Spring 2015

MB0044 PRODUCTION AND OPERATION MANAGEMENT

Ques1 Write short notes on:

Environmental scanning as a basis for strategic decision making

Tools for implementation of operations
Differentiation strategies as a basis of decision making
Core competencies as a basis of decision making

Answer 1.
Environmental scanning as a basis for strategic decision making:
The business environment of any organization includes the industry, marketplace,
governmental agencies, society, ecology, technology, and others. Organizations
should be aware of the business environment in which the firm exists, and have to
compete continually by exhibiting potential for opportunities and threats. Being
aware of those, and their impact on the firm by a process of analysis, is called
environmental scanning.
Tools for implementation of operations:
All functions in the organization including administration, finance, materials,
purchase, marketing, production, logistics, communication, and others can be
considered as operations. The reason is that all of them use some inputs like
materials or information either on a person-to-person basis or through a flow line.
They are required to use some process and convert them into outputs usable in the
next stage of the value chain.
Differentiation strategies as a basis of decision making:
Differentiation is a process by which a company distinguishes itself from its
competitors and their offerings. The process includes adding a set of differentiators,
which are meaningful, and adds value for the customer. The differences should be
perceived by the customer as important, distinctive, superior, and affordable.
Further, the differentiators have to make the companys offerings (the products and
services) profitable.
Core competencies as a basis of decision making:
Each organization is started by an entrepreneur or a small group of entrepreneurs.
The objective is to use their unique strengths to create and develop an organization.
These unique strengths are the core-competencies of the organization.
Outline of the main points of the topic:
For any topic work to be undertaken, it is good practice to prepare an outline of the
topic. The outline is the template of the topic preparation.

Analyze the topic: Analysis the procedure to monitor and control of project is a
must.
Conclude with your opinion: The opinion of a group of experts should be
collected and used as an estimate to obtain the forecast.

Ques2 Answer the following questions:

a. What is forecasting?
b. What are the benefits of forecasting?
c. What are the cost implications of forecasting?
d. List the different types of forecasting methods?

Answer 2.
Definition of Forecasting:

Forecasting is an art because subjective assessment coupled with historical and

contemporary judgment is required to improve the accuracy of forecasts. It is a
science because wide variety of numerical methods are used to obtain a number or
several numbers and further analyzed using mathematical models to ascertain the
accuracy of forecast.
b. Benefits of forecasting:
Forecasting basically helps to overcome the uncertainty about the demand and thus
provides a workable solution. Without the forecast, no production function can be
taken up. Hence, it can be stated that forecasting helps to:
Improve employee relations
Improve materials management
Get better use of capital and facilities
Improve customer service
c. Discuss the cost implications of forecasting:
Forecasting requires special efforts and involves inputs from experts which cost a lot
to the companies. Well-trained experts and associations substantially invest in
human resources and hence charge their clients for the service rendered. Thus,
forecasting done in-house or carried out externally requires significant investments.
Thus, it can be said that more the efforts put for forecasting, more will be the cost of
forecasting. Because of improved accuracy and better judgment, the losses that
would occur because of poor forecasting would decrease as more efforts are put in

for forecasting. Hence, higher the efforts, lower will be the losses. Because effort is
a direct function of forecasting, this cost goes up with increase in the forecasting
efforts.

d. List the forecasting methods based on the context or focus:

The forecasting methods can be classified based on the context or focus. The
different forecasting methods are discussed below. Based on the type of database,
the forecasting methods can be classified into 2. They are:

Quantitative (Statistical forecasting)

Qualitative (Subjective estimation)

Based on the forecast time period, the forecasting methods can be classified into 3.
They are:
Short range up to 1 year
Medium range 1 to 3 years
Long range 5 years or more
Based on the methodology, the forecasting methods can be classified into 3.
They are:
Time series methods
Causal methods
Predictive methods (Qualitative methods

Ques3. Describe the process of value analysis?

Answer 3.
a. Data gathering:
All relevant information concerned with the product and the parts that go to make it
are collected. The concerns at this stage are the raw materials used, its dimensions,
characteristics, availability, lead time, price, mode of transport, storage, and the
rate of consumption. All questions regarding each of them are asked. The available
information I s recorded and when information is not available, tags can be attached
for information gathering at a later date. No information should be considered
unimportant or irrelevant. It will be advantageous to record the source of
information. Classification will be helpful.
b. Analysis and valuation of functions:
The function of each part is listed. They are categorized as basic functions and
secondary functions. The description should be cryptic two or three words. If there
are many functions that any part has to perform weightage may be given to each

of them. Considered with the cost of the part and the weight, each function gets a
value attached to it. Table 14.2 depicts a brief about the key questions, techniques,
and tasks that need to be performed in step 2.

c. Idea generation and evaluation of substitutes:

Having collected the data and analyzed them and knowing the relative importance
of the functions, the next step is to identify the material or process that is amenable
to the application of value engineering. Since there are a number of factors to be
considered and to break away from the conventional thinking, brain storming is
preferred. Ideas are allowed to be submitted to the group for discussion. A few of
them will turn out to be worth more detailed evaluation.
d. Implementation and regulation:
The decision taken after evaluation is conveyed to the top management and
clearances are obtained for implementation. Teams are formed for each
implementation and concerned persons are involved and educated about the
impending change. Their cooperation is necessary for the change to be effective.
If any small changes are necessary when a few trials are taken, they should be
considered. After successful implementation, the change material change or the
process change becomes the new norm or standard for further operations. The
methodology adopted is on the lines of continuous improvement.

Ques4. What do you understand by line balancing? What happens if line

balance does not exist?
Answer 4.
Definition of Line Balancing

Assembly line refers to a special arrangement of facilities typically along a straight

line or a u-shaped line, exclusively to produce assemblies or finished products. The
assembly starts in the form of a skeleton at one end and passes through several
work stations where; different operations are performed and components are
added, and the final assembly is obtained after passing through successive stages.
The line is arranged so as to produce a specified number of products over a certain
time period. To facilitate easy mounting of components and fast operations, the
assembly moves at certain speed and rolls over at the end of the line.
Concept of Line Balancing
A simple line (typically set up for the purpose of assembly) consists of a series of
work stations, and the total work content of the product, which is expressed in
terms of the total time is divided among these workstations equally. For example,
consider five operations performed at A, B, C, D, and E. Each one can be a

workstation or more than one operation can be combined at a single workstation. In

a simple line like this it is easy to visualize the flow and also to make out the work
allocation. Figure depicts a simple line flow indicating the work stations.

Simple Line Flow Indicating the Work

Stations

As the items move along the line, the work is progressed intermittently and leaves
the line as a finished product. Typically the objective is, to divide the work content
equally among the workstations so that the workstations are loaded as evenly as
possible. This is known as balancing. Firstly, if such a balance is not achieved, a
certain amount of inefficiency will arise because some stations will have more work
to perform than others, and all the stations are expected to process same number
of items per period of time. Secondly, unequal work content at different
workstations leads to unequal work distribution and also formation of queue of
items. Hence, to ensure a smooth flow, all the workstations are given the same time
to process the items. The entire line typically, on a manual or power-driven
conveyor moves from workstation to workstation at a constant rate. The time
required to complete the work allotted to each station is known as the service
time and the time available at each station is known as the cycle time, normally
longer than the service time. The cycle time includes both the productive as well as
the non-productive time along with idle time if any. Nonproductive time includes
time for movement, handling and inspection time. The manner in which the work
content is allocated to the station is influenced by the technological sequence of the
assembly and expressed by precedence requirements, that is, one operation must
be completed before the other operation can start. Such constraints limit the ability
to achieve complete or perfect balance while allocating work to stations. The
allocation of work elements to a workstation may also be influenced by zoning
constraints which occurs in two ways: positive zoning constraint demands that
certain operations have to be clubbed together because of certain sharing of
resources, and negative zoning which insists that certain operations should be
clubbed together because of interference or conflict.
All these constraints make it very difficult or impossible to achieve perfect line
balance and hence, a certain amount of balancing delay or balancing loss is
inevitable. Balance delay is defined as the total time available to complete the
given job and the total time required. In other words, the balance delay is the
difference in time between the service time and the cycle time, expressed as a
percentage of the cycle time.

The objective of line balancing is that, given a desired cycle time, the attempt is to
assign work elements to workstations to:

Minimize idle time or balancing delay

Minimize the number of work stations
Distribute balancing delay evenly between stations
Avoid violating any constraints

Ques5. Explain the steps to set data in logical order so that the business
process may be defined. List the ingredients of a business process?

Answer 5.
The following steps should be considered for setting the data in a logical
order.
1. Check whether the participants in the process that is, people, teams, and
electronic applications are sufficient or, any changes and additions need to be
made.
2. Ensure that all the data expected is included or not. Generally, we start with an
initial set of data which we have. When we check them with the requirements of the
process for the desired outcomes, we find gaps. These gaps help us in determining
which subset of the data is appropriate at each task in the process.

3. Check whether the data is sufficient for the implementation of the process. This
can be achieved by answering the following questions:
a.
b.
c.

What is the path the process should take?

What decisions are to be made at any point in the process?
Are data available at those points?

4. State the rules used to define the various parts of the process. At this stage, the
naming conventions are also included. This is important to be included at the
process definition stage.
5. Determine the disposition of data at the end of the process and decide the
following:
a. Do we plan to keep the data or delete them?
b. If they are to be stored, where and in what form will be used?

c. What are the measures of security for access?

6. Determine the other elements depending upon the business process and the
need. The elements added must be questioned to collect a detail data. It is better to
go deeper into the details and collect data, and make them available at this initial
stage, so that a better model can be prepared. Then, the processes will be more
successful in delivering the desired output. Process definition enables us to go into
details at every stage of the process and verify the adequacy of data, the sequential
steps in the process and fill the gaps before attempting implementation.
The purpose of setting the data in a logical order is to, locate deficiencies and
remove them. Therefore, the decisions about process and sequence can be taken
and a model can be designed which is useful in all perspectives.

The ingredients that might be used in a business process can be briefly

outlined as shown below.

The data, which accomplishes the desired business objective.

Acquisition, storage, distribution, and control of data, which undertakes the
process across tasks.
Persons, teams, and organizational units, which helps to perform and achieve
the tasks.
Decision, which enhances the value of data during the process.

Ques6. Describe the post implementation review of a project. Explain the

tools that may be considered for post implementation review?

Answer 6.
Post Implementation Review of Project
After every stage of a project is implemented, it may so happen that there could be
a minor change or modification which has to be reviewed. This is known as post
implementation review. The review is performed in four parts as depicted in figure
10.12.
1. Final product review: The product obtained after every stage must meet the
requirements of that stage. If it completely meets the stated objectives, then focus
on the issues of maintenance of the processes and product performance. If the final
product does not completely meet the objectives then identify the variations in the
product and analyze the variation. Study the factors responsible for the change and
evaluate each one separately.

2. Outstanding project work review: Many times it is found that there may be some
item of the project which is still not in its finished form. It may be insignificant as it
may be a by-product of that stage which may not be required immediately for the
next stage. Then the items that are open should be resolved and necessary steps be
taken to close such open items.
3. Project review: Every aspect of a project from start to end has to be reviewed.
The objectives, performance criteria, financial criteria, resource utilization, slips and
gains of time, adherence to the project definition, and plans have to be reviewed. All
such review details and reports have to be well documented for future use.
4. Process review: Every process is important in any project. One may review the
process to see, if any changes can be made to improve its performance.

Tools for post implementation review

There are various tools for post project implementation review that may be
considered for improving and developing processes of the project. Reports are
prepared on the same which becomes the basis for all future discussion. Some of
the tools that may be considered for post implementation review are the final
product evaluation, outstanding project work evaluation, project review
questionnaire, and project evaluation as depicted in figure 10.13.
1. Final product evaluation: Final product evaluation may be done through regularly
organized meetings and quality reviews.
2. Outstanding project work evaluation: All outstanding works of a project can be
reviewed to check its output quality and performance.

3. Project review questionnaire: Project review questionnaire may become important

if the reviews are to be structured. Group discussion may be initiated depending
upon the points to be discussed.
4. Process evaluation: Evaluation of any process is one of the key issues of project.