Introduction to Production and Operations Research

PRODUCTION AND
OPERATIONS
RESEARCH
M-1
INTRODUCTION TO
POM
DR. JERRY JOHN
KARNATAKA COLLEGE OF MANAGEMENT

OPERATIONS MANAGEMENT
• Operations management is chiefly
concerned with planning, organizing and
supervising in the contexts of production,
manufacturing or the provision of services.
• As such, it is delivery-focused, ensuring
that an organization successfully turns
inputs to outputs in an efficient manner.
• The inputs themselves could represent
anything from materials, equipment and
technology to human resources such as
staff or workers.
• Outputs can be he end manufactured
product
Dr. Jerry John Karnataka College of Management

OM
Defined
• Operations Management:
– The business function responsible
for planning, coordinating, and
controlling the resources needed
to produce a company’s products
and services

TheRole of OM in the Business

Service VS
Manufacturing
• Intangible product
• No inventories
• High customer contact
• Short response time
• Labor intensive
Services:
• Tangible product
• Can be inventoried
• Low customer contact
• Capital intensive
• Long response time
Manufacturing:

OM
Decisions
• Decisions that set
the direction for the
entire company.
• Broad in scope &
long-term in nature
Strategic
decisions:
• Short-term & specific
in nature
• Bound by the
strategic decisions
Tactical
decisions:

Major HistoricalDevelopments
Industrial Revolution Late 1700s
Scientific Management Early 1900s
Human Relations Movement 1930s to 1960s
Management Science Mid-1900s
Computer Age 1970s
Just-In-Time Systems 1980s
Total Quality Management (TQM) 1980s
Reengineering 1980s
Flexibility 1990s
Time-based Competition 1990s
Supply Chain Management 1990s
Global Competition 1990s
Environmental Issues 1990s
Electronic Commerce Late 1990s – Early 21st Century

Industrial
Revolution
Late 1700s
• Replaced traditional craft
methods
• Substituted machine power
for labor
• Major contributions:
– James Watt (1764): steam
engine
– Adam Smith (1776): division
of labor
– Eli Whitney (1790):
interchangeable parts

Scientific
Management
Early 1900s
• Separated ‘planning’ from
‘doing’
• Management’s job was to
discover worker’s physical
limits through
measurement, analysis &
observation
• Major contributors:
– Fredrick Taylor: stopwatch
time studies
– Henry Ford: moving
assembly line
Dr. Jerry John
Karnataka College of Management

Human
Relations
Movement
1930s to
1960s
Recognition that factors other than
money contribute to worker
productivity
Major contributions:
• Understanding of the Hawthorn effect:
• Study of Western Electric plant in
Hawthorn, Illinois intended to study
impact of environmental factors (light &
heat) on productivity, but found
workers responded to management’s
attention regardless of environmental
changes
• Job enlargement
• Job enrichment

Management
Science
Mid-1900s
Dr. Jerry John
• Developed new
quantitative techniques for
common OM problems:
– Major contributions include
inventory modeling, linear
programming, project
management, forecasting,
statistical sampling, &
quality control techniques
– Played a large role in
supporting American
military operations during
World War II

Computer
Age
1970s
• Provided the tool necessary
to support the widespread
use of Management Science’s
quantitative techniques – the
ability to process huge
amounts of data quickly &
relatively cheaply
• Major contributions include
the development of Material
Requirements Planning (MRP)
systems for production
control
Dr. Jerry John

Developments: 1980s
Japanese Influence
Dr. Jerry John
Just-In-Time (JIT):
Techniques designed to achieve high-
volume production using coordinated
material flows, continuous
improvement, & elimination of waste
Total Quality Management
(TQM):
Techniques designed to achieve high
levels of product quality through
shared responsibility & by eliminating
the root causes of product defects
Business Process
Reengineering:
‘Clean sheet’ redesign of work
processes to increase efficiency,
improve quality & reduce costs

Developments:
1990s
Dr. Jerry John
• Offer a greater variety of product choices on a mass scale (mass
customization)
Flexibility:
• Developing new product designs & delivering customer orders
more quickly than competitors
Time-based competition:
• Cooperating with suppliers & customers to reduce overall costs
of the supply chain & increase responsiveness to customers
Supply Chain Management
• International trade agreements open new markets for expansion
& lower barriers to the entry of foreign competitors (e.g.: NAFTA
& GATT)
• Creates the need for decision-making tools for facility location,
compliance with local regulations, tailoring product offerings to
local tastes, managing distribution networks, …
Global competition:
• Pressure from consumers & regulators to reduce, reuse & recycle
solid wastes & discharges to air & water
Environmental issues:

Electronic
Commerce
Dr. Jerry John
Developing influence of broadband &
wireless
Internet & related technologies enable
new methods of business transactions:
E-tailing creates a new outlet
for retail goods & services
with global access and 24-7
availability
Internet provides a cheap
network for coordinating
supply chain management
information

PRODUCTION
• Production is the process by which raw
materials and other inputs are
converted into finished goods.
• Production is considered as the crucial
in any industrial organization.
• The other word synonymously used
with production is manufacturing.
• Manufacturing function from three
angles.
– Production as a system
– Production as an organizational
system
– Decision making in Production

Production
as a
System
• Production System
– A system whose function is to
convert a set of inputs into a set of
desired outputs
• Conversion Sub-System
– A sub-system of the larger
production system where inputs are
converted into outputs
• Control sub-system
– A sub-system of the larger
production system where a portion
of the output is monitored for
feedback signals to provide
corrective action if required.
Dr. Jerry John Karnataka
College of Management

A Production System Model

PRODUCTION AS AN ORGANIZATIONAL
FUNCTION
• The core of production system is its
conversion sub-system, wherein
workers, materials and machines
are used to convert inputs into
products and services.
• Process of conversion is at the heart
of production of production
function and is present in some
form in all organization.

DECISION
MAKING IN
PRODUCTION
Dr. Jerry John
OM are required to make a
series of decision in the
production function.
Plan, Organize, Staff, Direct
and Control all the activities
in the process of converting
all the inputs into finished
products.
Strategic, Operating and
Control decisions are the
three categories of decisions
made by operations
managers.

DECISION MAKING IN PRODUCTION
• Relating to products, processes and manufacturing facilities.
• These decisions are major once's having strategic importance and
long-term significance for the organization.
Strategic Decisions:
• Ongoing production of goods and services meets the market
demand and provides reasonable profits for the organization.
Operating Decisions:
• Day -to-Day activities of workers, quality of products and services,
production and overhead costs and maintenance of machines.
Control Decisions:

IMPORTANCE OF PRODUCTION FUNCTION
• The standard of living of people
depends on production of goods and
services.
• More the production, higher the
standard of living of the people.
• Production function can offer
competitive advantage to a firm in the
following areas :
– Shorter new-product lead time.
– More inventory turns.
– Shorter manufacturing lead time.
– Higher quality.
– Greater flexibility.
– Better customer service.
– Reduced wastage.

Types of
production

Types of
production
The types of
production system
are grouped under
two categories viz.,
Intermittent
production system,
and
Continuous
production system.

Intermittent Production System
Intermittent means something
that starts (initiates) and stops
(halts) at irregular (unfixed)
intervals (time gaps).

Intermittent
production
system
In the intermittent production system, goods are
produced based on customer's orders.
These goods are produced on a small scale.
The flow of production is intermittent
(irregular).
In other words, the flow of production is not
continuous.
In this system, large varieties of products are
produced.
These products are of different sizes. The design
of these products goes on changing.
It keeps changing according to the design and
size of the product.
Therefore, this system is very flexible.

Examples of
Intermittent
production
system

Features of
an
intermittent
production
system

The
characteristics
of an
intermittent
production
system are
listed as
follows:
The flow of production is not continuous. It is
intermittent.
Wide varieties of products are produced.
The volume of production is small.
General purpose machines are used. These
machines can be used to produce different types
of products.
The sequence of operation goes on changing as
per the design of the product.
The quantity, size, shape, design, etc. of the
product depends on the customer's orders.

Continuous
Production
System
• Continuous means something that
operates constantly without any
irregularities or frequent halts.

Continuous
Production
System
In the continuous production
system, goods are produced
constantly as per demand forecast.
Goods are produced on a large scale
for stocking and selling.
They are not produced on
customer's orders.
Here, the inputs and outputs are
standardized along with the
production process and sequence.

Examples of
Continuous
Production
System

Features of
Continuous
Productive
System

Characteristics
of a
Continuous
Production
System are
listed as
follows:
The flow of production is continuous.
It is not intermittent.
The products are standardized.
The products are produced on
predetermined quality standards.
The products are produced in
anticipation(An expectation) of
demand.
Standardized routing sheets and
schedules are prepared

Continuous
Production

1. Mass
Production
Flows
• Here, company produces
different types of products on
a large-scale and stock them
in warehouses until they are
demanded in The Market.
• The goods are produced either
with the help of a single
operation or uses a series of
operations.
• E.g. of mass production is the
production of toothpastes,
soaps, pens, etc.

Mass
Production
Flows

Characteristics
Mass
Production
Flows
There is a continuous flow of production.
However, this depends on the demand in the market.
Here, there is limited work-in-progress.
Supervision is easy because only few instructions are
necessary.
The material handling is done mostly by machines,
i.e. conveyors and automatic transfer machines.
The flow of materials is continuous.
There is little or no queuing at any stage of
production.

Process
Production
Flows
Here, a single product is
produced and stocked in
warehouses until it is
demanded in the market.
The flexibility of these
plants is almost zero
because only one product
can be produced.
Examples of these plants
include, steel, cement,
paper, sugar, etc.

Process
Production
Flow

Characteristics
Process
Production
Flows
There is a highly mechanized system for handling
materials.
Conveyors and automatic transfer machines are
used to move the materials from one stage to
another.
Low-skilled labour and skilled technicians are
required.
There is very less work-in-progress because
material flow is continuous.
The production planning and scheduling can be
decided well in advance.
The full production system is designed to
produce only one specific type of item.

Intermittent
Production
System

The types of
an
intermittent
production
system
include:
Project production
flows,
Jobbing
production flows,
and
Batch production
flows.

Project
Production
Flows
Here, in project production
flows, company accepts a
single, complex order or
contract.
The order must be
completed within a given
period of time and at an
estimated cost.
Examples of project
production flows mainly
include, construction of
airports, dams, roads,
buildings, shipbuilding, etc.

Examples of
Project
Production

Characteristics
Project
Production
The requirement of resources is not same (it varies).
Generally, the resource requirement at the beginning
is low. Then in mid of production, the requirement
increases. Finally, it slows down when the project is
near its completion phase.
Many agencies are involved in the project.
Each agency performs specialized jobs. Here,
coordination between agencies is important because
all jobs are interrelated.
Delays take place in completion of projects due to its
complexity and massiveness.
As routing and scheduling changes with fresh orders,
proper inspection is required at each stage of
production.

Job
Production
Here, in jobbing production flows, company
accepts a contract to produce either one or
few units of a product strictly as per
specifications given by the customer.
The product is produced within a given
period and at a fixed cost.
This cost is fixed at the time of signing the
contract.
Examples of such jobbing production flows
include, services given by repair shops,
tailoring shops, manufacturer of special
machine tools, etc.

Job
Production

Characteristics
Job
Production
 The production of items takes place in
small lots.
 Sometimes only one product is
produced at one time.
 The items are manufactured
strictly as per customer's
specifications.
 Highly skilled labour is required to
perform specialized jobs.
 There is disproportionate
manufacturingcycle time.
 For e.g. the time needed to design the
product may be more than the
manufacturing time.

Batch
Production
In batch production flows, the production
schedule is decided according to specific
orders or are based on the demand forecasts.
Here, the production of items takes place in
lots or batches.
A product is divided into different jobs.
All jobs of one batch of production must be
completed before starting the next batch of
production.
Examples of batch production flows include,
manufacturing of drugs and pharmaceuticals,
medium and heavy machineries, etc.

Batch
Production

Characteristics
Batch
Production
The products are made and kept in
stock until their demand arises in
the market
General purpose machines and
handling equipments, which can do
many different jobs quickly are
installed.
This is because large varieties of
items are to be produced.
There is a possibility of large work-
in-progress due to many reasons.

FORECASTING
• Production Forecasting
– "Production forecasting is estimating
the future demand for products and
services and the resources necessary
to produce the output..”
• Production forecasting means to estimate
the future demand for goods and
services.
• It also estimates the resources which are
required to produce those goods and
services.
• These resources include human
resources, financial and material
resources.
• So, production forecasting means to
estimate the 6M's of management.

6M’s
• The production manager first
estimates the future
– Market or demand for the
company's goods and
services.
• Then he estimates the
– Men (human resources),
– Money (financial resources),
– Materials,
– Machines and
– Methods
• which will be required to
produce those goods and
services.

PRODUCTION
FORECASTING
• Production forecasting estimates the future
technological developments.
• It estimates the customers needs and
preferences along with competitors' strategy
in the future.
• So, production forecasting is an estimation of
a wide range of future events, which affect
the production of the organization.
• First production manager studies all the past
and present events.
• Then he makes estimations about the future.
• So, most of the production forecasts are
made for existing goods and services.
• However, some new products will be
introduced into the market in an upcoming
future.
• Forecasts for these new products are
called predictions.

TYPES OF FORECASTS
• Technological Forecasts
– Concerned with rates of
technological progress
• Economical Forecasts
– Statements of expected
future business conditions
• Demand Forecasts
– Projection of demand for a
company's product or
services throughout some
future period

IMPORTANCE
OF
FORECASTING
IN
PRODUCTION
AND
OPERATIONS
MANAGEMENT
• Forecasting plays a pivotal
role in the operations of
modern management.
• It is an important and
necessary aid to planning and
planning is the backbone of
effective operations.
• Many organizations have
failed because of lack of
forecasting or faulty
forecasting on which the
planning was based

VARIOUS FACTORS OF
FORECASTING IN PRODUCTION
• The necessary elements of such forecasts include predictions relating to GNP and GDP, currency
strength, industrial expansion, job market, inflation rate, interests' rate, and balance of payments
and so on.
Economic Development:
• Predict the new technological developments that may change the operations of an organization.
Technological Forecasts:
• To predict as to what strategies your competitors would be employing to acquire gains in the
market share, perhaps at the cost of your market share.
Competition Forecasts:
• These forecasts involve predicting changes in the consumer tastes, demands and attitudes.
• Consumers have already established a trend for convenience, comfort and for products that are
easy to use and manage.
• Matters of taste and preference may change over a period.
Social Forecasts:

METHODS OF
FORECASTING
• QUALITATIVE METHODS
– Jury of Executive Opinion
• Involves taking opinion of a small group
of high-level managers and results in a
group estimate of demand.
– Salesforce Composite Methods
• It is based on estimate of expected
sales by salespersons.
– Market Research or Consumer Survey
Methods
• Determines consumer interest in a
product or service by means of
consumer survey.
– Delphi Method
• It is a judgmental method which uses a
group process that allows experts to
make forecasts.

METHODS OF
FORECASTING
• QUANTITATIVE METHODS
– Time Series Models
• Naive Approach
• Moving Averages Method
• Exponential Smoothing Method
– Casual Models
• Trend Projection
• Linear Regression Analysis

Time Series Models
• Time series models uses a series of past data to make a forecast for the future.
• Time series is a time ordered sequence of observations taken at regular
intervals over a period.
• Determines the TREND, SEASONAL VARIATIONS, CYCLES, OR IRREGULAR
VARIATIONS.
• Naive Approach
– Simple way to forecast in which the forecast of demand for the
next period is assumed to be equal to the actual demand in the
current period
• Moving Averages Method
• A forecasting method that uses an average of the ‘n’ most
recent periods of the demand data to forecast the next
period demand.
– Simple Moving Average Method
– Weighted Moving Average Method
• Exponential Smoothing Method
– A weighted moving average method in which data points are
weighted by an exponential function.

PROBLEMS
• The table below shows the monthly demand
over 6 months period for a product.
a. Determine the forecast of demand for the 7th
month using 3-month simple moving average
method.
b. If the weightage given for the demand for 6th,
5th, and 4th months are 0.5, 0.3 and 0.2
respectively, determine the forecast pf demand
for 7th month using weighted moving average
method.
Month 1 2 3 4 5 6
Demand (Units) 120 130 110 140 110 130

a. Determine the forecast of demand for the 7th
month using 3-month SIMPLE MOVING
AVERAGE method.
Forecast of demand for 7th month D6 + D5 + D4
3
130 + 110 + 140 = 380 = 126.67 units
3 3
Month 1 2 3 4 5 6
Demand (Units) 120 130 110 140 110 130

b. If the weightage given for the demand for 6th, 5th,
and 4th months are 0.5, 0.3 and 0.2 respectively,
determine the forecast pf demand for 7th month
using WEIGHTED MOVING AVERAGE METHOD.
Month 1 2 3 4 5 6
Demand (Units) 120 130 110 140 110 130
Weightage 0.2 0.3 0.5
Forecast of demand for 7th month W1D6 + W2 D5 + W3D4
W1+ W2 + W3
(0.5 X 130) + (0.3 X 110) + (0.2 X 140) = 126 units
0.5 + 0.3 + 0.2

EXPONENTIAL SMOOTHING METHOD
• ABC company predicted the sales for a product as 150
units for February 2003. Actual demand for February
2003 was 158 units. Using a smoothing constant (∝) of
0.3, forecast the demand for March 2003.
FMarch = FFeb + ∝ (𝐃Feb – FFeb)
• FFeb = Forecast for Feb = 150 units
• DFeb = Actual Demand for Feb – 158 units
• ∝ = Alpha (Smoothing Constant)
• FMarch= Forecast for March

SOLUTION
FMarch = FFeb + ∝ (𝐃Feb – FFeb)
FMarch = 150 + 0.3(158-150)
150 + (0.3 X 8) = 152.4
152 units

FACILITY LOCATION
• Facility location is refers to the location
of service organizations.
• It is known as factory location in
production organizations.
• Facility location refers to selection of
specific site for establishment of the
physical unit of production process.
• The success of the organization is also
depends on the decision of facility
location.
• It is a strategic decision of an
organization.

NEED OF
FACILITY
LOCATION
Selection of the location is long term
decision of organization.
Once selection of the location is very
expensive and some infeasible to alter the
location.
So it plays the vital role in the organization.
Selection the wrong facility location results:
• Low profit margin
• High cost of production
• Poor production efficiency
• High distribution cost
• Labour trouble
• Closure of organization.

NEED OF
FACILITY
LOCATION
• Facility location is importance for
both new and existing
organizations.
• Existing company may need facility
location:
– Change in availability of
resources
– Shift of demand.
– To expand new target market
– Development of new
technology
– Socio Political and legal
changes

NEED OF
FACILITY
LOCATION
Dr. Jerry John
Facility location planning
is more importance of
new organizations.
Facility location planning
involves three strategic
decisions:
• First to select a proper
geographical region
• Secondly, to select specific site
within this region
• Lastly, to find the actual site.

FACTORS
AFFECTING
FACILITY
LOCATION
• Facility location planning is
crucial for every
organization.
• A good facility location is that
which optimize the cost of
production ( inputs,
conversion process).
• It is the long-term
commitment; therefore the
top management should
analyze the SWOT analysis of
the proposed location.

FACTORS AFFECTING FACILITY
LOCATION
• The factors which affect the
selection of location are as
follows:
– Primary Factors Affecting
Plant Location
– Secondary Factors Affection
Plant Location.

FACTORS
AFFECTING
FACILITY
LOCATION
Dr. Jerry John
• Nature of Inputs ( Raw Materials)
• Nature of Outputs ( Product and Services)
• Nature of Technology Employed.
Primary Factors Affecting Plant
Location
• Availability of Labors and their skill
• Transportation and Communication Facilities
• Availability of Services
• Suitability of Land and Climate
• Opportunity for Expansion
• Political, Cultural and Economic Situation and
Regional Regulation.
• Special Grants, Regional Tax and Import Export
Barriers
Secondary Factors Affection Plant
Location.

PROCEDURES
IN FACILITY
LOCATION
• Facility location is a strategic decision
regarding selecting a best plant location.
• It is a long-term commitment of an
organization.
• A best selection of facility is a hub for
success of the organization besides that
wrong decision may negatively affects
every steps of the organization.
• As a long term concerned decision there is
some of the procedures.
• There are various quantitative and
qualitative analysis to find out the best
alternatives.
• The general procedures in facility location
includes:
– Preliminary Screening
– Detailed analysis.

PRELIMINARY
SCREENING
Dr. Jerry John
This is the basic stage before
selecting the facility location.
It includes:
• Proximate to customers, market,
raw materials ( Depends on the
company)
• Business Climate .
• PEST Environment:
• Availability of labor, materials etc.
• Others-

DETAILED
ANALYSIS
• Detailed analysis includes
both macro analysis and
micro analysis:
• This is the way of analyzing
best location by using
different qualitative and
quantitative method
– Qualitative Models:
– Quantitative Models:

QUALITATIVE
ANALYSIS
• Qualitative models are the
techniques of measuring
non monitory factors of
proposed facility/Plant
location.
– Simple Comparative Chart
Analysis:
– Point/Factors Rating
Method:

SIMPLE COMPARATIVE CHART
ANALYSIS ( SCCA)
• SCCA is the technique of analyzing the intangible
factors of location.
• It includes following steps:
– Identify the intangible factors.
– Compare/ranking the factors.
– Select the best alternative:
Intangible Factors Bangalore Mangalore Mysore
Labour Supply Most Suitable Suitable Suitable
Business Climate Very Good Good Good
Attitude of Community Very Favorable Un Favorable Favorable
Union Activities Less Important More Important Important

QUANTITATIVE
MODELS
Dr. Jerry John
They are:
Center Gravity
Method:
Linear Programming
Method:
Simulation Method:
It is basically mathematical models which
can be multiple use.
The quantitative modes are used for
analyzing those factors which can be
measured in terms of money.

FACILITY LAYOUT
PLANNING/DESIGN
Dr. Jerry John
• WHAT IS LAYOUT?
– Plants layout means the
disposition of the various
facilities.
– Plants layout begins with
design of the factory building
and goes up to the location
and movement and
individual worktable.
– It is the major consideration
of the production operation
management.

WHAT IS LAYOUT?
• Layout planning includes:
– New layout design.
– Minor change in present layout.
– Existing layout rearrange.
– Re-allocation of existing facilities.
– Building of a new plant.

OBJECTIVES
OF LAYOUT
• Objectives of Layout planning includes:
– Efficient utilization of floor space.
– Ensure smooth flow of operations.
– Efficient material handling system.
– Increase Production and productivity.

TYPES OF
LAYOUT
• The major types of
layouts are:
–Process ( Functional )
Layout:
–Product (Assembly
Line) Layout.
–Combination Layout.
–Fixed Position Layout.

PROCESS ( FUNCTIONAL ) LAYOUT
Dr. Jerry John
Process layout is simple layout design.
It is widely used layout.
In this layout machine are arranged according to their
function.
All the machines or similar operation at one location
(place)

PROCESS LAYOUT
• Flexibility
• Better utilization of production facility
• Lower investment
• Increase knowledge of supervisors

PRODUCT
(ASSEMBLY
LINE)
LAYOUT
Product layout is also
known as assembly line
layout.
It is widely used for
continuous production
system.
In this layout, machine are
arranged as the need of raw
materials.
Production of textile, sugar,
instant noodles, paper
mills.

PRODUCT LAYOUT
• In-process inventory is less
• Decrease handling cost
• Mechanized handling systems
• Unskilled workers can learn and manage the production.
• Manufacturing cycle is short due to uninterrupted
flow of materials.

COMBINATION
LAYOUT
• In this production world pure
product and process layout
are rare.
• It is the combination of both
product and process layout.
• In this method machine are
arranged in a process layout
but process grouping is
sequence to manufacture
various types and size of
production.
• It is also known as Group
Technology and Cellular
Layout.

COMBINATION LAYOUT

FIXED POSITION LAYOUT
• Interest and pride in doing the job
• Enlargement and upgrades the skills
• Flexibility
• Layout capital investment is lower.

QUALITY MANAGEMENT
It is a process that ensures the quality of the product
through out its life cycle.
Quality of product as the degree in which it fulfills the
requirement of the customer.
It is not absolute, but it judged or realized by comparing
it with some standards.
Quality comes as a result of systematic process.

COMPONENT OF QM
Quality
Planning
Quality
Control
Quality
Improvement
Quality
Assurance
QM
Dr. Jerry John

QUALITY
PLANNING
Quality control planning is
the first step. Requirements
must be identified, a
criteria needs to be set,
and important procedure
must be recognized as a
part of the plan.

QUALITY
CONTROL
Quality control is needed to
review the quality of the
product or service.
Inspection and testing is
necessary to identify
problems and defects that
need correction.

QUALITY
ASSURANCE
• Companies need to assure
defects and mistakes are
avoided in the manufacturing
of good or the delivery of
service, and quality
assurance guarantees
consistent results.
• Quality Control focused on
providing confidence that
quality requirements will be
fulfilled.

QUALITY
IMPROVEMENT
• There is always room for
improvement.
• Through quality
improvement, the results
can be measured and
possible improvements in
products or services can
be made.

PDCA: Plan-Do-Check-Act
It is a cyclic method for continuous improvement of processes

TOTAL QUALITY
MANAGEMENT
Dr. Jerry John
• “Total Quality management
is defined as a continuous
effort by the management
as well as employees of a
particular organization to
ensure long term customer
loyalty and customer
satisfaction. ”

QUALITY
CIRCLE
• A quality circle is a group of
workers who do the same or
similar work, who meet
• Regularly to identify, analyze and
solve work-related problems.
• Properties of Quality Circle:
– Participative management
technique within the
framework of a company
– Teams of 6 to 12 employees
voluntarily
– Define and solve a quality or
performance related problem.

OBJECTIVES
OF QUALITY
CIRCLE
• To improve quality, productivity, safety
and reduce the cost.
• To give opportunity to the employees
to use their wisdom and creativity
• To Promote team spirit, cohesive
culture among different levels and
• sections of the employees.
• To endorse self and mutual
development and leadership quality
• To fulfill the self esteem and motivation
needs of employees
• To develop the quality of work-life of
employees

6 SIGMA
• Six Sigma is a disciplined, data-driven approach and
methodology for eliminating defects (driving toward six
standard deviations between the mean and the nearest
specification limit) in any process – from manufacturing to
transactional and from product to service.

THE SEVEN
WASTES OF LEAN
MANUFACTURING
• Lean manufacturing, a management
philosophy primarily derived from the
Toyota Production System, focuses on
eliminating waste—called “Muda”—
within a manufacturing system.
• It considers many kinds of waste,
including the waste of excessive human
motion, and aims to integrate each step
of production into a holistic, efficient
process that reduces cost and improves
overall revenue.
• Under the lean manufacturing system,
seven wastes are identified:
– Overproduction,
– Inventory,
– Motion,
– Defects,
– Over-processing,
– Waiting,
– Transport.

MUDAS
• The most serious of the wastes.
• Cause all other types of wastes and results in excess inventor.Overproduction
• The waste produced by unprocessed inventory.Inventory
• Wasteful motion is all the motion, whether by a person or a machine,
that could be minimized.Motion
• Product deviating from the standards of its design or from the
customer’s expectationDefects
• Refers to any component of the process of manufacture that is
unnecessaryOver-processing
• Wasted time because of slowed or halted production in one step of the
production chain while a previous step is completedWaiting
• Having one plant closer to another in the production chain or
minimizing the costs of transportation using more efficient methods.Transport

LEAN
OPERATIONS
• Lean operations are providing higher
value to customers and eliminating
waste.
• A company operating on lean
principles strives to be efficient.
• Lean operations is a means of
running an organization by focusing
on providing greater customer
satisfaction while using as few
resources as possible.
• The objective of lean operations is
twofold: Creating value for customers
and eliminating waste.
• Companies that use lean operations
are highly concerned with efficiency.
• Lean operations allow companies to
do more with less which creates
value and increases profits.

LEAN
OPERATIONS
• There are several areas of
waste that companies should
consider reviewing when
taking on lean operations.
– Jobs
– Inventory
– Production Times
– Transportation

LEAN
OPERATIONS
• One of the most famous lean
operations examples is Toyota.
• The car manufacturer famously
created the Toyota Production
System (TPS), which has been a
longtime model for lean operations.
• The TPS is a socio-technical system,
meaning it focuses on workplace
interactions between people and
technology.
• The TPS is mainly tasked with
eliminating waste and inconsistency
in the manufacturing process.
• This revolutionary and oft-referenced
system has made Toyota one of the
top competitors in the highly
competitive automobile industry

JIT – Just In
Time
Inventory
Management
• Just-in-time also known as JIT is an
inventory management method whereby
labour, material and goods (to be used in
manufacturing) are re-filled or scheduled to
arrive exactly when needed in the
manufacturing process.
• JIT is a manufacturing management
process.
• It was first developed and applied in the
Toyota manufacturing plants in order to
meet consumer demands with minimum
delays.
• Waste minimization is one of the primary
objectives of Just In Time system.
• This needs effective inventory management
throughout the whole supply chain.

ELEMENTS
INVOLVED
IN JIT
• Continuous improvement:
– Attacking fundamental problems and
anything that does not add value to the
product.
– Devising systems to identify production
and allied problems.
– Simplicity: Simple systems are simple &
easy to understand, easily manageable
and the chances of going wrong are
very low.
– A product: oriented layout for less time
spent on materials and parts
movement.
– Quality control at source to ensure
every worker is solely responsible for
the quality of their own produced
output.

KANBAN
• KANBAN is a visual system for managing work
as it moves through a process.
• KANBAN is a concept related to lean and just-
in-time (JIT) production, where it is used as a
scheduling system that tells you what to
produce, when to produce it, and how much
to produce.
• The KABAN system can be thought of as a
signal and response system.
• When an item is running low at an
operational station, there will be a visual cue
specifying how much to order from the
supply.
• The person using the parts makes the order
for the quantity indicated by the KABAN and
the supplier provides the exact amount
requested.

APPLICATIONS
OF THE
KANBAN
SYSTEM
• The KANBAN system can be used
easily within a factory, but it can
also be applied to purchasing for
inventory from external suppliers.
• The KANBAN system creates
extraordinary visibility to both
suppliers and buyers.
• One of its main goals is to limit
the buildup of excess inventory at
any point on the production line.
• Limits on the number of items
waiting at supply points are
established and then reduced as
inefficiencies are identified and
removed.
• Whenever a limit of inventory is
exceeded, it points to an
inefficiency that needs to be
addressed.

ELECTRONIC
KANBAN
SYSTEMS
• To enable real-time demand signaling
across the supply chain, electronic
Kanban systems have become
widespread.
• These E-Kanban systems can be
integrated into Enterprise Resource
Planning systems.
• Toyota, Ford Motor Company and
Bombardier Aerospace are among the
manufacturers that are using E-
Kanban systems.
• These electronic systems still provide
visual signals, but the systems are also
usually enabled to automate parts of
the process such as transport through
the factory or even filing purchase
orders.

Introduction to Production and Operations Research

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