Untitled Quiz

Operations Management (OPTS2001)

• Course name: Operations Management
• Course code: OPTS2001
• Institution: GITAM School of Business, Visakhapatnam

Unit IV: Productivity

Introduction

• Productivity is crucial for industrial firms and national economic progress.
• High productivity means completing work quickly with minimal resource expenditure without compromising quality.

Introduction (cont'd)

• Work study forms the basis for work system design.
• Work design aims to identify the most effective ways to achieve necessary functions.
• Work study improves existing and proposed work methods, establishing standard work times.
• It comprises method study and work measurement.

Introduction (cont'd)

• Method study systematically records and analyzes existing and proposed work methods to improve efficiency and reduce costs.
• Work measurement uses techniques to determine the time a qualified worker needs to complete a specific task at a defined performance level.

Introduction (cont'd)

• Method study focuses on reducing work content and establishing the optimal way to do a job.
• Work measurement involves investigating and reducing ineffective work time and setting time standards based on the standard method.

Productivity

• Productivity is the quantitative relationship between what's produced and the resources used to produce it (output/input).
• Productivity can be expressed as Output ÷ Input.

Productivity (cont'd)

• Productivity reflects the efficiency of a production system.
• It's a key concept in production management.
• It's an indicator of how well production factors (land, capital, labor, energy) are utilized.

Factors Influencing Productivity

• Productivity factors are broadly classified as controllable (internal) and uncontrollable (external) factors.

Controllable or Internal Factors

• Product: Meeting requirements.
• Plant and equipment: Availability and reducing idle time.
• Technology: Automation.
• Materials and energy: Reducing consumption.
• Human factors: Motivation and training of workers.
• Work methods: Improving how things are done.
• Management style: Communication, policy and procedures.

Uncontrollable or External Factors

• Structural adjustments: Including economic and social changes.
• Economic factors: Shifts in employment, technology import, and industrial competitiveness.
• Social factors: Involvement of women in the workforce, education, values, and attitudes.
• Natural resources: Manpower, land, and raw materials.
• Government and infrastructure: Government policies, transport, power, and fiscal policies.

Total Productivity Measure (TPM)

• TPM considers all inputs.
• Applicable to manufacturing and service organizations.
• Total productivity = Total tangible output ÷ Total tangible input.
• Tangible output = Value of finished goods + Partial units+ Dividends + Interest + Other income
• Tangible input = Value of (human + material + capital + energy + other) input used
• Tangible means measurable.
• Output and input should be in the same measurement unit (e.g., rupees).

Partial Productivity Measures (PPM)

• Partial productivity = Total output ÷ Individual input.
• Types of PPM:
  • Labour productivity = Total output ÷ Labour input.
  • Capital productivity = Total output ÷ Capital input.
  • Material productivity = Total output ÷ Material input.
  • Energy productivity = Total output ÷ Energy input.
• Partial productivity may overemphasize one factor at the expense of others.

Example 1

• A company's productivity calculations from illustrative examples.

Example 2

• Provides data from an illustration for various productivity indices.
  • Computes labor, capital, material, energy, other miscellaneous, and total productivity.

JOB Design

• Job Design is the process of deciding the content of a job; duties, responsibilities, methods, techniques, systems, procedures, and relationships between the jobholder and superiors, subordinates, and colleagues

JOB Design (cont'd)

• Job design is deciding a job's contents, methods, and processes, optimizing work time.
• Avoiding manual work handled by machines.
• Job design provides a framework for job analysis.
  • Finding out qualities, skills and needs for the job.

JOB Design (cont'd)

• Job design decisions incorporate who, what, where, when, why, and how based on mental, physical characteristics of the workforce, tasks, location of work areas, time of occurrence in the work flow. Organizational rationale and worker motivation. A jobs method of performance and motivation.

Job Rotation

• A job rotation technique involves planned movement of employees between two or more jobs.
• Aims to provide broader skills, enhance job satisfaction, and facilitate cross-training.

Job Enlargement

• Job enlargement expands the number of tasks in a job, adding variety to reduce monotony.
• Horizontal restructuring method.

Job Enrichment

• Job enrichment increases job responsibilities to enhance job satisfaction.
• Vertical restructuring method, giving workers more authority, autonomy, and control.

Work Study

• A generic term encompassing method study and work measurement to systematically examine a job, its contexts, and influencing factors for improvement.
• Means for improving firm productivity by eliminating unwanted operations.
• Technique for identifying non-value-adding activities.
• Provides an accurate and systematic way for establishing time standards.

Work Study (cont'd)

• Work study has two main techniques: Method study and Work Measurement.
• Method study further breaks down into Motion study
• Work measurement further breaks down into Time study.

Advantages of Work Study

• Smooth production, reduced product costs, improved worker-management relations, efficient resource utilization, better work conditions, improved layout, standardized procedures.

Method Study

• Systematic analysis of each operation for improvement.
• Aims to remove unnecessary steps and optimize work methods.
• Breakdown of an operation into component elements for systematic analysis.
• Objective is finding better ways to do things and increasing efficiency while eliminating waste.

Objectives of Method Study

• Finding better ways of doing jobs.
• Adding value and increasing efficiency by removing waste.
• Improved workplace layout.
• Improved working procedures.
• Improved use of people, machines, and materials.
• Improved product design.

Objectives of Method Study (cont'd)

• Present true facts about the situation and analyze them critically
• Develop the best possible answer based on that critical examination

Scope of Method Study

• Applicable to various industries, including services.
• Improving procedures and sequences of work.
• Streamlining material flow, reducing delays, and improving layout.
• Improving working conditions.
• Reducing monotony, improving plant and material utilization.
• Improving manufacturing costs through shorter operation cycles

Steps or Procedure Involved in Methods Study

• Selecting the job for study and defining its boundaries
• Recording relevant facts through observations and collecting additional data
• Examining and challenging existing procedures, purposes, sequencing, and methods
• Developing the best practical, economic, and effective method, drawing on the contributions from those involved.
• Evaluating alternative methods for cost effectiveness.
• Defining the new method for management, supervisors, and workers.
• Installing the new method as standard practice and training those involved.
• Maintaining the new method to prevent returning to previous methods

Selection of the Job for Method Study

• Should be based on economic, technical, and human considerations.

A. Economic Aspects

• Bottleneck operations.
• Excessive labor.
• Significant scrap or defects.
• Poor resource utilization.
• Excessive material handling or backtracking

B. Technical Aspects

• Technical expertise for the involved job.
• Inappropriate quality.
• High scrap rate
• Worker complaints.

C. Human Considerations

• Worker complaints about strenuous work.
• High accident frequency.
• Inconsistent worker earnings.

Recording Techniques for Method Study

• Charts: Macro-Motion Charts (Operations Process Chart, Flow Process Chart, Two-Handed Process Chart, Multiple Activity Chart).
• Micro-motion Chart: SIMO Charts.
• Diagrams: Flow Diagrams and String Diagrams

Method Study Symbols

• Symbols used to represent operations, inspections, transportation, delays, and storage in flowcharts.

1. Operation Process Chart

• Divides a manufacturing process into separate operations, showing material introduction points and inspection stages.
• Visual representation of the process, allowing for analysis and improvement.

2. Flow Process Chart

• Elaborates upon Operation Process Charts; providing a more detailed representation of operations, including transportation, storage, and delays in a sequence.
• Types: Material (material-centric), Man (operator-centric), Equipment (machine-centric)
• Visually depicts the overall flow of work.

3. Two Handed Process Chart

• Records simultaneous activities of both hands of an operator.
• Useful for visualizing complete sequence and identifying potential improvements to coordination and efficiency.

4. Multiple Activity Chart

• Displays the activities of multiple people or machines over time.
• Provides an overview of inter-relationships amongst activities.
• Useful for analyzing idle time, equipment utilization, and assigning workers to tasks.

1. Flow Diagram

• Provides a graphical representation of a plant layout or manufacturing environment.
• Depicts the layout of machinery, storage areas, and movement paths.

2. String Diagram

• Scale drawing depicting the movement paths of workers or materials.
• Useful for identifying inefficient movement patterns and potential improvements in layout.

Micro-Motion Study Chart

• Divides human activities into smaller motions (Therbligs).
• Aids in finding optimal methods for tasks.
• Therbligs were categorized by Frank Gilbreth.

1. SIMO Chart

• Simultaneous Motion Chart.
• Used to analyze activity and coordination in tasks; involving recording multiple Therbligs performed by different body parts and/or people at the same time.
• Used as a form of micro-motion study.

Work Measurement

• Applying techniques establishing time for qualified workers to perform a specified task (measured at a baseline performance level).

Objectives of Work Measurement

• Comparing different methods.
• Determining optimal staffing levels.
• Planning and controlling operations.
• Establishing accurate costing.
• Managing financial incentives.
• Setting delivery dates.
• Cost Reduction
• Identifying non-performing workers
• Employee Training

Techniques of Work Measurement

• Time study (stopwatch technique), synthesis, work sampling, predetermined motion and time study (PMTS), and analytical estimating.

1. Time Study

• Measuring the time required for each element of a task.

2. Synthetic Data

• Building up time estimates for new tasks using element times from similar past tasks in a project.

3. Work Sampling

• Observing workers or machines over a period, recording activities and calculating the proportion of time for each activity.

4. Predetermined Motion Time Study (PMTS)

• Establishing time standards for basic human motions. MTM (Method Time Measurement) is most commonly used.

5. Analytical Estimating

• Estimating time based on practical experience and synthetic data.

Time Study

• Work measurement method.
• Vital for operations planning and control.
• Techniques to determine time for qualified workers performing specific tasks at a set performance level.

Steps in Making Time Study

• Selecting tasks to be studied.
• Gathering information about the job, worker, and conditions.
• Decomposing tasks into elements.
• Measuring time for each element using a stopwatch.
• Assessing worker speed (performance rating).
• Adjusting observed time per element by the rating factor.
• Incorporating allowances (fatigue, personal time, etc.).
• Calculating standard time for the whole job.
• Creating detailed job descriptions.
• Inspecting standards as needed.

Computation of Standard Time

• Time required for a worker under the desired conditions and performance levels, per task unit.

Computation of Standard Time (cont'd)

• Components: Elemental Time, Performance Rating, Relaxation Allowances, Interference and Contingency allowances, and Policy Allowances.
• Expressing values in the same unit (e.g., minutes).

Example 1 and 2 (Calculation)

• Illustrative examples calculating normal and standard times given observed times and ratings.
• Efficiency of an operator performing 50 tasks/jobs within a timeframe (6 hours 30 min).