Production and Operations

Management

BENGALURU CENTRAL UNIVERSITY

NEW SYLLABUS 2019 – 20 BBA

DEGREE(REGULAR) (CBCS - SEMESTER
SCHEME)

Prepared and Compiled By:

Gowtham Kumar C. K CMA (Inter), M.Com, K.SET,
B.ED Assistant professor
 2.6 Production and Operations Management
Syllabus

OBJECTIVE

The objective of the subject is to make the students understand the concepts of
production and operations management of an industrial undertaking and the
benefits of automation.

UNIT 1: INTRODUCTION TO PRODUCTION AND OPERATIONS

MANAGEMENT 12Hrs

Introduction - Meaning & Definition – Classification - Objectives and Scope of

Production and operation Management -Automation: Introduction – Meaning
and Definition – Need – Types - Advantages and Disadvantages.

UNIT 2: PLANT LOCATION AND LAYOUT 08 Hrs

Introduction – Meaning & Definition - Factors affecting location, theory and

practices, cost factor in location - Plant layout principles - space requirement-
Different types of facilities, Organization of physical facilities – building,
sanitation, lighting, air conditioning and safety.
UNIT 3: MATERIALS MANAGEMENT 08Hrs

Introduction – Meaning & Definition - Purchasing, Selection of Suppliers,

Inventory Management, Material Handling Principles and Practices, Economic
Consideration, Criteria for Selection of Materials Handling Equipment,
Standardization, Codification, Simplification, Inventory Control, Techniques of

UNIT 4: PRODUCTION PLANNING AND QUALITY CONTROL 16Hrs

Objectives and Concepts, capacity planning, corresponding production planning,

controlling, scheduling routing – Quality Control - Statistical Quality Control,
Quality Management, Control charts and operating characteristic curves,
acceptance sampling procedures, Quality Circle, Meaning of ISO and TQM.
Productivity – factors influencing productivity - Concept of Standard Time,
Method study, Time and Motion Study, Charts and Diagrams, Work
Measurements.
UNIT 5: MAINTENANCE AND WASTE MANAGEMENT 12Hrs

Introduction – Meaning – Objectives - Types of maintenance, Break down,

spares planning and control, preventive routine, relative advantages, maintenance
scheduling, equipment reliability and modern scientific maintenance methods -
Waste Management - Scrap and surplus disposal, salvage and recovery.
 UNIT – 1

INTRODUCTION TO PRODUCTION AND

OPERATIONS MANAGEMENT
Introduction
Production is the creation of goods and services. The production activity is
nothing but the step by step conversion of one form of material into another either
chemically or mechanically. This is done in factories which have manufacturing
processes. The basic inputs of production process are men, machines, plant,
services and methods. The finished products of one manufacturing process may
not become finished product for consumption it may become the raw material for
other manufacturing process. Production involves the step by step conversion of
one form of materials into another through processing to create or enhance the
utility of the products or services.

Meaning of Production

Production refers to the use of any process which is designed to transform a set
of input elements into set an output elements.

It involves the step by step conversion of one form of material into another to
create or enhance the utility of the products or services.
Definition of Production
According to Elwood Butta, “Production is a process by which goods or
services are created.”

Ways of Production

 Production by disintegration i.e., by separating the contents the desired

product is produced. Ex: Crude oil, fuel oils etc.,

 Production by Integration i.e., production by assembling various

components of the products to get desired product. Ex: 2 wheelers,
4wheelers etc.,

 Production by services i.e., production is based on chemical and

mechanical properties of materials without physical change. Ex: heat
treatment of metals etc.,
Classification by Production

a. Job shop production – It refers to the manufacturing facility that

produces several different products in smaller batches. They are
manufactured by one or few quantity of products designed and produced
as per the specification of the customers within prefixed time and cost.

b. Batch production – It refers to the manufacturing process in which

components or goods are produced in groups and not in continuous
stream. A limited number of products are produced at regular intervals.

c. Mass production – Under this, the manufacturing or processing of

uniform products in large quantities takes place. It is either a wholly
automated process or a series of short or repetitive procedures.

d. Continuous production -it is a method used to manufacture, produce or

process materials without interruption.

Production management

Meaning
It refers to the job of coordinating and controlling the activities required for
making a product, which involves control of schedule, cost, and performance,
quality and waste requirements.
It means planning, organizing, directing and controlling of production activities.
It deals with decision making regarding the quality, quantity, cost etc. It applies
management principles for production. It deals with converting raw materials into
finished goods or products.

Definition
According to H.A.Harding, “Production management is concerned with those
processes which convert the inputs into outputs. The inputs are various resources
like raw materials, men, machines, methods etc., and outputs are goods and
services”

According to A.W.Field, “Production management is the process of planning and

regulating the operations of that part of an enterprise which is responsible for
actual transformation of materials into finished products.”

Objectives of Production Management

1. Produce goods at right quality, right quantity, right time and at

minimum cost.
2. Optimum utilization of resources and available production
capacity.
3. Produce required quantities at a required quality.
4. Ensure maximum capacity utilization.
5. Flexible working conditions.
6. Minimum raw material, labour cost and maintenance cost.
7. Minimum storage, material handling and inspection.
8. Improve productivity of all inputs.

Scope of Production Management

Production and operations management are concerned with the conversion
of inputs into outputs, using physical resources, so as to provide the desired
utilities to the customer while meeting the other organizational objectives of
effectiveness, efficiency and adoptability. It distinguishes itself from other
functions such as personnel, marketing, finance, etc., by its primary concern for
„conversion by using physical resources.‟ Following are the
activities which are listed under production and operations management
functions:
1. Location of facilities
2. Plant layouts and material handling
3. Product design
4. Process design
5. Production and planning control
6. Quality control
7. Materials management

1. Location of facilities

Location of facilities for operations is a long-term capacity decision which

involves a long term commitment about the geographically static factors that
affect a business organization. It is an important strategic level decision-making
for an organization.

The selection of location is a key-decision as large investment is made in

building plant and machinery. An improper location of plant may lead to the
waste of all the investments made in the plant and machinery equipment. Hence,
location of plant should be based on the company‟s expansion plan and policy,
diversification plan for the products, changing sources of raw materials and many
other factors. The purpose of the location study is to find the optimal location
that will result in the greatest advantage to the organization.

2. Plant layout and material handling

Plant layout refers to the physical arrangement of facilities. It is the

configuration of departments, work centres and equipment in the conversion
process. The overall objective of the plant layout is to design a physical
arrangement that meets the required output quality and quantity most
economically.

According to James Moore, “Plant layout is a plan of an optimum

arrangement of facilities including personnel, operating equipment, storage
space, material handling equipments and all other supporting services along with
the design of best structure to contain all these facilities”.
 „Material Handling‟ refers to the „moving of materials from the store room to
the machine and from one machine to the next during the process of
manufacture‟. It is also defined as the „art and science of moving, packing and
storing of products in any form‟. It is a specialized activity for a modern
manufacturing concern, with 50 to 75% of the cost of production. This cost can
be reduced by proper section, operation and maintenance of material handling
devices. Material handling devices increases the output, improves quality, speeds
up the deliveries and decreases the cost of production. Hence, material handling
is a prime consideration in the designing new plant and several existing plants.

3. Product design

Product design deals with conversion of ideas into reality. Every business
organization has to design, develop and introduce new products as a survival and
growth strategy. Developing the new products and launching them in the market
is the biggest challenge faced by the organizations. The entire process of need
identification to physical manufactures of product involves three functions:
marketing, product development, and manufacturing. Product development
translates the needs of customers given by marketing into technical specifications
and designing the various features into the product to these specifications.
Manufacturing has the responsibility of selecting the processes by which the
product can be manufactured. Product design and development provides link
between marketing, customer needs and expectations and the activities required
to manufacture the product.

4. Process design
Process design is a macroscopic decision-making of an overall process route
for converting the raw material into finished goods. These decisions encompass
the selection of a process, choice of technology, process flow analysis and layout
of the facilities. Hence, the important decisions in process design are to analyze
the work flow for converting raw material into finished product and to select the
workstation for each included in the workflow.

5. Production planning and control

Production planning and control can be defined as the process of planning the
production in advance, setting the exact route of each item, fixing the
starting and finishing dates for each item, to give production orders to shops and
to follow up the progress of products according to orders.

The principle of production planning and control lies in the statement „First
Plan Your Work and then Work on Your Plan‟. Main functions of production
planning and control includes planning, routing, scheduling, dispatching and
follow-up.

Planning is deciding in advance what to do, how to do it, when to do it and

who has to do it. Planning bridges the gap from where we are, to where we want
to go. It makes it possible for things to occur which would not otherwise happen.

Routing may be defined as the selection of path which each part of the
product will follow, which being transformed from raw material to finished
products. Routing determines the most advantageous path to be followed from
department to department and machine to machine till raw material gets its final
shape.

Scheduling determines the programme for the operations. Scheduling may

be defined as „the fixation of time and date for each operation‟ as well as it
determines the sequence of operations to be followed.

Dispatching is concerned with the starting the processes. It gives necessary

authority so as to start a particular work, which has already been planned under
„Routing‟ and „Scheduling‟. Therefore, dispatching is „release of orders and
instruction for the starting of production for any item in acceptance with the route
sheet and schedule charts‟.

The function of follow-up is to report daily the progress of work in each shop
in a prescribed Performa and to investigate the causes of deviations from the
planned performance.

6. Quality control
Quality Control (QC) may be defined as „a system that is used to maintain a
desired level of quality in a product or service‟. It is a systematic control of
various factors that affect the quality of the product. Quality control aims at
prevention of defects at the source, relies on effective feedback system and
corrective action procedure.
 Quality control can also be defined as „that industrial management technique
by means of which product of uniform acceptable quality is manufactured‟. It is
the entire collection of activities which ensures that the operation will produce
the optimum quality products at minimum cost.
The main objectives of quality control are:

 To improve the company‟s income by making the production more

acceptable to the customers i.e. by providing long life, greater usefulness,
maintainability, etc.
 To reduce companies cost through reduction of losses due to defects.
 To achieve inter changeability of manufacture in large scale production.
 To produce optimal quality at reduced price.

 To ensure satisfaction of customers with productions or services or high

quality level, to build customer goodwill, confidence and reputation of
manufacturer.
 To make inspection prompt to ensure quality control.
 To check the variation during manufacturing.

7. Materials management

Materials management is that aspect of management function which is

primarily concerned with the acquisition, control and use of materials needed and
flow of goods and services connected with the production process having some
predetermined objectives in view.
The main objectives of materials management are:
 To minimize material cost.
 To purchase, receive, transport and store materials efficiently and
to reduce the related cost.
 To cut down costs through simplification, standardisation, value
analysis, import substitution, etc.
 To trace new sources of supply and to develop cordial relations with
them in order to ensure continuous supply at reasonable rates.
 To reduce investment tied in the inventories for use in other productive
purposes and to develop high inventory turnover ratios.
Importance of Production Management

1. Accomplishment of firm's objectives: Production management helps

the business firm to achieve all its objectives. It produces products, which
satisfy the customers' needs and wants. So, the firm will increase its sales.
This will help it to achieve its objectives.

2. Enhances reputation, goodwill and image: Production management

helps the firm to satisfy its customers. This increases the firms reputation,
goodwill and image. A good image helps the firm to expand and grow.

3. Helps to introduce new products: Production management helps to

introduce new products in the market. It conducts Research and
Development (R&D). This helps the firm to develop newer and better
quality products. These products are successful in the market because
they and they give full satisfaction to the customers.

4. Supports other functional areas: Production management supports

other functional areas in an organization, such as marketing, finance, and
personnel. The marketing department will find it easier to sell good-
quality products, and the finance department will get more funds due to
increase in sales. It will also get more loans and share capital for
expansion and modernization. The personnel department will be able to
manage the human resources effectively due to the better performance of
the production department.

5. Helps to face competition: Production management helps the firm to

face competition in the market. This is because production management
produces products of right quantity, right quality, right price and at the
right time. These products are delivered to the customers as per their
requirements

6. Optimum utilization of resources: Production management facilitates

optimum utilization of resources such as manpower, machines, etc. So,
the firm can meet its capacity utilization objective. This will bring higher
returns to the organization.

7. Minimizes cost of production: Production management helps to

minimize the cost of production. It tries to maximize the output and

8 | PRODUCTION AND OPERATIONS MANAGEMENT II SEMESTER BBA

 minimize the inputs. This helps the firm to achieve its cost reduction and
efficiency objective.

8. Expansion of the firm: Production management helps the firm to expand

and grow. This is because it tries to improve quality and reduce costs.
This helps the firm to earn higher profits. These profits help the firm to
expand and grow.

The importance of Production Management to customers and society:

1. Higher standard of living: Production management conducts continuous

research and development (R&D). Based on the research conducted an
industrial concern will produce new and better varieties of products.
People use these products and enjoy a higher standard of living.

2. Generates employment: Production activities create many different job

opportunities in the country, either directly or indirectly. Direct
employment is generated in the production area, and indirect employment
is generated in the supporting areas such as marketing, finance, customer
support, etc

3. Spread effect: Because of production, other sectors also expand.

Companies making spare parts will expand. The service sector such as
banking, transport, communication, insurance, BPO, etc. also expand.
This spread effect offers more job opportunities and boosts economy.

4. Creates utility: Production creates Form Utility. Consumers can get form
utility in the shape, size and designs of the product. Production also
creates time utility, because goods are available whenever consumers
need it.

5. Boosts economy: Production management ensures optimum utilization

of resources and effective production of goods and services. This leads to
speedy economic growth and well-being of the nation.

Five P’s of Production Management

The division of production management functions in to 5 p‟s (product, plant,

programme, processes and people) will provide useful conceptual framework for
the various activities performed by production or operations manager.
The Five P’s:

1. The Product:

Product is the link between production and marketing. It is not enough that a
customer requires product but the organization must be capable of producing the
product.

As per the product policy of the organization, an agreement is reached between

the various functions on the following aspects of the product
1. Performance
2. Quality and reliability
3. Aesthetics and ergonomics
4. Quantity and selling price
5. Delivery schedule.

To arrive at the above, the external and the internal factors which affect the
various aspects such as market needs, existing culture and legal constraints and
the environmental demands should be given due consideration. Thus the major
policy decisions regarding variety of product mix is going to affect the producing
system.

2. The Plant:

The plant accounts for major investment (fixed assets). The plant should match
the needs of the product market, the worker and the organization. The plant is
concerned with:
1. Design and layout of building and offices.
2. Reliability, perfect, maintenance of equipment.
3. Safety of operations.
4. The financial constraint.

Plant layout deals with physical arrangement of plants and machineries within
the selected site. The layout should be such that it should allow for smooth
movement of men and materials with minimum back tracking. The type of the
layout is dependent on production type, volume of demand, etc.

3. The Process:

There is always number of alternative methods of creating a product. It is

required to select the one best method, which attains the objectives.
In deciding about the process, it is necessary to examine the following factors:
1. Available capacity
2. Manpower skills available
3. Type of production
4. Layout of plant
5. Safety
6. Maintenance required
7. Manufacturing costs

4. The Programme:

The programme here refers to the timetable of production. Thus, the

programme prepares schedules for:
1. Purchasing
2. Transforming
3. Maintenance
4. Cash
5. Storage and transport

5. The People:

Production depends upon people. The people vary in their attitudes, skill and
expectations from the work. Thus, to make the best use of available human
resource, it is required to have a good match between people and jobs which may
lead to job satisfaction.

The production manager should be involved in issues like:

1. Wages/salary administration.
2. Conditions of work/safety.
3. Motivation.
4. Training of employees.

Meaning of Operation Management

It refers to the process of design, execution and control of operations that
convert resources into desired goods and services.
It is the activity where the resource flow within a defined system are
transformed in a controller manner with policies / desired by the management.
Objectives of Operation management
 Improve productivity by better utilization of resources like men,
material, method etc.,
 Have less/ no defects.
 Utilize plants and machinery effectively and effectively .
 Improve material handling equipments.
 Have proper control on raw materials, semi-finished goods and
finished goods.
 Achieve proper cash management.
 Enhance production staff with respect to their salary, wages etc.,.

Scope of Operations Management

1) Product selection and design: The product selection makes a system

efficient or inefficient. So it is very important to select right product
keeping over all objectives in mind.

2) Process selection and planning: Selection of process involves taking

decisions about technology, machines and equipment

3) Location facilities: It is the most important facility as it looks for long

term decisions; a wrong decision can makes it pay a lot. The operation
management helps to select that particular location where distribution,
production cost and location cost is less.

4) Layout and material handling facilities: Layout means positioning of

machinery. The machine should be so arranged that the flow of
production remains smooth. There should be a proper choice of material
handling equipments.

5) Capacity planning: Capacity refers to a level of output of the conversion

process over a period of time. Industry creates challenging problems in
capacity planning, requiring in the long run, expansion and contraction of
major facilitates in the conversion process. Some tools helps in capacity
planning are marginal costing, linear programming etc.
Importance of Operation Management
1) Towards customers: Customers are the most affected by any business.
The objectives of the operation management always depend on the
customer‟s preferences and their requirements.

2) Towards suppliers: Operations will have a major impact on suppliers,

both on how they prosper themselves, and on how effective they are at
supplying the operation.

3) Towards share holders: Better the operation is at producing goods and

services, the more likely the whole business is to prosper and shareholders
will be one of the major beneficiaries of this.

4) Towards employees: Similarly employees will be generally better off if

the company is prosperous. It includes the general working conditions
which are determined by the way the operation is designed.

5) Towards society: Although often having no direct economic connection

with the company individuals and groups in society at large can be
impacted by the way its operation managers behave.

Production and Operation management

Meaning
It refers to the management of the conversion process which converts land,
labour, capital and management inputs into desired output goods and services.
The conversion is done by using physical resources to meet the
organizational objectives. It is the transformation of production and operation
inputs and outputs to be distributed to meet the customers' needs.

Need for Production and Operation management

i) Produce right quality of product: The quality of product is established

based upon the customers‟ needs. The right quality is not necessarily best
quality. It is determined by the cost of the product and the technical features
suited to the specific requirements.

ii) Right quantity: The manufacturing organization should produce the

products in right number. If they are produced in excess of demand the
 capital will block up in the form of inventory and if the quantity produced
in short of demand, leads to shortage of products.

iii) Right time: Timely delivery is one of the important parameter to judge the
effectiveness of production department has to make the optimal utilization
of input resources to achieve its objective.

iv) Right manufacturing cost: Manufacturing costs are established before the
product is actually manufactured. Hence all attempts should be made to
produce the products at pre-established cost, so as to reduce the variation
between actual and standard cost.
Objectives of Production and Operation management
 To attain maximum output with lowest cost.
 To control pollution and wastage.
 To ensure optimum capacity and resources utilization .
 To ensure quality of products.
 To suggest changes in machinery and equipment.
 To ensure timely delivery of output.
 To maintain inventory.

Elements of Production and Operation management

i) Planning: Activities that establish a course of action and guide future
decision making is planning. It includes clarifying the role and focus of
operation in the organization, product planning, facility designing,
conversion process etc.,
ii) Organizing: Activities that establish a structure of tasks and authority.
Operation managers establish a structure of roles and flow of information
within the operation subsystem.
iii) Controlling: The operation manager must exercise control by measuring
actual outputs and comparing them to planned operations management.
iv) Behavior: Operations managers are concerned with how their efforts to
plan, organize, and control affect human behavior.
v) Model: The Operation Manager can prepare break even models and
linear programming to solve the organizational related problems.
Scope of Production and Operation management
1) Location of facilities: Selection of appropriate location must ensure the
availability of power supply, water supply, road conditions, nearness of raw
materials, skilled labors etc.

2) Plant layout and job design: Preparation of plant layout for the
establishment of machines in the required sequence. A job design must be
prepared to organize machines, tasks into a unit of work to achieve certain
objectives.

3) Materials handling: It is the process of ensuring the movement of raw

materials and semi finished goods inside the factory.

4) Product design: Designing the product and conceiving the idea about its
production. Product design considers the product size, weight, color etc.

5) Process design: It is the complete description of specific steps in the

production process. This determines the production process which is most
relevant.

6) Production and planning control: It means coordination of series of

functions according to a plan which will economically utilizes the plant
facilities and regulates orderly movement of goods.

7) Quality control: It is a staff function concerned with the prevention of

defects in manufacturing so that, items may be made right way and ensure
the quality standard.

8) Inventory management: It is the process of maintaining proper records

of raw materials semi finished goods and finished goods.

9) Maintenance management: It is the process of formulating the corrective

measures to stay in track with planned quality, time schedule and
predetermined cost schedules.

10) Automation: It is the technique of operating or controlling a productive

process by electronic device and reducing human intervention to the
minimum.
Functions of Production and Operation Management
1) Creation of goods and services: The foundation of every production and
operation department is creation of goods or services. Traditionally,
 production and operations department includes the physical assembling of
goods and also contains many customer care services to satisfy the needs
of customers.

2) Profit: The main function of production and operations department is to

produce a product or service that creates profit and revenue to the company.

3) Evaluation: Every production and operation department must function as

self-evaluating entity that monitors the quality, quantity, and cost of goods
produced.

4) Tasks: It includes forecasting, scheduling, purchasing, design,

maintenance, people management, flow analysis, reporting, assembly and
testing.

5) Fulfillment: It ensures timely delivery of the output from production to

customers.

6) Analysis: Standard analysis function in a production and operation

department include critical path analysis, stock control analysis, utilization
analysis, capacity analysis and just-in-time analysis of inputs, break- even
analysis and metric analysis.

Reasons for Production and Operation Management

 Helps in understanding the role played by the people in producing goods &
services.
 Helps in getting a clear picture about the factory.
 Helps in selecting a career.
 It has strategic use to the executives.
 Helps to understand how important it is to Nation

Automation

Meaning
It is the use of computers and other automated machinery for the execution
of business related tasks. It includes right from simple sensing devices to robots
and other sophisticated equipment.
 It helps in reducing the production time, increase manufacturing, flexibility,
reduce costs, eliminate human error and labour shortage problems.

Definition
According to M.H.Arousan,” Automation is a substitution of mechanical,
hydraulic, electrical and electronic devices for human organs of decisions and
efforts”

According to Ruddlerl Read, “Automation is nothing more than the extension

of principles of mechanisation to the integration of machines one with another
in such a manner as to have the group operate as an individual processing and
controlling units.”

Need and importance of Automation

 Facilitates efficient and detailed information through the use of

computers
 Ensures speedy recording, processing and presenting of information
 Increases the volume of work, scarcity of time and reduces the
manual process.
 Facilitates better quality of work by reducing errors created by manual
work.
 Achieves greater accuracy and speed through the use of automation.
 Increases the goodwill and reputation of the firm because automation
adds to the prestige and status of the firm.

Scope of Automation

i) Leads to increase in productivity: It increases speed of work and

reduces the consumption of time taken for production of products.

ii) Improved quality: The quality of goods produced is better when there is
automation of goods passes through definite process till it comes out as
finished goods.

iii) Reduction of cost per unit: It results in reduced total cost per unit of
output. When the goods are produced in a bulk cost per unit will be low.
Since labor is not involved, labor cost can also be saved.
 iv) Ensures high safety: Since labor does not intervene in production
working on machines which all otherwise dangerous can be avoided.
Proper safety measures are incorporated by introduction of automation.

v) Complex decision: Automation helps to take complex decisions with

ease.

vi) Handling monotonous jobs: It helps in handling the boring and

monotonous jobs effectively and efficiently.

vii) Lesser accidents: In automation accidents are very less as the machine
will perform its jobs as per instructions.

viii) Less scrap: The scrap and wastage will be less as the machine will
perform as intended.

ix) Less rework: When there are no defects, then there will be less or no
rework.
Advantages and Disadvantages of Automation
Advantages of Automation

1) Increases output and productivity: It increases the speed of work and

reduces the consumption of time taken for production of products. Since
there is no intervention of labor involved the goods passes from one
process to another, smoothly and quickly.

2) Improves and enhances quality: The quality of goods produced is better

when there is automation .the goods pass through definite process till it
comes out as finished goods. Thus there is an increase in the quality of
goods produced.

3) Consistency and uniformity in quality: The products produced are

identical in nature. Since all the raw materials are fed into the machines
the finished goods are uniform in nature which is very important from the
point of view of satisfying the customers.

4) Reduction in cost per unit of output: Automation results in reduced

total cost per unit of output. When the goods are produced in a bulk cost
per unit, will be low.
 5) Lesser industrial accidents: Automation eliminates the use of labor
force. Hence the number of accidents to workers is eliminated to a greater
extent.

6) Better production control: The speed of production increases the

productivity. Since no labor is involved control on production is easier.
The machines are arranged in such a sequence that raw materials pass
from one process to another without human intervention. Thus production
can be controlled.

7) Ensures high safety: Since labor does not intervene in production

working on machines which all otherwise dangerous can be avoided.
Proper safety measures are incorporated by introduction of automation.

8) Reduces labor problem: Goods are produced without the involvement

of men hence labor problems are eliminated.
Disadvantages of Automation

1. Heavy capital investments: Automation involves heavy capital

investment. The cost of capital, power consumption etc. increases
tremendously.
2. Displacement of labor: Replacement of workers by machines affects
the morale of workers.
3. Benefit of employee suggestion lost: Labor being displaced the
benefits of suggestion from employee is lost.
4. High cost of depreciation: Since automation eliminates labor, machines
are used instead of labor. Machines tend to depreciate every year.
Therefore depreciation is high in automation.
5. Not suitable for small firm: Since heavy investments are required in the
automated plants, it is not suitable for small industries. Moreover the
expenses involved like power, consumption, depreciation etc. are very
high
6. Lack of ready market: Automation results in increased production. If
increased production does not find a ready market, the pieces will fall and
results will be disastrous.
7. Unemployment problem: automation poses certain peculiar problems
for developing countries. These countries are characterized by a high
 rate of unemployment scarcity of foreign exchange shortage of highly
skilled personnel, shortage of capital etc.

Types of Automation

a. Numerically Controlled (NC) Machines– It uses computers to store,

calculate and execute operations that are performed by hands. Eg:
computerized numerical controlled mills.
b. Industrial Robots– It also helps in higher quality parts, reduced cycle times
and increases savings. They can work 24/7 to keep up the industrial
demands. They can be suitable to work in an environment which may be
dangerous to humans. They perform tasks like welding, material handling,
assembling etc.,
c. Flexible manufacturing systems (FMS)– It is a combination of NCM, IR
and other types of automation into one automation system. It produces
similar products and parts but maintains flexibility to change parts or
processes.
d. Computer aided manufacturing (CAM)– It uses computers in different
functions of production planning and control. It also includes computer
aided process planning (CAPP), group technology (GT), and production
scheduling, manufacturing flow analysis.
e. Support automation– It refers to the software packages which focuses on
the routine work of help desk personnel. It includes CAM, knowledge base
applications for self service etc.,
f. Run book automation– They define a set of items along with work flows
through GUI. It offers connectors and interfaces to existing items suitable
for the user.
g. Policy based automation– This type of automation works on the basis of
term policy for the rules management. They provide a rich set of features
for designing and managing policies.
h. IT-Workload automation– They allow the processing of job scheduling
for improvement and automate recurring tasks. They offer multi-platform
compatibility, policy based execution etc.,
i. Data centre automation– This is the fastest growing area in the recent
world. It helps in bringing the high demand for automated tools to provision,
change and manage vast number of components.
 Different types of Automation Tools
a. Artificial Neural Network (ANN)–It is also called as neural network. It is
a mathematical model or computational model inspired by structure /
functional aspects of biological neural network. It consists of inter
connected group of artificial neurons and information for computation.
b. Distributed Control system (DCS)– It is the control system for
manufacturing and processing any kind of system in which the controller
elements are not central in location but distributed throughout the system.
But they are connected by networks for communication and monitoring.
c. Human Machine Interface (HMI)– It is the interface in which the
interaction between the human and the machine occurs. It is to have
effective operation and control machine, feedback from the machine for
making operational decisions.
d. Supervisory control and data acquisition (SCADA)– It refers to the
industrial control system, computer systems that monitor and control
industrial, infrastructure and other facility based processes.
e. Programmable logic controller (PLC)– It is a digital computer used for
automation of electro mechanical processes like control of machinery, light
fixtures, amusement rides etc., it helps in extended temperature, immunity
to electrical noise, resistance to vibration etc.,
f. Programmable automation controller (PAC)–It is a compact controller
that combines the features and capabilities of a PC based control system
with typical programmable logic controller. It is used for process control,
data acquisition, remote equipment monitoring, and machine vision and
motion control.
g. Instrumentation– It is defined as the art and science of measurement and
controlling of process variables within a production or manufacturing area.
It is a device that measures and regulates physical quantity/process
variables such as flow, temperature, pressure etc.,
h. Motion control– It is a sub-field of automation. It is the position or velocity
of machines which are controlled using some types of devices like linear
actuator, electric motor etc., it is an important part for robotics.
i. Robotics – It is a branch of technology that deals with design, construction,
operation, structural disposition, manufacture and application of robots and
computer systems for controlling, sensory feedback and information
processing.
 Review Questions

SECTION - A (2 marks)
1. What do you mean by „Production‟?
2. What do you mean by production system?
3. Mention the different types of production systems.
4. What is job shop production?
5. What is batch production?
6. What is mass production?
7. What is continuous production?
8. Define production management.
9. Mention any four objectives of production management.
10. What do you mean by operations management?
11. Define Automation.
12. What is Mechanization?

SECTION - B (6 marks)

1. Briefly explain the production system and its characteristics.

2. What is job shop production? What are its characteristics, advantages
and limitations?
3. What is batch production? What are its characteristics, advantages and
limitations?
4. What is mass production? What are its characteristics, advantages and
limitations?
5. What is continuous production? What are its characteristics,
advantages and limitations?
6. Explain in brief the objectives of production management.
7. Explain in brief the objectives of operations management.
8. Explain needs and importance of automation.
9. Explain the scope of Production and Operations Management.

SECTION - C (14 marks)

1. Explain the different types of production systems.
2. Explain the framework of managing operations.
3. Explain the different types of Automation tools?
 UNIT – 2
PLANT LOCATION AND LAYOUT
Introduction
Selecting the suitable site is an important activity because this decides the fate of
the business to a very large extent. A good location may reduce the cost of
production and distribution to a considerable extent. A bad location on the other
hand could be a severe handicap for any enterprise.

Meaning of Plant location

It refers to the area where the plant will operate to produce goods and services.
It is the function of determining where plant should be located for maximum
operating economy and efficiency.
A good location may help in reducing the cost of production and
distribution to a considerable extent.

Definition of Plant location

According to R.C.Davis,” Plant location is the function of determining where

the plant should be located for maximum operating economy and effectiveness.”
According to Bethel Smiths & Atwater, “Plant location is that spot where,
inconsideration of the business as a whole the total cost of production and
delivering goods to all the consumers is the lowest.”

Needs for the selection of the plant location

 When the new plant or business is established
 When the old plant undergoes expansion, decentralization and
diversification to meet increased demands for its product.
 When the existing plant should be relocated due to an expansion.
 When the existing factory is not in a position to obtain renewal of lease.
 When a new branch is to be opened for increasing the volume of
production or distribution or both
 Social or economic reasons such as inadequate labour supply,
transportation difficulties etc.,
 On the expiry of lease and the landlord does not renew the lease.
Factors affecting the selection of plant location
1. With in the country or outside

The first step in the plant location is to decide whether the facility should be
located domestically or internationally. If the management decides on the
foreign location, the next step would be to decide upon a particular country
for location.

2. Selecting the region

The selection of a particular region out of the many natural regions of a

country is the second step in the plant location. The following factors
influence such selection

 Availability of raw materials – The plant should be located as close as

possible to the source of raw materials. Nearness to the raw materials
reduces the cost of transportation, proper supply of materials etc.,

 Nearness to the market - It is essential that the factory be located near

the market as it helps in providing prompt services to customers, after
sales services, replacement orders may be executed without delay etc.,

 Adequate power supply- Power is essential to move the weaves of an

industry. Coal, electricity, oil and natural gas are resources of power.
Industries using electricity have to be located at the place where electric
power is available regularly.
  Transport facilities–Places or regions with well developed means of
transport attract industries. Transport facilities are essential for bringing
raw materials and employees to the factory and also for carrying finished
products from the factory to the markets.

 Suitability of climate – Climate also bears an influence on plant

location. Certain industries require a particular climate. However, in the
present day, with the advancement of science and technology, artificial
climatic conditions can be created.

 Government policy – In the name of Balanced regional development

effects the location of an industry in number of ways. It influences the
licensing policy, institutional finance, government subsidies etc.,

 Competition between states –Different states in India competes with

one another to attract new industries. Various states offer investment
subsidies and sales tax exemptions to new units. There are various
incentives as well.

3. Selection of the locality or community

Selecting a particular locality or community in a region is the next step in the

plant location. A selection of the community in a chosen region depends
upon the following factors.

 Availability of Labor – Labor is an important factor of production. There

should be adequate supply of labor at a reasonable wages rate. This is
essential for the smooth functioning of any enterprise.

 Civic amenities for workers – Civic amenities such as schools, colleges,

clubs etc., are a must for the workers. The owners of the industrial units
have provided these facilities for the benefits of the employers.

 Finance and research facilities – Adequate capital is essential for the

successful working of any organization. A place where there is scope for
raising capital and to adapt with changing technology attracts new
industries.
  Existence of Complementary and supplementary industry– The
presence of the complementary and supplementary factories are
important. It helps securing the materials, labour, gaining reputation etc.,

 State assistance–The extent and nature of state assistance in monetary

and non-monetary terms to the industrial units located or to be located
decide the extent of attraction of new units to the locality.

 Local taxes and insurance - Taxes like sales, property should be

considered as they vary from place to place. Similarly the insurance cost
also should be considered thoroughly examined before setting up a unit.

 Availability of water – Certain factories require large quantities of water

for manufacturing purposes. Eg: fertilizers, leather tanneries etc., these
units must be located in such a places where adequate water supply is
available.

 Fire fighting facilities – Industrial units are exposed to fire hazards. In

case of a fire outbreak, adequate facilities must be available to put out the
same otherwise the damage caused could be extensive.

 Personal factors – Entrepreneurs are not always guided by pure

economic consideration in choosing a location. Personal likes and
dislikes also play an important role.
4. Selection of exact site
The choice of the exact site in a particular locality depends on the fore
factors.
 Suitability of the land – Not all industries can be established on all the
types of the lands. It depends on the type of the land available and which
is suitable to start the industrial concern.

 Availability and cost of the land – The price of the land differs from
place to place and region to region. The cost of the land in less in rural
side compared to the urban side.

 Waste disposal – The waste let out by an industrial concern should be

treated so that it will not harm others. The waste treatment in the urban
becomes difficult because of the space available.
  Type of soil/ground- Before deciding upon a site, the subsoil condition
should be tested to determine whether the soil or ground can bear the load,
of a super structure.

 Transportation facilities – The site should be connected to all the

facilities available to the transportation ways which helps in easy
movement of labour, material, customers, suppliers etc.,

Plant Layout
Meaning of Plant layout

It refers to the arrangement of machinery, equipments and other industrial

facilities. The main purpose is for achieving and the smooth flow of production
at less cost.



It is a plan for arranging the physical facilities and manpower required to

manufacture a product utilizing the facilities and manpower in an effective
manner.

Definition of Plant Layout




According to James Lundy, “Plant layout identically involves the allocation

of space and the arrangement of equipment in such a manner that overall
organization or operating costs are minimized.”

According to Moore, “Plant Layout is a plan of an optimum arrangement of

facilities including personnel, operating, equipment, storage space, material
handling equipment and all other supporting services along with the design of
best structure to contain all these facilities.”

Objectives of Plant layout

 Minimization of material handling and cost.
 Optimum utilization of men, materials, equipment and space .
 Minimizing the work in progress and maximizing the inventory
turnover.
 Modernizing the flow of materials.
 Easing the manufacturing process.
 Ensure the flexibility of manufacturing operations and arrangements.
  Providing employee convenience, safety and comfort.
 Minimizing investment in equipment .
 Reducing overall production time.
 Maintaining flexibility of arrangement and operation.
 Assisting the organizational structure.

Principles of Plant Layout

 Principles of Minimum Movement – Men and material should move the

shortest distance between operations so as to avoid waste of time and
labour and also to minimize the cost of materials handling.

 Principle of Unidirectional Flow–The movement of men, material,

equipment etc., should flow in one direction so that it increases the
smooth flow of production.

 Principle of Efficient Space Handling – There should be minimum

space between the equipments and machines as it helps the labours to
handle them effectively.

 Principle of Maximum Observation Capacity – The arrangement of

men, material, work space should arranged properly so that a manager can
have accessibility to observe the working in the plant layout effectively.

 Principle of Maximum Accessibility – The arrangement in the plant

layout should be so effective that the accessibility for different materials
and different equipment should be easy.

 Principle of Minimum Handling– The labour who works with the

different types of machines and equipment should handle them in an easy
way so that it reduces the human error.

 Principle of Maximum Protection– The plant layout involves all types

of equipments, raw materials which might be highly flammable
depending the production activity so it is necessary for an industry to
provide maximum protection to men material machines etc.,

 Principle of Maximum Flexibility –The layout should permit revisions

with least difficulty and at minimum costs.
  Principle of Integration of All Factors – The place of production
activity in a factory should be arranged in such a way that all factors of
production like land, labor, capital and organization should be carried out
effectively.

 Principle of Safety and Satisfaction – The layout should contain built in

provisions for safety. All necessary steps should be taken to enhance
workers satisfaction.

 Principle of Sequence – Machinery and operations should be arranged

in a sequential order. This principle is best achieved in product layout and
efforts should be made to have it adopted in the process layout.

 Principle of Usage– Every inch of available space should be effectively

utilized. This is extremely important in those places where land is costly.

 Principle of Compactness – The final layout should be well integrated

and look compact. All the requirements should be well knit.

Factors influencing plant layout decision

 Material - Storage and movement of raw materials in a factory play an

important role. There must be sufficient space to store the raw material
and the same should be moved to the production centres efficiently for the
purpose of processing.

 Product – The product manufactured also influences plant layout. It could

be big or small, liquid or solid or even a gas, it could be either heavy or
light. The layout meant for a heavy product will be different from that of
a light product.

 Worker – The position of employees i.e., whether they are to remain

stationery or moving also influences plant layout. The layout engineer
should also consider the type, position and requirements of employees.

 Machinery – The type of product, the volume of production, type of

process required and management policy determine the size and type of
machinery required. This in turn determines the plant layout.

 Type of industry–The industry type and method of manufacture also

exercises a significant influence on plant layout. The industry can be
 synthetic, analytical, extractive etc., depending on the type of industry
the plant layout will be designed.

 Managerial policies – The policies of the management also determines

the plant layout to certain extent. The policies could be about provision
for expansion, make or buy decision, personnel policies, purchase policy
etc.,

Importance of Plant layout

 Economies in movement–The manufacturing cost is accounted for by the

materials handling. Efforts must be taken to cut down the cost in the long
run. So a decision should be taken regarding how best the materials should
be handled.

 Effective use of available area–Eefforts should be taken in using the

available area by planning the plant layout properly. It can achieved by
planning the location of the equipment, services in proper order, multiple
functions services etc.,

 Reduction of production delay– Plant layout is a significant factor in the

timely execution of orders. An ideal layout eliminates such causes of
delays as shortage of space, long distance movements of materials,
spoiled work etc.,

 Improved quality control – Timely execution of orders will be

meaningful when the quality of the output is not below expectations. To
ensure quality, inspection should be conducted at different stages of
manufacture.

 Minimum investment in equipment–Investment on equipment can be

minimum and planned properly based on location or space available. It
includes minimum handling, installation charges, machine loading,
machine usage etc.,

 Avoidance of messed up of materials – It refers to any place where

materials are piled up or produced at a rate speed less rapid than the
previous operations. It is caused due to inadequate machine capacity,
storage space etc.,

 Better production control – It is concerned with the production of a

product of the right type at the right time and at a reasonable cost. A
 good plant layout is a requisite for control and systematic basis to build
industrial concern.

 Better supervision –A good plant layout ensures the number of workers

handled by a supervisor and enables the supervisor to get a full view of
the entire plant at one glance.

 Better utilization of labour – As labour is paid for every hour spent in

the factory, the management should utilize the time for productive
purpose effectively.

Theory and Practices of Plant Location and Cost Factor in Location

1. Principle of median location

A basic principle of location theory states that an activity will select the
median or middle point of location when selling an output to, or buying an
input from, activities located a disperse points. In particular, this analysis
indicates that the activity will locate at the median point, with an equal
number of attraction points in any direction, rather than the arithmetic
average of the distances to all points. The analysis imposes several restrictive
assumptions, including a trip to each location, the same transit cost per mile
to each location, the same quantity of output sold to, or input purchased from,
each location. The principle of median voter is a similar principle that has
been developed in the public choice study of voting behaviour.

2. Linear Market Competition (Hotelling)

Hotelling was one of the first to introduce the principle of spatial competition
(1929) by investigating how sellers would choose locations along a linear
market. He assumed that the product was uniform so customers would buy
from the most convenient location (nearest seller) and that the friction of
distance was linear and isotropic. The total price for the customer is thus the
market price plus the transport price (time or effort spent to go to the market).
 Under such circumstances, two com petitors will select locations A and B
for optimal market coverage. With P1 being the market price, the market
boundary would be F1 (point of cost indifference) since right of F1, customers
would get a lower price at location B instead of at location A and left of F1,
customers would get a lower price at location A. If for any reasons, location A is
able to lower the market price from P1 to P2, then its market area would expand
at the expense of location B, from F1 to F2.

3. Weber’s Theory of Plant Location

Alfered Weber ,a German economist, was the first economist who gave
scientific exposition to the theory of location and thus filled a theoretical gap
created by classical economists. He gave his ideas in his Theory of Location of
Industries‟ which was first published in German language in 1909 and translated
into English in 1929. His theory, which is also known as „Pure Theory‟ has
analytical approach to the problem.

The basis of his theory is the study of general factors which pull an industry
towards different geographical regions. It is thus deductive in approach. In his
theory he has taken into consideration factors that decide the actual setting up of
an industry in a particular area.

According to Weber, factors affecting location of industries may be broadly

classified into two groups or categories:
1. Regional factors or primary causes of regional distribution of industry.

2. Agglomerative and degglomerative factors or secondary causes

responsible for redistribution of industry.
1. Regional factors

After examining the cost structures of different industries, Weber came to

the conclusion that the cost of production varies from region to region. Therefore,
the industry in general is localized at a place or in a region where the cost of
production was the minimum.

According to Weber there are two general regional factors which affect „
cost of production:
(i) Transportation cost.
(ii) Labour costs. In fact, these two are the basic factors influencing
location of industries.

Transportation costs

Transportation costs play an important part in the location of an industry.

Transportation costs are influenced by the weight to be transported and the
distance to be covered. Generally, industries will have a tendency to localize at a
place where material and fuel are not difficult to obtain. Weber has further given
that the basic factors for location of an industry are the nature or type of material
used and the nature of their transformation into products.

Weber divided raw material into two categories: iniquities and specific
local raw material. The former is generally available at all places whereas the
latter is found only in a few. Likewise, material may be pure raw material and
gross raw material.

Pure raw material is one which does not lose its weight during production
process and the gross raw material is that which loses considerable weight in the
transformation process. The finished product is less in weight than the weight of
raw material used in its manufacture.

Examples of this type of material are sugar cane and iron ore. Weber has given
a material index to show the tendency of industries to get located either at a place
where raw materials are easily available or where the markets are closer.

Labour costs

Labour costs also affect the location of industries. If transportation costs

are favourable but labour costs unfavourable, the problem of location becomes
difficult to have a readymade solution. Industries may have tendency to get
located at the place where labour costs are low. But labour and transportation
costs should be low for an ideal situation. Whether labour costs will have an
upper hand in the location of an industry will be decided by labour cost index.

2. Agglomerative and Degglomerative Factors:

Agglomerative factors make industries centralize at a particulars place.

Such factors may include banking and insurance facilities, external economies
and the like. The tendency of centralization is influenced by the manufacturing
index which indicates the proportion of manufacturing costs in the total of
production. If the coefficient of manufacture is high industries will have a
tendency to centralize, if it is low, tendency of decentralization may be visible.

Degglomerative factors are those which decentralize the location of

industries. Examples of such factors are: local taxes cost of land, residence,
labour costs and transportation costs. Such factors decentralization because the
cost of production stands reduced due to decentralization of shift in location.

Weber has indicated two more possibilities. One is split in location. According
to Weber, when weight losing raw materials are used in production and it is
advantageous to carry out different activities at different places industries have a
tendency of split location.

Paper industry may be an example, where pulp is prepared at one place and
paper manufactured at another. The other is location coupling. If wastes
remaining after the main production are to be made saleable. Some subsidiary
industry may take place. This is known as location coupling.

Types of Plant layout

 Product or line layout– It is also called as line layout. In this type of

layout, the machines and equipment are arranged in one line depending
upon the sequence of operations required for the product. The material
move from to another machine sequentially without any deviation.

 Process or functional layouts – Under this type of layout, the machines

of a similar type are arranged together at one place. This type of layout is
used for group production. It is preferred when the product is not
standardized and the quantity produced is very small.
  Fixed position or Location layout– It involves the movement of
manpower and machines to the product which remains stationary. It is
advisable as it reduces the cost of moving them. This type of layout is
preferred when the size of the job is large and heavy. Ex: Ships,
generators, boilers, wagon building, aircraft manufacturing etc.,

 Combined layout– It is a combination of process and product layout. It

is mostly seen in industrial establishments.

 Cellular Plant Layout– Under this, the materials and the information
entering the operation are pre-selected to move to one part of the operation
where all the machines to process these resources are located. After being
processed, the partly finished products go to another cell. Ex: Computer
components manufacture.

Techniques of Planning Layout

1. Charts and diagrams
 Operation process chart
 Flow process chart
 Process flow diagram

2. Machines data card– This card provides the full information about the
placement and layout of equipment. It is prepared separately for each
machine. It includes information like capacity of machines, scrap occupied,
power requirement etc.,

3. Templates– It is a drawing of a machine or tool to cut out from the sheet

of paper. It is to show the area occupied by the machine. It is used by
engineers to prepare the floor plan.

4. Scale models– It is the advanced version of the template. It helps in

movement of men and machines in a miniature factory. The miniature
machines and models of material handling equipment are placed in a
miniature plant and moves around the like a pawn in a chessboard.
Factors consider for Planning Plant Layout
 Nature of the product
 Volume of production
 Basic managerial policies and decisions
 Nature of plant location
  Type of industry process
 Types of methods of production
 Nature of machines
 Climate
 Nature of material
 Type of machine
 Characteristics of the building

Revision of Plant layout

a. Expansion
 Increase in the output of the existing production
 Introduction of new product in the same line
 Diversification

b. Technological advancement

c. Improvements in the existing layout.

Arrangements of other facilities
 Location of receiving and shipping department
 Storage section
 Inspection
 Maintenance
 Employee facilities
 Medical aid facilities

Factory building

Meaning of Factory building

It is a building or a group of buildings containing a plant assembly for

manufacture of goods. It is a factor which should receive serious consideration
on the part of the management of every industrial enterprise, new or old, big or
small.

Definition of Factory building

According to James Moore, “A factory building is expected to provide
protection for men, machines, materials, parts or even the company‟s secrets.”
Factors to be considered while designing Factory building
a. Flexibility
b. Expandability
c. Strong enough
d. Materials handling
 Product and equipment
 Lighting, ventilation and air conditioning
 Appearance
 Service and maintenance cost
 Location of service department
 Security arrangements
 Location of production department
 Protection of property and people
 Employee facilities and services area
Types of factory building
 Single storey building i.e., MICO, BEL, HMT etc.,
 Multi storey building i.e., malls, schools, colleges, government
offices, software companies etc.,
 High bay type building i.e., steel mills, glass industries etc.,

 Special type of building i.e., aircraft industry, ship building, rocket

manufacturing etc.,

Organization of Physical facilities

Industrial sanitation
Meaning

It is concerned with the protection of the death of the employees in a factory.

It is the responsibility of every management to protect the sanitation needs of the
factory.

Definition

According to World book,” Sanitation is a field of public health. It involves

various efforts to control the environment to prevent and control diseases. It also
includes personal cleanliness, which helps protect against disease”
Elements of Industrial sanitation

 Supply of water
 Disposal of waste
 Supply of healthy food
 Good industrial house keeping
 Avoidance and control of insects
 Providing facilities for personal services

Industrial Lighting

Meaning

It is one of the important physical facilities. It helps in increasing the

productivity and adds to employee satisfaction. The quantity of light required
depends on the type of work to be performed.

Definition

In the words of John Shubin, “An efficient lighting system in a plant or

office produces high fatigue helps in preventing accidents and improves morale.
It decreases spoilage, raises the quality of workman ship and increases
production”

Importance of proper lighting

 Clarity of vision
 Reduces eye strain
 Quality of goods is maintained
 Increased output
 Effective utilization of floor space
 Good house keeping
 Reduces accidents
 Improves employee morale
 Effective supervision
 Reduces spoilage and wastage in production
 Sources of light
a. Natural lighting

Light which is obtained from the sun through the factory roof, doors and
windows is referred to as natural lighting. It is also called as day light which is
abundantly available and is free of cost. It includes

 Through windows –This includes the entry of light only through side
windows, opposite side windows and through side and monitor windows.

 Through roofs – This includes the entry of light through roof which
would be constructed transparent sheets, glass bocks etc., The height of
ceiling also effects the light quality.

b. Artificial lighting
It refers to the illumination secured through artificial means such as through
the use of bulbs, tube lights etc., it includes
 General lighting–This is provided by using fixtures, luminaries or grid
system placed at a certain height above the work area.
 Direct lighting – It refers to the light flows directly downward upon the
surface. This will give rise to glare hence its use is objected.
 Indirect lighting – Under this all the light emitted from the unit
towards the ceiling is diffused throughout the room.
 Semi indirect lighting – Under this method, 60 to 90% of the light is
directed towards the ceiling and the rest is immediately directed
downwards.
 Semi direct lighting –Under this method, at least 60- 90% of the light is
directed towards and the remaining is directed upwards. Thus shadows
are not formed.
 Group lighting – Wherever more illumination is needed, a combination
of general lighting and local lighting is used. This can be adjusted by a
modification of general lighting, when one group of machines requires a
higher intensity.
 Supplementary lighting –intense light is provided at the point of work
or in adjacent areas. The lamps mounted on fixtures are directly over the
job or machines.
 Air conditioning
Meaning

It is to simultaneously control the air, its temperature, humidity, motion,

distribution pressure and purity. It also includes factors like dust, odours, bacteria
and toxic gases.

Definition

A fuller definition of air conditioning is,” Industrial air conditioning, in its

broad sense, requires control over temperature, humidity, dust, motion, purity and
odours.”

Objectives of Air conditioning

 To protect workers health

 To provide comfort to the employee
 To secure specified temperature condition
 To maintain the quality of the product
 To protect certain machines and equipment
 To promote better employee-employer relationship
 To enable proper storage of raw materials

Types of Air conditioning

 Comfort Air conditioning–Under this, air conditioning is provided to

ensure comfort to the occupants of an enclosed space. This is commonly
observed in factory offices and administered buildings mainly to offer a
comfortable environment to the administrative staff.

 Industrial Air conditioning – It is undertaken mainly to create, maintain

and control the atmospheric conditions for the purpose of manufacturing
proposes and storage of finished goods.

 Summer air conditioning – In this type of air conditioning, the main

object is to provide a cool environment to employees during the summer
season.

 Winter air conditioning – Here the main objective is to provide warm

air to the employees during the harsh winter months.
  Composite air conditioning – In this system air conditioning is meant
both for cooling and warming the temperature as and when necessary
during the whole year.

Ventilation
Meaning

It is a process by which the products of respiration and combustion are

removed from an enclosed space. It is the removal or dilution of air which has
become warm, moist and stagnant by air. It removes stale air and lifts fresh air
into the factor building.

It is the movement of air from outside a building to the outside. It includes

both the exchange of air to the exchange as well as circulation of air within
building.

Importance of Ventilation

 Provision of adequate fresh air.

 Reduction of odors, impurities and injurious gases .
 Removal of dust and bacteria.
 Prevention of excessive heat generated in factories.
 To prevent excess humidity in factories.

Types of ventilation
a. Natural ventilation
 Wind
 Difference in temperatures
 Diffusion of gases

Types of natural ventilation

 Chimneys
 Ventilators

b. Artificial ventilation
 Vacuum system
 Plenum system or propulsion system i.e., fans or blowers
 Balanced system
 Industrial safety

Meaning

It refers to the various measures taken by the management to prevent the

occurrence of accidents in the factory. It helps in controlling the recognized
hazards to achieve a good level of risk.

Definition
According to R.B.Blake, “Any occurrence that interrupts or interferes with
the orderly program of the activity in question”
Industrial safety measures
 Material handling safety
 Industrial safety training program
 Industrial safety activity
Importance of Industrial safety
 Treatment for employees
 Medical examination
 Hazards identification
 Provision of protective devices
 Consultancy
 Training about safety and health

Industrial accidents
Meaning

It can be defined as an occurrence which interferes with the orderly progress

of work in an industrial establishment. It is an accident that occurs when the
employee is in the work place.

Definition

According to factories act of 1948 it is “An occurrence in an industrial

establishment causing bodily injury to a person which makes him unfit to resume
his duties in the next 48 hours”
Causes of Industrial accidents
 Unsafe acts of persons
 Unsafe of mechanical or physical conditions

Unsafe acts of person includes

 Operating without clearance.
 Operating or working at unsafe speed.
 Using equipment in an unsafe manner
 Unsafe loading, mixing, placing or combining.
 Taking unsafe position or posture.
 Working on moving or dangerous equipment.
 Failure to use safety attires like gloves, masks etc.,

Unsafe mechanical or physical conditions

 Inadequate guarded machines.

 Defective conditions in factory like rough surface, slippery, sharp,
decayed areas etc.,
 Unsafely designed machines and tools .
 Poor housekeeping, blocked exists etc.,
 Inadequate lighting and glare .
 Inadequate ventilation.
 Improper arrangement of processes such as piling, storage, over loading
etc.,
 Review Questions

SECTION - A (2 marks)

1. What do you mean by plant location?

2. What is factory building?
3. What is industrial accident?
4. What is the meaning of Industrial safety?
5. What is Industrial Lighting?
6. What is plant layout?
7. Mention any four objectives of plant layout.

SECTION - B (6marks)

1. Explain different operations strategies in case of location choice for

existing organization.
2. Explain the factors to be considered while selecting the location for the
new organization.
3. Explain the reasons for global or foreign location.
4. Explain the objectives of plant layout.
5. Explain the main principles of plant layout.
6. Explain the factors considered for an industrial building.

SECTION - C (14 marks)

1. Explain the need for selecting a suitable location.
2. Explain the factors influencing plant location.
3. What are the causes of industrial accident?
4. Explain the physical facilities required in an organization/factory.
5. Briefly explain types of factory building and importance of good
lighting in factory.
 UNIT – 3

MATERIALS MANAGEMENT

Introduction – Meaning & Definition - Purchasing, Selection of Suppliers,

Inventory Management, Material Handling Principles and Practices,
Economic Consideration, Criteria for Selection of Materials Handling
Equipment, Standardization, Codification, Simplification, Techniques of
Inventory Control.

Introduction

The functions of procurement of material, transformation of material to

intermediate and finished products, and distribution of finished products to
customers in an important aspect. It depends upon the managers about how they
can be successful in maintaining the flow of materials to the production process
on time. This chapter deals with all the aspects related to material.

Meaning of Materials Management

It deals with many important aspects connected with materials such as
purchasing, storage, inventory control, material handling etc.,
It is an approach for planning, organizing and controlling all those activities
concerned with the flow of materials into an organization.

Definition of Materials Management

According to Bailey and farmer, “Material management is the management
of the flow of materials into an organization to the point where those materials
are connected into the end products.”
Scope of materials management
Materials planning and programming: Based on the sales forecast and
production plans, the materials planning and control is done. This involves
estimating the individual requirements of parts, preparing materials budget,
forecasting the levels of inventories, scheduling the orders and monitoring the
performance in relation to production and sales.

Store-keeping: A store is also responsible for the physical verification of

stocks and reconciling them with book figures. A store plays a vital role in
the operations of a company.
Purchasing: This includes selection of sources of supply finalization in
terms of purchase, placement of purchase orders, follow-up, maintenance
of smooth relations with suppliers, approval of payments to suppliers,
evaluating and rating suppliers.
Inventory system: Inventory generally refers to the materials in stock.
It is also called the idle resource of an enterprise. Inventories represent
those items, which are either stocked for sale or they are in the process of
manufacturing or they are in the form of materials, which are yet to be
utilized.
Simplification, codification and standardization in stores:
Simplification is the process of reducing the variety of products
manufactured. It is concerned with the reduction of product range,
assemblies, parts, materials and design.
Standardization: Standardization means producing maximum variety of
products from the minimum variety of materials.
Specifications: It refers to a precise statement that formulizes the
requirements of the customer. It may relate to a product, process or a
service.
Materials handling: It is a function which deals with the preparation,
placing and positioning of materials to facilitate their movement or
storage.
Objectives of Materials Management
 Reduce material cost
 Uniform flow of material for production Ensure right quality at right
price
  Establish and maintain good relations with the suppliers and customers
Economy in using imported item and to find their substitutes
 Helps in using working capital Decision for buy or making

Importance of Materials Management

 Lower prices for materials and equipment: The material cost content
of total cost is kept at a reasonable level. Scientific purchasing helps in
acquiring materials at reasonable prices. Proper storing of materials also
helps in reducing their wastages.

 Helps to ensure the continued supply of raw materials: The equipment

is properly utilized because there are no break downs due to late supply
of materials.

 Helps to faster inventory turnover: The cost of indirect materials is kept

under check. Sometimes cost of indirect materials also increases total cost
of production because there is no proper control over such materials.
 Reduce lead time: The equipment is properly utilized because there are
no break downs due to late supply of materials.
 Less transportation cost – If the flow of materials are maintained
properly on time near to the production process the transportation cost
could be managed well.
 Reduce duplication of efforts – The movement of materials can be
reduced if the materials are maintained unidirectional. The duplication
efforts of the labour can be reduced in moving the material from one place
to another place.

 Reduce materials obsolescence – The materials can be protected from

being obsolete if the materials are used on time before it becomes out
dated in the market.

Functions of Materials Management

Material management covers all aspects of material costs, supply and
utilization. The functional areas involved in material management usually include
purchasing, production control, shipping, receiving and stores.
The following functions are assigned for material management:
1. Production and Material Control: Production manager prepares the
schedules of production to be carried in future. The requirements of parts and
materials are determined as per production schedules. It is ensured that every
type or part of material is made available so that production is carried on
smoothly.
2. Purchasing: Purchasing department is authorized to make buying
arrangements on the basis of requisitions issued by other departments. The
effort by this department is to purchase proper quality goods at reasonable
prices. Purchasing is a managerial activity that goes beyond the simple act of
buying and includes the planning and policy activities covering a wide range
of related and complementary activities.
3. Non-Production Stores: Non-production materials like office supplies,
perishable tools and maintenance, repair and operating supplies are
maintained as per the needs of the business. These stores may not be required
daily but their availability in stores is essential. The non-availability of such
stores may lead to stoppage of work.
4. Transportation: The transporting of materials from suppliers is an
important function of materials management. The traffic department is
responsible for arranging transportation service. The vehicles may be
purchased for the business or these may be chartered from outside. The
purpose is to arrange cheap and quick transport facilities for incoming
materials.
5. Materials Handling: It is concerned with the movement of materials within
a manufacturing establishment and the cost of handling materials is kept
under control. It is also seen that there are no wastages or losses of materials
during their movement. Special equipment‟s may be acquired for material
handling.
6. Receiving: The receiving department is responsible for the unloading of
materials, counting the units, determining their quality and sending them to
stores etc. The purchasing department is also informed about the receipt of
various materials.
 Purchasing

Meaning
It refers to the activity of acquiring goods or services to accomplish the goals
of an organization. It is the procurement of materials and other requirements from
certain external agencies.
It includes activities like deciding what to buy, where to buy, when to
buy, how much to buy and at what prices to buy.

Definition
According to Westing, Fine and Zenz “Purchasing is a managerial activity
that goes beyond the simple act of buying. It includes research and development
for the proper selection of materials and sources, follow-up to ensure timely
delivery; inspection to ensure both quantity and quality; to control traffic,
receiving, storekeeping and accounting operations related to purchases.”

Material purchasing
Purchasing is the first phase of Materials Management. Purchasing means
procurement of goods and services from some external agencies. ... It was
experienced that by giving the purchase responsibility to a specialist, the firm can
obtain greater economies in purchasing.
It is the act of buying materials for the factory at a given price.

Scientific purchasing
It is the procurement by purchase of the proper materials, machinery,
equipment and supplier or store used to manufacture of a product and market it
at the proper quantity and quality and at proper time.

Importance of Purchasing
1. Purchasing function provides materials to the factory without which
wheels of machines cannot move.
2. A one percent saving in materials cost is equivalent to a 10 percent
increase in turnover. Efficient buying can achieve this.
3. Purchasing manager is the custodian of his firm‟s purse as he spends
more than 50 per cent of his company‟s earnings on purchases.
 4. Increasing proportion of one‟s requirements are now bought instead of
being made as was the practice in the earlier days. Buying, therefore,
assumes significance.
5. Purchasing can contribute to import substitution and save foreign
exchange.
6. Purchasing is the main factor in timely execution of industrial projects.
7. Materials management organizations that exist now have evolved out
or purchasing departments.

Objectives of purchasing department

1. To avail the materials, suppliers and equipments at the minimum
possible costs - These are the inputs in the manufacturing operations. The
minimization of the input cost increases the productivity and resultantly the
profitability of the operations.

2. To ensure the continuous flow of production through continuous

supply of raw materials, components, tools etc. with repair and
maintenance service.
3. To increase the asset turnover: The investment in the inventories should
be kept minimum in relation to the volume of sales. This will increase the
turnover of the assets and thus the profitability of the company.
4. To develop an alternative source of supply: Exploration of alternative
sources of supply of materials increases the bargaining ability of the buyer,
minimisation of cost of materials and increases the ability to meet the
emergencies.

5. To establish and maintain the good relations with the suppliers:

Maintenance of good relations with the supplier helps in evolving a
favourable image in the business circles. Such relations are beneficial to the
buyer in terms of changing the reasonable price, preferential allocation of
material in case of material shortages, etc.

6. To achieve maximum integration with other department of the

company: The purchase function is related with production department for
specifications and flow of material, engineering department for the
purchase of tools, equipments and machines, marketing department for the
forecasts of sales and its impact on procurement of materials, financial
 department for the purpose of maintaining levels of materials and
estimating the working capital required, personnel department for the
purpose of manning and developing the personnel of purchase department
and maintaining good vendor relationship.
7. To train and develop the personnel: Purchasing department is managed
with varied types of personnel. The company should try to build the
imaginative employee force through training and development.
8. Efficient record keeping and management reporting: Paper processing
is inherent in the purchase function. Such paper processing should be
standardised so that record keeping can be facilitated. Periodic reporting to
the management about the purchase activities justifies the independent
existence of the department.
Functions of Purchase Department

Procurement of stores through indigenous and foreign sources

as required in accordance with the rules in force.
Checking of requisitions/purchase indents.
Selection of suppliers for issue of enquiries.
Issuing enquiries/tenders and obtaining quotations.
Analysing quotations and bids etc., and preparation of comparative
statement (quotation charts).
Consultation with the Indent or for selection and approval of quotations
and with Accounts Officer for pre-audit.
Negotiating contracts.
Checking legal conditions of contracts. Consulting Administrative Officer
or Secretary, if necessary.
Issue of Purchase Orders.
Follow-up of purchase orders for delivery in due time
Verification and passing of suppliers‟ bills to see that payments are
made promptly.
Correspondence and dealing with suppliers, carriers etc., regarding
shortages, rejections etc., reported by the Stores Department.
 Maintenance of purchase records.
Maintenance of progressive expenditure statement, sub-head
wise. Maintenance of vendor performance records/data.
Arrangement for Insurance Surveys, as and when
necessary. Clearance of foreign consignments.
Keeping various Departments/Divisions informed of the progress of their
indents in case of delay in obtaining supplies.
Serving as an information centres on the materials‟ knowledge i.e.
their prices, source of supply, specification and other allied matters.
Development of reliable and alternate sources of supply.

Steps in material purchasing processing

Step 1: Need Recognition
The business must know it needs a new product, whether from internal or
external sources. The product may be one that needs to be reordered, or it may
be a new item for the company.
Step 2: Specific Need
The right product is critical for the company. Some industries have
standards to help determine specifications. Part numbers help identify these for
some businesses. Other industries have no point of reference. The company may
have ordered the product in the past. If not, then the business must specify the
necessary product by using identifiers such as color or weight.
Step 3: Source Options
The business needs to determine where to obtain the product. The company
might have an approved vendor list. If not, the business will need to search for a
supplier using purchase orders or research a variety of other sources such as
magazines, the Internet or sales representatives. The company will qualify the
suppliers to determine the best product for the business.
Step 4: Price and Terms
The business will investigate all relevant information to determine the best
price and terms for the product. This will depend on if the company needs
commodities (readily available products) or specialized materials. Usually the
business will look into three suppliers before it makes a final decision.
Step 5: Purchase Order
The purchase order is used to buy materials between a buyer and seller. It
specifically defines the price, specifications and terms and conditions of the
product or service and any additional obligations.
Step 6: Delivery
The purchase order must be delivered, usually by fax, mail, personally, email
or other electronic means. Sometimes the specific delivery method is specified
in the purchasing documents. The recipient then acknowledges receipt of the
purchase order. Both parties keep a copy on file.
Step 7: Expediting
Expedition of the purchase order addresses the timeliness of the service or
materials delivered. It becomes especially important if there are any delays. The
issues most often noted include payment dates, delivery times and work
completion.
Step 8: Receipt and Inspection of Purchases
Once the sending company delivers the product, the recipient accepts or
rejects the items. Acceptance of the items obligates the company to pay for them.
Step 9: Invoice Approval and Payment
Three documents must match when an invoice requests payment - the
invoice itself, the receiving document and the original purchase order. The
agreement of these documents provides confirmation from both the receiver and
supplier. Any discrepancies must be resolved before the recipient pays the bill.
Usually, payment is made in the form of cash, check, bank transfers, credit letters
or other types of electronic transfers.
Step 10: Record Maintenance
In the case of audits, the company must maintain proper records. These
include purchase records to verify any tax information and purchase orders to
confirm warranty information. Purchase records reference future purchases as
well.
 Methods of purchasing
 Centralized purchasing- One department located as head or main office
purchases the requirements of all the units which belongs to the company.
This is known as Centralized buying.

 Decentralized buying: Every unit of the company has an independent

purchase department located locally which carriers out the purchasing
function for that particular unit.
Factors influencing purchasing policy
 Economic condition
 Regulatory changes
 Political environment
 Social environment
 Competition
 Organization goals and objectives
 Organizational structure
 Policies and procedures
 Technologies levels
 Manpower skills
 Time factor
 Current financial situation

Principles of purchasing
 Principle of right price
 Principle of right quality
 Principle of right time
 Principle of right source
 Principle of right quantity
 Principle of right attitude
 Principle of right contracts
 Principle of right material
 Principle of right transportation
 Principle of right place of delivery
 Selection of suppliers
It helps to have a quality inputs and also to offer quality products with less
cost. It is required to get all the information from them to evaluate according to
specific criteria and select the best providers for company.

Factors considered for selection of suppliers

 Sources of suppliers
 Development of approved list of suppliers
 Evaluation and selection of the suppliers
There are eight common supplier selection criteria which includes
 Cost.
 Quality & Safety.
 Delivery.
 Service.
 Social Responsibility.
 Convenience/Simplicity.
 Risk.
 Agility.

Selection of Suppliers
Selection of the right supplier is the responsibility of the purchase
department. It can contribute substantially to the fundamental objectives of the
business enterprise. Different strategies are required for acquiring different types
of materials. The selection of supplier for standardised.
Products will differ from non-standardised products. Following factors are
considered for the selection of suppliers:

A. Sources of Supplier
The best buying is possible only when the decision maker is familiar with all
possible sources of supply and their respective terms and conditions. The
purchase department should try to locate the appropriate sources of the supplier
of various types of materials. This is known as „survey stage‟. A survey of the
following will help in developing the possible sources of supply:
1. Specialised trade directories.
2. Assistance of professional bodies or consultants.
 3. The buyer‟s guide or purchase handbook.
4. The manufacturer‟s or distributor‟s catalogue.
5. Advertisements in dailies.
6. Advertisement in specialised trade journals.
7. Trade fair exhibitions.

B. Development of approved list of suppliers

The survey stage highlights the existence of the source. A business inquiry
is made with the appropriate supplier. It is known as „Inquiry Stage‟. Here a short
listing is made out of the given sources of suppliers in terms of production
facilities and capacity, financial standing, product quality, possibility of timely
supply, technical competence, manufacturing efficiency, general business
policies followed, standing in the industry, competitive attitude, and interest in
buying orders etc.

C. Evaluation and Selection of the Supplier

The purchase policy and procedure differ according to the type of items to
be purchased. Hence, evolution and selection of the supplier differ accordingly.
In the „Purchasing Handbook‟ edited by Aljian, the following variables to be
considered while evaluating the quotations of the suppliers have been described

1. Cost Factors
Price, transportation cost, installation cost if any, tooling and other
operations cost, incidence of sales tax and excise duty, terms of payment and cash
discount are considered in cost factor.

2. Delivery
Routing and F.O.B. terms are important in determining the point at which
the title to the goods passes from vendor to the buyer and the responsibility for
the payment of the payment charges.

3. Design and Specification Factors

Specification compliance, specification deviations, specification advantages,
important dimensions and weights are considered in line with the demonstration
of sample, experience of other users, after sale services etc.
4. Legal Factors
Legal factors include warranty, cancellation provision, patent protection,
public liability, federal laws and reputation compliance.

5. Vendor Rating
The evaluation of supplier or vendor rating provides valuable information
which help in improving the quality of the decision. In the vendor rating three
basic aspects are considered namely quality, service and price. How much weight
should be given to each of these factors is a matter of judgment and is decided
according to the specific need of the organization.

Inventory Management

Meaning
It is a stock of physical goods that contain economic value and held in
various forms by an organization in its custody awaiting packing, processing,
transformation, sale in future. It includes raw materials, work-in-progress,
finished goods and inventory of suppliers etc.,

Definition
Inventory, often called merchandise, refers to goods and materials that a
business holds for sale to customers in the near future.

Inventory Management
It is defined as the systematic location of storage and recording of goods. It
is the control program which allows the management of sales, purchases and
payments.
It helps to create invoices, purchase orders, receiving list, and payment
receipts and bar coded labels.

Benefits of Inventory Management

 Inventory balance
 Inventory turnover
 Repeat customer
 Accurate planning
 Warehousing organization
  Employee efficiency
 Inventory orders
 Inventory tracking
 Time saving
 Cost cutting

Inventory Control

Meaning
Inventory control refers to “all aspects of managing a company‟s
inventories: purchasing, shipping, receiving, tracking, warehousing and storage,
turnover, and reordering.”
It is a system which ensures the provision of the required quantity of
inventories of right quality and at right time.

Definition
It is defined as “Coordination and supervision of the supply, storage,
distribution, and recording of materials to maintain quantities adequate for
current needs without excessive oversupply or loss”.

Techniques of Inventory control

1. Economic order quantity (EOQ): One of the most important problems
faced by the purchasing department is how much to order at a time. Purchasing
in large quantities involve lesser purchasing cost. But cost of carrying them tends
to be higher. Likewise if purchases are made in smaller quantities, holding costs
are lower while purchasing costs tend to be higher.
Hence, the most economic buying quantity or the optimum quantity should
be determined by the purchase department by considering the factors such as cost
of ordering, holding or carrying.
This can be calculated by the following formula:
Q = √2AS/I
where Q stands for quantity per order ;
A stands for annual requirements of an item in terms of rupees; S
stands for cost of placement of an order in rupees; and
I stand for inventory carrying cost per unit per year in rupees.
 2. ABC analysis: In order to exercise effective control over materials,
A.B.C. (Always Better Control) method is of immense use. Under this method
materials are classified into three categories in accordance with their respective
values. Group „A‟ constitutes costly items which may be only 10 to 20% of the
total items but account for about 50% of the total value of the stores.
3. VED analysis: VED Analysis attempts to classify the items used into
three broad categories, namely Vital, Essential, and Desirable. The analysis
classifies items on the basis of their criticality for the industry or company.
Vital: Vital category items are those items without which the production
activities or any other activity of the company, would come to a halt, or at least
be drastically affected.
Essential: Essential items are those items whose stock – out cost is very high for
the company.
Desirable: Desirable items are those items whose stock-out or shortage causes
only a minor disruption for a short duration in the production schedule. The cost
incurred is very nominal.
4. FSN analysis: In FSN analysis, items are classified according to their rate
of consumption. The items are classified broadly into three groups: F – means
Fast moving, S – means Slow moving, N – means Non-moving.
5. Stock levels: There are four major types of stock levels of inventory.
a. Minimum Level: This represents the quantity which must be
maintained in hand at all times. If stocks are less than the minimum
level, then the work will stop due to shortage of materials.
b. Maximum Level: It is the quantity of materials beyond which a firm
should not exceed its stocks. If the quantity exceeds maximum level
limit then it will be termed as overstocking. A firm avoids overstocking
because it will result in high material costs.
c. Danger Level: It is the level below which stocks should not fall in any
case. If danger level approaches then immediate steps should taken to
replenish the stocks even if more cost is incurred in arranging the
materials.
d. Average Stock Level: The Average stock level is calculated such
as: Average Stock Level = Minimum stock Level + 1/2 of Reorder Q
 6.Just in time (JIT): Just-in-time production or the Toyota Production
System (TPS), is a methodology aimed primarily at reducing times within
production system as well as response times from suppliers and to customers. Its
origin and development was in Japan, largely in the 1960s and 1970s and
particularly at Toyota.
7.HML analysis: H-M-L analysis is similar to ABC analysis except the
difference that instead of “Annual Inventory Turnover”, cost per unit criterion is
used. The items under this analysis are classified based on their unit prices.
8.SDE analysis: The SDE analysis is based upon the availability of items
and is very useful in the context of scarcity of supply. In this analysis, „S‟ refers
to „scarce‟ items, generally imported, and those which are in short supply. „D‟
refers to difficult items which are available indigenously but are difficult items
to procure. Items which have to come from distant places or for which reliable
suppliers are difficult to come by fall into „D‟ category. „E‟ refers to items which
are easy to acquire and which are available in the local markets.
9.Perpetual inventory system: Perpetual inventory or continuous inventory
describes systems of inventory where information on inventory quantity and
availability is updated on a continuous basis as a function of doing business.
Generally this is accomplished by connecting the inventory system with order
entry and in retail the point of sale system.

Materials handling system

Meaning
Materials handling can be also defined as „the function dealing with the
preparation, placing and positioning of materials to facilitate their movement or
storage‟.
It is a system or combination of methods, facilities, labor and equipment for
moving, packaging and storing the materials to meet specific objectives.
It involves movement of materials from one place to another place for the
purpose of processing.

Factors influencing materials handling

Equipment factors to be taken into consideration may well include the
following:
 1. Adaptability: The load carrying and movement characteristics of the
equipment should fit the materials handling problem.
2. Flexibility: Where possible the equipment should have flexibility to
handle more than one material, referring either to class or size.
3. Load capacity: Equipment selected should have great enough load-
carrying characteristics to do the job effectively, yet should not be too large
and result in excessive operating costs.
4. Power: Enough power should be available to do the job.
5. Speed: Rapidity of movement of material, within the limits of the
production process or plant safety, should be considered
6. Space requirements: The space required to install or operate materials
handling equipment is an important factor in its selection.
7. Supervision required: As applied to equipment selection, this refers to
the degree of automaticity designed into the equipment.
8. Ease of maintenance: Equipment selected should be easily maintained at
reasonable cost.
9. Environment: Equipment selected must conform to any environment
regulations.

Objectives of material handling:

1. Minimize cost of material handling.
2. Minimize delays and interruptions by making available the materials at
the point of use at right quantity and at right time.
3. Increase the productive capacity of the production facilities by
effective utilization of capacity and enhancing productivity.
4. Safety in material handling through improvement in working
condition.
5. Maximum utilization of material handling equipment.
6. Prevention of damages to materials.
7. Lower investment in process inventory.
Principles of materials handling
Following are the principles of material handling:
1. Planning principle: All handling activities should be planned.
2. Systems principle: Plan a system integrating as many handling activities
as possible and co-ordinating the full scope of operations (receiving,
storage, production, inspection, packing, warehousing, supply and
transportation).
3. Space utilization principle: Make optimum use of cubic space.
4. Unit load principle: Increase quantity, size, weight of load handled.
5. Gravity principle: Utilise gravity to move a material wherever
practicable.
6. Material flow principle: Plan an operation sequence and equipment
arrangement to optimise material flow.
7. Simplification principle: Reduce combine or eliminate unnecessary
movement and/or equipment.
8. Safety principle: Provide for safe handling methods and equipment.
9. Mechanisation principle: Use mechanical or automated material
handling equipment.
10. Standardisation principle: Standardise method, types, size of material
handling equipment.
11. Flexibility principle: Use methods and equipment that can perform a
variety of task and applications.
12. Equipment selection principle: Consider all aspect of material, move
and method to be utilised.
13. Dead weight principle: Reduce the ratio of dead weight to pay load in
mobile equipment.
14. Motion principle: Equipment designed to transport material should be
kept in motion.
15. Idle time principle: Reduce idle time/unproductive time of both MH
equipment and man power.
16. Maintenance principle: Plan for preventive maintenance or scheduled
repair of all handling equipment.
Materials handling in different industries and fields
 Manufacturing
 Processing
 Construction
 Mining
 Power
 Machine tools
 Truck building
 Rail road car builders
 Ship building
 Aircraft

Selection of material handling equipments

Selection of Material Handling equipment is an important decision as it
affects both cost and efficiency of handling system. The following factors are to
be taken into account while selecting material handling equipment.

1. Properties of the material

Whether it is solid, liquid or gas, and in what size, shape and weight it is to
be moved, are important considerations and can already lead to a preliminary
elimination from the range of available equipment under review. Similarly, if a
material is fragile, corrosive or toxic this will imply that certain handling methods
and containers will be preferable to others.

2. Layout and characteristics of the building

Another restricting factor is the availability of space for handling. Low-level
ceiling may preclude the use of hoists or cranes, and the presence of supporting
columns in awkward places can limit the size of the material-handling equipment.
If the building is multi-storeyed, chutes or ramps for industrial trucks may be
used. Layout itself will indicate the type of production operation (continuous,
intermittent, fixed position or group) and can indicate some items of equipment
that will be more suitable than others. Floor capacity also helps in selecting the
best material handling equipment.
3. Production flow
If the flow is fairly constant between two fixed positions that are not likely
to change, fixed equipment such as conveyors or chutes can be successfully used.
If, on the other hand, the flow is not constant and the direction changes
occasionally from one point to another because several products are being
produced simultaneously, moving equipment such as trucks would be preferable.

4. Cost considerations
This is one of the most important considerations. The above factors can help
to narrow the range of suitable equipment, while costing can help in taking a final
decision. Several cost elements need to be taken into consideration when
comparisons are made between various items of equipment that are all capable
of handling the same load. Initial investment and operating and maintenance
costs are the major cost to be considered. By calculating and comparing the total
cost for each of the items of equipment under consideration, a more rational
decision can be reached on the most appropriate choice.

5. Nature of operations
Selection of equipment also depends on nature of operations like whether
handling is temporary or permanent, whether the flow is continuous or
intermittent and material flow pattern-vertical or horizontal.

6. Engineering factors
Selection of equipment also depends on engineering factors like door and
ceiling dimensions, floor space, floor conditions and structural strength.

7. Equipment reliability
Reliability of the equipment and supplier reputation and the after sale service
also plays an important role in selecting material handling equipments.

Economic Considerations in Material handling

(i) Initial cost of the equipment required.
(ii) Cost of installation, rearrangement and alterations to utilize
equipment and building etc.
(iii) Cost of repair and maintenance of the equipment used.
 (iv) Cost of power/fuel required for operation.
(v) Rate of obsolescence of handling equipment.
(vi) Depreciation rate.
(vii) Probable salvage value of equipment at the end of its useful life.
(viii) Labour cost for operation of equipment.
(ix) Cost of necessary auxiliary equipment (such as chargers for batteries
etc.).
(x) Interest on investment made for purchasing equipment.
(xi) Taxes and insurance charges on equipment procured.
(xii) License fees (for vehicles that may operate outside the factory or on
highways).
(xiii) Rent charges for space needed for parking of vehicles.
(xiv) Cost of supervision of the equipment.
(xv) Increased production expected by use of handling equipment.
Savings that the equipment shall bring about in direct labour cost or
other allied costs.

Materials handling Equipment

Meaning
It is the equipment that relate to the movement, storage, control and
protection of materials, goods, products throughout the manufacturing process,
distribution, consumption and disposal.
Types of material handling equipments

1. Conveyors – It is mechanical equipment consisting a continuous moving

belt that transports materials or packages from one place to another place.
They do not require operators, move a large volume of products and are
inexpensive to operate. It may include the following types of conveyors:
a. Belt conveyors –It consists of 2 or more pulleys, with the moving
materials on the conveyors belt which rotates above them.
b. Roller conveyors –It is the conveyors consisting of fixed location roller
over materials are moved by gravity or population.
b. Chain conveyors –it is a type of conveyors for production lines. It carries
a series of single pendants. It is driven by motor and other material
suspended on the pendants.

2. Industrial trucks – They are wheeled vehicles that can travel along variable
paths. They are electric, diesel, gas powered vehicles equipped with all holding
devices. It includes industrial tractor, platform trucks etc.

3. Automatically guided vehicles (AGVS) – These do not require operators and

offer flexibility in the functions they perform. They are controlled by signals sent
through wires in the floor or inductive tape on the floor space.

4. Cranes - They are the devices mounted on overhead rails or ground level
wheels or rails. They lift, swing and transport large and heavy materials.

5. Elevators – They are a type of cranes that lift materials usually between
floors of building.

6. Hoists – They are the devices which move materials vertically and horizontally
in a limited area. They are used primarily when materials must be lifted prior to
being moved from one point to another.

7. Industrial robots – It is a mechanism which has a movable arms like projection

with a gripper on the end that can perform a variety of repetitive tasks. It will be
in controlled so that it can be reprogrammed and flexible.

Standardization
It is the framework or an agreement to all relevant parties in an industry to
ensure that all processes which are associated with the creation of goods or
services are performed within set guidelines. It is to ensure that the end products
have a consistent quality with all regards.

Benefits of Standardization
 Cost reduction
 Better quality control
 Flexibility
  Responsiveness benefits
 Reduce inventory items
 Better means of communication about a product
 Helps in inventory analysis

Codification
It is the process of identifying each item by a number or digits. It also helps
in identifying the group, sub-group, type of the product and the dimension of the
item. It helps in identifying the product by purchase department.

Benefits of Codification
 Grouping up of similar items
 Avoids confusion
 Reducing duplication of items
 Minimization of the number of items
 Easy recognition of items

Simplification
Meaning
The process of Standardization leads to simplification or to reduction. It
reduces unnecessary varieties and standardizes to the most economical sizes,
grades, colours, types of parts etc., it reduces the complexity related to product
range, materials and design.

Benefits of Simplification
 Reduces price of product
 Improves product quality
 Quick delivery and better after sales services
 Reduces manufacturing operations
 Eliminates risk of obsolescence
 Review Questions

SECTION - A (2 marks)

1. Define material management.

2. Mention any four objectives of material handling.
3. What is codification?
4. Define inventory.
5. What is stock verification?
6. What is Just In Time?

SECTION - B (6 marks)

1. State the objectives of material management.

2. Explain the nature of materials handling.
3. Discuss the essentials of good inventory control system.
4. Explain the objectives of material handling.
5. Explain selection process of supplier.

SECTION - C (14 marks)

1. Discuss the factors to be considered while selecting material handling

equipment.
2. Discuss the different material handling equipments.
3. Discuss the guidelines for effective utilization of material handling
equipments.
4. Briefly discuss the principles of purchasing? Mention steps involved
in material purchasing processing?
5. Discuss the techniques of inventory control.
 UNIT – 4

PRODUCTION PLANNING AND QUALITY CONTROL

Production Planning

Meaning
It is the process of decision making related to men, materials, machinery,
methods etc., which is required by the firm for manufacturing operations.

It helps in allocation of the resources to produce desired product

in required amount at minimum cost.
Definition
According to Ray Wild, “production planning is concerned with the
determination, acquisition and arrangement of all facilities necessary for future
operations.”

Need for production planning and control

1. To ensure effective utilization of firms‟ resources.
2. To achieve the production objectives with respect to quality, quantity,
cost and timeliness of delivery.
3. To obtain the uninterrupted production flow in order to meet customers
varied demand with respect to quality and committed delivery schedule.
4. To help the company to supply good quality products to the customer
on the continuous basis at competitive rates.
Objectives of Production Planning
 Utilize resources
 Ensure stable flow of production
 Assess the resources
 Ensure the best possible inventory
 Minimize the wastage of raw materials
 Develop labour productivity
 Create better work environment
  Achieve consumer satisfaction
Functions of Production Planning
Effective utilization of resources – Production planning results in
effective utilization of resources, plant capacity and equipments which
results in low cost and high returns.
Steady flow of production – Production planning ensures a regular and
steady flow of production. All the machines are put to maximum use which
results in a regular production.
Estimate the resources – Production planning helps to estimate the
resources like men, materials etc., the estimate is made based on the sales
forecast so production is planned to meet sales requirements.
Ensures optimum inventory – Production planning ensures optimum
inventory. It prevents over stocking and under stocking. Necessary stocks
are maintained at a proper level to meet the production demands.
Co-ordinates activities of departments – It helps in coordinating the
activities of different departments. The marketing departments coordinate
production planning department to sale goods.
Minimize wastage of raw materials – It helps in minimizing the wastage
of raw materials. It ensures proper inventory of raw materials and materials
handling.
Improves the labour productivity – It improves the labour productivity
by maximum utilization of man power. Training also provided to workers.
The profits are shared in the form of wages and other incentives.
Helps to capture the market – It helps to give delivery of goods to
customers in time to have a regular flow of quality production. It helps the
company to face competition effectively.
Provides a better work environment – It provides a better work
environment to the workers as they get improved working conditions,
proper working hours, leave and holidays etc.,
Facilitates quality improvement –Iit helps in quality control as they
check the regularity of production. Quality consciousness is developed
among the employees.
Results in consumer satisfaction – It helps to give a regular supply of
goods and services to the customers at fair prices. It results in consumer
satisfaction.
Reduces the production cost – It makes the optimum utilization of
resources, minimizes wastages and also maintains optimum size of
 inventories.
Types of production systems

 Continuous production

It is also known as continuous process or continuous flow process. It refers

to the production of standardized products with a standard set of process. Under
this, the materials are processed continuously in motion, chemical reactions,
heating treatment etc., it operates 24/7 with infrequent shutdowns.
Ex: Oil refining, Power stations, Casting of steel, Metal smelting, Fertilizers
etc.,

 Job or Unit production

It involves production as per customer‟s specification. Each batch or orders

includes identical products and are different from other batches. It includes
smaller investment and equipment. It is flexible and adapted to changes in
product design and order size.
Ex: Garments Industry

 Intermittent production

Under this, the goods are produced partly for inventory and partly for
customer‟s orders.
Ex: Automobiles, printing presses, electrical goods etc.,

Production Control

Meaning
It is the function of management which plans, directs and controls the
materials supply and processing activities to meet sales program.
It involves materials handling, parts, assembling etc., it includes planning,
scheduling, routing, dispatching, storage etc.,

Objectives of Production Control

 Minimize production cost.
 Procurement of raw material, equipment and labour.
 Adjusting with demand forecast.
  Co-ordination with different departments/divisions.
 Avoid delay in production by regular and timely supply of raw
materials.
 Performance review of semi-finished and finished products and
quality system.

Benefits of Production Control

 Better service to customer – Production flows as per the scheduled time

and promised delivered dates are kept. It leads to the increase of
confidence among the group of salesman.

 Less overtime work – As flow of production is matched with the

promised delivery dates or expected demand periods, there will be few
rush firms in the same industry without adequate production and planning
and control system.

 Need for smaller inventories of WIP and finished goods – As the

production process in planned and maintained well it leads to the
minimum storage of WIP and finished goods.

 More effective purchasing –Due to the better materials management

leading to the effective inventory control, purchasing is more scientific.

 Less loss of time – As there is a proper flow of materials to workers on

time, the workers need not have to waste their time in the work place for
materials.

 Cost saving – A proper designed and introduced system of production

planning and control frequently results in major cost-savings.

 Less work stoppage – Work stoppages are avoided or minimized in

terms of time duration. Therefore delays in dispatch of goods to
customers are very infrequent.

 Maintain industrial harmony – Effective production control helps in

establishing harmonious industrial relations.

Factors determining Production Control

Manufacturing firms are classified as intermittent, continuous or composite
production firms, depending on the length of processing time without set up
changes.
 Production control procedure is comparatively simpler in the continuous
flow process operation than in intermittent, multi-operation production.

In case of continuous flow process operation, for example, found in

petrochemical, soap and synthetic fibre industries, routing is standardized, quality
control is highly developed and planning for raw materials, finished goods
inventory levels and markets is extremely important. The production control
function in such industries is generally embodied in the process equipment itself.
In case of intermittent, multi operation production, found in case of manufacture
of hand tools, toys, automobile spares etc, a great variety of material is used in
many ways and for many purposes. The products consist of a large number of
parts and sub-assemblies. The production control procedures become complex
and sophisticated in order to ensure proper sequence of operation and performing
these operations at the right time and the right place.
Factors affecting the complexity of production control procedures are:
1. Number of ultimate parts in the end product.
2. Number of different operations on each part.
3. Extent to which processes are dependent on the completion of previous
operations.
4. Variations in production rates of machines used in the process.
5. Number of discrete parts and sub-assemblies.
6. Degree to which customers orders with specific delivery dates occur.
7. Receipt of many small lot orders.

Production Planning and Control

Meaning
It refers to the decisions on the acquisition, utilization and allocation of
production resources to satisfy customer requirement.

Definition
According to Alford and Beatty, “PPC comprise the planning, routing,
scheduling, dispatch and follow up functions in the production process so
organized that the movements of material, performance of machines and
operations of labours sub-divided are directed and coordinated as to quantity,
time and place.”
Objectives of PPC
 Estimate the sources like men, machine, materials, methods etc.,
 To determine the capacity of manufacturing departments
 Minimize operating cost and keep delivery schedule
 Keep a check on production policy and ensure that production is
achieved before the target date
 Update about latest development in the field of production technique
 Optimum utilization of production departments.

Scope of PPC
o Materials– It helps in planning for the procurement of raw materials,
components and spare parts in the right quantities and specifications at the
right time, from right source and at the right price.
o Methods –Iit helps in choosing the best method of processing from several
alternatives. It also includes determining the best sequence of operations.
o Machines and equipments– The manufacturing methods are related to
production facilities available in the production system.
o Manpower – It involves planning for manpower such as labour,
supervisory and managerial levels having appropriate skills and expertise.
o Routing – It helps in determining the flow of work, material handling in
the plant and sequence of operations or processing steps.
o Estimating – It leads to the fixation of performance standards both for
workers and machines.
o Loading and scheduling - Loading is allocation of job to machines in
according to routing and depending on the consideration of machine
capacity. Scheduling ensure that parts, sub assemblies and finished products
are completed as per delivery dates.
o Dispatching–It is concerned with the execution of the planning functions. It
gives authority to start a particular work which has already been planned
under routing and scheduling functions.
o Expediting –It means chasing and follow up the progressing which is done
after the dispatching function. It helps in providing an efficient feedback and
review of targets and schedules.
o Inspection – It is related to the maintenance of quality in production and of
evaluating the efficiency of the processes, methods and labour so that
improvement can be made to achieve quality standards.
o Evaluating – It is done to improve performance of machines, processes
and labour is also evaluated to improve the same.
o Cost control – Manufacturing cost is controlled by wastage reduction,
value analysis, inventory control and efficient utilization of all resources.
Importance of PPC
 Facilitates and coordinates activities concerned with amount, location,
movement and timing etc.,
 Minimizes the working capital requirement
 Creates better control of material and efficient buying
 Optimum combination of resources and methods to bring down the
production cost.
 Orderly flow of production to avoid rush orders and minimizing
overtime.
 Right product with right quantity and right quality and at the right time.

Functions of PPC
Process planning – It helps in determining where each operation on a
component part, sub assembly or assembly is to be performed results in a
route for the movement of a manufacturing lot is done in factory.
Loading – The next step after route is loading to perform the next work
established against the selected machine or workstation.
Scheduling – It is the last in the planning functions. It determines when an
operation is to be performed or when work is to be completed, the
difference lies in the detail of the scheduling procedure.
Dispatching – This function may be centralized or decentralized
depending on the worker who would manage the various machine
operations depending on the routing and scheduling.
Reporting – The activity of the plant control is said to be in control when
the actual performance is within the objectives of the planned performance.
Corrective action –Iif any deviations are identified in the reporting related
to the delay of production process which may not happen within the
schedule time may require some corrective actions.
 Re planning - It is not corrective action. It revise routes, loads, schedules,
new plan is developed. It also includes any changes in market condition,
manufacturing process etc.,
Inspection – It is related to maintenance of quality in production and of
evaluating the efficiency of the processes, methods and labour to make
improvements which could help in achieving the quality standards set by
product design.
Evaluating – The main objective of evaluating is to improve performance
of machines, process and labour. It also analysis all the factors which
influences the production planning and control to identify the weak area.

Steps/Elements of PPC
1. Production planning
a. Planning
b. Routing
c. Scheduling
d. Loading
2. Production control
a. Dispatching
b. Following up
c. Inspection
d. Corrective

Planning– it the technique of foreseeing the steps in a long series

operations. It is taken at the right time and right place.
Routing– Under this, the operations, their paths and sequence are
established. To perform this machines and personnel are recruited.
Scheduling– It is the process of working out the time required to perform
each operation, entire series includes routing, making allowances to all
factors etc.,
Loading– it is the execution of scheduled plan as per the route. It
determines who will do the work. It involves the process to see how fast the
work is done.
Dispatching– It involves the issue of production orders for starting the
operations. It includes movement of materials, tools, inspection, beginning
of work etc.,
 Follow up– It involves determination of work progress, removing
obstacles, flow of work, productive operations etc., which take place with
the plans.
Inspection– It is to ensure the quality of goods. It can be required as
effective agency of production control.
Corrective measures– It involves the activities like adjusting the route,
rescheduling of work, repairs and maintenance of machinery and
equipment, inventories deviation etc.,

Advantages of PPC
Avoiding of rush orders – Production is well planned and its time aspects
are well controlled. Therefore, the production controls reduces the number
of risk orders and over time.
Avoidance of bottle necks– There shall not be any incomplete work to get
accumulated as the production flow happens according to the plan.
Cost reduction – THe production control programs minimizes the idleness
of men and machines which leads to better control of raw materials,
inventories etc.,
Effective utilization of resources–It reduces the loss of time by workers
waiting for the materials and makes most effective use of equipments.
Co-ordination – It serves to coordinate the activities of plant and results in
a concerted effort by workmen
Benefits to workers – Adequate wages, stable employment, job security,
improved working conditions, increased personal satisfaction etc.,
Efficient service to customers –It ensures better service to the customers
by enabling production to be conducted in accordance with time schedules
and deliveries are made on promised dates.

Limitations of PPC
Lack of accuracy – As planning is related to future, future is always
uncertain and so prediction about future is also difficult.
Costs – Plans formulated require too much cost and time as well. If the
costs cross beyond a limit it will be a burden to the institution.
Advance effect on decisions– Some plans are rigid and managers faces
difficulty while making the changes due to the external factors and
fluctuations in the existing environment.
 Delay in actions – Planning requires time to think, analyze and design the
final plan by which it may lose the existing opportunity available in the
market.
Psychological barrier – Managers in organization have to work strictly
according to the plan where as they may be able to give better performance
but some managers do not think beside the plan and perform their activities
like a machine.
Limited flexibility – There may be some changes in planning only up to
certain limit and this changes will further attract the changes in supporting
plans and as such the whole system is disturbed.
Human elements – Planning is the result of the thinking of human beings.
Information on the basis of which plan is formulated may not be free from
bias or there may be some other errors.
Limited practical value – Planning too much theoretical may have less
practical use to suit the environment due to unsuitability of environment
business to take various quick steps/ decision times.
Time consuming and costly process – This may delay action if certain
cases but it is also true that if sufficient time is not given to the planning
process, the plans produced may be unrealistic.

Capacity planning
It is the process of determining the production capacity required by an
organization to meet the changing demands for its products.
Strategy of capacity planning
Lead strategy – It is adding the capacity in anticipating an increase in
demand.
Lag strategy – It is adding the capacity only after the organization is
running at full capacity or beyond due to increase in demand. It reduces the
risk of waste.
Match strategy –It is adding capacity in small amounts in response to
changing demand in the market.

Factors influencing effective capacity planning

o Demand forecast
o Labour efficiency
 o Plant efficiency
o Multiplicity of shifts
o Subcontracting

Routine
It is the prescribed, detailed course of action to be followed regularly in a
standard procedure. It is mechanically performed procedures or activities.

It is the selection of path which each part of the product will follow while
being transformed from raw materials to finished products.

Techniques of Routine
 Route card
 Work sheet
 Route sheet
 Move order

Scheduling
It is the process of converting an outline plan for a project into a time-based
graphic presentation given information on available resources and time.

Objectives of Scheduling
 To maximize output
 To be predictable
 To minimize overhead
 To use optimum resources
 To reduce postponing
 To implement priorities
 To degrade heavy loads

Types of Scheduling
Forward scheduling – It is based on assigning the start and finish time of
the task based on the priority. It is used when customers places an order. It
assigns the earliest time available to finish the task and determines the work
centre.
 Backward scheduling – It determines the start and end time of the
waiting jobs by assigning them to latest available time slot to complete
the jobs when it is due.

Dispatching

It is concerned with the starting and the processing of production. It is based

on the route sheets and schedule sheets. It provides the authority to start the routed
and schedule work.

Functions of dispatching
o To ensure right products are moved from stores
o To instruct department to issue the right tools, accessories and fixtures.
o To inform the follow up section for production planning
o To direct inspection at various stages of production for inspection report.
o To maintain proper report of the various subsidiary orders issued with
each production.

Techniques of Production Planning and Control

A simple graph
A control chart
Control boards
Communication system
Linear programming

Program Evaluation and Review technique (PERT)

Meaning
It is a model for project management designed to analyze and represent the
tasks involved in completing a given project.

Various activities in PERT

Optimistic time i.e., minimum time required to complete the task.
Pessimistic time i.e., maximum possible time required to accomplish task.
Most likely time i.e., best estimation of the time required to accomplish a
task.
Time expected i.e., it assumes that everything proceeds as normal.
Advantages of PERT
Identifies critical paths.

Facilities early start, late start and lack of time.

It provides the potentiality to reduce the project duration due to the better
understanding of dependencies.

Disadvantages of PERT
It considers too many obstacles and
dependencies. Time consuming.
May not be applicable to all the projects.

Critical Path Method(CPM)

It is a mathematical based algorithms for scheduling a set of project
activities. It may use the basics technique of Expansion and Flexibility.

Difference between PERT and CPM

BASIS FOR COMPARISON PERT CPM

Meaning PERT is a project management CPM is a statistical technique
technique, used to manage of project management that
uncertain activities of a project. manages well defined activities
of a project.

What is it? A technique of planning and A method to control cost and

control of time. time.
Orientation Event-oriented Activity-oriented

Evolution Evolved as Research & Evolved as Construction

Development project project
Model Probabilistic Model Deterministic Model

Focuses on Time Time-cost trade-off

Estimates Three time estimates One time estimate

Appropriate for High precision time estimate Reasonable time estimate

 Management of Unpredictable Activities Predictable activities

Nature of jobs Non-repetitive nature Repetitive nature

Critical and Non-critical No differentiation Differentiated

activities

Suitable for Research and Development Non-research projects like civil

Project construction, ship building etc.

Crashing concept Not Applicable Applicable

Quality
It refers to the sum of the attributes or properties that describes a product.
These includes length, width, colour, specific gravity etc.,

Factors affecting quality

Market–It is the role of companies to identify the needs and then meet it
with existing technologies or by developing new technologies.
Money – The increased competition worldwide demands the industry to
opt for new and sophisticated technology which requires huge investments.
Management – The structure of the business organization, the quality
related responsibilities lie with persons at different levels in the
organizations.
Men – The growth in technology leads to the improvised technical skills in
the man power with different specializations.
Motivation –Based on the responsibility allotted to the employees, each
individual in the organization requires having proper motivation techniques
to producing the designed quality products.
Materials – Selection of proper materials to meet the desired tolerance
limit also is an important consideration.
Machines and mechanization – To have quality products which will lead
to the higher productivity of any organization, we need to use advanced
machines and mechanize various operations.
Modern information methods –It helps in storing and retrieving needed
data for manufacturing, marketing and servicing.
Quality control
It is a process by which entities review the quality of all the factors involved
in production. It includes functions like acceptance function, preventive function
and assurance functions etc.,

Quality assurance
It is the systematic measurement, comparison with a standard monitoring
of processes and an associated feedback that confers error prevention. It includes
of material quality, assemblies, products and components, services etc.,

Quality creation
It refers to the process of making customer delight of by identifying and
meeting the unexpected requirements with new or additional products or services.
It uses quality as an element to attract the customers.

Statistical Quality Control (SQC)

It refers to the use of statistical methods in monitoring and maintaining of the
quality of products and services. It considers the other variables and samples to
control product.
It uses tools like
 Descriptive statistics
 Statistical process control (SPC)
 Acceptance sampling

Quality Management
It is the act of managing all the activities and tasks related to maintain a
desired level of excellence. It includes creating and implementing quality
planning and assurance and quality control and quality improvement.

Importance of Quality management

It reduces cost of repairs, instruction, scrap, rework and product warranties
Helps in sustaining the revenue.
It uses QSP concept i.e., Quality, Service and Price.
 Product gets influenced by perception of quality which can be influenced
by advertising and promotional efforts.
It influences area like Engineering, purchased material quality,
manufacturing quality etc.,

Control charts
They are the charts which are used to know the variations and to control the
same. They uses the graphs which shows the standard and also control limit.

Operating Characteristic (OC) curve

The operating characteristic (OC) curve depicts the discriminatory power of
an acceptance sampling plan. The OC curve plots the probabilities of accepting
a lot versus the fraction defective.

When the OC curve is plotted, the sampling risks are obvious. We should
always examine the OC curve before using a sampling plan.

Acceptance sampling
Acceptance sampling uses statistical sampling to determine whether to
accept or reject a production lot of material. It has been a common quality control
technique used in industry. It is usually done as products leaves the factory, or
in some cases even within the factory.

Quality circles
It is the group of employees whose job is to identify problems, formulate
solutions and present their results too management with suggestion for
implementation.

Zero defects
It refers to the zero break downs, zero inventories, zero delays etc., this
concept is based on doing the right thing first time and eliminating defects. It
works on the following principles:
 Quality is given priority.
 Defect prevention.
 Zero defect is quality standard.
 Quality is measured in monetary terms.
International Standard Organization (ISO) 9000 series
ISO 9000 is a set of international standards on quality management and
quality assurance developed to help companies effectively document the quality
system elements to be implemented to maintain an efficient quality system.

They are not specific to any one industry and can be applied to organizations
of any size.ISO 9000 can help a company satisfy its customers, meet regulatory
requirements, and achieve continual improvement. However, it should be
considered to be a first step, the base level of a quality system, not a complete
guarantee of quality.

ISO 9000 principles of quality management

 Customer focus
 Leadership
 Engagement of people
 Process approach
 Improvement
 Evidence based decision making
 Relationship management

ISO 14000 series

It helps in identifying the organizations to manage the environment effects of
their business practices.

Some of the standards in ISO series are

 ISO 14001 –Specification of environment management system
 ISO 14004 – Guideline standard
 ISO 14010 through ISO 14015 – Environmental Auditing and
related activities
 ISO 14020 through ISO 14024 – Environment labelling
 ISO 14031 through ISO 14032 – Environment performance evaluation
 ISO 14040 through ISO 14043 – Life Cycle Assessment
Total quality management
It refers to an active approach encompassing a company to operate according
to the philosophy and system for continuous improvement of quality.

Principles of TQM
 Quality oriented management
 Focus on customer
 Involving the work force
 Continuous improvement
 Supplier partnership
 Measuring performance

 Cost reduction – TQM helps in reducing the cost which is spent for
quality control measures. By having a proper control over the products it
reduces the excessive cost.
 Customer requirement – The quality of the products are manufactured
based on the customer requirement and expectations.
 Defect reduction – AS TQM focuses on the quality of the product, it
reduces the human error and tries to focus on the zero defects products
manufacturing.
 Morale – IT improves the employee morale by giving priority to the
incentives and reducing the industrial accidents.

Disadvantages of TQM

 Risky jobs –It becomes difficult to check all the products individually to
control over the quality.
 Lack of skilled workers – Not all the employees are technically
sounded to understand the concept of TQM

 No benefits for many years – Though there are many industries which
is following TQM from a long time the benefits they have got are not very
big.
 Job insecurity – Although the employees are technically sounded are
not the job security is not assured to them.
Productivity
It refers to an economic measure of output per unit of input. Output includes
revenues and business inventories and input includes labour and capital.

Types of Productivity

 Labour Productivity – it is the amount of goods and services that a

worker produces in a given amount of time.
 Capital Productivity – It is the efficiency with which fixed capital
stock is used.
 Direct cost productivity –It includes all the items of direct cost
associated with resources used are aggregated on a monetary value basis.
 Total cost productivity – It is the productivity of all factors involved as
a whole in a production activity.
 Energy productivity – It is the ratio of output divided by energy
consumption.
 Raw material productivity – It expresses the amount of economic
value generated by a unit of material input or material consumption.
 Partial productivity –It is the ratio of output to one class of input.
 Total factor productivity –It is the ratio of net output to the sum of
associated labour and capital inputs.
 Total productivity –It is the ratio of total output to the sum of all input
factors.

Factors influencing productivity

1. Man Power:

Selection i.e. selection of right man for a specific job Applying well known
saying division of labour. Training i.e. consideration of training requirements
whether to be imparted training in the plant itself or to be sent for training outside
the unit to other plants within the country or abroad or training institutes.
2. Equipment and Machines:

The number of machine tools, their capacity and accessories required,

replacement policy of the organization and maintenance schedules etc.

3. Input Materials:
i. Appropriate quality of materials
ii. Material requirement planning (M.R.P.)
iii. Substitute of materials being used
iv. Inspection of input materials at various points
v. Cost of materials procurement and handling up to stores.

4. Time:
Time is significant for the following reasons:
i. Inspection of input materials i.e. raw material and semi finished or
finished items required for assembly.
ii. Time for inspection of finished products.
iii. Production time (total time of manufacturing).
iv. Time for repair and maintenance of machines and equipment.

5. Floor Area or Space:

i. Total area covered by the administrative block, production shop and

inspection & quality control departments etc.
ii. Location of different departments and shops etc.
iii. Other space covered by plant layout.

6. Power or Energy:
i. Maintenance of equipment for saving energy
ii. Use of renewable energy devices
iii. Use of biogas, photovoltaic cells, solar energy and other non conventional
techniques.
7. Finance:

Finance is required to maintain all the above requirements. The

management should be for minimum rather optimum finance.
8. Movement of Man and Materials:
i. The required motion of manpower within the plant
ii. The motion of raw material semi finished and finished products/items
within the plant.

Standard time
It is the time required by an average skilled operator, working at a normal
pace, to perform a specific task using a prescribed method. It also includes
appropriate allowances to look after the workers.

Usage of standard time

Staffing or workforce planning –The number of workers required cannot
accurately be determined unless the time required to process the existing
work in known.

Line balancing or production levelling – The correct number of

workstations for optimum work flow depends on processing time, standard
time at each workstations.
Materials requirements planning – MRP systems cannot operate
properly without accurate work standards.
System simulation – Simulation models cannot accurately simulate
operation unless times for all operations are known.
Wage payment– Comparing expected performance with actual
performance requires the use of work standards.
Cost accounting – Works standards are necessary for determining not only
the labour component of costs but also the correct allocation of production
costs to specific products.

Employee evaluation –In order to access whether individual employees

are performing as well as they should, a performance standards is necessary
against which the level of performance is measured.
Techniques to establish standard time
 Time study
 Predetermined motion time systems
 Standard data system
 Work sampling
Method study
It is the systematic recording and critical examination of existing and proposed
ways to doing work. It is a means of developing and applying easier and more
effective methods and reducing costs.

Objectives
 Develop work method and procedures
 Establish the best sequence of doing work
 Reduce monotony in the work
 Improve plant and material utilization
 Examine the facts critically
 Eliminate waste and unproductive operations

Steps involved in method study

 Select – Work selected for method study may be an identical problem area
or an identified opportunity. It may be identified through a systematic
review of a available data.

 Record – The record stage of method study involves gathering the

sufficient data to act as the basis of evaluation and examination. A wide
range of techniques are available for recording, the choice depends on the
nature of investigation.

 Examine – The recorded data are subjected to examination and analysis,

formalized versions of this process are critical examination and system
analysis.

 Develop – The examine stage merges into the develop stage of the
investigation as more thorough analysis leads to automatically to identity
areas of change.

 Install – the success of any method study project is realized when actual
change is made on the ground change that meets the originally specific
terms of reference for the project.

 Maintain – Sometime after introduction of new working methods it is

necessary to check that the new method is working that it is being properly
followed.
Time and motion study
It is an efficiency technique which combines the time study and motion
study.
Time study is concerned with the determination of the amount of time
required to perform a unit of work. It consists of observing and recording
the time required to perform each element of task.

Motion study it is a qualitative analysis of a work station leading to

design or improvement of an operation or activity.

Time study procedure

 Define the objective of the study – this involves statement of the use of
the result, the precision desired and the required level of confidences in
estimated time standards.
 Verify the standard method and conditions exist for operation and the
operator properly trained.
 Select operator to be studied if there are more than one operator doing
the same task.
 Record information about the standard method, operation, operator,
product, equipment and condition on the time study observation sheet.
 Divide the operation into reasonably small elements and record them on
the time study observation sheet.
 Time the operator for each of the element. Record the data for a few
minutes of cycles on time study observation sheet.
 Collect and record the data required number of cycles by timing and
rating the operator
 Calculate the representative watch time for each element of operation.
 Determine the allowances for fatigue and various delays
 Determine the standard time of operation.

Meaning of motion study

It is a qualitative analysis of work station leading to the design or improvement
of an activity. It is a part of method study where analysis of the motion of an
operator or work will be studied.
Benefits of motion study
 It grows the ability of workers
 Life of machine can be increased
 Reduces the exhaustion of workers
 Decreases the labour cost due to less wastage of factory or plant
 Helps in improve the methods or procedures adopted in performance of
various jobs
 Assists to improve the layout of th e facility
 Improve utilization of resources

Work Study
Work study is the investigation, by means of a consistent system of the work
done in an organization in order to attain the best utilization of resources i.e.
Materials, Machines, Men and Money. All the technologies and management
systems are related with productivity.

Flow chart
A flowchart is a type of diagram that represents an algorithm, workflow or
process. The flowchart shows the steps as boxes of various kinds, and their order
by connecting the boxes with arrows. This diagrammatic representation
illustrates a solution model to a given problem. Flowcharts are used in analyzing,
designing, documenting or managing a process or program in various fields.

Flow Chart Defined

A flow chart is a graphical or symbolic representation of a process. Each step
in the process is represented by a different symbol and contains a short
description of the process step. The flow chart symbols are linked together with
arrows showing the process flow direction.

Common Flowchart Symbols

 Terminator: An oval flow chart shape indicating the start or end of the
process.
 Process: A rectangular flow chart shape indicating a normal process
 flow step.
 Decision: A diamond flow chart shape indication a branch in the process
flow.
 Connector: A small, labeled, circular flow chart shape used to indicate
a jump in the process flow.
 Data: A parallelogram that indicates data input or output (I/O) for a
process.
 Document: Used to indicate a document or report

Flow Diagram
Flow diagram is a collective ter m for a diagram representing a flow or
set of dynamic relationships in a system. The term flow diagram is also used as
a synonym for flowchart and sometimes as a counterpart of the flowchart.

Flow diagram is a graphic representation of the physical route or flow of

people, materials, paper works, vehicles, or communication associated with a
process, procedure plan, or investigation

Types of Diagram used in work study

1. Outline process Chart

An outline process chart is a proccess chart which gives an overall view

of a process by recording only the main operations and sequences in
proper sequence.

2. Operation process chart

An operation process chart provides a compact over all view of the whole system
of operations involved in the pro duction of a product. In this chart only the main
activities (i.e. operations and inspections) carried out to complete a job are
recorded in the sequence of their occurrence but irrespective of where they are
performed and who performs them.
3. Flow process chart

The Flow process Chart is a simple half-text, half-picture method of showing the
steps in a process, using symbols to indicate the type of action being taken and
text to give details of the action. Thee chart can selectively be used to show what
happens to selected people, materials or equipment.

The following example illustrates a flow process chart for an egg tray production
line which is an example of a material-type flow process chart:

4. Two handed process chart

Two handed process chart is also known as Left and Right Hand process chart.
As the name suggests, activities of a worker's hand are recorded with respect to
each other. This usually comes into picture when the work involves repetitive
and short operations.

5. Mutliple activities chart

Multiple activity charts are the process charts using a time scale. It usually comes
in picture when work study man wants to record the activities of one subject with
respect to other on a single chart. Subject may be the worker, machine or
equipment

6. Man Machine chart

A man-machine chart graphically reprresents the relationship between the

manual work performed by one or more operators and one or more machines
involved in a manufacturing process.

7. Process Flow diagram

A process flow diagram (PFD) is a diagram commonly used in chemical and

process engineering to indicate the general flow of plant processes and
equipment. The PFD displays the relatioonship between major equipment of a
plant facility and does not show minor details such as piping details and
designation.
8. String diagram

String diagram is one of the useful and simplest techniques of method study. It
can be defined as a scale model on which a thread is used to trace the path or
movements of man and materials during a specified sequence of events. It can
also be stated that string diagram in a special form of flow diagram.

Work Measurements
Meaning
Work measurement is concerned with the determination of the amount of
time required to perform a unit of work. Work measurement is very important
for promoting productivity of an organization. It enables management to
compare alternate methods and also to do initial staffing. Work measurement
provides basis for proper planning.

Definition
Work measurement has been defined by British Standard Institution as, “The
application of techniques designed to establish the time for a qualified worker to
carry out a specified job at a defined level of performance”.

Objectives of Work Measurement

1. To compare the times of performance by alternative methods.
2. To enable realistic schedule of work to be prepared.
3. To arrive at a realistic and fair incentive scheme.
4. To analyze the activities for doing a job with the view to reduce or
eliminate unnecessary jobs.
5. To minimize the human effort.
6. To assist in the organization of labor by daily comparing the actual
time with that of target time.

Uses of Work Measurement

1. Wok measurement is used in planning work and in drawing out
schedules.
2. Wok measurement is used to determine standard costs.
 3. Wok measurement is used as an aid in preparing budgets.
4. It is used in balancing production lines for new products.
5. Wok measurement is used in determining machine effectiveness.
6. To determine time standards to be used as a basis for labour cost
control.

Techniques of Work Measurement

1. Time study: 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 analysing the data so as to determine the time
necessary for carrying out the job at the defined level of performance. In
other words measuring the time through stop watch is called time study.
2. Synthetic data: A work measurement technique for building up the time
for a job or pans of the job at a defined level of performance by totalling
element times obtained previously from time studies on other jobs
containing the elements concerned or from synthetic data.

3. Work sampling: A technique in which a large number of observations are

made over a period of time of one or group of machines, processes or
workers. Each observation records what is happening at that instant and the
percentage of observations recorded for a particular activity, or delay, is a
measure of the percentage of time during which that activities delay occurs.

4. Predetermined motion time study (PMTS): A work measurement

technique whereby times established for basic human motions (classified
according to the nature of the motion and conditions under which it is
made) are used to build up the time for a job at the defined level of
performance. The most commonly used PMTS is known as Methods Time
Measurement (MTM).

5. Analytical estimating: A work measurement technique, being a

development of estimating, whereby the time required to carry out elements
of a job at a defined level of performance is estimated partly from
knowledge and practical experience of the elements concerned and partly
from synthetic data.
 Review Questions

SECTION - A (2 marks)

1. What do you mean by production planning and control?

2. What is quality circle?
3. What is time and motion study?
4. What is material requirement planning?
5. What is capacity planning?
6. What is routing?
7. What is scheduling?
8. Mention the types of scheduling.

SECTION - B (6 marks)

1. What are the objective of production planning and control?

1. State the objectives of scheduling?
2. Mention the benefits of Motion study?
3. Explain the techniques of routing.
4. Discuss the advantages of production planning and control.

SECTION - C (14 marks)

1. Discuss the functions of Production Planning & Control.

2. Discuss the types of production system.
3. Discuss the principles of scheduling.
4. Write a note on
a. Quality circle.
b. ISO.
4. Explain the techniques of work measurement study?
 UNIT – 5

MAINTENANCE AND WASTE MANAGEMENT

Meaning of Maintenance
The term 'maintenance' means to keep the equipment in operational
condition or repair it to its operational mode. Main objective of the maintenance
is to have increased availability of production Systems, with increased safety and
optimized cost.

Definition of Maintenance
A formal definition of Maintenance: “Maintenance is taken as a set of
activities which helps in keeping plant, machinery and other facilities in good
condition.”

Objectives of Maintenance
1. To formulate an efficient utilize of labour and equipments.
2. To reduce the repair time and repair cost.
3. To reduce the loss due to production stoppages.
4. To develop the quality of products
5. To improve productivity.
6. To extend the life of capital assets by minimizing the rate of erosion.
7. To remain all productive assets in good working condition.
8. To exploit efficiency and economy in production.
9. To minimize accidents through regular inspection and repair of safely
devices.
10. To reduce the loss of productive time due to equipment failure.

Importance of Maintenance
1. Proper maintenance keeps the equipment in operational condition.
2. Unpredictability in equipments leads to variability in product
characteristics and result in defective parts.
3. It reduces the cost of idle equipment idle labour and lost sales chat can
 result from a breakdown.
4. It reduces the danger of permanently losing market shares due to bad
quality of products which occurs through machine disturbance.
5. It reduces the cost of idle time.
6. Equipment failure can be decreased by practicing of proper
maintenance.
7. It establishes a competitive edge and to provide good customer service.

8. It ensures the reliable equipments that will respond to customer demand

when needed.

Reasons for Maintenance

1. Obligation of Care - To satisfy a legislated duty that is owed to owners,
occupants and guest on the property.
2. Risk Management - To keep the assets in a state of good repair for the
owners' health and safety.
3. Artistic Preservation - To keep the assets from deteriorating in
appearance and becoming unsightly.
4. Answerable Stewardship - To ensure that the assets achieve their full
potential service life.
5. Fiscal Responsibility - To leverage efficiencies that can be reflected on
`he owners' balance sheet.
6. Physical truthfulness - To keep the assets in good working order so as
to minimize disruptions and downtimes.
7. Duty to lessen - To prevent unnecessary damage to assets that may
result in their premature failure.

Functions of Maintenance Management

1. Primary Functions
i) Maintenance of existing plant/equipment, existing plant buildings and
ground.
ii) Equipment inspection and lubrication.
iii) Utilities generation and distributing.
iv) Alterations to existing equipments and buildings.
v) New installations of equipments and buildings.
2. Secondary Functions
i) Store keeping
ii) Plant protection
iii) Fire protection
iv) Waste disposal and Salvage
v) Insurance administration
vi) Property accounting

Classification of Maintenance
The maintenance can be classified into 3 categories such as
i. The breakdown maintenance or corrective maintenance
ii. Preventive maintenance
iii. Predictive Maintenance

i) Breakdown Maintenance or Corrective Maintenance

Breakdown Maintenance refers to chart type of maintenance under which

the repair of any machine occurs the breaks. Breakdown Maintenance a machine
or any other facility Io run without much routine attention, till it actually breaks
down and then it is put back into commission. It leads Io disruption of productive
plants. Repairing the machine after it breaks down is called breakdown
maintenance. Maintenance tasks are intentionally withheld until an asset stops
working or starts failing.

Advantages of Corrective maintenance

1. The investment for maintenance is very low under corrective maintenance
2. Under corrective maintenance , omly few staff are required.
3. Lower short-term costs.

Disadvantages of Corrective maintenance

1. Sometime the labour cost increases due to overtime.
2. Expenditure involved with repair or replacement of equipment.
3. Possible derivative equipment or process damage from equipment failure.
4. Increased cost due to unplanned downtime of equipment.
5. Incompetent use of staff resources.
ii) Preventive Maintenance
Preventive maintenance refers to that type of maintenance under which the
repairing of any machine at planned intervals. Through preventive maintenance
Sudden breakdowns could be prevented and costly down time can be avoided.
This work is done at time when the shop can spare the machine for repairs
generally during off shift hours, Sundays and holidays. This is part of a good
maintenance program.

Advantages of Preventive Maintenance

1. Better protection to the employees.
2. Decline in production down time.
3. Lesser number of standing equipment
4. Lesser expenses on repairs
5. Less Spare parts
6. Identification of items with high maintenance cost
7. Lesser unit cost of manufacture
8. Maintains quality and continuity of production ,Disadvantages Preventive
Maintenance

Disadvantages of Preventive Maintenance

1. It is expensive.
2. Monitoring is required continuously so it is time consuming.
3. Accurate judgment is required which cannot be obtained always.
4. It is a necessity to maintain high control on all the facilities.

iii) Predictive Maintenance

Predictive maintenance refers to the measurements that identify the onset of

a degradation mechanism, thereby allowing causal stressors to be eliminated or
controlled prior to any significant deterioration in the component physical State.

Advantages of Predictive Maintenance

1. It decreases in equipment or process downtime.
2. It reduces in costs for parts and labour.
3. It ensures better product quality.
 4. Improved worker and environmental safety.
5. It assists to improve worker moral.
6. Increased component operational life/availability.
7. It allows for pre-emptive corrective actions.
8. It ensures energy savings.

Disadvantages of Predictive Maintenance

1. It leads to increase investment in analytic equipment.
2. It leads to increase investment in staff training.

Meaning of Maintenance Scheduling

Maintenance Schedule is a List of planned maintenance tasks to be performed
during a given Period, together with the expected start times and durations of
each of these tasks. Schedules can apply to different time periods i.e. Daily
Schedule, Weekly Schedule etc.

Maintenance Schedule Techniques

The scheduler should find out some effective techniques for ensuring better
maintenance arranging these activities in different fashion makes different types
of schedules. They are as follows:

1. Daily schedule: Daily schedule is developed to provide a day's work for

each maintenance employee of the area
2. Weekly schedule: Weekly general schedule is made to provide week's
worth of Work for each employee in an area.
3. Gantt charts: Gantt charts are used to represent the timings of tasks
required to complete a project.
4. Bar charts: Bar charts used for technical analysis which represents the
relative magnitude of the values.
5. PERT/CPM: PERT/CPM which are used to find the time required for
completion of the job and helps in the allocation of resources.

Equipment Reliability
Equipment Reliability is the unexpected and untimely nature of a breakdown that
causes the greatest damage disrupting operations when they seem to be most
critical. Hence, greater emphasis is not placed on the capability of equipment or
a machine nor to breakdown in operation this is referred to as reliability.

Types of Equipment Reliability

a) Component reliability Where each part or component of a machine/
equipment is designed for a given Level of reliability. It is defined as the
probability that a type of part component will not fail in a given time
period or number of trials under ordinary conditions of use.

b) System reliability is the combined reliability of all the components or parts

that make up the machine equipment. It is the mathematical probability of
a system performing a Specific function in a given environment for a
specific length of Lime or number of cycles.

Spares planning and control

It is the concept which deals with the proper planning of spare parts as and
when it is required for repairs. The cost of the spare parts is more than the cost
of total maintenance in the industries.

Lack of proper planning of spare parts may lead to the increase in delay of
production function, wastage of time etc.,

Objectives of Spare parts management

 To make identification of spare parts
 To forecast of spare parts requirement
 To consider inventory analysis
 To consider the stocking policies for capital and insurance spares
 To consider the spare parts inspection
 To ensure the replacement policies for spare parts
 To ensure the development of inventory control systems
 To establish the spare parts bank

Modern Scientific Maintenance Methods

1. Reliability Centred Maintenance (RCM)

RCM programs are gaining in popularity and have been piloted in a few
Reclamation power facilities with good results. The goal of these programs is to
provide the appropriate amount of maintenance at the right time to prevent forced
outages while at the same time eliminating unnecessary maintenance.

Implemented properly, RCM can eliminate some of the drawbacks of PM

and may result in a more streamlined. efficient maintenance program. RCM
seems very attractive in times of diminishing funding, scarcity of skilled
maintenance staff, and the pressure to "slay online" due to electric utility
industry deregulation.

Features of Reliability Centred Maintenance

a. It may be labour intensive and time consuming to set up initially.
b. It may require additional monitoring of quantities, like temperature and
vibration, to be effective.
c. It may result in a "run-to-failure" or deferred maintenance philosophies
for some equipment which may cause concern rot some Staff and
managers
d. If may require initial and later revisions to the maintenance schedule in a
tail and error fashion deepening on the success of the initial maintenance
schedule and equipment condition.
e. It should result in a more manageable maintenance workload focused on
the most important equipment.

Advantages of Reliability Centred Maintenance

(a) Can be the most efficient maintenance program.
(b) Lower costs by eliminating unnecessary maintenance or overhauls.
(c) Minimize frequency of overhauls.
(d) Reduced probability of sudden equipment failures.
(e) Able to focus maintenance activities on critical components.
(f) Increased component reliability.
(g) Incorporate root cause analysis.

Disadvantages of Reliability Centred Maintenance

(a) Can have Significant Start Up cost, timing. equipment etc.
(b) Savings potential not readily seen by management.

2. Six Sigma Maintenance

Six sigma is a maintenance process that focuses on reducing the variation in

business production processes. By reducing variation, a business can achieve
tighter control over its operational Systems, increasing their cost effectiveness
and encouraging productivity break through.
The main methodologies of Six Sigma are Define, Measure. Analyze.
Improve, Control (DMAIC) and Design for Six Sigma (DFSS). This will deal
with DMAIC applied to existing processes. As opposed Io DFSS, which is used
in the implementation of new products or SCWICCS. IE is important 10 use
creativity to meld expectations about Six Sigma. The methodology is flexible and
will not replace or diminish any technique or tool already used, but will add to
them. This fear is common and must be prevented to avoid resistance that win
destroy the program.

3. Enterprise Asset Management (EAM)

Enterprise Asset Management (EAM) means the whole life optimal

management of the physical assets of an optimization to maximize value. It
covers such things as design, construction, commissioning, operations,
maintenance and decommissioning or replacement of plant, equipment and
facilities. "Enterprise" refers to the management of the assets across departments,
Locations, facilities and, in some cases, business units by managing assets across
the facility. Organizations can improve utilization and performance, reduce
capital costs, reduce asset-related operating costs, extend asset life and
subsequently improve ROA (return on assets).

4. Lean maintenance

Lean maintenance is the application of lean principle in maintenance

environments. Lean system recognizes seven forms of waste in maintenance.
They are over production, waiting, transportation, process waste, Inventory,
waste motion and defects. In lean maintenance, these wastes are identified and
efforts are made for the continuous improvement in process by eliminating the
wastes Thus, lean maintenance leads to maximize yield, productivity and
profitability.

5. Computer Aided Maintenance

Computer-aided maintenance refers to systems that utilize software to

organize planning scheduling and support of maintenance and repair. A common
application of such systems is the maintenance of computers, either hardware or
software, themselves. It can also apply to the maintenance of other complex
systems that require periodic maintenance, such as reminding operators that
preventive maintenance is due or even predicting when such as maintenance
should be performed based on recorded past experience. For
effective discharge of the maintenance function, a well designed information
system is an essential tool. Such systems serve as effective decision support tools
in the maintenance planning and execution. For optimal maintenance scheduling,
large volume of data pertaining to men, money and equipment is required to be
handled. This is a difficult task to be performed manually.

Waste management

Introduction
Waste represents the portion of basic raw material lost in processing having
no recoverable value. Waste may be visible remnants of basic raw materials or
invisible; e.g. Disappearance of basic raw materials thorough evaporation smoke
etc. shrinkage of material due to natural causes may also from a part of a material
wastage.

Meaning of waste management

Waste management is the collection, transport, processing or disposal,
managing and monitoring of waste materials. The term usually relates to
materials produced by human activity, and the process is generally undertaken to
reduce their effect on health, the environment or aesthetics. Waste management
is a distinct practice from resource recovery which focuses on delaying the rate
of consumption of natural resources. All waste materials whether they are solid,
liquid, gaseous or radioactive fall within the remit of waste management.

Definition of Waste management

Meaning of Waste
Waste is that portion of raw material lost in processing, having no recovery
value. Waste may be visible or invisible and has no value. Visible waste is
physically present say saw dust, ash etc. Invisible waste is the disappearance of
basic raw material in form of evaporation, smoke loss in weight due to natural
chemical reaction, and so on. Waste may be solid or liquid.
Types of Waste
The different forms of waste are:

i) Scrap: Scrap is the incidental residue from certain types of manufacture

usually of small account and low value recoverable without further
processing. It is unavoidable. Scrap metal originates just as frequently
between businesses and homes as well. The proper disposal and recycling
of scrap metal is typically done by a business or service. Typically a
"scrapped' will advertise his services to conveniently remove scrap metal
for people who don't need it, or need to get rid of it.

ii) Surplus: Surplus refers to those materials which are in excess of the
reasonable operational requirements of the concern. These are imperial
sells materials and equipment that are no longer required by the
organization. This could range from scrap metals, warehouse materials and
production equipment to entire refineries.

iii) Spoilage: Spoilage is outcome of materials being damaged in

manufacturing operations in Such a way that they cannot be rectified and
brought back to normal Specifications. It can be avoided. It is the term used
for materials which are badly damaged in the Manufacturing operations,
and they cannot be rectified economically and hence taken out of process
to be disposed of in some manner without further processing. Spoilage may
either be normal or abnormal.

iv) Detectives: Defective work is that portion of production which is below

standard Specification or quality and can be rectified by incurring
additional expenditure on material, labour and works overheads known a
"rectification cost`.

v) Salvaged items: Salvaged items are those which cannot be put to use for
their original purpose for which they were procured and they have hitherto
been used.

Importance of Waste Management

1. Effective waste management not only reduces environmental problems but
also increases productivity of industrial activity. Improper disposal of
waste is a health and environmental hazard Large quantities of waste hat
have not been placed according to good engineering practice can slip and
collapse.
 2. Waste that is treated or disposed off in unsatisfactory Ways can cause a
severe aesthetic nuisance in terms of smell and appearance.
3. Waste items that are recycled without being cleaned effectively or
sterilized can transmit infection to later users.
4. Polluted water flowing from waste dumps and disposal sites can cause
serious pollution of water supplies.
5. Chemical wastes may be fatal or have serious effects if ingested, inhaled
or touched and can cause widespread pollution of water supplies.

Methods of Disposal of Waste

The various methods of disposal of waste are as follows:

1. Landfill: Disposing of waste in a landfill involves burying the waste, and

this remains a common practice in most countries. Landfills were often
established in abandoned or unused quarries, mining voids or borrow pits.
A properly designed and well-managed landfill can be a hygienic and
relatively inexpensive method of disposing of waste materials. Older,
poorly designed or poorly managed landfills can create a number of adverse
environmental impacts such as wind-blown litter, attraction of vermin, and
generation of liquid leach ate.

2. Incineration: Incineration is a disposal method in which solid organic

wastes are subjected to combustion so as to convert them into residue and
gaseous products. This method is useful for disposal of residue of both solid
waste management and solid residue from waste water management. This
process reduces the volumes of solid waste to 20 to 30 percent of the
original volume. Incineration and other high temperature waste treatment
systems are sometimes described as "thermal treatment". Incinerators
convert waste materials into heat gas, steam and ash.

Incineration is carried out both on a small scale by individuals and on a

large scale by industry. It is used to dispose of solid, liquid and gaseous
waste. It is recognized as a practical method of disposing of certain
hazardous Waste materials. Incineration is a controversial method of waste
disposal, due to issues such as emission of gaseous pollutants.

3. Recycling: Recycling refers to the collection and reuse of waste materials

such as empty beverage containers. The materials from which the items are
made can be reprocessed into new products. Material for recycling
 may be collated separately from general Waste using dedicated bins and
collection vehicles, or sorted directly from mixed waste streams. The most
common consumer products recycled include aluminium such as beverage
cans, copper such as wire. steel food and aerosol cans, old steel furnishings
or equipment, polyethylene and PET bottles, glass bottles and jars,
paperboard cartons, newspapers, magazines and light paper, and corrugated
fibre board boxes.

4. Sustainability: The management of waste is a key component in a business

Ability to maintaining IS014001 accreditation. Companies are encouraged
to improve their environmental efficiencies each year. One way to do this
is by improving a company's waste management with a new recycling
Service.

5. Resource Recovery: Resource recovery uses LCA (life cycle analysis)

attempts to offer alternatives to waste management. For mixed MSW
(Municipal Solid Waste) a number of broad studies have indicated that
administration, source separation and collection followed by reuse and
recycling of the non-organic fraction and energy and compost/fertilizer
production of the organic waste fraction via anaerobic digestion to be the
favoured path.

6. Avoidance and reduction methods: An important method of waste

management is the prevention of waste material being created, also known
as waste reduction. Methods of avoidance include reuse of second-hand
products, repairing broken items instead of buying new, designing products
to be refillable or reusable (Such as cotton instead of plastic shopping
bags), encouraging consumers to avoid using disposable products (such as
disposable cutlery), removing any food/liquid remains from cans,
packaging and designing products that use less material to achieve the same
purpose (for example, light weighting of beverage cans)

Scrap
Scraps are recyclable and other materials left over from product consumption
such as parts of vehicles, building supplies, and surplus materials. Unlike waste
scrap has significant monetary value.
Types of Scrap
Scrap is a class by itself and should be distinguished from surplus stores, and
can be divided in two categories viz.:

(a) Ordinary Scrap: These are the items, which have regular demands as raw
material in the Railway Workshops such as cast iron, non-ferrous materials
which are used for manufacturing various components of running stock.

(b) Surplus Scrap: These are items which are not required by the Railways
for their own Use and are invariably disposed of by auction sale or other
means. Even new or Second hand material that is usable, may come in this
category of scrap, if it is useless for the Railways. All surplus scrap is
almost always 'dead surplus'.

Reasons for arising of Scrap the various reasons for arising of scrap
are:
(a) By use, various components are worn out to such a condition that they
can't be reconditioned economically or are beyond repair.

(b) In a manufacturing process some wastage are unavoidable and therefore

some quantify of scrap material is generally generated

Sources of Scrap
As explained above Scrap is a normal natural arising in any manufacturing
or maintenance activity? The annual arising of ferrous scrap on the Indian
Railways and Production Units come to around 6/7 lacks tones.
The major sources of arising are:

(a) Railway workshops under Mechanical Engineering, Civil Engineering

Electrical Engineering, Signal and Telecommunication Engineering
Department, Printing Presses etc.

(b) Condemned Rolling stock such as wagons, coaches, locomotives, boilers,

etc. These are kept at nominated central locations or kept with different
Chief/Head train examiners Carriage Foremen, Loco Foramen in the
Divisions.
(c) Scrap permanent way materials such as released condemned Rails, Tie
bars, M.S. and C.I. Sleepers, track fittings, Points and Crossings, etc.
 (d) Scrap bounding material such as off-cuts of bars and rounds, structures,
pipe and pipe fittings which arise with the Inspector of Works of various
divisions, administrative offices and Railway colonies.
(e) Inactive/surplus items being declared as scrap by Survey Committees.

Disposal of Scrap
Scrap metal originates just as frequently between businesses and homes as
well. The proper disposal and recycling of scrap metal is typically done by a
business or service. Typically a scrapper will advertise his service to
conveniently remove scrap metal for people who don‟t need to get rid of it.
Disposal of scrap when bundled in an imaginative manner can result in handsome
returns to the organization.

An effective disposal requires a compact disposal organization reposing to

the materials manager, continuous market survey on the prices of various
categories of scrap generated in the plant and constant touch with the industries
which generate similar scrap and with the end-users. 'Scrap is often taken to a
wrecking yard, where it is processed for later melting into new products. A
wrecking yard, depending on its location, may allow customers to browse their
lot and purchase items before they are sent to the smelters although many scrap
yards that deal in large quantities of scrap usually do not, often selling entire units
such as engines or machinery by weight with no regard to their functional status.

Surplus Disposal
Surplus Materials Disposal is responsible for the proper disposal of property,
including the sale, donation, scrapping or other disposal of equipment, materials
and supplies in accordance with government policy, law and applicable
environmental regulations.

Salvage and Recovery

Every covered project shall be made available for deconstruction, salvage,
and recovery prior to demolition. It shall be the responsibility of the applicant to
recover the maximum feasible amount of salvageable designated recyclable and
reusable materials prior to demolition. In order to provide sufficient time for
deconstruction and salvage and recovery to be undertaken, no demolition may
commence until a period of five working days has elapsed from
the date of issuance of the demolition permit. Recovered and salvaged designated
recyclable` and reusable materials from the covered project shall qualify to be
counted in meeting the diversion requirements of this chapter. Recovered or
salvaged designated recyclable and reusable materials may be given away or sold
on the premises, or may be removed to reuse warehouse facilities for storage or
sale. Title to designated recyclable and reusable materials forwarded to the
operator of recycling facilities will transfer to the service provider upon removal
of designated recyclable and reusable materials from the covered project site.
 Review Questions

SECTION - A (2 marks)

1. What is maintenance?
2. Define the term maintenance Management.
3. What is waste management?
4. What is reliability?
5. Define scrap.

SECTION - B (6 marks)

1. Discuss the classification of maintenance?

2. Mention elements of effective maintenance management.
3. Discuss the types of waste.
4. Explain the importance of waste management.

SECTION - C (14 marks)

1. Explain the methods of disposal of wastes?

2. Write a note on salvage and recovery.
3. Explain the Sources of waste and scrap?