Tagore Engineering College

Department of Management Studies

Operations Management

(prepared by Er.G.V.Hariharan)

Unit 1
Introduction to operations management
The production and operation tend to be interchangeable today the main feature of
operation is that there is an input process output with primary and secondary
industries

Role and importance of operations

● managing stock using quality techniques to ensure maximum quality output
is achieved from minimum inputs
● warehousing and distribution of finished products ensuring appropriate
methods of production server used
● operations is important because it is one of the core activities of any business
it produces the products and services which enables the business to make a
profit
● To meet production requirements based on purchase of raw materials

Operations Systems

Operations Management is concerned with the efficient conversion of an

organisation resource into goods or services that it has been set up to provide this
can be subdivided into three key areas
● purchase and storage of raw materials
● production and storage of finished goods
● distribution of finished goods
Operations Management

Operations management is an area of Management concerned with overseeing

designing and controlling the process of production and redesigning business
operations in the production of goods or services it involves the responsibility of
ensuring that business operations are efficient in terms of using as few resources as
needed and effective in terms of meeting customer requirements. Relationship of
operations management to senior management in commercial context can be
compared to the relationship of line officers to the highest level senior officers in
military science. It dynamically informs lots of Strategies and involves individual
peoples concentration towards different roles over time.

Ranges of OM

Operations management ranges from strategic to tactical and operational levels

representatives strategic issues include determining the size and location of
manufacturing plants deciding the structure of service for telecommunication
tactical issues include plant layout and structure project management methodology
fixation and equipment selection operational issues include production scheduling
and control inventory management quality control and inspection

What does operations mean?

Operations management as a corporate area in charge of Designing, managing and

tracking different processes or made up of interrelated sequential activities through
which the components and factors required including raw material, labour,capital,
information and client.

Nature of Operations management

First the term production management is more used for a system where tangible
products are produced as operations management is more frequently used where
various inputs are transformed into tangible services viewed from this perspective
operations management will cover such services organisation like banks Airlines
utilities pollution control Agencies super bazar educational institutions libraries
consultancy firms and different departments including service sector the second
distinction relates to the evolution of subject called operations management

Objectives of OM

● Cost, the ability to produce at low cost

● quality the ability to produce in accordance with specification and without
error
● Speed the ability to do things quickly in response to customer demands
● dependability the ability to deliver products and services in accordance with
promises made to the customers
● flexibility the ability to change operations which includes four aspects
change the volume of production,change the time taken to produce, change
the mix of different products,ability to innovate and introduce new products
and services

To measure efficiency: To improve productivity

Productivity is the ratio of output Input and it is the measure of a managers or an

employee's efficiency in using the organisation's scarce resources to produce goods
and services. The higher the numerical value of this ratio the greater efficiency
total quality approach to operations improvement the quality movement with such
approaches as small scale continuous improvement process and the large-scale
radical redesign of the process is directly affecting productivity and measure of
efficiency. Take for example the Dutch telecommunications company Phillips
business communication system PBCS, was long sheltered by import barriers and
capital government contracts recently it has found itself in a competitive global
economy and deregulated private eyes network where customers shop around for
services

Historical development of om

operations management program typically include instruction in principles of

general management manufacturing and production system material planning
includes operations management it is similar to engineering that it blends art with
applied science people skills creativity rational and knowledge of Technology all
required for success.

Before the first Industrial Revolution work was mainly done through two systems
the system and craft guilds the domestic system merchants took materials to homes
where artists perform the necessary work, craft guilds on the other hand were
Association of artists which passed work from one shop to another for example
leather was tanned by a Turner passed to carriers and finally arrived at shoemakers.

Some fundamental principles essential to the Japanese approach

● process control SPC and worker responsibility over quality
● Easy to see quality boards gauges meters,etc and poke -yoke
● insistence on compliance quality first
● Line stop to correct quality problems correcting once only errors will fix the
defect partly
● 100 percentage check will inspect the techniques and as well as machines

Transformation processes
● learning identifying about the root cause of issues faced by the organisation
identifying about ways to address these issues
● awareness about the larger structures of power and how these structures are
operating as well as examining the way in which the power is operated
within the organisation
 ● vision articulating the type of world those in the organisation believe it is
possible for the constituents they serve in examining the organisational role
in moving towards that world
● strategy outlining the steps of organisation which is a need to take for
implementing the vision especially it relates to the power building influence
and visibility of its constituents
● action identifying and implementing a method for moving the organisation
into social change that suits the organisation while maintaining the capacity
to continue and for providing core services
● reflection evaluating the results of action taken by examining what worked
what did not and what will be needed to improve upon the plan in future

Goods
Tangible
Can be produced to the inventory for
off the shelf availability
Minimal contact with ultimate
consumer
Complexion interrelated processing
Remind on system variable on weekly
monthly and seasonal basis
Market served by production system
for Regional National and international
Large units that can take advantage of
Economics of scale
Location of system is in relation to
regional National and international
markets
Services
Intangible and perishable consumed in
the process of their production
Availability achieved by keeping the
product to system open for services
High contact with clients or customers
Simple processing
Demand commonly variable on hourly
daily and weekly basis
Markets served by production system
or usually local
Relatively small units to serve local
markets
Location dependent on location of local
customers clients and users
 Service orientation manufacturing needs to be geared to serve,

● intangible and perishable nature of services

● constant interaction with clients and customers
● small volumes of production to serve local markets
● need to locate facilities to serve local markets

Operation system perspectives

Being the component of the organisation operations Management is concerned

with organisational goal behaviour controlling organising and planning operations
management is a component of organisation which is concerned with creation of
utilities in Raw materials through conversion process it can be enclosed in a frame
of general management function it involves facility designing and using the
conversion process.

Levels on Operations Management

1. Director
2. Area operations director
3. district manager
4. zone manager
5. plant manager
6. supervisor
7. operators
Recent Trends in Operations

● Global Marketplace
● operations strategy
● total quality management
● flexibility time reduction
● Technology
● worker involvement
● reengineering
● environmental issues
● supply chain management
● corporate downsizing
● lean production

Operation strategies
● production factory location
● factory design layout and quality standards
● external vendor in procurement

different types of businesses need assistance with

operation in the simplest sense operation involved the
processes for employees performed to support the
product after it is customer. With the right strategies a
 business can complete all of its essential processes with
efficiency

Challenges in operations management

● culture
● business environment
● quality standards
● pricing
● Technology
● Economics of scale
● market segmentation
● usage of resources

Operations Relationship with other Strategies

The objective of the operations function is to produce the

goods and services required by the customers while
managing resources as efficiently as possible this can lead to
conflicts within an organisation conflicts between operations
in the marketing functions are likely to centre on the Desire
of marketing to ensure that operations on send it on satisfied
customers
Corporate level strategy

It is the highest level of strategy with sets the long-term

direction scope for the whole organisation with organisation
comprises more than one business unit corporate level
strategy will be concerned with that those businesses should
be how resources example cash will be allocated between
them and how relationship between the various business
units under corporate centre and business unit should be
managed accordingly

business level strategy

it is a primarily concerned with how a particular business

unit should complete within its industry and what is its
strategic aims and objectives should be depending upon the
organisations corporate strategy and the relationship between
the corporation and its business unit a business unit strategy
may be considered
Functional level strategy

the bottom level strategy is that individual functions that is

operations marketing finance etc these strategies are
concerned with how each function contributes to the business
strategy what their strategic objective should be and how
they should be managed with their resources in help of those
objectives

Framework of operations management

● It makes it easier to work with Complex Technologies

● it ties together a bunch of discrete objects or
components into something more useful
● It forces a team to implement code in a way that
promotes consistent coding for bucks and more flexible
applications
● everyone can easily test and debug the code given code
that they didn't write
● goals probably incomplete
● simplification of use
● consistency in interface
● enhancement of core functionality
● collecting discrete process into logical Association
Supply chain management it is based on two core ideas

The first is practically every product that reaches the end

user of the circulating effort of multiple organisational
departments these departments are referred to collectively
called as supply chain

the second idea is that while supply chains have existed for
longer time most organisations have only pay attention to
what was happening within their four walls few businesses
understood much less manage the entire time of activities
that ultimately delivered product to the final consumer the
result was disjoint and often ineffective supply chain

Managing upstream and downstream value added flow of

materials final goods and related information among
suppliers company resellers and final consumers supply
chain management is a systematic strategy coordination of
the traditional business function and the tactics across the
business functions within a particular company and across
businesses within the supply chain for the purpose of
improving the long-term performance of the individual
companies and supply chain as a whole globally
supply chain forum is the integration of key business
processes and practices across the supply chain for the
purpose of creating value for customers and stakeholders
supply chain support supply chain management is a set of
organisations directly linked by one or more of the upstream
and downstream flows of products services finances or
information from the source to the consumer managing a
supply chain in supply chain management

Problems of supply chain management

● distribution network configuration number location on
network machines of suppliers production facilities
distribution centres warehouses cross docks and
customers
● Distribution strategy questions of operating control
delivery scheme pool point shipping direct store
delivery closed-loop shipping,mode of transportation
less than truckload LTL intermodal transport including
trailer on flat car TOFC, Container on flatcar COFC
contract carrier ,third party Logistics 3PL
● Trade offs in logistics activities it may increase the total
cost if only one of the activity is optimised
Supply chain sustainability

it is a business issues affecting an organisation supply chain

and logistics network industry country quantified by
comparison with SECH social economic and cultural and
health ratings

it is incorporating three aspects they are economic social and

environmental dimensions CONSUMERS have become
more aware of the environment impact of their purchases and
companies SECH ratings and along with Non governmental
organisations are setting the agenda for transition to
organically grown foods and locally produced goods that
support Independent and small businesses because apply
change frequently account for over 75 percentage of
companies footprint was exploring

Reverse supply chain

it is a process of managing the return of goods it is also

known as aftermarket Customer services other words any
time money is taken from the company's warranty reserve or
service logistics budget one can speak of a reverse logistics
operations as well
Corporate
● what business shall we be in?
● what business shall we acquire?
● how do we allocate resources between business ?
● what is the relationship between business ?
● what is the relationship between the centre and the
business ?
Business
● how do we compete in this business?
● what is the mission in this business?
● what are all the strategic objectives of the business?

Function
● how does a function contribute to the business strategy ?
● what are the strategic objectives of this function ?
● how are the resources managed in the function?
● between the operations strategy and business strategy
● enable operations to set priorities that enhance
competitive advantage
Strategic fit for OM

● Tangible
● financial
● physical
● intangible
● Technology
● human resources
● reputation
● culture

several tools have been developed one can use in order

to analyse the resources and capabilities of a company
this includes what value chain analysis cash flow
analysis and more benchmarking with relevant peers is
useful tool to assess the relative strengths of resources
and capabilities of company compared with competitors
strategic fit can be used actively to evaluate the current
strategy situation of a company as well as opportunities
such as organisational divisions that is related to the
resource based view of the phone with suggest the key
to profitability is not only through positioning and
industry selection but rather through an internalinternal
focus which seeks to utilise the unique characteristics of
a company's portfolio of resources and capabilities.

Applications of operations management

● it makes it easier to work with Complex
Technology
● it combined together a bunch of discrete objectives
into small things which are useful
● It forces the team to implement code in a way that
promotes consistent coding fewer errors, flexible
applications
● everyone can easily test and debug the code even
code that they didn't write
● goals
● simplification of use
● enhancement of core functionality
● collecting discrete processes into associations
which is logical
● consistency in interface
Customer Service Management
it concerns with the relationship between the organisation
and customers. Customer service is the source of customer
information. It also provides the customer with real time
information on scheduling and product availability through
interfaces

Unit 2

FORECASTING, CAPACITY AND FACILITY

DESIGN

Demand,the basis of all productive activities and

demand as the mother of production it is essential for
the business managers to have clear understanding of
the following aspect
 ● what are the source of demand ?
● what are the determinants of demand?
● how do the buyers decides the quality of product to
be purchased ?
● how do the buyers respond to change in product
prices and the prices of related goods ?
● how can the total or market demand for the product
they are surgeon forecasted?

Definition of law of demand

● people are willing and able to buy

● during a particular period of time
● decreases or increases as the price of the goods and
services Rise and falls
● other factors remains constant
● Demand is relationship between two variables price and
quantity with all these factors that could affect demand
being held constant

Types of demand

● Individual and market demand

● demand for firms product and industrial product
● autonomous and derived demand
 ● short term and long term demand
● demand for durable and non durable products

Expectations of demand
● Conspicuous consumption
● speculative market
● giffen goods
● ignorance

Demand forecasting

It is one of the crucial aspects in which managerial

economics differs from your economic theory life in the
treatment of risk and uncertainty demand forecasting is the
activity of estimating the quantity of a product or service that
consumers will purchase demand forecasting may be used in
making pricing decisions in assessing future capacity
requirements and making decisions on whether to enter a
new market in demand forecast is the prediction of what will
happen to your company and the existing fails it would be
best to determine the demand forecasting using a multi
functional approach take input from sales and marketing
finance and production should be considered final demand
forecasts is there consensus of all the participating managers
Concept of forecasting

The manager can conceptualise the future indefinite Times if

he is concerned with the future event its order intensity and
duration we can be predicted and he is concerned with the
course of future variables like demand rise or profit he can
project the future

projections are of two types forward and backward

significance of demand forecasting in the context of business
policy decisions can hardly be overemphasized demand
forecasting is mainly for corporate planning and for the
survival and growth of a corporate unit which has to be
planned for to avoid crucial activities toys exist only with
regard to concepts and techniques of forecasting that we
employ it must be noted that the purpose of forecasting in
general is not to provide an exact future data with perfect
Precision the purpose is just bring out the range of
possibilities concerning the future and argument of
assumptions it is not actual future but likely future

Steps in demand forecasting

● identify the products that are to be considered as a part
of forecast process
● set parameters for demand forecast
● determine the target market
● gather data relevant to the effort
● calculate the actual forecast

what are all the natures of forecasting ?

that is the use of forecast data how it is related to

forward planning and corporate planning with the firm
depending upon the use the choice of forecasting can be
made a in terms of short run on terms of long run active
passive conditional or unconditional
nature of product mix for which you are attempting a
demand forecast this examination to be carefully done to
check whether the product is consumer goods or
producer goods perishable durable final or intermediate
demand a couple of examples to illustrate the
importance of this factor demand for intermediate goods
like basic Chemicals derived from the final demand for
finished goods like detergents promoting sales to
advertising or price competition is much less important
in case of intermediate goods compared the final goods.
the skillful demand forecasting is needed to avoid
waste there are storage facilities then buyers can adjust
their demand according to the availability price and
income the price taken for such adjustment varies from
product to product daily necessities that are bought more
frequently will lead to quicker adjustments

determinants of demand once you've identified the

nature of water for which you are building a forecast for
next task is to locate clearly the determinants of demand
for a product depending on the nature of the product and
nature of forecast different determinants vilasam
different degree of importance in different demand
functions

Techniques of demand forecasting

● demand forecasting general considerations
● factors involved in the demand forecasting
● the purpose of forecasting
● determinants of demand
● length of forecast
● forecasting demand for new products
● Criteria for a good forecasting method
● presentation of a forecast the management
 ● role of macro level forecasting in demand forecast
● recent trends in demand forecasting
● control of demand

Purpose of forecasting
● reducing cost of purchasing raw materials
● determine an appropriate price policy setting sales
targets and establishing control centres
● involving a suitable advertising and promotional
campaign
● planning manpower requirements
● demand forecast of a particular product form guidelines
for related industries
● purpose of long term forecasting is to expand the
existing unit
● purpose of short term forecasting is to schedule the
appropriate production

Types or methods of demand forecasting

● survey of buyers intentions
● Delphi Method
● Expert Opinion
● collective opinion
 ● naive models
● smoothing techniques (moving average, exponential
smoothing , analysis of time series and trend
projections)
● use of economic indicators controlled experiments
● judgement approach

Objectives of demand forecasting

● forecast alerts the finance level in the plant, equipment
and inventory required to meet the demand as well as
budgets to be created to manage your business
● the demand forecast also affect the personnel
department's hiring training and decisions making
● for the marketing departments assigning the resources to
a particular product reports of the sales
● marketing finance and operations department maths
demand and supply contributes to the appropriate use of
resources in the fulfillment of customer demand forecast
● it enables the manufacturing department to plant
production to meet customer requirements to support the
purchasing department to correlate deliveries of
materials and supplies with production schedule

Approaches to forecasting
1. identify and clearly state the objectives of forecasting
 2. select appropriate methods of forecasting
3. identify variables
4. Gather relevant data
5. determine the most probable relationship
6. for forecasting the company's share in the payment to
different assumptions may be made
○ ratio of the company's sales to the industry sales
will continue as in the past
○ on the basis of an analysis of likely competition and
industrial Trends the company may assume a
market share different from that of the past
7. forecast may be made in terms of unit or sales process
in Rupees
8. can be made in terms of product groups and then broker
for individual products
9. which can be made on annual basis and then divided
month wise

Capacity planning
capacity the ability to deliver in a defined time.
● Output measures are useful for high-volume
standardized processes example automatic production:
 line number of cars week hotel room service: number of
guests, for Call Centre customers: call per hour
● input method as usual for low volume flexible processes
and for many service operations examples Hospital beds
available it is a maximum output rate of a production or
service facility and capacity planning is a process of
establishing the output rate that may be needed a facility

Inadequate capacity planning can lead to the loss of

customers on business excess capacity can drain the
company's resources and prevent investments into more
ventures the question of when capacity should be increased
and by how much on the critical decisions it is a process of
determining the production capacity in an organisation to
meet changing demands for its products effective capacity is
the maximum amount of work that an organisation is capable
of competing in a given period due to constraints such as
quality problems with lack of material having a difference
between the capacity of an organisation that demands of his
customers result in the efficiency is there in underutilized
resources or unfulfilled customers

the goal of the capacity planning to minimise the discrepancy

demand for an organisation capacity where is based on the
changes of production output such as increasing or
decreasing the production quantity of an existing product
better utilisation of existing capacity can be accomplished
through improvement in overall equipment effectiveness we
capacitor can be increased through introducing new
techniques equipment materials increasing number of
workers and Nations increasing the number of ships
acquiring additional production facilities capacity is
calculated as (number of machines X no of shift X utilization
X efficiency)

Strategies
● lead strategy, adding capacity in anticipation of increase
and it is an aggressive strategy with the goal of making
the customers away from companies computers by
improving the service level and radiation lead time large
capacity does not necessarily imply high inventory
levels excess capacity can also be rented to other
companies
● lag strategy, refers to adding capacity only after the
organisation is running at full capacity or beyond due to
increase in demand this is more conservative strategy it
decreases the risk of waste but it may result in the loss
of possible customers otherwise stock out or low service
levels
 ● match strategy it is addison in capacity with small
amount in response to face the changes in demand this is
more moderate strategy
● adjustment strategy is adding or reducing capacity in
small or large amount due to the consumer comment aur
due to major changes to a product or system architecture

Objectives of capacity planning

● to identify and solve capacity problem in the timely
manner
● to maintain a balance between required capacity and
available capacity
● capacity planning is to minimise the discrepancies
Capacity planning decisions

it normally involves different activities including assessing

existing capacity, forecasting capacity needs, identified
alternate ways to modify the capacity, evaluating financial
economic and technological alternatives, selecting capacity
alternative most suitable to achieve the strategic mission.

Steps of capacity planning

 ● Determine the service level requirements work done by
the system quantifying users expectation
● define workloads
● determine the unit of work identify service level for
each workload analyse current capacity the current
capacity of the system must be analysed to determine
how it is meeting the needs of the users
● measure service level and compared with the objectives
the overall resources usages
● finally forecast of future business activity should be
determined and implementing the required changes in
the system configuring will ensure that sufficient
capacity will be available to maintain service level
● determine and plan future system configuration

Factors affecting capacity planning

● product and service
● process facilities, includes manufacturing techniques
● supply factor, timely and assurance
● External factor, investors and govt policies
● human factor skills and qualities of works

Problems in capacity planning

● there is no standard terminology

 ● there is no standard definition of capacity
● there are number different capacities for the same
system
● there is no standard workload
● There is no uniformity among the systems
● forecasting future applications is difficult

Sales and operational planning it is known as aggregate

planning is a process for executive level of management
elderly needs and reviews projections for demand supply and
resulting financial input
it is a decision making process that makes the certain tactical
plans in every business area with the overall view of
companies business plan overall result of sales and operation
planning is that a single operating plan is created that
identifies allocation of companies resources including time
money and employers function of

The setting the overall level of manufacturing and other

activities for this satisfying the current plant levels one of its
primary purpose is to establish production traits that will
achieve management objective of maintaining rising follower
in inventories of backlogs sales and operational planning is a
set of decision making process to maintain the balance
demand and supply to integrate financial planning and
operational planning and to link high level strategic planning
a process that provides management ability to strategic
leader wrecked its business to achieve the competitive
advantage on a continuous basis

MRP material requirement planning

● planning and inventory control system used to manage

manufacturing processes it should meet three objectives
● materials are available for production and products
● available for delivery to the customers
● maintain the lowest possible material and production
levels in store plan manufacturing activities delivering
schedules and purchasing activities

Sales and operations planning it is an integrated business

management was developed for forecasting the sales plan
protection plan inventory plant and customer lead time it
depends on specific nature of the industry and it also
determines the highest demand which is required for tighter
planning than Idle consumer products sales and operations
planning is also known as aggregate planning it is a process
for executive level management regularly meets and reviews
projections for demand and supply which results in financial
impact. Sales and operations planning is also been described
as the effect of the decision making process to balance
demand and supply to integrate financial planning and
operational planning and to link high level strategic plans
with a today operations it is a process that provides
management the ability to start a weekly direct its business
touches competitive advantage on a continuous basis the
process being performed at least monthly which brings all
together functional plans and recoin supply demand and new
product plants adapted by earlier dictionary it is an
accommodation of customers order that have been promised
for delivery for some future date it is also focus on a
customer order that cannot be filled immediately but is filled
as soon as possible tactical planning it takes into account the
overall strategy is of the company which are found in the
strategic planning it aimed to provide companies develop and
align the tactical plans developed by the various business
area there are two types of approaches that are used in sales
and operations planning it is top down planning and bottom
up planning top down planning is the simplest approach to
sales and approaches of operational planning in this
forecasting is derived from a combination of products and
services that are requiring several resources for example
number of manufactured finished products using this top
down approach several tactical plans can be created based on
the overall forecasting process and their resources across
finished fits into this particular planning what are main
planning this approach is very very much used by the
companies to provide a stable manufacturing schedule and
for the type of finished goods it can change from one month
to another month essays for class is not helpful for the
resource planning it needs to calculate the resources for each
of the products and then amalgamate the resources to get an
overall picture of resource requirement

production plans

it was mainly to use where the cost of making a change in

production was extremely expensive when the cost of
holding inventory is very low for example in oil industry
using the number of Production plan the production remains
constant and inventory is used to observe the difference
between the sales forecasts and production energy production
plant takes elements from both of the level and the planning
will be more variation for providing a differentiated
forecasting plan

sales and operational planning best practices

● It is much more integrated set of business processes and
technologies that are single process or Technology will
 focus on implementation of the new strategy which
takes shape for future thinking
● it develops an sequence of different initiative
● it focus on more information
● it provides effective leadership for the process
● it organises the boundaries strength which is more
vulnerable for giving lot of attempt to implement.

Benefits of sales and operations planning

it was a result of monthly planning activities provides the
company's annual targets in terms of sales and supply it
provides efficiency of a particular supply chain and
profitability of a business that is relying on their plan it
reminds success in meeting customer demands and putting
all the resources to work and synchronising supply to meet
the demand it ties together the operational plan with strategic
business plan providing a Holistic view of demand supply
and Finance that you can literally plan to profit.

Manufacturing Resource Planninf MRP II

It is defined as a method of effective planning of all

resources of a manufacturing company it addresses the
operational planning in units and has a simulation capability
to answer what two questions on extension of closed loop
MRP

key functions and features of MRP II

● master production schedule
● item Master Data
● bill of materials
● inventory AND orders
● material requirement planning
● purchase management
● shop floor control
● capacity planning
● standard costing
● cost reporting
● business planning
● contract management
● tool management
● engineering change control
● sales analysis and forecasting
● finite capacity scheduling
● general ledger
● account payable
● account receivable
Benefits of MRP II
● Better control of inventories
● improved scheduling
● reduced Working Capital Management
● accurate inventory records
● improved design control
● better quality control
● productive relationship with suppliers more higher

Enterprise resource planning

it a business management software usually a suite of

integrated application that a company can use to restore and
manage data from every stage of business including
● product planning and cost development
● marketing and sales
● inventory management
● shipping and payment

it is a software which used by Industry that produces

components that support a variety of business function
organisation consider ERP system for Vital role playing
because it integrates very organisational systems and
facilitates error free transaction and production ERP system
development is different from the traditional system
development ERP systems run on a variety of computer
hardware and network configuration it is a fundamental
integrating business process which saves time and expensive
activities already used task that benefit from this integration
include chronological history of every transaction order
tracking and revenue tracking matching purpose and the
centralisation of this data is done by ERP

Erp eliminates the need to synchronise changes between

multiple systems it brings transparency for each statistical
data and facilitates standard product naming and coding it
provides a comprehensive enterprise view it protects the
sensitive data it greatly improve the quality and efficiency of
business it provides support to upper level management
providing highly critical decision making information it
provides increased opportunities for collaboration it improve
the data security in an organisation to more easily able to
access the key functional data of a company it performs at all
levels of platforms to provide a collaborative information to
the Employees and as well as the content which Masters the
learning curve of communicating in various formats across
distributed systems it suppose upper level management
Facility location

is a right location for the manufacturing facility to have

sufficient access to the customers workers and transportation
is a trap Nova of the to offer assistance to satisfy their delight
customers which is more productive therefore an
organisation becomes very important to have surgical
formulation according to their business manufacturing unit
facility location determination is business critical strategic
decision There are several factors which determine the
location of the facility among them competition cost and
corresponding associated effects it is the scientific process
utilising various techniques right location ensure the success
of organisation current Global competitive environment
when you consider industrialisation it becomes Geographic
area of focal point of different locations based on several
factors and issues there are some issues with reference to
location selection
Factors influencing facility location

● customer proximity
● business area
● availability of skilled labour
● free trade zone
● suppliers
● environmental policy

Types of Facility Layout

● Heavy manufacturing facilities which includes large

requiring of space and or extensive
● light industrial facilities which is smaller cleaner plans
and usually less costly retail and
● service facilities smallest and least costly

Steps in selection location model

Heavy manufacturing location

● construction cost
● raw material and finished goods
● shipment modes
● proximity to raw materials
● utilities
 ● labour availability

light industry location

● transportation cost
● proximity to markets
● frequent delivery
● land cost
● easily accessible
● education and training abilities

retail location

● proximity to customers
● location is everything

Global location

● raw material availability

● government stability
● number of government regulations
● suppliers
● political and economic criteria
● cultural criteria
● commercial travel
● exchange rates
 ● technical expertise
● regional location
● neighbour modes and equality of education
● transportation cost approximately of customers
number of customers local construction business

Facility Planning
• Long range capacity planning,
• Facility location
• Facility layout
Strategic Capacity Planning
Defined
• Capacity can be defined as the ability to hold, receive,
store, or
accommodate.
• Strategic capacity planning is an approach for determining
the overall capacity level of capital intensive resources,
including facilities, equipment, and overall labor force size.
Capacity Utilization
Capacity utilization rate = Capacity used/ Best operating
level
Capacity used
– rate of output actually achieved

Best operating level

– capacity for which the process was designed

Strategy Formulation
• Capacity strategy for long-term demand
• Demand patterns
• Growth rate and variability
• Facilities
– Cost of building and operating
• Technological changes
– Rate and direction of technology changes
• Behavior of competitors
• Availability of capital and other inputs
Key Decisions of Capacity Planning
1. Amount of capacity needed
2. Timing of changes
3. Need to maintain balance
4. Extent of flexibility of facilities
Capacity cushion – extra demand intended to offset
uncertainty
Steps for Capacity Planning
1. Estimate future capacity requirements
2. Evaluate existing capacity
3. Identify alternatives
4. Conduct financial analysis
5. Assess key qualitative issues
6. Select one alternative
7. Implement alternative chosen
8.monitor results

Capacity
• Design capacity
– maximum output rate or service capacity an operation,
process, or facility is designed for
• Effective capacity
– Design capacity minus allowances such as personal time,
maintenance, and scrap
• Actual output
– rate of output actually achieved--cannot
exceed effective capacity.
Efficiency and Utilization
Actual output / Effective capacity

Design capacity
Both measures expressed as percentages
Determinants of Effective Capacity
• Facilities
• Product and service factors
• Process factors
• Human factors
• Operational factors
• Supply chain factors

Nature of Location Decisions

• Strategic Importance
– Long term commitment/costs
– Impact on investments, revenues, and operations
– Supply chains
• Objectives
– Profit potential
– No single location may be better than others
– Identify several locations from which to choose
• Options
– Expand existing facilities
– Add new facilities
– Move

Making Location Decisions

• Decide on the criteria
• Identify the important factors
• Develop location alternatives
• Evaluate the alternatives
• Make selection

Location Decision Factors

1. Regional Factors
• Location of raw materials
• Location of markets
• Labor factors
• Climate and taxes

2. Community Considerations
• Quality of life
• Services
• Attitudes
• Taxes
• Environmental regulations
• Utilities
• Developer support

Unit 3
Design of product process and work systems

introduction

what is the process of creating a new product by making a

business to its customers it is efficient and as well as
effective generation development towards ideas which is
leading a process for finding in your product the product
designs roll is to combine 8 science technology and to create
a new product that couple the usage of different people
product design is sometimes confused with industrial design
and has recently become a broad term which includes service
software the physical product design industrial design and as
well as bringing some usability and associated with
ergonomics analysis Industries everyone in the team begins
to the search something which is the fastest effect materials
which will help you figure out how their problems can be
solved this can range from statistics articles and many other
resources

concept

this is very lucky way of finding a matter of defining it the

situation becomes the parameters within which the design of
the constructor

synthesis

designers here brainstorm different ideas designing

problems in this idea of brainstorming when was not of
judgement but instead build original ideas

product design expression

within a specific audience it is challenging to character each

possible personality within the group similarly a product and
have an attractive appearance that function does not follow
through it will process it immediately like a drop in regards
to consumer interest it considers the production cost in the
end the manufacture want and economically reduce the
product the purchase a look at the price appearance and trust
each value the end user is concerned with the usability and
functionality of the product the maintenance and repair
document focus on how will the final product can be
maintained in the production assembling diagonalization and
service of ability

Factors influencing product design

fashion

knowing what's working and watch not working and

industry will help you to a other term the fat from your
design or add a unique twist what is already working with
other products knowing what's information also gives you an
edge because it will keep you from repeating the same
mistake again and again which is Saving you the trouble of
spending your bills and use your precious time in inspiration
to brainstorm the next Big Idea creating something which has
never seen before
cost

make it affordable a big part of design process the factor of

cost how much it is going to cost for you to produce or
distribute your design what are all the design as was packed
with reference to design process and what you want it to do
compromise on the quality of your design is very important

Other factors

● Reputation
● Plant & Machines
● Raw Materials
● Quality policy
● Effect on existing products

Trends in product design

A product that fails in the Marketplace the first time may be
introduced to the market to more Times if it continues to find
the product of then considered to be that because a market
believes it to be a failure most new products while even if it
is a great idea all types of production of cleaning to the
economic health of manufacturing sectors innovation
provides much of the competitor instant for the development
of new products with the help of new technology in new
design interpretation is often required it takes only
manufacturer to create a new product Paradise gym for force
the restaurant industry to capture the for the innovation
product designed to benefit people of all ages and abilities
without penalty to any group account data spelling aging
population by extending Independence and supporting the
changes in the physical and the sensor in it's what we
encounter as we grow older

approaches to product design

designing for the customers

● Industrial design
● Voice of the customer
● quality function deployment
designing for manufacture and assembly
● over the wall approach
● concurrent engineering
● design for manufacturing
● Design for assembly

designing for ease of production

● Specification
● standardisation
● simplification
● designing for quality
● designing for robustness
● designing for production
● designing for automation
● designing for reliability
● designing for economics
● designing for Environmental Protection
● designing for recycling
● designing for assembly
 ● designing for mass customisation
● delayed differentiation and modular design

Product planning
it enables the product executive and their teams
● to drive overall product mission directions at age in
features
● collect and prioritise ideas
● Reconcile changes due to the shifting priorities and
resource allocation
● monitor and report development progress in contact
with properties
● share information with stakeholders why are road maps
product backlog community social media and other
artefacts

What are the benefits of product planning

● gives everyone involved an accurate picture of
who is doing what why and why when it allows
● for the development of focus solely on
development
● it helps to ensure that most important areas are
captured and incorporated
 ● the end result is that product delivered with far
more of what customers wants and sales team
expects

a new approach to product planning

● plan your marketing campaign

● creating advance interest
● celebrating their results
● interesting some maintenance
● improving the product
● product planning process
● enquiry
● proposal of functional material
● design and prototyping
● functional product differentiation
● final confirmation of the customer

Essential steps of product planning

the four Gates first it is and covering the needs and wants for
consumer once you have done that the second phase
understanding opportunities through research defining the
product and deciding what are the attributes, Then the
conceptual design and The Fourth is realising that
opportunity by detailed design and conducted stress analysis

The detailed way of asking right questions

● is when getting to production do you want to patent it?
● do you want to build a more refined prototype?
● do you want to go into the prototyping process ? and
● which brings us the last point ?

the bottom line is that product planning requires

elevation that you believe in because potentially you
will be living with it for long time

product selection

Idea

generation product ideas or investment opportunities

come forward to make use of the different sources such
as business newspapers research institutes consultations
natural resources universities competitors starting point
of Idea generation could be a sample analysis of the
strength and weakness
evaluation

Screening of product ideas is the first step in evaluation

fitting of potential product into the business long-range
sales plan and availability of qualified people to handle
its marketability each and every identify the product
opportunity needs to be adequately evaluated pre
feasibility study of the product market technical and
financial aspect is highly necessary for the stage to have
a clear picture of associated costs and benefits as a

choice

It is made of a product which has been found to be

commercially viable technically feasible and
economically desirable adjust is necessary machineries
to be set in motion

Series of action

● Learn
● Synthesize
● Imagine
 ● Present
● Refine
● Prototype
● Proposal

Causes of product failure

● Management oversight during the basic planning stages

initially research may be there in adequately done or
bungled and interpretation
● lack of sound market appraisal product problems and
effect example manufacturing of a product that is too
costly or too complicated
● inadequate marketing support for instance the company
may have rated the product so high in the market that
they cut back on promotion
● lack of consumer education about the product
Elements of product strategy

● What are you selling?

● what value do you provide your customers ?
● how will you price your product?
● how will you distribute your product?

Product strategy

1. Product positioning
2. Required
3. Re positioning
4. Overlapping
5. Scope analysis
6. Elimination
7. Modified design
8. Diversification
9. Value marketing
Work study

it is a systematic examination of methods of carrying out

activities such as to improve the effective use of resources
and two set of standards of performance for activities to be
carried out generic term for these techniques particularly
method study and work measurement which are used in the
examination of human work in all its context and which lead
systematically to investigate the factors which affect
efficiency in economy of the situation in order to effect
improvement this has to do with productivity improvement
but also improvement of quality and safety

Work Data

data the data contributes to improved methods to rice output

quality reduce their stages and have reliability and ensure
safety standard time data contribute to the capacity planning
and scheduling control of Manpower utilisation and quality
improvement implementation planning for product or service
and the process design requires a detailed understanding of
methods and timings in a distribution of transport system
which can never be announced its efficiency we need to
remember always the performance in efficiency may rise
from many reasons out of the worker control

Procedures for work study

● select the task be studied

● record the collected data source and by direct
observation
● examine challenging the purpose place Sequencing
method of work
● develop new methods drawing on contribution of those
concerned
● evaluate the cells of alternative solutions
● define new methods and present findings
● install new methods and training those involved
● maintain established and trolled procedures

Work measurement

● select the task

● record the fact
● analyse them
● calculate basic and standard time for the task
 ● agree the method and its related time

A work is measured for following reasons

● Discover eliminate lost or ineffective time

● established under time for performance measurements
● to measure performance against realistic expectation
● to set operating goals and objectives

techniques of work measurement

● Time study
● predetermined motion Time systems
● standard data
● Work sampling

Steps to Improve productivity

● management commitment
● training and empowerment
● fabric saving
● work study time and methods
● measuring performance
● Line balancing
● quality
 ● personnel management
● better equipment

What is Method Study?

Method study deals with analysing every topic/chapter and

identifying the strong and weak points in that. Then studying
in a pattern in which maximum topics are covered in a
minimum time span. Simply put, method study is when each
and every piece of study material or work is put through
thorough scrutiny in order to ensure that every word is
understood and retained by you. This is also advantageous as
it prevents any kind of error or misleading information from
getting through as it detected and conveniently omitted in the
learning process. Method study is the best way to go about
your studying to achieve better results and productivity.
Being meticulous with your study materials or work is
beneficial because you can make less errors and improve
stronger retention abilities.
Objectives of Method Study

The objectives of the method study are as follows:

To improve the quality of learning

To improve the usage of materials, books and other literature
To develop a better physical working environment
To achieve an economy in human efforts
To reduce the unnecessary fatigue
To improve the design and condition of the workspace
To improve the workspace layout
To finally improve the processes and procedures
How to Approach Method Study?
Method study is the process of breaking down the entire
study process and approaching it one step at a time. So, here
are some method study tips on how you can prepare better:

For method study, you can follow a procedure of learning ,

described by each step in it:

Select
First, select the work that you are planning to do. It can be
any pending work, management, practice, learning course,
etc. A defined problem area or an identified opportunity may
be the subject of a method study. It is typically defined
through a thorough analysis of available data, standard
monitoring or control procedures, high levels of discontent
and complaint, or as part of a change in management policy,
procedure, technology, or venue, and usually because it
meets certain urgency and/or priority requirements.

Record
The Record stage of a method study entails collecting
enough data (both in terms of quality and quantity) to serve
as the foundation for assessment and review. There are
several recording methods to choose from, depending on the
nature of the investigation, the work being studied, and the
degree of detail needed. Gather or record all the sufficient
information and data that you will be needing during your
study. Here, you might need recordings, diagrams, charts,
notes, etc for your study.

Examine
The collected data is examined and analysed; critical
evaluation and systems analysis are formalised forms of this
method. The goal is to recognise, often through a formal
questioning process, certain aspects of the overall work
system that need to be improved or that can benefit from the
change. Examine all the information that you have recorded.
You can examine and analyse the data you have gathered to
identify the sections that need work.

Develop
When more detailed research leads to establish areas of
progress, the Examine stage of the investigation merges into
the Develop stage of the investigation. The goal here is to
recognise potential improvement actions and evaluate them
in order to establish a preferred solution. Here you need to
develop a preferred solution for the data that you have
examined. You can identify short-term and long-term
solutions where you can work a short-term solution till the
long-term solution comes to fruition.

Install
In this method, you need to install the theoretical changes
that you were planning to do. Here, you need to create a
physical solution that has been implemented. In this part, you
might figure out some reasons behind any section that is
lacking or any area of improvement that you can work on.

Maintain
It is important to verify that new working methods are
working, that they are being followed correctly, and that they
are producing the desired results after some time has passed.
This is the period of maintenance. Here, you need to learn to
maintain the changes that you have done. In this section, you
will learn whether the changes that you have done are really
beneficial or not.

These were some of the tips on how to go about method

study. Following each one of them along with hard work and
determination will lead to good results.
What is motion study?

Motion study is a systematic way of determining the best

method of doing the work by scrutinizing the motions made
by the worker or the machine. As per Gilbreath it is the
science of eliminating the wastefulness due to unnecessary
motions. He was interested in finding the one best way to do
the job. he analyzed the motions of bricklayers and was
successful in reducing the number of motions of a bricklayer
from 18 to 5.

Motion study can be divided into three components or types:

1) Therblig analysis: a therblig is a small part of a job.

Gilbreath gave 17 basic motions of a worker each motion is
known as therblig.

2) Micro motion study: it is the study of elements of an

operation with the help of high-speed movie camera in order
to eliminate the unnecessary motions involved in the
operation and balancing the necessary motions.
3) Principles of micro economy: this motion study find out
the correct application of theories behind motion elements to
achieve synchronization of human body movements, best
layout of work places and optimum design of equipments.
The five basic principles of micro economy are;

i) Principle of minimum movement

ii) Principle of natural movement

iii) Principle of habitual movement

iv) Principle of rhythmic movement

v) Principle of symmetrical movement

Motion Study can be performed in the following steps:

Step I: Break up the operation of the job:

The first step is to prepare a detailed list of all operations in

the present method of manufacturing the job. All details such
as material handling, machine work and hand work are
included in the list. This may be done with the help of a
process chart or diagrams of motion and film analysis or
models etc.

Step 2 Questions should be asked on himself by the motion

study engineer about the way in which these operations are
to be performed, and about the tools and equipment’s needed.
The procedure of this questioning is known as “Critical
Examination”.

Questions are asked on the following five points:

i) Purpose:

What is the purpose of this operation?

Does the operation fulfill the requirements?

Step 3
After considering the above questions a new better method is
developed.

Before finalising the new method the following facts should

also be thought over during the motion study:
i) Elimination:

Every operation of the job should be thought and whether it

can be eliminated without any harm.

ii) Combine:

In this context it is to be observed that whether two or more

can be combined to save operation time.

For maintaining the new method the following steps are

advised:

a) A job instruction sheet should be given to the worker.

b) Scheduled checks should be done to compare what is

actually being done against the job instruction sheet.

c) Selection and training of persons must be done according

to the job specifications for this new method.

Recording Techniques – Charting:

Recording is the second step in the basic procedure for
Method Study. Just after the selection of a particular work for
study, the relevant information regarding various processes,
inspection, transportation with respect to an existing method
or a new method must be recorded properly. Therefore, for
efficient recording the charts have been developed.

The recording of the details will be done in charts to get

more clear picture. Apart from that a record is also needed
before and after comparison is to be made to assess the
effectiveness of the study. Charting is the visual
representation of recording of facts. It is a technique by
which analysis for developing the method can be done
quickly and easily.

For easy understanding care should be taken during the time

of the preparation of the chart.
 Unit 4
Materials Management

Material management can deal with campus planning and

building design for the moment of materials that deal with
tangible components of supply chain it plans and designs for
the delivery distribution storage collection and removal of
occupant generated streams of materials and services streams
of occupant generated materials and activities include Mel
office supplies lab supplies for special deliveries custodial
services waste and recycling and service calls

Materials Management

Material Management is the management of flow of

materials into an organization to
the point where these materials are converted into the firm’s
end product.
 Material management is a total concept involving an
organization structure unifying
into a single responsibility, the systematic flow and control
of materials from identification
of need through customer delivery.
Materials Management involves organizing, and
co-coordinating all management
functions that are responsible for every aspect of materials
movements, storage, and
transformation.
Materials Management is defined as the function responsible
for the coordination of
planning, sourcing, purchasing, moving, storing, and
controlling materials in an optimum
manner so as to provide a pre-decided service to the
customer at a minimum cost.
The amount spent on materials is increasing in relation to
the expenditure on other
inputs.
Materials offer considerable scope for reducing cost and
improving profit.

material management plan may include planning guidelines

aur full design for the following
 ● Truck delivery and service vehicle routes
● loading and delivery points to increase accommodation
● recycling trash and hazardous waste collection and
● removal to increase the waste diversion and reduce cost
regulatory and operational planning

Materials management challenges the major challenges that

material manager face is maintaining a constant flow of
materials from production to destination that may be many
factors that in habit lucky ratio of inventory management
which results in production shortages Premium freight and
often inventory adjustment

Benefits of materials management Material Management as

an approach for planning organising and controlling of all
activities partially concerned with cloth materials into an
organisation the effective materials management plan can
improve organisation control removing unsafe and unsightly
conditions placing co services out of sight and creating a
more friendly environment which will improve the visual
and physical sense of place for those who live and work there
 Objectives of materials management right quality
right quantity right time from right source and from at
right price
at the lowest price consistent with desired quality and
service to maintain a high inventory turnover by
reducing access storage carrying cost element inventory
losses maintain continuity of supply curve and
introduction of the cloth materials and services to the
user's to hire develop motivate and trained personnel
and to provide a Reservoir the Talent
to reduce inventory investment to ensure consistency
in quality to provide cordial supplier relations to achieve
a high degree of cooperation and coordination with usse
departments
to maintain good records and controls that provides
an auditing training financial sufficiency in honesty to
participate in make or buy decision objectives of
materials management continuity of supply cost
reduction
to minimise overall cost of acquisition by improving
their efficacy and efficiency of operations and
procedures
to develop and maintain good relationship with
supplier and the attitude that desire to furnish the
organisation with new ideas
 to develop reliable alternate source of supply to
promote a competition in the performance and pricing

Materials Planning is the scientific way of determining the

requirements of raw
materials, components, spares and the other items that go
into meeting the production needs
within economic investment policies. Material planning is
one part of overall production
planning.
Sales forecasting and Aggregate Planning are the basic
inputs for materials planning.
The task under planning are:
Estimating the individual requirements of parts.
Preparing materials budget.
Forecasting the levels of inventories.
Scheduling the orders.
Monitoring the performance in relation to production and
sales.
FACTORS INFLUENCING MATERIAL PLANNING
MACRO FACTORS
Price trends
Credit policies
Government policies
Technology
Business cycle
MICRO FACTORS
Corporate policies
Availability
Working capital
Corporate capabilities
Plant location
Demand forecasting accuracy
Seasonal factors
Availability of substitute materials
Delegation of powers
MATERIAL BUDGETING
PROCESS
● Requirements Of materials
● Amount of
materials
to
be purchased
● Purchase
Budget
Or
materials budget
Inventory
norms/targets
Variance report
for control
Inventory of
materials on
hand
Forecast
of prices
And rates
Actual prices
Benefits of Material Budgets
1. When a material budget is to be expressed in terms of
rupees, the purchase manager
has to provide the budget department with two types of
information (i) estimate of material
prices during to coming year. (ii) Plans for the specific
timing of purchases.
2. In purchasing, reasonably precise knowledge of materials
requirements over an
extended period of time facilitates forward buying and
permits the advantageous use of
contract purchasing and blanket order purchasing techniques.

Value analysis

systematic analysis that identifies and selects the best value

alternative for design materials and processing it proceeds by
repeatedly asking can the cost of this time must be reduced
or eliminated without diminishing the effectiveness required
quality or customer satisfaction to distinguish between the
enquiry cost in a particular design and minimise the locked
in cost the examination of each procure the element to a
certain its total cost of acquisition maintenance and usage in
order to replace it with a more cost-effective substitute and
also called value in use analysis
There 4 basic reasons for keeping inventory time the
● time lags present in supply chain from supplier to user at
every stage request that you maintain certain amount of
inventory to use in Lead time play time itself can be
addressed by ordering that many days in advance
● uncertainty inventory for maintained as buffers to meet
uncertainty is in demand
● Economics of scale ideal condition of one unit at a time
at a place where are you sir needs it were a user use it
for a cost in terms of logistics
● appreciation in value in some situations from stock
gains their value when it kept for a long time and at least
that is a standard for consumption

Justin time it is a production strategy that strives to improve

business return on investment by reducing interest inventory
and associated carrying cost to meet its objectives the
process relies on signals for conveyance system it is
involving with the process which tells the production went to
make the next part kanban system for usually tickets but can
be simple visual signals such as the presence or absence of a
part on a shelf implemented correctly
MATERIAL MANGEMENT INFORMATION SYSTEM
(MMIS)
Material Management is a system of interrelated activities
combining material
movements, storage and transformation involving all
management functions like planning,
organizing, controlling, coordinating etc.
MMIS provides online information on stock level of raw
materials, in process
inventories, finished goods, materials in ware house.
MMIS provides information at right time, it also request the
supplier to supply
materials on time.
Thus, helps in decision making.
It also helps in accessing information rapidly, detects errors
and assures prompt
decision making.
MMIS takes decisions regarding when to buy (or) when to
make parts and the like.
MMIS can do all these only when it is designed with the
parameters that capture the
management issues like what to buy, when to buy, from
whom to buy, how to buy, and how
much to pay and it should be constants working overtime
 MMIS should be able to provide unsolicited data (Not asked
for), in right time for
decision making.
Any intelligent MMIS should request the supplier computer
to send materials
whenever the stock levels come to reorder level.

it focuses on continuous improvement and can improve

manufacturing organisations returns on investment quality
and efficiency and inventory strategy company is employee
to increase efficiency and to decrease waist by receiving
goods only as they are need of production design

Effects OF JIT the factory begin building many vehicles to

order eliminating the risk they would not be sold this
improved the company's return on equity when I process for
parts quality problems are faced on the production line I can
take a production line had to be slowed or even stop no
inventory mental 9 could not operate from in process
inventory value production problem was fixed many people
into a lot of predicted that it would be abandoned and for this
reason Toyota installed and overhead full 9 similar to the bus
Deadpool that let any work on online order line stop for a
process for a quality problem benefits of the it it allows the
setup time to reduce the elimination of inventory for change
overtime

SMED single minute exchange of dies. Supplies comment

at regular intervals throughout the production day it is
synchronised with production demand and the optimal time
of inventory is on hand at any time in parts move directly
from the truck to the point of assembly the need for storage
facility is reduced production scheduling and work hard and
cistern C synchronised with demand is there is no demand
for a product that time it is not made this says the company
money either by not having to pay workers over time or by
having the in focus on other work to participate in training
increased emphasising on supplier relationships will make
the inventory does not want supply system problem that
creates a proper storage
Layout arrangement of items within certain limits a plan
for such arrangement act of laying out something a map or a
drawing of a construction site showing the position of roads
buildings or other Constructions store layout and visual
factors that contribute the uniqueness of a store exterior and
interior of a store convey several messages about the store to
the consumers the building that houses retail store near
exterior design a poster on important aspects of design there
are some key factors to be kept in mind while developing
stores

managing space is a first and foremost the concern of almost

every retailer when it comes to designing the stores interior
space is always an expensive mens casual retailers always try
to maximize the return on sales per square feet that
applicants of layout allocating spaces to various categories in
the store is very important this can be based on many factors
like historical sales gross margins industry averages and
strategic objectives designing the interior of a so in such a
way as to influence customer behaviour is referred to as a
visual factor that includes Optimisation and appropriation of
fixtures displays colours lighting music ceilings and flooring
which is more significant aspect of the design of a store to
attract customers attention
Value ANALYSIS

● Value analysis is an approach to improve the value of

the product or process by understanding its constituent
components and their associated cost
● the ratio between a function for a customer satisfaction
at the cost of the function
● effect produced by a product or by one of its elements in
order to satisfy customer needs and methodology
● to increase the value of an object to be analysed this
could be an existing or a new product or resources to
accomplish their expected plan
● something that is necessary on the same way the
customer

Vendor ratings please aur periodically revised to reflect

changes in assessment in a significant internal or external
event directly affect the provider which is applicable to large
small public or private vendor rating services all different
types of Hospet of a technology provider such as strategy
organisation product Technology marketing and financial
reporting when ratings are helpful in understanding the
providers offering which is aligning the business started the
and to help the assessment of health of their own strategic
provider portfolio it also reveals solution jobs among
providers and marketers that could be e useful for investing
right opportunity Technology providers with a clear focus
solid products or more advantages is maybe rate and
positively by the provider has even though there are many
challenges in these aspects of creating a proper potential
which will drive to develop further

Vendor rating
• Vendor rating is a process of rating a supplier based on
some rating techniques. The
hallmark of an effective purchase department is the quality of
suppliers selected. The
purchaser’s prime interest lies in getting the best value from
his suppliers. This implies that
he should be in a position to assess and rate their
performance against what is expected
from an ideal supplier. The absolute standard is difficult to
define with exactness but there
should be some method for evaluating suppliers and grading
them. An objective and
accurate vendor rating can become an asset and valuable tool
in the hands of a buyer in
making his purchase decisions as also providing feedback to
suppliers with low rating to
encourage improvement in their performance.
There are various rating criteria such as
Discounts received
Price
Compliance with other specifications
Installation cost
Market information
Credit terms
Maintenance of Specifications
Promptness of delivery.
Service
Co-operation
Management Competence
Disposition of rejects,
Employee training, Adjustment Policies, Cost reduction
suggestions, Inventory
Plans, Financial Position.
STORES MANAGEMENT – NATURE
• Store as building is a place, where inventories are kept.
• Store is defined as a place for goods. Storage/storekeeping
is defined as the act of
storing the goods.
• The store is used to cover all aspects of preservation of
goods i.e. building, supplies
and the act of storing.
• Stores or Storage is the function of receiving, storing and
issuing materials. It
involves supervision or the clearance of incoming supplies,
to ensure that they are
maintained in good condition, safely and in readiness for use
when required while they are
in storage and issuing them against authorized requisitions.
• In short, it is connected with the physical handling and
well-being of the stocks.
Importance / Functions of Stores Management
• Stores ensure ready accessibility of major materials,
there-by efficient service to
users.
• Efficient storage of stores yields the following benefits:
1. Ready accessibility of major materials permitting efficient
service to users.
2. Efficient space utilization and flexibility of arrangement.
3. A reduced need for materials handling equipment.
4. A minimization of materials deterioration and pilferage.
5. Ease of physical counting.

PROCESS OF INVENTORY MANAGEMENT AND

CONTROL
It refers to the planning for optimum quantities of materials
at all stages in the
production cycle and evolving techniques which would
ensure the availability of planned
inventories. Four steps are involved:
1. Determination of optimum inventory levels and
procedures of their review and
adjustment.
2. Determination of the degree of control i.e. required for the
best results.
3. Planning and design of the inventory control system.
4. Planning of the inventory control organization.
Too much of inventory results in locking up of working
capital accompanied by
increased carrying costs (but reduced ordering costs).
Too less of inventory releases working capital for alternative
uses and reduces
carrying costs and increases ordering costs.
To overcome this problem-The trend of sales must be
watched closely and inventories
adjusted in advance of the change in rate of production as
determined by actual sales.
The actual level of the inventory may also be improved by a
close study of the
manufacturing cycle.
2. Determination of the degree of control
The second aspect of inventory management is to decide just
how much control is
needed to realize the objectives of inventory management.
ABC classification approach is useful in deciding the degree
of control.
‘A’ class items are ‘high’ in value but ‘low’ in quantity, ‘C’
class inventories are the
opposite of ‘A’ group, i.e., ‘high’ in quantity and ‘low’ in
value.
 In between ‘B’ group stock which are more or less equal in
quantity and value
proportion to the total inventory.
3. Planning and design of the inventory system
An inventory system provides the organizational structure
and the operating policies
for maintaining and controlling goods to be stocked.
The system is responsible for ordering and receipt of goods,
timing the order
placement, and keeping track of what has been ordered, how
much, and from whom

UNIT 5 Scheduling and Project

Management
Project
• A project is a group of unique, interrelated activities that
are planned and executed in
a certain sequence to create a unique product/ service, within
a specific time frame, budget
and the client’s specifications.
• According to the project management Institute’s (PMI)
publication, “A Guide to the
Project Management Body of Knowledge , a project is
defined as, “ a temporary undertaken
to create a unique product or service.”
• According to the British Standard, a project is define as, “a
unique set of co-ordinated
activities, with definite starting and finishing and technical
performance goals.”
Objectives of project
Time
Cost
Safety
Quality Performance

According to the project management Institute’s (PMI), “

Project management is the
application of knowledge, skills, tools and techniques to
project activites to project
activities in order to meet or exceed stakeholder needs and
expectations.
• Elements of Project Management:
1. Identification of the project.
2. Technical and financial appraisal of the project.
3. Proper formulation of project.
4. Actual implementation of the project.
5. Feedback and revision of objectives.
6. Policy restrictions.
7. Government regulation.
8. Manage staff.
9. Manage client relationship
10. Evaluation at the end of the project.

Program Evaluation and Review Technique (PERT)

• The Program (or Project) Evaluation and Review
Technique, commonly abbreviated
PERT, is a model for project management designed to
analyze and represent the tasks
involved in completing a given project. It is commonly used
in conjunction with the critical
path method or CPM.
• PERT event: a point that marks the start or completion of
one or more activities. It
consumes no time and uses no resources. When it marks the
completion of one or more
tasks, it is not “reached” (does not occur) until all of the
activities leading to that event have
been completed.
• Predecessor event: an event that immediately precedes
some other event without any
other events intervening. An event can have multiple
predecessor events and can be the
predecessor of multiple events.
• Successor event: an event that immediately follows some
other event without any
other intervening events. An event can have multiple
successor events and can be the
successor of multiple events.
• PERT activity: the actual performance of a task which
consumes time and requires
resources (such as labor, materials, space, machinery). It can
be understood as representing
the time, effort, and resources required to move from one
event to another. A PERT activity
cannot be performed until the predecessor event has
occurred.
• Optimistic time (O): the minimum possible time required to
accomplish a task,
assuming everything proceeds better than is normally
expected
CPM methods can be applied with success to large scale
research and development
programs e.g. construction work, industrial maintenance and
installation operations.
• Objectives of CPM Analysis:
1. To determine a route between two or more operations
which optimizes some
measures of performance.
2. To locate the obstacles and difficulties involved in a
production process.
3. To assign the starting and finishing times for each
operation or activity.
4. To determine the float associated with each non-critical
activity.
• Applications of CPM:
1. In production planning
2. Location of and deliveries from a warehouse.
3. Road systems and traffic schedules.
4. Communication network
Difference between PERT and CPM
PERT CPM
1. PERT is appropriate where time
estimates are uncertain in the duration of
activities as measured by optimistic time,
CPM assumes that the duration of every
activity is constant and therefore every
activity is critical or not
2. PERT is concerned with events which are
the beginning or ending points of
operation.
CPM is concerned with activities
3. PERT is suitable for non-repetitive
projects.
CPM is designed for repetitive projects.
4. PERT can be analyzed statistically. CPM can not be
analyzed statistically.
5. PERT is not concerned with the
relationship between time cost.
CPM establishes a relationship between
time and cost and cost is proportionate to
time.