IPE-311: OPERATIONS

MANAGEMENT

DR. NIKHIL R. DHAR

Professor, IPE Department
BUET
Course Content
Production Planning and Control
Project Scheduling and Quality Control
Plant Location and Plant Layout
Demand Forecasting and Processes
Inventory Control and Models
Material Handling and Design of Operations
Resource Allocation and Materials Management
Operations Management in Supply Chain

Dr. N.R. Dhar, Professor, Department of Industrial and Production Engineering, BUET 211/2
Suggested Reading
Operations Management-Strategy and Analysis-Lee, et. Al.
Element of Production Planning and Control - Eilon Samuel
Industrial Engineering and Production Management–M.
Telsang
Production and Operations Management - S.N. Chary.
Production and Operations Management-R. Panneerselvam

Dr. N.R. Dhar, Professor, Department of Industrial and Production Engineering, BUET 211/3
Marks Distribution
Total Marks: 300
Class Test Class Attendance Midterm Exam Final Examination
(20%) [5%] [15%] [60%]
1 2 3
30 30 30 15 45 180

Class Test-1 Production Planning and Control

Class Test-2 Project Scheduling and Control Techniques
Class Test-3 Plant Location and Plant Layout
Class Test-4 Forecasting Methods
Assignment:

Dr. N.R. Dhar, Professor, Department of Industrial and Production Engineering, BUET 211/4
LECTURE 01: PRODUCTION
PLANNING AND CONTROL

DR. NIKHIL R. DHAR

Professor, IPE Department
BUET
Production Management
Production management involves the planning, organization, direction and
execution of production activities. The ultimate goal of any production
management solution is to convert a collection of raw materials into a
finished product. Some people refer to production management as the
bringing together of the 6 'Ms':
Men
Money
Machines
Materials
Methods
Markets
The production management principles are often referred to as operation
management principles, and they are designed to facilitate the production of
goods that are of the required quality and quantity.
Dr. N.R. Dhar, Professor, Department of Industrial and Production Engineering, BUET 211/6
Objectives of Production Management
To produce goods and services as per the estimated manufacturing cost
and minimum inputs of resources.
To produce right quality goods and services as per the established
standards and specifications.
To produce goods and services as per the decided time schedule.
Minimize the use of resources to the optimum level. These are 4M‘s
like Manpower, Machinery, Materials and Money. These inputs are to
be used to full extent to result minimum cost and time.
Maximize the utilization of manpower.
Minimizing the total cost of production with continuous elimination of
non-value added activities and improving labor productivity on the
production shop floor.
Dr. N.R. Dhar, Professor, Department of Industrial and Production Engineering, BUET 211/7
Functions of Production Management
In modern industries, production management has to perform a variety
of functions.
Design and development of the production process.
Production planning and control.
Implementation of the plan and related activities to produce the
desired output.
Administration and coordination of the activities of various
components and departments responsible for producing the
necessary goods and services.
Get real-time insight into the production.
Improve performance with flexible routing.
Monitor production costs with ease.
Dr. N.R. Dhar, Professor, Department of Industrial and Production Engineering, BUET 211/8
Role of Production in Business
Business is defined as the activity of providing goods and
services involving financial, commercial and industrial aspects.
Production, is the transformation of raw materials and operational
inputs into output that, when distributed, meet the needs of
customers.
Hence production plays a very important role in the overall
business scenario as it basically deals with the manufacturing of
the goods, which are in turn provided for the customer to fulfill
the needs.
The plan for production has to be developed by taking a number
of things into account, that can be basically grouped into 5P’s.
Dr. N.R. Dhar, Professor, Department of Industrial and Production Engineering, BUET 211/9
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. Product deals with areas like performance,
aesthetics, quality, reliability, quantity, production costs and delivery date.
Plant: The plant accounts for major investment (fixed asset). The plant
should match the needs of the product, market, the worker and the
organization. Plant deals with the making the product. It is basically includes
areas like future demand, health and safety, productivity and reliability of
equipment, environmental issues.
Processes: There are always number of alternatives methods of creating a
product. But it is required to select the one of the best method which attains
the objectives. Processes deals with the different ways of producing a
product. It will consider areas like available capacity, available skills, type of
production, safety, production costs and maintenance requirements.
Dr. N.R. Dhar, Professor, Department of Industrial and Production Engineering, BUET 211/10
Programs: The program here refers to the time-table of production.
Thus the program prepares schedules for purchasing, transforming,
maintenance, cash and storage and transport. Program deals with the
dates and times of the products that are to be produced and supplied to
customers. It would consider areas like purchasing patterns, need
for/availability of storage and transportation.
People: Production depends upon people. The people vary in their
attitudes, skill and expectations from the work. Thus, to make best use
of available human resource, it is required to have a good match
between people and jobs which may lead to job satisfaction. People
deals with key personnel decisions like wages and salaries, safety and
training, work conditions, leadership and motivation, and
communication.
Dr. N.R. Dhar, Professor, Department of Industrial and Production Engineering, BUET 211/11
Production Planning and Control
Production Planning and Control (PPC) can be defined as the process of
planning or deciding on the resources the firm will require for its future
manufacturing operations and of allocating and time scheduling these
resources to produce the desired products on time at the least total cost.
PPC is most essential for any organization. Planning process within an
organization is dynamic and continuous. PPC involves
The planning of production
A decision on the sequence of operations to achieve what has been
planned
The setting of starting and finishing time for production
Proper dispatching of the material and
Follow up action to check the progress of operations
Dr. N.R. Dhar, Professor, Department of Industrial and Production Engineering, BUET 211/12
Objectives of PPC
Systematic planning of production activities to achieve the highest
efficiency in production of goods/services
To organize the production facilities like men, machines etc., to
achieve stated production objectives with respect to quantity and
quality, time and cost.
Optimum Scheduling of resources
Coordinate with other departments relating to production to achieve
regular balanced and uninterrupted production flow
To conform to delivery commitments
To be able to make adjustments due to changes in demand and rush
orders.

Dr. N.R. Dhar, Professor, Department of Industrial and Production Engineering, BUET 211/13
Main Elements of PPC
Routing: It is about selection of path or route through which raw materials
pass in order to make it into a finished product. The points to be noted while
routing process are – full capacity of machines, economical and short route
and availability of alternate routing. Setting up time for the process for each
stage of route is to be fixed. Once overall sequence are fixed, then the
standard time of operations are noted using work measurement technique.
Loading and Scheduling: Loading and Scheduling are concerned with
preparation of workloads and fixing of starting and completing date of each
operation. On the basis of the performance of each machine, loading and
scheduling tasks are completed.
Dispatching: Dispatching is the routine of setting productive activities in
motion through the release of orders and instructions, in accordance with
previously planned time and sequence, embodied in route sheet and schedule
charts. It is here the orders are released.
Dr. N.R. Dhar, Professor, Department of Industrial and Production Engineering, BUET 211/14
Follow Up and Expediting: Follow up or expediting is that branch of
production control procedure which regulates the progress of materials and
part through the production process. Progress may be assessed with the
help of routine reports or communication with operating departments. The
follow up procedure is used for expediting and checking the progress.
Inspection: Inspection is the process of ensuring whether the products
manufactured are of requisite quality or not. Inspection is undertaken both
of products and inputs. It is carried on at various levels of production
process so that pre-determined standards of quality are achieved.
Inspection ensures the maintenance of pre-determined quality of products.
Corrective: At evaluation process, a thorough analysis is done and
corrective measures are taken in the weaker spots.

Dr. N.R. Dhar, Professor, Department of Industrial and Production Engineering, BUET 211/15
Stages of Production Planning and Control
Stage-1: Pre-Planning: Under this phase of production planning, basic
ground work on the product design, layout design and work flow are
prepared. The operations relating to the availability scope and capacity
of men, money materials, machines, time are estimated.
Stage-2: Planning: This is a phase where a complete analysis on
routing, estimating and scheduling is done. It also tries to find out the
areas of concern for short time and long time so that prominent
planning can be prepared.
Stage-3: Control: Under this phase, the functions included are
dispatching, follow up, inspection and evaluation. It tries to analyze
the expedition of work in progress. This is one of the important phases
of the Production Planning and Control.

Dr. N.R. Dhar, Professor, Department of Industrial and Production Engineering, BUET 211/16
Types of Production
Batch Production: Batch production is the manufacturing of limited number
of product produced at regular intervals & stocked in warehouse as finished
goods. Example: Chemical, Paint & Motor vehicles etc. Characteristic of
batch production are:
Short Run
Skilled labors in specific trades
Limited span of control
General purpose machine and process type layout
Manual material handling
Manufacturing cycle time affected due to queues
Large Work in process (WIP)
Flexible production schedule
Need to have PPC
Dr. N.R. Dhar, Professor, Department of Industrial and Production Engineering, BUET 211/17
Mass and Flow Production: Mass as well as flow production are
characterized by the manufacturer of several number of a standard product
and stocked in the warehouses as finished goods awaiting sales. The goods
under mass production are manufactured either at a single operation or a
series of operation on one machine. Example: Assembly shop of
automobiles, Electric fans. Characteristic of mass and flow production are:
Continuous flow of material
Special purpose machine and product type layout
Mechanized material handling
Low skilled labor
Short manufacturing cycle time
Easy supervision
Limited work in processes (WIP) inventory

Dr. N.R. Dhar, Professor, Department of Industrial and Production Engineering, BUET 211/18
Process Production: Process production is characterized by the
manufacture of single product produced and stocked in the
warehouses awaiting sales. Example: Sugar, Steel, Paper, Cement
plants. Characteristic of process production:
Special purpose machine with built in control
Highly mechanized material building
Virtually zero manufacturing time
Low skilled labor
Highly qualified supervisors
Negligible WIP
Limited PPC
Dr. N.R. Dhar, Professor, Department of Industrial and Production Engineering, BUET 211/19
Project Production: Project production is characterized by
complex sets of activities that must be performed in a particular
order within the estimated expenditure. Example: Construction of
Roads, Buildings etc. Characteristic of project production are:
Definite beginning and definite end
Non uniform requirement of resources
Involvement of different agencies
Fixed position layout
High cost overrun
Scheduling & control

Dr. N.R. Dhar, Professor, Department of Industrial and Production Engineering, BUET 211/20
Jobbing Production: Jobbing production is characterized by the
manufacture of one or few number of a single product designed and
manufactured strictly to customer’s specifications within the given period
and within the price fixed prior to the contract. Example: General repair
shop, Tailoring shops. Characteristic of jobbing production are:
Small production runs
Discontinuous flow of materials
Not proportionate manufacture cycle time
Highly skilled labor
Highly competent knowledgeable supervision
Large WIP
Limited function of PPC

Dr. N.R. Dhar, Professor, Department of Industrial and Production Engineering, BUET 211/21
Production Systems
High Labor
Project
Intensive

Job Shop
Customization

Batch Production

Flow Shop
Capital
Intensive
Continuous
Production
Low
Low Volume High
Dr. N.R. Dhar, Professor, Department of Industrial and Production Engineering, BUET 211/22
Areas of Production Planning & Control
Preparation of production budget
Devising manufacturing methods and sequence of
operations
Deciding type of machines and equipment
Preparation of operation sheets and instruction cards
Estimating men, machine and material requirements
Undertaking time and motion studies
Preparing master schedules

Dr. N.R. Dhar, Professor, Department of Industrial and Production Engineering, BUET 211/23
Limitations of PPC
Based on assumptions: Production planning and control is based on
certain assumptions. In case the assumptions prove correct, the planning
and control will go smoothly. But if they go wrong, process of planning
and control will go weak.
Rigidity: Under production planning and control, there is rigidity in the
behavior of employees and it may not help in smoothening flow of work.
Difficult for small firms: This process is time consuming and therefore
not affordable for small firms
Costly: It is a costly device as its implementation requires separate
persons to perform functions of planning, expediting, dispatching etc.
Dependence on external factors: External factors like natural calamities,
change in technology, government controls etc reduce effectiveness of
production planning.
Dr. N.R. Dhar, Professor, Department of Industrial and Production Engineering, BUET 211/24
Benefits of Production Planning and Control
Higher quality
Better resource utilization and reduced inventory
Reduced manufacturing cycle time
Faster delivery
Better customer services
Lower production costs and lower capital investment
Higher customer service
Improved sales turnover
Improved market share
Improved profitability
Flexibility and dependability
Lower prices
Dr. N.R. Dhar, Professor, Department of Industrial and Production Engineering, BUET 211/25
LECTURE 02: PROJECT SCHEDULING
AND CONTROL TECHNIQUES

DR. NIKHIL R. DHAR

Professor, IPE Department
BUET
Project
A project is a temporary endeavor involving a connected sequence of
activities and a range of resources, which is designed to achieve a
specific and unique outcome and which operates within time, cost and
quality constraints and which is often used to introduce change.
Characteristic of a Project
A unique, one-time operational activity or effort
Requires the completion of a large number of interrelated activities
Established to achieve specific objective
Resources, such as time and/or money, are limited
Typically has its own management structure
Need leadership

Dr. N.R. Dhar, Professor, Department of Industrial and Production Engineering, BUET 211/27
Scheduling the Project
Planning a project, developing a budget for it, and scheduling all the of the
many tasks involved are not easily separable.
Budget must include both the amounts and timing of the resources received
or expanded.
One cannot prepare a budget without knowing the specifics of each task and
the time periods during which the task must be undertaken.
Planning scheduling and controlling techniques are as follows:
Linear Balancing Method
Progress Curve or S Curves
Matrix Schedules
Critical Path Method (CPM)
Program Evaluation and Review Technique (PERT)
Gantt Chart or Bar Chart
Dr. N.R. Dhar, Professor, Department of Industrial and Production Engineering, BUET 211/28
Critical Path Method (CPM)
Types of CPM
Activity-on-Node (AON) Network
Activity-on-Arrow (AOA) Network

Dr. N.R. Dhar, Professor, Department of Industrial and Production Engineering, BUET 211/29
 Early Start (ES): is the earliest possible time an activity can start based
on the logic and durations identified on the network
Late Start (LS): is the latest possible time an activity can start without
extending the completing date of the project.
LS= LF – D (Backward Pass)
Early Finish (EF): is the earliest possible time an activity can finish if it is
start on Early Start Time (ES) and finish within the planned duration.
EF= ES + D (Forward Pass)
Late Finish (LF): is the latest possible time an activity can finish without
extending the completion date of the project
Total Float (TF): is the maximum amount of time that the activity can be
delayed without extending the completion time of the overall project

Dr. N.R. Dhar, Professor, Department of Industrial and Production Engineering, BUET 211/30
Situations in Network Diagram

A must finish before either B or C can start

Both A and B must finish before C can start

Both A and C must finish before either of

B or D can start

A must finish before B can start

both A and C must finish before D can start

Dr. N.R. Dhar, Professor, Department of Industrial and Production Engineering, BUET 211/31
Example: Construct a network diagram (AON and AOA) based on the
activity and preceding activities:
Activity a b c d e f g
Immediate Predecessor - - a b b c, d e

Activity-on-Node (AON) Network Activity-on-Arrow (AOA) Network

Dr. N.R. Dhar, Professor, Department of Industrial and Production Engineering, BUET 211/32
Example: Construct a network diagram (AON and AOA) based on the
following activity and preceding activities:
Activity A B C D E F G H I J
Immediate Predecessors - A B G D A C,F D A D,I

Activity A B C D E F G H I J
Predecessors -- -- -- A B,C B,C B,C C G,H D,E

Activity A B C D E F G H I J K
Predecessors -- -- A,B A,B A,B C,E C,D G F,G I,H J

Example: In a program consisting of eleven activities, the constraints

determined are as follows. Draw the network diagram (AON and AOA).
AB AC AD BE CF CG DH
EI FJ GK HK IL JL KL

Dr. N.R. Dhar, Professor, Department of Industrial and Production Engineering, BUET 211/33
Example: Draw the network for the following relationships: Activity C can
be performed at the same time as E; but D cannot be started unless both C
and A are completed; A and B can be performed simultaneously, B has also
constraint on activity C and E both D and E should be completed before the
objective is achieved. A D
Solution :
C
B E
Example: In a program consisting
of five activities, the constraints
determined are as under. Draw the
network.
AB AD CB CD
Solution
BE DE
Dr. N.R. Dhar, Professor, Department of Industrial and Production Engineering, BUET 211/34
Example: Develop the network for a project with following activities and
immediate predecessors. Construct the network and find the critical path.
Activity a b c d e f g h i j
Immediate Predecessors - - - b c a a f g d, e
Completion Time 6 8 5 13 9 15 17 9 6 12

Solution:

Start Start

Dr. N.R. Dhar, Professor, Department of Industrial and Production Engineering, BUET 211/35
Example: Develop the network for a project with following activities and
immediate predecessors. Construct the network and find the critical path.
Activity A B C D E F G H I J
Immediate Predecessors - A B G D A C,F D A D,I
Duration 90 15 05 20 21 25 14 28 30 45

Solution:

Dr. N.R. Dhar, Professor, Department of Industrial and Production Engineering, BUET 211/36
Example: Develop the network for a project with following activities and
immediate predecessors. Construct the network and find the critical path.
Activity a b c d e f g h i j
Immediate Predecessors - - a a a b, c d d, e f g, h
Duration 5 4 3 4 6 4 5 6 6 4

Solution:

Dr. N.R. Dhar, Professor, Department of Industrial and Production Engineering, BUET 211/37
Gantt Chart or Bar Chart
Gantt charts are used as a tool to monitor and control the project progress. A
Gantt Chart is a graphical presentation that displays activities as follows:
Time is measured on the horizontal axis. A horizontal bar is drawn
proportionately to an activity’ s expected completion time.
Each activity is listed on the vertical axis.
In an earliest time Gantt chart each bar begins and ends at the earliest
start/finish the activity can take place which is shown below:

Dr. N.R. Dhar, Professor, Department of Industrial and Production Engineering, BUET 211/38
 Example: Draw a Gantt chart for the work of decorating the drawing room
of a house. The list of activities involved in this project are as follows:
Activity A B C D E F G H I J
Immediate Predecessors - A B G D A C,F D A D,I
Duration 90 15 05 20 21 25 14 28 30 45
Solution: Activity Immediate Estimated
90 105 115 129 149 194
Predecessor Completion Time A
A None 90
B
B A 15
C
C B 05 D
D G 20 E
E D 21 F
F A 25 G
G C,F 14 H
H D 28 I
I A 30 J
J D,I 45

Dr. N.R. Dhar, Professor, Department of Industrial and Production Engineering, BUET 211/39
Example: Draw a Gantt chart for the work of decorating the drawing room
of a house. The list of activities involved in this project are as follows:

Dr. N.R. Dhar, Professor, Department of Industrial and Production Engineering, BUET 211/40
Example: Draw a Gantt chart for the work of decorating the drawing room
of a house. The list of activities involved in this project are as follows:

ID Task Name Predecessors Duration

1 Start - 0 days
2 A 1 [--] 5 days
3 B 1 [--] 4 days
4 C 2 [A] 6 days
5 D 3 [B] 2 days
6 E 3 [B] 5 days
7 F 4,5 [C,D] 8 days
8 Finish 6,7 [E,F] 0 days

Dr. N.R. Dhar, Professor, Department of Industrial and Production Engineering, BUET 211/41