Master of Business Administration- MBA Semester 2 MB0044 Production and Operations Management

Q1. Explain briefly the Computer Integrated Manufacturing?

Answer: Integration occurs when a broad range of manufacturing and supporting activities are linked. CIM (Computer Integrated Manufacturing) is the complete automation of a manufacturing plant, with all processes functioning under computer control and digital information tying them together. The three major functions in manufacturing are: Production Design Management functions.

Production function converts resources into design. Finally the management functions plan and control production activities.

The three computer aids in CIM are: Computer aid to the production function (automated flow of materials) Computer aid to the design function (automated flow of technological information) Computer aid to the management function (automated flow of managerial information)

Different areas of production process where CIMs are included when it comes to the production-

1. 2. 3. 4. 5. 6. 7.

Engineering Design Production Planning Production Scheduling and control Shop Control Order Processing Material Control Distribution and many other areas.

Information flow across all the functions takes place with the help of computers. Transmission, processing, distribution and feedback happen almost in real time so that intended activities are conducted rapidly.

CIM process helps in rapid production and also reduces indirect costs. CIM uses computers to control the entire production process. This integration allows the processes to exchange information with each other and thus they become capable of initiating actions. As response times decrease, customer satisfaction increases resulting in better business. CIM helps in avoiding accumulation of materials resulting in better throughput and better utilization of space. Bar coded labels that accompany materials contain instructions for processing them which are read by sensing devices and display the status of monitors. This information is available to all concerned personnel responsible in planning, marketing and other activities so that they will be aware of the status of any order. If expediting is needed to meet deadlines, they will be able to seek intervention. Identifying shortages and ensuring faster deliveries become easy with CIM.

Thus, CIM (Computer Integrated Manufacturing) is an important aspect of technology in manufacturing. Almost 40 percent of manufacturing companies are now using one or more elements of CIM technology.

Q2. What is automation? What are the kinds of automation?

Answer - Automation is the use of scientific and technological principles in the manufacture that take over work normally of machines that take over work normally done by humans. Automation is a technology concerned with the application of mechanical, electronic, and computer based systems to operate and control production. For services, automation usually means increase in quality and productivity using labor saving devices. Automation is ideal when services provided of the product are highly standardized. Some extent of automation can be designed even with customization, that is, product or services meant to produce or deliver low volumes specific to requirement. The cost per unit determines the extent of automation required. Automation system cost huge sums of money and therefore, a deep analysis of the various factors has to be done.

Examples of places where automation is used: Banking sector ATMs Education Long distance learning technology There are three kinds of automation:

1. Fixed 2. Programmable 3. Flexible

1. Fixed Automation - The sequence of processing is fixed by the equipment configuration. By its nature, fixed automation is very rigid. They are designed for high volume production and their rigidity ensures less variability. They are not amenable to change in products or process and also need minimal human intervention. Example - Oil refineries and chemical processing units. High initial investment for custom-engineered equipment High production rate Relatively inflexible in accommodating product changes 2. Programmable Automation - Programming devices enable machines to operate automatically. The machines have sensing and control devices that enable this. The simplest of them called machine attachments replace human effort. They guide, locate, move and achieve relative positions by means of cams, optical sensing and loaded sensing mechanisms and activate the controls to remove human intervention. They are computer Numerically Controlled or for short CNC machines. The operation sequence is controlled by a program. E.g., NC machines, industrial robots, AGVs High investment in general-purpose equipment Low production rate, compared to fixed automation Flexibility to changes Most suitable for batch production

3. Flexible Automation: Robots are higher in the order of automation as they perform a variety of tasks. They are designed to move materials by holding them in their arms and making precise movements according to programmes written into the computers that reside in them. They simulate human actions, grip and hold tools with the help of sensors. It is an extension of programmable automation. E.g., flexible manufacturing systems

High investment for a custom-engineered system Continuous production of varying mixture of products Medium production rates With virtually no production time lost for changeover

Diagrammatical representation of automation

Q3. What are the factors that influence the plant location?
Answer Planning is the most important function of management. It is especially when we have to deal with lands, buildings, and machineries. Lands, buildings, and machineries are costly and once fixed cannot be moved. Most importantly part of planning in operation management is Plant Location Planning Factors influencing plant location can be classified broadly into two types:

General Availability of land Availability of inputs (labour, raw materials) Closeness to market places Communication facilities Infrastructure, Housing Government Support

Special Economic stability outside investments Cultural factors Wages Joint ventures support of big time players

General Factors: 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. 2. Availability of inputs while choosing a plant location, it is very important to get the labor at the right time and raw materials at good qualities. The plant should be located: Near to the raw material source where there is no loss of weight At the market place when there is a loss of weight in the material Close to the market when universally available 3. Closeness to market places Organizations can choose to locate the plant near the customers market or far from them depending upon the product they produce. It is advisable to locate the plant near to market place, when: The projection life of the product is low The transportation cost is too high The product are delicate and susceptible to spoilage After sales service are promptly required 4. Communication facilities Communication facility is also an important factor which influences the location of plant. Regions with good communication facilities viz. Postal and tele communication links should be given priority for the selection of sites. 5. Infrastructure It plays a prominent role in deciding the location. The basic infrastructure needed in any organization are:

 Water Power Waste Disposal 6. Transport Transport facility is a must for facility location and the 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. Basic modes of transportation are: Air, Rail, Road & Water. 7. Government Support The factors that demand additional attention for plant location is the policies of the state govt. and local bodies concerning labor laws, building codes and safety. 8. Housing and Recreation They also influence the plant location. Locating a plant with the facilities of good schools, housing and recreation for employees will have a greater impact on the organization. Special Factors:

1. 2. 3. 4.

Economic Stability outside investments Cultural Factors Wages Joint ventures Support of big time players

Q4. Describe the seven basic quality control tools. Answer: Quality - Degree to which a set of inherent characteristics fulfills requirements. Quality control tools are specific activities and procedures adopted using date for determining a particular aspect of quality for arriving at decisions which are conclusive. Each toll though developed and tested by senior personnel or consultants will be simple enough to be understood, implemented and interpreted by the personnel for their immediate use. The tools to be used, criteria to be adopted and the way of interpreting the date are handed over to them for use. Seven basic quality control tools: 1. 2. 3. 4. 5. 6. 7. Flow Chart Check Sheet Histogram Pareto Analysis Scatter Diagram Control Chart Cause and Effect Diagram

1. Flow Chart It is a visual representation of process showing the various steps. It helps in locating the points at which a problem exists or an improvement is possible. Detailed data can be collected, analyzed and methods for correction can be developed using flow charts. Various steps includes Listing out the various steps or activities in a particular job Classifying them as a procedure or a decision

2. Check Sheet Check sheets are used to record the number of defects, types of defects, locations at which they are occurring, times at which they are occurring, and workmen by whim they are occurring. It keeps the record of the frequencies of occurrence with reference to possible defect causing parameter.

3. Histogram Histograms are graphical representation of data. They are generally used to record huge volumes of data about a process. They reveal whether the pattern of distribution has a single peak or many peaks and also the extent of variation around the peak. This helps in identifying whether the problem is serious.

4. Pareto Analysis It is a tool for classifying problem areas according to the degree of importance and attending to the most important. Pareto principle also called 80-20 rule, states that 80 percent of the problems that we encounter arise out of 20 percent of items.

5. Scatter Diagram It is used when we have two variables and want to know the degree of relationship between them. We can determine if there is a cause and effect relationship between the variables and the degree of extent over a range of values of the variables.

6. Control Chart They are used to verify whether a process is under control. Variables, when they remain within a range, will render the product and maintain the specifications. This is called quality of conformance. 7. Cause and Effect Diagram It represents all the possible causes which lead to a defect on quality characteristics. These are arranged in such a way that

different branches representing causes connect the stem in the direction of the problem.

Q5. Define project management. Describe the five dimensions of project management. Answer Managing a project is the practice of controlling the use of resources, such as cost time, manpower, hardware, and software involved in the project. It usually starts with a problem statement and ends with delivery of complete product.

Project management is chiefly associated with planning and managing change in an organization, but a project can also be something unrelated to business - even a domestic situation, such as moving house, or planning a wedding. Projects can be various shapes and sizes, from the small and straightforward to extremely large and highly complex. Examples of projects Commissioning a new industrial unit Construction of a house Setting up of an office Developing a technology Launching a new product in the market Project management is accomplished through the use of the processes such as:

Initiation Planning Execution

Controlling Closing

Project managers or the organization can divide projects into above phases to provide better management control with appropriate links to the ongoing operations of the performing organization. Collectively, these phases are known as the project life cycle which we would see in next chapter. Project managers deliver projects while balancing the following constraints:

Scope Schedule Quality Resources Customer Satisfaction Risk

These all are so intertwined that a change in one will most often cause a change in at least one of the others For example:

If time is extended, the cost of the project will increase. If time extended with the same cost then quality of the product will reduce. If scope is extended then cost and time will also extend.

Changes to any of these legs sets off a series of activities that are needed to integrate the change across the project.

There are five dimensions of project management 1. Features 2. Quality 3. Cost 4. Schedule 5. Staff

For example, if you add staff, the schedule may shorten and the cost might increase. The trade-offs among the five dimensions of project management are not linear. For each project, you need to decide which dimensions are critical and how to balance the others so as to achieve the key project objectives.

Q6. What is meant by Supply Chain Management (SCM)? What are the objectives of SCM? Answer A supply chain is a network of facilities and distribution options that performs the functions of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these finished products to customers. A set of approaches used to efficiently integrate suppliers, manufacturers, warehouses etc. so that the product is produced and distributed in the right quantity, to the right location and at the right time is called Supply Chain Management. SCM is the practice of coordinating the flow of goods, services, information and finances as they move from raw material to parts supplier to manufacturer to wholesaler to retailer to consumer. This process includes order generation, order taking, information feedback and the efficient and timely delivery of goods and services. Efficiently managing this process involves overseeing relationships with suppliers and customers, controlling inventory, forecasting demand and getting constant feedback on what is happening at every link in the chain. Supply Chain Management is considered by many experts worldwide as the ultimate solution towards efficient enterprise management. Many management failures have been attributed to the lack of the system to bind various subsystems within a geographically widespread enterprise, which true to modern trends, also includes an umbrella of customers, suppliers and associates. Mangers of tomorrow are therefore, expected to raise themselves above the level of perpetual crisis management to one of proactive, predictive and performance oriented management. Supply chain involves several elements such as location, production, inventory and transportation. Once you have determined all the elements in the supply chain, there are three main paths in the process 1. Product Flow includes the movement of goods from a supplier to a customer, as well as customer returns. 2. Information Flow involves transmitting orders and updating the status of delivery. 3. Financial Flow consists of credit terms, payments and payments schedules, plus consignment and title ownership.

Objectives of SCM (Supply Chain Management) SCM are required by an enterprise as a tool to enhance management effectiveness with the following organizational objectives. Reduction of inventory Enhancement of participation level and empowerment level Increase in functional effectiveness of existing systems like Enterprise Resource Planning (ERP), Accounting software and Documentation such as Financial Reports/Statements. Effective integration of multiple systems like ERP, communication systems, documentation system and security. Design/Research & Development (R&D) systems. Better utilization of resources like men, material, equipment and money. Optimization of money flow cycle within the organization as well as from external agencies. Enhancement of value of products, operations, and services. These enhancements will consequently enhance the profitability of organization. Enhancement of satisfaction level of customers and clients, supporting institutions, statuary control agencies, suppliers and vendors, employees and executives. Enhancement of flexibility in the organization to help in easy implementation of schemes involving modernization, expansion and diversification even divestments, mergers, and acquisitions. Enhancement of coverage and accuracy of management information systems.