UNIT II

OPERATIONS MANAGEMENT

PLANT LOCATION

NEED FOR SELECTION

Business is newly started The existing business expansion

Establishment of branches Land lease expires

Plant location involves two major activities

1. To select a proper geographic region2. Selecting a specific site with in the

region

PLANT LOCATION

Meaning-the establishment of an industry at a particular place. It is of 2 types-

1. Localization / centralization-means concentration of similar type of industries at some particular place. E.g. textile in Mumbai.

2. Delocalization /Decentralization-means spreading of similar type of industries at different places. E.g. banking industries.

Factors affecting location & site decisions

1. Availability of raw materials2. Proximity to market3. Integration with other parts of

organization4. Availability of labor and skills5. Availability of Amenities6. Transport & communication facilities

Factors affecting location & site decisions (contd…)

7. Suitability of climate8. Availability of services9. Regional regulations10.Room for expansion11.Safety requirements12.Others like low interest on loans,

special grants, living standards

Pla

nt

layout

Plant layout

• Meaning-Plant layout is the physical

arrangement of industrial facilities. It involves the allocation of space & the arrangement of equipment in such a manner that overall operating costs are minimized.

Factors affecting plant layout1. Management Policy2. Manufacturing process3. Nature of product4. Volume of production5. Type of Equipment6. Type of building7. Availability of Total floor area8. Arrangement of Material Handling

Equipment9. Service facilities10. Possibility of future expansion

METHODS OF PRODUCTION

The methods of production can be of the following types:

1. Intermittent or interrupted production

a. Job Productionb. Batch Production

2. Mass and flow line production

JOB PRODUCTION

In this type of production, every job is different from the other in terms of type, cost, efforts, consumption of materials or specifications.

•ADVANTAGES Reaching the target customer’s

requirements Special training to labor Best suitable for pull system of demand

• DISADVANTAGESXTime takingX Large scale economies cannot be realizedX CostliestX Division of labor is not possible

BATCH PRODUCTION

All the products manufactured under a batch are similar in terms of type, cost, efforts, consumption of materials or specifications.

• ADVANTAGES cost of product design per unit is

low Economies of production Flow of materials can be continuous Automation and mechanization

• DISADVANTAGESX Varying customer demandsX Not appropriate for pull system

MASS PRODUCTION

This is also called flow production. The production can be undertaken on large and specialized machines and processes.

• ADVANTAGES Mechanization and division of labour Large – scale economies Minimum material handling costs

• DISADVANTAGESX Special careX Idle machinery may result in wastage

of resourcesX Bottle necks

Types of plant layout

1. Product layout 2. Process layout3. Fixed Position/ Stationary

layout4. Combination lay out

Product Layout

▫Layout that uses standardized processing operations to achieve smooth, rapid, high-volume flow

▫Here machines are arranged acc. to the needs of product & in the same sequence as the operations are necessary for manufacture. E.g. ‘back office’ of services such as banks and insurance companies.

Raw materialsor customer

Finished item

Station 2

Station 2

Station 3

Station 3

Station 4

Station 4

Material and/or labor

Station 1

Material and/or labor

Material and/or labor

Material and/or labor

Used for Repetitive or Continuous Processing

Product Layout (contd…)

Work Station 1

Work Station 2

Work Station 3

Product Layout(sequential)

Used for Repetitive ProcessingRepetitive or Continuous

Product Layout (contd…)

Advantages of Product Layout

1. High rate of output2. Low unit cost3. Labor specialization4. Low material handling cost5. High utilization of labor and

equipment6. Established routing and scheduling7. Short processing time

Disadvantages of Product Layout

1. Creates dull, repetitive jobs2. Poorly skilled workers may not

maintain equipment or quality of output

3. Fairly inflexible to changes in volume4. Highly susceptible to shutdowns5. Needs preventive maintenance6. Require large capital investment

Process layout

▫Layout that can handle varied processing requirements

▫Here all machines performing similar type of operations are grouped together at one location in the process layout. Thus here facilities are grouped together acc. To their functions. E.g. all drilling machines are located at one place known as drilling section.

Dept. A

Dept. B Dept. D

Dept. C

Dept. F

Dept. E

Used for Intermittent processingJob Shop or Batch

Process Layout(functional)

Advantages of Process Layouts

1. Can handle a variety of processing requirements2. Machines breakdown doesn’t result in shutdown.3. Equipment used is less costly4. Wide flexibility in production facilities.5. Each production unit of system works

independently.6. High utilization of facilities7. Variety makes the job interesting.

Disadvantages of Process Layouts

1. In-process inventory costs can be high

2. Challenging routing and scheduling3. Equipment utilization rates are low4. Material handling is slow and

inefficient & is more.5. More space is required6. Longer processing time7. Back tracking may occur.

Comparison of product & process layout

factors Product layout Process layout1. nature Sequence of facilities Similar aregp2gether

2. Machines utilization Not to full capacity Better utilization

3. product standardized diversified

4. Processing time less more

5. Material handling less more

6. inventory High WIP Low WIP

7. breakdown Can’t tolerate Can tolerate

8. Production centre simple complex

9.flexibilty low high

10. floor space Requires less more

11. investment high low

FIXED POSITION LAYOUT

• Layout by fixed position of the product is inherent in ship building, aircraft manufacture .

ADVANTAGES

•It is possible to assign one or more skilled workers to a project from start to finish in order to ensure continuity of work

•It involves least movement of materials•A number of quite different projects

can be taken with the same layout

DISADVANTAGES

There appears to be low utilization of labor and equipment

It involves high equipment handling costs

COMBINATION LAYOUT

•A combination of process and product layouts combines the advantages of the both types of layouts.

•A combination layout is possible where an item is being made in different types and sizes.

•examples: wood saws, files etc

WORK STUDY

Work study is defined as that body of knowledge concerned with the analysis of the work methods and the equipment used in performing a job, the design of an optimum work method and the standardization of proposed work methods.

Objectives of Work Study1. To analyze the present method of doing a

job, systematically in order to develop a new and better method.

2. To measure the work content of a job by measuring the time required to do the job for a qualified worker and hence to establish standard time.

3. To increase the productivity by ensuring the best possible use of human, machine and material resources and to achieve best quality product/service at minimum possible cost.

4. To improve operational efficiency.

WORK STUDY

METHOD STUDYWORK

MEASUREMENT

MOTION STUDY TIME STUDY

BASIC WORK STUDY PROCEDURE

1. Select the job or process or the operation to be studied.

2. Record all relevant facts about the job or process or operation using suitable charting techniques.

3. Examine critically all the recorded facts, questioning the purpose, place, sequence, person and the means of doing the job/process/operation.

4. Develop the new method.

RECORDING SYMBOLS

Standard Symbol Name of Activity

Operation

Transportation/Movement

Inspection

Delay/ Temporary storage

Storage

Combined Activity

PROCESS CHARTS

Outline Process Chart Operation Process Chart Flow Process Chart Two handed Process Chart Multiple Activity Chart Man – Machine Chart Flow Diagram String Diagram SIMO Chart

PRIMARY QUESTIONS

The PURPOSE for whichThe PLACE at whichThe SEQUENCE in whichThe PERSON by whomThe MEANS by which

ELIMINIATING

COMBINING

REARRANGING

OR

SIMPLIFING

those activitiesWith a view to

SECONDARY QUESTIONS

The secondary questions cover the second stage of the questioning technique, during which the answers to the primary questions are subjected to further query to determine whether possible alternatives of place, sequence, persons and means are practicable and preferred as a means of improvement upon the existing method.

PURPOSE: what is done?

why is it done?

what else might be done?

what should be done?

 

PLACE: where is it done?

Why is it done there?

Where else might it is done?

Where should it be done?

SEQUENCE: When is it done?

Why is it done?

When might it be done?

When should it be done? 

PERSON: who does it?

Why does that person do it?

Who else might do it?

Who should do it? 

MEANS: How is it done?

Why is it done that way?

How else might it be done?

How should it be done ?

Procedure (contd…)

5. Measure the work content and establish the standard time using an appropriate work measurement technique.

6. Define the new method.

7. Install the new method as standard practice.

8. Maintain the new method for the job/process/operation

THE TECHNIQUES OF WORK MEASUREMENT

1.  Direct Time study2.  Synthesis Method

3. Analytical Estimating4. Predetermined Motion Time System (PMTS)5. Work Sampling / Activity Sampling / Ratio Delay Method

METHOD STUDYWork methods analysis or

Method Study is a scientific technique of observing, recording and critically examining the present method of performing a task or job or operation with the aim of improving the present method and developing a new and cheaper method.

MOTION STUDY

Motion Study is the science of eliminating wastefulness, resulting from using unnecessary; ill – directed and inefficient motion.

The aim of motion study is to find and perpetuate the scheme of the least waste methods of labor.

OBJECTIVES OF MOTION STUDY

To study the existing method To develop an improved method To reduce excessive materials handling To improve utilization of resources To eliminate wasteful and inefficient motions To standardize work methods or processes.

TYPES OF MOTION STUDY

1. Micro motion Study Take motion picture of the operations Analyze the film

The film is analyzed by breaking the job cycle into micro motions or therbligs.

Therbligs indicate the basic motions consisting of three parts

i) When the motion begins ii) The nature of the motion iii) When the motion ends.Ex: Search – Sr; Select – St; Transport empty –

TE etc Prepare a SIMO chart

TYPES OF MOTION STUDY

2. Memomotion Study

It is a special form of motion study in which motion pictures are taken at slow speed using a motion picture camera.

WORK MEASUREMENT

It is defined as the application of techniques designed to establish the work content of a specified task by determining the time required for carrying out the task at a defined standard of performance by a qualified worker.

THE QUALIFIED WORKER

A qualified worker is one who is accepted as having the necessary physical attributes, who possess the required intelligence and education and who has acquired the necessary skill and knowledge to carry out the work in hand to satisfactory standards of safety, quantity and quality.

OBJECTIVES OF WORK MEASUREMENT

1. Improved planning and control of activities or operations.

2. More efficient manning of the plant3. Reliable ideas for labor performance4. Reliable basis for labor cost control5. Basis for sound incentive schemes

WORK MEASUREMENT PROCEDURE

Break the job into elements Record the observed time for each element Establish elemental time values by extending

observed time into normal time by applying a rating factor

Assess relaxation allowances Determine the frequency of occurrences of

each element in the job, multiply the work content by its frequency to arrive at work content of the job

THE TECHNIQUES OF WORK MEASUREMENT

1.  Direct Time study2.  Synthesis Method

3. Analytical Estimating4. Predetermined Motion Time System (PMTS)5. Work Sampling / Activity Sampling / Ratio Delay method

DIRECT TIME STUDY

Time study is concerned with the determination of the amount of time required to perform a unit of work.

The main objective is to determine by direct observation, the quantity of human work in a specified task and hence to establish the standard time, within which an average worker working at a normal pace should complete the task using a specified method.

PROCEDURE OF TIME STUDY

 a.  Obtaining and recording all available information about the job, operator and the surrounding conditions likely to affect the execution of the workb.  Recording the complete description of the method, breaking down the operation into 'elements'c.  Measuring with a stopwatch and recording the time taken by the operator to perform each 'element' of the operation.

i) Non – fly back ii) Fly Back iii) Split hand

d. Assessing the rating using rating scalee.    Extending observed time to ‘basic times’

= Observed time * Rating factor Where, RF = Rating of observed worker/Rating of

Qualified Workerf.    Determining the allowances to be made over and above the basic time for the operationg. Determining the 'standard time' for the operation.

SYNTHESIS METHODSynthesis is a technique of

work measurement for building up the time required to do a job at a defined level of performance by synthesizing or totaling elemental time values obtained from previous time studies on other jobs containing similar job elements or from standard data.

ANALYTICAL ESTIMATING

It is used to determine the time values for jobs having long and non- repetitive operations.

Procedure:1. Find the job2. Break the job into elements3. Select time value from standard data

catalogue4. Estimate time values for remaining elements5. Add 3 and 46. Add Relaxation allowances

PREDETERMINED MOTION TIME SYSTEM (PMTS)It is defined as a work measurement technique by which normal or basic times are established for basic human motions and these time values are used to buildup the time for a job at a defined level of performance.

Predetermined time standards are standard data for wide variety of basic body motions which are common in many industrial operations.