1.Explain the different types of production with its merits and demerits.

Some of the most important types of production are: (i) Job Production (ii) Batch production and
(iii) Mass or flow production!

A production manager will have to choose most appropriate method for his enterprise.

The final decision regarding any particular method of production is very much affected by the
nature of the products and the quantity to be produced. Production methods may be broadly
classified as Job Production, Batch production and Mass or Flow Production.

(i) Job Production:

Under this method peculiar, special or non-standardized products are produced in accordance
with the orders received from the customers. As each product is non- standardized varying in
size and nature, it requires separate job for production. The machines and equipment’s are
adjusted in such a manner so as to suit the requirements of a particular job.

Job production involves intermittent process as the work is carried as and when the order is
received. It consists of bringing together of material, parts and components in order to assemble
and commission a single piece of equipment or product.

Ship building, dam construction, bridge building, book printing are some of the examples of job
production. Third method of plant layout viz., Stationery Material Layout is suitable for job
production.

Characteristics:

The job production possesses the following characteristics.

1. A large number of general purpose machines are required.

2. A large number of workers conversant with different jobs will have to be employed.

3. There can be some variations in production.

4. Some flexibility in financing is required because of variations in work load.

5. A large inventory of materials, parts and tools will be required.

6. The machines and equipment setting will have to be adjusted and readjusted to the
manufacturing requirements.

7. The movement of materials through the process is intermittent.

Limitations:

Job production has the following limitations:

1. The economies of large scale production may not be attained because production is done in
short-runs.

2. The demand is irregular for some products.

3. The use of labour and equipment may be an inefficient.

4. The scientific assessment of costs is difficult.

(ii) Batch production:

Batch production pertains to repetitive production. It refers to the production of goods, the
quantity of which is known in advance. It is that form of production where identical products are
produced in batches on the basis of demand of customers’ or of expected demand for products.

This method is generally similar to job production except the quantity of production. Instead of
making one single product as in case of job production, a batch or group of products are
produced at one time. It should be remembered here that one batch of products may not resemble
with the next batch.

Under batch system of production the work is divided into operations and one operation is done
at a time. After completing the work on one operation it is passed on to the second operation and
so on till the product is completed. Batch production can be explained with the help of an
illustration. An enterprise wants to manufacture 20 electric motors.

The work will be divided into different operations. The first operation on all the motors will be
completed in the first batch and then it will pass on to the next operation. The second group of
operators will complete the second operation before the next and so on. Under job production the
same operators will manufacture full machine and not one operation only.

Batch production can fetch the benefits of repetitive production to a large extent, if the batch is
of a sufficient quantity. Thus batch production may be defined as the manufacture of a product in
small or large batches or lots by series of operations, each operation being carried on the whole
batch before any subsequent operation is operated. This method is generally adopted in case of
biscuit and confectionery and motor manufacturing, medicines, tinned food and hardware’s like
nuts and bolts etc.

The batch production method possesses the following characteristics:

1. The work is of repetitive nature.

2. There is a functional layout of various manufacturing processes.

The product completed at one operation is automatically passed on to the next till its completion.
There is no time gap between the work done at one process and the starting at the next. The flow
of production is continuous and progressive.

Characteristics:

The mass or flow production possesses the following characteristics.

1. The units flow from one operation point to another throughout the whole process.

2. There will be one type of machine for each process.

3. The products, tools, materials and methods are standardized.

4. Production is done in anticipation of demand.

4. Same type of machines is arranged at one place.

5. It is generally chosen where trade is seasonal or there is a need to produce great variety of
goods.

(iii) Mass or flow production:

This method involves a continuous production of standardized products on a large scale. Under
this method, production remains continuous in anticipation of future demand. Standardization is
the basis of mass production. Standardized products are produced under this method by using
standardized materials and equipment. There is a continuous or uninterrupted flow of production
obtained by arranging the machines in a proper sequence of operations. Process layout is best
suited method for mass production units.

Flow production is the manufacture of a product by a series of operations, each article going on
to a succeeding operation as soon as possible. The manufacturing process is broken into separate
operations.

The product completed at one operation is automatically passed on to the next till its completion.
There is no time gap between the work done at one process and the starting at the next. The flow
of production is continuous and progressive.

Characteristics:

The mass or flow production possesses the following characteristics.

1. The units flow from one operation point to another throughout the whole process.

2. There will be one type of machine for each process.

3. The products, tools, materials and methods are standardized.

4. Production is done in anticipation of demand.

5. Production volume is usually high.

6. Machine set ups remain unchanged for a considerable long period.

7. Any fault in flow of production is immediately corrected otherwise it will stop the whole
production process.

Suitability of flow/mass production:

1. There must be continuity in demand for the product.

2. The products, materials and equipment’s must be standardized because the flow of line is
inflexible.

3. The operations should be well defined.

4. It should be possible to maintain certain quality standards.

5. It should be possible to find time taken at each operation so that flow of work is standardized.

6. The process of stages of production should be continuous.

Advantages of mass production:

A properly planned flow production method, results in the following advantages:

1. The product is standardized and any deviation in quality etc. is detected at the spot.

2. There will be accuracy in product design and quality.

3. It will help in reducing direct labour cost.

4. There will be no need of work-in-progress because products will automatically pass on from
operation to operation.

5. Since flow of work is simplified there will be lesser need for control.

6. A weakness in any operation comes to the notice immediately.

7. There may not be any need of keeping work-in-progress, hence storage cost is reduced.
 2.) What is product development? Explain the stages in New Product
Development.

The product development process describes the steps a product owner should follow before
releasing a new product to the market or upgrading the features of the existing product. It
involves all the essential steps, from identifying the product-market fit to planning the best
approach for developing and releasing the product to its costing and go-to-market strategy.

Choosing the proper process flow is crucial to ensure a start-to-finish for product development.
The two most popular product development frameworks are:

1. Design Thinking Approach: In this framework, you start with understanding the users,
their issues and then identify the possible solutions for the user group. This framework
ends with creating a prototype and testing the solution in the market to check the market
fit.

2. New Product Development Framework: This is a more commonly accepted approach

where you begin with your product ideas and validate them in the market to check for the
fit. Once it's validated, you build a prototype, plan your entire production and post-
production, and work on the costing before actual development.

A product development process helps you test the new product developed for market-fit and its
usefulness for the customers. Here are some ways in which a thoroughly defined product
development process can help you:

1. Provide valuable features

2. Better quality
3. Greater control on development
4. Foolproof your concept
5. Reduce cost significantly

1. Provide valuable features

It helps you add the features the customer is looking for, thus providing better value to them.
Then, when you test the waters for the idea, you will know what functionality/feature will pull
the user to the product. This will help you plan the product accordingly.

2. Better quality

You will plan everything from the raw materials to the product's features at the planning stage.
Additionally, you are also checking the market fit and will end the process by testing your
prototype. This will ensure that you release a high-quality and accessible product to the market.
3. Greater control on development

Proper planning allows greater control on what you will do next and how you will release the
product to the market. The strategy will also ensure that the product is aligned to the user's needs
and the business goals. This helps foster product success and further your growth.

4. Foolproof your concept

This approach allows you to validate the concept with the actual audience and get their feedback
before prototyping the idea. In addition, it gives you accurate data on whether the product is
approved or not and identifies the pulse of the audience for the idea.

5. Reduce cost significantly

When you take a planned approach, you can simplify the development processes, reduce the cost
of materials and ensure you release the product with the essential features. Subsequently, it
allows you to reduce the price of the product.

The new product development process framework explained

The new product development process framework involves bringing an original product idea to
the market. Although the process differs from industry to industry, it can essentially be broken
down into six stages: ideation, research, planning, prototyping, sourcing, and costing.

This six-step framework is widely used in the product development industry and has been cited
in several studies and academic papers, an example being the academic paper titled “A
framework for successful new product development,” written by Nadia Bhuiyan. The purpose of
this paper was to propose a development framework that would help launch a new product
successfully into the market. It also proposed the inclusion of relevant metrics for measuring and
monitoring the success of the framework.

As a stakeholder in the product development process, you might be aware of the complexities
involved in developing a product from scratch. These six stages aim to simplify the process, and
help product developers release an innovative and useful product in the market.

Below, we have explained the factors that you must consider at each stage of the product
development process.

1. Ideation

Many aspiring entrepreneurs get stuck on ideation, often because they’re waiting for a stroke of
genius to reveal the perfect product they should sell. While building something fundamentally
“new” can be creatively fulfilling, many of the best ideas are the result of iterating upon an
existing product.
The SCAMPER model is a useful tool for this stage. It helps you quickly come up with product
ideas by asking questions about existing products. Each letter stands for a prompt:

 Substitute (e.g. fur in faux fur)

 Combine (e.g. a phone case and a battery pack)
 Adapt (e.g. a bra with front clasps for nursing)
 Modify (e.g. an electric toothbrush with a sleeker design)
 Put to another use (e.g. memory foam dog beds)
 Eliminate (e.g. the middleman to sell sunglasses and pass the savings on to consumers)
 Reverse/Rearrange (e.g. a duffle bag so that it doesn’t wrinkle your suits)

By asking these questions, you can come up with novel ways to transform existing ideas or even
adapt them for a new target audience or problem.

If you're still looking for your "aha!" moment, we also put together a list of resources for coming
up with your own product ideas. It includes analysing online marketplaces and reinventing
historical trends to help you create new products for your target market altogether.

While using the SCAMPER method to brainstorm your ideas, you would come up with plenty of
options. However, not all ideas may be worth serious research. Therefore, build a checklist or a
set of criteria, keeping your business goals in mind, to help you decide whether a particular idea
deserves to be considered for further ideation.

For instance, you may accept an idea that is solving an impending problem of your target
audience while being financially feasible. However, it would be wise to reject an idea that seems
unrealistic or far-fetched. For instance, your product idea may be largely similar to a product that
already exists. In such cases, you have to act objectively and outright reject the idea, however
dear it may be to your heart.

2. Research

With your product idea in mind, you may feel inclined to leapfrog ahead to production, but that
can become a misstep if you fail to validate your idea first. During this phase, when thoroughly
researching the market for your idea, check for the product-market fit.

Product validation ensures you’re creating a product people will pay for and that you won’t
waste time, money, and effort on an idea that won't sell. There are several ways you can validate
your product ideas, including:

 Talking about your idea with family and friends

 Sending out an online survey to get feedback
 Starting a crowdfunding campaign
 Asking for feedback on forums like Reddit
 Researching online demand using Google Trends
 Launching a “coming soon” page to gauge interest via email opt-ins or pre-orders
Before you decide to go about validating your idea, it is important to get feedback from a
substantial and unbiased audience as to whether they would buy your product. However, be wary
of overvaluing feedback from people who “definitely would buy” if you were to create your
theoretical product—until money changes hands, you can’t count someone as a customer.

Validation research will also inevitably involve competitive analysis. If your idea or niche has
the potential to take off, there are likely competitors already operating in that space.

Visiting your competitors’ websites and signing up for their email lists will allow you to
understand how they attract customers and make sales. Further, asking your potential customers
what they like or dislike about your competitors will help you identify the gaps and define your
competitive advantage.

The information compiled from doing product validation and market research will allow you to
gauge the market demand for your product. It will also help you identify the level of competition
that exists in the market and help you better in the planning phase. Here is a free competitive
analysis template to help you out with this task.

3. Planning

Since product development can become complicated quite quickly, it’s important to take the time
to plan before you begin to build your prototype.

When you eventually approach manufacturers or start looking for materials, if you don’t have a
concrete idea of what you want your product to look like and how it will function, it’s easy to get
lost in the subsequent steps.

The best place to begin planning is with a hand-drawn sketch of what your product will look like.
The sketch should be as detailed as possible, with labels explaining the various features and
functions.

4. Prototyping

The goal of the prototyping phase during product development is to create a finished product to
use as a sample for mass production.

It’s unlikely you will get to your finished product in a single attempt—prototyping usually
involves experimenting with several versions of your product, slowly eliminating options, and
making improvements until you feel satisfied with a final sample.

Prototyping also differs significantly depending on the type of product you are developing. The
least expensive and simplest cases are products you can prototype yourself, such as food recipes
and cosmetic products. This do-it-yourself prototyping can also be extended to fashion, pottery,
design and other verticals, if you are lucky enough to be trained in these disciplines.
However, more often than not, entrepreneurs will work with a third party to prototype their
product. In the fashion and apparel industry, this usually involves working with a local
seamstress (for clothing and accessories), cobbler (for shoes), or pattern maker (for clothing).
You can usually find these services online by Googling local services in the industry.

Most large cities also have art, design, or fashion schools where students are trained in these
techniques. Administrators from these university or college programs can usually grant you
access to their internal job board, where you can create a request for prototyping help.

5. Sourcing

Once you have a product prototype you’re satisfied with, it is time to start gathering the materials
and securing the partners needed for production. This is also referred to as building your supply
chain: the vendors, activities, and resources that are needed to create a product and get it into a
customers’ hands.

While this phase will mainly involve looking for manufacturing-related services, you may also
factor in storage, shipping, and warehousing into your choices at this stage.

In Shoe Dog, a memoir by Nike founder Phil Knight, the importance of diversifying your supply
chain is a theme that is emphasised throughout the story. Finding multiple suppliers for the
different materials you will need, as well as different potential manufacturers, will allow you to
compare costs. It will also ensure that you have a ready list of alternative suppliers to source
materials if there are any supply-side issues from existing suppliers or manufacturers.

It also has the added benefit of creating a backup option if one of your suppliers or
manufacturers doesn’t work out. Sourcing several options is an important part of safeguarding
your business for the long term.

When looking for suppliers, there are plenty of resources both online and in person. While it may
seem old-fashioned, many business owners choose to attend trade shows dedicated to sourcing.

Trade shows, especially the ones hosted by trade chambers and government ministries, provide
the opportunity to meet hundreds of reliable suppliers from India and overseas. During these
trade shows, product developers and designers get the chance to check, touch, and discuss
materials, and build a personal relationship with suppliers, which can be valuable when it comes
time to negotiate prices.

During the sourcing phase, you will inevitably come across the decision of whether to produce
your product locally or overseas. It is a good idea to compare the two options, as they both have
their own advantages and disadvantages.

6. Costing

After research, planning, prototyping, and sourcing are done, you should have a clearer picture of
what it will cost to produce your product. Costing is the process of taking all of the information
gathered thus far and adding up what your cost of goods sold (COGS) will be so that you can
determine a retail price and gross margin.

Begin by creating a spreadsheet with each additional cost broken out as a separate line item. This
should include all of your raw materials, factory set-up costs, manufacturing costs, and shipping
costs. It is important to factor in shipping, import fees, and any duties you will need to pay in
order to get your final product into the customer’s hands, as these fees can have a significant
impact on your COGS depending on where you are producing the product.

If you were able to secure multiple quotes for different materials or manufacturers during the
sourcing phase, you could include different columns for each line item that compares the cost.
Another option is to create a second version of the spreadsheet so that you can compare local
production vs overseas production.

Once you have your total COGS calculated, you can come up with a retail price for your product
and subtract the COGS from that price to get your potential gross margin, or profit, on each unit
sold.

At the end of the six stages, you have an MVP (Minimum Viable Product) that you can release in
the market. It is, however, essential to have a defined strategy to — enter the market, price the
product, and set up the necessary infrastructure to sell the product.

Here are some questions that can help you identify the right price, proper selling strategy, and the
different ways to launch your product.

1. What is the unique value proposition of the product that sets you apart?
2. How have you positioned your product? Is it meant for a select audience or for mass
consumption?
3. What is the selling strategy you have determined for the product? Are you planning to introduce
product bundles or promote cross-selling?
4. Where will you be selling the product? Via offline mode only or via offline and online mode?
Your strategy needs to identify the distribution channel and its setup costs adequately.

3.)Explain the different types of layout with its merits and demerits

Important Types of of Plant Layout (with advantages and disadvantages)

Some of the important types of plant layout are: A. Product or line layout, B. Process or
functional layout, C. Layout by stationary material!

(A) Product or Line Layout:

Product or Line Layout is the arrangement of machines in a line (not always straight) or a
sequence in which they would be used in the process of manufacture of the product. This type of
layout is most appropriate in case of continuous type of industries where raw materials is fed at
one end and taken out as finished product at the other end. For each type of product a separate
line of production will have to be maintained.

This type of layout is most suitable in case of metal extraction industry, chemical industry, soap
manufacturing industry, sugar industry and electric industry. It should be noted that this method
is most suitable in case of mass production industries.

Following diagram clearly explains product layout:

In the above diagram there are two products A and B for which separate lines of production have
been maintained. Kimbaii and Kimbaii jr. have given a simple diagram to explain this type of
layout in the book “Principles of Industrial organisation”.

According to Shubin and Madeheim, product layout is suitable where:

(i) large quantity of standardized products are produced;

(iv) there should be greater interchangeability of the parts; and (v) to maintain good equipment
balance each work station must employ machines or equipment’s of approximately equal
capacities. Similarly to maintain good labour balance, each work station must require an equal
amount of work to be performed.

Advantages of Product Layout:

(1) Removal of obstacles in production:

Product layout ensures unrestricted and continuous production thereby minimising bottlenecks in
the process of production, this is because work stoppages are minimum under this method.

(2) Economies in material handling:

Under this method there are direct channels for the flow of materials requiring lesser time which
considerably eliminate back-tracking of materials. On account of this, cost of material handling
is considerably reduced. This is greatly helpful in achieving desired quality of the end product.

(3) Lesser manufacturing time:

Under this method (as already pointed), backward and forward handling of materials is not
involved, it leads to considerable saving in manufacturing time.

(4) Lesser work in progress:

 On account of continuous uninterrupted mass production, there is lesser accumulation of work
in progress or semi-finished goods.

(5) Proper use of floor space:

This method facilitates proper and optimum use of available floor space. This is due to non-
accumulation of work in progress and overstocking of raw materials.

(6) Economy in inspection:

Inspection can be easily and conveniently undertaken under this method and any defect in
production operations can be easily located in production operations. The need for inspection
under this method is much less and can be confined at some crucial points only.

(7) Lesser manufacturing cost:

On account of lesser material handling, inspection costs and fullest utilisation of available space,
production costs are considerably reduced under this method.

(8) Lesser labour costs:

Due to specialisation and simplification of operations and use of automatic simple machines,
employment of unskilled and semi-skilled workers can carry on the work. The workers are
required to carry routine tasks under this method. This leads to lesser labour costs.

(9) Introduction of effective production control:

Effective production control on account of simple operation of this method can be employed
successfully. Production control refers to the adoption of measures to achieve production
planning.

Disadvantages of Product Layout:

(1) Lesser flexibility:

As work is carried in sequence and process arranged in a line, it is very difficult to make
adjustments in production of operations. Sometimes, certain changes under this method become
very costly and impractical. On account of this drawback, this method is not suitable in the
production of goods which are subject to quick style and design changes.

(2) Large investment:

Under this method, machines are not arranged in accordance with functions as such similar type
of machines and equipment is fixed at various lines of production. This leads to unavoidable
machinery duplication resulting in idle capacity and large capital investment on the part of the
entrepreneur.
(3) Higher overhead charges:

Higher capital investment leads to higher overheads (fixed overheads) under this method. This
leads to excessive financial burden.

(4) Interruption due to breakdown:

If one machine in the sequence stops on account of breakdown, other machines cannot operate
and work will be stopped. The work stoppage may also take place on account of irregular supply
of material, poor production scheduling and employee absenteeism etc.

(5) Difficulties in expanding production:

Production cannot be expanded beyond certain limits under this method.

(6) Lack of specialisation in supervision:

Supervision of different production jobs becomes difficult under this method as there is absence
of specialised supervision as the work is carried on in one line having different processes and not
on the basis of different departments for different specialised jobs. Under this method a
supervisor is supposed to have detailed knowledge of all the machines and processes which leads
to absence of specialisation in the process of supervision.

(7) Under-utilisation of machines:

As has already been pointed out, separate set of one type of machines is fixed at different lines of
production. Usually, these machines are not properly and fully utilised and there remains idle
capacity in the form of under utilised equipment.

(B) Functional or Process Layout:

It is just the reverse of product layout. There is a functional division of work under this method.
For example, lathes are fixed in one department and welding activities are carried in another
department of the factory. The salient features of this type of layout are based on Frederick W.
Taylor’s concept of ‘functional organisation’.

This method is generally adopted for producing different varieties of unlike products. This is
particularly adopted tor job order industries like engineering, ship building and printing etc. The
following diagram shows that raw material travels through various process or departments from
lathes passing through mills, grinders, drills, welding, inspection, finishing, and assembly and to
finished product.

Advantages of Process Layout:

(1) Maximum utilisation of machines:

This method ensures fuller and effective utilisation of machines and consequently investment in
equipment and machines becomes economical.

(2) Greater flexibility:

Changes in the sequence of machines and operations can be made without much difficulty. This
is because the machines are arranged in different departments in accordance with the nature of
functions performed by them.

(3) Scope for expansion:

Production can be increased by installing additional machines without much difficulty.

(4) Specialisation:

As has already been pointed out that under this method, specialised machines are used for
performing different production operations. This leads to specialisation.

(5) Effective utilisation of workers:

Specialised workers are appointed to carry different type of work in different departments. This
leads to effective and efficient use of their talent and capabilities.

(6) More effective supervision:

As the machines are arranged on the basis of functions, performed by them, the specialised and
effective supervision is ensured by the specialised knowledge of supervisors. Each supervisor
can perform his task of supervision effectively as he has to supervise limited number machines
operating in his department.

(7) Lesser work stoppages:

Unlike the product method, if a machine fails, it does not lead to complete work stoppage and
production schedules are not seriously affected. Due to breakdown in one machine, the work can
be easily transferred to the other machines.

Disadvantages of Process Layout:

(1) Coverage of more floor area:

Under this method, more floor space is needed for the same quantum of work as compared to
product layout.

(2) Higher cost of material handling:

Material moves from one department to another under this method, leading to the higher cost of
material handling. The mechanical devices of material handling cannot be conveniently
employed under this method on account of functional division of work. Material has to be carried
by applying other methods from one department to another, resulting into higher cost of material
handling.

(3) Higher labour costs:

As there is functional division of work, specialised workers are to be appointed in different

departments for carrying specialised operations. The appointment of skilled worker leads to
higher labour costs.

(4) Longer production time:

Production takes longer time for completion under this method and this leads to higher
inventories of work-in-progress.

(5) Difficulties in production, planning and control:

Due to large variety of products and increased size of the plant, there are practical difficulties in
bringing about proper coordination among various areas (departments) and processes of
production. The process of production, planning and control becomes more complex and costly.

(6) Increased inspection costs:

Under this type of layout more supervisors are needed and work is to be checked after every
operation which makes the process of supervision costlier.

(C) Layout by Stationary Material:

This type of layout is undertaken for the manufacture of large parts and assemblies. In this case,
material remains fixed or stationary at one place, men and equipment are taken to the site of
material. This is suitable in case of ship building, locomotives and heavy machinery industries
etc.

Advantages:

(a) Economies in transformation:

As the work is carried at one place and material is not taken from one place to another, this leads
to savings in transformation costs.

(b) Different jobs with same layout:

Different projects can be undertaken with the help of same layout.

(c) Production in accordance with specifications:

The jobs can be performed in accordance with the specifications given by the customers.

(d) Scope for flexibility:

It provides maximum flexibility for various changes in production processes and designs of the
products.

Disadvantages:

(a) Immobility of material:

As material is fixed at one place, this leads to certain difficulties in arranging specialised
workers, machines and equipment for the job.

(b) Large investment:

This method is time consuming and costlier as compared to first two methods.

(c) Unsuitable for small products:

This method is not suitable for producing and assembling small products in large quantities. In
actual practice, it has been observed that a judicious combination of three types’ viz., product,
process and stationary material layout is undertaken by different organisations. This is done with
the view to enjoy the advantages of all the methods.

4.) Explain the concept of Six Sigma with its advantages and
disadvantages.

Six Sigma businesses devote themselves to continuous quality improvement. Six Sigma uses
statistical and empirical methods to track defects and variations in your business outputs and to
identify the causes. Then you work on improving operations to eliminate the flaws.
The benefits of Six Sigma in manufacturing are obvious, but sales and service organizations also
use Six Sigma for improvement. The benefits to the Six Sigma process in services are that
managers can analyze, for example, how staff interact with customers and how information is
shared. Managers can then apply that knowledge to improve performance.

There are two main methods of applying Six Sigma. One is designed to improve existing
processes. The other is for new processes, or for completely replacing old and inefficient ones.

Six Sigma Masters

Six Sigma isn't just about number crunching and analysis, it's also about people. Like martial arts
masters, trained Six Sigma staff are ranked by belts.

A Six Sigma champion, for example, is an upper manager who sponsors Six Sigma projects,
helps remove obstacles and provides Six Sigma teams with resources. A black belt is a lower-
ranked but highly trained expert, working on Six Sigma projects full time. A green belt works
part of their time on Six Sigma projects and helps train other employees in Six Sigma principles.

Benefits to Six Sigma Process

Like any business-management concept, Six Sigma has advantages and disadvantages.
Companies that successfully adopt Six Sigma can see profits rise; companies that try it and fail
may lose ground. Supporters say the benefits to Six Sigma processes make it more than
worthwhile:

 Spotting the potential for defects before they occur, then eliminating them, is cheaper than
fixing problems after they happen.
 Six Sigma's analysis of your company processes is data-heavy, making it easy to spot problems
and solve them promptly.
 Six Sigma is about continuous improvement rather than a one-time fix. If your initial solutions
for improving processes don't work out, Six Sigma professionals are prepared to move on to the
next.
 Even if you never hit the 99.99966 percent defect-free rate, striving for it will make your
products or services much better.
 Six Sigma is proactive, which is good for customers. You can spot and fix problems ahead of time
rather than reacting after customers make complaints.
 Six Sigma can save money by reducing returns.

Flaws with Six Sigma

Despite the undeniable benefits, critics say businesses should keep in mind the flaws with Six
Sigma before jumping on the bandwagon.

 Six Sigma is about quality improvement, not cost reduction. Improving quality and eliminating
defects can cost money in the form of increased overhead and added investment in machinery.
  Achieving Six Sigma often requires better equipment, improved testing systems, more quality
checks and tighter tolerances. This can consume a lot of resources.
 The statistical analysis necessary for Six Sigma requires a commitment of resources, too.
 If you commit to Six Sigma and your competitors don't, your products or services will become
higher quality, worthy of a higher price. Some customers, however, may prefer cheaper
products over quality.

Before launching Six Sigma, weigh the pros and cons for your company. If, say, you
manufacture cancer drugs or space shuttle parts, your customers may be very happy to pay top
dollar for defect-free products. If you're selling pens or scissors, customers will probably make
price a higher priority.

Streamlining your business removes wasteful or redundant steps to improve efficiency.

Streamlining may involve modernization of your equipment, outsourcing organizational
activities, and minimizing low-performing products and services to focus on what your company
does best. In business, time is money, so a small business achieves several financial and
operational advantages from streamlined operations. You reduce costs, attract more customers
through nimble response times, drive higher revenue and compete effectively.

Better Financial Performance

When you cut wasteful steps and positions, the salaries you pay workers can be reassigned to
profitable production activities. You avoid wasting money on equipment, tools, supplies and
resources that don't contribute to profitable tasks. Your products reach customers quickly when
demand is highest, and you attract more customers because of an efficient operation. High
revenue and low costs means improved profitability and cash flow.

Faster Response Times

A streamlined operation leads to faster response times and makes your business adaptable and
flexible. A company with a streamlined process is better able to modify production on the fly to
satisfy a customer while maintaining profitability. Response times on special orders improve
with streamlined operations as well. Retailers used to offer a four- to six-week turnaround on
custom orders. As of 2014, that doesn't work. Customers expect rapid response in as few as one
or two days.

Optimized Resource Allocation

Since streamlining reduces waste, it results in better resource allocation. Businesses can use
enterprise resource planning tools to avoid redundant supply orders across departments and
minimize excess inventory. With streamlining, you allocate your best people, equipment, tools
and supplies to the most profitable projects and activities. When it takes 8 days to complete
processes that once took two weeks, you gain several days in which resources are allocated to
other profitable activities.
Competitive Strength

Companies in a given industry watch what the most successful companies do and mimic it. In
some cases, streamlining is necessary to compete. A competitor that cuts production or process
times in half has a significant advantage if you do nothing. It is better to take the lead in
streamlining, but keeping up with top competitors is important. You avoid losing customers to
businesses that serve your customer’s needs more flexibly and efficiently than you can.

5.) Define Kaizen and state the elements of Kaizen.

The word 'Kaizen' is composed of two Japanese words: 'kai' meaning 'change' and 'zen'
meaning 'for the better'. It is also known as “continuous improvement”.
Kaizen means improvement, continuous improvement involving everyone in the
organization from top management, to managers then to supervisors, and to workers.
In Japan, the concept of Kaizen is so deeply engrained in the minds of both managers
and workers that they often do not even realize they are thinking Kaizen as a customer
driven strategy for improvement This philosophy assumes according Imai that ‘’our way
of life – be it our working life, our social life or our home life – deserves to be constantly
improved’’
Improvement begins with the admission that every organization has problems, which
provide opportunities for change. It evolves around continuous improvement involving
everyone in the organization and largely depends on cross-functional teams that can be
empowered to challenge the status quo.

The Five Elements Of Kaizen are as follows:-

1. Teamwork

All employees should work collaboratively to achieve one end goal: continuously improve
internal business processes. To clarify, all employees includes anyone from corporate to frontline
employees.
2. Personal Discipline

Self-disciplined employees are a more valuable and contributing member to their workforce.
Therefore, Kaizen insists that all employees must increase their self-discipline in all aspects
related to their work. For example, time management, the quality of their work performance,
spending of material and financial resources, etc.

3. Improve Morale

A company may or may not succeed in implementing changes within their workforce. Despite
this, all employees should aim to maintain high morale. This means that all employees should
strive to increase their confidence and enthusiasm. To help encourage this, senior employees
should offer motivational tools. For instance, pleasant working conditions, incentives and
rewards, and competitive salary and benefits.

4. Quality Circles

It is important to arrange circles that are of quality and that include employees from different
levels of the company. Quality circles refers to a group of employees that often get together to
discuss and create solutions for improving internal business processes. In these circles,
employees have the opportunity to share their ideas and thoughts, knowledge and expertise,
technology, and other useful resources. As a result, the collaboration and cooperation within
these quality circles will enable employees to measure the effectiveness of their performance.
Consequently, this will enable them to further improve.

5. Suggestions for Improvement

All employees should be given the freedom to offer their ideas and suggestions for improving
operational processes. Furthermore, if doable, submitted ideas and suggestions must be taken
into account and must be acted upon. In other words, if there is enough time, money, and
resources, the idea/suggestion should be implemented.