Industrial management note as ppt. Format as Makaut structural engineering M.tech , 1st sem subject

1. INTRODUCTION TO
INDUSTRAIL MANAGEMENT &
OPERATIONS MANAGEMENT

2. Operations Management-Management process concerned with
systematic design, directing and controlling the process of
production and redesigning the business operations in the
production of goods and services.
Operations management -is the administration of business
practices to create the highest level of efficiency possible within
an organization. It is concerned with converting materials and
labor into goods and services as efficiently as possible to
maximize the profit of an organization.
Business operations:
Effective and

3. Organizations:
Manufacturing
Retailing
Transportation
Banking
Construction
Government
Healthcare
Functions:
Accounting
Distributing
Engineering
Operations
Finance
HR
Marketing

4. Process: any activity or group of activities that
takes one or more inputs, transforms and adds
value to them and provides one or more
output for its customers.
Nested process: concept of process within a
process

5. Operation Management is important to
improve the overall productivity of an
organization.
Operation management plays a crucial role in
an organization as it handles issues like
design, operations, and maintenance of the
system used for the production of goods &
services.

6. How important is operations management?
The business function responsible for planning,
coordinating, and controlling the resources needed
to produce products and services for a company.
Operations management refers to the
administration of business practices to create the
highest level of efficiency possible within an
organization.

7. Operation system:
 Input
 Output
 Process

8. Input: Raw material, labour, energy
Output: Goods & Services

9. Operations management includes:
 Principles of general management
 Manufacturing / production system
 Factory management
 Equipment maintenance & store management
 Production control
 Industrial relations
 Cost control
 Materials control / inventory planning

10. Productivity and measure of productivity
Productivity is the basic measure of performance for economies,
industries, firms and process. Productivity is the value of outputs
(service and products) produced divided by the values of input
resources (wages, cost of equipment….) used.
Productivity= Output/Input

11. Types of productivity measures:
Labour productivity
Capital productivity
Direct cost productivity
Energy productivity
Raw material productivity
Multi productivity ratio / index

12. Example:
There are two industries manufactured two types of product. Standard
time of production per piece is 1.5 minutes. The output of two
industries are 300 and 200 respectively per shift of 8 hours.
1. What is the productivity of each per shift of 8 hours?
Productivity= actual production / standard production

13. The sate ferry service charges Rs.18 per ticket, plus Rs.3 surcharge. It is
expects to sell 4700 tickets during the eight week summer season.
During that period, the ferry service will experience Rs110000 in labour
cost. Materials required for each passage sold (tickets, tourist
information sheet, and the ticket) cost Rs.1.30. Overhead during the
period comes to Rs79,000.
What is the multifactor productivity ratio?
If ferry-support staff work an average of 310 person-hours per week
for the 8 weeks of the summer season, what is the labour
productivity ratio? (calculate on an hour basis).

14. Solution:
Ticket sold: 4700
Price: Rs.18
Surcharge: Rs.3
Value of output: Rs.98700
Labour cost: Rs.110000
Material cost: 4700x1.30=6110
Overhead cost: Rs.79000
Total cost (input): 195110
Multi factor productivity: 98700/195110

15. Solution:
Hours per week: 310x8=2480 (labour hours input)
Labour productivity= 98700/2480

16. Student tuition at university Birmingham University is Dollar 100 per
semester credit hour. The sate supplements school revenue by
matching student tuition Dollar for Dollar. Average class size for a
typical three-credit course is 50 students. Labour cost are dollar 4000
per class, material costs are dollar 20 per student per class, and over
head costs are dollar 25000 per class.
1.Calculate multifactor productivity ratio
2. If instructors work an average of 14 hours per week for 16 weeks for
each three credit class of 50 students, what is the labour productivity
ratio?

17. 1. Value of output=50x3x(100+100)=30000/class
Value of input: Labour+Material+Overhead=
4000+(20x500)+25000=30000/class
Multifactor productivity: Output/Input= 30000/30000=1
2. Labour hours input= 14x16= 224 hours / class
Labour productivity= 30000/224=Dollar 133.93/ hour

18. Decision making of Operations Management
Break even analysis= F+Q.c=Q.P: Q=(F/P-c)
Make or buy
Outsourcing

19. Decision making of Operations Management

20. History of Development of Production & Operations Management /
System:
 Industrial revolution (1760-1840): Division of labour and
interchangeability of parts
domestic production system- artisans
Craft Guilds- association of artisans (Marketing)
 1883: F.W Tylor (Father of Scientific Mgt.)- Introduction of stop watch
Work sampling
Time and motion study (PMTS)
Work-study & works measurement
Motion picture of work
Introduction of THERBLIGS (Frank & Lilian Gilberth)

21. History of Development of production & operations management / system:
 5000 B.C- Sumerian priests developed the ancient system of recording
inventories, loans, taxes and business transactions
 4000 B.C- Egyptian period: planning, organizing, control in large
projects of constructions of pyramids.
 1100 B.C- specialization of labour based on skill (introduced in china),
and also division of operations
 Feudal system: hierarchy of organization based on social positions and
wealth,

22. History of Development of production & operations management / system:
 1910: Henry Gantt- project management concept, Industrial Engg:
administration & organizations
 1913- EOQ- Economic consideration of production system
 1924- Walter Shewart- Control charts (QC), Variations: assignable and
common causes of variation, SPC
Optimization techniques- mathematical optimization
linear programming, simplex method
Introduction of OR
 1987: ISO, ISO 9000 (1994), ISO 9001-2015
 1975: MRP, BOM, Product Design, ERP, HRM, Accounting
 Recent Trends: BPRE
Lean manufacturing system, FMS, CMS, Six sigma (process control
based on six standard of deviation)

23. THERBLIGS (basic motion element):
Therbligs are 18 kinds of elemental motions used in the study of motion
economy in the workplace. A workplace task is analyzed by recording
each of the therblig units for a process, with the results used for
optimization of manual labor by eliminating unneeded / unwanted
movements.

24. Types of Therbligs:
1. Motions required for performing an operation
2. Motions that tend to slow down type 1 motion
3. Motions that do not perform an operation

25. Types of Therbligs:
1. Motions required for performing an operation:
 Transport empty
 Grasp
 Transport loaded (carry)
 Position
 Use
 Assemble
 Disassemble
 Release load
 Inspect

26. Types of Therbligs:
Motions that tend to slow down type 1 motion :
Search
 Find
 Select
 Plan (person thinking)
 Pre-position (set up)

27. Types of Therbligs:
Motions that do not perform an operation :
 Hold
 Unavoidable delay
 Avoidable delay (standby)
 Rest

28. Production Process

29. Types of
production:
Extractive industries
Manufacturing finished
goods industries

31. Types of
production:

36.  Batch production is when a small quantity of identical products are made. Batch production
may also be labour intensive, but jigs and templates are used to aid production. Batches of the
product can be made as often as required. The machines can be easily changed to produce a
batch of a different product.
 Mass production is when hundreds of identical products are made, usually on a production
line. Mass production often involves the assembly of a number of sub-assemblies of individual
components. Parts may be bought from other companies. There is usually some automation of
tasks (eg by using Computer Numerical Control machines) and this enables a smaller number of
workers to output more products.
 Continuous flow production is when many thousands of identical products are made. The
difference between this and mass production is that the production line is kept running 24 hours
a day, seven days a week to maximize production and eliminate the extra costs of starting and
stopping the production process. The process is highly automated and few workers are required.

37. Unit or Job type of production:
This type of production is most commonly observed when you produce
one single unit of a product. A typical example of the same will be tailored
outfits which are made just for you or a cake which is made just like you
want it.
Example of Unit type of production
It is one of the most common types of products used because it is
generally used by small businesses like restaurants, individual products
providers or individual services providers.

38. Batch type of Production:
It is one of the types of production most commonly used in consumer
durables, FMCG or other such industries where there are large variety of
products with variable demands. Batch production takes place in batches.
The manufacturer already knows the number of units he needs to a
manufacturer and they are manufactured in one batch.
So, if a manufacturer has the shortage of Product X and 100 units of this
product is consumed in one month, then the manufacturer can give orders
for batch production of 100 units of Product X.
Example: bakeries, textiles, furnitures

39. Features of Batch Production:
Production is done in batches
The total number of units required is decided before the
batch production starts
Once a batch production starts, stopping it midway may
cost a huge amount to the company.
Demand plays a major role in a batch production.
Example – seasonality of products.

40. • Advantages
• Since larger numbers are made, unit costs are lower.
• Offers the customer some variety and choice.
• Materials can be bought in bulk, so they are cheap.
• Production is flexible since different batches are made
• Workers specialize in one process
• Disadvantages
• Workers are often less motivated because the work becomes repetitive.
• Initial set-up costs are high.
• Expensive to move products around the workplace.
• Storage space will be needed to store raw materials.

41. Features of Mass Production:
Mass production is generally used to dole out huge volumes of the
product
It is used only if the product is standardized
Demand does not play a major role in a Mass production. However,
production capacity determines the success of a mass production.
Mass production requires huge initial investment and the working
capital demand is huge too.

42. • Advantages
• Labour costs are usually lower
• Materials can be purchased in large quantities, so they are often cheaper
• Large number of goods are produced
• Unit costs are relatively low
• Disadvantages
• Machinery is very expensive to buy, so production lines are very expensive
to set up.
• Workers are not very motivated, since their work is very repetitive.
• Not very flexible, as a production line is difficult to adapt.
• If one part of the line breaks, the whole production process will have to
stop until it is repaired.delay the production process
• Maintenance cost are very high

43. Features of Continuous production:
Majority of the work is done by machines rather than humans
Work is continuous in nature. Once production starts, it cannot be
stopped otherwise it will cause huge loss.
A very controlled environment is required for continuous production.
The above were the four types of production explained with examples

44. Job shop type of manufacturing:
Is a method resulting in a wide variety of products. These products are
made in small lot sizes with the ability to achieve maximum flexibility in
mind. They’re not specialized in any way so that customers can request
customizations to meet their specific needs.
Example:
A paint shop, a machine tool shop, a commercial printing shop, a
machining center, and other factories that create customized products in
small batches and offer customization

45. Project-based production:
Is one-of-a-kind production in which only one unit is manufactured at a time.
This type of production is often used for very large projects or for individual
customers.
• Advantages
• Unique, high quality products are made.
• Workers are often more motivated and take pride in their work.
• Products are made according to individual customer needs and improve
customer satisfaction
• Production is easy to organize
• Disadvantages
• Very labour intensive, so selling prices are usually higher.
• Production can take a long time and can have higher production cost, (e.g., if
special materials or tools are required)

46. DECISIONS MAKING IN OPERATIONS MANAGEMENT:
Break even analysis- profit or loss
Make or buy- cost effective
Outsourcing- cost cutting measure

47. PLANT LOCATION

48. Plant location: deciding the suitable location, area, place etc. where the
plant or the factory will start functioning.
Two important factors:
Geographic region
Specific site
Getting suitable raw material
Processing raw material to finished product
Finished product distribution

49. Factors of Plant location
Nearness to RM
Transport facility
Nearness to the market
Availability of labour
Availability of fuel and power
Availability of water
Climate conditions
Financial and other aids
Land
Community attitude
Security
Expansion facility
Ancillaries

50. Locational Economics:
The economics aspects of locations are considered to decide as to which of the possible
two or more preliminary sleeted location is overall best location.
Lowest production cost
Least distribution cost
 Community facility
 Community attitude
 Housing facility
 Cost of living
 Community size

51. Other costs which decide the locational economy are those of:
Land
Building / rent
Equipment and machinery
Labor
Water, power and fuel
Raw material
Taxes

52. Locational economies:
Factors Location 1 Location 2
Cost of- 100000 90000
Land 1200000 1300000
Building 5000 6000
Water 15000 17000
Power 140000 120000
Labour
Fuel 40000 34000
Raw material etc. 140000 130000
Community facility Good Excellent
Community attitude All right Encouraging
Housing facility Very good Good
Cot of living High High Normal
Community size Small Medium
Which location is better?

53. Rate of Return (ROR) in %:
Total sales-Total expenses/Total investment

54. Plant layout

55. Plant layout:
Plant layout can be defined as a technique of locating machines,
processes and plant services within the factory so as to achieve the
greatest possible output of high quality at the lowest possible total cost
of manufacturing.

56. Objectives of good plant layout:
Material handling and transportation is minimized and efficiently controlled
Point of congestions are eliminated- line balancing
Work station are designed suitably
Worker movements are minimized
Waiting time of the semi diminished product is minimized
Working conditions are better and safer
Flexibility in changing product design and for future expansion
Utilization of cubic space
Plant maintenance is simpler
Less capital cost – increased productivity and better product quality

57. Principles of plant layout:
Integration
Minimum movements and material handling
Smooth and continuous flow
Cubic space utilization
Safe and improved environment
Flexibility

58. Types of layout:
Process layout- similar machines / operations
Product lay out- product flow line
Combination layout
Fixed position layout- product are fixed

59. Process layout:
It is also known as functional layout and characterized by keeping
similar machines or similar operations at one location. This type of
layout is generally employed for industries engaged in job order
production and non-repetitive kind of manufacturing activities.
Advantages:
Wide flexibility- work, equipment and workers
Better utilization of available equipment's
Comparatively less number of machines are needed- reduced capital
investment
Better product quality- better supervision
Workers in one section are not affected by the nature of the
operations carried out in another section.

60. Dis-advantages:
For the same amount of production, process layout needs more
space
Automatic material handling is extremely difficult
More material in process remains in queue for further operations
Completion of same product takes more time
Work in process inventory is large
Production control is difficult
Raw material has to travel larger distance for being finished goods
Required more inspection and efficient coordination

61. Product layout: it is also known as line type layout. It implies that various
operations on raw materials are performed in a sequence and the machines
are placed along the product flow line.
Machines are arranged in the sequence in which the raw material will be
operated upon. Suitable for continuous flow production.
Advantages:
Less space requirement for the same volume of production
Automatic material handling, lesser material movements, times and cost
Less- process inventory
Better coordination and simple PPC
Smooth and continuous work flow
Less skilled workers may served the purpose

62. Dis-advantages
Product oriented- product change require major change in layout
Machines are scattered along the line, more machines of each type
have to be purchased, keeping a few stand by
Less supervision hence, inspection become more difficult
It is difficult to increase production beyond the capacities of the
production line.

63. Combination layout:
Combination of both product and process layout
Fixed position layout:
The fixed layout permits a product to maintain at a particular place, and the needed resources
like manpower, machinery, material, equipment, etc. are transported to the product's location.
Advantages:
It is possible to assign one or more skilled worker to a project from start to finish in order
to ensure continuity of work
Involves less movement of material
Maximum flexibility of any type of change
A number of quite different projects can be taken with the same layout.
Dis-advantages:
It involves a low content of work in progress
Less utilization of labor and equipment
Involves high equipment handling cost

67. Thank you