Production and Project

Management
ChEg5211
Chapter-1
Classification of Production System

Fig. 2.2 Classifications of production systems

Job-Shop Production
are characterized by manufacturing one or
few quantity of products designed and produced
as per the specification of customers within
prefixed time and cost.
distinguishing feature of this is low volume
and high variety of products.
 A job-shop comprises of general-purpose machines
arranged into different departments.
Each job demands unique technological requirements,
demands processing on machines in a certain sequence.
Examples: Candle manufacturing, Soap manufacturing.
Job-shop Production is characterized by
1. High variety of products and low volume.
2. Use of general purpose machines and facilities.
3. Highly skilled operators who can take up each job as
a challenge because of uniqueness.
4. Large inventory of materials, tools, parts.
5. Detailed planning is essential for sequencing the
requirements of each product, capacities for each work
centre and order priorities.
Advantages
1. Because of general purpose machines and facilities
variety of products can be produced.
2. Operators will become more skilled and competent, as
3. Full potential of operators can be utilized.
4. Opportunity exists for Creative methods and innovative ideas.

Limitations
1. Higher cost due to frequent set up changes.
2. Higher level of inventory at all levels and hence higher inventory cost.
3. Production planning is complicated.
4. Larger space requirements.
Batch Production
(APICS) defines Batch Production as a form of
manufacturing in which the job pass through the
functional departments in lots or batches and each lot
may have a different routing.
It is characterized by the manufacture of limited
number of products produced at regular intervals and
stocked awaiting sales.
Examples: Chemicals, paint & motor vehicles etc.
Batch Production is characterized by
1. Shorter production runs.
2. Plant and machinery are flexible.
3. Plant and machinery set up is used for the production
of item in a batch and change of set up is required for
processing the next batch.
4. Manufacturing lead-time and cost are lower as
compared to job order production.
Advantages
1. Better utilization of plant and machinery.
2. Promotes functional specialization.
3. Cost per unit is lower as compared to job order
production.
4. Lower investment in plant and machinery.
5. Flexibility to accommodate and process number of
products.
6. Job satisfaction exists for operators.
Limitations
1. Material handling is complex because of irregular and
longer flows.
2. Production planning and control is complex.
3. Work in process inventory is higher compared to
continuous production.
4. Higher set up costs due to frequent changes in set up.
Mass Production
Manufacture of discrete parts or assemblies using a continuous
process are called Mass Production.
This production system is justified by very large volume of
production.
The machines are arranged in a line or product layout. Product
and process standardization exists and all outputs follow the same
path.

Examples: Assembly shop of automobiles, radios, electric fans.

Mass Production is characterized by
1. Standardization of product and process sequence.
2. Dedicated special purpose machines having higher production capacities and output rates.
3. Large volume of products.
4. Shorter cycle time of production.
5. Lower in process inventory.
6. Perfectly balanced production lines.
7. Flow of materials, components and parts is continuous and without any back tracking.
8. Production planning and control is easy.
9. Material handling can be completely automatic.

Advantages
1. Higher rate of production with reduced cycle time.
2. Higher capacity utilization due to line balancing.
3. Less skilled operators are required.
4. Low process inventory.
5. Manufacturing cost per unit is low.
Limitations
1. Breakdown of one machine will stop an entire production
line.
2. Line layout needs major change with the changes in the
product design.
3. High investment in production facilities.
4. The cycle time is determined by the slowest operation.
Continuous Production
Production facilities are arranged as per the sequence of
production operations from the first operations to the
finished product.
The items are made to flow through the sequence of
operations through material handling devices such as
conveyors, transfer devices, etc.

Examples: Sugar, Alcohol, Steel, Paper, and Cement

plants.
Continuous Production is characterized by
1. Dedicated plant and equipment with zero flexibility.
2. Material handling is fully automated.
3. Process follows a predetermined sequence of
operations.
4. Component materials cannot be readily identified
with final product.
5. Planning and scheduling is a routine action.
Advantages
1. Standardization of product and process sequence.
2. Higher rate of production with reduced cycle time.
3. Higher capacity utilization due to line balancing.
4. Manpower is not required for material handling as it
is completely automatic.
5. Person with limited skills can be used on the
production line.
6. Unit cost is lower due to high volume of production.
Limitations
1. Very high investment for setting flow lines.
2. Product differentiation is limited.

PRODUCT
Though many authors define the product with Consumer
orientation, it is better for us to deal with different angles,
because it will be helpful for us to understand the subject of
production and Project Management.
(i) For a Consumer:
Product is a combination of or optimal mix of potential utilities.
This is because every consumer expects some use or uses from
the product.
he/she always identifies the product in terms of the uses.
Example-Soap can be identified by complexion, cleanliness of
body, freshness, fragrance or health.... etc.
 Because of this, many producers advertise that
they are selling health, or they are selling Cine star
Complexion or they are selling freshness and so on.

(ii) For a Production Manager:

Product is the combination of various surfaces and
processes (or operations).
This is because the production Manager is solely
responsible for producing the product.
(iii) For a Financial Manager:
For him the product is a mix of various cost elements
as he is responsible for the profitability of the product.
(iv) For a Personnel Manager:
For him the product is a mix of various skills, as he is
the person who selects and trains the personnel to meet
the demand of the skill to produce the product.
 In general we can define the product as a bundle of
tangible and intangible attributes, which along with the
service is meant to satisfy the customer wants.

2.5 Productivity
Productivity is defined in terms of utilization of
resources, like material and labour.
In simple terms, productivity is the ratio of output to
input.
 Example, productivity of labour can be measured as
units produced per labour hour worked.
Productivity = output/Input
For survival of any organization, this productivity
ratio must be at least 1.
If it is more than 1, the organization is in a
comfortable position.
The ratio of output produced to the input resources
utilized in the production.
 Productivity is closely linked with quality, technology and
profitability.
Hence, there is a strong stress on productivity improvement in
competitive business environment.
Productivity can be improved by
(a) Controlling inputs,
(b) Improving process so that the same input yields higher
output, and

(c) Improvement of technology.

 Productivity can be measured at firm level, at
industry level, at national level and at international
level.

2.5.1 Productivity Analysis

Purposes of studies of productivity for improvement
purposes, following types of analysis can be carried out:

1. Trend analysis: Studying productivity changes for

the firm over a period of time.
2. Horizontal analysis:
Studying productivity in comparison with other firms
of same size and engaged in similar business.

3. Vertical analysis:
Studying productivity in comparison with other
industries and other firms of different sizes in the same
industry.
4. Budgetary analysis:
Setting up a norm for productivity for a future period as
budget, based on studies as above, and planning strategies
to achieve it.

2.5.2 Factors Affecting Productivity

Economists site a variety of reasons for changes in
productivity.
However some of the principle factors influencing
productivity rate are:
1. Capital/labour ratio:

It is a measure of whether enough investment is being

made in plant, machinery, and tools to make effective
use of labour hours.

2. Scarcity of some resources:

Resources such as energy, water and number of

metals will create productivity problems.
3. Work-force changes:
Change in work-force effect productivity to a larger
extent, because of the labour turnover.

4. Innovations and technology:

This is the major cause of increasing productivity.
5. Regulatory effects:
These impose substantial constraints on some firms,
which lead to change in productivity.

6. Bargaining power:
Bargaining power of organized labour to command
wage increases excess of output increases has had a
detrimental effect on productivity.
7. Managerial factors:
Managerial factors are the ways an organization
benefits from the unique planning and managerial skills
of its manager.

8. Quality of work life:

It is a term that describes the organizational culture,
and the extent to which it motivates and satisfies
employees.
Productivity Measurement:
Productivity may be measured either on aggregate basis or on
individual basis, which are called

Total and Partial measure.