2. 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
3. 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.
4. 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
5. 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
6. Productivity Calculations
Labor Productivity
Units produced
Productivity =
Labor-hours used
1,000
= = 4 units/labor-hour
250
One resource input single-factor productivity
7. 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.
8. 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.
9. 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.
10. 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.
11. QUALITY
Quality is that characteristic or a combination of
characteristics that distinguishes one article from the
other or goods of one manufacturer from that of
competitors or one grade of product from another when
both are the outcome of the same factory.
Quality of a product is defined as its fitness for the
purpose for which it is made. Many characteristics of the
product like its shape, color, surface, finish etc. determine
the quality of the product.
12. CONTROL
Control may be defined as the comparison of the
actual with the pre-determined standards and
specifications. Control locates the deviations and tries
to remove them.
QUALITY CONTROL
Quality control may be defined as that industrial
management technique or group of techniques by
means of which products of uniform acceptable quality
are manufactured’.
13. Objectives of quality control:
To decide about the standard of quality of a product which is
easily acceptable to the customer.
If the quality of product is falling down manufacturing, then
to determine the different steps to check this deviation.
To verify whether the product conforms to the predetermined
standards.
To take necessary steps so that the products which are below
the standard do not reach to the customers.
To take different measures to improve the standard of quality
of product.
To develop quality consciousness in the various sections of the
manufacturing unit.
To reduce the wastage of raw materials, men and machines
during the process of production.
14. Functions of the quality control
To ensure that only the products of uniform and standard
quality are allowed to be sold to consumers.
To suggest methods and ways to prevent the manufacturing
difficulties.
To reject the defective goods, so that the products of poor
quality may not reach to the consumers.
To find out the points where the control is breaking down and
investigate the cause of it.
To correct the rejected goods, if it is possible. This procedure is
known as Rehabilitation of defective goods.
To help increase the sales of the product so, in short, we can
say that Quality Control is a technique followed in industries to
improve industrial efficiency concentrating on better standards
of quality.
15. INSPECTION
Inspection is the function to judge the quality
of a product. It also means checking the
acceptability of the manufactured products.
Inspection is the process of measuring the quality of
a product or service in terms of established
standards.
Inspection is the are of applying tests,
preferably by the aid of measuring appliances to
observe whether a given item of product is within
the specified limit of variability
16. 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
17. TYPES OF INSPECTION
.
The Inspection Types are:
•Tool Inspection
•First piece Inspection
•Working Inspection
•Sample Inspection
•Final Inspection Pilot piece Inspection
•Key operation Inspection
•Functional Inspection
•Endurance Inspection
18. CLASSIFICATION OF INSPECTION
Inspection is classified on the basis of the location of the work
spot. 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.
19. TOTAL QUALITY MANAGEMENT
(TQM)
Encompasses entire organization, from supplier to
customer
Stresses 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
20. 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
21. Continuous Improvement
Represents continual
improvement of all processes
Involves all operations and work
centers including suppliers and
customers
People, Equipment, Materials,
Procedures
22. 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
23. 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
24. Six Sigma Quality (Continued)
Six Sigma allows managers to readily describe
process performance using a common metric:
Defects Per Million Opportunities (DPMO)
Number of defects
DPMO = x 1,000,000
Number of
opportunities
for error per x No. of units
unit
24
25. 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
26. Benchmarking
Selecting best practices to use as a
standard 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
27. 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
28. 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
29. 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
30. 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
31. 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
32. Tools of TQM
Tools for Generating Ideas
Check sheets
Scatter diagrams
Cause-and-effect diagrams
Tools to Organize the Data
Flowcharts
33. Tools of TQM
Tools for Identifying Problems
Histogram
Statistical process control chart
34. 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
35. Tools of TQM
(b) Scatter Diagram: A graph of the value of one
variable vs. another variable
Productivity
Absenteeism
Figure 6.6
36. 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
37. Cause-and-Effect Diagrams
Material 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
Machine
Manpower
(hoop & Figure 6.7
(shooter)
backboard)
38. Tools of TQM
(d) Flowchart (Process Diagram): A chart that describes the
steps in a process
Figure 6.6
39. Flow Charts
MRI Flowchart
1. Physician schedules MRI 7. If unsatisfactory, repeat
2. Patient taken to MRI 8. Patient taken back to room
3. Patient signs in 9. MRI read by radiologist
4. Patient is prepped 10. MRI report transferred to
5. Technician carries out MRI physician
6. Technician inspects film 11. Patient and physician discuss
8
80%
1 2 3 4 5 6 7 11
9 10
20%
40. Tools of TQM
(e) Histogram: A distribution showing the frequency of
occurrences of a variable
Distribution
Frequency
Repair time (minutes)
Figure 6.6
41. 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
42. 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
43.
44. MEANING
Green operation can be called as sustainable operations management.
Sustainability
The 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.
45.
46. ASPECTS
Sustainable developement depends on 3 important
aspects-
Green supply chain management
Waste management
ISO standards
47. 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.
48. 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.
49.
50. WASTE MANAGEMENT
Various 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.
51. 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.
52. 3R STRATEGY
Reduce means source reduction and waste
prevention
Reducing 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.
53. RECYCLE
When you've 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.
54. LEAN MANUFACTURING
Lean Manufacturing, also called Lean Production, is a
set of tools and methodologies that aims for the
continuous elimination of all waste in the production
process. The main benefits of this are lower
production costs, increased output and shorter
production lead times.
55. OBJECTIVES
Defects and wastage
Cycle time
Inventory level
Labor productivity
Utilization of equipment and space
Flexibility
Output
56. TYPES OF WASTE
Transport
Inventory
Motion
Waiting
Overproduction
Over Processing
Defects
57. International Quality Standards
The International Standards Organization
(ISO) started developing environmental
management standards in the early 1990s
The International Organization for Standardization (ISO) is an international
non-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 of
environmental management.
58. 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
59. ISO 14000
Environmental Standard
Core Elements:
Environmental management
Auditing
Performance evaluation
Labeling
Life cycle assessment
60. ISO 14000
Environmental Standard
Advantages:
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
61. 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 Green'
http://www.icmrindia.org/casestudies/catalogue/Operations/OPER082.h
tm
Sony announces green operations management targets
http://www.iomnet.org.uk/News/Manufacturing/April-2010/Sony-
announces-green-operations-management-targets-19709905.aspx
