Production and Productivity Production is the process of creating, growing, manufacturing, or improving goods and services. Productivity measures the efficiency or rate of production. It is the amount of output (e.g. number of goods produced) per unit of input (e.g. labor, equipment, and capital). Labour productivity measures the amount of output per worker
Levels of Productivity The unit of analysis used to calculate or define: Aggregate productivity—the total level of productivity for a country. Industry productivity—the total productivity of all the firms in an industry. Company productivity—the level of productivity of a single company. Unit productivity—the productivity level of a unit or department. Individual productivity—the productivity attained by a single person.
Forms of Productivity Total Factor Productivity An overall indicator of how well an organization uses all of its resources (i.e., labor, capital, materials, and energy) to create all of its products and services. Outputs Productivity = Inputs
Forms of Productivity Labor Productivity A partial productivity ratio that uses only one category of resource (labor) to gage the organization’s productivity in utilizing that resource. Outputs Labor Productivity = Direct Labor
Productivity Calculations Labor Productivity Units produced Productivity = Labor-hours used 1,000 = = 4 units/labor-hour 250One resource input single-factor productivity
Managing Productivity The Importance of Productivity Is a primary determinant of an organization’s level of profitability and its ability to survive. Partially determines people’s standard of living within a particular country. Productivity Trends The United States has the highest level of productivity in the world, although the gap is closing as other countries become more productive. Manufacturing productivity growth continues to exceed that of the service sector.
Improving Productivity Improving Operations Spending more resources on research and development helps identify new products, new uses for existing products, and new methods for making products. Reworking transformation processes and facilities can boost productivity.
Improving Productivity Increasing Employee Involvement Increased employee participation can increase quality and productivity. Cross-training of employees allows the firm to function with fewer workers. Rewards are essential to the success in improving productivity.
Efficiency Vs Effectiveness The primary difference: Efficiency - productivity metric and Effectiveness - quality metric! Efficiency is a productivity metrics meaning how fast one can do something Effectiveness is a quality metrics meaning how good a person is at testing.
QUALITY Quality is that characteristic or a combination ofcharacteristics that distinguishes one article from theother or goods of one manufacturer from that ofcompetitors or one grade of product from another whenboth are the outcome of the same factory. Quality of a product is defined as its fitness for thepurpose for which it is made. Many characteristics of theproduct like its shape, color, surface, finish etc. determinethe quality of the product.
CONTROL Control may be defined as the comparison of theactual with the pre-determined standards andspecifications. Control locates the deviations and triesto remove them.QUALITY CONTROL Quality control may be defined as that industrialmanagement technique or group of techniques bymeans of which products of uniform acceptable qualityare manufactured’.
Objectives of quality control:To decide about the standard of quality of a product which iseasily acceptable to the customer.If the quality of product is falling down manufacturing, thento determine the different steps to check this deviation.To verify whether the product conforms to the predeterminedstandards.To take necessary steps so that the products which are belowthe standard do not reach to the customers.To take different measures to improve the standard of qualityof product.To develop quality consciousness in the various sections of themanufacturing unit.To reduce the wastage of raw materials, men and machinesduring the process of production.
Functions of the quality controlTo ensure that only the products of uniform and standardquality are allowed to be sold to consumers.To suggest methods and ways to prevent the manufacturingdifficulties.To reject the defective goods, so that the products of poorquality may not reach to the consumers.To find out the points where the control is breaking down andinvestigate the cause of it.To correct the rejected goods, if it is possible. This procedure isknown as Rehabilitation of defective goods.To help increase the sales of the product so, in short, we cansay that Quality Control is a technique followed in industries toimprove industrial efficiency concentrating on better standardsof quality.
INSPECTION Inspection is the function to judge the qualityof a product. It also means checking theacceptability of the manufactured products.Inspection is the process of measuring the quality ofa product or service in terms of establishedstandards. Inspection is the are of applying tests,preferably by the aid of measuring appliances toobserve whether a given item of product is withinthe specified limit of variability
OBJECTIVES OF INSPECTION: a. Inspection separates defective components from non- defective ones and thus ensures the adequate quality of products. b. Inspection locates defects in raw materials and flows in processes which otherwise cause problems a the final stage. c. Inspection prevents further work being done on semi- finished products and thus checks the work of designers. d. It also helps to establish and increase the reputation by protecting consumers from receiving poor quality
CLASSIFICATION OF INSPECTION Inspection is classified on the basis of the location of the workspot. Classification based on it is given below:1. Floor or Decentralized Inspection: Floor or Decentralized Inspection means inspection on the point of production. it requires the inspector fully equipped with all their devices or equipment to go to the point of work and visit the machines and check the materials coming out from the machine on the spot.2. Centralized Inspection: Centralized Inspection is quite opposite to floor Inspection. In this kinds, Inspection is carried out in Inspection rooms. Under this type, there will be one Inspection room for the entire factory or a number of Inspection sections maintained on different locations of the plant. The parts or products to be checked are moved to the Inspection rooms where various measuring devices are located.
TOTAL QUALITY MANAGEMENT (TQM)Encompasses entire organization, from supplier to customerStresses a commitment by management to have a continuing, companywide drive toward excellence in all aspects of products and services that are important to the customer
Seven Concepts of TQM 1. Continuous improvement 2. Six Sigma 3. Employee empowerment 4. Benchmarking 5. Just-in-time (JIT) 6. Taguchi concepts 7. Knowledge of TQM tools
Continuous Improvement Represents continual improvement of all processes Involves all operations and work centers including suppliers and customers People, Equipment, Materials, Procedures
Six Sigma Two meanings Statistical definition of a process that is 99.9997% capable, 3.4 defects per million opportunities (DPMO) A program designed to reduce defects, lower costs, and improve customer satisfaction
Six Sigma Lower limits Upper limits Two meanings 2,700 defects/million Statistical definition of a process that 3.4 defects/million is 99.9997% capable, 3.4 defects per million opportunities (DPMO) A program designed to reduce defects, lower costs, Mean improve and customer satisfaction 3 6 Figure 6.4
Six Sigma Quality (Continued) Six Sigma allows managers to readily describe process performance using a common metric: Defects Per Million Opportunities (DPMO) Number of defectsDPMO = x 1,000,000 Number of opportunities for error per x No. of units unit 24
Employee Empowerment Getting employees involved in product and process improvements 85% of quality problems are due to process and material Techniques Build communication networks that include employees Develop open, supportive supervisors Move responsibility to employees Build a high-morale organization Create formal team structures
BenchmarkingSelecting best practices to use as astandard for performance 1. Determine what to benchmark 2. Form a benchmark team 3. Identify benchmarking partners 4. Collect and analyze benchmarking information 5. Take action to match or exceed the benchmark
Just-in-Time (JIT)Relationship to quality: JIT cuts the cost of quality JIT improves quality Better quality means less inventory and better, easier-to- employ JIT system
Just-in-Time (JIT) ‘Pull’ system of production scheduling including supply management Production only when signaled Allows reduced inventory levels Inventory costs money and hides process and material problems Encourages improved process and product quality
Taguchi Concepts Engineering and experimental design methods to improve product and process design Identify key component and process variables affecting product variation Taguchi Concepts Quality robustness Quality loss function Target-oriented quality
Quality Robustness Ability to produce products uniformly in adverse manufacturing and environmental conditions Remove the effects of adverse conditions Small variations in materials and process do not destroy product quality
Quality Loss Function Shows that costs increase as the product moves away from what the customer wants Costs include customer dissatisfaction, warranty and service, internal scrap and repair, and costs to society Traditional conformance specifications are too simplistic
Tools of TQM Tools for Generating Ideas Check sheets Scatter diagrams Cause-and-effect diagrams Tools to Organize the Data Flowcharts
Tools of TQM Tools for Identifying Problems Histogram Statistical process control chart
Tools of TQM(a) Check Sheet: An organized method of recording data Hour Defect 1 2 3 4 5 6 7 8 A /// / / / / /// / B // / / / // /// C / // // //// Figure 6.6
Tools of TQM(b) Scatter Diagram: A graph of the value of one variable vs. another variable Productivity Absenteeism Figure 6.6
Tools of TQM(c) Cause-and-Effect Diagram: A tool that identifies process elements (causes) that might effect an outcome Cause Materials Methods Effect Manpower Machinery Figure 6.6
Cause-and-Effect DiagramsMaterial Method (ball) (shooting process) Grain/Feel Aiming point (grip)Size of ball Air pressure Bend knees Hand position Balance Lopsidedness Follow-through Missed Training free-throws Rim size Conditioning Motivation Rim height Consistency Rim alignment Backboard stability Concentration MachineManpower (hoop & Figure 6.7(shooter) backboard)
Tools of TQM(d) Flowchart (Process Diagram): A chart that describes the steps in a process Figure 6.6
Flow Charts MRI Flowchart1. Physician schedules MRI 7. If unsatisfactory, repeat2. Patient taken to MRI 8. Patient taken back to room3. Patient signs in 9. MRI read by radiologist4. Patient is prepped 10. MRI report transferred to5. Technician carries out MRI physician6. Technician inspects film 11. Patient and physician discuss 8 80%1 2 3 4 5 6 7 11 9 10 20%
Tools of TQM(e) Histogram: A distribution showing the frequency of occurrences of a variable Distribution Frequency Repair time (minutes) Figure 6.6
Tools of TQM(f) Statistical Process Control Chart: A chart with time on the horizontal axis to plot values of a statistic Upper control limit Target value Lower control limit Time Figure 6.6
Statistical Process Control (SPC) Uses statistics and control charts to tell when to take corrective action Drives process improvement Four key steps Measure the process When a change is indicated, find the assignable cause Eliminate or incorporate the cause Restart the revised process
MEANING Green operation can be called as sustainable operations management. SustainabilityThe conventional definition of sustainable development is “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”“an enduring, balanced approach to economic activity, environmental responsibility and social progress” The extent to which “sustainability” can actually ever be achieved especially at the level of an individual enterprise or industry is through the life cycle of its products.
ASPECTS Sustainable developement depends on 3 important aspects- Green supply chain management Waste management ISO standards
GREEN SUPPLY CHAIN The term “supply chain” implies a linear relationship among its participants, it is more accurate to say it is anetwork of processes that performs the functions of procurement of materials, transformation of these materials into intermediate and finished products, and distribution of these finished products to customers. Thus, supply chain management (SCM) is the process of planning, implementing, and controlling the operations of the supply chain as efficiently as possible. It includes the acquisition, storage, and movement of raw materials, work-in-process inventory, and finished goods from point-of-origin to point-of- consumption.
There are two main aspects that differentiate green supply chains from traditional supply chains.Firstly, green supply chain aims to improve the environmental performance of its existing supply chain through environmental monitoring and collaboration through application of environmental technologies.Secondly, the supply chain is augmented to include reverse supply chain management that builds a closed-loop system for the products.
WASTE MANAGEMENTVarious types of wastes such as Municipal or domestic wastes, hazardous wastes, Bio-Medical wastes get generated in power plant areas, plant hospital and the townships of projects. The wastes generated are a number of solid and hazardous wastes like used oils & waste oils, grease, lead acid batteries, empty cylinders (refillable), paper, rubber products, fused lamps & tubes, fire resistant fluids etc.
Municipal Waste Management: Domestic or municipal waste is generated in households at townships. This waste is segregated into bio-degradable and non biodegradable wastes at source itself in different colored containers and thereafter the two types are disposed separately.Hazardous Waste Management: the handling and disposal of hazardous wastes are done as per the Hazardous Wastes (Management & Handling) Rules 1989 (as amended in 2003) guidelines issued by Government of India for the treatment, storage and disposal of hazardous wastes.
3R STRATEGYReduce means source reduction and waste preventionReducing waste does not only mean you have to reduce what you buy, but also to obtain what you need in the most resource-efficient way. Seldom- used items, like certain power tools and party goods, often collect dust, rust, take up valuable storage space, and ultimately end up in the trash.
RECYCLE When youve done all you can to avoid waste, recycle. Recycling is the process by which materials are collected and used as raw materials for new products. There are four steps in recycling: collecting the recyclable components of municipal solid waste, separating materials by type, processing them into reusable forms, and purchasing and using the goods made with reprocessed materials.REPLACE Nowadays, durable products are not favoured by manufacturers, as they reduced sales. Non-durable goods are produced for short period of consumption and then disposed of and it would certainly waste energy and resources. Therefore, replace non-durable goods by durable goods certainly helps to conserve the environment.
LEAN MANUFACTURINGLean Manufacturing, also called Lean Production, is aset of tools and methodologies that aims for thecontinuous elimination of all waste in the productionprocess. The main benefits of this are lowerproduction costs, increased output and shorterproduction lead times.
OBJECTIVES Defects and wastage Cycle time Inventory level Labor productivity Utilization of equipment and space Flexibility Output
TYPES OF WASTE Transport Inventory Motion Waiting Overproduction Over Processing Defects
International Quality Standards The International Standards Organization (ISO) started developing environmental management standards in the early 1990sThe International Organization for Standardization (ISO) is an internationalnon-governmental organization that sets standards in many areas of business.The ISO has set up the ISO 14000 family of standards to address the needs ofenvironmental management.
The aims of the standard include: Making better use of “energy-consuming” assets Reinforcing energy management best practices Helping facilities managers evaluate and prioritize the implementation of energy-efficient technologies Enabling energy management improvements that directly contribute to greenhouse gas emissions reduction initiatives Supporting the integration of energy management systems with other key operations systems for environmental, health and safety
ISO 14000 Environmental StandardCore Elements: Environmental management Auditing Performance evaluation Labeling Life cycle assessment
ISO 14000 Environmental StandardAdvantages: Positive public image and reduced exposure to liability Systematic approach to pollution prevention Compliance with regulatory requirements and opportunities for competitive advantage Reduction in multiple audits
CASES A Case Study of Wal-Mart’s “Green” Supply Chain Management.http://www.apicsterragrande.org/Wal-Mart%20Sustainability.pdf Environmental Sustainability at Wipro: Green IT and IT for Greenhttp://www.icmrindia.org/casestudies/catalogue/Operations/OPER082.h tm Sony announces green operations management targetshttp://www.iomnet.org.uk/News/Manufacturing/April-2010/Sony- announces-green-operations-management-targets-19709905.aspx