PRODUCTION

• The conversion of raw materials to end product by using processes, machines, men and tools

Manufacturing

• Is the production of tangible goods only, whereas production includes creation of both tangible goods and intangible services.

Production Management

• It deals with decision making related to production process so that the resulting goods or services are produced according to specifications in amounts and by schedules demanded and at minimum cost – E S Buffa

PM

• Production Management is defined as the design, operation, and improvement of the transformation process, which converts the various inputs into the desired outputs of products and services

• A branch of management which deals with the production function. It involves organising, directing and controlling the production process.

• Management of an organisation’s productive resources or its production system which converts inputs into tangible / intangible outputs needed by the customers of the organisation.

• Production management ensures the optimum utilisation of resources in order to attain the production objectives of an organisation.

• Multi disciplinary– Material management, man management,

planning methodologies, scheduling techniques, quality management, cost control, maintenance management and a host of techniques and tools.

5 P

• Product• Plant• Processes• Programmes• People

Objectives

• Maximum posssible production, productivity, employee satisfaction, cutomer satisfaction, profit, utilisation of resources.

• Minimum scrap / rework, production cycle time.

• Higher operating efficiency• Protection of the environment

Ultimate Objectives

• Control & reduction in Manufacturing costs• To improve the product quality• Manufacturing schedule

Intermediate Objectives

• Machinery & equipments• Materials• Manpower• Manufacturing services• Methods

Scope

• Selection of location – end product– Land acquisition, building, construction, selection

and installation of machinery, purchasing, receiving, storing, issuing of raw materials and converting the raw materials into products ready for sale.

Scope- Cont’d

• Long Term Strategic Decisions– Product selection & Design– Process selection & Planning– Location facilities– Layout & material handling facilities– Capacity planning

• Short term Strategic decisions– Production planning– Production control– Inventory control– Quality control– Method study– Maintenance & replacements– Cost control & Reduction

Factory

• Is a place where factors of production- land, labour, money and enterprise are grouped together for the creation of goods or services.

Activities

• Related to production system designing– Production engineering( design of tools, jigs,

design, development and installation of equipment)

– Plant location– Work environment, work measurement, plant

layout, time and motion study, material handling

• Activities related to analysis and control– Production planning– Production control– Quality control

Human factorR & D activities

Comparison

Manufacturing• Tangible• Produced to inventory• Minimum or no contact

with customer• Demand varies

–week/month/season• Market served on regional

level• Economies of scale• Location is in relation to

regional market

Services• Intangible & perishable• System is open for services • High contact with the

customer• Demand –

Hourly/daily/weekly• Local market

• Relatively small units- local• Location for local customer

Duties & responsibilities of The Production Manager• Planning the geographical location of the factory• Purchasing the production equipment• Layout of the equipment within the factory• Designing production processes and equipment• Product design• Designing production work and establishing work standards• Capacity planning• Production planning and scheduling• Production control• Inventory management• Supply chain management• Quality control

Cont’d

• Production equipment maintenance and repair

• Measurement and monitoring of productivity• Industrial relations / personnel matters• Health and safety• Staff selection and training• Budgeting & capital planning

Problems of Production Management

• Decisions relating to:– Design of the production system• Long range decisions – selection and decision of

products, selection of equipment and processes, production of design of parts processed, job design, location of the system, facility layout

• Operation & control of the system• Short run decisions - inventory, production control,

maintenance and reliability of the system, quality control, labour control, cost control and improvement.

Responsibilities of Production Manager

• Production planning• Production control• Plant layout• Materials handling• Quality control• Methods analysis• Work measurement (work study, time study)• Cost control, standardisation, storage, wages,

incentives

In terms of three major managerial functions

• Planning– Capacity, location, products & services, make or

buy, layout, projects, scheduling.

• Organising– Degree of centralisation, sub contracting,

incentive plans, issue of work orders, job assignments.

• Controlling– Inventory control, quality control, cost control

• Three general categories of decision taken by production managers are: strategic decision, operating decision, controlling decision.

• Decision areas include: – Quality management, product & service design,

process &capacity design, location design, layout design, job design, supply chain management, inventory management, scheduling and maintenance.

Systems or types of production

• Continuous production system– Is one in which the equipment and work stations

are arranged in the sequence in which the input raw materials are converted into desired components or assembly.

• Intermittent production system– is one in which the production equipments are

grouped and organised according to the functions or process they perform.

Job production

• Goods are produced according to customers orders

• Also known as market order business• Each job is different.• Cost of item –high• Highly skilled labour required

Batch production

• When manufacturing is done in batches on the basis of customer’s orders.

• Eg. If 500 is to be done per year, it is about 40 per month.

• A batch of 25 or 50 units can be taken at atime.

Mass production

• Is adopted for off the shelf or stock items for the consumer market.

• In terms of 1000 units• A huge volume of limited variety• SPMs , transfer lines are used• Robotics• Cost of facility is high• Raw material inventories come down.

Process production

• ( Continuous Flow production)– Extended form of mass production.

– Process is automatic and non stop.

Productivity

• Productivity = Output/Input

• Productivity can be increased by:– By increasing of output, keeping input constant.– By decreasing inputs for producing the same

output.– By increasing outputs proportionately higher than

increases affected in inputs.

Factors contributing to increase of productivity

• Better utilisation of resources like men, machine and materials

• Using efficient ways of working• Through good and systematic plant layouts using guidelines

and principles of motion economy• Reducing material handling through better layouts and using

appropriate material handling equipments / facilities• Selection of proper maintenance policy, keeping in mind

preventive maintenance and breakdown maintenance.• Provision of healthy and safe working conditions to workmen

• Through modern HRM methods, counselling rather than threatening workmen, through participation of workmen in management including quality circles. This will keep the workforce motivated.

• Provision of fair wages and proper compensation through incentive schemes.

• By ensuring better quality

• In a manufacturing unit the standard time allowed for the production of a unit is 5 hours. If in a particular month 126 units are produced by employing 4 persons and the allowable delays are found to be 44 man hours, find the productivity?

• Earned Standard Hours – Std time /unit = 5 hours– Production =126 units– ESMH =5x 126= 630 hours

Available Man-hoursManpower employed= 4Monthly working hours=4 x 25 x 8 = 800 hoursAllowed delays = 44 hoursActual Man-hours available =800 – 44 =756 hours

Productivity = (630/756 ) x 100 = 83.33%

Plant location

• Location of plant is the function of determining where the plant is to be located, for maximum operating economy and effectiveness.

• Location once decided, must be permanent.• Consideration factors – raw material, supplies,

labour and market.

Steps in choosing a location

• 1. Deciding on domestic or international location – Competitive advantage derived from location

– If international location, choice of country• Political stability• Export and import quotas• Exchange rates• Cultural and economic considerations• Availability of natural resources, cost of labour• Friendliness with the country • Favourable climate at the location

• 2. Selection of the region– Availability of raw materials– Nearness to market– Availability of power– Transport facilities– Suitability of climate– Govt. policy and competition between states

• 3. Selection of appropriate place within the region.– Skilled labour at cheaper rate– Water– Civic amenities– Finance

• 4. Selection of various sites within the

selected place.– Availability of cheap land to build the plant– Soil, topography– Low cost of construction in levelling, foundation– Facilities for transportation of goods– Cost of installation of electricity, gas– Cheap means of disposing of factory waste– Availability of experienced sub contractors– Cost of laying water supply, sewage– Low pollution

Decide optimum site

• Work out the cost for different sites and select the optimum site where he would get the maximum benefit

Factors of location ( Location Theory)

• Weber’s Theory• Primary factors– Material & labour• Material oriented• Market oriented

• Secondary factors– Banking, credit, insurance, communication, rent,

utility rates• Agglomerating & degglomerating factors

Factors affecting location of a plant

• Raw materials

– Cotton textile• Kerala, AP, Karnataka, Tamil Nadu, Mumbai, West

Bengal, Kanpur, Gujarat, MP

– Sugar Industry• UP, Bihar, MP, Maharashtra, Tamil Nadu, Mandya

• Iron & steel Industry– Bihar, Orissa, MP, West Bengal, Karnataka

• Cement – Bihar, TN, Gujarat, MP, AP, UP, HP & Orissa

• Jute– WB

• Paper – Bamboo, grass, wood, sugarcane– WB, Orissa , UP, Nagaland, Kerala, Assam

• Coal – WB, Bihar, Orissa, MP, TN, Assam, Gujarat

IT Industry

• Educated manpower• Power• Satellite link• Telecommunication• Transportation• Location with good climate• Industry policy of state

Plant Layout

• Refers to the arrangement of machinery, equipment and other industrial facilities – such as receiving and shipping departments, tool rooms, maintenance rooms, employee amenities, etc. – for the purpose of achieving the quickest and smoothest production at the least cost.

• Knowles & Thomson– Plant layout involves:• Planning and arranging manufacturing machinery,

equipment, and services for the first time in completely new plants;• The improvements in layouts already in use in order to

introduce new methods and improvements in manufacturing procedures.

Objective of a good plant layout• Provide enough production capacity• Reduce material handling costs• Reduce congestion that impedes the movement of people or material• Reduce hazards to personnel• Utilize labour efficiently• Increase employee morale• Reduce accidents• Utilize available space efficiently• Provide for volume and product facility• Provide for ease of supervision• Facilitate co-ordination & face to face communication where appropriate• Provide for employee safety• Allow ease of maintenance• Allow high machine utilisation• Improve productivity

Factors governing layout• Factory location• Type of manufacturing process– Synthetic, Analytical, Intermittant, Repetitive, Non

repetitive

• Type of the product• Material input• Employee requirements• Machinery in the factory• Managerial policies

• Managerial policy– Volume of production, provision for expansion, extent of

automation, make or buy of components, desire for rapid delivery of goods to customers, purchasing policy, personnel policies

– Human factors• Exit provisions• Rest rooms• Drinking water• Lavatory• Obstruction free work floor

Principles of plant layout• Principle of:– overall integration– Utilisation– Flexibility– Expansion– Minimum distance– Max. use of volume– Max. visibility– Max. accessibility– Ordeliness– Safety & satisfaction

Types of layout

• Process layout ( functional layout)• Product layout ( straight line layout)• Hybrid layout ( Combined layout)• Fixed position layout

Process layout

• Is the arrangement of a facility so that work centres or departments are grouped together according to their functional type.

• Also called as– Functional layout– Job shop layout

Product Layout

• Product layout involves the arrangement of machines in one line, depending upon the sequence of operations. Each of the components skip some of the machines not required. Machines are arranged serially, to machine similar components. Materials are worked out into finished components through a series of integrated operations. Back tracking is avoided.

Advantages of Product layout

• Uninterrupted output• Reduced amount of work in progress• Encourages use of automatic devices• Best use of floor space• Effective supervision• Improved production control

Demerits of product layout

• Higher initial investment• Danger of breakdown• Expansion is costlier• Lack of flexibility• Dangers of specilisation

Advantages of process layout

• Lower capital lockup• Greater flexibility• Quality supervision• Uninterrupted functioning• Fuller utilisation of machine capacity• Full scope for expansion

Demerits of a process layout

• Difficulties in production planning and control• Excessive handling of materials• Larger stock pile in the process• Possibility of more floor space• Elonged production cycle time

Product or Process layout?

• Product layouts are preferred where:

– One or few standard products are involved– Production is in large quantities– Components are such that material handling

facilities are utilised efficiently– The same machine is used for less number of

products and operations– Minimum inspection stages

• Process layouts are preferred where:– Many types or kinds of products are involved– Production is in small quantities– Heavy materials or products are used where

material handling facilities cannot be used efficiently

– A number of products can be done on the same machine

– Inspection stages are many

Fixed position layout

• Job is stationary• Men, machines and tools move towards the

job– Eg: Locomotives, Ship, Satellite, Aircraft, Boilers,

Generators– Site construction, Hospitals

Hybrid layout• A combination of product and process layouts,

with an emphasis on either, to utilise the advantages of both the types of layouts.

– Machines are arranged in a sequence. Hence sequence is followed as product layout.

– There are more number of machines at each stage, and they are grouped as mini departments so that they can take up different components of a similar nature. Process layout principle is followed here.

Advantages of a Good layout

• Advantages to the workers– Reduction in effort– Reduction in fatigue– Reduction in number of handling– Activities at maximum efficiency– Encourages specialisation

• Reduction in labour cost • Reduction in number of workers, length of haul• Increase in production per man hour• Reduction in maintenance costs

• Reduction in manufacturing cost• Saving in power• Improved quality of product by reduced number of

handlings

• Effective production control• Effective supervision and capital investment

Characteristic of an Efficient layout

• Smooth flow of production• Maximum utilisation of space (also cubic space)• Sufficient space between the machines, for gangway, for movement of

people and trolleys• Minimum handling space between machines• Provision of ventilation, illumination, water facilities, toilet• Flexibility in layout• Location of storage• Provision to facilitate supervision, co-ordination• Workmen safety• Effective co ordination and integration• Central locations for inspection

Techniques of a plant layout

• Charts & Diagrams• Operation flowchart• Flow process chart

• Machine card• Templates• Scale models• Wooden models of machines• Layout drawings

Procedure for deciding a Layout for a new plant

• Fix the objectives with regard to capacity, production flexibility and future expansion

• Collect data about machines and available space

• Make an overall plan• Decide on service activities(location, nature)• Determine the building specifications• Decide on the industrial machine dimensions• Prepare the layout drawings

Cellular layout• A close grouping of equipments for processing

a sequence of operations in multiple units of a part or a family of parts is called as ‘manufacturing cells’– Reduces distances moved by parts between

machines– Reduces transportation cost– Frequently parts are processed one by one through

processing steps and thereby reducing the work in progress inventory and the manufacturing cycle time or throughput time.

Organisation of Physical facilities

• Factory Building• Industrial sanitation• Noise control• Plant lighting• Ventilation• Air conditioning• Employee safety & health

Factory Building

• The design of the building• The types of material for construction• The types of building

Factory Building

• An ideal factory building is one which is built to house the most efficient layout that can be provided for the process involved, yet which is architecturally attractive and of such a standard shape and design as to be flexible in its use and inexpensive in its construction. – James Lindey

Significance of a Good factory Building

• Continuous & effective operation• Reduction in material handling costs• Provision of protection to all In house items• Cutting down production cycle time• High employee morale• Provision of better control points• Reduced costs of repairs & maintenance• Core case of company image

Factory Design considerations

• Building foundation• Location of receiving & Despatching departments• Location of Aisles• Material handling arrangement• Location of production & service departments• Type of construction• Type of building• Built in flexibility

• Expandability - shape – U,E, H, I, L, T• Lighting, Ventilators, doors & windows• Floor & roof structures• Damp proof construction• Waste disposal• Special process needs• Protection of property & people• Aesthetic consideration

Types of building

• Wood frame• Bricks• Steel frame• RCC• Pre-stressed concrete slab

- Availability, Strength, Durability, Safety, cost

• Single storey buildings• High bay and monitor types• Multi storey buildings• Special Buildings

• Aircraft, Saw mills

Industrial Sanitation

• Sanitation – Science of safeguarding health

• Industrial sanitation – science of safeguarding health of the industrial workers

Elements of sanitation

• Supply of wholesome water• Waste and effluent disposal• Avoidance & control of insects, rodents etc.• Food sanitation• Good industrial housekeeping• Providing facilities for personnel service• To be free from air pollution

Supply of wholesome water

• Drinking• Toilet purpose• Hand washing• Canteen• Manufacturing – Plating, Heat treatment

• Lakes, Canals, Springs, Rivers, Borewells, Taps

Industrial wastage

• Is a residue or piece of raw materials, a byproduct of the manufacturing process.

• Waste is also produced by industrial establishment and plant personnel– Salvageable waste– Non salvageable waste• Liquid waste• Solid waste

Food sanitation

• Factories Act – canteen – 250 persons– Clean handling– No galvanized utensils– Cover– Kitchen – washed clean before & after preparation

Good housekeeping

• Eliminates accidents & fire hazards• Conservation of space, time , materials and

efforts• Improvement of employee morale

Avoidance & control of insects & rodents

• Insects- diseases• Rodents - plague

• Providing facilities for personnel services• Air pollution– Proper town planning & zoning

Lighting

• Is one of the physical facilities most required in a factory.

• Most important single environmental factor contributing to worker satisfaction, comfort & productivity.

• Lighting is good when it is free from glare and is properly diffused, its colour pleasant & flow direct and steady.

• Illumination between 14 and 18 lumens will be ideal in any industrial establishment.

Sources of Lighting

• Day light ( Natural lighting)

• Artificial lighting

Natural Lighting• Advantages– Available in abundance– Free of cost– Requires no maintenance– Free from load shedding

• Limitations– Only during daytime & intensity varies– Windows & roofs have to be specially constructed– Difficult to provide uniform lighting throughout

Artificial Lighting• Advantages– Illumination is constant– Intensity can be controlled to suit the operations– Only method available after daylight hours– Well suited to provide supplementary lighting– Less no. of windows

• Disadvantages– Quite expensive – investment, recurring – cost &

maintenance– Power cuts – generator maintenance

Ventilation

• Supply of air to an enclosed place and removal of air from there.

• Natural• Mechanical

• Ventilation differs from air conditioning in that, the latter conditions the air by heating or cooling it by such process, while the former, merely supplies fresh air to or removes vitiated air there from without in any way conditioning it.

• General ventilation ( Dilution ventilation)– For comfort control– To keep contaminants within safe limits

• Local Exhaust ventilation

Air conditioning

• Simultaneous control of temperature and humidity, distribution and purity of air by artificial means.

• Air conditioning is the control of the relationship between certain characteristics of the air, such as temperature, purity, humidity, movement and distribution, to that end, the air will meet the requirement of a particular situation in a room or building

Types

• Winter A/c• Summer A/c

• Comfort or domestic a/c• Industrial a/c– Partial a/c– Complete a/c

While designing the building

• Avoid or reduce the number of windows• Provide for air ducts in the walls• Provide for a seperarte room for installation

of a/c units• Provide facilities for admitting fresh air into

the building

Noise control

• Unwanted and unpleasant sound

• People get headache & get exhausted

• Control – impossible to eliminate – Control at source– Control by absorption – Control through ear protection