Production and Operations Management Notes PDF

Index Unit Page Number Unit I 1 Overview of Production and Operations Management Unit II 24 Facility Location and Layout Planning Unit III...

Index Unit Page Number Unit I 1 Overview of Production and Operations Management Unit II 24 Facility Location and Layout Planning Unit III 39 Work and Job Design Unit IV 65 Materials Management Unit V 103 Quality Management Unit VI 122 Safety Management  PRODUCTION AND OPERATIONS MANAGEMENT Unit I OVERVIEW Production and Operation Management deals with the creation of goods and services through the application of the business concept. They are also vital in both service and manufacturing firms. It has a primary objective, which is to employ the company’s resources to produce goods and services fit for the market. The goal of the production function is to add value. Be it product or services; the idea is to create something that will strengthen the relationship between the organization and customers. But this cannot only be made possible by the production department. The marketing people also have a huge role to play in this. They are the ones that will distribute the product to potential buyers and should have the capacity to inform the production department of what customers or consumers would prefer. Production management is relevant to the firm’s success in many ways. Used efficiently, it can lead to numerous accomplishments which will take the business to a great height. Following are the importance of production management:  Helps the Firm to Accomplish its Objectives  Boost Business Reputation and Goodwill  Reduces the Cost of Production The goal of customer satisfaction is an important part of effective production and operations. In the past, the manufacturing function in most companies was inwardly focused. Manufacturing had little contact with customers and didn’t always understand their needs and desires. In the 1980s, many U.S. industries, such as automotive, steel, and electronics, lost customers to foreign competitors because their production systems could not provide the quality customers demanded. As a result, today most American companies, both large and small, consider a focus on quality to be a central component of effective operations management. Meaning of "Production" Production implies the creation of goods and services to satisfy human needs. It involves conversion of inputs (resources) into outputs (products). It is a process by which, raw materials and other inputs are converted into finished products. Earlier the word "manufacturing" was used synonymously with the word "production", but nowadays, we use the term "manufacturing" to refer to the process of producing only tangible goods whereas the word "production" (or operation) is used to refer to the process of creating both goods (which are tangibles) as well as services (which are intangibles). Any process which involves the conversion of raw materials and bought-out components into finished products for sale is known as production. Such conversion of inputs adds to the value or utility of the products produced by the conversion or transformation process. The utility or added value is the difference between the value of outputs and the value of inputs. The value addition to inputs is brought about by alteration, transportation, storage or preservation and quality assurance. Meaning of “Operations” 1 The term “operations” refers to a function or system that transforms inputs into outputs of greater value. Operations are often defined as a transformation or conversion process wherein inputs such as materials, machines, labour and capital are transformed into outputs (goods and services). In a productive system, if the outputs are strictly tangible goods, such a system is referred to as a “production system” and the transformation process is referred to as “production”. Nowadays, the service system in which the output is predominantly a service or even a pure service, is also treated as a productive system and often referred to as an “operating system” instead of a “production system”. Production/Operations as a System This view is also known as "systems concept of production". A system is defined as the collection of interrelated entities. The systems approach views any organisation or entity as an arrangement of interrelated parts that interact in ways that can be specified and to some extent predicted. Production is viewed as a system which converts a set of inputs into a set of desired outputs. A production system has the following elements or parts : (i) Inputs, (ii) Conversion process or transformation process, (iii) Outputs (iv) Transportation subsystem, (v) Communication subsystem and (vi) Control or decision making subsystem. Production/Operations as a Conversion/Transformation Process The conversion or transformation sub-system is the core of a production system because it consists of processes or activities wherein workers, materials, machines and equipment are used to convert inputs into outputs. The conversion process may include manufacturing processes such as cutting, drilling, machining, welding, painting, etc., and other processes such as packing, selling, etc. Any conversion process consists of several small activities referred to as "operations" which are some steps in the overall process of producing a product or service that leads to the final output. Importance of Production Function The production is the core function of any business organisation. Production function creates goods and services and organisations exist primarily to create goods and/or to provide services. Without production function, there would be no need for any other function such as marketing, finance or human resource function. Also, more than 50 per cent of employees in a business organisation have jobs in the area of production. Moreover the production function is responsible for a major portion of assets in most organisations. Consumption of goods and services is an integral part of any society and production function facilitates creation of goods and services for the benefit of people in the society. Objectives of Production/Operations Management Some of the important objectives of production/operations management are : (i) Maximum customer satisfaction through quality, reliability, cost and delivery time. (ii) Minimum scrap/rework resulting in better product quality. (iii) Minimum possible inventory levels (i.e.,optimum inventory levels). (iv) Maximum utilisation of all kinds of resources needed. (v) Minimum cash outflow. 2 (vi) Maximum employee satisfaction. (vii) Maximum possible production (i.e., outputs). (viii) Higher operating efficiency. (ix) Minimum production cycle time. (x) Maximum possible profit or return on investment. (xi) Concern for protection of environment. (xii) Maximum possible productivity. Responsibilities of Production/Operations Managers The following are the major responsibilities of production/operations managers : (i) Meeting requirements of quality demanded by customers. (ii) Establishing realistic delivery or completion dates. (iii) Producing the required volume of products to meet the demand. (iv) Selection and application of most economic methods or processes. (v) Controlling the cost of inputs and conversion process and thereby keeping the cost of outputs within the desired limits. DECISION MAKING IN PRODUCTION/OPERATIONS MANAGEMENT The production/operations managers manage all activities of the production/operations systems which convert inputs into the desired outputs (goods and services). The production/operations managers have the ultimate responsibility for the creation of goods or provision of services. Even though the kind of jobs that production/operations managers oversee vary from organisation to organisation, (because of the different products or services involved) their job is essentially managerial. They must co-ordinate the use of resources through the managerial process of planning, organising, staffing, directing (or influencing) and controlling. The decisions which production/operations managers make may be classified into three general categories: (i) Strategic Decisions: Decisions about products, processes and facilities. These decisions are strategically important and have long-term significance for the organisation. (ii) Operating Decisions: Decisions about planning production to meet demand. These decisions must help to resolve the issues concerned with planning production to meet customers’ demands for products and services and to achieve customer satisfaction at reasonable costs. (iii) Control Decisions: Decisions about controlling operations concerned with day-to-day activities of the workers, quality of products and services, production costs, overhead costs and maintenance of plant and equipment. PROBLEMS OF PRODUCTION/OPERATIONS MANAGEMENT The problems involved in production management require two major types of decisions relating to : (i) Design of the production system and (ii) Operation and control of the production system. Decisions related to the design of production system are long-run decisions whereas, decisions related to operations and control of the production system are short-run decisions. The problems involve the relative balance of the emphasis on such factors as cost, service and reliability of both functional and time performance, which depends on the basic purposes of the total enterprise 3 and on the general nature of goods and services produced. In general, manufacturing organisations emphasise more on cost, consistent with quality and delivery commitments whereas, service organisations may emphasise reliability and service, consistent with cost objectives (for example, hospitals). Long-Run Decisions Long-run decisions related to the design of the production system are: (i) Selection and Design of Products: Product selections and designs with productive capability (i.e., producibility of products) are interdependent. (ii) Selection of Equipment and Processes: Selection of the most economic equipment and processes among the various alternatives considered, the firm's capability to invest in capital assets and its basic approach to production (i.e., job, batch, mass or continuous production) must be considered. (iii) Production Design of Parts Processed: Production design aims at selection of equipment, processes, and tools for economic production which set limits on the cost of outputs. (iv) Job Design: It involves basic organisation of work as well as matching workers to their jobs in order to reduce fatigue and improve productivity. (v) Location of the System: It is a trade-off decision since there is no one best location for a productive system to be located. The balance of cost factors determined by various considerations is critical. (vi) Facility Layout: This involves decisions related to design capacity, basic modes of production, shifts of working, use of overtime and subcontracting. In addition, operations and equipment must be located in relation to each other such that the overall material handling cost is minimised. Other factors involved are heating, lighting and other utility requirements, the allocation of storage space, washing space and the design of the building to house the layout. Short-Run Decisions Short-run decisions related to the operations and control of the system are : (i) Inventory and Production Control: Decisions made are concerned with allocation of productive capacity consistent with demand and inventory policy. Feasible schedules must be worked out and the load on machines and labour and the flow of production must be controlled. (ii) Maintenance and Reliability of the System: Decisions must be made regarding the maintenance effort, maintenance policy and practice recognising the fact that machine down time may lead to idling of labour and production stoppage resulting in lost sales. (iii) Quality Control: Decisions must be made to set permissible levels of risk that bad parts are produced and shipped or the risk that good parts are scrapped due to sampling inspection. Inspection costs must be balanced with the probable losses due to passing defective materials or products. Decisions regarding controlling the quality of on-going processes must be taken. (iv) Labour Control: Labour is the major cost element in most products and services. Hence, work measurement and wage incentive systems must be developed to control labour costs and to increase labour productivity. (v) Cost Control and Improvement: Day-to-day decisions which involve the balance of labour, material and overhead costs must be made by production supervisors. THE SCOPE OF OPERATIONS MANAGEMENT 4 Operations management has been gaining increased recognition in recent years because of the following reasons: (i) The application of operations management concepts in service operations. (ii) The growing importance of quality. (iii) The introduction of operation management concepts to other areas such as marketing and human resources and (iv) The realization that the operations management function can add value to the end product. FACILITY PLANNING Facility planning exercise determines how an activity's tangible fixed assets best support achieving the activity's objectives. In developing a layout for a system producing goods or services, we seek the optimum allocation of space to the components of the system. More specifically we try to determine the best arrangement of facilities and equipment capable of satisfying anticipated demand (quantity, quality and timing) at lowest cost. This is the phase when all the elements of the process are integrated and therefore special care should be taken to create an environment conductive to high productivity and the satisfaction of social and psychological needs of all the people at work. Facility Planning is also known under other names such as Lay out Planning, Plant Layout, Facilities Design, Facilities Planning etc. Objectives of Facility planning i) Support organisation's mission through improved material handling_ materials control and good housekeeping. ii) Effectively utilise people, equipment, space and energy. iii) Minimise capital investment. iv) Be flexible and promote ease of maintenance. v) Provide for employee safety and job satisfaction. These objectives can be restated as characteristics of good layout. Stages in New Product development Process: - -To minimize risk of new product failure, new product development follows a structured process. - Stages in new product development are: Idea Generation. Idea Screening. Concept Development & Testing. Marketing Strategy Development. Business Analysis. Product Development. Market Testing. Commercialization. Idea Generation: - New product development process starts with search for ideas. 5 - Sources of new product ideas could be Customers: Market research could be done with recent customer/lead users (customer who make advance use of product & recognize improvement needs). Market research determines product improvement required. R & D / Employees: Employees could be encouraged to give new product ideas & rewarded suitably. Competition: Through study/analysis of competitive products. Marketing Channel & Their Staff: Dealers, distributors, employees of distributors & dealers. Senior/Top Management: Product innovators could be senior management. Idea Screening: - Ideas generated need to be screened for action. - To start with, ideas are sorted into Promising ideas. Marginal ideas. Rejects. - Promising ideas are evaluated by a committee. - Surviving promising ideas are screened through a process. Concept Development & Testing: - Attractive ideas should be refined into list able product concepts. Product Ideas: Possible product that company may offer to the market. Product Concept: Elaborated version of the idea expressed in meaningful consumer terms. Product Image: Picture that consumer acquire of an actual/potential product. Marketing Strategy Development: - After concept testing, for concepts that qualify a preliminary marketing strategy is created to introduce new product into market. - Marketing strategy may be refined in later stages. Business Analysis: - After product concept/marketing strategy is developed, company can evaluate proposal’s business attractiveness. - For this, Sales. 6  Cost. Profits. Are projected for 5 years period. - These are matched with company’s objectives. If there is a match, the new product concept moves to product development stage. Product Development: - If a product concept passes the business analysis test, it is taken forward to the product development stage. - So far, the concept exists on paper. - In product development, concept is provided in detail to R & D to make physical product. - Stages in product development could be: o Prototype development. o Prototype Lab Testing. Test for Functionality. Test for Psychological aspects such as color. Test for Looks/Styles. Test for Price Fitment. o Functional Testing. Test for Safety/Effectiveness. o Consumer Testing. Test samples with consumers in lab. - Once management is satisfied with new product, functional/psychological performance, product is ready for market. Market Testing: - At this stage, new product is ready for: Brand Name. Packaging. Preliminary Marketing Program. - Objective of market testing could be: Test product in actual market setting. Learn about actual market size. Learn about how consumers/dealers handle, use, repurchase new product. Commercialisation: - After successful market testing, new product moves to commercialisation stage. - During this stage, production of new product on a commercial basis is rapidly built up. - New product is formally launched. For this, decision to be taken could be: o When to Launch: o Where to Launch: o To Whom: o How to Launch: 7 The Phases of Product Design To design is to formulate a plan for the satisfaction of human need. A. Recognition of need: The designing process begins with recognition of need and deception to do something about it. Recognition of the need and phrasing the need often constitute a highly creative act, because the need may be only an age of discontents, a feeling of uneasiness, or a sensing that something is not right. For example the need to do something about a food packaging machine may be indicated by noise label, by the variation in package weight, and by slight but perceptible variations in the quality of the packaging or wrap. B. Definition of the problem: It must include all the specifications for the product that is to be designed. Specifications are the inputs and output quantities, the characteristics and the dimensions, and all the limitations on these quantities. The specification defines the cost, the number to be manufactured, the expected life, the range, and the reliability. Anything, which limits the designer’s freedom of choice, is specification. Firms that are constantly evolving new designs make extensive use of computer-assisted design (CAD) techniques during this phase. These approaches enable designers to develop and test a multitude of goods or service configurations that could not otherwise be explored. C. Synthesis: After the problem is defined and a set of written and implied specification has been obtained, the next step in design is the synthesis of the optimum solution. D. Analysis and optimization: Synthesis cannot take place without both analysis and optimization, because the product under design must be analyzed to determine whether the performance complies with the specification. The analysis may reveal that the product is not an optimum one. If the design fails either or both of these tests, the synthesis procedure must begin again. E. Evaluation: It is a significant phase of the total design process. Evaluation is the final proof of a successful design. Here the designer wishes to discover: If the design really satisfy the need or needs? Will it compete successfully with similar products? Is it economical to manufacture and to use? Is it easily maintained and adjusted? Can a profit be made from its sale and use? etc. F. Presentation: The designer has also to sale the new idea. The designer should not be afraid of possibilities of not succeeding in a presentation. In fact, occasional failure should be accepted, because failure or criticism seems to accompany every really creative idea. Those willing to risk defeat obtain the greatest gains. In final analysis, the real failure would lie in deciding not to make the presentation at all. Process Selection In the manufacturing the product, the process selection refers to the way an organization chooses to produce its goods. Essentially it involves choice of technology and related issues. And it has major implications for capacity planning, layout of facilities, equipment, and design of work systems. Process selection occurs when new products or services are being planned. However it also occurs periodically due to technological changes in equipment. 8  Capacity Planning Forecasting Facilities & Equipment Process Selection Layout Product and service design Work design In the processing system the continuous and intermittent processing have some key differences which affect- how these systems are managed. The following sections highlight the key differences between the processing systems. Continuous and Semi-continuous Processing High volumes of standardized output are produced by continuous processing systems. The ultimate continuous processing systems produce a simple product such as flour or sugar. Generally, these products are measured on a continuous basis rather than counted as discrete units. Industries that use continuous processing are sometimes referred to as process industries. Products of process industries include plastics, chemicals, petroleum, grain, and steel. Other examples include liquid and powder detergents, and water treatment. The output of the system is highly standardized. Semi continuous processing produces outputs that allow for some variety; products are highly similar but not identical. Example includes automobiles, television, computers, calculators, cameras and video equipments. This form of processing is often referred to as repetitive manufacturing. Intermittent Processing When systems handle a variety of processing requirements, intermittent processing is used. Volume is much lower than in continuous system. Intermittent systems are characterized by general-purpose equipments that can satisfy a variety of processing requirements, semiskilled or skilled workers who operate the equipment, a narrow work span of supervision than for most continuous systems. One form of intermittent processing occurs when batches, or lots, of similar items are processed in the same manner (e.g., food processing). A canning factory might process a variety of vegetables; one run may be sliced carrots, the next green beans, and the next corn beets. All might need similar process of washing, sorting, slicing, cooking, and packing, but the equipment needs to be cleaned and adjusted between runs. Another form of intermittent processing is done by a job shop which is designed to handle a great variety of job requirements than batch processing.Lot sizes vary from large to small, even a single unit. What distinguishes the job shop operation from batch processing is that the job requirements often vary considerably from job to job. Examples of intermittent processing are textbook publication, bakeries, health care systems, and educational systems. In some cases the outputs are made for inventory (clothing, automobile tires); in others, 9 they are destined to meet customer needs (health care) or specifications (special tools, parts, or equipment). Types of Process Process technologies are broadly of five types according to its unique operating characteristics, problems, and challenge. These five types are Job shop, Batch, Assembly line and Continuous and Project. i. Job shop: Job shop technology is a process technology suitable for a variety of custom–designed products in small volumes. Job shop technology is appropriate for manufactures of small batches of many different products. It is also considered as intermittent processing systems because small quantities are produced. ii. Batch: Batch technology is a process technology suitable for a variety of products in varying volumes. Batch technology is a step up from job shop technology in terms of products standardization, but it is not as standardized as assembly line technology. Within the wide range of products in the batch facility, several are demanded repeatedly and in large volumes. These few dominant products differentiate batch facilities from job shops. The system must be flexible for the low-volume/high-variety products, because it is meant for those many jobs which are performed with frequent shifting from one job to another. This system has a high to moderate variety range. Many food items are produced by batch system. iii. Assembly Line: Assembly line technology is a process technology suitable for a narrow range of standardized products in high volumes. Assembly line (or simply line) technology is for facilities that produce a narrow range standardized products. Laundry appliances are a representative example. Since the product designs are relatively stable, specialized equipment, human skill and management systems can be developed and dedicated to the limited range of products and volumes. Beyond this range, the system is inflexible. Automobiles, for example are produced in Assembly Line system. iv. Continuous: Continuous process is suitable for producing a continuous flow of products. Chemical plants and oil refineries exemplify users of continuous flow technology. Materials and products are produced in continuous, endless flows rather than in batches or discrete units. The product is highly standardized, as are all of the manufacturing procedures, the sequence of product buildup, materials and equipment. Continuous flow technology affords high-volume, around- the-clock operation with the capital-intensive, specialized automation. It produces large volumes of one highly standardized item. There is no processing variety. Sugar is produced by a continuous processing system. v. Project: Project technology is suitable for producing one-of-a-kind products. Project technology deals with products that are tailored to the unique requirement of each customer. A construction company, with its many kinds and sizes of projects, is an example. Since the products cannot be standardized, the conversion process must be flexible in its equipment capabilities, human skills and procedures. The conversion process features problem solving, teamwork, and coordinated design and production of unique products. It is suitable for handling complex jobs consisting of unique sets of activities that must be completed in a limited time span. Examples include large or unusual construction projects, new product development or promotion, space mission, and disaster relief efforts. TYPES OF PRODUCTION SYSTEM Basic 2 types of production system - 10 1. Intermittent production system 2. Continuous production And they are further divided into sub types as – A. INTERMITTENT PRODUCTION SYSTEM: -  Intermittent means something that starts (initiates) and stops (halts) at irregular (unfixed) intervals (time gaps).  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 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 according to the design and size of the product. Therefore, this system is very flexible  Examples of the intermittent production system:- The work of a goldsmith and a tailor’s is based exclusively on the frequency of customer orders. Here, ornaments or clothes are not made continuously. THE TYPES OF INTERMITTENT PRODUCTION SYSTEM -: Ai) Project production Aii) Job shop production and Aiii) Batch production flows. 11 Ai) PROJECT PRODUCTION:  The company accepts a single complex order or contract.  The order must be completed within a certain period of time and at an estimated cost.  Consider manufacturing of ships, or flyovers or bridges or highways etc.  Such products are never manufactured in large quantities.  Labour, facilities and other resources focus on these products.  Therefore, each product can be treated as a project, which requires the sequencing of certain activities, either in series or simultaneously.  Examples - construction of airports, roads, buildings, shipbuilding, dams, etc. Aii) JOB SHOP PRODUCTION:  In the job production flows, the company accepts a contract to produce one or a few units of a product strictly according to the specifications given by the customer.  The product is produced within a certain period and at a fixed cost. This cost is fixed at the time of signing the contract.  Examples -services provided by clothing workshops, repair shops, manufacturers of special machine tools, etc. Aiii) BATCH PRODUCTION FLOWS:  In batch production flows, the production schedule is decided according to specific orders or is based on demand forecasts. 12  Here, the production of items takes place in lots or lots.  A product is divided into different jobs.  All jobs in a production batch must be completed before starting the next production batch.  Example - manufacturing of drugs and pharmaceuticals, medium and heavy machinery, etc. B. CONTINUOUS PRODUCTION SYSTEM:  Continuous means something that operates constantly without irregularities or frequent stops.  Goods are constantly produced according to the demand forecast. The goods are produced on a large scale for storage and sale.  They are not produced at the customer’s request.  Here, the inputs and outputs are standardized together with the production process and the sequence.  Examples - (i) Food industry is based solely on the demand forecast. Here a large-scale food production takes place. It is also a continuous production.  (ii) Fuel industry is also based solely on the demand forecast. Crude oil and other raw sources are continuously processed on a large scale to obtain a usable form of fuel and offset global energy demand. SUB TYPES OF CONTINUOUS PRODUCTION SYSTEMS -: 1. MASS PRODUCTION FLOWS: Here, the company produces different types of large-scale products and stores them in warehouses until they are demanded in the market. 13 B –ii) PROCESS PRODUCTION PROCESSES:  Here, a single product is produced and stored in warehouses until it is demanded in the market.  The flexibility of these plants is almost nil because only one product can be produced. Examples -Production system at steel, cement, paper, sugar, plant etc. 14 Unit II FACILITY LOCATION AND LAYOUT PLANNING Facility Location is the right location for the manufacturing facility, it will have sufficient access to the customers, workers, transportation, etc. A manufacturing unit is the place where all inputs such as raw material, equipment, skilled labors, etc. come together and manufacture products for customers. Facility locations involve numerous aspects, such as the location of manufacturing plants, assembly locations as well as distribution centres. Facility location refers to establishment of the physical unit of production process. The physical unit means "plant" where man, material, money, equipment, machinery etc are brought together for manufacturing of product. The need of facility location, factory location or plant location is important for both new enterprises and existing enterprises. NEED OF FACILITY LOCATION (FACTORY LOCATION, PLANT LOCATION) Decision of facility location (generally, facility refer to service organization and factory or plant refers to manufacturing organization) is important to any organization whether it is manufacturing or service. Facility location has a significant impact on firm's operation as well as cost structure. Once the location is decided and plant is installed, it is highly expensive to alter the location if it is later known that the location decision was not correct. Location decision is a long-term commitment. An established company might need the factory location planning for following reason: The availability and cost of resources like labor, raw materials and other supporting resources may change. The geography of demand may shift. It may be desirable to change facility location to provide before service to the customer. As the new market is opened, the added capacity should be located so that the market is served effectively. Development of new technologies. Socio–Political situations, economic conditions or government policy may change. Facility location planning is more important for new enterprises. The success of organization is also dependent on the location decision. Wrong location decision may doom the business and its existence forever. However, it is very difficult to find ideal and perfect location for any business. So, there is need to analyze the various factors affecting the plant location and take help of mathematical modeling technique to determine the best location decision. The plant location involves three major activities. First to select a proper geographical region. Select specific site with this region. Find the actual site. FACTORS AFFECTING PLANT LOCATION The production function is associated with conversion of input to desired output by using the appropriate technology i.e. conversion process. The inputs are fed to conversion process, while 15 outputs are marketed. Here, the important factors are input, conversion process and market and these are the primary factors affecting location decision. However other minor factors too are important for location decision. Nature of the input (raw material): In some cases, it is beneficial to locate the factory (plant) near to raw material. If the cost of transportation of raw material is very high comparison to the transportation of finished goods, it is suitable to establish the factory near to input resources. For example cement factory is established near the sources of lime because major input is lime which is very bulky. Similarly, sugar factory is established nearer to sugar cane farm. Other examples are oil refineries, steel industries, and paper industries which are established nearer to source of raw material. Nature of output (product or service): In some cases it is beneficial to locate the facility nearer to market or potential customer. Service produced by hotels, golf course, church, temples, schools, hospitals, are usually located near the market or the recipients because these services cannot be transported or keep in stock. These facilities should be located within the reach of consumers. In manufacturing organization, when the product are potential of being damaged or spoiled in course of transportation it is beneficial to establish plant nearer to market. Furthermore, a plant being nearer to the market can catch a big share of the market and can render quick service to the customer. In some cases the transportation of final product to market may be costly compared to transportation of raw material to industry and transportation cost has significant effect, in such case it is beneficial to establish plant nearer to market. For examples soft drink companies like Coca Cola and Pepsi are established nearer to market. Nature of technology employed: Conversion process and the technology employed also determine the facility location decisions. The conversion process, which produces unfriendly conditions to the people and environment, are usually located in remote areas i.e. far from consumer and the final product and service are transported to the market. The nuclear plant and airport are the good examples. Other minor factors affecting the location decisions are: Availability of labors and their skill Stable labor forces of right kind, adequate size (number), and reasonable rates with proper attitude towards works are a few factors which govern the plant location to a major extent. The purpose of management is to face less boycotts, strikes or lockouts and to achieve lower labor cost per unit of production. Transport facilities: Good transportation facility is an important factor of determination of location. Basic mode of transportation like air, road, rail, water, pipelines are preferred based on the nature of raw material and finished goods. A lot of money is spend on transporting the raw material and finished goods. The location should minimize the cost of transportation. Availability of services: Services like gas, electricity, water, drainage, waste disposal, communication and other external amenities like shop, community services, communication system etc. are also important 16  Suitability of land and climate: The topography (geography) of the land also affects plant location. Similarly the climatic conditions e.g. rain fall, humidity, average temperature are also critical factor while determining the location decisions. Opportunity for expansion: The long range prospective of expansion opportunity must be considered while making location decision. The location should be flexible enough to cover the expansion program. Political, cultural and economic situation and regional regulations: The political instability may jeopardize the business. Socio-cultural situation like women, foreign worker restriction of working should be considered. The economic condition of locality is important factor to be considered for business like gambling, casino, insurance companies or private educational institutions. Similarly, the study must be made of local regulations before determining the location decisions. Special grants, regional tax and import (export) barriers: Some local authorities and central government offer special grants, low interest loan, low rental or taxes and other inducement in the hope of attracting certain industries to a particular location. Location of companies to foreign countries to avoid export difficulties are now commonly accepted practices. After identify the several key location requirement management should find the alternative locations that are consistent with these requirement. These alternative locations are subjected to qualitative and quantitative analysis before determining the exact location decisions. COMPETITIVE ADVANTAGE BETWEEN URBAN, RURAL & SUB URBAN PLANT LOCATIONS The basis of plant location is first to locate the region and after that to locate the site with in that region. Each region may have the urban, rural & sub-urban site. Thus at the second stage the relative merit and demerit of these different types of locations must be assessed. Urban sites (city) The advantage and disadvantage of urban sites are listed below. Advantage Better transportation system Larger market Right labor force is available Availability of services Greater easy to finance. Disadvantage Low area of land available Cost of land and building construction are high Expansion generally hard Local taxes are high 17  Labour salaries are high Union problems. Rural sites (Plant sites in small towns) The advantage and disadvantage of rural sites is as follows: Advantage Plenty of land, low cost Unskilled labor available, low cost Less union problem No neighbor problem. Municipal, other regulations and taxes are seldom burdensome. Government gives inducements to develop underdeveloped areas. Disadvantage Skilled labor are not available Transportation facility may in inadequate Power may be unavailable Far market Fewer services available. An alternative between rural and urban is sub-urban sites which being a compromise between the two is probably the most suitable. It possesses the good points of both urban and rural. General Procedure In Facility Location The factory location includes the determination of alternatives site of various geographical regions. These alternative sites are subjected to various qualitative and quantitative analyses to find-out the adequate alternatives among them. The procedure in facility location include Preliminary screening Detailed analysis that includes qualitative and quantitative models. Preliminary screening The importance of various factors affecting the location depends on the types of products and service. Some time it is beneficial to locate proximate to marketing where as in other cases it is better to locate proximity to raw material. The factors like labour, transportation facilities, availability of resources, climatic condition, regional regulations, political, cultural and economic situation, has the various degree of effect on the plant location decision depending upon the types of product or service. Hence the preliminary screening is done to alternatives sites, with regard to these factors affecting the location decisions. The detailed information regarding these factors could be obtained from local chambers of commerce, local communities, trade publications etc. Detailed analyses Once the preliminary screening narrows alternative sites to just a few, more detailed analysis is 18 done. This detail analysis involves either qualitative techniques or quantitative techniques or both. A. Qualitative techniques Some factors affecting the location cannot be measure in terms of money. The subjective evaluations of sites, regarding these qualitative factors are carried out in qualitative models. These qualitative models are: Simple comparative chart analysis Factor ratings. I. Simple comparative chart analysis This method is widely used for analyzing intangible factors affecting the locations decision. The following steps should be followed Identify critical intangible factor affecting the location decision Compare all the alternative location on the basis of these factors like good / bad, favorable / unfavorable, important /not important etc. Select the best location for organization. The simple comparative chart can be used when an organization does not feel to evaluate intangible factors in details as shown in table. Intangible factors Location A Location B Location C Labor supply Suitable More suitable Suitable Business climate Good Very good Not good Attitude ofUnfavorable Favorable More favorable community Union activities Important Less More important important From the above simple comparative chart analysis for intangible factors location 'B' is selected as good one. II. Factor Rating Method The factors affecting the facility location decision discussed earlier are all more or less important for any type of the organization i.e. the importance of each of these factors may vary for different types of plants. Hence operations managers can use weightings of these factors of the location with respect to the purposed plant or organization to make the location decision more objective. The factor-rating method is most widely used of the general location decision techniques because they provide a mechanism to combine diverse intangible factors in an easy to understand format. The step used in this method to reach to the selection of the location is as follows: Step 1: Identify and note down all the relevant critical success factors to the purposed plant or organization. Step 2: Assign a rate to each factor to reflect its relative importance in company's objectives. Generally these factor are rated from 1-5. A rating of 5 is given to the most important factor and 1 is given to the least important one. These are called factor ratings. 19 Step 3: Take the attractive location alternatives from preliminary screening. Assign the rate to the alternative for each factors according to the benefits a particular location option offers. Generally, these rates varies from 1 - 10. A rating of 10 is given to the most beneficial factor at that particular location. Similarly a rating of 1 is given to the least beneficial factor at that location. These rating are called the location rating. [Note: There is no specific benchmark for factor rate and location rate determination. This is depended on the analytical skill of decision maker. Step 4: Factor rating calculated in step 3 and corresponding location rating calculated in step 4 are multiplied and the cumulative total rating for each alternative location is calculated. Step 5: Select the location with highest total score. Example 1: Location selection for a sugar factory base on the tabulated information Factors Facto Location A Location B Location C r Location Scor Location Scor Location Scor rating rate (1 - es rate (1 - es rate (1 - es s (1-5) 10) 10) 10) 1. Availability of sugar 5 8 40 10 50 6 30 cane 2. Transportation 4 10 40 4 16 10 40 3. Labour costs 3 3 9 8 24 6 18 4. Proximity to market 5 7 35 5 25 10 50 5. Power supply 3 8 24 1 3 8 24 6. Governmental/ local 4 9 36 10 40 8 32 rules & regulations 7. Environmental rules 3 8 24 9 27 7 21 8. QOL issues 2 10 20 5 10 10 20 9. Banking 1 9 9 2 2 10 10 Total cumulative score 237 197 245 Conclusion: Since total cumulative score for the location is highest i.e. 245 hence location C is selected for the purposed sugar factory. B. Quantitative Techniques (Models) Various quantitative models are used to determine the best locations of facilities. The widely used models for location decisions are Simple median model Linear programming Simulation I. Simple median model Simple median model is also called centre of gravity method. It is a quantitative method for 20 choosing an optimal facility location that minimize cost of transportation based on the median load. II. Simulation Method Different quantitative models are developed for location decision. These models have their own assumptions, specifications and conditions for application. However in real world (working situations) these specifications, limitations or assumptions may not be applicable or may not be met, reducing the usefulness of these models. Similarly there might be numerous constraints and variable which makes it difficult, handling with quantitative method. Hence to cope with this real complex problem, simulation method is developed. This method is based on the approximation technique. Besides these three models other models are also used for location decision. They are Cost benefit analysis Locational Break even analysis (BEA) Analytical Delphi methods. I. Cost Benefit Analysis In this method, all the factors affecting the location decision are estimated as cost/unit & those locations is determining where the variable cost/unit is least. This method does not take account the intangible factor. So this method is unsuitable for that situation where in tangible factors e.g. attitude of labor, government regulation or others are major concern. Variable costs per unit of production for two location factor are as follows: Location A Location B Material 12 8 Labor 8 8 Power 4 3 Taxes 3 1 Insurance 1 2 Transportation 2 4 Total 30 26 Comparing the variable cost per unit of location B is less than Location A, so Location B is selected. II. Locational Break-Even-Analysis (BEA) Break even analysis can help a operations manager to make an economic comparison of location alternatives by making the cost-volume analysis. The transformation process from inputs to outputs involves two types of costs, namely, the fixed cost and variable cost. Fixed costs are the capital expenditures which are long-term investments in fixed assets like purchase of the land, construction of building purchase of machines and equipment. These costs remain constant irrespective of the volume of production. An organization always prefers to have a low break-even volume so that its investments can be completely recovered soon. In facility location planning, a location at which the break-even 21 volume is lower is preferred. The fixed cost and the variable cost may be different at different location options, and hence, these options may have different values of VBE. In the following BEP analysis of three alternatives A, B and C, the alternative location C is best because it has lower VBE. Comparative study of location A,B,C. TR TR TC TR TC VC Cost/revenue Cost/revenue Cost/revenue TC VC VC FC FC FC 0 VBE 0 VBE 0 VBE Units of production Units of production Units of production Location A Location B Location C Factory Layout Concept Plant layout means the disposition of the various facilities (equipments, materials, human resources) and utilities of the plant within the area of the site (location decision) selected previously. Plant layout begins with the design of the factory building and goes up to the location and movement of individual work table. All the facilities like equipments, raw materials, machinery, tools, fixtures, workers etc. are given a proper place so that the objective of lay out will meet. There are various layout principles; however considerable arts & skill are required in designing a good plant layout. The research work is being continued in order to develop a scientific approach for solving plant layout problems. Objectives Of Layout In a good plant layout, the following objectives are met. Handling & transportation of material is minimized. Bottlenecks and points of congestions are eliminated (by line balancing) so that the raw material and semi-finished goods movement is faster. Workstations are designed suitably & properly. Suitable spaces are allocated to production and service centre. The movements made by workers are minimized. Waiting time of the semi-finished goods is minimized. Working conditions are safer, better & improved. There is an increased flexibility for changes in product design and for future expansion. There is a utilization of cubic space (length / width / height) There are improved work methods and reduced production cycle times. Plant maintenance is simpler. There is increased productivity and better product quality with reduced capital cost. Principles Of Plant Layout The few principles for sound plant layouts are: Integration Minimum movement & material handling 22  Smooth & continuous flow Cubic space utilization Safe & improved environment Flexibility Integration: It means, integration of production centers facilities like workers, machinery, raw material etc in a logical & balance manner. Minimum movement and material handling: The number of movements of workers & material should be minimized. It is better to transport material in optimum bulk rather than in small amounts. Smooth and continuous flow: Bottlenecks, congestion points & back tracking should be removed by proper line balancing technique. Cubic space utilization: Besides using the floor space of a room, if the ceiling height is also utilized, more materials can be accommodated in the same room. Boxes or bags containing raw material or goods can be stocked one above the other to store more items in the same room. Overhead material handling equipments save a lot of valuable floor space. Safe and improved environments: Working places should be safe, well ventilated and free from dust, noise, fumes, odor and other hazardous conditions. This will increase the operating efficiency of the workers and also improve their morale. All these lead to satisfaction amongst the workers & thus better employer- employee relationship. Flexibility: In automotive and other industries, where models of product change after some time, it is better to permit it all possible flexibility in the layout. The machinery is arranged in such a way that the changes of the production process can be achieved in the least cost or disturbance. Factors Influencing Plant Layout The objectives of layout are affected by various factors. 1. The material factor: This includes design, variety, quantity, necessary operation and sequence of various material (Raw material, work in progress goods, finished goods) used in production system. 2. The machinery factor: This includes the producing equipment, tools & their utilization. 3. The man factor: This includes human resources employed in production system for supervision, service, direct and indirect direct workers. 4. The movement factor: This includes inter-intra departmental movement of man and material factors for transport and handling and inspection at the various operations of production function. 5. The waiting factor: This includes permanent & temporary storage of finished goods, semi finished goods or raw materials are delayed for dispatch or processing. 6. The service factor: This includes maintenance, inspection, waste, scheduling & dispatching. 7. The building factor: This includes outside and inside building features, utility distribution and 23 equipment. 8. The change factor: This includes versatility, flexibility & expansion. Types Of Layout It is quite difficult to distinguish the lay out type because, the production lay out are now made more flexible to achieve the versatility of service and goods as per customer requirement. However in broad aspects, lay out are classified as follows: Process layout (Functional layout) Product layout (Assembly line) Combination layout Fixed position layout Process Layout Process layout is characterized by keeping similar machines or similar operation at one location (place). This is also called functional lay out because machine are arranged according to their function. Taking an example of a work shop, all lathes will be at one place, all milling machines at another and so on. This type of layout is generally employed for industries engaged in job order production and non repetitive kind of manufacturing or maintenance activities. In the figure, it is seen that all lathe works are done on lathe section which consists of one or more lathe machine as required. Similarly, all the milling works are carried out on milling section where milling machines are placed and so on. For example a machine shaft has to be made which consist of shaping, drilling, milling and lathe operation. For that the component is issued from the store, it is that carried to shaper section where shaping is done, then to drilling section where drilling is done on the shaped component. Similarly, it is carried to milling and lathe operation. The final component are inspected on inspection department and finally issued to store. Process layout Inspection Broaching Milling Store room department section section Shaper section Lathe Section Drill section Stock Room Advantages: Wide flexibility exists as regards allotment of work to equipments and workers Better utilization of the available equipments. Comparatively less number of machines is needed, thus involving reduced capital investment. Better product quality because, supervisors and worker attend to one type of machines and operations. Varieties of jobs make the work more interesting for the workers. 24  Workers in one section are not affected by the nature of the operation carried out in another section. For example, a lathe operator is not affected by the rays of the welding, as the two sections are quite separate. Disadvantages (compared to product layout): For the same amount of production, process layout needs more space. Automatic material handling is more difficult. More material in process remain in queue for further operation Completion of same product takes more time. Work-in-process inventory is quite large. Production control becomes difficult and also needs skilled manpower to carry out variety of job in single machine. Raw material has to travel larger distance for being processed to finished goods. This increases the material handling and associated costs. It needs more inspections & efficient co-ordinations. Some example of functional (process) lay out are: nursing homes, hospitals, universities, office building, work shop, tailor shop, printing process etc. Product Layout It is also known as line layout. It implies that various operations on the raw material are performed on sequence and the machines are placed along the product flow line. It means, machines are arranged in sequence in which the raw material will be operated upon. This type of layout is preferred for continuous production which involves continuous flow of in-process material towards the finished product stage. Some examples are textile, sugar, instant noodles, paper mills etc. From these examples it is seen that product layout are suitable for high volume production system, producing very limited or single variety products. As we know, in sugar only sugar related products could be produced. This layout is specialised for high volume unique products making highly inflexible. Product Layout X S T D S O E T V O R E Y F C A B H I M N O P K G R W R O O O O M M Z L 25  K G Raw material from the store is fed to three lines X, Y, and Z. Material in X lines gets processed on machine D, E, F & G and meets material of Y line after it has been processed on the main assembly line machine A & B. Products of X and Y lines are assembled at W and get processed on the machine H and I till another parts comes from Z line and assembles with main product at V. After that the total assembly gets worked on machine M, N, O and P and final products are send to stock room. Assumptions for product layout 1. Volume is adequate for high equipment utilization. 2. Product demand is stable enough to justify high investment in specialized equipment. 3. Product is standardized or approaching a phase of its life cycle that justifies investment in specialized equipment. 4. Supplies of raw materials and components are adequate and uniform quality (adequately standardized) to ensure that they will work with the specialized equipment. Advantages (compared to process lay out) Less space requirements for the same volume of products compared to process lay out. Automatic material handling, lesser material handling movements, times and cost. Less in process inventory. Product completes in lesser time. Better co-ordination and simple production planning & control Smooth & continuous workflow. Less skilled workers may serve the purpose. Disadvantages The layout is inflexible. The pace or rate of working depends upon the output rate of the slowest machine. This involves excessive idle time for other machines if the production line is not adequately balanced. Machine being scattered along the line, more machine of each type are required for keeping them stand by, because if any machine in the line fails, it may lead to shut sown of the complete production line. This is how product layout involves higher capital investment. Though it involved less supervision as compared to process layout, sometimes it (inspection) becomes difficult when one inspector has to look after many (say all welding) machines in two or more production lines. It is difficult to increase production beyond the capacities of production line. Combination Layout 26 Combinations of process and product layout are usually used to acquire the advantage of both layouts. More ever, in these days' pure product or process layout are rare. A combination layout is possible where items are being made in different type and sizes. In such cases, machinery is arranged in a process layout but process grouping (a group of number of similar machine) is than arranged in a sequence to manufacture various types and size of products. The point to be noted is that, no matter the product varies in size and type, the sequence of operation remains same or similar in combination layout. In the following figure of Combination layout, F, G, H, I represent different machine and 1, 2, 3, 4, 5 represent the similar type of machine. Here same machine are arranged in process lay out, however different machines are arranged as product lay out. A combination layout is also useful when numbers of items are produced in same sequence in fewer amounts (i.e. not on bulk) and it is not advantageous to have single production line for each product. For example refrigerator & TV manufacturers use a combination layout. First of all, they use process layout for manufacture of parts and components. However they use product layout for final assembling of products. To sum up, in combination layout, fabrications are normally handled with a process layout, where as assembly operations are carried out by product layout. S F T F1 G1 I O H1 I1 N R F2 A G2 E L F3 G3 H2 I2 P R O R O F4 G4 O M H3 I3 D F5 G5 U C T Combination Layout Fixed Position Layout In other types of layout discussed earlier, the product moves past stationary production equipment, where as in this case the reverse applies; men and equipment are moved to the material, which remain at one place and product is completed at that place where the material is fixed. Layout by fixed position of the product is inherent in ship building, aircraft manufacture and big pressure vessels fabrications. Advantages: It is possible to assign one or more skilled workers to a project from start to finish in order ensuring continuity of work. It involves least movement of materials. There is maximum flexibility for all sorts of changes in product and process. A number of quite different projects can be takes with the same layout. Disadvantages: It usually involves a low content of work-in-process. 27  There appears to be low utilization of labor and equipments. It involves high equipment handling costs. Application: Layout by fixed position of product is limited to large items made singly or in very small lots. Comparison Of Basic Layout The fundamentals differences between product oriented, process oriented and fixed layout are discussed Difference between three types of layout Basis Product oriented Process oriented Fixed position Product Standardized product, large Diversified product, varying Made to order, low volume, stable rate of volume, varying rate of volume. output output. Work-flow Straight line, same Variable flow, different Little or no flow of sequence of operation for sequence of operation material but human each unit. come to site. Human Highly specialized, routine Primarily skilled performed Greater flexibility, work skill & with less supervision & repetitive task location vary Material Flow, predictable, Variable flow Variable flow, general handling systematized, can be purpose handling automated. equipment needed. Inventory High turnover of raw High raw material Variable inventories, material and WIP inventory. inventory, low turnover of frequent tie-up as raw material production cycle is long and WIP inventory Capital Large investment in General purpose flexible General purpose, requirement specialized equipments equipments and process mobile equipment and and processes. process Product Relatively high fixed cost, Relatively low fixed cost, Relatively low fixed cost low unit cost for direct high unit cost for direct cost, high unit labor & labor and labor, material materials material & material cost. handling. Space Efficient utilization, large Large WIP space Small output per unit utilization output per unit space. requirement, small output space if conversion is per unit space. on site. 28 Product Versus Process Layout Relative Advantages of Product Layout i) Lower total material handling cost ii) Lower total production time iii) Less work-in-process iv) Greater incentive for groups of workers to raise level of performance and greater possibility of group incentive pay plans with broader coverage. v) Less floor area required per unit of production. vi) Simpler production control; fewer controls & records needed, lower accounting cost. Relative Advantages of Process Layout i) Less duplication of equipment and hence lower total investment in equipment. ii) Greater flexibility of production. Flexibility with respect to accommodating design changes, production volume changes, and new products and new machines. iii) Capability to handle breakdown of equipment by transferring the work to other machines. iv) Better and more efficient supervision possible through specialisation. v) Greater incentive to efficient individual workers. When to use Product and Process Layouts? Product Layout i) One or few standard products. ii) Large volume of production of each item over a considerable period of time. iii) Possibility of carrying out effective motion and time studies and setting accurate standards. iv) When there is a scope for getting good labour & equipment balance. v) Minimum of inspection required during processing. vi) Minimum of very heavy equipment or equipment requiring special features (isolation from general production areas etc.) vii) Little or no occasion to use some machines for more than one operation. Process Layout i) Many types cir styles of products, or emphasis on special orders. ii) Relatively Ion Column o production of individual items. iii) Adequate motion and time studies difficult or impossible to make., iv) Difficult to achieve good labour and equipment balance. v) Many inspections required during a sequence of operations. Methods Of Plant And Factory Layouts A layout furnishes details of the building to accommodate various facilities (like workers, materials, machinery etc). In addition, it integrates various aspects of the design of production system. The information required for plant lying out includes, dimensions of work places, sequence of operations, flow pattern of materials, storage space for raw material, in process inventory and finished goods, offices, toilets etc. There is no single universal technique leading to 29 best layout. Various techniques independently or in conjunction with other techniques may be employed at different stages involved in plant or factory layout. The word plant or factory can be taken more or less as synonyms. The following methods may be used while developing a layout in sequential order. Process flow chart Material movement pattern Layout analogues o Templates o Three dimensional models The correlation chart Travel chart Load path matrix The initial stage of the development is process flow chart. They show how different component parts assemble in sequence of operation to form sub-assemblies, which in turn lead to assemblies (finished products). Secondly, the flow pattern of material in process is traced and layout is built around it. Once the material movement patterns are determined, layout analogues are developed. These analogues are: 1. Templates 2. Three-dimensional models. Templates (Cut outs) They are used to develop plant layout. They are two-dimensional or block templates made up of cardboard, colored paper or celluloid. They are made to scale (e.g. 1: 50) and are placed on the scaled outline plan of the building. Templates or cut outs show the plan of the various facilities and the buildings. They show the actual flow floor space utilization. These templates have flexibility in use and can be moved on the graph paper from place to place in order to evaluate various feasible positions for different machines. Models They are the scale models of a facility and more clear to the real situation as besides length and width they show the height of a facility also. Models are used mainly to develop floor plans and elevations. Models can be made for production machine, workers, material handling equipment or any other facility. Models are much more effective and fast as compared to drawings or templates especially when multi storey plant layout is to be designed. Multi storey models can be made of a clear plastic. The correlation chart, travel chart & load path matrix are the mathematical model to have the optimum layout which minimize the material handling, material flow of cost of transportation. These help to determine the layout of one facility with relation to other department. These help to increase the efficiency of existing plant layout. Layout Procedure The ideal procedure for a plant layout is to build the layout around the productive process and then design the building around the layout. This may not be possible always, because the plant 30 building may already be existing or shape of plant may not permit the construction of a building to house the productive process, etc. Ultimately, one has to strike a balance between the two approaches. However, various procedural steps involved in plant layout have been listed and described below: a. Accumulate basic data The basic date includes: ▪ Volume and rate of production. ▪ Product specification and bill of materials. ▪ Process sheets indicating tools, equipments, the method and the product which will be manufactured. ▪ Flow process charts. ▪ Standard time to complete each operation, etc. b. Analyze and coordinate basic data The basic data are analyzed and coordinated in order to find ▪ The workforce and size and type. ▪ Number of work stations required ▪ Type of equipment required ▪ Storage and other space requirements. ▪ Assembly chart and operation process chart help coordinating data. c. Decide the equipment and machinery required Number of equipments required to meet a particular production target can be calculated by knowing the following parameters. ▪ Number of articles to be produced ▪ Capacity of each equipment ▪ Time in which the order is to be completed, etc. d. Select the material handling system. The material handling system is selected for moving raw material, semi-finished goods and final products. The type of material handling equipment to be selected depends upon: ▪ Material/product to be moved ▪ Container in which it will be moved ▪ Length of movement ▪ Frequency of movement ▪ Speed of movement, etc. e. Sketch plan of the plot for making factory building Sketch plan for the plot to mark building outline, roads, storage and service areas, etc. The plan orientation should utilize maximum, the natural heat light and other weather conditions. f. Determine a general flow pattern. Machinery may be laid as per production p[process requirements and plant building be erected 31 about the same. The flow pattern of materials should be such that the distance involved is least between the store and the shipping department through the production centers.There should be minimum back tracking and bottlenecks. Flow patterns may be analyzed using operation process charts or travel charts in case of multiple flow patterns.Based upon the process or product requirements, one may adopt process layout, product layout, or a combination layout. Plant layout should be flexible so that it can accommodate changes in product or product diversification g. Design the individual work station. Each work station should be laid for achieving optimum performance of operations, materials and space utilization, safety and comfort of employees etc. h. Assemble the individual layout into the total layout. Once the individual work station is designed , the next step is to assemble the individual layout into the total layout in accordance with the general flow pattern and the building facilities. i. Calculate storage space required. The storage space can be calculated by knowing the volume of each store item, number of items to be kept in store, the time each item may be kept in store etc. j. Make flow diagrams for work stations The next step is to make flow diagrams for work stations and allocate them to areas on areas on plot plan. k. Plan and locate service areas. Service area like office, toilets, wash rooms, tool rooms, rest and launch room, cafeterias, dispensary, power generating areas and packing area etc are planned and allocated. l. Make master layout The next step is to built the master layout by using the templates and models m. Check final layout Once the master layout is prepared, it is checked as regard to following layout principle aspects: Integration Minimum movement & material handling Smooth & continuous flow Cubic space utilization Safe & improved environment Flexibility n. Get official approval of the final layout. After the final plant layout has been checked, it is got officially approved and signed by the team which checked the final layout. The final layout accompanies information like product drawings, bill of materials, assembly and operation process chart, manpower requirement, equipment requirement, estimated expenditure and revenues etc depending the layout type and scale of production. o. Install the approved layout. Once the official approval has been obtained, detailed plan for installing production , service and 32 other centers are made and carried out accordingly. Flow Pattern of Materials: Meaning and Types Meaning of Flow Pattern: “Flow Pattern” means the system to be adopted, for the movement of raw materials, from the beginning and up to the end of manufacturing. The overall-objective of the ‘Flow Pattern’ is to plan for the economical movement of the raw materials throughout the plant. The Flow Pattern affects the following: (i) Materials handling cost. (ii) Amount of work-in-process. (iii) Capital and space tied up by work-in-process. (iv) Length of total production time. (v) The rate of the performance and coordination of operations. (vi) Amount of physical and mental strain on the operators. (vii) Supervision and control mechanisms. Quite often a plant layout design starts with the flow system around which services and other facilities are added and building design are modified accordingly but sometimes the flow must be adopted to suit existing buildings. Factors Governing Flow Pattern: (i) External transport facilities. (ii) Number of products to be handled. (iii) Number of operations on each product. (iv) Number of units to be processed. (v) Number of sub-assemblies made up ahead of assembly line. (vi) Size and shape of available land. (vii) Necessary flow between work areas. Types of Flow Pattern: The flow patterns can be classified into horizontal and vertical. The horizontal flow system is adopted on a shop floor while vertical flow is adopted where material has to move in a multi- storey building. 1. Horizontal Flow Lines: There are five basic types of horizontal flow line: (i) I-Flow or Line Flow. (ii) L-Flow. (iii) U-Flow. (iv) S-Flow. (v) O-Flow. 33 (i) I-Flow or Line Flow: It is the simplest form of flow. In this, materials are fed at one end and components leave the line at the other end. This type is economical in space and convenient in I-shaped buildings. I-Flow is preferred for building automobile Industries. (ii) L-Flow: It is similar to the I-Flow and is used where I-line cannot be accommodated in the available space. (iii) U-Flow: In this, both feeding and output take place at the same end i.e., it allows both receiving and despatching of goods to be done on one side. In comparison to I or L-Flow, this method is easier for supervision. This type of flow can be adopted in the manufacture of Electric Motor Industry etc. (iv) S-Flow: If the production line is so long that zig-zagging on the plant floor is necessary, than S-Flow is adopted. This type provides efficient utilization of space and is compact enough to allow effective supervision. (v) O-Flow: This type is used where processes or operations are performed on a rotary table or a rotary handling system. The components are moved from one working station to the other and when they leave the O-line, a complete set of processes or operations have been performed. The components are inspected before they are moved on to a second line for an additional series of processes or operations or to an assembly line. O-Flow can be adopted by industries manufacturing electric bulbs. These above mentioned basic flow lines are mostly used by industries in various combinations. Examples of combinations of basic horizontal flow systems are shown below. 34 Unidirectional and Retractional Flow: (a) Unidirectional Flow: The flow is said to be unidirectional when the material is passed from one work station to another without having to pass along the same path. The flow methods explained above are all unidirectional type of flow. (b) Retractional Flow: In this, the flow is repeated i.e., two or more non-consecutive operations are performed on the same machine. The aspect of flow is decided by consideration of machine utilization. In this flow, the available machine time is fully utilized but schedules have to allow for repeated machine setting and for the fact that intermittent localized halts occur in the production line i.e., each time a machine is switched over from one operation setting to another. This flow is also known as Repeated flow. 2. Vertical Flow Lines: This type of flow is for multi-storey buildings. In order to have the materials handling systems and control mechanisms to operate effectively, following six basic aspects of vertical flow systems are in use. (i) Processing downward or upward. (ii) Centralized or Decentalized elevation. (iii) Unidirectional or Retractional flow. (iv) Vertical or Inclined flow. (v) Single or Multi-flow. (vi) Flow between buildings. (i) Processing Downwards or Upwards: 35 In downward processing, the materials are fed from the top floor and in upward processing the materials are fed from the bottom floor while the finished product is received at the top floor. In processing downward much gravity handling system such as roller lines, chutes, pipes, buckets, hand operated lifts etc. can be used. These are economical in installation, operation, maintenance etc. (ii) Centralized or Decentralized Elevation: In a centralized elevation all the material handling devices are installed at one central place of the building. Therefore, this system is economical in supervision and maintenance. It sometimes reduces installation cost also. This method is usually employed when the flow on each floor is a U- flow. A decentralized elevation method is more costly in installation, maintenance and space, but by this method handling on each floor can be greatly reduced and more flexibility in design of the flow lines is possible. (iii) Unidirectional or Retractional Flow: In retractional type of flow, material has to come back on the floor which had already passed previously. This is done purposely to achieve better utilisation of available space and machines. (iv) Vertical or Inclined Flow: This type of flow is more economical and carried on with material handling devices such as elevators, chutes, buckets etc. In addition, inclined flow may also be carried out by conveyor belts as used in coal handling plants and chain system to move boiler grates etc. and similar other tasks. (v) Single or Multi-flow: In a single flow, there is only one flow line of materials while in multi-flow, there will be several flow lines and all these feed one assembly line. (vi) Flow between Buildings: When one production line is executed in several adjacent buildings, the flow of goods may be achieved either on an elevated floor or a ground floor. Ground floor is cheaper but requires more handling than an elevated floor. Elevated flow frees the ground for traffic and storage purposes. 36 Capacity Planning Capacity planning is the process of determining the production capacity needed by an organization to meet changing demands for its products. In the context of capacity planning, design capacity is the maximum amount of work that an organization is capable of completing in a given period. Design capacity refers to the maximum designed service capacity or output rate and the effective capacity is the design capacity minus personal and other allowances. These two functions of capacity can be used to find the efficiency and utilization. Capacity planning helps businesses with budgeting and scaling so they can identify their optimal levels of operations. Capacity planning helps to determine how services are offered, the appropriate time frames and staff required to meet current demand and cover all operational costs. Steps in Capacity Planning Here are five critical steps that every capacity planning process should include. STEP 1: CHECK ON THE CURRENT SLA LEVELS Before you look toward your future needs, you need to understand the current capacity and Service Level Agreements of your IT systems. This may involve reviewing SLA documents and signed partnership agreements with service providers, as it’s important to know whether or not your vendors are keeping up their end of the SLA and how much room you have for growth. STEP 2: ANALYZE YOUR EXISTING CAPACITY Next, analyze your current capacity. During this step, you also want to consider how well your systems stand up to current needs. For instance, if your users frequently complain about slow performance or other issues, it could be a sign that you’re lacking proper capacity to support user activity. STEP 3: DETERMINE YOUR FUTURE NEEDS Once you have an idea of your current capacity, it’s time to map out future capacity requirements. “If you are looking only at the company’s future growth, what you are really looking at is how well the existing infrastructure, servers, and applications will hold up to an increased number of users”. “Future needs are different, though, and have more to do with the way the company’s business may change.” It’s important to think about growth like specialized client needs, including requirements for running new applications, or updating other hardware and software elements. STEP 4: IDENTIFY ANY OPPORTUNITIES FOR CONSOLIDATION Capacity planning is also an ideal time to consolidate your workloads or potentially eliminate under provisioned servers. Not every workload will be well-suited for consolidation, and it’s imperative that consolidation doesn’t come at the cost of necessary redundancy. STEP 5: MAKE YOUR CAPACITY RECOMMENDATIONS AND TAKE ACTION Remember, your capacity plan should be just that: a plan outlining the actionable steps you should take to support your users and infrastructure now and into the future. Using the data and insights about your current capacity and where your needs will take you in the future, you can formulate recommendations about how to best support these requirements. Following your plan, your team can prepare your infrastructure capacity for the future. Keep in mind, though, that this is an ongoing initiative — you should regularly check into your existing capacity and compare it to your future requirements to ensure you’re on track. Capacity planning is especially important when prepping your infrastructure to handle high-capacity projects. In 37 addition, if you undergo a merger or acquisition, you’ll need to ensure that you have the right capacity in place to account for new users. Capacity planning is a critical pursuit for you and your team, and it can go a lot smoother with the right tools and technology in place. 38 Unit III Work and Job Design Work/job design/ task design is used to assess how tasks or the entire job is organised within the work environment, and then ensure these are well-matched to the attributes of the employee. Job design is a core function of human resource management and it is related to the specification of contents, methods and relationship of jobs in order to satisfy technological and organizational requirements as well as the social and personal requirements of the job. It is the allocation of specific work tasks to individuals and groups. Allocating jobs and tasks means specifying the contents, method and relationships of jobs to satisfy technological and organizational requirements, as well as the personal needs of jobholders. If the work design is good, or safety in design, it considers hazards and risks as early as possible in the planning and design process. It aims to eliminate or minimise the possibility of workplace injury or illness throughout the life of the product or process. Job design makes the work more interesting and challenging, which motivates the employees for higher level of performance. The challenging and interesting job provides better pay for the employees which inspires them for better job performance. Objectives of Work Design 1. The first objective of job design is to meet the requirements of the organisation, such as high productivity, technical efficiency and quality of work. 2. The second objective is to satisfy the needs of the individual employees such as job satisfaction in terms of interest, challenge and achievement. 3. The next objective is to integrate the needs of the individual with the requirements of the organisation. Work Study Work study is a means of enhancing the production efficiency (productivity) of the firm by elimination of waste and unnecessary operations. It is a technique to identify non-value adding operations by investigation of all the factors affecting the job. Work study is a combination of two groups of techniques, method study and work measurement, which are used to examine people's work and indicate the factors which affect efficiency. Measure the amount of work involved in the method used and calculate a “standard time” for doing it. Role of Work Study 1. To standardise the method of doing a work, 2. To minimise the unit cost of production, 3. To determine the standard time for doing a task, 4. To minimise the material movement, and operators movement, 5. To eliminate unnecessary human movements, 6. To utilise facilities such as man, machine and materials most effectively, and 39 7. To a systematic investigation of all factors. Objectives of Work Study: 1. Increased efficiency, 2. Better product quality, 3. To choose the fastest method to do a job, 4. To improve the working process, 5. Less fatigue to operators and workers, 6. Effective labour control, 7. Effective utilisation of resources, 8. To decide equipment requirements, 9. To pay fair wages, 10. To aid in calculating exact delivery, 11. To formulate realistic labour budgeting, and 12. To decide the required manpower to do a job. Basic Procedure of Work-Study Select - The task to be studied. Record - By collecting data at source & by direct observation. Examine - By challenging the purpose, place, sequence & method of work. Develop - New methods, drawing on contribution of those concerned. Evaluate - Results of alternative solutions. Define. Install. Maintain. Framework of work study Method Study Method study is the process of subjecting work to systematic, critical scrutiny to make it more effective 40 and/or more efficient. It is one of the keys to achieving productivity improvement. It is the technique of systematic recording and critical examination of existing and proposed ways of doing work and developing an easier and economical method. Method study is to simplify the job and develop more economical methods of doing it. It is systematic both in investigation of problem being considered and in the development of its solutions. It can be stated as one of most penetrating tools of investigation available to management. Objectives of Method Study 1. Improvement of manufacturing processes and procedures. 2. Improvement of working conditions. 3. Improvement of plant layout and work place layout. 4. Reducing the human effort and fatigue. 5. Reducing material handling 6. Improvement of plant and equipment design. 7. Improvement in the utility of material, m