Operations management

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Operations management

  1. 1. UNIT II OPERATIONS MANAGEMENT
  2. 2. PLANT LOCATION
  3. 3. NEED FOR SELECTION  Business is newly started  The existing business expansion  Establishment of branches  Land lease expires
  4. 4. Plant location involves two major activities 1. To select a proper geographic region 2. Selecting a specific site with in the region
  5. 5. PLANT LOCATION Meaning-the establishment of an industry at a particular place. It is of 2 types- 1. Localization / centralization-means concentration of similar type of industries at some particular place. E.g. textile in Mumbai. 2. Delocalization /Decentralization-means spreading of similar type of industries at different places. E.g. banking industries.
  6. 6. Factors affecting location & site decisions 1. Availability of raw materials 2. Proximity to market 3. Integration with other parts of organization 4. Availability of labor and skills 5. Availability of Amenities 6. Transport & communication facilities
  7. 7. Factors affecting location & site decisions (contd…) 7. Suitability of climate 8. Availability of services 9. Regional regulations 10. Room for expansion 11. Safety requirements 12. Others like low interest on loans, special grants, living standards
  8. 8. Plantlayout
  9. 9. Plant layout • Meaning- Plant layout is the physical arrangement of industrial facilities. It involves the allocation of space & the arrangement of equipment in such a manner that overall operating costs are minimized.
  10. 10. Factors affecting plant layout 1. Management Policy 2. Manufacturing process 3. Nature of product 4. Volume of production 5. Type of Equipment 6. Type of building 7. Availability of Total floor area 8. Arrangement of Material Handling Equipment 9. Service facilities 10. Possibility of future expansion
  11. 11. METHODS OF PRODUCTION The methods of production can be of the following types: 1. Intermittent or interrupted production a. Job Production b. Batch Production 2. Mass and flow line production
  12. 12. JOB PRODUCTION In this type of production, every job is different from the other in terms of type, cost, efforts, consumption of materials or specifications.
  13. 13. • ADVANTAGES  Reaching the target customer’s requirements  Special training to labor  Best suitable for pull system of demand • DISADVANTAGES XTime taking X Large scale economies cannot be realized X Costliest X Division of labor is not possible
  14. 14. BATCH PRODUCTION All the products manufactured under a batch are similar in terms of type, cost, efforts, consumption of materials or specifications.
  15. 15. • ADVANTAGES  cost of product design per unit is low  Economies of production  Flow of materials can be continuous  Automation and mechanization • DISADVANTAGES X Varying customer demands X Not appropriate for pull system
  16. 16. MASS PRODUCTION This is also called flow production. The production can be undertaken on large and specialized machines and processes.
  17. 17. • ADVANTAGES  Mechanization and division of labour  Large – scale economies  Minimum material handling costs • DISADVANTAGES X Special care X Idle machinery may result in wastage of resources X Bottle necks
  18. 18. Types of plant layout 1. Product layout 2. Process layout 3. Fixed Position/ Stationary layout 4. Combination lay out
  19. 19. Product Layout ▫ Layout that uses standardized processing operations to achieve smooth, rapid, high- volume flow ▫ Here machines are arranged acc. to the needs of product & in the same sequence as the operations are necessary for manufacture. E.g. ‘back office’ of services such as banks and insurance companies.
  20. 20. Raw materials or customer Finished item Station 2 Station 2 Station 3 Station 3 Station 4 Station 4 Material and/or labor Station 1 Material and/or labor Material and/or labor Material and/or labor Used for Repetitive or Continuous Processing Product Layout (contd…)
  21. 21. Work Station 1 Work Station 2 Work Station 3 Product Layout (sequential) Used for Repetitive Processing Repetitive or Continuous Product Layout (contd…)
  22. 22. Advantages of Product Layout 1. High rate of output 2. Low unit cost 3. Labor specialization 4. Low material handling cost 5. High utilization of labor and equipment 6. Established routing and scheduling 7. Short processing time
  23. 23. Disadvantages of Product Layout 1. Creates dull, repetitive jobs 2. Poorly skilled workers may not maintain equipment or quality of output 3. Fairly inflexible to changes in volume 4. Highly susceptible to shutdowns 5. Needs preventive maintenance 6. Require large capital investment
  24. 24. Process layout ▫ Layout that can handle varied processing requirements ▫ Here all machines performing similar type of operations are grouped together at one location in the process layout. Thus here facilities are grouped together acc. To their functions. E.g. all drilling machines are located at one place known as drilling section.
  25. 25. Dept. A Dept. B Dept. D Dept. C Dept. F Dept. E Used for Intermittent processing Job Shop or Batch Process Layout (functional)
  26. 26. Advantages of Process Layouts 1. Can handle a variety of processing requirements 2. Machines breakdown doesn’t result in shutdown. 3. Equipment used is less costly 4. Wide flexibility in production facilities. 5. Each production unit of system works independently. 6. High utilization of facilities 7. Variety makes the job interesting.
  27. 27. Disadvantages of Process Layouts 1. In-process inventory costs can be high 2. Challenging routing and scheduling 3. Equipment utilization rates are low 4. Material handling is slow and inefficient & is more. 5. More space is required 6. Longer processing time 7. Back tracking may occur.
  28. 28. Comparison of product & process layout factors Product layout Process layout 1. nature Sequence of facilities Similar aregp2gether 2. Machines utilization Not to full capacity Better utilization 3. product standardized diversified 4. Processing time less more 5. Material handling less more 6. inventory High WIP Low WIP 7. breakdown Can’t tolerate Can tolerate 8. Production centre simple complex 9.flexibilty low high 10. floor space Requires less more 11. investment high low
  29. 29. FIXED POSITION LAYOUT • Layout by fixed position of the product is inherent in ship building, aircraft manufacture .
  30. 30. ADVANTAGES • It is possible to assign one or more skilled workers to a project from start to finish in order to ensure continuity of work • It involves least movement of materials • A number of quite different projects can be taken with the same layout
  31. 31. DISADVANTAGES There appears to be low utilization of labor and equipment It involves high equipment handling costs
  32. 32. COMBINATION LAYOUT • A combination of process and product layouts combines the advantages of the both types of layouts. • A combination layout is possible where an item is being made in different types and sizes. • examples: wood saws, files etc
  33. 33. WORK STUDY Work study is defined as that body of knowledge concerned with the analysis of the work methods and the equipment used in performing a job, the design of an optimum work method and the standardization of proposed work methods.
  34. 34. Objectives of Work Study 1. To analyze the present method of doing a job, systematically in order to develop a new and better method. 2. To measure the work content of a job by measuring the time required to do the job for a qualified worker and hence to establish standard time. 3. To increase the productivity by ensuring the best possible use of human, machine and material resources and to achieve best quality product/service at minimum possible cost. 4. To improve operational efficiency.
  35. 35. WORK STUDY METHOD STUDY WORK MEASUREMENT MOTION STUDY TIME STUDY
  36. 36. BASIC WORK STUDY PROCEDURE 1. Select the job or process or the operation to be studied. 2. Record all relevant facts about the job or process or operation using suitable charting techniques. 3. Examine critically all the recorded facts, questioning the purpose, place, sequence, person and the means of doing the job/process/operation. 4. Develop the new method.
  37. 37. RECORDING SYMBOLS Standard Symbol Name of Activity Operation Transportation/Movement Inspection Delay/ Temporary storage Storage Combined Activity
  38. 38. PROCESS CHARTS  Outline Process Chart  Operation Process Chart  Flow Process Chart  Two handed Process Chart  Multiple Activity Chart  Man – Machine Chart  Flow Diagram  String Diagram  SIMO Chart
  39. 39. PRIMARY QUESTIONS The PURPOSE for which The PLACE at which The SEQUENCE in which The PERSON by whom The MEANS by which
  40. 40. ELIMINIATING COMBINING REARRANGING OR SIMPLIFING those activitiesWith a view to
  41. 41. SECONDARY QUESTIONS The secondary questions cover the second stage of the questioning technique, during which the answers to the primary questions are subjected to further query to determine whether possible alternatives of place, sequence, persons and means are practicable and preferred as a means of improvement upon the existing method.
  42. 42. PURPOSE: what is done? why is it done? what else might be done? what should be done? PLACE: where is it done? Why is it done there? Where else might it is done? Where should it be done?
  43. 43. SEQUENCE: When is it done? Why is it done? When might it be done? When should it be done? PERSON: who does it? Why does that person do it? Who else might do it? Who should do it? MEANS: How is it done? Why is it done that way? How else might it be done? How should it be done ?
  44. 44. Procedure (contd…) 5. Measure the work content and establish the standard time using an appropriate work measurement technique. 6. Define the new method. 7. Install the new method as standard practice. 8. Maintain the new method for the job/process/operation
  45. 45. THE TECHNIQUES OF WORK MEASUREMENT 1. Direct Time study 2. Synthesis Method 3. Analytical Estimating 4. Predetermined Motion Time System (PMTS) 5. Work Sampling / Activity Sampling / Ratio Delay Method
  46. 46. METHOD STUDY Work methods analysis or Method Study is a scientific technique of observing, recording and critically examining the present method of performing a task or job or operation with the aim of improving the present method and developing a new and cheaper method.
  47. 47. MOTION STUDY Motion Study is the science of eliminating wastefulness, resulting from using unnecessary; ill – directed and inefficient motion. The aim of motion study is to find and perpetuate the scheme of the least waste methods of labor.
  48. 48. OBJECTIVES OF MOTION STUDY  To study the existing method  To develop an improved method  To reduce excessive materials handling  To improve utilization of resources  To eliminate wasteful and inefficient motions  To standardize work methods or processes.
  49. 49. TYPES OF MOTION STUDY 1. Micro motion Study  Take motion picture of the operations  Analyze the film The film is analyzed by breaking the job cycle into micro motions or therbligs. Therbligs indicate the basic motions consisting of three parts i) When the motion begins ii) The nature of the motion iii) When the motion ends. Ex: Search – Sr; Select – St; Transport empty – TE etc  Prepare a SIMO chart
  50. 50. TYPES OF MOTION STUDY 2. Memomotion Study It is a special form of motion study in which motion pictures are taken at slow speed using a motion picture camera.
  51. 51. WORK MEASUREMENT It is defined as the application of techniques designed to establish the work content of a specified task by determining the time required for carrying out the task at a defined standard of performance by a qualified worker.
  52. 52. THE QUALIFIED WORKER A qualified worker is one who is accepted as having the necessary physical attributes, who possess the required intelligence and education and who has acquired the necessary skill and knowledge to carry out the work in hand to satisfactory standards of safety, quantity and quality.
  53. 53. OBJECTIVES OF WORK MEASUREMENT 1. Improved planning and control of activities or operations. 2. More efficient manning of the plant 3. Reliable ideas for labor performance 4. Reliable basis for labor cost control 5. Basis for sound incentive schemes
  54. 54. WORK MEASUREMENT PROCEDURE  Break the job into elements  Record the observed time for each element  Establish elemental time values by extending observed time into normal time by applying a rating factor  Assess relaxation allowances  Determine the frequency of occurrences of each element in the job, multiply the work content by its frequency to arrive at work content of the job
  55. 55. THE TECHNIQUES OF WORK MEASUREMENT 1. Direct Time study 2. Synthesis Method 3. Analytical Estimating 4. Predetermined Motion Time System (PMTS) 5. Work Sampling / Activity Sampling / Ratio Delay method
  56. 56. DIRECT TIME STUDY Time study is concerned with the determination of the amount of time required to perform a unit of work. The main objective is to determine by direct observation, the quantity of human work in a specified task and hence to establish the standard time, within which an average worker working at a normal pace should complete the task using a specified method.
  57. 57. PROCEDURE OF TIME STUDY a. Obtaining and recording all available information about the job, operator and the surrounding conditions likely to affect the execution of the work b. Recording the complete description of the method, breaking down the operation into 'elements' c. Measuring with a stopwatch and recording the time taken by the operator to perform each 'element' of the operation. i) Non – fly back ii) Fly Back iii) Split hand
  58. 58. d. Assessing the rating using rating scale e. Extending observed time to ‘basic times’ = Observed time * Rating factor Where, RF = Rating of observed worker/Rating of Qualified Worker f. Determining the allowances to be made over and above the basic time for the operation g. Determining the 'standard time' for the operation.
  59. 59. SYNTHESIS METHOD Synthesis is a technique of work measurement for building up the time required to do a job at a defined level of performance by synthesizing or totaling elemental time values obtained from previous time studies on other jobs containing similar job elements or from standard data.
  60. 60. ANALYTICAL ESTIMATING It is used to determine the time values for jobs having long and non- repetitive operations.
  61. 61. Procedure: 1. Find the job 2. Break the job into elements 3. Select time value from standard data catalogue 4. Estimate time values for remaining elements 5. Add 3 and 4 6. Add Relaxation allowances
  62. 62. PREDETERMINED MOTION TIME SYSTEM (PMTS)It is defined as a work measurement technique by which normal or basic times are established for basic human motions and these time values are used to buildup the time for a job at a defined level of performance. Predetermined time standards are standard data for wide variety of basic body motions which are common in many industrial operations.

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