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MB0044 – Production & Operations Management (Assignment 1 Answers)


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Master of Business Administration

Semester II

 MB0044 – Production & Operations Management

 Assignment 1

1. Explain in brief the origins of Just in Time. Explain the different types of wastes that can be eliminated using JIT.

Ans. Just in time were developed to minimize wastage across the organization. If a firm is optimistic about the demand, then that firm increases their planned inventories. On the other hand if the demand is weak when compared to the expectations, then that firm’s unplanned inventories are high. That means companies don’t keep a lot of excess inventory, then manufacture a product as an order comes in. It is management philosophy of continuous and forced problem solving.

The seven types of wastes to be eliminated according to JIT are :

1. Over production

Over production is to manufacture products before it is actually needed. If the demand for that product decreases, the extra parts or products produced may not be useful or needed. Also over production results in high storage costs and is also difficult to detect defects. So, over productions is considered a waste.

2 Inventory.

Excess procurement or production builds up stock of materials which are not immediately use, this locking space and fund carrying heavy cost.

3 Waiting time.

Waste of time happen when goods are not moving or being processed. The operator, the machine or the part will either be not working or be worked upon. The duration is can be said to be unproductive and may create more serious consequences.

4. Movement

Any unnecessary movement is a waste of energy; it causes blockages, disrupting movements and delaying the flow of other items creating delays.

5. Effort:

The people, who work, do not make a study as to how the products on which they are making are utilized and do not realize the purpose for which they are made. This lack of education will lead to waste of resources. Finally, they end up in shortage of resources when needed.

6. Defective products.

The defective products leads to a tremendous loss to the company. This is because they use up the same equipments, workmen and the time that would be used to make good products. Thus defective products use up resources and result in losses.

7. Over Processing

Some steps like unnecessary processing or production do not add value to the final output. As a results, it is waste of all the inputs that go into the process.

Q.2 What is value engineering or value analysis ? Elucidate five companies which have incorporate VE with brief explanation.

Ans. Value of engineering (VE) or value Analysis is a methodology by which we try to find substitutes for a product or an operation.

The concept of value engineering originated during the second world war. It was developed by the General Electric corporations (GEC). Value Engineering has gained popularity due to its potential for gaining high Returns on investment (ROI). This methodology is widely used in business re-engineering, government projects, construction, assembling and machining processes, health care and environmental engineering, and many others. Value engineering process calls for a deep study of a product and the purpose for which it is used, such as the raw materials used; the processes of transformation; the equipment needed, and many others. It is also questions whether what is being used is the most appropriate and economical. This applies to all aspects of the products.

1. GENERAL ELECTICALS CORPORATION (GEC)

The concepts of value engineering originated in 1947 in General Electricals corporation (GEC) When a substitute for asbestos for flooring had to be found. Specialized dealers could provide an equally good material at a lesser price.

Initially, the practitioners were the people in charge of purchasing who tried to locate substitute material which would be equally good, if not better, at a lower price. This the first and basic approach to value engineering. A the concept percolated to the manufacturing departments, engineers applied the same principles and found that, they could use alternate materials, which were cheaper giving the same performance. It was also fund that dimensions and tolerance could be altered without affecting the performance of the part or the product. The investigations took them on the path of eliminating some operations. The focus was on the value of each bit materials, each operation. This approach led to the design stage.

2. ASHOK LEYLAND.

In implementation of VA, Ashok Leyland changed gear material from phosphor bronze to a less expensive cast iron and eliminated frequent field complaint of gear seizure in trucks.

3. TVS.

T.V. Sundaram Lyenger (TVS) Limited is one of the largest automobile distribution companies in India.

During the mid 1940 to 1960s, TVS based in Madurai was ranked as the best bus transportation system in India. It could manage to run the fleets for about 96% of the time.

TVS used the VE approach to restore the mobility of buses that had broken down. They stocked their garage with some critical assemblies of a bus. Whenever, a part or an assembly failed of a bus, they replaced it immediately with a new one, thus restoring mobility within a couple of hours.

When compared to the traditional method, this approach has gained much more benefits to the company, it helped to save time, reduce cost, efficient, quicker, and competitive.

4. MODI XEROX.

Modi Xerox designed the VE-d low-cost copier 1025 ST, which uses a single tray. The advantage of new design is that it is easy to operate and the cost is also very low.

5. TITAN

Titan watches introduced new designs adopting a strategy of innovation.

Q.3 Explain different types of quantitative models. Differentiate between work-study and motion study.

Ans. There are different quantitative models.

1. LINEAR PROGRAMMING: Linear programming technique is often used for optimizing a given objective like; profit or revenue maximization, or cost outgo minimization. Distribution of the revenues is the critical issue, when there are limited resources and they have to meet competing demands.

2. TRANSPORTATION MODEL: Transportation model is concerned with goods from manufacturing centres or warehouses which have to be supplied to depots or retails outlets. The demand and supply position of the places where they are required or produced and the cost of transportation are considered in the model. We use this model to economize.

3. ASSIGNMENT MODEL: Allocating jobs or persons to machines, awarding different projects to contractors is done so that maximum returns occur or less expenses are incurred. Hence, calls for the use of this model.

4. INVENTORY CONTROL MODEL: Inventory control model considers the:

· Frequency of placing orders.

· Quantities per order considering the cost of placing an order.

· Number of pieces that are to be kept in reserve.

· Rate of consumption.

· Lead time required for the supplier.

· Cost involved in storage.

We have different models which give solutions to optimization depending upon the probabilities of consumption and supply.

5. WAITING LINE MODELS: Queues are formed when the rate of services is at a variance with the rate of arrival. They are formed when the rate of production is less at particular points compared to the previous one. Sometimes we see multiple service points and a single queue are formed for feeding them. Number of items which includes the following is studied with some special techniques.

· People to be serviced.

· Rate of service

· Type of queue discipline that is intended to be followed.

· Policy of priority

· Tolerable amounts of waiting

· Others.

  1. SIMULATION MODELS: Simulation models are used when we will not be able to formulate mathematical model. So, we develop a model which resembles a real life situation. Based on this pattern, we predict and plan our procurement, production, delivery and other actions.
  2. PERT (PROJECT EVALUATION AND REVIEW TECHNIQUE) AND CPM (CRITICAL PATH METHOD) MODELS: When projects are undertaken with a number of activities, some happens in sequence, with gaps of weeks or months and some happens simultaneously. It is important to estimate the time required for completion of the project. A lot of coordination is needed while supplying the resources. It is also equally important to identify the bottlenecks and smoothen resources so that time schedules are maintained. Delayed completion may entail penalties. In this model, we adopt special methods to make the system.

Q.4 What is rapid prototyping ? Explain the difference between Automated flow line and Automated assembly line with examples.

Ans. Prototyping is a process by which a new product is developed in small numbers.

Prototyping is helpful to:

· Determine the suitability of the materials

· Study the various methods of manufacture

· Determine type of machinery required

· Develop techniques to overcome problems that may be encountered when full-scale manufacturing is undertaken.

Prototype do meet the specification of the components that enter a product and performance can be measured on those. It helps in confirming the design and any shortcomings can be rectified at low-cost. If serious defects or problems arise during manufacturing, a thorough change in design or even its replacement may be considered. Toa arrive at decisions and to make use of the advantageous stated above, it is important that the prototypes are made within the shortest possible time, Rapid prototyping facilities this.

The advanced Rapid Prototype Modelling Processes are:

Computer Aided Design (CAD)

Selective Laser Sintering (SLS)

Fused Deposition Modelling (FDM)

Lamination Object Manufacturing (LOM)

Electronic Beam Melting (EBM)

Q.5 Explain Break even Analysis and centre of gravity methods. Explain product layout and process layout with examples.

Ans. Break even analysis

Every manufacturing company will have three major contributors to cost;

1. Investments made for land, plant and machinery resulting in interest and depreciation.

2. Recurring expenses, which are not proportional to the quantity of production.

3. Variable costs, which are directly proportional to the quantity produced.

For our calculations, we combine the first two costs together and call them fixed costs. We call those costs that depend on the quantity of production as variable costs.

We compare the total costs for different locations on estimated amounts per annum and select whichever locations costs the least. However we will have to consider the possible variations in production levels during the foreseeable time spans and take decision.

CENTRE OF GRAVITY METHOD.

Centre of gravity method is used mainly when;

· Transportation costs, either for distribution of products or collection of materials from different suppliers is the main criterion.

· Production rates are high.

· The volume and weights of materials that have to be moved are huge.

· Time taken either to receive materials from suppliers or delivery to customers is critical.

It is better to locate the facility at such a place, which caters to the different points most optimally. The vital factor is the load, that is, number of items, or the weights that need to be moved from the central location to the existing or demanding point. We use this method when, both distance and load have to be considered for optimality in terms of costs.

PRODUCT LAYOUT

Product layout is also called as production lines or assembly lines. They are designed and laid out in such a way that only few products are capable of being manufactured or assembled. Materials flow through the various facilities. These use special machines to perform specific operations to produce only one product at one time. So, companies should set different set of machines for different products. Workers perform a narrow range of activities to complete the operations on the product as it moves in a flow line. The operation times, the sequence of movements and routing procedures are highly standardized to meet production requirements which are synchronized with many such products to complete finished goods to meets demands. Using special machines and implementing standardization in operations have many advantages which are listed below:

· The skill required of the workers is low

· Supervision is minimal

· Training needs are small

Precautions to be taken are:

· Constant check on the processes needs to be performed so that quality is assured.

· Corrective measures have to be implemented to avoid rejections, since, the quantities that get manufactured will be continuous.

· Check for the behavioral of the worker. As jobs are repetitive, workers tend to be bored and lose concentration. This may affect productivity and quality.

Example:

Let us consider an examples of a stainless steel manufacturing industry, in which the operations turning, milling and drilling happen in a sequence. Testing is performed in each process to assure the quality. The items are then sent to the assembly block. The items that arrive for assembly are either bought out items or made item components from elsewhere in the plant. The final product inspection is made and send to the packing dispatch.

Q6. Explain Juran’s Quality Trilogy and Crosby’s absolutes of quality. List out the pillars of Total Productive Maintenance.

Ans: JURAN’s Quality Triology

Juran uses his famous universal Breakthrough Sequence to implement quality programmes. The universal break through sequences are ;

Proof of need: there should be a compelling need to make changes.

Project identification: here what is to be changed is identified. Specific projects with time frames and the resource allocation are decided.

Top management commitment: Commitment of the top management is to assign people and fix responsibilities to complete the project.

Diagnostic journey: Each team will determine whether the problems result from systemic causes or are random or are deliberately caused. Root causes are ascertained with utmost certainty.

Remedial Action: This is the stage when changes are introduced. Inspection, testing,and validation are also included at this point.

Holding on to the gains: the above steps results in beneficiary results. Having records or all actions and consequences will help in further improvements. The actions that results in the benefits derived should be the norm for establishing standards.

JURAN has categorised cost of quality in to four categories:

1.Failure Costs–Internal :These are cost of rejections, repairs in terms of materials,labour, machine time and loss of morale.

2. Failure Costs-External:

These are cost of replacement, on-site rework including spare parts and expenses of the personnel, warranty costs and loss of goodwill.

3. Appraisal Costs:

These are cost inspection, including maintenance of records,certification, segregation costs, and others.

4. Prevention costs:

Prevention cost is the sequence of three sets of activities, Quality planning, Quality control, and Quality improvement, forming the triology to achieve

TOTAL QUALITY MANAGEMENT.

JURAN’s argument says that;

Quality is the result of good planning consideration the needs of both internal and external customers and develops processes to meet them. The processes are also planned to meet them.

Quality is built into the system of manufacture, inputs and processes that are on stream like raw material, spare parts, labour, machine maintenance, training, warehousing, inspection procedures, packaging, and other. All these have to follow standards and control exercises to make sure that mistake do not occur often and that if mistakes do occur then they are corrected at the source.

Quality improvement measures are essential to keep the quality culture alive. Newer methods will be found, some operations can be eliminated, improved technology available. In short, as experience is gained things can always be done better. IT is for the management to take the initiative and encourage the employees to be on lookout for opportunities for improvement.

CROSBY’S Absolutes of Quality

Like Deming, Crosby also lays emphasis on top management commitment and responsibility for designing the system so that defects are not inevitable. He urged that there be no restriction on spending for achieving quality. In the long run, maintaining quality is more economical than compromising on its achievement. His absolutes can be listed as under:

Quality is conformance to requirements, not ‘goodness’

Prevention, not appraisal, is the path to quality.

Quality is measured as the price Paid for non-conformance and as indices

Quality originates in all factors. There are no quality problems. It is the people designs and processes that create problems. Crosby also has given 14 points similar to those of Deming. His approach emphasizes on measurement of quality, increasing awareness, corrective action, error cause removal and continuously reinforcing the system, so that advantages derived are not lost over time. He opined that the quality management regimen should improve that overall health of the organization and prescribed a vaccine. The ingredients are.

1. Integrity:

Honesty and commitment help in producing everything right first time, every time.

2.Communication:

Flow of information between departments, suppliers, customers helps in identifying opportunities.

3.Systems and operations:

These should bring in a quality environment so that nobody is comfortable with anything less than the best.

Total Production Maintenance (TPM)

Maintenance is a function in any operations system. Maintenance keeps the equipments in good condition. Generally equipments deteriorate because usage wear to the parts introducing inaccuracies on the products made on them. When the deterioration produces a component which exceeds the permitted deviations rendering them unacceptable, maintenance is undertaken to bring back the machine to produce acceptable components. Sometimes the failure is sudden and serious and the equipment stops working. Disruption of production and emergency repairs works are costly and schedules are missed causing delays in supplies and consequent losses. These breakdowns occur because the equipment was carrying hidden defects which were not apparent. All theses are attended to by the maintenances department. Historical records indicate the probability of failures over different periods thus enabling us to plan to attend to them. With progress in automation, we have costly equipments. We have flow lines and any one machine breaking down causes a series of machine to be idle. So, we have to move towards zero breakdowns like we want to move towards zero defects by implementing TQM Tools. TPM puts the responsibility of maintenance where it belongs to and the operator who uses the equipment. It is a company wide activity which involves all the people. The main thrust is eliminating all break downs. The focus is on the operating personnel because they would know about malfunctioning earlier and more than anybody else. They work on the machine and are aware of the slightest variations that occur and thus should be able to plan to remove the cause before it becomes serious. So every planned maintenance activity reduces the probability of a breakdown, Ownership of the operation and machine increases the commitment of the workmen. Autonomy is the starting point for learning and excellence. The worker can suggest better ways of improving quality, productivity,and design. This help in continuous improvement, Team work and participation improves the quality culture. The principles of 5S- the housekeeping activities which improve efficiency at workplace is considered a measurable standard to aid the implementation at TPM even in the office rooms.

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