IMTS TQM (Production & Operations Management) by IMTS INSTITUTE

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PRODUCTI ON&OPERATI ONS

MANAGEMENT

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IMTS (ISO 9001-2008 Internationally Certified) PRODUCTION & OPERATIONS MANAGEMENT

PRODUCTION & OPERATIONS MANAGEMENT

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PRODUCTION & OPERATIONS MANAGEMENT CONTENTS: Chapter: 01

01-08

Operation Management – Introduction – Definition – Nature and Scope – Functions and responsibilities – Advantages and disadvantages. Chapter: 02

09-25

Production Manager – Role – qualities – Responsibilities of a production Manager – Production strategies – Relationship of a production with other functions – Marketing – Finance – Human Resource Management – Problems of Production Management. Chapter: 03

26-40

Decision making – Introduction – Definition – Functions – Types of decisions – Techniques in decision making – production and productivity Chapter: 04

41-51

Work study – Definition – Objectives – Major components of work study – Importance and significance – Procedures – Steps – Human considerations in work study – Benefits – Work study with productivity – Workers – Supervisors and management – Influence of methods and time study on production activities. Chapter: 05

52-73

Motion study – Definition – Aims – Scope – Procedure – Analytical approach – Selection – Recording techniques of motion study – Symbols – Micro motion study – SIMO chart – Memo motion study – String diagram – Man-machine chart etc - Principles of motion economy – Design of workplace layout – Design of workplace.

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Chapter: 06

74-91

Time study – Definition – Objectives – Techniques – Estimations – Procedures – Advantages and disadvantages – Standard time and allowances – Performance rating – Methods of rating – Distinguish between study and work measurement.

Chapter: 07

92-114

Flow process Charts – Network Analysis.

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PRODUCTION & OPERATIONS MANAGEMENT

CHAPTER – 01 OPERATIONS MANAGEMENT BASICS STRUCTURE 1.0 OBJECTIVES 1.1 INTRODUCTION 1.2. DEFINITION OF OPERATIONS MANAGEMENT 1. 3. NATURE AND SCOPE OF OPERATIONS MANAGEMENT 1. 4. FUNCTIONS OF OPERATIONS MANAGEMENT 1. 5. RESPONSIBILITIES OF OPERATION MANAGER 1. 6. ADVANTAGES & DISADVANTAGES OF OPERATIONS MANAGEMENT 1. 6. 1. Advantages of operations management 1. 6. 2. Disadvantages of operations management 1.7. QUESTIONS 1.8. SUGGESTED READINGS

1.0. OBJECTIVES End of this chapter you should be able to: 

Understand the concept and nature and scope of Operations Management



Know the functions of operations management



Understand the responsibilities of Operations Managers



Know the advantages and disadvantages of operations management.

1.1. INTRODUCTION Operations Management is the conversion of inputs into outputs, using physical resources, so as to provide the desired utility/utilities of form, place, possession or state or a combination there of to fulfill the customer needs as well as meeting the other organizational objectives and effectiveness, efficiency and adaptability. To many people, the term production conjures up images of factories, machines and assembly lines. Interestingly enough, the field of production management in the past focused almost exclusively on manufacturing management, with a heavy emphasis on the methods and techniques used in operating a factory. In recent years, the scope of production management has broadened considerably. Production concepts and techniques are applied to a wide range of activities and situations outside manufacturing; i.e., in services such as health care, food service, recreation, banking, hotel management, retail sales, education, transportation and government. This broadened scope has given the field the name production/operations management, or more simply, Operations Management, a term that more closely reflects the diverse nature of activities to which its concepts and techniques are applied.

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A luxury cruise ship provides an example of an operations management system. Most of the activities performed by the captain and crew driving a cruise or in preparation for the cruise fall within the realm of operations management among those activities are running the ship, managing food service, providing medical services, training and supervision of the crew, overseeing activities of passengers, and house keeping. Navigation, maintenance, and general repairs are required to keep the ship on course and in good operating condition. Food and beverages must be ordered, meals must be prepared and served in an appetizing manner, and dinning must be kept in clean. Medical supplies must be on hand and personnel sufficiently prepared to handle a wide range of illness and emergencies. Motivation, training, productivity, job assignments, and personal appearance of screw members are important. Passengers must be assigned to cabins, activities must be scheduled, trips ashore at ports of call must be arranged, and other needs must be attended to in order to maintain satisfactory customer relations. This gives you some idea of the nature and scope of operations management on a luxury ship.

1.2. DEFINITION OF OPERATIONS MANAGEMENT “Operations Management may be defined as a process, which combines and transforms various resources used in the production operations subsystem of the organization into value added products/services in a controlled manner as per the policies of the organizations”. EL WOOD S. BUFFA defines as “Operations/Production Management deals with decision – making related to production process so that the resulting goods or services are produced according to specifications in amounts and by the schedules demanded and at minimum cost”.

1.3. NATURE AND SCOPE OF OPERATIONS MANAGEMENT The nature of production can be better understood by viewing the manufacturing function as 

Production as a system

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Production as an organizational function

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Production as a conversion or transformation process

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Production as a means of creating utility

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Decision - making in production

a) Production as a system: A system is defined as the collection of interrelated entities. The systems approach views any organization 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 output. A production system has the following elements or parts  Inputs  Conversion process  Outputs  Transportation subsystem

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 Communication subsystem  Control or decision making subsystem.

ii) Production as an organizational function: To create goods and services, all organizations perform the following four basic functions either for manufacturing goods or providing services to the society. They are Marketing, Production/Operations, and Finance and Human Resources functions. Production which creates goods and services, marketing generates demand for products or obtain customers order, finance keeps the track of how well the organization performs and takes care of cash inflows and outflows and Human resources looks into the people aspect of the organization and best utilization of people. Hence, production is as a part of organizational function. iii) Production as a conversion or 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 equipments are used to convert inputs into outputs. The conversion process includes manufacturing process such as cutting, drilling, machining, welding, painting etc… and other process packaging, selling etc…

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iv) Production as a means of creating utility: Production is defined as the process of adding to the value of outputs or the process of creating utility in outputs. Utility is the power of satisfying human needs. During the process of converting the raw material into finished goods is the various types of utilities such as form utility, place utility, time, procession, knowledge or created while adding the value of the outputs. v) Decision - making in production: Operation managers are required to make a series of decisions in the production function. They plan, organize, staff, direct and control all the activities in the process of converting all the inputs into finished products. At each level, operating managers are expected to make decisions and implementation. The decision includes strategic, operating and control decisions.

1.3. SCOPE OF OPERATIONS MANAGEMENT Operations Management is substituted for production management as many individuals and organizations continue to use the term production solely to manufacturing activity. As such, operations management as wider scope begins with the idea stage, goes through research and development, manufacturing, purchasing, inspection, quality control and warehousing and ends with customer. Production is a subset of operations management. Its scope is a part of operations management. It focuses on  Product design  Forecasting  Facility location  Capacity planning  Plant layout  Shop floor management  Resource management  Production planning and control  Job design  Maintenance  Quality management  Work measurement  Purchasing  Store keeping  Warehouse management  Inventory control  Materials management  Project management

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1.4. FUNCTIONS OF OPERATIONS MANAGEMENT The ultimate responsibility of creating the goods or services lies with the operations management personnel. The focus of the POM personnel will vary from organization to organization, but the basic task of optimally utilizing the resources through the management process will not vary. As we are aware planning, organizing, staffing, directing, and controlling are the basic functions of the management. Planning involves determining a future course of action. The planning process begins by deciding what are desire and then the designing the ways for accomplishing their objectives. For example, capacity, location, products & services, make or buy, layout, projects and scheduling etc… Organizing refers to the administrative structure of the organization. It involves putting the parts of the system together in such a way that desired result can be achieved. For example, degree of centralization, subcontracting, hiring/laying off of employees, incentive plans, etc. Staffing involves selection and training of personnel who will operate the system. Directing refers to release the commands or orders, making suggestions or otherwise motivating subordinates to perform their assigned duties in a timely and efficient manner. Controlling involves measuring the results of operations, deciding if they are acceptable and instituting corrective actions if need be. Controlling functions involves in operations division in the aspect of inventory control, operating decisions, controlling decisions and so on. Apart from the above managerial functions, the operations manager should concentrate the following functions which are more relevant to Operations Management: 

Production Techniques: Equipment design, process design, plant layout and shop layout, design of materials handling systems.

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Capacity Management: Forecasting demand, delivery commitment, facility location and resource allocation.

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Industrial Engineering: Method study, work study measurements.

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Production Planning and Control: Estimating, forecasting, routing, scheduling, dispatching and progressing.

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Inventory Control: Purchasing, storing, and controlling inventory levels and material issues.

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Quality Control: Inspection, quality control, Quality Assurance and reliability, statistical quality control and total quality control.

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Maintenance: Servicing, repairing, breakdown/preventive maintenance, spare parts inventory control and equipment replacement.

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Other functions such as cost control, standardization, wages and incentives etc.,

1.5. RESPONSIBILITIES OF OPERATION MANAGER The following are the major responsibilities of operations managers: 

Meeting requirements of quality demanded by customers.



Establishing realistic delivery or completion dates.

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

Producing the required volume of products to meet the demand.

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Selection and application of most economic methods or processes.

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Controlling the cost of inputs and conversion process and thereby keeping the cost of outputs within the desired limits.

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Perform all managerial functions such as planning, organizing, staffing, directing and controlling in operations division/department.

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Operation managers are responsible for the amalgamation of five P’s namely Product, Plant, Processes, Programs, and People.

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Product is the most obvious interface between production & marketing.

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Plant should have the capacities to meet the present needs as well as that of the future.

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The processes include the transformation or convention processes which convert the inputs into outputs.

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The programs consist of schedules or time tables which set times for delivery of products or services to customers.

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The people aspect of production management includes the skills, knowledge, intelligence etc… of labour and managerial personnel which is crucial for the efficient and effective utilization of resources for the production of outputs.

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Make right decision which relates to production department at right time for smooth running of the division/department.

1.6. ADVANTAGES & DISADVANTAGES OF OPERATIONS MANAGEMENT 1. 6. 1. Advantages of Operations Management: The advantages/benefits of operations management are as under. 

Maximum customer satisfaction in quality, reliability & service in delivery.

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Maximum utilization of all resources.

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Maximum employee satisfaction.

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Maximum possible production (output).

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Maximum productivity.

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Maximum possible profit or ROI.

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Minimum production cycle time.

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Minimum cash outflow.

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Minimum inventory level (possible) optimum.

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Minimum scraps rework (resulting in better product quality).

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Concern for protection environment.

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Maximum operating efficiency.

1.6.2. Disadvantages of Operations Management: The disadvantages of operations management require two major types of decisions relating to:

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Design of the production system.



Operation and control of the production system.

Decisions related to the design of production system are long run decisions such as selection and design of products, selection of equipment and processes, production design of parts processed, job design, location of the system, facility layout. Decisions related to operations and control of the production system are short run decisions such as inventory and production control, Maintenance and reliability of the system, quality control, labour control, cost control and improvement. The relative importance of these problems of production management varies considerably depending on the nature of the production system. The operation manager must be able to sense the relative importance of these various problems in a given situation and take appropriate decisions to solve these problems.

1.7. QUESTIONS Section - A 1. Define Operations Management. 2. List out the nature of production. 3. List the elements of production systems. 4. Mention any four functions of operations management? 5. List any two advantages of Operations Management. Section – B 1. Briefly explain the nature of productions. 2. What are the advantages of Operations Management? 3. What are the disadvantages of Operations Management? 4. Briefly explain the functions of Operations Management. 5. What are the responsibilities of Operations manager? Section - C 1. Write a detailed essay on nature and scope of operations management. 2. Define Operations Management. Discuss clearly the functions and responsibilities of operations manager of a modern factory.

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1.8. SUGGESTED READINGS 1. Aswathappa. K & Shridhara Bhat.K, “Production & Operations Management”, Mumbai: Himalaya Publishing House, 1999. th

rev. ed., Mumbai: Himalaya Publishing House,

2005. 5. Ramamurthy. P, “Production & Operations Management”, 2

rev.ed., New Delhi: New Age

International Pub, 2006. 6. Stevention. William.J, “Production/Operations Management”, 5th ed., Burr Ridge: McGraw Hill Publication, 1996.

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CHAPTER - 02 OVERVIEW OF PRODUCTION MANAGEMENT STRUCTURE 2.0. OBJECTIVES 2.1. INTRODUCTION 2.2. PRODUCTION MANAGER’S ROLES 2.3. QUALITIES OF PRODUCTION MANAGER 2.4. RESPONSIBILITIES OF PRODUCTION MANAGER 2.5. PRODUCTION STRATEGIES 2.6. RELATIONSHIP OF A PRODUCTION WITH OTHER FUNCTIONS: 2.6.1. Finance 2.6.2. Marketing 2.6.3. Human resource management 2.6.4. Other functions 2.7. PROBLEMS OF PRODUCTION MANAGEMENT 2.8. QUESTIONS 2.9. SUGGESTED READINGS

2.0. OBJECTIVES End of this chapter you should be able to 

Know the role, qualities and responsibilities of production manager.



Discuss the production strategies.

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Understand the relationship between production Management and other functional areas of Management.



Discuss the problems of production management.

2.1. INTRODUCTION Production is not the application of tools to materials but is the application of logic to work. Production is the process by which goods (production) and services are produced. Production consists of series of operations that transforms materials from a given form to the desired form. Services are those functions which have some utility, for example, providing legal advice to a client, repair of an automobile, etc., 2.2. PRODUCTION MANAGER’S ROLES 

Overseeing the production process, drawing up a production schedule;



Ensuring that the production is cost effective;

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

Ensure implementation and evolution of safety procedure.

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Monitoring the production processes and adjusting schedules as needed;

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Monitoring product standards and implementing quality-control programs;

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Implement and drive continuous improvement activities through implementation of change management process and best practices.

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Liaising among different departments, e.g. Suppliers, managers;

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Optimize resource utilization by implementation of an effective production organization.

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Working with managers to implement the company's policies and goals;

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Ensuring that health and safety guidelines are followed;

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Ensure coaching and development of resources to meet business’s objectives.

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Supervising and motivating a team of workers;

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Reviewing the performance of subordinates;

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Develop and track improvement in reduction of planned DH hours.

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Coordinate, set up and implement standard operating procedure for all production operations.

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Making sure that products are produced on time and are of good quality;

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Manage the adherence to prescribed procedures to ensure first pass quality meets or exceeds planned goals.

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Working out the human and material resources needed;

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Ensure prescribed line pm’s are completed timely.

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Ensure complete compliance to prescribed QMS, GMP’s and 5S processes.

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Drafting a timescale for the job;

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Estimating costs and setting the quality standards;

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Track competencies of subordinates and provide leadership and development as required to achieve the objectives.

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Demonstrated ability to manage multiple projects simultaneously, set priorities, identify and address problems, meet deadlines, and stay within budget · Experience coordinating work of freelance editors, proofreaders, and designers

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Ability to create and manage production budgets

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Planning skill

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Leadership skill

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Communication skill

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Technical skills

2.3. QUALITIES OF PRODUCTION MANAGER In theory, most managers aspire to be ‘successful’ within their organizations, but defining that quantity can be problematic at best. The idea of managerial success can be financial, organizational,

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relational, or some combination of these or other aspects. Also, a manager may see him or herself as successful but be unaware that others do not share that view. Therefore, here are a few thoughts on what qualities make up a successful manager. Listening skills: The successful manager is the person who is a good listener. Of course, listening is more than hearing. It is the ability to understand what the person is saying and provide appropriate feedback. Granted, just because a manager is a good listener doesn't mean they have to do everything that is requested of them. The successful manager is the person who can convey to people that they hear what they are saying, but can still make the right decision for the department. But, the successful manager understands that people want to at least feel like they are being heard. Authenticity: Another trait of a successful manager is authenticity. This means that the manager is "real", which can be difficult for some people in a leadership position. Sometimes people feel like they need to be the "boss", which causes them to take on a different personality. This is particularly noticeable when people are promoted from within and they adopt a new attitude as a manager. Overall, people don't always have to "like" their manager, but they should respect them and know what to expect. Production: Of course, successful managers have to produce. This means that they have to perform the duties of the job as required by the organization. In addition, the "successful" manager is often the person who develops their department and takes it to the "next level." Success is also measured when the manager gets their whole team moving towards that goal of production. Humor: In today's modern organizational environment, successful managers often have a sense of humor. This goes beyond the ability to crack jokes and tell funny stories. It is also about creating a general environment where people have fun and are relaxed enough to enjoy their work. Granted, work can't always be fun and games but people are often more productive when they like coming to work. Vision: Finally, the successful manager is the person who can cast a vision for the future in their department. More importantly, they have to be able to articulate that vision in a tangible manner and inspire their employees to embrace that vision. Some managers can paint a "big picture" but they can't translate it to the day-to-day operations. Or, they can't convey to employees why they should care about that particular vision. The whole package: Overall, the successful manager is the person who can relate to their employees, create a team, and move them effectively towards a goal of production and development. The challenge of management is that some aspects can be taught, while others seem to be innate. The successful organization is the place that can effectively evaluate those people who have the ability to be successful managers and ultimately grow the organization.

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Abilities/Experience: Managerial qualities are essential as production managers look after a team of production staff. The ability to work with budget, a production manager will have to work with budget for his entire production including additional finance. (Food costs, travel)

2.4. RESPONSIBILITIES OF PRODUCTION MANAGER In the present era of cut – throat competition at various stages of operations, an enterprise should produce goods and services keeping into consideration the requirements and satisfaction of the potential customer. The objective should be to produce goods at least costs and to maximum satisfaction in an enterprise is most important. In an organization production manager has to administer a great variety of activities. He assembles appropriate resources and direct the use of these resources, be they people, machines, processing etc… in transforming material and time of people into products and services. Managers also have to respond to other forces from the external environment such as government regulation, labour organization, as well as local, regional, national and international economic conditions. Thus managers have to pay more attention not only to what their customers might buy but also to increasing government regulations and behaviour of consumer and environmental protection groups. The manager should be able to channelize the production process in a manner which ensures most efficient use of the resources to the best advantage for the enterprise. He is responsible for producing right quantity of material at the right time. He should be able to do something real and constructive about production problems. He should be well conversant with the ways and means to attain the desired goals. The duties of the production manager, in general, can be classified as given below. 

Production manager should concern himself with production planning: In every enterprise, production manager is responsible for producing the required quantity of product in time to meet the stipulated delivery date. The quantity to be produced depends on the magnitude of demand whereas the time by which the production should be completed is determined by delivery date. Besides, this production department has to make arrangement for input factors also to produce in economical size. To achieve all these objectives proper production planning is necessary. Production planning involves the generation and identification of alternative course of action and to select the optimum alternative. This can be done by (i) assessing the requirement of various factors of production on the basis of demand forecasting and (ii) formulating demand schedule or factors of production to permit purchase of raw material and the production of product in economic lot sizes.



Production Control: It is the duty of the production manager to use the resources at his disposers in the best possible manner as well as to regulate the operation in such a way that the desired delivery schedule is maintained. This is done by routing, scheduling and inspection during production process.

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Production managers should concern him with quality control: It is the responsibility of the production manager to manufacture the goods and services of desired specifications. Though the quality of the finished goods can be ensured by the inspection of finished goods but it is better to employ measures which minimize likelihood producing defective items.

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Method of analysis: There can be a number of ways in which some operation can be executed. Production manager should select the most efficient and economical method to perform the operations.

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Plant layout and material Handling: The physical arrangement of manufacturing components and the equipment for handling the material during production process has considerable effect on cost of production. The material handling system and the plant layout should be most efficient for the given situation.

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Proper Inventory Control: Inventory implies all the materials, parts, supplies, tools, and in – process of finished products kept in stocks for some time. The procurement policy of these items requires careful consideration and analysis. The purchases should be planned in economic lot sizes and the time of purchase should be so scheduled that the investment in the inventory is at lowest possible level. This implies determination of economic lot sizes and re-orders level.



Work study: Method study and work measurement techniques are applied to find the relationship between output of goods and services and input of human and material resources. The production manager should try to find the most appropriate method of performing various operations involved in a production process so as to obtain the optimum use of the resource as well as increasing the productivity.

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Production manager should be able to generate the interest of the workers to increase their efforts by providing them wage incentives. This will result, an increase in labour productivity.

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The cost of production varies with different methods of production. The production manager is responsible to follow a systematic approach to control capital and expenditure designed in a way that designed in a way that desired profit is ensured. The natures of problems associated in production management are such that the production

manager should have the capability as well as the aptitude to use qualitative and quantitative methods of analysis to get the desired solutions.

2.5. PRODUCTION STRATEGIES An organization’s production strategy is derived directly from the corporate mission and business strategy. An organizations strategy has a long term impact on the nature and characteristics of the organization. Strategies affect the ability of firm to complete or to serve its intended purpose. Top level management people in a company are responsible for making the vital decisions that the company’s overall goals and objectives and keep all departments or units of the company pulling together towards these goals and objectives.

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Decisions that have a long range impact on the general direction and basic character of a company are called strategic decisions. Production strategy is a long term functional strategy or an action plan for the production of a company’s products/services and provides a road – map for what the production or operations functions must do to achieve the business strategies. Production/operations function of an organization aims to provide products/services to its customers by using a combination of the following strategies to fill market gaps. 

Timely delivery of products/services.

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Flexibility in meeting customers’ demand in terms of change in product design or change in production volume.

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Quality of products/services to meet customers’ specifications.

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Cost effectiveness in terms of low price for its products/services relative to that of its competitors. These strategic alternatives form bases for the production/operations function. The selected

strategies are translated into operations sub-goals with desired product characteristics, process characteristics and customer services. Some of the specific operations objectives are as follows: Achieving highest efficiency at all operational subsystems: This objective aims to improve the efficiency of each operational subsystem such that the overall productivity of the organization is improved. Gearing up the operations subsystems to meet delivery commitments: Meeting committed delivery dates while satisfying demand is considered to be an important factor which will help in improving the image of the organization as well as holding the customers for a longer period. This helps in achieving the objective of the focus strategy. Flexibility in meeting customers' demand in terms of change in product design: Very often the design of products/services keeps changing because of customers' taste, technological obsolescence and change in technical requirements where these products/services will be used. Under such situations, the design and development section of the organization should immediately respond to these changes and make available the required design so that the organization can retain its customers and also attract more customers. This will help in achieving some of the objectives of growth strategies. Flexibility in production volume to meet changing customers' demand: In many situations, buyers may cancel a part of their orders because of reduced requirements from their side. But, the supplier organization would have already planned for raw materials. The above change in the order size will force the supplier organization to have surplus stock because of unutilized raw materials corresponding to the partial cancellation of the order. Here, the supplier organization is willing to accept the cancellation of order from the buyer's side mainly to retain customers. In this process, the organization would build up enormous inventory. This inventory may be utilized for new products,

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alternate products or new orders of the same product. These exercises will fulfill the objectives of the growth strategy, viz. concentric diversification, and also the objective of simultaneous combination strategy. Satisfying customers' demand with world class product quality: In view of the growing global competition, quality plays a major role in promoting products/services locally and internationally. Hence, the objective of the organization should be to produce products/services with world class quality. Fulfilling this objective would definitely help in improving the company's market share and would thereby result in a significant growth of the organization in the long run. This will help in achieving the objectives of growth strategies as well as that of generic strategies. To be effective in labour relation and manpower cost control: Manpower cost is a portion of the total cost of products/services. In a declining market, it is advisable to apply more control on labour utilization and give increased emphasis on labour cost minimization. These exercises will help in achieving the objectives of the turnaround strategy and in fulfilling the objectives of overall cost leadership strategy which aims to provide products/services at a low price. Efficient material utilization and its cost control: In the process of providing products/ services to customers, the raw materials are converted into finished goods by the value addition process. If we closely examine the different cost components of the products/services, it will be evident that the cost of raw materials forms a major proportion. So, any attempt to optimize the utilization of the raw materials would certainly improve the productivity of the organization, thus helping it achieve the objectives of the turnaround strategy as well as the overall cost leadership strategy. Efficient facility utilization and its cost control: In the process of value addition, many facilities are utilized. So, proper selections are usage of facilities reduces the cost of equipments/ machineries. This will help in achieving the objectives of the turnaround strategy as well as the overall cost leadership strategy. In general, organizations would be interested in improving their productivity by formulating proper corporate strategies. The objectives of such corporate strategies are (Sahay, Prem Vrat and Jain, 1996): 1. To increase the rate of return on investment. 2. To increase sales turnover. 3. To maximize profit. 4. To improve the economy of the nation. 5. To improve earning per share. 6. To improve employment. 7. To attain substantial market share.

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Except the fourth and sixth objectives, all other objectives are internal to the organization. In the long run, to have greater acceptability and recognition of the industry to which the organization belongs, it is better to tune its activities in the line of improving the economy of the nation and also to maximize the employment opportunities for the nation. The other objectives are closely interrelated. For example, if the sales turnover (second objective) of the organization is increased, definitely, it will have a positive impact on the objectives 1, 3, 4, 5, and 7. At the same time, on certain occasions it will have some effect on the sixth objective. The production/manufacturing strategies would help in achieving the above corporate objectives.

2.6. RELATIONSHIP OF A PRODUCTION WITH OTHER FUNCTIONS Organizations are formed to pursue goals that are achieved more efficiently by the concerted efforts of a group of people than by individuals working alone. Business organizations are devoted to producing goods and /or providing services. They may be for-profit or nonprofit organizations, their goals, products, and services may be similar or quite different. Nonetheless, their functions and the way they operate are similar. A typical business organization has three basic functions: finance, marketing, and production/operations. These three functions, and other supporting functions, perform different but related activities necessary for the operation of the organization. The interdependency of the major functions is depicted by overlapping circles. The functions must interact to achieve the goals and objectives of the organization, and each makes an important contribution. Often the success of an organization depends not only on how well each area performs but also on how well the areas interface with each other. For instance, in manufacturing, it is essential that production and marketing work together. Otherwise, marketing may promote goods that production cannot profitably produce, or production may turn out items that have no demand. Similarly, unless finance and production people work closely, funds for expansion or new equipment may not be available when needed.

Organization

Finance

Production/Operations

Marketing

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In addition to the three primary functions, many organizations have a number of supporting functions, such as personnel, accounting, and engineering. The existence of these functions and the emphasis placed on each depend on the type of business a firm is engaged in. Let's take a closer look at these functions, beginning with the three primary ones. Operations: The operational function consists of all activities directly related to producing goods or providing services. The production function exists not only in manufacturing and assembly operations, which are goods-oriented, but also in areas such as health care, transportation, food handling, and retailing, which are primarily service-oriented are the transactions of the diversity of operations management settings. The operations function is the core of most business organizations; it is responsible for the creation of an organization's goods or services. Inputs are used to obtain finished goods or services using one or more transformation processes (e.g., storing, transporting, and cutting). To ensure that the desired outputs are obtained, measurements are taken at various points in the transformation process (feedback) and then compared with previously established standards to determine whether corrective action is needed (Control). The conversion process is shown below. The essence of the operations function is to add value during the transformation process: Valueadded is the term used to describe the difference between the cost of inputs and the value or price of outputs. In nonprofit organizations, the value of outputs (e.g., highway construction, police and fire protection) is their value to society; the greater the value added, the greater the effectiveness of these operations. In for-profit organizations, the value of outputs is measured by the prices that customers are willing to pay for those goods or services. Firms use the money generated by value-added for research and development, investment in new plants and equipment, and profits. Consequently, the greater the value-added is the greater the amount of funds available for these purposes. One way that businesses attempt to become more productive is to examine critically whether the operations performed by their workers add value. Businesses consider those that do not add value wasteful. Eliminating or improving such operations decreases the cost of inputs or processing, thereby increasing the value-added. For instance, a firm may discover it is producing an item much earlier than the scheduled delivery date to a customer, thus requiring the storage of the item in a warehouse until

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delivery. In effect, additional costs arc incurred by storing the item without adding to the value of the item. Reducing storage time would reduce the transformation cost and, hence, increase the value-added provides some specific illustrations of the transformation process.

Fig: Conversion Process Hospital Inputs

Processing

Output

Doctors, nurses.

Examination

Healthy patients

Hospital

Surgery

Medical supplies

Monitoring

Equipment

Medication

Laboratories

Therapy

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2.6.1. Finance: The finance function comprises activities related to securing resources at favorable prices and allocating those resources throughout the organization. Finance and operations management personnel cooperate by exchanging information and expertise in such activities as: 1. Budgeting: Budgets must be periodically prepared to plan financial requirements. Budgets must sometimes be adjusted, and performance relative to a budget must be evaluated. 2. Economic analysis investments proposals: Evaluation of alternative investments in plant and equipment requires inputs from both operations and finance people. 3. Provision of hinds: The necessary funding of operations and the amount and timing of funding can be important and even critical when funds are tight. Careful planning can help avoid cash-flow problems. Most for-profit firms obtain the majority of their funds through the revenues generated by sales of goods and services. 2.6.2. Marketing: Marketing consists of selling and/or promoting the goods or services of an organization. Advertising and pricing decisions are made by marketing people. Marketing is also responsible for assessing customer wants and needs, and for communicating those to operations people (short term) and to design people (long term). That is, operations needs information about demand over the short-to-intermediate term so that it can plan accordingly (e.g., purchase materials or schedule work), while design needs information that relates to improving current products and services and designing new ones. Marketing, design, and production must work closely to successfully implement design changes and to develop and produce new products. Marketing can supply information on consumer preferences so that design will know the kinds of products and features needed; operations can supply information about capacities and judge the manufacturability of designs. Operations will also have advance warning if new equipment or skills will be needed for new products or services. Finance people should be included in these exchanges in order to provide information oil what funds might be available (short term) and to learn what funds might be needed for new products or services lead time so that customers can be given realistic estimates of how long it will take to fill their orders. Thus, marketing, operations, and finance must interface on product and process, design, forecasting, setting realistic schedules, quality and quantity decisions, and keeping each other informed on the Other's strengths and weaknesses. The following figure shows that operations interface with a number of supporting functions

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2.6.3. Human Resource Management: The success of the production programme depends upon the quality, attitude and skills of the people. The personnel department has its role throughout the organization. The responsibility of matching the job and the person lies with Human Resource Management department (Personnel department). The personnel department has to keep records of the development of workers, identify their training needs, manpower utilization, recruitment, labor relations, contract negotiations, wage and salary administration, assisting in manpower projections, and ensuring the health and safety of employees. It is only through skilled, committed and loyal workers the production objectives can be fulfilled. Thus in order to achieve production goals in particular and organizational goals in general, personnel department has to channelize the skills and efforts of the workforce into constructive outlets to achieve the set objectives.

2.6.4. Other Functions:

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There are a host of other supporting functions that interface with operations, finance, and marketing, among them are accounting and purchasing. Depending on the nature of the organization, personnel, product design and development, industrial engineering, and maintenance may also be included. Accounting: Accounting has responsibility for preparing the financial statements, including the income statement and balance sheet. It also supplies information to management on costs of labor, materials, and overhead, and may provide reports on items such as scrap, downtime, and inventories. It must keep track of receivables, payables, and insurance costs, and prepare tax statements for the firm. Purchasing: Purchasing has responsibility for procurement of materials, supplies, and equipment. Close contact with operations is necessary to ensure correct quantities and timing of purchases. The purchasing department is often called on to evaluate vendors for quality, reliability, service, price, and ability to adjust to changing demand. Purchasing is also concerned with receiving and inspecting the purchased goods. Public Relations: Public relations have responsibility for building and maintaining a positive public image of the organization. This might involve sponsoring a Little League team, donating to cultural events, giving public tours of facilities, and sponsoring community affairs (e.g., marathons, bike races). Donating the use of facilities and providing public service messages and information about the organization, its employees, its products, and its services also fill under the heading of public relations. Good public relations provide many potential benefits. An obvious one is in the marketplace. Other potential benefits include public awareness of the organization as a good place to work (labor supply), improved chances of approval of zoning change requests, community acceptance of expansion plans, and the generation of a positive attitude among employees. Industrial Engineering: Industrial engineering is often concerned with scheduling, performance standards, work methods, quality control, and material handling. This function is typically found in manufacturing plants of medium and large firms. Distribution: Distribution involves the shipping of goods to warehouses, retail outlets, or final customers. Maintenance: Maintenance is responsible for general upkeep and repair of equipment, buildings and grounds, heating and air-conditioning; removing toxic wastes; parking; and perhaps security. Many of these interfaces are elaborated on in later chapters. The importance of production /operations management, both for organizations and society, should be fairly obvious: The consumption of goods and services is an integral part of our society. Production/operations management is responsible for creating those goods and services. Organizations exit primarily to provide services or create goods. Hence, production is the core function of an organization. Without the core, there would be no need for any of the other functionsâ&#x20AC;&#x201D;the organization would have no purpose. Given the central nature of its function, it is not surprising that more than half of all employed people in this country have jobs in production and operations. Furthermore, the operations function controls a major portion of the assets in most organizations.

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2.7. PROBLEMS OF PRODUCTION MANAGEMENT The problems involved in production management require two major types of decisions relating to: 

Design of the production system, and



Operation and control of the production system.

Decisions related to the design of production system are long run decisions where as 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 and on the general nature of goods and services produced. In general, manufacturing organizations emphasis more on cost, consistent with quality and delivery commitments whereas service organizations may emphasis reliability and service, consistent with cost objectives (for example, hospitals). Long run Decisions Long run decisions to the design of the production system are: 

Selection & Design of products: Product selections and designs with productive capability (i.e., producability of products) are interdependent.



Selection of equipment and process: Selection of the most economic equipments and processes among the various alternatives considered the firm’s capability to investment in capital assets and its basic approach to production must be considered.



Production Design of parts processed: Production design aims at selection of equipments, processes, and tools for economic production which set limits on the cost of outputs.



Job Design: It involves basic organization of work as well as matching workers to their jobs in order to reduce fatigue and improve productivity.



Location of the system: It is a trade-off decision since there is no one best location for a productive system to be selected. The balance of cost factors determined by various considerations is critical.



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 equipments must be located in relation to each other such that the overall material handling cost is minimized. Other factors involved are heating, lighting and other utility requirements, the allocation of storage space, wash 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: 

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.

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Maintenance and Reliability of the System: Decisions must be made regarding the maintenance effort, maintenance policy and practice recognizing the fact that machine down time may lead to idling of labour and production stoppage resulting in lost sales.



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. Decisions regarding controlling the quality of on – going processes must be taken.



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.



Cost control & improvement: Day to day decisions which involve the balance of labour, material and overhead costs must be made by production supervisors. The relative importance of these problems of production management varies considerably

depending on the nature of the production system. The operation manager must be able to sense the relative importance of these various problems in a given situation and take appropriate decisions to solve these problems.

2.8. QUESTIONS Section – A 1. Give an example for services. 2. Mention any four qualities of production manager. 3. List any four duties of production manager in industry. 4. Define production strategy. 5. List out the objectives of corporate strategies according to Sahay & et.al. 6. List out the activities of financial personnel in Production management. 7. What are the supporting functions of marketing? Section – B 1. Write short note on inter-functional relationship of production manager with

Marketing.

2. Write short note on inter-functional relationship of production manager with

Human Resource

Management. 3. Write short note on inter-functional relationship of production manager with

Finance.

4. Briefly explain the problems and issues of production management. 5. What are the qualities of production manager? Section – C 1. Discuss the different role of production manager’s in manufacturing industry. 2. Write an essay an account of the responsibilities of production manager. 3. Discuss the concept of production strategies in detail. 4. Explain briefly the functional relationship of production with other sub functions of

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management.

2.9. SUGGESTED READINGS 1. Aswathappa. K & Shridhara Bhat.K, “Production & Operations Management”, Mumbai: Himalaya Publishing House, 1999. rd

2. Buffa, Elwood, “Operations Management”, 3 ed. New York: JohnWiley & sons, 1972. th

3. Chhabra. T. N, “Principles & Practices of Management”, 9 rev.ed, Delhi: Dhanpat Rai & Co, 2005. th

4. Goel.B. S, “Production & Operations Management”, 12 ed., Meerut: Pragati Prakashan, 1997. 5. Monks, Joseph. G “Operations Management: Theory & Problems” New York: McGraw Hill Publication, 1996. 6. Ramamurthy. P, “Production & Operations Management”, 2

rev.ed., New Delhi: New Age

International Pub, 2006. 7. Stevention. William.J, “Production/Operations Management”, 5th ed., Burr Ridge: McGraw Hill Publication, 1996. 8. Telsang Martand. T, “Production Management”, New Delhi: S. Chand & Co, 2005.

CHAPTER - 03 DECISION MAKING STRUCTURE 3.0. OBJECTIVES 3.1. INTRODUCTION 3.2. DEFINITION OF DECISION-MAKING 3.3. RELATIONSHIP BETWEEN DECISION AND DECISION - MAKING 3.4. DECISION- MAKING FUNCTIONS 3.5. TYPES OF DECISIONS

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3.5.1. Programmed and Non – Programmed Decisions 3.5.2. Major and Minor Decisions 3.5.3. Routine and Strategic Decisions 3.5.4. Individual and Group Decisions 3. 5. 5. Simple and Complex Decisions 3.5.6. Organizational and Personal Decisions 3.6. STEPS IN DECISION-MAKING PROCESS 3.7. DECISION MAKING TECHNIQUES 3.8. PRODUCTION & PRODUCTIVITY 3.8.1. Strategies for improving productivity 3.8.2. Production vs. Productivity 3.9. QUESTION 3.10. SUGGESTED READINGS

3.0. OBJECTIVES End of this chapter you should be able to 

Know the kinds of decisions and its importance.



The development of alternative course of action.



The selection of alternatives.



Understand the decision making techniques.



Understand the concept of production & productivity.

3.1. INTRODUCTION Decision making is a key in every part of a person’s life, but it becomes especially important as an individual moves into progressively greater leadership roles. As a leader, you have to use every

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resource you can to make the best decisions you can make. Many leaders find that tools can be helpful in making their decisions (along with their “gut” and some old-fashioned common sense). Decision is a choice between two or more alternatives. This implies three things: 

When managers make decisions they are choosing right one from alternatives,



They are deciding what to do on the basis of some conscious, and



Deliberate logic or judgment. A decision may be defined, in terms of commitment of resources – raw materials, machines,

finance, time, efforts etc… in a particular channel of thinking and action. For example, a decision to advertise the product, involves the time, effort, finance of the marketing department in preparation of advertisement programme, its implementation and reviewing its progress. Whenever a manager takes a decision, his thinking and actions are involved in a particular direction. Whenever the decision is implemented, it implies commitment of precious organizational resources in that particular direction. Decision-making is the process of choosing a course of action from among alternatives to achieve desired results. 3.3. DEFINITION OF DECISION-MAKING Decision-making is a course of action chosen by a manager as the most effective means at his disposal for achieving goals and solving problems. - Theo Haimann 3.4. RELATIONSHIP BETWEEN DECISION AND DECISION – MAKING Decision-making is a process; a decision is the outcome of this process.

Process of decision-making

Decision

3.5. DECISION- MAKING FUNCTIONS Decision-making is the vehicle for carrying managerial workload and discharging managerial responsibilities. It is through decision making that managers strive to achieve organizational goals. They attempt to bridge the gap between the existing situation and the desired situation by taking and executing decisions. The quality of judgement in decision-making determines the quality of management. The life of a manager is a perpetual decision making activity. The business executive is by profession a decision maker and the moment of decision is the most creative event in the life of the executives. Administration is essentially a decision making process. The task of a manager is to make decisions and to get these decisions implemented. Decision making is the heart of planning. Decision making is ubiquitous and permeates every step in the management process. It penetrates all the functions of management. Decision making is a pervasive function because it is

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performed by managers at all levels of management and in all functional areas. According to Drucker, “whatever a management does he does through decision making”. Decision making is so crucial to the job of managing that it is called the heart of management. However, decision making is only one of the ways in which managers can influence effective accomplishment of goals. Thus, decision making is the primary task of management. 3.5. TYPES OF DECISIONS Decisions can be classified in a number of ways as shown below. 

Programmed and Non – Programmed Decisions



Major and Minor Decisions



Routine and Strategic Decisions



Individual and Group Decisions



Simple and Complex Decisions



Organizational and Personal Decisions

3.5.1. Programmed and Non-Programmed Decisions: According to Herbert Simon, Programmed decisions are concerned with relatively routine and repetitive problems. Information on these problems is already available and can be processed in a preplanned manner. Such decision has short – term impact and is relatively simple. These types of decisions are made at lower level executives of management. These decisions require little thought and judgement. The decision-maker identifies the problem and applies the predetermined solution. For examples, granting leave to employees, purchase of raw materials, disciplinary action against late comers, determining salary payments to employees who have been ill, and so on. Non-programmed decisions are novel and non-repetitive. Such decisions deal with unusual problems. It cannot be tackled in a predetermined manner. A high degree of executive judgement and deliberation is required to solve the problem.

These types of decisions are made at higher-level

management. For example, to locate a new branch office, development of a new product, and so on. 3.5.2. Major and Minor Decisions: Some decisions are considerably more important than others. For example, decision relating to the purchase of a new plant worth of Rs.2 crores is a major decision. Top management may decide these decisions. On the other hand, purchase of spare parts for the machineries is a minor decision. The lower level management people may decide matter. 3.5.3. Routine & Strategic Decisions: Routine or operating decisions are of repetitive nature. They involve short – term commitment and have minor impact on the future of the organization. It relate to day – to –day operating of business. Usually standard procedures are established to make such decisions quickly. Routine decisions required little deliberation and money and are taken by managers as lower levels. For example, a supervisor can decide whether an employee is entitled to overtime pay or not, Provision for air conditioning, better

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lighting, parking facilities, cafeteria service, deputing employees to attend conferences, etc. are all routine decisions Strategic or policy decisions involve long – term commitments and large investments. These exercise a permanent influence on the future of the organization as a whole. Strategic decisions need much deliberation and judgement, because such basic decision deals with unique problems and policy issues. These types of decisions are made at top-level management. Launching a new product, location of a new plant, installations of computer system are examples of strategic decisions. Policy decisions are sometimes published as policy manual to guide operating managers. 3.5.4. Individual and Group Decisions: Individual decisions are taken by a single person at his capacity without consultation with any other persons what so ever. Individual decisions are taken where the problem is of a routine nature where the analysis of variables is simple and where definite procedures to deal with the problem already exist. Group decisions taken by a group of persons constituted for particular purpose. These decisions are generally important for the organization. Group decision making generally results in more realistic and well balanced decisions and encourages participative decision making. But it involves delay and makes it difficult to fix responsibility for such decisions. Decisions taken by Board of Directors or Committee are some examples of group decision.

Advantages of group decisions: 

Increased acceptance by those affected: The group’s members mostly accept decisions made by a group and they help



implement those decisions more readily.

Easier coordination: Decisions made by groups reduce the amount of coordination necessary to bring the decision into play.



Easier communication: Decisions made by groups reduce the amount of communication necessary to implement the decision.



More information processed: Because many individuals are involved, more data and information can be brought to bear on the decision.

Disadvantages of group decisions: 

Group decisions take longer: Groups take longer than individuals to make decisions.



Groups can be indecisive: Groups can drag on and never take decision because they can always blame other members of the group for lack of progress.



Groups can compromise:

This can lead to decisions that satisfy the lowest common

denominator. It can lead to groupthink or conformity to peer pressure. 

Groups can be dominated: The highest status individual, if he chooses, can influence the group so that it notices his or her choices. This negates the advantages of group decision-making.

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If the advantages are utilized and the disadvantages avoided, groups are better decision, making units than individuals. Two approaches to group decision-making have recently been proposed as alternatives to the conventional interacting or discussion group.

These two approaches, known as the nominal group

technique and the Delphi technique are designed to avoid the disadvantages of groups and to utilize the advantages of groups for effective problem-solving. Nominal Group Technique: This technique proceeds as under: 

Members first silently and independently generate their ideas on a problem in writing.



They then present their ideas (one by one) to the group without discussion. The ideas are summarized and written on a black board.



The recorded ideas are then discussed for the purposes of clarification and evaluation.



Finally, each member silently gives his independent rating about various ideas through a system of voting. The group decision is the pooled outcome of individual votes.

Delphi Technique: In this technique, the group consists of persons who are physically dispersed and are anonymous to one another. They are asked to send their opinion on a topic through mail. For this purpose, they are first sent a carefully designed questionnaire. Their responses to the questionnaire are then summarized into a feedback report and sent back to them along with a second questionnaire which is designed to probe more deeply into the ideas generated in response to the first questionnaire. Generally, a final summary is developed on the basis of replies received the second time. 3.5.5. Simple and Complex Decisions: When variables to be considered for solving a problem are few, the decision is simple; when they are many, the decision is complex. When we combine these two types of decisions with the low or high certainty of their outcomes, we get four types of decisions. 

A decision in which the problem is simple and the outcome has a high degree of certainty. These are called mechanistic or routine decisions.



Decisions in which the problem is simple but the outcome has a low degree of certainty. These are called judgmental decisions. Many decisions in the area of marketing, investment and personnel are of this type.



Decisions in which the problem is complex but the outcome has a high degree of certainty. These are called analytical decision. Many decisions in the area of production are of this type.



A decision in which the problem is complex and the outcome has a low degree of certainty. These are called adaptive decision.

Changes in corporate plans and policies to meet the

changes in environment and technology are decisions of this type. 3.5.6. Organizational and Personal Decisions:

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Organizational decisions are made to further development of organization. Managers make them in their official capacity as allocator of resources. These decisions are based on rationality, judgement and experience. Such decisions can be delegated to lower levels. These decisions affect the functioning of the organization. For example, decision relating to payment of dividend, alteration of authorized capital, adoption of new product technology etc… Personal decisions are made by a single individual. Such decision can not be delegated. For example, decision to retire early, decision to resign the post, decision to marry and so on. Such decisions affect the personal life of a manager but may affect the organization indirectly or directly. For example, the decision of a manager to proceed on a long leave is a personal decision of the manager. But then, in interest of the organization he must depute some person for act on his behalf, till he returns.

3.6. STEPS IN DECISION-MAKING PROCESS Following six steps involved in the process of decision-making: 

Identify the problem.



Diagnosing the problem.



Discover alternative course of action.



Evaluate alternatives



Select the best alternatives



Implementing and follow-up of action.

a) Identification of the problem: The decision making process begins with the recognition of a problem that requires a decision. The problem may arise due to gap between present and desired state of affairs. The threats and opportunities created by environmental changes may also create decision problems. At this stage, a manager should identify and define the real problem. A problem well defined is half solved. In order to recognize the problem quickly, a manager must continuously monitor the decision-making environment, imagination, experience and judgement are required for detection of problems that require managerial decisions. b) Diagnose the Problem: Diagnosing the real problem implies analyzing it in terms of its elements, its magnitude, its urgency, its courses, and its relation with other problems. In order to diagnose the problem correctly, a manager must obtain all pertinent facts and analyze them carefully. The most important part of diagnosing the problem of manufacturing costs and may start a cost reduction drive when the real problem is poor engineering design. The problem may be analyzed in terms of the following 

Nature of the decision-routine or strategic



Impact of the decision,



Futurity of the decision



Periodicity of the decision, and

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Limiting or strategic factor relevant to the decision.

Fig: Decision - Making Process

c) Discover Alternatives: The next step is to search for the various possible alternatives. An executive should not jump on the first feasible alternative to solve the problem quickly. A wide range of alternatives increases the manager’s freedom of choice. But it is advisable for the manager to limit himself to discover of those alternatives, which are strategic or critical to the problem. The Principle of the limiting factor should be followed for this purpose. According to Barnard, “Strategic factors refer to those that are most important in determining the action to be taken in solving a given problem.” For example, in a decision to expand operations, capital or government control or size may be the limiting factors. “In choosing from among alternatives, the more an individual can recognize and solve those factors which are limiting or critical to the attainment of the desired goal, the more clearly and accurately he or she can select the most favorable alternative”. The idea is to keep the range of alternatives within a manageable limit. Time and cost constraints should be kept in mind. Development of alternatives is a creative process requiring research and imagination. Management must ensure that the best alternatives are considered before a course of action is selected. Relevant information must be collected and analyzed for this purpose. d) Evaluate Alternatives: Once the alternatives are discovered, the next stage is to evaluate or screen each feasible alternative. Evaluation is the process of measuring the positive and negative consequences of each alternative. Management must balance the costs against possible benefits. Considerable knowledge and judgement are required to measure the plus and minus points and to find out the net benefit of each alternative. Both quantitative and qualitative evaluation is needed to ensure that all tangible and intangible factors are taken into account. The element of risk involved in each alternative and the resources

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available for its implementation should also be considered. Management must set some criteria against which the alternatives can be evaluated. Peter Drucker has suggested the following criteria to weigh the alternative courses of action: a) Risk: Degree of risk involved in each alternative. b) Economy of effort: Cost, time and effort involved in each alternative. c) Timing: Whether the problem is urgent. d) Limitation of resources: Physical, financial and human resources. e) Select the Best Alternative: After evaluation, the optimum alternative is selected. Optimum alternative is the alternative that will maximize the results under given conditions. Choice of the best alternative is the most critical point in decision-making. The ability to select the best course of action from several possible alternatives separates the successful managers from the unsuccessful ones. Past experience, experimentation, research and analysis are useful in selecting the best alternative. f) Implementation and Follow up: Once a decision is made it needs to be implemented. Implementation involves several steps. First, the decision should be communicated to those responsible for its implementation. Secondly, acceptance of the decision should be obtained. Thirdly, procedures and time sequence should be established for implementation. Necessary resources should be allocated and responsibility for specific tasks should be assigned to individuals. The implementation of the decision should be constantly monitored. The effects of the decision should be judged through periodic progress reports. In case the feedback indicates that the decision is not yielding the desired results, necessary changes should be made in the decision or in its implementation. Herbert Simon has identified three phases in the decision-making process. i)

Intelligence activity involves a search for the conditions underlying the decision. It includes identification and diagnosis of the problem, definition of objectives and collection of information.

ii)

Decision activity is concerned with the generation and evaluation of alternative courses of action. Choice activity implies selection of the best course of action. Post choice activity involves

implementation of the decision. 3.6. Decision Making Techniques: The number of different decision making techniques that are available is astounding and bewildering. The techniques listed here include a short description as well as any links to articles discussing their use and files that are stored here. ď&#x192;&#x2DC;

Pros-Cons-Fix (PCF): Used to choose between several options. The pros and cons of each option are listed, and then the list of cons is examined to see if any fixes are available to address

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each con. The final step is re-listing the pros and cons, excluding the cons which have been addressed with fixes. The strength of this method is that it eliminates cons which should not play a role in your decision. Can be mixed with PMI. 

Plus-Minus-Interesting (PMI): Similar to PCF, except that instead of listing fixes you list interesting factors for each option that could turn into a positive or negative. Each plus, minus and interesting is ranked on a scale to give you a total score for each option. Can be mixed with PCF.



Cost-Benefit Analysis (C/B): Usually an entirely quantitative method, though it can incorporate non-quantitative factors. Adds up the costs and benefits to get a total value for each option. Useful in financial situations to estimate dollar value of propositions or investment strategies.



Pareto Analysis: Used in prioritizing tasks or changes. Write out a complete list of the changes you are considering making and rank them according to a relevant measure. For example, if you are trying to improve your blog reader numbers, list out all the methods and rank them by which you expect to generate the largest return. Do that one first and proceed down the list.



Paired Comparison: Used when facing multiple problems or tasks to prioritize them. Create a matrix with each task in a row, and the same list in column. Block out the bottom diagonal of the matrix. There should be one cell for each problem/task pair left. In each cell, compare the row task with the column task, indicate which is better and give it a score. To prioritize the list, add up the scores for each task and rank the tasks according to their total.



Reverse Ranking: Reverse ranking is just like Pareto analysis, except the ranking occurs from worst to best. When we face multiple options that all seem good, it can be hard to rank the best first and proceed down the line. In these cases, start by picking the worst option from the list and continue picking the worst until you are left with one option, which is your best one.



SWOT Analysis: A strategic method for considering the pros and cons of a person or organization divided into internal factors that belong to the organization, and external factors that belong to the situation and environment. A SWOT Analysis is typically used as a starting point to develop a strategy for accomplishing a specific objective. Some people have criticized SWOT Analysis as being detrimental because it leads people to believe they have done sufficient planning once they’ve listed the positives and negatives.



Weighted Matrix: A method for explicitly considering the different factors in a decision. Using a matrix with each option in a row and the important factors in each column, give each option a score for each factor. Each factor also gets a weight itself. By multiplying the score by the weight and summing up for each option, you can get an overall score that takes into account each option various strengths and weaknesses.

3.8. PRODUCTION & PRODUCTIVITY Production is any process / Procedure. Developed to transform a set of inputs into a specified set of output elements like finished products and services in proper quantity and quality.

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In economics, productivity is the amount of output created (in terms of goods produced or services rendered) per unit input used. Productivity is a relationship between the output (products/services) and the input (resources consumed in providing them) of a business system. For instance, labor productivity is typically measured as output per worker or output per labor-hour.

Pr oductivity 

Output Input

For survival of any organization this productivity ratio must be at least one (1) It is more than one, the organization is in a comfortable position. So, the objective of the organization should be to identify ways and means to improve productivity to the highest possible level. 3.8.1. Strategies for improving Productivity: There are several strategies for improving the productivity which are 

Increased output for the same input



Decreased input for the same output



Proportionate increase in the output is more then the proportionate increase in the input



Proportionate decrease in the input is more then the proportionate decrease in the output



Simultaneous increase in the output with decrease in the input

(a) Increased output for the same input: In this strategy, the output is increased while keeping the input constant. Let us assume that in a steel plant, the layout of the existing shops is not proper. By slightly altering the location of the billetmaking section, i.e., bringing it closer to the furnace which produces hot metal, the scale formation at the top of ladles can be reduced to a greater extent. The molten metal is usually carried in ladles to the billet –making section. In the long run, this would give more yields in terms of tons of billet produced. In this exercise, there is no extra cost involved. The only task is the relocation of the billet making facility by shifting it closer to the furnace which involves insignificant cost. So, this is an example where the output is increased without any increase in the input. (b) Deceased input for the same output: In this strategy, the input is decreased to produce the same output. Let us assume that there exists a substitute raw material to manufacture a product which has the required properties and it is available at a lower price. If we can identify such material and use it for manufacturing the product, then certainly it will reduce the input cost. In this exercise, the job of the purchase department is to identify an alternate substitute material. The process of identification does not involve any extra cost. So, naturally, the productivity ratio will increase because of the decreased input by way of using cheaper raw material to produce the same output. (c) Proportionate increase in the output is more than the proportionate increase in the input: Introducing a new product into the existing product mix of an organization. Let us assume that the existing facilities are not fully utilized. So, the R & D wing of the company has identified a new product which has

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a very good market and which can be manufactured with the surplus facilities of the organization. If the new product is taken up for production, then the following will result. 

There will be an increase in the revenue of the organization by way of selling the new product in addition to the existing product mix.



There will be an increase in the material cost, and operation and maintenance cost of machineries because of producing the new product.

If we closely examine these two increases, we find that the proportionate increase in the revenue will be more than the proportionate increase in the input cost. Hence, there will be a net increase in the productivity ratio. (d) Proportionate decrease in the input is more than the proportionate decrease in the output: Considering the previous example, i.e., dropping an uneconomical product from the existing product mix. This will result in the following. 

There will be a decrease in the revenue of the organization because of dropping a product from the existing product mix.



There will be a decrease in the material cost, and operation and maintenance cost of machineries because of dropping an existing product from the product mix.

If we closely examine these two decreases, we find that the proportionate decrease in the input cost will be more than the proportionate decrease in the revenue. Hence, there will be a net increase in the productivity ratio. (e) Increase in the output with decrease in the input: Let us assume that advance automated technologies like, Robot, Automated Guided Vehicle System etc… are available in the market which can be employed in the organization of our interest. The outcome of these modern tools can be summarized as followings. 

There will be a drastic reduction in the operation cost. Initially, the cost on equipment would be very high. But in the long run, the reduction in the operation cost would breakeven the high initial investment and offer more savings on the input.



These advanced facilities would help in producing more number of goods because they don’t experience fatigue. The increased production will therefore yield more revenue.

In this example, there is an increase in the revenue while there is a decrease in the input in the long run. Hence, the productivity ratio will increase at a faster rate. Production, however, is the act of making things; in particular the act of making products that will be traded or sold commercially. Production decisions concentrate on what goods to produce, how to produce them, the costs of producing them, and optimizing the mix of resource inputs used in their production. Productivity and production management is the art of conducting and directing, through the application of frameworks and techniques, all aspects and operations of developing, creating, and innovating products.Productivity and production management’s ultimate goal is the efficient consumption

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and allocation of resource inputs to maximize the quality and quantity of goods produced or services rendered. To improve productivity and production management, organizations should use forecasts on demand to preordain production plans. Through it, miscalculations could be sidestepped. Businesses that produce to order would be able to supervise the backlog of unfilled orders, while those that produce to stock would be enabled to observe and control the level of inventory. Forecasting capabilities could be enhanced by way of incorporating excellent information technology. Another tool for enhancement is standardizationâ&#x20AC;&#x201D;a necessary foundation on which innovations can be focused. Standardizing methods can be implemented by prognosticating revolution on product and on process. These involve methodologies such as process reengineering and major product redesign, both requiring process automation. Some enterprises choose to do small upgrading at a time to minimize the cost of these processes. Another way to improve productivity and production management is keeping managers vigilant of the factors that constitute problems regarding quality, cost and time in the production area. The most popular approaches are lean manufacturing and workplace improvement. Both approaches encourage worker and management collaboration emanating mutual respect; and straightforward and transparent improvement methodologies. Lean marketing is the methodical extermination of wastes that are the root of productivity and production incompetence and slow advancements. These wastes may include: overproduction; inaccurate inventory; slow-paced transportation; product defects; and unnecessary processes. Workplace improvement involves activities such as developing good relationships circling around the workers, management, suppliers and consumers; acquiring proper and state-of-the-art technology; empowering workers to make improvements; improving production scheduling, quality assurance, inventory, manufacturing methods and efficiency control; and conserving materials, energy and time. To gain productivity and production management advantage, the aforementioned can be organizationally applied. If not, researching on ways on developing this field could be conducted. One point is vital: total restructuring of productivity and production ways is harder than maintaining good and tested practices. 3.8.2. Production vs. Productivity: Production refers to the volume, value or quantity of goods and services produced by a worker, plant, firm or economy. It is the sum total of the results achieved by the various factors together. Productivity, on the other hand, is concerned not merely with the total value or volume of output of product, what is more important is that it shows us the efficiency of the production. The difference between the two is when we find that all increases in production, does not necessarily result in increased productivity. If increase in total output is brought about with an increase in the input of factors of production, production will have increased, but productivity will only remain constant or low. Keeping all factors same, when we achieve higher output, then it is called increased productivity.

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Keeping all factors same, when we achieve higher output, then it is called increased productivity.

3.9. QUESTIONS Section – A 1. Define decision – making. 2. What do you meant by the term decision? 3. State the relationship between decision and decision making. 4. List the various kinds of decisions. 5. Mention any four types of decision making techniques. 6. What do you meant by analytical decision? 7. What do you meant by adaptive decision? 8. What factors you considered for problem analysis? 9. Define strategic factor. 10. List the criteria to evaluate the alternative course of action. 11. What is production? 12. What is productivity? Section – B 1. Briefly explain the functions of decision making. 2. Distinguish between programmed and non – programmed decisions. 3. What are the advantages and disadvantages of group decisions? 4. Write short note on (a) Nominal Group Techniques, & (b) Delphi Technique. 5. Distinguish between production and productivity. Section - C 1. Discuss the different kinds of decisions with suitable examples. 2. Explain with neat diagram about the decision making process. 3. Explain the various kinds of decision making techniques in detail. 4. Write a detailed essay on the strategies for improving productivity.

3.10. SUGGESTED READINGS th

1. Chhabra. T. N, “Principles & Practices of Management”, 9 rev.ed, Delhi: Dhanpat Rai & Co, 2005. 2. Monks, Joseph. G “Operations Management: Theory & Problems” New York: McGraw Hill Publication, 1996. 3. Senapathy. R, “Production & Materials Management”, Chennai: ARS Pub, 2002. 4. Shridhara Bhat.K, “Production & Materials Management”, 2

ed., Mumbai: Himalaya Publishing

House, 2005.

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5. Stevention. William.J, “Production/Operations Management”, 5th ed., Burr Ridge: McGraw Hill Publication, 1996. 6. Stevention. William.J, & Ozgur Ceyhun, “Introduction to Management Science”, New Delhi: Tata McGraw Hill Publication, 2007.

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CHAPTER - 04 WORK STUDY STRUCTURE 4.0. OBJECTIVES 4.1. INTRODUCTION 4.2. WORK STUDY - DEFINITION 4.3. OBJECTIVES OF WORK STUDY 4.4. MAJOR COMPONENTS OF WORK STUDY 4.5. IMPORTANCE & SIGNIFICANCE OF WORK STUDY 4.6. WORK STUDY PROCEDURES 4.7. HUMAN CONSIDERATIONS IN WORK STUDY 4.8. BENEFITS OF WORK STUDY 4.9. WORK STUDY WITH PRODUCTIVITY 4.10. WORK STUDY AND WORKERS 4.11. WORK STUDY AND SUPERVISOR 4.12. WORK STUDY AND MANAGEMENT 4.13. INFLUENCE OF METHODS AND TIME STUDY ON PRODUCTION ACTIVITIES 4.14. QUESTIONS 4.15. SUGGESTED READINGS

4.0. OBJECTIVES End of this chapter you should be able to 

Know the importance and components of work study.



The methodology of work study



The significance of work study in various factors of industry like productivity, human resources in various levels.



Get an idea for setting work study in industry.

4.1. INTRODUCTION Work Study is the systematic study of an operation or process to ensure the best possible use of the human and material resources available. The prime aim is to improve productivity. The application of Work Study to a department or company is made to improve the existing method of operation, as a result change will occur which will affect all personnel - irrespective of status. For the application to be successful, due regard must be paid to the reactions of all concerned.

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4.2. WORK STUDY – DEFINITION “A generic term for those techniques, particularly method study and work measurement, which are used in the examination of human work in all its contexts, and which lead systematically to the investigation of all the factors which affect the efficiency and economy of the situation being reviewed, in order to effect improvement”. - British Standards Institution approved definition B.S. 3138: 1959

4.3. OBJECTIVES OF WORK STUDY 

The object of applying Work Study is to obtain the optimum use of the human and material resources, which are available to it. The benefits may stem from improvements in one or more of the following:



Increased production and productivity



Reduced costs - labour, material, overheads



Improvement of conditions, which involve an element of excessive fatigue or danger



Improved quality



Better control of costs



To standardize the method, material and equipment used in the production process.



Measurement of work values.



Ensuring proper performance of those employed in production process.



Initiating and awarding incentive bonus schemes.



Optimum use of resources.



Examination of weakness, if any, in the production process.



Investigation and analysis of existing situation.

4.4. MAJOR COMPONENTS OF WORK STUDY The scope of work study is very wide. Mainly, it incorporates the following: 

Work simplification or method, widely known as Motion study.



Work measurement which is popularly known as Time study.

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4.5. IMPORTANCE & SIGNIFICANCE OF WORK STUDY 

The value of work study lies in the fact that, by carrying out its systematic procedures, a manager can achieve results better than anybody else.

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Work study is a means of raising the productivity by reorganization of work, a method which normally involves little or no capital expenditure on facilities and equipment.



Work study is systematic and hence all the facts about the operations are available.



Work study is the most accurate means of setting standards of performance, on which the effective planning and control of production depends.



Work study can contribute to the improvement of safety at work by exposing hazardous operations and developing safer methods of performing operations.



The savings resulting from properly applied work study start at once and continue as long as the operation continues in the improved form.



As a tool, work study can be applied everywhere – stores, labs, offices, manufacturing plants, restaurants, farms and so on.



Work study is relatively cheap and easy to apply.



It is one of the most penetrating tools of investigation available to management. It attacks on inefficiency in any organization since, in investigating one set of problems; the weakness of all the other functions affecting them will be exposed.



Results in improved safety.



Reduction in training time4.6. WORK STUDY PROCEDURES

There are eight fundamental steps in performing a complete work study in any operation or process being examined whether in industry, in a service enterprise or in the office. 

Select the job or process to be studied.



Record or collect all relevant data about the job or process, using the most suitable data collection techniques. So that the data will be in the most convenient form to be analyzed.

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ď&#x192;&#x2DC;

Examine the recorded fact critically and challenge everything that is done, considering in turn; the purpose of the activity; the place where it is performed; the sequence in which it is done; the person who is doing it; the means by which it is done.

ď&#x192;&#x2DC;

Develop the most economic method, taking into account all the circumstances and drawing as appropriate on various production management techniques, as well as on the contribution of managers, supervisors, workers and other specialists with whom new approaches should be explored and discussed.

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Evaluate the results attained by the improved method compared with quantity of work involved and calculate a standard time for it.



Define the new method and the related time and present it all those concerned, either verbally or in writing, using demonstration.



Install the new method, training those involved, as an agreed practice with the allotted time of operation.



Maintain the new standard practice by monitoring the results and comparing them with the original targets.

4.7. HUMAN CONSIDERATIONS IN WORK STUDY Work study will become the powerful management tool to improve productivity only if a good relationship is established between the managers, supervisors and workers. Due consideration should be given to everyone concerned as an individual, and ensure that no one should perceive a threat to his/her job security and self-respect. Thus, it is essential to consider the relationship between work study and workers, supervisors and the management as work study is a participative tool for investigation of the work being performed. 4.8. BENEFITS OF WORK STUDY 

Work Study can considerably increase productivity. People can benefit from, less tiring work, better working conditions and, because an efficient company can meet competition successfully, better employment prospects.



Work Study raises efficiency by re-organization of work. It therefore need involve little or no capital expenditure. Yet, where such an outlay is desirable, Work Study can ensure that it is spent to the best advantage.



Work Study is systematic; its procedures are designed to ensure that no factors affecting the situation are overlooked.



It is the best means available for setting standards of performance, and although often seen as the basis for incentives, the real value lies in the information provided for work scheduling, estimating deliveries and for accurate costing.



Work Study produces savings very quickly and these gains continue as long as the improved methods evolved are maintained.



Work Study is a universal tool, it is not confined to the workshops but can be equally effective in the office, warehouse, and in distribution, etc.



Work Study is the most searching technique available because it takes every fact into account. It reveals weaknesses often overlooked in the day to day working.

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4.9. WORK STUDY WITH PRODUCTIVITY As we know, productivity is nothing but the reduction in wastage of resources. The resources may be men, machines, materials, power, space, time etc…. We have also seen from the definition of work study that it reduces wastage of time, effort and increase the efficiency of man and machine. Thus, productivity implies development of an attitude of mind and constant urge to find better, cheaper, easier, quicker and safer means of doing a job, manufacturing a product and providing service. In general, a nation progresses if it improves its productivity and performance. If our country is to move forward, industries and agriculture are the two key areas where we must lay our emphasis for improvement in productivity. In past, there has been regular upward revision in payment of wages/salaries in all industries but no noticeable improvement in productivity. The net result was sky – rocketing of prices of all commodities which made us lose our competitive edge in the world market for our products. Our aim now must be to make people more productivity conscious, if we were to improve their standard of living. Productivity holds the key to prosperity of an individual, an organization and a natio

Increase in productivity results in: 

Increase in production and hence higher profits.



Products produced will be cheaper.



Revision in wages and declaration of bonus possible due to increased profits.

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Improvement in living standard of workers.



Brings prosperity to the nation.

Thus, work study is an organized effort to improve productivity, quality, and to reduce costs within an organization.

4.10. WORK STUDY AND WORKERS As stated earlier, workers’ confidence in the sincerity of the management is absolutely essential in the application of work study by an organization. During the course of application of work study, following factors have to be taken into consideration.  Management must take initiative for holding frequent discussions with workers before commencing work study.  If work study is applied, then workers and their representatives are kept fully informed of the management’s intention. All the records of work study must also be made available before them to instill confidence.  Work study improves the flow of work and supply of materials. This improves the efficiency of the workers and also their earnings. This aspect will be welcomed by all, especially if they are paid on piece work basis.  Generally, there is a fear of redundancy arising out of the result of work study. There must be definite policy in respect of their retrenchment or transfer to another department. This is a very important factor and must be discussed by the management with the trade unions.  There may be a strong resistance to changes in methods of work as a result of method study. The workers must be explained about the new methods and their advantages. Sometimes, experienced and old workers may not be satisfied at all, then as a solution, if the output of these old workers is reasonably satisfactory, they will have to be left alone and the changes are taught to others.  Sometimes, workers hesitate in being timed, because the nearness of position of work study expert must be such that he/she disturbs the worker as least possible, work study expert must also ensure that before attempting to record time, a worker should become accustomed to his/her presence.  Workers’ representatives should be trained in the techniques of increasing the productivity. This will help in their understanding of the importance of work study and they will also be able to explain it to their fellow workers. This will also help them in ensuring that no steps are being taken which may harm them. 4.11. WORK STUDY AND SUPERVISOR

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The work study man is going to face difficult problems because of supervisor or foreman’s attitude. Foreman is an authority on the shop floor to all workers and the success of work study in all its phases depends on him totally as it is he who has to cooperate with the work study expert. Before the work study begins, the whole purpose of work study and the procedures involved in the work study must be carefully explained to the foreman so that he understands exactly what is being done. This facilities the work of work study expert as he/she is going to convey and convince the workers regarding the purpose and benefits of work study. Thus, it helps to establish trust and gains the acceptability for foreman.

4.12. WORK STUDY AND MANAGEMENT Two types of difficulties are generally experienced by the management. First, any change in the existing method is an interruption of a comfortable routine way of doing work. Second, the main difficulty is that when work study experts are active in the plant, managers may feel that their role in the organization has been taken up by the work study expert and their position has been illegally seized. Sometimes, supervisory staff like, foreman, etc… do not cooperate with these experts which will also results in workers not carrying for them and do not make any effort to carry out their suggestions. We must also note that their will not be any obstruction at all, if all concerned are clear that the work study department is a tool of the management for improving the productivity. Work study expert must observe the following rules so as to overcome these difficulties: 

Work study expert must resist giving orders to the work directly.



They must not discuss any matter with the workers which are outside the jurisdiction of work study. If such questions are asked by the workers, they must be referred to their foreman first.



The work study expert must also seek help from the foreman regarding managerial matters.



At the start of the work, work study expert must seek the introduction of all workers through the foreman.

4.13. INFLUENCE OF METHODS AND TIME STUDY ON PRODUCTION ACTIVITIES The basic objective of production management is to manufacture the right quantity and quality of goods at the pre – determined time and pre – established cost. Work study is tool to achieve this objective. During the product design and process design, the methods of

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manufacture are fixed and process planning is done using the standard time and standard method. Method analysis indicates how the work is best accomplished and time standards indicate how long it will take to complete the job.

Process analysis and standard and standard time help to have a control on quality and quantity manufactured. Based upon the standard time, standard costs are determined and this helps the analysis of variance between actual and standard costs. Product cost which is a function of method and standard time and cost control is very much essential to be in completion. Standard time forms the basis for compensation. This helps to link wages and the work content. Thus, work study applied in right spirit help to accomplish the production objectives. 4.14. QUESTIONS Section â&#x20AC;&#x201C; A 1. Define Work study. 2. What are the components of work study? 3. List out the procedures of work study. 4. Mention any two benefits of work study. 5. State any two objectives of work study. Section â&#x20AC;&#x201C; B 1. What are the objectives of work study? 2. Draw a neat sketch on the components of work study with its tools. 3. Briefly explain the importance of work study. 4. Briefly explain the benefits of work study. 5. Write short notes on (a) Human considerations in work study. (b) Work study and supervisor.

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6. Briefly explain the influences of work study on production activities. Section - C 1. Describe the steps involved in work study. 2. Write short notes on (a) Work study with productivity (b) Work study and workers (c) Work study and Management

4.15. SUGGESTED READINGS 1. Aswathappa. K & Shridhara Bhat.K, “Production & Operations Management”, Mumbai: Himalaya Publishing House, 1999. rd

2. Buffa, Elwood, “Operations Management”, 3 ed., New York: JohnWiley & sons, 1972. 3. Nair. N.G., “Production & Operations Management”, New Delhi: Tata McGraw Hill, 2000. 4. Panneerselvam. R, “Production & Operations Management”, New Delhi: Prentice Hall of India, 2003. 5. Saravanavel.P & Sumathi.S, “Production & Materials Management”, Chennai: Margham Pub, 2000.

CHAPTER - 05 MOTION STUDY STRUCTURE 5.0. OBJECTIVES

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PRODUCTION & OPERATIONS MANAGEMENT 5.1. INTRODUCTION 5.2. METHOD STUDY - DEFINITION 5.3. OBJECTIVES/AIMS OF METHOD STUDY 5.4. SCOPE OF METHOD STUDY 5.5. METHOD STUDY PROCEDURE 5.6. ANALYTICAL APPROACH OF METHOD STUDY 5.7. RECORDING TECHNIQUES 5.7.1. Process chart symbols 5.7.2. Micro motion study 5.7.3. Operation process chart 5.7.4. Flow process chart 5.7.5. Two handed process chart 5.7.6. Multiple activity chart (or) man machine chart 5.7.7. Flow diagram 5.7.8. String diagram 5.7.9. Cycle graph 5.7.10. Chrono cycle graph 5.7.11. Memo motion photography 5.7.12. Simultaneous motion cycle chart (simo chart) 5.8. PRINCIPLES OF MOTION ECONOMY 5.8.1. Use of human body 5.8.2. Arrangement of work place lay out 5.8.3. Design of tools and equipments 5.9. DESIGN OF WORKPLACE LAYOUT 5.10. DESIGN OF WORKPLACE 5.11. QUESTIONS 5.12. SUGGESTED READINGS

5.0. OBJECTIVES End of this chapter, you should be able to 

Understand the concept of motion study



Know the procedure of motion study



Recording techniques of motion study



Familiarize the use of symbols, charts and diagrams for recording.

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Capable to design the workplace layout.

5.1. INTRODUCTION Method study is a systematic evaluation of existing and proposed plans and performance of any work system and the evaluation of improvement, through analytical process of critical examination. i.e., method study involves critical examination and systematic recording of an existing and proposed way of doing a job so as to find a better and more efficient method. Method study is called as Method analysis, Method engineering, Motion Study and work improvement. 5.2. METHOD STUDY – DEFINITION According to FRANK GILBRETH, the real founder of motion and time study as science, defined motion study as the “Science of eliminating wastefulness resulting from ill directed and inefficient motion”. The aim of motion study is to find the scheme of least wastage of labour. According to the GILBRETH, motion study consists of dividing work into the most fundamental elements possible, studying these elements separately and in relation to one another and from these studied elements, when timed, building methods of least waste.

5.3. OBJECTIVES/AIMS OF METHOD STUDY 

Better design of plant equipment and buildings



Improved layout of factory and offices



Better working conditions and environment



High standards of safety and health



Improved flow of work



Better quality



Greater job satisfaction



High earnings



Improved utilization of resources



Effective material handling



Efficient procedure for product process



Optimum level of inventory



Optimum level of output



Improved administration



Reduction of wastages

5.4. SCOPE OF METHOD STUDY Following are the scope of method study. 

Layout

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Working conditions



Movement



Quality standards, good design



Tools and equipments,



Material handling etc…



Hospital



Army, and



Agriculture etc…

5.5. METHOD STUDY PROCEDURE Following steps are involved in the method study 

Select



Record



Examine



Develop



Install



Maintain

i) Select: Select the work worth studying and define the objectives to be achieved. An objective may be to reduce the manufacturing cost, or reduce bottlenecks or reduce fatigue incurred by the workers in order to increase their efficiency. ii) Record: Record all the relevant information pertaining to the existing method if any in details and in the form of a chart to obtain a clearer picture about the same. Recording can be done with the help of following aids: a) Process charts: Charts are generally represented by symbols because symbols produce a better picture and quick understanding of the fact. Following charts are used for record data. 

Out line process chart: Recorded the principle operations and inspection of the processes.



Flow process chart: Record the activities of men, material or equipment are analyzed into five events. Operation, inspection, transport, storage and delay.



Two handed process chart: Record the information on movement of two hands or limbs of the operator.



Multiple activity charts: Recorded the simultaneous/interrelated activities of operators and/or machines on a common time scale.



Simultaneous Motion Cycle (SIMO): Record the movement of body members of the operators, expressed in terms of therbligs on a common time scale.

b) Diagrams and models:

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Flow diagram: A flow diagram is a drawing or a diagram which is drawn to scale. Recorded the information on the path of men, materials and equipments on a scale model.



String diagram: String diagram is a model or a scale plan of the shop, in which every machine or equipment is marked and a peg or pin is struck by or in the area representing a facility. It is used to record the complex movements and plant layout and design problem.

c) Photographic aids: 

Cycle-graph: Record the movement of hand obtained by exposing a photographic plate to the light emitted from small bulbs attached to the operator’s fingers.



Chrono – cyclegraphs: Record the modification of cycle-graph in which record is made using flash lights.

iii) Examine: This is the most important step in method study. The main aims of this step is to eliminate the activity altogether if it is unnecessary, to combine it with other activities, and to change the sequence of activities so that work delay is reduced and simplify the activity to reduce the work content or time consumed. In this step, we will have to ask a series of questions. The questions may be classified into primary and secondary questions. Primary questions: Purpose: What is the purpose of the event? Why is it necessary? Place: Where does the event take place? Why there? Sequence: When does it occur? Why then? Person: Who carries out the work? Why that person? Means: How is the purpose achieved? Why that particular way? Secondary questions: Purpose: What else could be done? Place: Where else could it be done? Sequence: When else could it be done? Person: Who else could do it? Means: How else could it be done? Alternative questions: Purpose: What should be done? Place: Where should it be done? Sequence: When should it be done? Person: Who should do it? Means: How should it be done?

iv) Develop: Develop the best method as resulted from critical examination and record it. The developed method should be,

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Practicable and feasible,



Safe and effective,



Economical, and



Acceptable to design, production control, quality control and sales departments



v) Install: Install the best developed method or the improved method. Installation involves three phases, namely – planning, arranging and implementing. During first two stages the programme of installation (phase wise) and a time table, are planned and the necessary arrangements of resources, equipments, tools and instructions to workers, over time etc… are made. Implementing phase involves the introduction of developed method as standard practice. vi) Maintain: Maintain that standard practice by regular routine checks and verifications. The installed new method should be maintained. The workers should not be allowed to slip back to the old method. The work study man should check, i)

Whether the workers are following the new developed method or not.

ii)

Whether the developed method have any defects.

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The above facts are carefully reviewed and the reactions from the supervisors and workers are noted. The reasons for variations are used for further improvement. The changes due to various reasons are accepted and the instructions are suitably modified.

5.6. ANALYTICAL APPROACH OF METHOD STUDY The following six steps are involved during method study. They are Select, Record, Examine, Develop, Install and Maintain. Select – Analysis of the job. Record – Record by means of charts and diagrams all relevant facts about the present method. Examine – Critical examination of all facts. Develop – Develop an efficient and economical method. Define – The new method to be introduced. Install - Installation of the new method as a standard practices. Maintain – Maintaining the standard practices. Selection: Among the basic steps of method study, selection possesses the greatest challenge at the initial stages of any project. The first few days of any project demands exacting analysis in order to clarify and crystalline areas for detailed investigation. Though selection of the problem is the prerogative of the management, basis on which judicious selection is made, the exact areas for detailed investigation etc… are all decided by the work study experts. In minor assignments, like the study of a specific process, selection is a comparatively easy task. In major assignments, however, where the problem is large in magnitude, and wide in scope, a preliminary or diagnostic survey maybe called for. (a) Diagnostic Approach: In major assignments of larger magnitude and wider scope, diagnostic approach is useful in selection of specific areas for investigation. The steps involved in diagnostic approach are as follows. 

Breakdown in the capital structure.



Arrange in terms of succession of cost.



Make spot checks.



Rearrange in succession in order of feasibility of cost reduction and value added.



Draw action program.

(b) Consideration in selection: While selecting the subject for study, the following considerations should be borne in mind: 

Economic considerations



Technical considerations



Human considerations

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Economic Consideration: The value of the anticipated results must commensurate with the efforts put in. short studies which can yield appreciable dividends quickly are to be preferred to long term studies whose benefits may be difficult to foresee. Technical Consideration: It should be ensured that adequate technical knowledge is available with which to carry out the study. Where a large problem throws up a number of subjects which are independent of each other, it is better to have small individual studies initiated on each subject. Where a problem brings to light two or more subjects which are interrelated, independent studies on each might be carried out in the preliminary stages, but later they should be continuously integrated by coordinating the recording of the different teams working on each subject. The critical examination has to be carried out by the teams as a whole. The scope and magnitude of the problem would determine the number of subjects to be studied. Studies that would lead to better working conditions, improved environment or increased earnings for the workers must be given due procedure over others. Human Considerations: Where resistance to change or reaction is likely to be more, the subject should not be proceeded with until acceptance has been gained. A spectacular improvement imposed against the will of the staff, can never be effective compared to a modest improvement in implementation with the cooperation of staff. Field of Choice: The ranges of jobs which may be tackled by method study vary over a wide area. However, following areas should be primarily considered. 

Optimizing allocation of any specific resources.



Design of equipment for man – machine equilibrium.



Improving the working conditions or environment.



Reducing the time required for performing the activity.



Improving the layout



Minimizing movements



Quality improvement



System improvement



Cost reduction



Customer satisfaction



Standardization/Simplification



Material handling activities

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High accident rate

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Excessive overtime



Excessive scrap



Too much work in progress.



Idle labour time/Idle machine time.

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5.7. RECORDING TECHNIQUES According to the nature of the job being studied and the purpose for which the record is required, the techniques fall into the following categories.  Charts  Diagrams  Templates and models

S.No.

Recording Technique

Information recorded

CHARTS 1

Out line Process Chart

Principle

operations

and

inspection

the

processes. 2

Flow Process Chart

Activities of men, material or equipment are analyzed into five events as:Operation, Inspection, Transport, Storage and Delay.

Two handed Process Chart

Movement of two hands or limbs of the operators.

Multiple activity Chart

Simultaneous/inter related activities of operators and/or machines on a common time scale.

Simultaneous

Motion

(SIMO)

cycle

Movement of body members of the operator expressed in terms of therbligs on a common time scale.

DIAGRAMS AND MODELS 1

Flow Diagram

Path of men, materials and equipments on a scale model.

String Diagram

Same as above except for the variation that it uses string to trace the path.

PHOTOGRAPHI AIDS 1

Cycle Graph

Movement of hand obtained by exposing a photo graphic plate to the light emitted from small bulbs to the operators fingers.

Chrono Cycle Graph

Modification of cycle graph in which record is made using flash lights.

5.7.1. Process Chart Symbols: The recording of various facts for the selected job in a process chart is done by using standard symbols.

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These symbols are used to represent a clear picture of different types of activities involved in a shop. The following symbols are used in process charts.

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5.7.2. Micro Motion Study: It is applicable for operations with very short cycles which are repeated thousands of times. Goes into greater details to determine where movements and efforts can be saved and to develop the best possible patterns of movements and enables operators to perform the operation repeatedly with minimum effort and fatigue. The technique used for this typically involves filming the operation and hence is known

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as micro motion study. Examples of operators studied could be cashier in the bank â&#x20AC;&#x201C; routine job of taking payment slips from customer and issuing cash. Based on the idea that human activity can be divided into movements or group of movements (therbligs) according to the purpose for which they are made. The therbligs cover movements or reasons for the absence of movement. Each therblig has specific color, symbol and letter for recording purposes. Therbligs refer primarily to motions of the human body at the workplace and to the mental activities associated with them. They permit a much more precise and detailed description of the work than any other method described earlier. Considerable practice is required in identification of therbligs before they can be used for analysis with confidence. 5.7.3. Operation Process Chart: It is a graphical representation of the sequence of only operations and inspections involved in a process. Each operation and inspection is numbered from the beginning to the end of the chart. Operation process chart is also known as Outline Process Chart. Isometric view of a spindle. To be connected with a rotor assembly.

5.7.4. Flow Process Chart: Flow process chart is a graphical representation of the sequence of all the activities which are recorded namely Operation, Inspection, Transport Delay and Storage in order to have a complete idea about the process.

It gives vital information about distances moved and time required for each event.

5.7.5. Two Handed Process Chart: It is a process chart in which activities performed by both the hands of the operator are recorded to show their inter relation ship. It is also known as left and right hand process chart and is used to minimize the unnecessary movements of hands in an economical way.

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This chart is generally used for repetitive operations. Two handed process chart is also known as operator activity chart. The above chart is used for machining and assembling of instruments like carburetor, pressure gauge, fuel pump etc.

5.7.6. Multiple Activity Chart (Or) Man Machine Chart: Multiple activity chart is one in which the activities of more than one machine or worker are recorded on a common time scale to indicate their inter relation ship. It is used when a group of workers are doing an assembly work and when a worker operates a number of machines at a time. Activities of workers or machines are marked in separate vertical bars with a common time scale. This chart shows the idle time of the machine or worker during the process. By carefully analyzing, the idle time of worker or machine is reduced. To record the time, ordinary stop watch is used.

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Example: An operator can operate two semi-automatic machines simultaneously. The activities of the two machines and the activities of the operator are recorded in separate vertical columns. This chart enables the management to find out the correct number of machines that a worker can operate at a time and also to find out the correct number of workers required to do a job.

5.7.7. Flow Diagram: In any industry, there are movements of men and materials from one place to another. Process chart indicates the sequence of activities and it does not indicate the path of movements of men and materials, when a job is being done. If unnecessary movements, back tracking and traffic congestion are relative position of machines, material handling equipments, Jigs and fixtures etc and indicate the path of movement of men or materials. For better understanding, the different movements can be marked in different colours. Process symbols are also used in the diagram to identify the different activities at different work stations.

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The flow diagram is used: 

To remove the unwanted movements of men and materials.



To avoid back tracking and traffic congestion.



To improve the plant lay out.



To reduce the distance traveled by the materials.

5.7.8. String Diagram: A string diagram is a scale plan of the shop in which a string or coloured thread is used to trace the path of workers, materials during the process when the paths are many and repetitive, it may not be possible to use flow diagram. Under such circumstances a string diagram is used. For example, an operator is attending three automatic machines. Location of machines and raw material stores are drawn to scale in a drawing sheet. Pins are fixed at the machine centre and the stones in the drawing sheet. A continuous coloured thread or string is wound around the pins where the operator or material moves during the process. The thread is removed and the total length is measured. Then the length is multiplied by the scale to get the actual distance moved by the operator. Advantage: i) ii)

It is used to find out the complex movements of men and material. It indicates back tracking, congestion, bottle necks etc. in the path of the operator/material.

iii)

It is used to check whether the work station is suitably located.

iv)

It is used to find out the most economical route.

Disadvantages

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It is not possible to trace irregular or curvilinear path of the workers or materials using string diagram.

5.7.9. Cycle Graph: It is a photographic technique used to record the path of motion of a body number. A small electric bulb is attached to the hand or finger or other part of the body of the operator. The light source is photographed by a still camera to show the path of the motion. The continuous line of photographic film is called a cycle graph. This technique is used where the motions are too fast and is not followed by the eye. It does not indicate the speed and direction of movement. A record of path of movements is usually traced by a continuous source of light on a photograph. The path of movements of a hand may be recorded on a photograph in this way if the worker is asked to wear a ring carrying a small light which may make the trace on the photograph. If the purpose is to record the path over which the worker moves, this light may be attached to the helmet.

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5.7.10. Chrono Cycle Graph: To overcome the draw back of the cycle graph, Gilbreth used a relay circuit (On and Off). With the bulb and is attached to the operator to flicker. The path is obtained in a cycle graph is continuous where as in a chrono cycle graph is dotted. The pointed end of the pear shaped dots indicates the direction of the movement. The spacing between the dots shows whether the speed of the member of body is fast or slow. By counting the number of dots and by knowing the rate at which the light source is interrupted, the time taken for a movement can be calculated.

5.7.11. MEMO Motion Photography: A camera is placed with a view over the whole working area takes pictures at a rate of one or two per second (as against regular 24 frames per second). A 10 minute activity can be compressed in one minute film. Very rapid survey of the general pattern of movements may be obtained. From the activity, larger movements giving rise to wasted effort can be detected and eliminated.

5.7.12. Simultaneous Motion Cycle Chart (SIMO CHART): It is an extremely detailed two handed chart which records the motions (THERBLIGS) performed by the two hands on a common scale. The time scale is represented in works, ( __1___ of minutes = __1___ x 60 Seconds 2000

2000

= __6__ = __3__ = 0.03 seconds) 200

100

SIMO chart is generally used for micro motion analysis of, i)

Short cycle repetitive jobs.

ii)

High order skill jobs (i.e.) component assembly, inspection, packaging etc.

Construction: 

Using a 16 mm movie camera the micro motions are filmed as the worker performs the job. A timing device is used for recording the time.



Now the filmed motions are viewed and the most effective work cycle is selected for analysis (A cycle means a complete series of motions from the beginning to the end of a performed work).



The selected work cycle is analyzed frame by frame by using a special projector. The analysis should be carried out first on the let hand and then on the right hand movements.

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The data noted in step 3 is recorded in the form of a therblig chart. The duration of actual movements should be read from the wing counter.



A SIMO chart is prepared for further study and analysis.



This SIMO chart of the existing method is subjected to a questioning procedure based on the “Principles of motion economy” to develop a better and improved procedure for long a job.



A new SIMO chart is then produced for the improved method.



The improved new method is checked to claim its advantages over the old method.

Advantages: 

It permits very accurate and detailed analysis



Films are taken at a faster rate and can be projected on the screen at a slower rate for analysis.



It is advantageous to stop at any point and analysis can be made easily and quickly.



It can be used for training purposes.

Disadvantages: 

It is not suited for long cycle jobs.



It is more expensive.

5.8. PRINCIPLES OF MOTION ECONOMY When a worker is doing a job, he uses number of motions or movements or the limbs. By carefully observing the number of movements made by a worker the unnecessary and unproductive movements can be identified and eliminated. The analysis of an operation in terms of individual motions of a worker is known as “Motion analysis” The purpose of motion analysis is to design and improve a method which eliminates unnecessary and unproductive movements of a worker. It employs human efforts more productive. Therefore, Gilbreth designed a set of rules which consumes minimum time and energy in performing limb motions in order to complete a job. This is possible only by economizing the use of motions. The set of rules of human motions are called “Principles of Motion Economy”. The number of principles used for the Economy of motions is; a) Principles concerned to the use of human body. b) Principles related to the arrangement of work place lay out. c) Principles related to the design of tools and equipments. 5.8.1. Use of human body:  Both hands should be used while doing a job.  Both the hands should begin and complete their movements at the same time.  The two hands should not be idle at the same time except during rest periods.  Motions of the hands should be symmetrical, simultaneous and opposite directions.

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 Motions should be made simple and have minimum number of limbs. The purpose is to complete the job in the shortest duration of time with minimum fatigue.  Momentum should be employed and it should be reduced to a minimum wherever it has to be over come by human effort.  Motion should be continuous and smooth than straight line motions to reduce fatigue.  Ballastic movements are easy, fast and more accurate than controlled or restricted movements.  A worker may use mechanical aids to assist him to overcome muscular effort.  Work should be arranged in such ways that eye movements are limited to a comfortable area.  Work movements should be rhythmical and automatic, if possible.

5.8.2. Arrangement of work place lay out:  Definite and fixed locations should be provided for all tools and materials to permit habit formation.  Tools, materials and other mechanical devices should be pre-positioned to reduce the therbligs search.  Gravity bims and containers should be used for delivering the goods at the work place.  The finished product should be dropped on a conveyor or chute near the work place by gravity so that the operator does not use his hands for delivering the products.  Tools, materials and controls should be preferably being located within maximum area to reduce the mental strain of the operation.  Good illumination, ventilation and temperature control should be provided to reduce accidents.  Comfortable chair and working table should be provided to the worker. The height of the work place and seat should be made flexible alternately sitting and standing.  In order to reduce eye fatigue, the colours of the work place should be different from that of the work.

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 All heavy parts should be lifted by mechanical devices.

5.8.3. Design of tools and equipments:  Jigs, fixtures and foot operated devices should be used to hold the objects to reduce the hand work load.  Two or more tools should be combined wherever possible to have multiple cuts.  Tools and materials should be positioned wherever possible to avoid search.  There should be maximum surface contact between the tools and the hand to apply proper hand force with less fatigue.  Where the work is carried by fingers the load distribution on to each finger should be as per the normal capacity of the finger. If possible, automatic and semi automatic tools should be used.

5.9. DESIGN OF WORKPLACE LAYOUT In contrast to the inherently routine capacity calculations, designing the layout is, on the whole, a creative activity. In this case the inputs for the design will include the results of the automated processing of the optimum arrangement of workplaces in space, list of principles to be taken into consideration in proposing the layout, list of prescribed clearances between the workplaces and their environment and will consider other necessary information. Of the methods that are used to find an optimum workplace layout and the following have been incorporated in the expert system: CRAFT, the triangular method, and the centre of gravity method. It will also contain references to using AutoCAD for layout drawings. The CRAFT (Computer Relative Allocation of Facilities Technique) method is an exact method based on finding a minimum of the mathematical model function:

n = number of units of equipment yij = costs of product movement between activities i and j over a distance unit lij = distance between equipment i and j

5.10. DESIGN OF WORKPLACE The workplace today is a result of historical innovations that were designed to make the workplace a productive environment. However the world of work continues to change, and the design factors that once were helpful are adding less value than they once did. Here are a set of principles and practices you can use in designing offices and workplaces.  Work patterns: How we work differently.  Working spaces: Patterns of space we use.

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 Overall design principles: Basic guidelines for workplace design.  Physical design principles: Principles for the solid stuff.  Physical layout elements: Aisles, pillars and so on make a difference.  Psychological principles: Basic human needs are important.  Office design: Principles for creating good offices.  Workstation design: Designing the desk where people sit.  Workplaces for teams: Building places where people can work together.  Designing experiences: Within your workplace, for all who visit and work there. There are a number of patterns of work. If you can understand these better then you can design environments that better suit the people. Good workstation design can lead to more effective and contented employees. Here are some tips to help. Chairs  Ergonomic. There are standards and legislation on ergonomics which need to be followed. Chair mobility, height, depth, cushioning and back support are all important.  Not too comfortable? The comfort paradox is that if we are too comfortable, we are less likely to get up. Yet sitting in one position for a longer time is not that healthy.

Lighting  Low-level desk lighting. The trouble with overhead lighting is that as people lean forward, they cast a shadow over their work. A desk light creates a pool of light over the work, creating a focus on it. Worktop  Adequate depth. Many worktops are designed to hold deep computers. These are not necessary when people are using notebooks and flat-panel displays.  Ls, Us and curves. The human arms in movement describe two circles. This is supported by desks which are L-shaped, U-shaped or curved in a similar way. Storage  Adequate storage. Storage is available in shelves, drawers, cupboards and worktop space. Ensure there is enough, to hand, and which does not encroach.  Not too much. People will fill all storage you give them. Think about what is truly useful as opposed to space to put the junk. Good storage has things taken out of it as well as put into it. Utilities  Utilities at the worktop. When computers and equipment are permanently fixed, then under-desk power and network sockets are acceptable.  Enough power sockets.

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Cleanliness  Working place must be clean. For this purpose, care must be taken to provide a suitable place for everything connected with the job. Workers must be asked to keep everything in its place. Work area must be clean and well painted.

5.11. QUESTIONS Section – A 1. Define Motion Study. 2. List the steps involved in method study procedure. 3. Mention any four charts used for record the data. 4. List out the diagrams used for record the data. 5. List out the photographic aids used for record the data. 6. What factors you considered for selecting the method study? 7. Give the meaning for the following symbol in motion study. (a) (b)

8. Operation process chart is also known as ------------------------. 9. List out the kinds of flow process charts. 10. State the purpose for using the flow diagram. 11. Define Principles of Motion Economy. 12. State any two advantages of String diagram. Section – B 1. What are the objectives of method study? 2. List out the scope of method study. 3. Write short note on analytical approach of motion study. 4. Describe micro motion study. 5. Explain the importance of a good work place layout. 6. Bring out the importance of flow diagram. Section – C 1. Explain the steps involved in implementing method study in detail. 2. Describe the various recording aids used in method study. 3. How do you design a workplace? Explain its elements in detail. 4. Write an essay on principles of motion economy. 5.12. SUGGESTED READINGS 1. Aswathappa. K & Shridhara Bhat.K, “Production & Operations Management”, Mumbai: Himalaya Publishing House, 1999. rd

2. Buffa, Elwood, “Operations Management”, 3 ed., New York: JohnWiley & sons, 1972.

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71 th

3. Chase, Richard & Nicholas Aquilano, “Production & Operations Management”, 7

ed.

Burr

Ridge: McGraw Hill Publication, 1995. 4. Murthy.C.S.V., “Production Management”, 2

rev. ed., Mumbai: Himalaya Publishing House,

2005. 5. Nair. N.G., “Production & Operations Management”, New Delhi: Tata McGraw Hill, 2000. 6. Panneerselvam. R, “Production & Operations Management”, New Delhi: Prentice Hall of India, 2003. 7. Saravanavel.P & Sumathi.S, “Production & Materials Management”, Chennai: Margham Pub, 2000.

CHAPTER - 06 TIME STUDY STRUCTURE 6.0. OBJECTIVES 6.1. INTRODUCTION 6.2. DEFINITION 6.3. OBJECTIVES OF TIME STUDY (WORK MEASUREMENT) 6.4. TECHNIQUES OF TIME STUDY (WORK MEASUREMENT) 6.5. ESTIMATION 6.6. TIME STUDY PROCEDURE 6.7. ADVANTAGES AND DISADVANTAGES OF TIME STUDY 6.8. STANDARD TIME AND ALLOWANCES 6.8.1. Uses of standard time 6.8.2. Allowance factors 6.9. PERFORMANCE RATING 6.9.1. Factors affecting performance rating

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PRODUCTION & OPERATIONS MANAGEMENT 6.9.2. Need for performance rating 6.10. METHODS OF RATING 6.11. DISTINGUISH BETWEEN STUDY AND WORK MEASUREMENT. 6.12. QUESTIONS 6.13. SUGGESTED READINGS

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6.0. OBJECTIVES After end of this chapter, you should be able to 

Define a time study and explain the importance of time study.



Describe the techniques of time study.



Describe how time studies are performed.



Discuss the advantages and disadvantages of time study.



Discuss the importance of standard time and allowances factors.



Discuss the significance of performance rating and the methods.



Compare time study and method study.

6.1. INTRODUCTION Time study is a technique for determining as accurately as possible, the time required to carry out a specified task by a qualified worker at a defined level of performance. It records the time required to perform a task during a cycle and also the rate or pace at which the operator is working under specified conditions. It is also called as Work Measurement. This was originally proposed by Frederick Taylor and was later modified to include a performance rating (PR) adjustment. The time study is considered to be one of the most-widely used means of work-measurement. Basically, by using time study, an analyst will be taking a small sample of a single worker's activity and using it to derive a standard for tasks of that nature.

6.2. DEFINITION According to ILO, “Time study is a work measurement technique for recording the times and rates of working for the elements of a specified job carried out under specified conditions and for analyzing the data so as to obtain the time necessary for carrying out the job at a defined level of performance”.

6.3. OBJECTIVES OF TIME STUDY (WORK MEASUREMENT) 

To reduce the ineffective time of performing a job and there by eliminate the non productive time.



To reduce the total production time and increase the productivity.



To find out the standard time for doing a job.



It is used as a basis for wage incentive.



To develop standard data for future reference.



To compare the times of performance of alternative methods.



To improve the method of doing a task.



To prepare a realistic schedule and there by better production control.



To determine the idle or rest time of an operator.

6.4. TECHNIQUES OF TIME STUDY (WORK MEASUREMENT)

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The various techniques used in work measurement are; 

Stop watch time study.



Production study.



Work sampling or Ratio delay study.



Synthesis from standard data.



Analytical estimating.



Predetermined Motion and Time System (PMTS). Out of these, the first three techniques involve direct observations where as the other techniques

are data based and analytical in nature. 

Pre-determined motion Time system (PMTS): This is the technique for measuring work, where by time established for human motions. This is used to build up the time for a job at defined level of performance. This technique is also used for finding the time for basic motions of the Trebling.



Stop Watch Time study: This is a technique for determining as accurately as possible, the time required to carry out a specified task by a qualified worker at a defined level of performance. It records the time required to perform a task during a cycle and also the rate or pace at which the operator is working under specified conditions.



Synthetic Data: The term “Synthetic Data” is the technique of work measurement for building up the time for a job or parts of the job at a defined level of performance by totaling element time obtained previously from time studies on other jobs.



Analytical Estimating: It is a work measurement technique whereby time required to carry out elements of a job at a defined level of performance is estimated by knowledge and practical experience of the elements concerned.

It is widely used to estimate time in engineering,

maintenance and construction work. It can give satisfactory results though they are less accurate than those obtained by time study. In this method, time is not estimated for the job as a whole, but the task is broken into elements as in time study, but elements are longer. Time for, longer elements is worked out by a trained estimator only. 

Activity / work sampling: It is a technique of work measurement, in which a large number of instantaneous observations which are made over a period of time of group of machines, process or workers. This is also known as Random observation work sampling. Uses of work sampling:

(a) To measure the working and non-working time of men and machines for delay allowances / utilization of time of machines. (b) To estimate the percentage of devoted to each of duties included in the jobs performed by such people is maintenance, personnel, office workers, managers etc. (c) To establish time standards.

6.5. ESTIMATION

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Accurate time estimation is a skill essential to good project management. It is important to get time estimates right for two main reasons: 

Time estimates drive the setting of deadlines for delivery of projects, and hence peoples’ assessments of your reliability



They often determine the pricing of contracts and hence their profitability. Usually people vastly underestimate the amount of time needed to implement projects. This is

true particularly when they are not familiar with the task to be carried out. They forget to take into account unexpected events or unscheduled high priority work. People also often simply fail to allow for the full complexity involved with a job. This section discusses how to estimate time on small projects. Time estimates are important inputs into the other techniques used to organize and structure medium and large sized projects Gant chart and critical path techniques. Both of these techniques reduce large projects down into a set of small projects. The first stage in estimating time accurately is to fully understand what you need to achieve. This involves reviewing the task in detail so that there are no unknowns. Inevitably it is the difficult-tounderstand, tricky problems that take the greatest amount of time to solve. Ensure that within your estimate you also allow time for project management, detailed project planning, liaison with outside bodies, meetings, quality assurance and any supporting documentation necessary. 6.6. TIME STUDY PROCEDURE Following steps are involved in time study. 

Step- 1: First select the job to be studied. Breakdown the work content of the job into small) possible elements. Then inform the worker and define the best method.



Step-2: Observe the time for appropriate number of cycles (such as 25 to 50).



Step-3: Determine the average cycle time (CT) Cycle Time (CT) =



 Times No. of cycles

Step-4: Determine the normal time (NT). NT = CT (PR) Where, PR is the performance rating



Step-5: Determine the standard time using the following formula. ST = NT (AF)

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1 , AF being the allowance factor. 1 - % Allowance

Where, AF =

In step-2, n can be calculated using the following formula. Z [n1,x - (x) x ] 2

---------------------------2

h (x)

where, n1 = Preliminary sample size x = recorded stopwatch times h = half the precision interval in % (for example, if the precision interval is ±5%, then h = 0.05) Z = the standard normal statistic for the desired confidence level. Problem - 1 In a welding shop, a direct time study was done on a welding operation. One inexperienced industrial engineer and one experienced industrial engineer conducted the study simultaneously. They agreed precisely on cycle time (shown below) but their opinion on rating the worker differed. The experienced engineer rated the worker 100% and the other engineer rated the worker 120%. They used a 10% allowance. Cycle Time (in minutes)

Number of Times observed

From the above statement, (a) Determine the standard time using the experienced industrial engineer's worker rating. (b) Find the standard time using the worker rating of inexperienced industrial engineer. (c) Comment on the reliability of time study engineers. Solution. (a) Rating the worker at 100% by the experienced Industrial engineer Cycle Time (CT) =

20 x2  24 x1  29 x1  32 x1 = 25 minutes. 5

Normal Time (NT) = CT x PR = 25 x 100% = 25 minutes Standard Time (R) = (NT)I(l - %A) = 25/(1 - 0. 10) = 27.78 minutes

(b) Rating the worker at 120% by the inexperienced Industrial Engineer

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Cycle Time (0) = 25 minutes Normal Time (NT)

= CT x PR

= 25 x 120% = 30 minutes Standard Time (Sl)= NTI(l - %A) = 30/(1 - 0.10) = 33.33 min.

(c) Comment The results in part (a) and part (b) show differences in normal time and standard time. The task of estimating performance rating of a worker requires certain experience. So, we can rely results obtained by the experienced industrial engineer. Rating exercise is an art. So, the consists in rating skill can be improved by repeatedly seeing rating films and/or by attending short courses performance rating.

6.7. ADVANTAGES AND DISADVANTAGES OF TIME STUDY Advantages: 

The standard labour cost per unit of product can be calculated from output standard which maybe useful for managerial decisions.



Managerial comparisons of actual and standard production rates are made possible from output standards.



Output standards aids planning and controlling of flow of production through calculation of number of machines and operators required.



Evaluation of machine capacities is possible through which it is possible for selection, replacement of machines.



Time study results may be used to guide marketing department for pricing the product, to submit for tenders, and fix delivery dates.



Observation during a time study may enable the engineer to suggest for further improvement in work methods, better motion sequences, training necessity and better work place layout which results in higher productivity.

Disadvantages 

Time study is not suitable for non – repetitive jobs.



Time study is not suitable for highly automated work place where operators control is minimized.



It may not affect the operator’s morale, if output standard is not attained.



The skill and judgement of the time study analyst may impose limitations on which arrival of output standard.



Physiological, Psychological and sociological aspects of the worker are not taken into account while doing the time study.

6.8. STANDARD TIME AND ALLOWANCES

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The phrase “Standard Time” refers to the time, which is taken by a normal worker for a specific task or job, working under moderate conditions and including other allowances such of fatigue, setting to tool and job, repairing of tool etc… i.e., Standard time or allowed time is the total time permitted to complete a job. Standard time = Normal time + Allowance

The actual time is observed by using stop watch. The time study for a job is conducted for number of times and the average of the observed time is calculated. Basic time is calculated from the observed time by multiplying the rating factor. The rating is measure of efficiency of a worker.

OBSERVED TIME (OT)

PRA

STANDARD TIME (OR) ALLOWED TIME

Observed Time

PRA -

Rating Factor

Rest and Personal allowance

Process Allowance CA PA

Contingency Allowance

Policy Allowance

The standard time is calculated by adding the following allowances with the basic time.

Rest and personal allowance or Relaxation allowance.

Process allowance or unavoidable delay allowance.

Contingency allowance.

Special Allowance.

Policy allowance can also be added to the standard time based on the management decision. 6.8.1. Uses of standard Time: a) Comparison of alternative methods: Method study is used to develop improved methods. It the practitioner arrived at two or more alternative improved methods, the one, which requires the least time, will generally be considered more efficient. b) Manning:

By knowing the available time for the completion of various jobs in a plant, it is possible to

determine the number of people required for manning the plant. The analysis of the amount of effective and idle time inherent in a job makes it possible for work to be allotted efficiently, so that each workers time is used to the best advantage. c) Planning:

The knowledge of time standards enables to fix production norms for each operation /

job. This makes it possible to plan and schedule production targets for men and machines to utilize these resources to the maximum extent possible.

In the same manner, planning and scheduling of

maintenance jobs is also possible.

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d) Control by management: When a plan is established, it needs to be received and controlled closely. Accurate record of waiting time of men and machines and also the knowledge of actual performance against the expected normal rate form a reliable basis of control e) Rational basis for incentives: Time standard data is what is expected from a qualified person while working at normal performance, provides a rational basis for introducing financial incentive schemes which are equitable both to the management and workers. f) Standard data: One of the most important purposes of work measurement is to build up standard data for job constituents of jobs need not be studied again but operation job time could be built up by referring to standard data. 6.8.2. Allowance Factors: The allowance is the addition to the normal time in order to arrive at standard time. In other words, it is a portion / part of standard time. Types / classification / kinds of allowances: The phrase “Allowances” is divided into the following categories. 

Process allowances.



Relaxation allowances



Special allowances



Contingency allowances.



Policy allowances.

1. Process allowances: These allowances are meant to compensate workers for the enforced idleness due to the character and the nature of process or an operation. If the idleness would not have been enforced, the workers would have earned more. Such idleness is unavoidable when a worker handles a machine automatically for a part of the total working time, where it is not possible to complete / balance the production line. This not benefit to a worker, it becomes a major portion of the total cycle time. 2. Relaxation allowances: Personal and rest allowances a worker because he cannot work continuously. Such allowances are also in need of the workers to take care of his personal needs and requirements. For example, visiting toilet, tea time etc. This is also to help him to recover from psychological and physiological pressure while performing an operation. Rest allowances is a relaxation allowances to over come fatigue as a result of unhealthy working conditions, physical over load, inconvenience, postures etc. Components of Relaxation allowances: The following are the components of relaxation allowances. 

Personal needs allowances.



Fatigue allowances.

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Personal needs allowance is intended to compensate the operator for the time necessary to go away from place of work to attend to personal needs, namely, getting a glass of water, washing hands etc. Fatigue allowances is intended to provide a workman an opportunity to recover from physiological and psychological effects of fatigue caused by carrying out a specified task under specified conditions. Following are the classification of fatigue allowances: 

Basic fatigue allowance.



Variable fatigue allowance.

Basic fatigue allowance is allowed to an operator who performs a job seated, who is engaged on light work in good working conditions, and who is called upon to make normal use of his body. Variable fatigue allowance is allowed to an operator who is engaged on medium and heavy work, who performs work in a posture after than sitting, and who is called upon to work in working conditions which are abnormal and cannot be improved upon.

Variable fatigue allowance, therefore, varies

according to the conditions under which a work is performed. 3. Special allowances: These allowances are given for activities which are not generally the part of total work cycle but are essential for performing the work satisfactorily. They may be temporary or permanent. Special allowances are classified into two categories. They are 

Periodic activity allowance



Interference allowance:

a) Periodic allowance: It is for the activities to be carried out periodically during work cycle. For example, setting up a plant, regrinding a label tool etc. b) Interference allowance: The term “Machine Interference Allowances are the allowances which are provided at time, of a worker looking after two / more machines and stops operating one machine at random or cyclically, while he is attending to another machine. The result of machine stoppages or machine interference is loss in production or total output. Thus, the worker suffers for his not fault in his work, because of low output. Classification of interference allowance: 

Cyclical interference allowances are given to a worker for handling more than one automatic machine which has different automatic cycle times.



Random interference allowances are given on machines which stop or have to be stopped due to certain causes occurring at random for example, when a yarn breaks in winding.

Determining factors of interference allowance: The following are the major determining factors of Interference Allowance

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Number of machines per operator: The more number of machines assigned per operator, the greater is the interference allowance.



Machine running time: The longer the machine running time, the lesser is the interference allowance.



Ratio of machine time to outside work: The higher the ratio of machine time to outside work, the lesser is the interference allowance.



Inside work:

Higher the inside work causes greater he loss due to interference.

Methods of measuring interference Allowance: The following are the methods of measuring interference allowance: 1. Work sampling. 2. Production study. 3. Queuing theory and 4. Interference theory. 4. Contingency allowance: The term “contingency allowance” is a small allowance of time included into the work content of the job to compensate the operator for the time lost due to legitimate interruption and delay which are uneconomical to measure because of their infrequency and irregular occurrences. Occurrences of contingency allowances The following are the rare and irregular occurrences of contingency allowance. 

Total breakage involving removal of tool from its holder, trip to tool crib, filling up breakage report, replacing tool at tool crib, falling tool in its holder, effecting adjustments etc.



Obtaining necessary gauges from central pool.



Filling cool and reservoir from time to time.



Removal of turning, boring, drilling, etc by helpers.



Daily oiling and cleaning by maintenance department



Operators waiting time for helper or mechanical handling facility.



Machine stoppages due to untimely movement of parts from previous machine.



Consultation with super visor, operators and others regarding work.

Contingency allowance should not exceed 5% otherwise; the method should be improved upon. 5. Policy allowance: The term “Policy allowance” refers to the allowance which is abolition to standard time intended to provide a worker an opportunity to earn a specific level of earning aha specified level of performance.

Determining factors of policy allowance: The following are the important considerations in policy allowing Policy allowance is purely a management decision, workers and their representatives can not demand for the policy allowances.

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Generally, policy allowance is the same for all operations and is allowed at a certain percentage of standard time. The total is obtained may be titled as allowance time or specified time but must be differentiated from standard time. Time study expert is generally not the person to the decision of the policy allowance yet it is the person, who should advise the management in favour of or against it. His responsibility, however, lies in his task to see that the policy allowance when awarded is included in the allowance time, viz… introductory allowance, learner allowance, and unusual conditions allowance. Introductory Allowance: This is the allowance at times given at the time of introduction of an incentive scheme. The allowance is strictly temporary and decreased week by week until it disappears, say after 4 to 5 weeks. Learner Allowance:

The introduction of a new worker into the systems may slow down the working of

the whole team until he / she became proficient. It no allowance is given, the training of the apprentice or learner will be neglected. Unusual Conditions Allowance: The allowance covers the additional time required for special case of some specific type of raw material or equipment in handling at loading or unloading points.

6.9. PERFORMANCE RATING Performance rating is the process of adjusting the actual pace of working of an operator by comparing it with his mental picture of pace of an operator working at normal speed. Mathematically,

Performance Rating 

Observed pace  100 Normal pace

Rating, in other words, is a leveling factor to convert observed timings into normal timings (the normal time of an element being time that would be taken by an average worker to carry out the task in hand at the defined level to performance).

6.8.1. Factors Affecting Performance Rating: The variation in actual times for a particular element may be due to the factors both internal and external. The external factors which are not under the control of work study man are: 

Variation in the quality or other characteristics of the material used even though it is in prescribed tolerance limit,



Change s in the operating efficiency of too is and equipment within their useful life, and



Unavoidable changes in methods or conditions of operations.



Change in working conditions like heat, light, dust, vibration, etc. Factors which are within the control work study expert are known as internal factors, such as: (a) Acceptable variation in the quality f the product (b) Variation due to operators' ability, and (c) Variation due to operators' attitude of mind

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6.8.2. Need for Performance Rating: Observed time varies from element to element and even among the elements of the same operation. This is due to inconsistency in the working pace (speed) of the operator and slight variations in the basic motions employed by him. Variations in operators’ speed are simple to understand. Rarely, all workers work at the same speed. Different workers have different temperament and attitudes towards work. Some workers by their nature are quick while some others slow. Some worker from each of these groups is timed for the same element; the time taken by the slow worker may be almost twice the time taken by a fast worker. Thus, the standard time, if set on the basis of time actually taken by the fast worker, will render the standard unattainable. Similarly, the standard time, if developed on the basis of actually token by a slow worker, will be very loose and even the most inefficient worker shall be able to attain it. This will make a mockery of the time setting process. What should the time study expert do?  Should he/she search for workers who can perform the work at normal pace? This may not be possible.  Should he/5he ask them to slow down or speed Lip so as to perform the work at the normal pace? No, it is not possible.

Time study expert does neither of these two things. The time operator for whatever speed lie works and yet he is able to specify, standard time as if the worker was working at the normal pace. The magic wand that he uses as a leveling factor is called performance rating.

6.10. METHODS OF RATING There are five different methods of performance rating - Speed rating, Westinghouse system of rating, Synthetic rating, Objective rating and Systems based Physiological evaluation. 1. Speed Rating: In this method, performance rating is fixed by the observer by comparing the operator's movement with his own concept of normal pace. An average worker is rated at 100, better than average worker is rated at a figure higher than 100 and below average worker is rated lower than 100. If a worker is rated at 110, it means that an average worker will require 10 per cent more time to perform the Job. And if he/she is rated 85, it implies that the average worker will require 15 per cent less time to do the job, the observed time of the element is multiplied by the speed rating divided by 100 to obtain normal time of the element. 2. Westinghouse System of Rating: Westinghouse system utilizes a set of criteria to measure the proficiency of working of the operators i.e., as a basis to arrive at the performance rating: (i) skill, (ii) effort, (iii) consistency and (iv) conditions.

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Skill criterion: It measures the operator's proficiency in adhering to a given method, proper co-ordination of hands and eyes. The skill has been classified into six degrees, each degree indicating a specified level of skill with which an operator performs the task -- poor, fair, average, good, excellent and super skilled. ii)

Effort criterion. Effort criterion measures the speed with which the skill is applied. Similar to skill, effort is also divided into six degrees - Poor, fair, average, good excellent, superb.

iii)

Consistency; Consistency measures the presence of factors which affect the consistency of the operator to perform the work cycle repeatedly within the same time. The elements which affect the consistency are - variations in the materials, hard spots, wearing of toot cutting edges, and presence of foreign elements. Consistency like skill and effort are sub-divided into six classes Poor, fair, average, good, excellent, perfect.

iv)

Conditions measure the extent to which disagreeable elements like temperature, vibration, light, sound, etc., affect the operator's performance. Conditions criterion too has been classified into six degrees -Poor, fair, average, good, excellent, perfect. As per this system, the time study analyst, assigns a rating for criterion for a particular task,

obtains their numerical values from the respective tables and establishes the performance rating by summing up the four values and adding a leveling factor to normalize the observed time of the job. The Westinghouse system of performance rating is applied to the cycle time in case of manual work rather than to the individual elemental times. 3. Synthetic Rating: The performance rating under this method is established by comparing observed time of some of the manual elements with those of known time values of the elements from pre-determined motion and time studies. The steps to arrive at the synthetic rating are 

The time study is conducted in the usual mariner to record time values of the elements of the work cycle.



The pre-determined standard time of some of the manual elements is picked up from the tables of PMTS values.



The motion time value of each element is divided by observed time value of the same element to obtain its rating factor.



The individual rating factors are aggregated into average rating factor called performance rating factor.



The performance rating factor is then applied to all manual elements comprising the study to normalize their times.

Synthetic performance rating method may be followed by the beginners until they gain proficiency in their assessment. To use this method effectively, actual time of as many manual elements as possible should be taken up to compile synthetic rating.

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4. Objective Rating: In this method, the operator's speed is rated against a single standard pace which is independent of job difficulty. The observer merely rates the speed of movement of activity, paying no attention to job itself. After the pace rating is made, an allowance or a secondary adjustment is added to the pace rating to take care of job difficulty. Job difficulty is divided into six classes, and percentage is provided for each of these factors. The job difficulties as per the founder of the system - M.E. Mundel have been categorized into six classes, viz-, (i) Amount of body used, (ii) Foot pedals, (iii) Bi-manualness, (iv) Eye-hand co-ordination, (v) Handling equipment, and (vi) Weight. 5. Physiological Evaluation of Performance Rating: Many studies have recently shown that there is a relationship between physical work and the amount of oxygen consumed by the operator. More recently, it has also been found that the change in heartbeat rate is a reliable measure of muscular activity. This technique is, however, is not being used now but large number of people in various parts of the world are working on this problem.

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6.11. DISTINGUISH BETWEEN STUDY AND WORK MEASUREMENT

Sl No. 1

Points of distinction

Work measurement

Definition

Work

Method study

measurement

the

Method

study

application of techniques to

systematic and scientific

establish

evaluation of existing and

the

time

for

qualified worker to carry out a

proposed

plans

and

specified work at a defined

performance of any work

level of performance

system and the evaluation of improvement, through analytical

process

critical examination. 2

Techniques/Elements

Time study, work sampling,

Motion study.

pre-determined

layouts were simplification.

motion

time

Facilities

study Analytical estimating 3

Results

Time standards

Improved

methods,

equipments

and

sequence. 4

Uses

Cost

estimation,

production

scheduling, incentive planning

Work

design,

standards.

6.12. QUESTIONS Section â&#x20AC;&#x201C; A 1. Define time study. 2. (i) Time study is also called as ---------------------(ii) The concept of time study is proposed by ----------------------3. List any four techniques of time study. 4. What do you meant by synthetic data? 5. What is work sampling? 6. Give the formula for average cycle time. 7. What is standard time? 8. List out the kinds of allowances? 9. What do you meant by contingency allowance? 10. What is performance rating? 11. List out the methods of performance rating. 12. List out the methods of measuring interference Allowance.

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time

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Section – B 1. What are the objectives of time study? 2. Briefly explain the various techniques of time study. 3. Write short note on estimation in time study. 4. Explain the step by step procedure of time study. 5. What are the advantages and disadvantages of time study? 6. Briefly explain the factors affecting performance rating. 7. Differentiate time study and method study. Section – C 1. Write an essay on standard time and its applications. 2. Discuss the different kinds of allowances in detail. 3. Describe the various kinds of performance rating methods.

6.13. SUGGESTED READINGS th

1. Chase, Richard & Nicholas Aquilano, “Production & Operations Management”, 7

ed.

Burr

Ridge: McGraw Hill Publication, 1995. th

2. Goel.B. S, “Production & Operations Management”, 12 ed., Meerut: Pragati Prakashan, 1997. 3. Monks, Joseph. G “Operations Management: Theory & Problems” New York: McGraw Hill Publication, 1996. 4. Panneerselvam. R, “Production & Operations Management”, New Delhi: Prentice Hall of India, 2003. 5. Ramamurthy. P, “Production & Operations Management”, 2

rev.ed., New Delhi: New Age

International Pub, 2006. 6. Saravanavel.P & Sumathi.S, “Production & Materials Management”, Chennai: Margham Pub, 2000. 7. Shridhara Bhat.K, “Production & Materials Management”, 2

ed., Mumbai: Himalaya Publishing

House, 2005. 8. Stevention. William.J, “Production/Operations Management”, 5th ed., Burr Ridge: McGraw Hill Publication, 1996.

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PRODUCTION & OPERATIONS MANAGEMENT CHAPTER - 07 PROJECT MANAGEMENT STRUCTURE 7.0. OBJECTIVES 7.1. INTRODUCTION 7.2. FLOW PROCESS CHART 7.2.1. Types of flow process chart. 7.2.2. Uses flow process charts 7.3. NETWORK ANALYSIS 7.3.1. Basic concepts of network analysis 7.3.2. Network rules 7.3.3. Critical path method [cpm] 7.3.4. Project evaluation and review technique [pert] 7.3.5. Cost analysis 7.4. QUESTIONS 7.5. SUGGESTED READINGS

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7.0. OBJECTIVES End of this chapter, you should be able to 

Describe the importance of different kinds of flow process charts and its uses.



Know the basic components of network analysis.



Familiarize to construct simple network diagram.



Give a general description of PERT and CPM techniques.



List the kinds of information that a PERT and CPM analysis can provide.



Analyze networks with deterministic and probabilistic times.



Describe activity “crashing” and solve typical problems.

7.1. INTRODUCTION A flow process chart, either a Single-Column Flow Process Chart, or a local form, can help you to analyze your work flow. You can prepare a flow process chart for any process, person, or material you wish to analyze. The heading of the chart indicates what aspect of the operation you are analyzing and where the process begins and ends. You should then list the steps that are involved in the process in the sequence in which the steps occur under your present method. Further this chapter introduces the basic concept of project management. It begins with a brief discussion of basic concepts, and techniques of network analysis such as PERT and CPM and cost analysis.

7.2. FLOW PROCESS CHART Flow process chart is a graphical representation of the sequence of all the activities which are recorded namely Operation, Inspection, Transport Delay and Storage in order to have a complete idea about the process. It gives vital information about distances moved and time required for each event.

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SUMMARY EXISTING

PROPOSED

No. of Operations

No. of Inspections

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The path of movement of material from raw material store to the finished goods store with different process symbols is shown. In the existing method, the material movement is more. It can be reduced by inter changing the positions of drilling and shaping machines. Types of Flow process chart:

a) Man type flow process chart This records the activities of the operator only (i.e.) the movements of worker from one place to another while performing his assigned work. Storage activity does not appear in this chart.

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b) Material type flow process chart This records the activities of the material only (i.e.) the sequence of activities involved when the material is being processed.

Points where material enters and the locations where transportation,

inspection, delays and storage operation performed on the material shown in this chart. It is used in the assembly section. c) Equipment type flow process chart This records how machine or equipment is used. 7.2.2. Uses Flow Process Charts: In analyzing a flow process chart, you can determine the actions you must take to improve the sequence of any operation by asking yourself Who?,

What?,

When?,

Where?,

Why?,

and

How? You should make notes relating to these questions on the chart that represents your present method of work flow You will use these notes for the development of a revised chart that will represent a proposed method of work flow. You can apply flow process charting effectively to solve procedural problems created by changes in your personnel, your organization, or your volume of work; to review your operating methods periodically; and to establish new organizations. A resale operation, such as the preparation and processing of a breakout document, the movement of merchandise during receipt, or a cash-handling procedure are all work flow situations that you can analyze by using a flow process chart. Even if you decide against using an actual chart, you can still improve yourself

the

sequence

operations

any work

flow

situation

the questions: Who?, What?, Where?, When?, Why?, and How? An

office

asking

operation

can be analyzed in a similar manner.

7.3. NETWORK ANALYSIS 7.3.1. Basic Concepts of Network Analysis: a) Network: It is graphical representations of a project plan showing inter relationships of the various activities. b) Project:

It is a combination of interrelated activities all of which must be executed in a certain

order to achieve a set goal. c) Activity:

An activity is any portion of a project which consumes time or resources and has a

definable beginning and ending. In the arrow scheme of networking activities are graphically represented by arrow with description and time estimates along the arrow. d) Events:

The beginning and ending points of activities are called events.

An event is an

instantaneous point in time. The events are shown by modes. There are 3 types of events namely burst event, merge event and dual event. e) Burst Event: If an event represents the joint initiation of more than one activity, it is called a burst event. Node 2 represents the joint initiation of activities banc. Hence it is a burst event.

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f) Merge Event: If an event represents the joint completion of more than one activity, it is called a merge event. g) Dual Event: If an event represents the joint completion of more than one activity and also the joint initiation of more than one activity, it is called a dual event. h) Dummy Activity:

A dummy activity is an imaginary activity which does not consume any time (or)

resources. It is used to show the logical relationship. It is represented by dash row. (---------------). When a project has two or more activities which have some of their immediate predecessors in common, then it becomes necessary to introduce a dummy activity. 7.3.2. Network Rules: 1. Each activity is represented by one and only one arrow in each network. Therefore no single activity can be represented twice in the network. 2. No two activities can be identified by the same beginning and end events. In such cases, a dummy activity is introduced to resolve the problem. 3. Before an activity can be undertaken, all activities proceeding it must be completed. Thus, a network should be developed on the basis of logical (or) technical dependencies between various activities of the project. The discipline of networking requires that the project be considered in a through and analytic manner and the predecessor-successor relationships between the various activities clearly laid. 4. The arrows depicting various activities are indicative of the logical precedence only. The length and bearing of the arrows are of no significance. 5. The flow of the diagram should be from the left to right. 6. Arrows (activities) should not be crossed unless it is completely unavoidable. 7. Arrows should be kept straight and not covered or bent. 8. Angle between the arrows should be as large as possible. 9. Each activity must have a tail and head event. No two or more activities may have the same tail and lead events. 10. Dangling must be avoided in a network diagram. This happens when precedence and interrelationships of the activities are not properly identified. 11. The general rules for numbering the events is that no went can be numbered until all preceding events have been numbered the number at the head of an arrow is always large than that at its fail, i.e., events should be numbered such that for every (i,j), i<j. In order to conform this rule, the number of the events was done by a

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7.3.3. Critical Path Method: CPM was developed by J.E. Kelly of the Remington Rand Corporation and M.R. Walker of Du Pont to plan and coordinate maintenance projects in chemical plants. The integrative procedure of determining the critical path is as follows. Break down the project into various activities systematically, Label all activities. Arrange all the activities logical sequence. Construct the arrow diagram. 1. Number all the nodes (events) and activities. Find the time for each activity. Considering it to be deterministic. Indicate the activity times on the arrow diagram. 2. Calculate earliest start time, earliest finish time, latest start time and latest finish time. Tabulate activity moral times, earliest times and latest times. 3. Determine the total float for each activity by taking difference between the earliest time and latest time, for each node. 4. Identify the critical activities (the activities with Zero float) and connect them with the beginning node and the ending node in the network diagram by double line arrow. This gives the critical path. 5. Calculate the total project duration. 6. If it is intended to reduce the total project duration, crash the critical activities of the network. 7. Optimize the cost. 8. Update the network and smooth the network resources. Time Calculations in CPM: Let zero be the starting time for the project. Then for activity there is an earliest starting time (ES) relative to the project starting time, which is the earliest possible time whom the activity can begin, assuming that all of the predecessors also are started at their ES. Then for that activity, its earliest finish time (EF) is simply ES activity time. Let us suppose that use have a target time for completing the project. Then this time is called the latest finish time (LF) for the final activity. The latest start time (LS) is the latest time at which an activity can start if the target is to be maintained. Float or Slack Values Total float = the difference between earliest start time of tail event and the latest finish time of head for the activity. Free Float = total float â&#x20AC;&#x201C; Head event slack. Independent float = Free float â&#x20AC;&#x201C; Tail event slack. Critical Event The slack of an event is the difference between the latest and earliest event times (or) Slack. The events with zero slack time are known critical events.

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Critical Activities The difference between the latest start times of an activity will indicate the amount of time by which the activity can be delayed without affecting the total project duration. This difference is usually called as total float. Activities with zero total float are known as critical activities. The sequence of critical activities in a network is called critical path. The critical path is longest “path in the network from the starting event to ending event and defines the minimum time required to complete the project.”

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The critical path is 1-3-5-7-8-10 (shown in red line in Figure with the project duration of 22 days. 7.3.4. Project Evaluation and Review Technique [PERT]:

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PERT is one of the techniques which are widely used today for planning, scheduling and controlling activities of a project in an industrial environment. These projects are usually large and complex. (i) Terminologies in PERT Following are the important terminologies in PERT, namely, a)

Time estimates

b) Expected or average time c)

Measure of deviation and variation.

d) Probability of completing the project. e)

Effect of near or next critical path.

a) Time Estimates 

Optimistic Time (t0): It is the best estimation of the minimum time to perform an activity if every thing goes wrong.



Pessimistic time (tp): It is the best estimation of the maximum time to perform an activity if every thing goes wrong.



Most probable Time (t m): It is the best estimation of time to perform an activity under normal conditions.

b) Expected (or) Average Time (te): te =

t 0  4tm  t p 6

c) Measure of deviation and variation

 t p  t0     6 2

S .D 

  

tp - t0 6

d) Compute the standard normal deviate: Z

 Duedate  Expectedda teofComple tion    Pr oject SD  

(ii) PERT Algorithm - Steps  Make a list of activities that make up the project including immediate predecessors.  Making use of step-1 sketch the required network.  Denote the most likely time by tm the optimistic time to, and pessimistic time by tp

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 Using beta distribution for the activity duration, the expected time te, for each activity is computed by using the formulae, te =

t t  4t m  t 0 6

 Tabulate various times, i.e.; expected activity times, earliest and latest times and mask the EST and LFT on the arrow diagram.  Determine the total float for each activity by taking the difference between EST & LFT.  Identify the critical activities and connect them with the beginning node and the ending node in the network diagram by double line arrows.

This gives the critical path and the expected date of

completion of the project.  Using the value of tp and t0, compute the variance (  ) of each activity’s time estimates by using the 2

 t p  t0 formula.     6  2

  

 Compute the standard normal deviate: Z =

 Duedate  Expectedda teofComple tion    Pr oject SD  

 Use standard normal tables to find the probability P (Z  Z0) of completing the project within the scheduled time, where Z~N (0, 1).

(iii) Implementing PERT The first step to scheduling the project is to determine the tasks that the project requires and the order in which they must be completed. The order may be easy to record for some tasks (e.g. When building a house, the land must be graded before the foundation can be laid) while difficult for others (There are two areas that need to be graded, but there are only enough bulldozers to do one). Additionally, the time estimates usually reflect the normal, non-rushed time. Many times, the time required to execute the task can be reduced for an additional cost or a reduction in the quality. Example: An R & D project has a list of tasks to be performed whose time estimates are given in the Table as follow

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Solution

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7.3.5. Cost Analysis: The two important components of any activity are the cost and time. Cost is directly proportional to time and vice versa. For example, in constructing a shopping complex, the expected time of completion can be calculated using be time estimates of various activities. But if the construction has to the finished earlier, it requires additional cost to complete the project. We need to arrive at a time / cost trade-off between total cost of project and total time required to complete it. Normal time: Normal time is the time required to complete the activity at normal conditions and cost. Crash time: Crash time is the shortest possible activity time; crashing more than the normal time will increase the direct cost. Cost Slope: Cost slope is the increase in cost per unit of time saved by crashing. A linear cost curve is shown in Figure.

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Project Crashing Procedure for crashing 

Step1: Draw the network diagram and mark the Normal time and Crash time.



Step2: Calculate TE and TL for all the activities.



Step3: Find the critical path and other paths.



Step 4: Find the slope for all activities and rank them in ascending order.



Step 5: Establish a tabular column with required field.



Step 6: Select the lowest ranked activity; check whether it is a critical activity. If activity; else go to the next highest ranked activity.



Note: The critical path must remain critical while crashing.



Step 7: Calculate the total cost of project for each crashing.



Step 8: Repeat Step 6 until all the activities in the critical path are fully crashed.

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so, crash the

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The sequence of crashing and the total cost involved is given in Table. Initial direct cost = sum of all normal costs given = Rs. 490.00

7.4. QUESTIONS Section â&#x20AC;&#x201C; A 1. What is flow process chart? 2. Give any two applications of flow process chart.

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3. List out the types of flow process chart. 4. Define network. 5. Define project. 6. Define activity. 7. What is dummy activity? 8. What is total float? 9. What is meant by slack of an event? 10. Define critical path. 11. What do you meant by PERT? 12. What is an optimistic time? 13. Define normal time. 14. Define cost slope. 15. Give the formula for find out variance in PERT. Section â&#x20AC;&#x201C; B 1. Briefly explain the different kinds of flow process chart. 2. State the rules for constructing network diagram. 3. Briefly explain the terminologies used in PERT. 4. What are the steps involved in crashing the activities? 5. Construct a network for each of the projects whose activities and their precedence relationships are given below. Activity

Predecessor

H,I

F,G

6. Identify the critical path for the following network diagram.

6 1

8 5

Section â&#x20AC;&#x201C; C 1. Calculate earliest start, earliest finish, latest start and latest finish of each activity of the project given below and determine the critical path of the project, Total float, Independent float and free float.

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Activity

1-2

1-3

1-5

2-3

2-4

3-4

3-5

3-6

4-6

5-6

Duration (in weeks)

2. A project schedule has the following characteristics. Activity

1- 2

2- 3

2- 4

3- 5

4- 5

4- 6

5- 7

6- 7

7- 8

7- 9

8- 10

9- 10

a) Construct a PERT network diagram. b) Identify the critical path and compute the expected project completion time. c) What is the probability factor for completing the project in 30 weeks?

7.5. SUGGESTED READINGS rd

1. Buffa, Elwood, “Operations Management”, 3 ed., New York: JohnWiley & sons, 1972. th

2. Chase, Richard & Nicholas Aquilano, “Production & Operations Management”, 7

ed.

Burr

Ridge: McGraw Hill Publication, 1995. th

3. Goel.B. S, “Production & Operations Management”, 12 ed., Meerut: Pragati Prakashan, 1997. 4. Monks, Joseph. G “Operations Management: Theory & Problems” New York: McGraw Hill Publication, 1996. 5. Stevention. William.J, “Production/Operations Management”, 5th ed., Burr Ridge: McGraw Hill Publication, 1996. 6. Stevention. William.J, & Ozgur Ceyhun,“Introduction to Management Science”, New Delhi:Tata McGraw Hill Publication, 2007.

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