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Lectures notes
On
Production and Operation
Management
Prepared by
Dr. Sarojrani PattnaikDr. Swagatika Mishra
Assistant Professor
Department of Mechanical Engineering
VSSUT Burla
.
On
Production and Operation
Management
Prepared by
Dr. Sarojrani PattnaikDr. Swagatika Mishra
Assistant Professor
Department of Mechanical Engineering
VSSUT Burla
.
PRODUCTION AND OPERATION MANAGEMENT(3-0-0)
1.Productivity:Importance,productivityratio,productivitymeasurement,
productivityindex,awareness—improvement—maintenance(A.I.M)
proceSs.
2.Production System Models of production system, Product Vs. Services,
Process-focused & product focused systems, product strategies, product
life cycle, production function.
3.Forecasting : Methods—moving average, exponential smoothing,
Regression analysis, coefficient of co-relation, Delphi, Market survey.
4.Facilities Planning : Site location, facilities layout and various types,
planning using CRAFT work place design, working conditions—noise
illumination etc.
5.Motion study—principles of motion—economy, Time study-standard time.
6.Production Planning & Control : Aggregate planning. Sequencing, Line
balancing, Flow control,Dispatching,expediting, Gantt chart, line of
balance, learing curve.
7.Project Management—Network scheduling, PERT. Critical path, Most
likely time estimate , Resource leveling.
8.38.Modern Trends in Manufacturing :Basic concepts of CAD,CAM,FMS, CIM,
ISO 9000, Quality circle, Kaizen, Kanbans, Poke Yoke' supply chain
management.
Text Books
1.Production Systems : Planning, Analysis & Control : By—Riggs, J.L.(4th
Edn.) John Wiley & Sons
2.Modern Production/Operation management : By—Buffa, E.S. & Sarin,
=,.K.(8`" Edn.) John Wiley & Sons.
3.Production & Operations Management : By Panneer saivem, R.(2'1Edn.)
PHI
4.Production & Operations Managem ent : By Chary, S.N.(TMH)
1.Productivity:Importance,productivityratio,productivitymeasurement,
productivityindex,awareness—improvement—maintenance(A.I.M)
proceSs.
2.Production System Models of production system, Product Vs. Services,
Process-focused & product focused systems, product strategies, product
life cycle, production function.
3.Forecasting : Methods—moving average, exponential smoothing,
Regression analysis, coefficient of co-relation, Delphi, Market survey.
4.Facilities Planning : Site location, facilities layout and various types,
planning using CRAFT work place design, working conditions—noise
illumination etc.
5.Motion study—principles of motion—economy, Time study-standard time.
6.Production Planning & Control : Aggregate planning. Sequencing, Line
balancing, Flow control,Dispatching,expediting, Gantt chart, line of
balance, learing curve.
7.Project Management—Network scheduling, PERT. Critical path, Most
likely time estimate , Resource leveling.
8.38.Modern Trends in Manufacturing :Basic concepts of CAD,CAM,FMS, CIM,
ISO 9000, Quality circle, Kaizen, Kanbans, Poke Yoke' supply chain
management.
Text Books
1.Production Systems : Planning, Analysis & Control : By—Riggs, J.L.(4th
Edn.) John Wiley & Sons
2.Modern Production/Operation management : By—Buffa, E.S. & Sarin,
=,.K.(8`" Edn.) John Wiley & Sons.
3.Production & Operations Management : By Panneer saivem, R.(2'1Edn.)
PHI
4.Production & Operations Managem ent : By Chary, S.N.(TMH)
VEER SURENDRA SAI UNIVERSITY OF TECHNOLOGY BURLAHA
DEPARTMENT OF MECHANICAL
LESSON PLAN FORProduction and Operation Management
SUBJECT CODE: 8thSemester
LectureTopics to be coveredRemark
Lecture 1Productivity: Importance, productivity ratio, productivity
measurement, productivity index
Lecture 2Awareness–improvement–maintenance(A.I.M)process,
Production System, Models of production system
Lecture 3Product Vs. Services, Process-focused & product-focused systems
Lecture 4Product strategies, product life cycle, production function
Lecture 5Forecasting: Methods
Lecture 6Moving average,Exponential smoothing
Lecture 7Regression analysis, coefficient of co-relation
Lecture 8Delphi, Market survey
Lecture 9Facilities planning: Site location, facilities layout
Lecture 10Types of facility layout,Planning using CRAFT work place design
Lecture 11Working conditions–noise illumination etc.
Lecture 12Problemson single facility location usingmedian method
Lecture 13Problemson single facility location using minimax method and
gravity method
Lecture 14ProblemsonsinglefacilitylocationusingEuclidean-distance
location
Lecture 15Motion study, Principles of motion-economy, method study
Lecture 16Rulesconcerninghumanbody,workplacelayoutandmaterials
handling,
Lecture 17Rules concerning tools and equipments design, time conservation
Lecture 18Time study and work measurement techniques
DEPARTMENT OF MECHANICAL
LESSON PLAN FORProduction and Operation Management
SUBJECT CODE: 8thSemester
LectureTopics to be coveredRemark
Lecture 1Productivity: Importance, productivity ratio, productivity
measurement, productivity index
Lecture 2Awareness–improvement–maintenance(A.I.M)process,
Production System, Models of production system
Lecture 3Product Vs. Services, Process-focused & product-focused systems
Lecture 4Product strategies, product life cycle, production function
Lecture 5Forecasting: Methods
Lecture 6Moving average,Exponential smoothing
Lecture 7Regression analysis, coefficient of co-relation
Lecture 8Delphi, Market survey
Lecture 9Facilities planning: Site location, facilities layout
Lecture 10Types of facility layout,Planning using CRAFT work place design
Lecture 11Working conditions–noise illumination etc.
Lecture 12Problemson single facility location usingmedian method
Lecture 13Problemson single facility location using minimax method and
gravity method
Lecture 14ProblemsonsinglefacilitylocationusingEuclidean-distance
location
Lecture 15Motion study, Principles of motion-economy, method study
Lecture 16Rulesconcerninghumanbody,workplacelayoutandmaterials
handling,
Lecture 17Rules concerning tools and equipments design, time conservation
Lecture 18Time study and work measurement techniques
Lecture 19Performance rating anddifferent types of allowances
Lecture 20Production planning and control-Aggregate planning
Lecture 21Sequencing and line balancing
Lecture 22Flow control
Lecture 23Dispatching, centralized and decentralized dispatching
Lecture 24Expeditingand Gantt chart
Lecture 25Line of balance and learning curve
Lecture 26Project management, network scheduling
Lecture 27PERT with problems
Lecture 28Problems
Lecture 29Critical path method with problems
Lecture 30Problems
Lecture 31Resource levelling
Lecture 32Basicconcepts of CAD, CAM, FMS
Lecture 33CIM, JIT, ISO 9000
Lecture 34Quality circle, Kaizen, Kanbans
Lecture 35Poke Yoke, Supply chain management
Lecture 36Revision of problems
Lecture 37Revision of problems
Lecture 38Revision of problems
Lecture 39Revision of problems
Lecture 40Revision of problems
Lecture 20Production planning and control-Aggregate planning
Lecture 21Sequencing and line balancing
Lecture 22Flow control
Lecture 23Dispatching, centralized and decentralized dispatching
Lecture 24Expeditingand Gantt chart
Lecture 25Line of balance and learning curve
Lecture 26Project management, network scheduling
Lecture 27PERT with problems
Lecture 28Problems
Lecture 29Critical path method with problems
Lecture 30Problems
Lecture 31Resource levelling
Lecture 32Basicconcepts of CAD, CAM, FMS
Lecture 33CIM, JIT, ISO 9000
Lecture 34Quality circle, Kaizen, Kanbans
Lecture 35Poke Yoke, Supply chain management
Lecture 36Revision of problems
Lecture 37Revision of problems
Lecture 38Revision of problems
Lecture 39Revision of problems
Lecture 40Revision of problems
CHAPTER-I
PRODUCTIVITY
1.1Introduction
Production/Operation management is the process which combines and transforms various
resources used in the production/operation subsystem of the organization into value added
products/services in a controlled manner as per the policies of the organization.
Transform
(In controlled manner as
per the policies of the organization)
Production/Operation function:
The set of interrelated management activities which are involved in manufacturing certain
products is called production management and for service management, then corresponding set
of management activities is called as operation management.
Examples: (Products/goods)
Boiler with a specific capacity,
Constructing flats,
Car, bus, radio, television.
Examples: (Services)
Medical facilities,
Travel booking services.
In the process of managing various subsystems of the organization executives at
different levels of the organization need to track several management decisions.
The management decisions are Strategic, tactical and operational.
Defining goalsPlant locationeffective and
Making policiesnew product establishmentefficient utilization
Monitoring of budgetsof resources
Resources used in
production/ operation
subsystem
Value added products/services
Range of inputsRequired output (product/service)
(Having the requisite quality level)
Strategic (Top level)Tactical (Middle level)Operational (Bottom level)
PRODUCTIVITY
1.1Introduction
Production/Operation management is the process which combines and transforms various
resources used in the production/operation subsystem of the organization into value added
products/services in a controlled manner as per the policies of the organization.
Transform
(In controlled manner as
per the policies of the organization)
Production/Operation function:
The set of interrelated management activities which are involved in manufacturing certain
products is called production management and for service management, then corresponding set
of management activities is called as operation management.
Examples: (Products/goods)
Boiler with a specific capacity,
Constructing flats,
Car, bus, radio, television.
Examples: (Services)
Medical facilities,
Travel booking services.
In the process of managing various subsystems of the organization executives at
different levels of the organization need to track several management decisions.
The management decisions are Strategic, tactical and operational.
Defining goalsPlant locationeffective and
Making policiesnew product establishmentefficient utilization
Monitoring of budgetsof resources
Resources used in
production/ operation
subsystem
Value added products/services
Range of inputsRequired output (product/service)
(Having the requisite quality level)
Strategic (Top level)Tactical (Middle level)Operational (Bottom level)
2
Corrections from feedback information:
Tight quality check on the incoming raw-material.
Adjustment of machine settings.
Change of tools.
Proper allocation of operations to machines with matching skills.
Change in the production plans.
1.2 Productivity:
Productivity is a relationship between the output (product/service) and input (resources
consumed in providing them) of a business system.The ratio of aggregate output to the
aggregate input is called productivity.
Productivity = output/Input
For survival of any organization, this productivity ratio must be at least 1.If it is more
than 1, the organization is in a comfortable position. The ratio of output produced to the
input resources utilized in the production.
1.3 Importance:
Benefits derived from higher productivity are as follows:
It helps to cut down cost per unit and thereby improve the profits.
Gains from productivity can be transferred to the consumers in form of lower priced
Products or better quality products.
These gains can also be shared with workers or employees by paying them at higher rate.
A more productive entrepreneur can have better chances to exploit expert opportunities.
It would generate more employment opportunity.
Overall productivity reflects the efficiency of production system.
More output is produced with same or less input.
The same output is produced with lesser input.
More output is produced with more input.
The proportional increase in output being more than the proportional increase in input.
1.4 Productivity Measurement:
Productivity may be measured either on aggregate basis or on individual basis, which are called
total and partial measure.
Total productivity Index/measure = Total output/ Total input
=Total production of goods and services
Labour+material+capital+Energy+management
Partial productivity indices, depending upon factors used, it measures the efficiency of individual
factor of production.
Corrections from feedback information:
Tight quality check on the incoming raw-material.
Adjustment of machine settings.
Change of tools.
Proper allocation of operations to machines with matching skills.
Change in the production plans.
1.2 Productivity:
Productivity is a relationship between the output (product/service) and input (resources
consumed in providing them) of a business system.The ratio of aggregate output to the
aggregate input is called productivity.
Productivity = output/Input
For survival of any organization, this productivity ratio must be at least 1.If it is more
than 1, the organization is in a comfortable position. The ratio of output produced to the
input resources utilized in the production.
1.3 Importance:
Benefits derived from higher productivity are as follows:
It helps to cut down cost per unit and thereby improve the profits.
Gains from productivity can be transferred to the consumers in form of lower priced
Products or better quality products.
These gains can also be shared with workers or employees by paying them at higher rate.
A more productive entrepreneur can have better chances to exploit expert opportunities.
It would generate more employment opportunity.
Overall productivity reflects the efficiency of production system.
More output is produced with same or less input.
The same output is produced with lesser input.
More output is produced with more input.
The proportional increase in output being more than the proportional increase in input.
1.4 Productivity Measurement:
Productivity may be measured either on aggregate basis or on individual basis, which are called
total and partial measure.
Total productivity Index/measure = Total output/ Total input
=Total production of goods and services
Labour+material+capital+Energy+management
Partial productivity indices, depending upon factors used, it measures the efficiency of individual
factor of production.
3
Labour productivity Index/Measure = Output in unit
Man hours worked
Management productivity Index/Measure =Output
Total cost of management
Machine productivity Index/Measure=Total output
Machine hours worked
Land productivity Index/Measure=Total output
Area of Land used
Partial Measure = OutputorOutputorOutputorOutput
LabourCapitalMaterialsEnergy
PROBLEMS:
Example-1
The input and output data for an industry given in the table. Find out various productivity
measures like total, multifactor and partial measure.
Output and Input production data in dollar ($)
Output
1.Finished units10,000
2.Work in progress2,500
3.Dividends1,000
4.Bonds-------
5.Other income--------
Input
1.Human3,000
2.Material153
3.Capital10,000
4.Energy540
5.Other Expenses1,500
Solution:
Total measure =Total Output= 13,500= 0.89
Total Input15,193
Multi factor measure = Total Output=13,500 = 4.28
Human+Material3,153
Multi factor measure =Finished units=10,000 = 3.17
Human+Material3,153
Partial Measure1=Total Output=13,500= 25
Energy540
Partial Measure2=Finished units= 10,000 = 18.52
Energy540
Labour productivity Index/Measure = Output in unit
Man hours worked
Management productivity Index/Measure =Output
Total cost of management
Machine productivity Index/Measure=Total output
Machine hours worked
Land productivity Index/Measure=Total output
Area of Land used
Partial Measure = OutputorOutputorOutputorOutput
LabourCapitalMaterialsEnergy
PROBLEMS:
Example-1
The input and output data for an industry given in the table. Find out various productivity
measures like total, multifactor and partial measure.
Output and Input production data in dollar ($)
Output
1.Finished units10,000
2.Work in progress2,500
3.Dividends1,000
4.Bonds-------
5.Other income--------
Input
1.Human3,000
2.Material153
3.Capital10,000
4.Energy540
5.Other Expenses1,500
Solution:
Total measure =Total Output= 13,500= 0.89
Total Input15,193
Multi factor measure = Total Output=13,500 = 4.28
Human+Material3,153
Multi factor measure =Finished units=10,000 = 3.17
Human+Material3,153
Partial Measure1=Total Output=13,500= 25
Energy540
Partial Measure2=Finished units= 10,000 = 18.52
Energy540
4
Note:For multifactor and partial measures it is not necessary to use total output as numerator.
Often, it is describe to create measures that represent productivity as it relates to some particular
output of interest.
Other fields for the measurement of partial measures of productivity are:
BusinessProductivity Measure
RestaurantCustomers (Meals) per labour hour
Retail StoreSales per square foot
Utility plantKilowatts per ton of coal
Paper millTons of paper per cord of wood
Example-2
A furniture manufacturing company has provided the following data. Compare the labour,
raw materials and supplies and total productivity of 1996 and 1997.
Output: Sales value of production in dollar ($)
22,000 (in 1996) and 35,000 (in 1997)
19961997
Inputs: Labour10,00015,000
Raw materials and Supplies8,00012,500
Capital equipment depreciation7001,200
Other2,2004,800
Solution:
19961997
a.Partial productivities
Labour2.202.33
Raw materials and Supplies2.752.80
b.Total Productivity1.051.04
1.5 Productivity measurement approaches at the enterprises level:
As stated above total productivity is expressed as the ratio of aggregate output to the aggregate
input. That the total overall performance is captured in this ratio, becomes apparent, if we
examine the relationship between this ratio and the age-old performance measure of profit.
If the outputs and input for the period for which productivity is measured, are expressed in
rupees, then under such restrictive assumptions one can write:
Aggregate output =Gross Sales=G (Say)
Aggregate input=Cost=C (Say)
Note:For multifactor and partial measures it is not necessary to use total output as numerator.
Often, it is describe to create measures that represent productivity as it relates to some particular
output of interest.
Other fields for the measurement of partial measures of productivity are:
BusinessProductivity Measure
RestaurantCustomers (Meals) per labour hour
Retail StoreSales per square foot
Utility plantKilowatts per ton of coal
Paper millTons of paper per cord of wood
Example-2
A furniture manufacturing company has provided the following data. Compare the labour,
raw materials and supplies and total productivity of 1996 and 1997.
Output: Sales value of production in dollar ($)
22,000 (in 1996) and 35,000 (in 1997)
19961997
Inputs: Labour10,00015,000
Raw materials and Supplies8,00012,500
Capital equipment depreciation7001,200
Other2,2004,800
Solution:
19961997
a.Partial productivities
Labour2.202.33
Raw materials and Supplies2.752.80
b.Total Productivity1.051.04
1.5 Productivity measurement approaches at the enterprises level:
As stated above total productivity is expressed as the ratio of aggregate output to the aggregate
input. That the total overall performance is captured in this ratio, becomes apparent, if we
examine the relationship between this ratio and the age-old performance measure of profit.
If the outputs and input for the period for which productivity is measured, are expressed in
rupees, then under such restrictive assumptions one can write:
Aggregate output =Gross Sales=G (Say)
Aggregate input=Cost=C (Say)
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