This document provides an overview of key concepts in industrial management, including production management, materials management, inventory management, and sales forecasting. It discusses the objectives, types, and functions of production management. It also covers topics like production planning and control, material management, inventory control, ABC analysis, VED analysis, and perpetual inventory systems. The document aims to explain the basic concepts and processes involved in efficiently managing industrial operations through planning, organizing, and controlling activities related to production, materials, and inventory.

1. 1

2. INDUSTRIAL
MANAGEMENT
Presentedby :P.Prasath
M.Pharmacy 1st year
Department of pharmaceutics
2

3. CONTENTS
 Production management
 Production control
 Planning control
 Material management
 Inventory management
 Sales forecasting
 Budget and cost control
 Industrial and personal relationship
 Concept of TQM
3

4. PRODUCTION MANAGEMENT
 Production management is a process of planning,
organizing, directing and controlling the activities of the
production function.
 It combines and transforms various resources used in the
production subsystem of the organization into value
added product in a controlled manner as per the policies
of the organization. 4

5. OBJECTIVE OF PRODUCTION MANAGEMENT
 1. RIGHT QUALITY.
 2. RIGHT QUANTITY.
 3. PREDETERMINED TIME.
 4. PRE-ESTABLISHED COST.
 Other objectives are :
 1. Machinery and Equipment.
 2. Materials.
 3. Manpower.
 4. Supporting Service. 5

6.  The objective of the production management is ‘to
produce goods services of right quality and quantity at
the right time and right manufacturing cost’.
1. RIGHT QUALITY
 The quality of product is established based upon the
customers needs.
 The right quality is not necessarily best quality. It is
determined by the cost of the product and the technical
characteristics as suited to the specific requirements.
6

7. 2. RIGHT QUANTITY
 The manufacturing organization should produce the
products in right number.
 If they are produced in excess of demand the capital will
block up in the form of inventory and if the quantity is
produced in short of demand, leads to shortage of
products.
7

8. 3. RIGHT TIME
 Timeliness of delivery is one of the important parameter
to judge the effectiveness of production department.
 So, the production department has to make the optimal
utilization of input resources to achieve its objective.
4. RIGHT MANUFACTURING COST
 Manufacturing costs are established before the product is
actually manufactured.
 Hence, all attempts should be made to produce the
products at pre-established cost, so as to reduce the
variation between actual and the standard
(pre-established) cost.
8

9. 5 P`S OF PRODUCTION MANAGEMENT
 1. PRODUCTS.
 2. PLANT.
 3. PROCESS.
 4. PROGRMS.
 5. PEOPLE.
 When this five element integrated a successful
production management takes place. 9

10. SCOPE & ACTIVITIES OF PRODUCTION MANAGEMENT
 There are two types of scope & activities of PM :
1. Strategic level.
 (a) Design & development of new product.
 (b) Process design & Planning
 (c) Facilities location & layout planning
 (d) Design of material handling
 (e) Capacity planning
2. Operational level.
 (a) Production Planning
 (b) Inventory Control
 (c) Product maintenance & replacement
 (d) Cost Control & Cost Reduction 10

11. PRODUCTION & PLANNING CONTROL (PPC)
 PPC is the powerful tool available to the management to
achieve the stated objective.
 Production planning starts with the analysis of data like
demand & delivery schedule etc & the basis of
information available and resources like machine,
material & men.
 So, PPC is the process of directing & coordinating of
firms resources towards attaining prefixed goal.
11

12. FUNCTIONS OF PRODUCTION & PLANNING
CONTROL
 1. Material Function
 2. Machine & Equipment
 3. Methods
 4. Routing
 5. Estimating
 6. Scheduling
 7. Dispatching
 8. Expediting
 9. Inspection
 10.Evaluation
12

13. TYPES OF PRODUCTION
 1. BATCH PRODUCTION
 2. MASS & FLOW PRODUCTION
 3. PROCESS PRODUCTION
 4. PROJECT PRODUCTION
 5. JOBBING PRODUCTION
13

14. BATCH PRODUCTION
 Batch production is the manufacturing of limited number
of product produced at regular intervals & stocked in
warehouse as finished goods.
 Eg. Chemical , paint & motor vehicles etc.
14

15. CHARACTARISTIC OF BATCH PRODUCTION
 1. Short Run.
 2. Skilled labors in specific trades
 3. Limited span of control
 4. General purpose machine and process type layout
 5. Manual material handling
 6. Manufacturing cycle time affected due to queues
 7. Large WIP
 8. Flexible production schedule
 9. Need to have PPC.
15

16. MASS & FLOW PRODUCTION
 Mass as well as flow production are characterized by the
manufacturer of several number of a std product and
stocked in the warehouses as finished goods awaiting
sales.
 The goods under mass production are manufactured
either at a single operation or a series of operation on one
machine.
 Eg: Assembly shop of automobiles, radios, electric
fans.
16

17. CHARACTARITIC OF MASS & FLOW PRODUCTION
 1. Continuous flow of material.
 2. Product type layout.
 3. Mechanized material handling.
 4. Low skilled labor.
 5. Short manufacturing cycle time.
 6. Easy supervision.
17

18. PROCESS PRODUCTION
 Process production is characterized by the manufacture
of single product produced and stocked in the
warehouses awaiting sales.
 Eg: Sugar, Steel, Paper, Cement plants.
18

19. CHARACTARITIC OF PROCESS PRODUCTION
 1. Special purpose m/c with built in control.
 2. Highly mechanized material building.
 3. Virtually zero manufacturing time.
 4. Low skilled labor.
 5. Highly qualified supervisors.
 6. Limited PPC.
19

20. PROJECT PRODUCTION
 Project production is characterized by complex sets of
activities that must be performed in a particular order
within the estimated expenditure.
 Eg: construction of Roads, Buildings etc.
20

21. CHARACTARITIC OF PROJECT PRODUCTION
 1. Definite beginning & definite end.
 2. Non uniform requirement of resources.
 3. Involvement of different agencies.
 4. Fixed position layout.
 5. High cost over run.
 6. Scheduling & control.
21

22. JOBBING PRODUCTION
 Jobbing production is characterized by the manufacture
of one or few number of a single product designed and
manufactured strictly to customer’s specifications within
the given period and within the price fixed prior to the
contract.
 Eg: general repair shop, tailoring shops.
22

23. CHARACTARITIC OF JOBBING PRODUCTION
 1. Small production runs.
 2. Discontinuous flow of materials.
 3. Not proportionate manufacture cycle time.
 4. Highly skilled labor.
 5. Highly competent knowledgeable supervision.
 6. Limited function of PPC.
23

24. MATERIAL
MANAGEMENT
24

25. MATERIALS MANAGEMENT
 Materials management involves planning, programming,
organizing, directing, controlling, and co-coordinating
the various activities concerning the materials.
 The production managers found it necessary to develop
an organized body of knowledge on this subject.
 The resulting set of related disciplines is known as
materials management.
25

26. MATERIALS MANAGEMENT
• Materials management is the grouping of management
functions supporting the complete cycle of material flow,
from the purchase and internal control of production
materials to the planning and control of work in process
to the warehousing, shipping, and distribution of the
finished product.
26

27. FUNCTIONS OF MATERIALS MANAGEMENT
• Materials planning and programming
• Raw material purchase
• Receiving, store keeping, and warehousing
• Issuing of material
• Inventory control
• Value engineering
• Transportation of materials
• Vendor development
• Vendor rating
• Disposal of scrap and surpluses
27

28. 5 M’S OF MATERIAL MANAGEMENTS
 Men
 Machines
 Methods
 Money
 Materials
28

29. FOCUS OF MATERIAL MANAGEMENT
 To procure right materials
 In Right Quantity
 Of Right Quality
 At Right Time
 From Right sources
 At Right prices
5 R’s, principles of purchasing 29

30. PRIMARY OBJECTIVES
• Buying the best item at the lowest cost
• Reduction in inventory cost and High inventory turnover
• Maintaining the flow of production
• Maintaining the consistency of quality
• Optimization of acquisition and possession, resulting in
lower cost
• Cordial relationship with suppliers
• Maintaining good records
• Contribution towards competitiveness
• Personnel development
30

31. SECONDARY OBJECTIVES
 Promotion of standardization with suppliers
 Development of reciprocal relations with customers
 Committees to decide on economic make –or- buy
decisions
 Development of inter departmental relationships
 Can undertake acquisitions
31

32. ADVANTAGES OF MATERIAL MANAGEMENT
• Material cost can be lowered
• Controlling of indirect cost
• Risk of inventory loss minimized
• Reduction in loss of time of direct labour
• Cost of material used in different department ascertained
• Control of manufacturing cycle
• Material congestion in storage places avoided
• Improvement in delivery of the product 32

33. PHASES IN MATERIAL MANAGEMENT
• Planning (Plans for capacity or production levels and
required inventory levels
• Material utilization (efficiency of the flow of materials
through the plant)
• Physical (storing, receiving and issuing of materials and
physical checking of inventory of raw materials, work in
process, finished goods, record keeping)
• Control or follow up (feedback and corrective action
involved)
33

34. CHALLENGES OF MATERIAL MANAGEMENT
 Selection of appropriate vendors
 Land and storage cost increase
 Difficulty in forecasting demand accurately
 Scarce capital for investment in materials inventory
 Diversification of product lines
 Optimizing time and quantity for products
 Management of information
34

35. 35

36. INVENTORY MEANS…
 All the materials , parts, suppliers, expenses and in
process or finished products recorded on the books by an
organization and kept in its stocks, warehouses or plant
for some period of time.
Definition of inventory control
 Inventory control is the technique of maintaining the size
of the inventory at some desired level keeping in view
the best economic interest of an organization. 36

37. SCOPE OF INVENTORY CONTROL
 Determination of inventory policies.
 Determining various stock levels
 Determining economic order size
 Safety or buffer stock
 Determining lead time
 Examining the work of inventory policy
37

38. OBJECTIVES OF INVENTORY CONTROL
• To ensure smooth flow of stock.
• To provide for required quality of materials.
• To control investments in stock.
• Protection against fluctuating demand.
• Protection against fluctuations in output.
• Minimization of risk and uncertainty.
• Risk of obsolescence.
• Minimization of material cost.
38

39. TYPE AND REASON FOR HOLDING INVENTORY
 (1) Raw materials
To reap the price advantage available on seasonal raw
materials.
 (2) Work in progress
To balance the production flow.
 (3) Ready made components
When the components are bought rather than made.
 (4) Scraps
They are disposal of in bulk.
 (5) Finished Goods
Lying in stock rooms and waiting dispatches
39

40. MAJOR ACTIVITIES OF INVENTORY CONTROL
 Planning the inventories
 Procurement of inventories
 Receiving and inspection of inventories
 Storing and issuing the inventories
 Recording the receipt and issues of inventories
 Physical verification of inventories
 Follow-up function
 Material standardization and substitution. 40

41. INVENTORY COSTS
 Ordering cost
 Carrying cost
 Out of stock or shortage cost
 Capacity cost
41

42. ORDERING COSTS
 Cost of placing an order with a vendor of materials
 Preparing a purchase order
 Processing payments
 Receiving and inspecting the material
 Ordering from the plant
 Machine set up
 Start up scrap generated from getting a production run
started 42

43. CARRYING COSTS
 Costs connected directly with materials
 Obsolescence
 Deterioration
 Pilferage
 Financial costs
 Taxes
 Insurance
 Storage
 Interest
43

44.  Capital costs
 Interest on money invested in inventory
 Interest on money in land and building
 Storage space costs
 Building rent
 Depreciation
 Cost of maintenance
 Out of stock costs
 Lost sales, transportation
 Capacity costs
 Overtime when capacity is low
 Idle time when capacity is large
44

45. BENEFITS OF INVENTORY MANAGEMENT
 Inventory control ensures an adequate supply of
materials, stores, etc.
 Minimizes stock outs and shortages, and avoids costly
interruptions in operations.
 It keeps down investments in inventories, inventory
carrying costs and obsolescence losses to the minimum
 It facilitates purchasing economies through the
measurement of requirements on the basis of recorded
experience
 It provides a check against loss of materials through
carelessness or pilferage
45

46. STEPS IN INVENTORY CONTROL
 Deciding the maximum- minimum limits of inventory
 Determination of Reorder point
 Determination of reorder quantity
 Perpetual inventory control
 ABC analysis
 VED analysis
46

47. MAXIMUM STOCK LEVEL
 Quantity of inventory above which should not be
allowed to be kept. This quantity is fixed keeping in view
the disadvantages of overstocking;
Factors to be considered:
 Amount of capital available.
 Godown space available.
 Possibility of loss.
 Cost of maintaining stores
 Likely fluctuation in prices
 Seasonal nature of supply of material
 Restriction imposed by Govt
 Possibility of change in fashion and habit.
47

48. MINIMUM STOCK LEVEL
 This represents the quantity below which stocks should
not be allowed to fall .
 The level is fixed for all items of stores and the following
factors are taken into account:
1.Lead time
2. Rate of consumption of the material during the lead
time.
48

49. RE-ORDERING LEVEL
 It is the point at which if stock of the material in store
approaches, the store keeper should initiate the purchase
requisition for fresh supply of material.
 This level is fixed some where between maximum and
minimum level.
49

50. ECONOMIC ORDER QUANTITY
 It is also known as standard order quantity , optimum
quantity or economic lot size.
 By definition economic order quantity that size of order
for which the total cost is minimum.
 The widely used formula is
EOQ =√{2RCp/Ch}
Where ,
R= Annual quantity to be used in units.
Cp=Cost of placing an Order.
Ch= cost of holding one unit for one year. 50

51. ABC ANALYSIS
 (Always better control analysis)
 It is efficient control of stores requires greater in case of
costlier items.
51
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52.  VED ANALYSIS
• Based on critical value & shortage cost of an item
It is a subjective analysis.
Items are classified into:
 Vital:
• Shortage cannot be tolerated.
 Essential:
• Shortage can be tolerated for a short period.
 Desirable:
 Shortage will not adversely affect, but may be using
more resources.
52

53. 53
CATEGORY 1 - NEEDS CLOSE MONITORING & CONTROL
CATEGORY 2 - MODERATE CONTROL.
CATEGORY 3 - NO NEED FOR CONTROL

54. Perpetual Inventory System
 It is a method of recording stores balances after
every receipt and issue, to facilitate regular
checking and obviate closing down for stock taking.
54

55. 55

56.  FORECASTING
 Primary function is to predict the future using data we
have in hand
 SALES FORECASTING
 Art or science of predicting future demand by
anticipating what consumers are like to do in a given set
of circumstances
 Sales forecasting made by the marketing staff
 Poor forecasting causes serious ill effects on production
operation
56

57. EXTERNAL FACTORS INTERNAL FACTORS
Relative state of the economy Labour problems
Direct and indirect competition Inventory shortages
Styles or fashions Working capital shortage
Consumer earnings Price changes
Population changes Change in distribution method
Weather Production capability shortage 57
Factors affecting sales forecasting

58. Qualitative Quantitative
Executive opinion method Time Series Analysis
Delphi Method Market Test Method
Sales force composite method Regression Analysis
Survey of Buyer’s intentions
58

59. EXECUTIVE OPINION METHOD
 Most widely used
 Method of combining and averaging views of several
executives regarding a specific decision or forecast.
 Leads to a quicker (and often more reliable) result
without use of elaborate data manipulation and statistical
techniques.
Delphi Method
Process includes a coordinator getting forecasts
separately from experts, summarizing the forecasts
giving the summary report to experts who are asked to
make another prediction; the process is repeated till
some consensus is reached
59

60. SALES FORCE COMPOSITE METHOD
 Also known as “Grassroots Approach”
 Individual salespersons forecast sales for their territories
 Individual forecasts are combined & modified by the
sales manager to form the company sales forecast.
 Best used when a highly trained & specialized sales force
is used.
 Surveyof Buyer’s intentions
 Process includes asking customers about their intentions
to buy the company’s product and services
 Questionnaire may contain other relevant questions 60

61. TIME SERIES ANALYSIS
Make forecasts based purely on historical patterns in the
data.
 The Trend component-Gradual upward or downward
movement over time.
61

62. MARKET TEST METHOD
 Used for developing one time forecasts particularly
relating to new products
 A market test provides data about consumers' actual
purchases and responsiveness to the various elements of
the marketing mix.
 On the basis of the response received to a sample market
test, product sales forecast is prepared.
62

63. REGRESSION ANALYSIS
 Identifies a statistical relationship between
sales(dependent variable) and one or more influencing
factors, which are termed the independent variables.
 When just one independent variable is considered
 (Eg: population growth), it is called a linear regression,
and the results can be shown as a line graph predicting
future values of sales based on changes in the
independent variable.
 When more than one independent variable is considered,
it is called a multiple regression
63

64. BENEFITS OF SALES FORECASTING
 Better control of Inventory
 Staffing
 Customer Information
 Use for Sales People
 Obtaining Financing
Limitations of Sales Forecasting
 Part hard fact, part guesswork
 Forecast may be wrong
 Times may change 64

65. 65

66. BUDGET AND COST CONTROL
 Basically, it's making sure that you're spending less than
you're bringing in and planning for both the short- and
long-term.
 Provide a forecast of revenues and expenditures, that is,
construct a model of how a business might perform
financially if certain strategies, events and plans are
carried out.
 Enable the actual financial operation of the business to
be measured against the forecast.
 Establish the cost constraint for a project, program, or
operation 66

67. WHAT IS BUDGET?
 A budget is one of the most basic and probably most
useful things you can do to get in control of your
finances.
 It is simply a snapshot of your financial situation at a
particular point in time, which can help you keep track of
what you're earning, what you're spending, and what
happens to the leftovers (if there are any). 67

68. WHAT IS BUDGETARY CONTROL?
 Budgetary control is the use of the comprehensive
system of budgeting to aid management in carrying out
its functions like planning, coordination and control.
 This system involves: Division of organization on
functional basis into different sections known as a budget
centre.
68

69. 69

70. ACCORDING TO FUNCTION
SALES BUDGET:
 Sales budget is the most important budget based on
which all the other budgets are built-up. This budget is a
forecast of quantities and values of sales to be achieved
in a budget period.
PRODUCTION BUDGET:
 Production budget involves planning the level of
production which in turn involves the answer to the
following questions: What is to be produced? When is it
to be produced? How is it to be produced? Where is it to
be produced?
70

71. COST OF PRODUCTION BUDGET:
 This budget is an estimate of cost of output planned for a
budget period and may be classified into
 Material Cost Budget, Labor Cost Budget, Overhead
Cost Budget.
PURCHASE BUDGET:
 This budget provides information about the materials to
be acquired from the market during the budget period.
71

72. PERSONNEL BUDGET:
 This budget gives an estimate of the requirements of
direct labor essential to meet the production target. This
budget may be classified into
 a. Labor requirement budget
 b. Labor recruitment budget
RESEARCH AND DEVELOPMENT BUDGET:
 This budget provides an estimate of expenditure to be
incurred on R & D during the budget period.
 R&D budget is prepared taking into consideration the
research projects in hand and new R & D projects to be
taken up. 72

73. CAPITAL EXPENDITURE BUDGET:
 This is an important budget providing for acquisition of
assets necessitated by the following factors:
 a. Replacement of existing assets.
 b. Purchase of additional assets to meet increased
production
 c.Installation of improved type of machinery to reduce
costs.
73

74. CASH BUDGET:
 This budget gives an estimate of the anticipated receipts
and payments of cash during the budget period. Cash
budget makes the provision for minimum cash balance to
be maintained at all times
MASTER BUDGET
 CIMA defines this budget as “The summary budget
incorporating its component functional budget and which
is finally approved, adopted and employed”. Thus master
budget is a summary of all functional budgets in capsule
form available in one report.
74

75. ACCORDING TO FLEXIBILITY
FIXED BUDGET:
 This is defined as a budget which is designed to remain
unchanged irrespective of the volume of output or
turnover attained. This budget will, therefore, be useful
only when the actual level of activity corresponds to the
budgeted level of activity.
FLEXIBLE BUDGET:
 CIMA defines this budget as one “ which, by recognizing
the difference in behavior between fixed and variable
costs in relation to fluctuations in output, turnover or
other variable factors such as number of employees, is
designed to change appropriately with such fluctuations” 75

76. COST CONTROL
 The process or activity on controlling costs associated
with an activity, process, or company.
 Cost control typically includes,
 (1) investigative procedures to detect variance of actual
cost from budgeted cost,
 (2) diagnostic procedures to ascertain the cause(s) of
variance, and
 (3) corrective procedures to effect realignment between
actual and budgeted costs. 76

77. CONCLUSION
 Without proper planning of cost management,
deliverables may happen, but chances of over shooting
the budget always remain.
 It is very critical that we nee to keep a strict vigil on
various process involved in estimation, budgeting and
control in a project so as to ensure its completion within
the allotted time frames and budget. 77

78. 78

79. MEANING & CONCEPT
 The term ‘Industrial Relations’ comprises of two terms:
‘Industry’ and ‘Relations’
 “Industry” refers to “any productive activity in which an
individual (or a group of individuals) is (are) engaged”.
 By “relations” we mean “the relationships that exist
within the industry between the employer and his
workmen.”
79

80. DEFINITION
The Industrial Relation relations also called as labor -
management, employee employers relations.
1) “Employer-employee relationships that are covered
specifically under collective
bargaining and industrial relation laws”.
2) “Concerned with the systems, rules and procedures
used by unions & employers to determine the reward
for effort & other conditions of employment 80

81. PARTIES TO INDUSTRIAL RELATION
81

82. OBJECTIVES
1. To safeguard the interest of labor and management by
securing the highest level of mutual understanding.
2. To avoid industrial conflict.
3. To improve the economic conditions of workers in the
existing state of industrial managements and political
government
4. To Protect management and labor interests.
82

83. IMPORTANCE
 Uninterrupted production
 Reduction in Industrial Disputes
 High morale
 Mental Revolution
 Reduced Wastage
 Foster Industrial Peace
 Promote Industrial Democracy
83

84. ROLE OF THREE ACTORS TO INDUSTRIAL RELATIONS
Role of Employee:
 To redress the bargaining advantage on one-on-one basis
 To secure better terms and conditions for their members
 To obtain improved status for the worker in his/her work
 To increase implementation of democratic way of
decision making at various levels
84

85. ROLE OF EMPLOYERS
 Creating and sustaining employee motivation
 Ensuring commitment from employees
 Negotiating terms and conditions of employment with
leaders
 Sharing decision making with employees
85

86. ROLE OF STATE
 Labor policies
 Labor laws
 Industrial tribunals
 Wage boards
 Industrial relations policy
86

87. CAUSES FOR POOR INDUSTRIAL RELATION
The main reasons are as follows:
 Inadequate fixation of wages or improper wage structure.
 Indiscipline, Unhealthy working conditions at the
workplace.
 Lack of human relations skills on the part of supervisors
and managers.
 Desire of workers for higher bonus, wages or daily
allowances.
 Desire of employers to pay as little as possible to its
workers.
87

88. PRINCIPLES OF CODE OF DISCIPLINES
 There should be no strike or lockout without prior notice.
 No unilateral action should be taken in connection with
any industrial matter.
 Employees should not follow go slow tactic.
 No deliberate damage should be caused to a plant or
property
 Acts of violations, intimidation and should not be
resorted
88

89. 89

90. 1. UNITARY APPROACH
 Industrial relation is grounded in mutual co-operation,
individual treatment, team work and shared goals.
 Union co-operate with the mgt. & the mgt.’s right to
manage is accepted because there is no ‘ we they feeling’
 Assumption: Common interest & promotion of harmony
No strikes are there.
 It’s a reactive IR strategy.
 They seek direct negotiations with employees. 90

91. 2. PLURALISTIC APPROACH
 It perceives:
 Org. as a coalitions of competing interest.
 Stability in IR as the product of concessions and
compromises between management & unions.
 Conflict between management and workers is understood
 Conflict is viewed for innovation and growth.
 Strong union is necessary.
91

92. 3. MARXIST APPROACH
 Regard conflict as Pluralists…
 Marxists see conflict as a product of the capitalist
society.
 Conflict arises due to the division in the society between
those who own resources and those who have only labor
to offer.
 For Marxist all strikes are political. 92

93. TOTAL QUALITY MANAEMENT
93

94. DEFINITIONOF TOTAL QUALITY MANAGEMENT
 TQM is the art of managing the whole to achieve
excellence.
 "TQM is a management approach for an organization,
centered on quality, based on the participation of all its
members and aiming at long-term success through
customer satisfaction, and benefits to all members of the
organization and to society."
94

95. EFFECT OF TQM (QUALITY IMPROVEMENT)
 Improve Quality (Product/Service)
 Increase Productivity (less rejects, faster job)
 Lower Costs and Higher Profit
 Business Growth, Competitive, Jobs, Investment
95

96. TQMSIX BASIC CONCEPTS
1. Leadership
2. Customer Satisfaction
3. Employee Involvement
4. Continuous Process Improvement
5. Supplier Partnership
6. Performance Measures
(All these present an excellent way to run a business)
96

97. 1.LEADERSHIP
 Top management must realize importance of quality
 Quality is responsibility of everybody, but ultimate
responsibility is CEO
 Involvement and commitment to CQI
 Quality excellence becomes part of business strategy
 Lead in the implementation process
97

98. CHARACTERISTICS OF SUCCESSFUL LEADERS
1. Give attention to external and internal customers
2. Empower, not control subordinates. Provide resources,
training, and work environment to help them do their
jobs .
3. Emphasize improvement rather than maintenance
4. Emphasize prevention
5. Encourage collaboration rather than competition
6. Train and coach, not direct and supervise 98

99. CONTD..
7. Learn from problems – opportunity for improvement
8. Continually try to improve communications
9. Continually demonstrate commitment to quality
10. Choose suppliers on the basis of quality, not price
11. Establish organize systems that supports quality efforts
.
99

100. IMPLEMENTATION PROCESS
 Must begin from top management
 Cannot be delegated (lack of involvement cited as
principle reason for failure)
 Top/senior management must be educated on TQM
philosophy and concepts
 Visits to TQM companies, read books, attend seminars
 Need a roadmap/framework for implementation –
consider timing (any crisis)
 Formation of Quality Council – policies, strategies,
programmes
100

101. 2.CUSTOMER SATISFACTION
 Customer is always right – in Japan customer is “King”
 Customer expectations constantly changing – 10 years
ago acceptable, now not any more!
 Delighting customers (Kano Model)
 Satisfaction is a function of total experience with
organization
 Need to continually examine the quality systems and
practices to be responsive to ever – changing needs,
requirements and expectations – Retain and Win new
customers
101

102. ISSUES FOR CUSTOMER SATISFACTION
 Check list for both internal and external customers
1. Who are my customers?
2. What do they need?
3. What are their measures and expectations?
4. Does my product/service exceed their expectations?
5. How do I satisfy their needs?
6. What corrective action is necessary?
102

103. CUSTOMER FEEDBACK
 Discover customer dissatisfaction
 Discover priorities of quality, price, delivery
 Compare performance with competitors
 Identify customer’s needs
 Determine opportunities for improvement
103

104. 3.EMPLOYEE INVOLVEMENT
 People – most important resource/asset
 Quality comes from people
 Deming – 15% operator errors, 85% management system
 Project teams – Quality Control Circles (QCC), QIT
 Education and training – life long, continuous both
knowledge and skills
 Suggestion schemes; Kaizen, 5S teams
 Motivational programmes, incentive schemes
 Conducive work culture, right attitude, commitment
104

105. 4.CONTINUOUS PROCESS IMPROVEMENT
 View all work as process – production and business
 Process – purchasing, design, invoicing, etc.
 Inputs – PROCESS – outputs
 Process improvement – increased customer satisfaction
 Improvement – 5 ways:
 Reduce resources.
 Reduce errors.
 Meet expectations of downstream customers.
 Make process safer.
 Make process more satisfying to the person doing. 105

106. PROBLEM – SOLVING METHOD
1. Identify the opportunity (for improvement)
2. Analyze the current process
3. Develop the optimal solution(s)
4. Implement changes
5. Study the results
6. Standardize the solution
7. Plan for the future 106

107. IDENTIFY THE OPPORTUNITY (FOR IMPROVEMENT)
 Phase 1 – Identify problems
 Use Pareto Analysis – external & internal failures,
returns
 Phase 2 – Form a team (same function of
multifunctional)
 Phase 3 – Define scope of problem (Paint process – data
collected foe a week showed high 30% ‘runs’ defect)
107

108. ANALYZE THE CURRENT PROCESS
 Understand the current process, how it is performed
 Develop process flow diagram
 Define target performance
 Collect data, information
 Determine causes not solution (use cause and effect
diagram)
 Root cause if possible
108

109. DEVELOPE THE OPTIMAL SOLUTION(S)
 • To establish solutions
 • Recommended optimal solution to improve process
 • Create new process, combine different process, modify
existing process
 • Creativity (rubber pad adhesive, door trim)
 • Brainstorming, Delphi, Nominal Group Technique
 • Evaluate and testing of ideas/possible solutions
109

110. 5.SUPPLIER PARTNERSHIP
 • 40% production. Cost comes from purchased materials,
therefore supplier Quality Management important
 • Substantial portion quality problems from suppliers
 • Need partnership to achieve quality improvement –
long-term purchase contract
 • Supplier Management activities
 • Define product/program requirements
110

111. 6.PERFORMANCE MEASURES
 Managing by fact rather than gut feelings
 Effective management requires measuring
 Use a baseline, to identify potential projects, to asses
results from improvement
 E.g. Production measures – defects per million,
inventory turns, on-time delivery
111

112. REFERENCE
 Inventory management – basic concepts by
Ain Kiisler ,L-Consult OU.
 Pharmaceutical regulatory affairs – Total Quality
Management by c.v.s subrahmanyam.,
J.Thimmasetty pg:no: 134-171
 Project management budgeting: estimating costs
and risk chapter:07 by jack.R meredith , samuel.k
mantel Jr. 8th edition.
 Pharmaceutical Manufacturing – the Quiet
Revolution Paul Sharratt Institute for Chemical and
Engineering Sciences Singapore. 112

113.  Production Systems : Planning, Analysis & Control : By
— Riggs, J.L.(4th Edn.) John Wiley & Sons
 Modern Production/Operation management : By —
Buffa, E.S. & Sarin, =,.K.(8`" Edn.) John Wiley & Sons.
 Production & Operations Management : By Panneer
salvem, R.(2'1 Edn.) PHI
 Production & Operations Management : By Chary,
S.N.(TMH)
 Production and operation management (with skill
development ,caselets and cases) second edition by
S.Anilkumar, N.Suresh.
113

114.  Pharmaceutical industrial management by R.M.Mehta
 Project Management: A Systems Approach to Planning,
Scheduling, and Controlling By Harold Kerzner
 Entrepreneurship Development By S Anil Kumar
 Factory management &business organization by A.S.
Deshpande
 Project management practice 1 work breakdown
structure (rev E, june 2003)
 Introduction to production control by D.Tiranti &
Walker
 Production and Inventory Control BY DR. LOTFI
.K.GAFFAR
114

115. 115
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