and supply of finished goods to the customers is an important factor. The basic modes of transporation are by Air, Road, Rail, Water and Pipeline. The choice of location should be made depending on these basic modes. Cost of transportation is also an important criterian for plant location. Communication failure: communication facility is also an important factor which influences the location of a plant. Regions with good communication facilities viz. Postal and Tele communication links should be given priority for the selection of sites.

1.2

1.4

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Availability of Land

Availability of Inputs

Closeness to market pl

Communication Facilities

Infrastructure

Transport

Government Support

Housing and recreation

2. Special Factors The special factors that influence the plant location are: 1. 2. 3. 4. 2.1 Economic stability outside investments Cultural factors Wages Joint ventures support of big time playes Rating methods.

General factors or special factors: each factors has its own importance in determining the location of a plant. Therefore, ranking them and giving weightage of them is one of the ways of determining the location. The methods which determine the most likely location are: a. b. c. d. e. Rating plan method Factor rating method Point rating method Break-even analysis Centre of gravity method

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Q.6 Explain Jurans Quality Trilogy and Crosbys absolutes of quality. List out Demings 14 points.
Jurans quality triology: Juran uses his famous Universal Breakthrough Sequence to implement quality programmes. The universal breakthrough sequences are: 1. Proof of need: There should be a compelling need to make changes. 2. Project identification: Here what is to be changed is identified. Specific projects with time frames and the resource allocation are decided. 3. Top management commitment: Commitment of the top management is to assign people and fix responsibilities to complete the project 4. Diagnostic journey: Each team will determine whether the problems result from systemic causes or are random or are deliberately caused. Root causes are ascertained with utmost certainty. 5. Remedial action: This is the stage when changes are introduced. Inspection, testing, and validation are also included at this point. 6. Holding on to the gains: The above steps result in beneficiary results. Having records or all actions and consequences will help in further improvements. The actions that result in the benefits derived should be the norm for establishing standards. Juran has categorised cost of quality into four categories: 1. Failure costs Internal: These are costs of rejections, repairs in terms of materials, labour, machine time and loss of morale. 2. Failure costs External: These are costs of replacement, on-site rework including spare parts and expenses of the personnel, warranty costs and loss of goodwill. 3. Appraisal costs: These are costs of inspection, including maintenance of records, certification, segregation costs, and others. 4. Prevention costs: Prevention cost is the sequence of three sets of activities, Quality Planning, Quality Control, and Quality Improvement, forming the triology to achieve Total Quality Management. Crosbys absolutes of quality: Like Deming, Crosby also lays emphasis on top management commitment and responsibility for designing the system so that defects are not inevitable. He urged that there be no restriction on spending for achieving quality. In the long run, maintaining quality is more economical than compromising on its achievement. His absolutes can be listed as under: 1. 2. 3. 4. Quality is conformance to requirements, not goodness Prevention, not appraisal, is the path to quality Quality is measured as the price paid for non-conformance and as indices Quality originates in all factions. There are no quality problems. It is the people, designs, and processes that create problems

Crosby also has given 14 points similar to those of Deming. His approach emphasises on measurement of quality, increasing awareness, corrective action, error cause removal and continuously reinforcing the system, so that advantages derived are not lost over time. He

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opined that the quality management regimen should improve the overall health of the organisation and prescribed a vaccine. The ingredients are: 1. Integrity: Honesty and commitment help in producing everything right first time, every time 2. Communication: Flow of information between departments, suppliers, customers helps in identifying opportunities 3. Systems and operations: These should bring in a quality environment so that nobody is comfortable with anything less than the best. Quality Tools: 1. Cause-and-effect diagram (also called Ishikawa or fishbone chart): Identifies many possible causes for an effect or problem and sorts ideas into useful categories. 2. Check sheet: A structured, prepared form for collecting and analyzing data; a generic tool that can be adapted for a wide variety of purposes. 3. Control charts: Graphs used to study how a process changes over time. 4. Histogram: The most commonly used graph for showing frequency distributions, or how often each different value in a set of data occurs. 5. Pareto chart: Shows on a bar graph which factors are more significant. 6. Scatter diagram: Graphs pairs of numerical data, one variable on each axis, to look for a relationship. 7. Stratification: A technique that separates data gathered from a variety of sources so that patterns can be seen (some lists replace stratification with flowchart or run chart).

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