MBA607_Operations Management (1)

goals of the organization. Subordinate’s participation in setting goals and action plans and in reviewing performance provides a good measure of self-control. As a result there is improvement in the understanding, motivation and morale of the individual. However, MBO requires education and training of subordinates and a democratic leadership style on the part of managers. Technique # 8. Job Enrichment: Job enrichment is the process of redesigning a job in order to enlarge its scope and to give the worker more to do. Its purpose is to improve job satisfaction, motivation and morale of workers. When the job is engineered to workers the dehumanization element is reduced so as to improve productivity and to reduce cost. It provides an opportunity for the satisfaction of higher level needs. The following methods can be adopted for job enrichment: (a) Give workers new and more varied tasks to perform. (b) Provide greater freedom and self-control in performing jobs. (c) Give opportunity to do the whole task rather than an element of it. (d) Give employees greater responsibility for their own work. (e) Provide an opportunity to the worker to become an expert on a particular task. (f) Supply production reports (feedback) directly to workers. More diverse tasks and responsibilities imply greater flexibility in work assignments. Job enrichment provides an experience that widens the skill, knowledge and confidence of employees. It contributes towards the development of positive attitudes and work environment so as to reduce employee’s absenteeism and turnover. Technique # 9. Flexitime—an Alternative Work Pattern: Flexitime is a relatively new work pattern which is a major departure from tradition. It allows the workers to set their own work hours subject to a minimum number of hours per week. During a particular period all workers are required to be present. Such a period is called ‘core hours.’ Subject to these limitations workers are given the freedom to decide when they will work. Flexitime helps to reduce worker alienation and to raise productivity. It reduces the tyranny of supervisors and provides job opportunity to working mothers, aged persons and students. It 100 CU IDOL SELF LEARNING MATERIAL (SLM)

has greater motivational value than five days’ work-week. By permitting workers the right of self-determination, flexitime reduces tardiness, overtime and short-term absenteeism. Technique # 10. Quality of Work Life (QWL): QWL is a new technique for improving productivity and quality of work. Technique # 11. Quality Circles (QC): A quality circle is a small group of workers which regularly meets to discuss problems, investigate causes, recommend solutions and if authorized, to take corrective action. It usually consists of five to fifteen members who collectively identify, analyze and resolve work-related problems and may even implement solutions. A leader is appointed to direct and guide the circle. A Facilitator makes integration of programme easier at all levels. The Coordinator supervises the facilitators and directs administration of the programme. There is a Steering Committee which oversees and directs the efforts of all quality circles in the organization. The purpose of a quality circle programme is to improve motivation, productivity and product quality. It is designed to optimize the manpower by capturing the creative and innovative power of the workforce. It provides workers an opportunity to participate in decisions about their work. As a result, they take greater interest in their jobs. It develops a sense of participation and contribution among workers. A quality circle programme is based on the philosophy that quality and output can be improved through the participation of employees in solving work problems. The Japanese concept of quality circle has taken firm roots in India. Introduced in India by BHEL in 1981, the movement has now spread to about 250 to 350 establishments. Nearly 7,000 quality circles involving 70,000 workers are in operation. Companies like BHEL, HMT, Modi Rubber, J.K. Synthetics, etc., have successfully implemented this concept. However, a number of top managers treat this concept as bad and in such cases the quality circle programme fails to click. It cannot thrive without positive commitment and support of top management and without grass-root support. Some Other Techniques The following are the productivity techniques: Management is defined as the organisation and control of different activities involved to achieve higher productivity. The manufacturing time of a job is equal to the total content plus 101 CU IDOL SELF LEARNING MATERIAL (SLM)

the total ineffective time. The total work content of the job consists of basic work content and excess work content. The excess work content is due to the inefficient methods of manufacture and the defects in the design of the product. The total ineffective time is due to the poor attitude of the workers and the lack of management interest. 1. Basic Work Content: It is the time required to produce a product if- (i) The design and specifications are perfect. (ii) Manufacturing method is perfect. (iii) There is no idle time from any cause. Thus, the basic work content is the minimum time required to manufacture a product and it cannot be reduced. 2. Defects in Design and Specification: (i) Defects in the design of product. (ii) Lack of standardisation. (iii) Poor quality standards. 3. Inefficient Methods of Operation: (i) Selection of wrong machines. (ii) Selection of wrong tools. (iii) Bad layout of plant and equipments. (iv) Bad working methods of the operator. 4. In Effective Time Due to Management: (i) Poor production planning. (ii) Shortage of raw materials. (iii) Poor maintenance of plant and machinery which leads to an accident. 102 CU IDOL SELF LEARNING MATERIAL (SLM)

(iv) Producing variety of products to increase the setup time. 5. In Effective Time Due to Workers: (i) Poor attitude towards the work. (ii) Absence, lateness and illness. (iii) Accidents. 5.7 PRODUCTIVITY IMPROVEMENT MODELS The productivity improvement models are discussed in detail below: Model # 1. Material Based Measures: This method includes material planning and control (MPC), purchasing, logistics, material storage and retrieval, source selection and procurement of quality material, waste elimination. It encompasses the following methods: i. Material planning and control. ii. Material storage and retrieval. iii. Source selection and procurement of quality material. iv. Waste elimination. v. Recycling and reuse of waste materials. vi. Purchasing logistics. Model # 2. Process or Task Based Measures: Process based productivity is based on management style, communication in the organization, work culture, motivation, promotion group activities. Process based techniques include improvements in doing work like; process design and human factor engineering, to increase productivity; there are two main techniques (method Study and work measurement) of simplifying any task- (a) Method Engineering is the systematic recording and critical examination of the present and the proposed way of doing work as a means of developing better economical, easier and efficient way of doing work and implementing it. 103 CU IDOL SELF LEARNING MATERIAL (SLM)

(b) Work Measurement is an application of technique designed to establish and time required by qualified worker to carry out specified tasks at defined level of performance. In short, measurement of time to do work. Model # 3. Technology Based Measures: This included use of advanced and updated technology to increase productivity. It consist CAD/CAM/CIMS, Robotics, Laser technology, Modern maintenance technology, Energy technology, Flexible manufacturing system (FMS). (a) Computer Aided Design (CAD): CAD refers to design of products, processes or systems with the help of computers. The impact of CAD on human productivity is significant. Speed of evaluation of alternative designs, Minimization of risk of functioning, and Error reductions are the advantages of CAD. (b) Computer Added Machining (CAM): CAM is very much useful to design and control the manufacturing. It helps to achieve the effectiveness in production system by line balancing. CAM helps in production planning and control (PPC), capacity requirements planning (CRP), manufacturing resources planning (MRP-II) and materials requirement planning (MRP) and automated inspection. (c) Computer Integrated Manufacturing (CIMS): Computer integrated manufacturing is characterized by automatic line balancing, machine loading (scheduling and sequencing), automatic inventory control and inspection. It includes robotics, modern maintenance techniques, energy technology, Flexible Manufacturing System (FMS). Model # 4. Product Based Measures: Productivity can be improved by improving product design, by improving the quality of parts of product. Productivity can be improved by taking following action regarding product: i. Value analysis and value engineering. ii. Product diversification. iii. Standardization and simplification. iv. Reliability engineering. 104 CU IDOL SELF LEARNING MATERIAL (SLM)

v. Product mix and promotion. Model # 5. Employee or Labour Based Measure: Employee based method includes financial and non-financial incentives at individual and group level, employee promotion, job design, job enlargement, job enrichment and job rotation, worker participation in decision-making, Quality Circles (QC), Small Group Activities (SGA), personal development. It includes: i. Financial and non-financial incentives at individual and group level. ii. Employee promotion. iii. Job design, job enlargement, job enrichment and job rotation. iv. Worker participation in decision-making. v. Quality circles (QC), small group activities (SGA). vi. Personal development. Model # 6. Management Based Measures: Management can increase productivity by taking the actions like; management technique, communication and promoting group activity, work culture and motivation. (a) Work Culture: Work culture is a combination of qualities in an organization and its employees that arise from what is generally regarded as appropriate ways to think and act. Work cultures that mix of practices and ideologies arising from the interactions of people with their work environments have been shaped in all by diversity. (b) Motivation: To have motivated employees means increased productivity at work. To do this, offer rewards for milestones they achieve. If employees are rewarded, they will see their hard work paying off in tangible way i.e. productivity. 5.8 FUNCTIONS OF PRODUCTION MANAGEMENT The definitions discussed above clearly shows that the concept of production management is 105 CU IDOL SELF LEARNING MATERIAL (SLM)

related mainly to the organizations engaged in production of goods and services. Earlier these organizations were mostly in the form of one man shops having insignificant problems of managing the productions. But with development and expansion of production organizations in the shape of factories more complicated problems like location and lay out, inventory control, quality control, routing and scheduling of the production process etc. came into existence which required more detailed analysis and study of the whole phenomenon. This resulted in the development of production management in the area of factory management. In the beginning the main function of production management was to control labour costs which at that time constituted the major proportion of costs associated with production. But with development of factory system towards mechanization and automation the indirect labour costs increased tremendously in comparison to direct labour costs, e.g., designing and packing of the products, production and inventory control, plant layout and location, transportation of raw materials and finished products etc. The planning and control of all these activities required more expertise and special techniques. In modern times production management has to perform a variety of functions, namely: (i) Design and development of production process. (ii) Production planning and control. (iii) Implementation of the plan and related activities to produce the desired output. (iv) Administration and co-ordination of the activities of various components and departments responsible for producing the necessary goods and services. However, the responsibility of determining the output characteristics and the distribution strategy followed by an organization including pricing and selling policies are normally outside the scope of Production Management. 5.9 IMPORTANCE OF PRODUCTION MANAGEMENT Every successful organization has a line function as well as a support function that must be efficient. But the production comes under the line function category which has a direct impact on the customers. Hence it dictates customer experience. Customer experience is critical for the survival of any organization. Therefore line function to a large extent determines the future of the company in question. 106 CU IDOL SELF LEARNING MATERIAL (SLM)

5.10 SUMMARY  Production Management refers to the application of management principles to the production function in a factory. In other words, production management involves application of planning, organizing, directing and controlling the production process.  Productivity is an overall measure of the ability to produce a good or service. More specifically, productivity is the measure of how specified resources are managed to accomplish timely objectives as stated in terms of quantity and quality. Productivity may also be defined as an index that measures output (goods and services) relative to the input (labor, materials, energy, etc., used to produce the output).  Production management is a function of management, related to planning, coordinating and controlling the resources required for production to produce specified product by specified methods, by optimal utilization of resources.  Production management is defined as management function which plans, organizes, coordinates, directs and controls the material supply and processing activities of an enterprise, so that specified products are produced by specified methods to meet an approved sales programme. These activities are being carried out in such a manner that labor, plant and capital available are used to the best advantage of the organization. 5.11 KEYWORDS  Capacity utilization or capacity utilization is the extent to which a firm or nation employs its installed productive capacity  Capital Expenditures (Capex. Capital): The cash cost of acquiring capital equipment or goods. Capital expenditures result in depreciation that is the cost that appears on the P&L statement.  Cash Flow: The beginning and ending net cash as a result of cash that has flowed through an operation over a given period of time.  Centralization: Combining of disparate inventories at a central location implying that the total inventory and logistics cost needed to meet anticipated demand can be lower. Availability may be a problem at regional locations. 5.12 LEARNING ACTIVITY 107 CU IDOL SELF LEARNING MATERIAL (SLM)

1. Draw a strategic diagram to increase the Productivity of the organization ___________________________________________________________________________ __________________________________________________________ 2. Discuss various techniques used by the organization for Production Management ___________________________________________________________________________ __________________________________________________________ 5.13 UNIT END QUESTIONS A. Short Descriptive Type Questions 1. Explain productivity? 2. Explain integrated product development. 3. Discuss the productivity improvement model? 4. List out the functions of production management? 5. Discuss the importance of production management? B. Long Descriptive Type Questions 1. Explain the expressions order winners and order qualifiers? What was the order winner(s) for your last major purchase of a product or service? 2. Explain batch production and mass production along with its advantages and disadvantages. Suggest suitable method of production for below categories: 1. Automobile 2. Computers 3. Discuss the pros and cons for a company considering a foreign location for its operations 4. As a project manager of a large petro-chemicals refinery, how will you select the appropriate location of the plant? Discuss the various factors affecting your decision. 5. Suppose you are working as a turnkey project consultant. One of your clients wants guidance in selecting facility location for his new fast-food restaurant. Guide your client. 108 CU IDOL SELF LEARNING MATERIAL (SLM)

C. Multiple Choice Questions 1. This method includes material planning and control (MPC), purchasing, logistics, material storage and retrieval, source selection and procurement of quality material, waste elimination. a. Material Based Measures b. Product based measure c. Technology based measures d. None of these 2. A ………… circle programme is based on the philosophy that quality and output can be improved through the participation of employees in solving work problems. a. quality b. quantity c. system d. product 3. Like roots of a tree, ––––––––– of organization is hidden from direct view. a.goodwill b. core competence c. Higher management d. Capital investment 4. Fixed position layout is adopted when 109 a. Products are of different variety b. Product is very heavy involving assembly of large number of parts CU IDOL SELF LEARNING MATERIAL (SLM)

c. Products are in large numbers d. All of these 5. Which of the following is not a type of specification? a. Material specifications b. Dimensional specifications c. Manpower specification. d. Performance specifications 6. ––––––––– should have the ability to develop a vision to see patterns into the future. a. Leaders b. Workers c. Management d. None of these 7. Critical path method a. Helps in ascertaining time schedules b. Makes better and detailed planning possible c. Provides a standard method for communicating project plans schedules and to time and cost performance d. All of these 8. Critical Path Net Work helps an engineer a. To concentrate his attention on critical activities b. To divert the resources from noncritical advanced activities to critical activities 110 CU IDOL SELF LEARNING MATERIAL (SLM)

c. To be cautious for avoiding any delay in the critical activities to avoid delay of the whole project d. All of these 9. Both Rowan plan and 50-50 Halsey plan will provide the same earning when the actual time is _________ the standard time. a. One-fourth b. One-half c. Equal to d. Twice 10. In break-even analysis, total cost consists of a. Fixed cost b. Variable cost c. Fixed cost + variable cost d. Fixed cost + variable cost + overheads Answers 1. a 2. a 3. b 4. a 5. a 6. a 7. d 8. d 9. b 10. c 5.14 REFERENCES  Stevenson W.J. (2018). Operations Management. New Delhi: Tata McGraw Hills.  Chase, Jacobs, Aquilano & Aggarwal. (2005). Operations Management. New Delhi: Tata McGraw Hills.  John O. McClain and L. Joseph Thomas. (1986). Operations Management. New Delhi: Prentice Hall of India.  Askin, R. G., C.R. Standridge, Modeling & Analysis of Manufacturing Systems, 111 CU IDOL SELF LEARNING MATERIAL (SLM)

John Wiley and Sons, New York 1993.  J. A. Buzacott, J. G. Shanthikumar, Stochastic models of manufacturing systems, Prentice Hall, 1993.  D. C. Montgomery, Statistical Quality Control: A Modern Introduction, 7th edition, 2012. R.B. Grubbström, Modelling production opportunities - an historical overview, Int. J. Production Economics 1995  Orlickly, Materials Requirement Planning, McGraw-Hill 1975 112 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT 6: PLANT LOCATION 113 Structure 6.0 Learning Objective 6.1 Introduction 6.2 Definitions 6.3 Locational Analysis 6.4 Selection Criteria 6.5 Significance 6.6 Importance of Plant Location: 6.7 Factors Affecting Plant Location 6.7.1 Primary factors: 6.7.2 Secondary factors: 6.8 Plant Layout 6.9 Definition 6.10 Importance 6.11 Essentials 6.12 Types of Layout 6.12.1 Product or line layout: 6.12.2 Process layout: 6.12.3 Fixed Position or Location Layout 6.12.4 Combined layout 6.13 Factors Influencing Layout CU IDOL SELF LEARNING MATERIAL (SLM)

6.14 Dynamics of Plant Layout 6.15 Applicability of Plant Layout 6.16 Summary 6.17 Keywords 6.18 Learning activity 6.17 Unit end question 6.18 References 6.0 LEARNING OBJECTIVE After studying this unit, you will be able  Describe the concepts of plant location and plant layout  Identify the various factors to be considered for selection of plant location- from state/area to the specific site  Distinguish among the alternative patterns of plant layout  Discuss the various factors influencing the choice of an initial layout and its subsequent modification 6.1 INTRODUCTION Plant layout is the most effective physical arrangement, either existing or in plans of industrial facilities i.e. arrangement of machines, processing equipment and service departments to achieve greatest co-ordination and efficiency of 4 M’s (Men, Materials, Machines and Methods) in a plant. Layout problems are fundamental to every type of organization/enterprise and are experienced in all kinds of concerns/undertakings. The adequacy of layout affects the efficiency of subsequent operations. It is an important pre-requisite for efficient operations and also has a great deal in common with many problems. Once the site of the plant has been decided, the next important problem before the management of the enterprise is to plan suitable layout for the plant. 114 CU IDOL SELF LEARNING MATERIAL (SLM)

6.2 DEFINITIONS According to James Lundy, “Layout identically involves the allocation of space and the arrangement of equipment in such a manner that overall operating costs are minimized”. In the words of Mallick and Gandreau, “Plant layout is a floor plan for determining and arranging the designed machinery and equipment of a plant, whether established or contemplated, in the best place, to permit the quickest flow of material, at the lowest cost and with the minimum handling in processing the product, from the receipt of raw material to the shipment of finished product”. According to Apple, “Plant layout is planning the path each component/ part of the product is to follow through the plant, coordinating the various parts so that the manufacturing processes may be carried out in the most economical manner, then preparing drawing or other representation of the arrangement and finally seeing that the plan is properly put into effect.” (Plant Layout and Material by Apple). In the words of Sansonneti and Malilick (Factory management Vol. 103) “It is planning the right equipment, coupled with right place, to permit the processing of a product unit in the most effective manner, through the shortest possible distance and in the shortest possible time.” The last definition seems to be most appropriate. 6.3 LOCATIONAL ANALYSIS Locational analysis is a dynamic process where entrepreneur analyses and compares the appropriateness or otherwise of alternative sites with the aim of selecting the best site for a given enterprise. It consists the following: (a) Demographic Analysis: It involves study of population in the area in terms of total population (in no.), age composition, per capita income, educational level, occupational structure etc. (b) Trade Area Analysis: It is an analysis of the geographic area that provides continued clientele to the firm. He would also see the feasibility of accessing the trade area from alternative sites. (c) Competitive Analysis: It helps to judge the nature, location, size and quality of competition in a given trade area. (d) Traffic analysis: To have a rough idea about the number of potential customers passing by the proposed site during the working hours of the shop, the traffic analysis aims at judging the alternative sites in terms of pedestrian and vehicular traffic passing a site. 115 CU IDOL SELF LEARNING MATERIAL (SLM)

(e) Site economics: Alternative sites are evaluated in terms of establishment costs and operational costs under this. Costs of establishment is basically cost incurred for permanent physical facilities but operational costs are incurred for running business on day to day basis, they are also called as running costs. Two sites A and B are evaluated in terms of above mentioned two costs as follows: Table 6.1: Comparative Costs of Alternative Locations Costs Site A (Rs.) Site B (Rs.) Cost of establishments: Land and Buildings 350000 230000 Equipment 60000 60000 Transport facilities 20000 30000 Cost of operations: Materials, freight and carriage 34000 24000 Taxes and insurance 10000 7500 Labour 100000 70000 Water, power and fuel 10000 8000 Total 584000 429500 The above cost statement indicates that site B is preferable to site A keeping in mind economic considerations only although in some respects site A has lower costs. By applying 116 CU IDOL SELF LEARNING MATERIAL (SLM)

the definition of ideal location which is the place of maximum net advantage or which gives lowest unit cost of production and distribution, site B would be preferred. 6.4 SELECTION CRITERIA The important considerations for selecting a suitable location are given as follows: a) Natural or climatic conditions. b) Availability and nearness to the sources of raw material. c) Transport costs-in obtaining raw material and also distribution or marketing finished products to the ultimate users. d) Access to market: small businesses in retail or wholesale or services should be located within the vicinity of densely populated areas. e) Availability of Infrastructural facilities such as developed industrial sheds or sites, link roads, nearness to railway stations, airports or sea ports, availability of electricity, water, public utilities, civil amenities and means of communication are important, especially for small scale businesses. f) Availability of skilled and non-skilled labour and technically qualified and trained managers. g) Banking and financial institutions are located nearby. h) Locations with links: to develop industrial areas or business centers result in savings and cost reductions in transport overheads, miscellaneous expenses. i) Strategic considerations of safety and security should be given due importance. j) Government influences: Both positive and negative incentives to motivate an entrepreneur to choose a particular location are made available. Positive includes cheap overhead facilities like electricity, banking transport, tax relief, subsidies and liberalization. Negative incentives are in form of restrictions for setting up industries in urban areas for reasons of pollution control and decentralization of industries. k) Residence of small business entrepreneurs want to set up nearby their homelands One study of locational considerations from small-scale units revealed that the native place or homelands of the entrepreneur was the most important factor. Heavy preference to homeland suggests that small-scale enterprise is not freely mobile. Low preference for Government 117 CU IDOL SELF LEARNING MATERIAL (SLM)

incentives suggests that concessions and incentives cannot compensate for poor infrastructure. Table given below also suggests that the locational choice undergo change with differences in the levels of development across the regions (hills and plains). Factors Affecting Location Decision . Entrepreneur’s Response Total Considerations Hills Plains No. % No. % No. % Homeland 15 67 11 39 26 52 Government 3 14 1 4 4 8 Incentives Availability of 0 0 14 1 2 Raw material Availability of 2 9 00 2 4 Labour Availability of 0 0 5 18 5 10 Market Availability of 1 5 9 32 10 20 infrastructure Facilities 118 CU IDOL SELF LEARNING MATERIAL (SLM)

Others 1 5 14 2 4 Total 22 100 28 100 50 100 6.5 SIGNIFICANCE From the discussion above, we have already learnt that location of a plant is an important entrepreneurial decision because it influences the cost of production and distribution to a great extent. In some cases, you will find that location may contribute to even 10% of cost of manufacturing and marketing. Therefore, an appropriate location is essential to the efficient and economical working of a plant. A firm may fail due to bad location or its growth and efficiency may be restricted. 6.6 IMPORTANCE OF PLANT LOCATION: The selection of location is an important factor for the success of an enterprise. It is equally important for both new as well as already established enterprises. The location choice is vital to any new firm because some changes and adjustments in capacity, qualitatively and quantitatively, at the initiation stage are always possible. However, one should note that it is not easy to change the location of the operation base once such a base has been established. Two different situations under which location decision are made are: –  Location choice for the first time  Location choice for an already established organization with one or more existing facilities 6.7 FACTORS AFFECTING PLANT LOCATION Many factors are considered while selecting a site. According to their importance these are classified as primary factors & secondary factors. 6.7.1 Primary factors:  Raw material supply: Production process will continue properly when adequate supply of raw material is there. Raw material cost is a part of total production cost. Inadequate supply of raw material will result in the reduction in production. It will increase downtime & hence reduce efficiency of industry. Due to this inadequacy, profit maximization may not be obtained. The time to transport & cost of transportation is also 119 CU IDOL SELF LEARNING MATERIAL (SLM)

important. Hence, industries are situated where raw material is available easily.  Nearness to market: This factor will produce the product to customer in short time period and hence it will be less damage to the product. It also reduces transportation cost. Also it will help the supplier to know the requirement of customers.  Transportation Facility: While selecting a site one thing has to be considered that is transportation of any raw material, semi- finished & finished goods should be as less as possible. By this factor material will be transported less, which will affect the material quality, cost of transportation, time to transport etc. Hence for all above reasons producer has to select cheap & speedy transportation with various sources like road, airways, railways, waterways etc.  Labor Supply: Labor is most effective part of the industry, who produces the product. The producer has to choose the site in such a way that labor should present in adequate quantity with low cost and labor would be skilled or unskilled. If labors are not present in sufficient numbers it will increase downtime of production and decrease plant efficiency.  Power Supply: Electrical, diesel, automatic etc. energies are required to produce the product and also required for transportation. For continuous production process regular and sufficient supply is necessary. Many companies follow the industrial area because of availability of regular & sufficient power supply.  Supply of Capital: Capital is required for the industries for production, day to day working, expansion, marketing etc. Large scale production requires large amount of capital which may be raised by shares, debentures etc. 6.7.2 Secondary factors:  Natural factors: Factors like land, water, climate etc. are very important for industries.  Government Policy: in particular area new plant cannot be started due to some rules and regulations made by government. Also, there are some subsidies and other facilities to support small scale industries to grow up.  Availability: Availability of housing, hospitality, entertainment, education facilities also helps in deciding plant location.  Miscellaneous factors: 120 CU IDOL SELF LEARNING MATERIAL (SLM)

1. Sufficient water supply 2. Danger of attack during war 3. Personal factors 4. Environmental & ecological factors 5. Availability of safety facilities like fire- fighting, police etc. Selection of Site as Per Area: Broadly, the area can be classified as rural, suburban and urban area. 1. Rural area: In some cases, rural area is selected to start a production unit. Government is providing various incentives & subsidies to entrepreneurs to start plant in rural area instead of urban area. Advantages of rural area:  Land is available in abundance with cheap rate.  Large number of labours is available with less salary & wages due to lower standard of living.  Taxes are not there in rural area.  More stable labors are available. Less chances of job hopping due to less job opportunities.  No hostile environment between labor & managers.  No restrictions for height of building, drainage etc.  Rural environment is healthy. Slum & dirty area is not present in rural area. Disadvantages of rural area:  Less transportation facility.  Poor communication facilities. Sometimes, postal, telegraph, telephone services may not work properly. 121 CU IDOL SELF LEARNING MATERIAL (SLM)

 Less modernization.  Support industries are not available.  Unskilled labors are available in large number than skilled labors.  Water supply, drainage, fire- fighting facilities is not available.  Poor education, entertainment, hospital facilities. 3. Urban area: Urban area is exactly opposite to rural area. Now-a-days, large plants are not allowed in cities, only offices are allowed. Advantages of rural area:  All types of transportation are available.  Big market is available for the product. Most of the companies first introduce product in city area.  Skilled labors are available, so no need to train them.  All municipal facilities like water supply, drainage, fire- fighting is available.  Banking & insurance facilities are found good in cities.  All types of supporting industries are available.  Entertainment, education, hospital, postal services are available easily as compared to rural area. Disadvantages of rural area:  Higher land cost.  Higher labor cost due to high standard of living.  Due to availability of jobs, employee changes job consistently. Job snatching also takes place in cities by giving more salary or by good incentive schemes.  Some restrictions are made by municipal in case of height of building, drainage etc.  Strong trade union movement. 122 CU IDOL SELF LEARNING MATERIAL (SLM)

 Industrialization in city increases slum & dirty area. 4. Sub-urban area: Both city & rural areas have certain limitations. Due to which the trend is towards sub-urban area, which will take advantages of both the areas & eliminate limitations. Advantages of rural area:  As compared to urban area, land is available at cheaper rate.  Adequate land is available for future expansion.  Skilled & unskilled labors are available.  Training services for labors are also available.  Infrastructural facilities like road, water, banking etc. developed by government, authorities or industrial associates. Disadvantages of rural area: After few years sub-urban area may be developed into urban area with its advantages & disadvantages. In general, urban area provides benefits for small enterprises, whereas, rural area provide benefits for large scale industries. Sub-urban area is suitable for medium size industries. 6.8 PLANT LAYOUT The efficiency of production depends on how well the various machines; production facilities and employee’s amenities are located in a plant. Only the properly laid out plant can ensure the smooth and rapid movement of material, from the raw material stage to the end product stage. Plant layout encompasses new layout as well as improvement in the existing layout. It may be defined as a technique of locating machines, processes and plant services within the factory so as to achieve the right quantity and quality of output at the lowest possible cost of manufacturing. It involves a judicious arrangement of production facilities so that workflow is direct. 6.9 DEFINITION A plant layout can be defined as follows: 123 CU IDOL SELF LEARNING MATERIAL (SLM)

Plant layout refers to the arrangement of physical facilities such as machinery, equipment, furniture etc. within the factory building in such a manner so as to have quickest flow of material at the lowest cost and with the least amount of handling in processing the product from the receipt of material to the shipment of the finished product. According to Riggs, “the overall objective of plant layout is to design a physical arrangement that most economically meets the required output – quantity and quality.” According to J. L. Zundi, “Plant layout ideally involves allocation of space and arrangement of equipment in such a manner that overall operating costs are minimized. 6.10 IMPORTANCE Plant layout is an important decision as it represents long-term commitment. An ideal plant layout should provide the optimum relationship among output, floor area and manufacturing process. It facilitates the production process, minimizes material handling, time and cost, and allows flexibility of operations, easy production flow, makes economic use of the building, promotes effective utilization of manpower, and provides for employee’s convenience, safety, comfort at work, maximum exposure to natural light and ventilation. It is also important because it affects the flow of material and processes, labour efficiency, supervision and control, use of space and expansion possibilities etc. 6.11 ESSENTIALS An efficient plant layout is one that can be instrumental in achieving the following objectives: a) Proper and efficient utilization of available floor space b) To ensure that work proceeds from one point to another point without any delay c) Provide enough production capacity. d) Reduce material handling costs e) Reduce hazards to personnel f) Utilise labour efficiently g) Increase employee morale h) Reduce accidents 124 CU IDOL SELF LEARNING MATERIAL (SLM)

i) Provide for volume and product flexibility j) Provide ease of supervision and control k) Provide for employee safety and health l) Allow ease of maintenance m) Allow high machine or equipment utilization n) Improve productivity 6.12 TYPES OF LAYOUT As discussed so far the plant layout facilitates the arrangement of machines, equipment and other physical facilities in a planned manner within the factory premises. An entrepreneur must possess an expertise to lay down a proper layout for new or existing plants. It differs from plant to plant, from location to location and from industry to industry. But the basic principles governing plant layout are more or less same. As far as small business is concerned, it requires a smaller area or space and can be located in any kind of building as long as the space is available and it is convenient. Plant layout for Small Scale business is closely linked with the factory building and built up area. From the point of view of plant layout, we can classify small business or unit into three categories: 1. Manufacturing units 2. Traders 3. Service Establishments 1. Manufacturing units In case of manufacturing unit, plant layout may be of four types: (a) Product or line layout 125 (b) Process or functional layout (c) Fixed position or location layout (d) Combined or group layout CU IDOL SELF LEARNING MATERIAL (SLM)

6.12.1 Product or line layout: Under this, machines and equipments are arranged in one line depending upon the sequence of operations required for the product. The materials move from one workstation to another sequentially without any backtracking or deviation. Under this, machines are grouped in one sequence. Therefore materials are fed into the first machine and finished goods travel automatically from machine to machine, the output of one machine becoming input of the next, e.g. in a paper mill, bamboos are fed into the machine at one end and paper comes out at the other end. The raw material moves very fast from one workstation to other stations with a minimum work in progress storage and material handling. The grouping of machines should be done keeping in mind the following general principles. a) All the machine tools or other items of equipments must be placed at the point demanded by the sequence of operations b) There should no points where one line crossed another line. c) Materials may be fed where they are required for assembly but not necessarily at one point. d) All the operations including assembly, testing packing must be included in the line A line layout for two products is given below. Product A Lathe Drill Grinder Assembly Paint shop Product B (1) (2) (3) (4) (5) Planer Grinder Miler Lathe Welding (1) (2) (3) (4) (6) Figure: 6.1 Lineout layout Advantages: Product layout provides the following benefits: a) Low cost of material handling, due to straight and short route and absence of backtracking b) Smooth and uninterrupted operations c) Continuous flow of work 126 d) Lesser investment in inventory and work in progress e) Optimum use of floor space CU IDOL SELF LEARNING MATERIAL (SLM)

f) Shorter processing time or quicker output g) Less congestion of work in the process h) Simple and effective inspection of work and simplified production control i) Lower cost of manufacturing per unit Disadvantages: Product layout suffers from following drawbacks: a. High initial capital investment in special purpose machine b. Heavy overhead charges c. Breakdown of one machine will hamper the whole production process d. Lesser flexibility as specially laid out for particular product. Suitability: Product layout is useful under following conditions: 1) Mass production of standardized products 2) Simple and repetitive manufacturing process 3) Operation time for different process is more or less equal 4) Reasonably stable demand for the product 5) Continuous supply of materials Therefore, the manufacturing units involving continuous manufacturing process, producing few standardized products continuously on the firm’s own specifications and in anticipation of sales would prefer product layout e.g. chemicals, sugar, paper, rubber, refineries, cement, automobiles, food processing and electronics etc. 6.12.2 Process layout: In this type of layout machines of a similar type are arranged together at one place. E.g. Machines performing drilling operations are arranged in the drilling department, machines performing casting operations be grouped in the casting department. Therefore the machines are installed in the plants, which follow the process layout. Hence, such layouts typically have drilling department, milling department, welding department, heating department and painting department etc. The process or functional layout 127 CU IDOL SELF LEARNING MATERIAL (SLM)

is followed from historical period. It evolved from the handicraft method of production. The work has to be allocated to each department in such a way that no machines are chosen to do as many different jobs as possible i.e. the emphasis is on general purpose machine. The work, which has to be done, is allocated to the machines according to loading schedules with the object of ensuring that each machine is fully loaded. Process layout is shown in the following diagram. Drillin (2 Planni Grindi (5 g ) ng ng ) (1) (1 (2) (3 (5 ) ) ) Millin g Weldi Assemb ng ly (3 ) (4 (4 (6 (6 )) )) Product A: Product A: Product B: Process layout showing movement of two products The grouping of machines according to the process has to be done keeping in mind the following principles a) The distance between departments should be as short as possible for avoiding long distance movement of materials b) The departments should be in sequence of operations c) The arrangement should be convenient for inspection and supervision. Advantages: Process layout provides the following benefits a) Lower initial capital investment in machines and equipments. There is high degree of machine utilization, as a machine is not blocked for a single product b) The overhead costs are relatively low c) Change in output design and volume can be more easily adapted to the output of 128 CU IDOL SELF LEARNING MATERIAL (SLM)

variety of products d) Breakdown of one machine does not result in complete work stoppage e) Supervision can be more effective and specialized f) There is a greater flexibility of scope for expansion. Disadvantages: Product layout suffers from following drawbacks a. Material handling costs are high due to backtracking b. More skilled labour is required resulting in higher cost. c. Time gap or lag in production is higher d. Work in progress inventory is high needing greater storage space e. More frequent inspection is needed which results in costly supervision Suitability: Process layout is adopted when 1. Products are not standardized 2. Quantity produced is small 3. There are frequent changes in design and style of product 4. Job shop type of work is done 5. Machines are very expensive Thus, process layout or functional layout is suitable for job order production involving non- repetitive processes and customer specifications and non- standardized products, e.g. tailoring, light and heavy engineering products, made to order furniture industries, jewelry. 6.12.3 Fixed Position or Location Layout In this type of layout, the major product being produced is fixed at one location. Equipment labour and components are moved to that location. All facilities are brought and arranged around one work center. This type of layout is not relevant for small scale entrepreneur. The following figure shows a fixed position layout regarding shipbuilding. 129 CU IDOL SELF LEARNING MATERIAL (SLM)

Figure 6.2 Location layout Advantages: Fixed position layout provides the following benefits a) It saves time and cost involved on the movement of work from one workstation to another. b) The layout is flexible as change in job design and operation sequence can be easily incorporated. c) It is more economical when several orders in different stages of progress are being executed simultaneously. d) Adjustments can be made to meet shortage of materials or absence of workers by changing the sequence of operations. Disadvantages: Fixed position layout has the following drawbacks a. Production period being very long, capital investment is very heavy b. Very large space is required for storage of material and equipment near the product. c. As several operations are often carried out simultaneously, there is possibility of confusion and conflicts among different workgroups. Suitability: The fixed position layout is followed in following conditions 1. Manufacture of bulky and heavy products such as locomotives, ships, boilers, generators, wagon building, aircraft manufacturing, etc. 2. Construction of building, flyovers, dams. 3. Hospital, the medicines, doctors and nurses are taken to the patient (product). 6.12.4 Combined layout 130 CU IDOL SELF LEARNING MATERIAL (SLM)

Certain manufacturing units may require all three processes namely intermittent process (job shops), the continuous process (mass production shops) and the representative process combined process [i.e. miscellaneous shops]. In most of industries, only a product layout or process layout or fixed location layout does not exist. Thus, in manufacturing concerns where several products are produced in repeated numbers with no likelihood of continuous production, combined layout is followed. Generally, a combination of the product and process layout or other combination are found, in practice, e.g. for industries involving the fabrication of parts and assembly, fabrication tends to employ the process layout, while the assembly areas often employ the product layout. In soap, manufacturing plant, the machinery manufacturing soap is arranged on the product line principle, but ancillary services such as heating, the manufacturing of glycerin, the power house, the water treatment plant etc. are arranged on a functional basis 6.13 FACTORS INFLUENCING LAYOUT While deciding his factory or unit or establishment or store, a small-scale businessman should keep the following factors in mind: a) Factory building: The nature and size of the building determines the floor space available for layout. While designing the special requirements, e.g. air conditioning, dust control, humidity control etc. must be kept in mind. b) Nature of product: product layout is suitable for uniform products whereas process layout is more appropriate for custom-made products. c) Production process: In assembly line industries, product layout is better. In job order or intermittent manufacturing on the other hand, process layout is desirable. d) Type of machinery: General purpose machines are often arranged as per process layout while special purpose machines are arranged according to product layout e) Repairs and maintenance: machines should be so arranged that adequate space is available between them for movement of equipment and people required for repairing the machines. f) Human needs: Adequate arrangement should be made for cloakroom, washroom, lockers, drinking water, toilets and other employee facilities, proper provision should be made for disposal of effluents, if any. g) Plant environment: Heat, light, noise, ventilation and other aspects should be duly considered, e.g. paint shops and plating section should be located in another hall so that 131 CU IDOL SELF LEARNING MATERIAL (SLM)

dangerous fumes can be removed through proper ventilation etc. Adequate safety arrangement should also be made. Thus, the layout should be conducive to health and safety of employees. It should ensure free and efficient flow of men and materials. Future expansion and diversification may also be considered while planning factory layout. 6.14 DYNAMICS OF PLANT LAYOUT Plant layout is a dynamic rather than a static concept meaning thereby if once done it is not permanent in nature rather improvement or revision in the existing plant layout must be made by keeping a track with development of new machines or equipment, improvements in manufacturing process, changes in materials handling devices etc. But, any revision in layout must be made only when the savings resulting from revision exceed the costs involved in such revision. Revision in plant layout may become necessary on account of the following reasons: a) Increase in the output of the existing product b) Introduction of a new product and diversification c) Technological advancements in machinery, material, processes, product design, fuel etc. d) Deficiencies in the layout unnoticed by the layout engineer in the beginning. 6.15 APPLICABILITY OF PLANT LAYOUT Plant layout is applicable to all types of industries or plants. Certain plants require special arrangements which, when incorporated make the layout look distinct form the types already discussed above. Applicability of plant layout in manufacturing and service industries is discussed below. In case of the manufacturing of detergent powder, a multi-story building is specially constructed to house the boiler. Materials are stored and poured into the boiler at different stages on different floors. Other facilities are also provided around the boiler at different stations. Another applicability of this layout is the manufacture of talcum powder. Here machinery is arranged vertically i.e. from top to bottom. Thus, material is poured into the first machine at the top and powder comes out at the bottom of the machinery located on the ground floor. 132 CU IDOL SELF LEARNING MATERIAL (SLM)

Yet another applicability of this layout is the newspaper plant, where the time element is of supreme importance, the accomplishment being gapped in seconds. Here plant layout must be simple and direct so as to eliminate distance, delay and confusion. There must be a perfect coordination of all departments and machinery or equipment’s, as materials must never fail. Plant layout is also applicable to five star hotels as well. Here lodging, bar, restaurant, kitchen, stores, swimming pool, laundry, shaving saloons, shopping arcades, conference hall, parking areas etc. should all find an appropriate place in the layout. Here importance must be given to cleanliness, elegant appearance, convenience and compact looks, which attract customers. Similarly plant layout is applicable to a cinema hall, where emphasis is on comfort, and convenience of the cinemagoers. The projector, screen, sound box, firefighting equipment, ambience etc. should be of utmost importance. A plant layout applies besides the grouping of machinery, to an arrangement for other facilities as well. Such facilities include receiving and dispatching points, inspection facilities, employee facilities, storage etc. Generally, the receiving and the dispatching departments should be at either end of the plant. The storeroom should be located close to the production, receiving and dispatching centers in order to minimize handling costs. The inspection should be right next to other dispatch department as inspections are done finally, before dispatch. The maintenance department consisting of lighting, safety devices, fire protection, collection and disposal of garbage, scrap etc. should be located in a place which is easily accessible to all the other departments in the plant. The other employee facilities like toilet facilities, drinking water facilities, first aid room, cafeteria etc. can be a little away from other departments but should be within easy reach of the employees. Hence, there are the other industries or plants to which plant layout is applicable. 6.16 SUMMARY  In this lesson you have observed that the entrepreneur has to make decisions regarding plant location, which refers to the selection of a particular site for setting up a business or factory. But before making such a choice, he has to go through the detailed locational analysis considering various factors, which influence his decision. It is a long-term strategic decision, which cannot be changed once taken. An optimum location can reduce the cost of production and distribution to a great extent. Thus great care and appropriate planning is required to select the most appropriate location.  The efficiency of production depends on how well the various machines; production 133 CU IDOL SELF LEARNING MATERIAL (SLM)

facilities and amenities are located in a plant. An ideal plant layout should provide the optimum relationship among the output, floor area and manufacturing process.  An efficient plant layout is one that aims at achieving various objectives like efficient utilization of available floor space, minimizes cost, allows flexibility of operation, provides for employees convenience, improves productivity etc. The entrepreneurs must possess the expertise to lay down a proper layout for new or existing plants. It differs from one plant to another. But basic principles to be followed are more or less same. From the point of view of plant layout, we can classify small business into three categories i.e. (a) manufacturing units (b) traders (c) service establishments.  Designing of layout is different in all above three categories e.g. manufacturing unit may follow one of Product, Process, and fixed position or combined layout, as the case may be. Traders might go either for self- service or full service or special layouts whereas service establishments such as motels, hotels, and restaurants must give due attention to customer convenience, quality of service, efficiency in delivering the service etc. While deciding for layout for factory or unit or store, a small entrepreneur has to consider the factors like the nature of the product, production process, size of factory building, human needs etc.  Plant layout is applicable to all types of industries or plants. At the end, the layout should be conducive to health and safety of employees. It should ensure free and efficient flow of men and materials. Future expansion and diversification may also be considered while planning factory layout. 6.17 KEYWORDS  .Business Environment – Implies aggregate of all forces, factors and institutions, which are external to and beyond the control of business organizations and their management  Continuous process - A process, which involves mass production of, standardized product repetitively.  Diversification – A process of entering into a field of business, which is new in terms of the market or technology or both 134 CU IDOL SELF LEARNING MATERIAL (SLM)

 Expansion – Consists of increasing the sales revenue, profits and market share of existing product line or service  Entrepreneur - A person who is skilled at identifying new products (or sometimes new method of production), setting up operations for setting up new products, marketing the product and arranging the finance for the operations.  Handling cost - Cost of carrying material or storage cost.  Intermittent process –Is a process in which raw materials are converted into components or parts for stock. But they are combined according to customer orders.  Manufacturing – General term for the process of producing or assembling goods by hands or machines for sale to others. 6.18 LEARNING ACTIVITY 1. Compare and discuss about the plant layout of 2 factories having similar production lines. ___________________________________________________________________________ __________________________________________________________ 2. How the location and plant layout effect the productivity of the organization? ___________________________________________________________________________ __________________________________________________________ 6.17 UNIT END QUESTION A. Short Descriptive Type Questions 1. Describe the factors that should be taken into account in deciding the location of plant? 2. Discuss the importance of location in business? 3. Define the plant layout. 4. Explain locational analysis? 135 5. Define plant location B. Long Descriptive Type Questions CU IDOL SELF LEARNING MATERIAL (SLM)

6. The governing principle is that a plant should be so located as to permit the production of the product at the lowest cost per unit.” Comment. 7. Explain the meaning and significance of plant location .How will you decide the location of a mini steel plant in India? 8. Explain the various factors influencing the layout of grocery store? 9. Discuss the Plant Layout? Explain different types of layouts. 10. List out the advantages of good plant layout? 11. Explain the significance of the Sergeant Florence Theory in decisions related to plant location? C. Multiple Choice Questions 1. The aim of a good store layout should be a. Customer convenience b. Stocking as much merchandise as can be placed in the store c. The elimination of stockroom space d. All of the above 2. one way to increase and direct customer traffic through the store is to a. Make merchandise difficult to reach b. Keep goods that are in heavy demand in convenient locations c. Place items that are used together in different parts of the store d. Organize the store so that customers do not have a view of the entire department 3. Which of the following stores would find the self-service type of layout most convenient? a. A jewelry store 136 CU IDOL SELF LEARNING MATERIAL (SLM)

b. A shoe store c. A supermarket d. A coffee shop 4. What is the location of lower control limit in the X bar-R control chart? a. 3 standard deviations below central line b. 2 standard deviations below central line c. 1 standard deviations below central line d. Any of the above 5. Which of the following Principles of Management is not advocated by F W Taylor? a. Selection of best worker for each particular task b. Division of work between worker and management c. Training and development of the workmen d. Involvement of workers in strategy planning 6. Which of the following industries should be located near the vicinity of raw materials? a. Cycles b. Televisions c. Sewing machines d. Steel mills 7. For which of the following industry humid climate is helpful 137 CU IDOL SELF LEARNING MATERIAL (SLM)

a. Cotton 138 b. Steel c. Light Bulb d. Automobile 8. For good natural ventilation, the ____ type of building preferred a. Flat roof b. Saw tooth c. High bay d. Monitor 9. Buildings for foundries and steel mills are often of the a. Flat roof b. Saw tooth c. High bay d. Bow string 10. Which of the following is not true for Multi-storey building? a. High heating and ventilation cost b. Small ground runs for drainage c. Adopted for manufacture of light goods d. Less roof repairs Answers CU IDOL SELF LEARNING MATERIAL (SLM)

1. a 2. c 3. c 4. a 5. d 6. d 7. a 8. d 9. c 10. a 6.18 REFERENCES  Stevenson W.J. (2018). Operations Management. New Delhi: Tata McGraw Hills.  Chase, Jacobs, Aquilano & Aggarwal. (2005). Operations Management. New Delhi: Tata McGraw Hills.  John O. McClain and L. Joseph Thomas. (1986). Operations Management. New Delhi: Prentice Hall of India.  Charentais M Poornima, Entrepreneurship Development Small Business Enterprises: Pearson Education First Impression, 2006  Florence. P. Sargent, Investment, Location and Size of plant, London: Cambridge University Press, 1984  Government of India (Office of the Economic Adviser), Location of Industries in India, New Delhi, 1963  Lundy, James. L. Effective Industrial Management, New Delhi: Eurasia Publishing House, New Edition, 1984  Sreekantaradhya, B.S., Regional Dispersal of Industries, New Delhi; Deep and Deep, 1985  Weber, Alfred, Theory of Location of Industries, Chicago: The University of Chicago Press, 1929  Asian Productivity Organisation, Production Engineering, Manila: APO, 1981 Buffa Elwood S., Operations Management, New Delhi: Wiley Eastern, 1986 Kumar Anil, S.C. Purnima, Abrahim Mini K, K Jayashree, “Entrepreneurship development”: New Age International Private Limited Publisher, 2003  Read Ruddel R., Plant Layout – Factors, Principles and Techniques, Illinois: Richard D. Irwin, 1978  Gupta C.B. and Khanka S.S., Entrepreneurship and small business management: Sultan Chand and Sons 2003  Shubin John A. and H. Madeheim, Plant Layout, New Delhi: Prentice Hall of India, 1986 139 CU IDOL SELF LEARNING MATERIAL (SLM)

 Gupta and Srinivasan, Entrepreneurial Development: Sultan Chand and Sons 1995 140 CU IDOL SELF LEARNING MATERIAL (SLM)

UNIT 7: MANUFACTURING SYSTEM 141 Structure 7.0 Learning objective 7.1 Introduction 7.2 Types of Manufacturing Systems 7.2.1 Custom Manufacturing Systems 7.2.2 Intermittent Manufacturing Systems 7.2.3 Continuous Manufacturing Systems 7.2.4 Flexible Manufacturing Systems 7.3 Characteristics for Manufacturing 7.4 Production Planning and Control 7.5 Characteristics of Production Planning and Control 7.6 Objectives of Production Planning and Control 7.7 Importance of PPC 7.8 Product design and development 7.9 Process of Product design and development 7.10 Techniques of Product Development 7.11 Summary 7.12 Keywords 7.13 Learning activity 7.14 Unit End questions 7.14 References CU IDOL SELF LEARNING MATERIAL (SLM)

7.0 LEARNING OBJECTIVE After studying this unit, you will be able  Types of manufacturing system  Describe the Production and planning control  Describe the Product design and development  Importance of PPC  Process of Product design and development  Technique of product development 7.1 INTRODUCTION Manufacturing, a branch of industry, is the application of tools and processes for the transformation of raw materials into finished products. The manufacturing sector is closely connected with engineering and industrial design. Some industries, such as semiconductor and steel manufactures use the term fabrication instead. Manufacturing includes all intermediate processes required for the production and integration of a product’s components. The term manufacturing system refers to a collection or arrangement of operations and processes used to make a desired product or component. It includes the actual equipments for composing the processes and the arrangement of those processes. In a manufacturing system, if there is a change or disturbance in the system, the system should accommodate or adjust itself and continue to function efficiently. Normally the effect of disturbance must be counteracted by controllable inputs or the system itself. 142 CU IDOL SELF LEARNING MATERIAL (SLM)

Figure 7.1 Manufacturing system 7.2 TYPES OF MANUFACTURING SYSTEMS The manufacturing systems differ in structure or physical arrangement. According to the physical arrangement, there are four kinds of classical manufacturing systems and two modern manufacturing systems that is rapidly gaining acceptance in industries. The classical systems are, 1. Job shop 2. Flow shop 3. Project shop 4. Continuous process The modern manufacturing systems are 1. Linked cell system (Cellular manufacturing system) 2. Flexible manufacturing system (FMS) In the world of manufacturing, there are a lot of systems to choose from, each with its ideal 143 CU IDOL SELF LEARNING MATERIAL (SLM)

use case and set of advantages and drawbacks. Having the appropriate manufacturing system for your product can yield a variety of benefits, including the ability to maintain the high quality of your goods, being more efficient in your production processes and saving money across the board. The right system can also help you produce higher volumes, thereby meeting your production volume targets. According to the book Handbook of Design, Manufacturing, and Automation by Richard C. Dorf and Andrew Kusiak, there are four types of manufacturing systems: custom manufacturing, intermittent manufacturing, continuous manufacturing and flexible manufacturing. 7.2.1 Custom Manufacturing Systems Custom manufacturing is by far the oldest and most popular type of manufacturing system in existence. It also happens to be associated with both the highest-quality products and the lowest-volume efficiency. In the custom manufacturing system, each item is produced by a single craftsperson, who works solely by hand or with the help of a machine. When machines are used, they tend to be highly specialized to their task and cannot produce more than one item at a time. This system will tend to have the highest unit cost for the product manufactured. As a result, custom-manufactured products are of the highest quality but are also the most expensive products in the market. 7.2.2 Intermittent Manufacturing Systems The intermittent manufacturing system allows companies to make different types of goods using the same production line. Therefore, the manufacturing facility is designed to handle different product sizes and requirements. Generally, the goods are processed in lots to fulfill orders. This system is commonly referred to as a “job shop” due to its popularity in countries with relatively cheap labor making products for multinationals based thousands of miles away. The goods made using this manufacturing method are produced in small quantities, so they may not be suitable for stock. Customization is typically done post-purchase. This type of system is designed for production runs that happen intermittently, hence the name, or products that don’t require high volumes. It uses general purpose machines and requires highly skilled labor. 7.2.3 Continuous Manufacturing Systems Continuous manufacturing systems are designed to enable the mass production of a single 144 CU IDOL SELF LEARNING MATERIAL (SLM)

product. The product goes through an assembly line with different stations where parts are added or worked on a little further. This method first arose during the Industrial Revolution and is most closely associated with the Ford Company, which employed the system to produce Model Ts in the 1920s. This type of production system is ideal when a company has very high volume targets since it reduces the unit cost of the product. It does, however, require a massive capital injection at startup due to the investment in equipment and labor required. 7.2.4 Flexible Manufacturing Systems Flexible manufacturing is a modern manufacturing system that has become very popular. It involves a significant investment in machinery, although it reduces labor costs by implementing robots eschewing human labor altogether. These machines can easily be reconfigured to manufacture different products in different quantities, and the whole process is automatic. This method is called flexible manufacturing due to the flexibility in the variety of high- volume goods it can produce. Due to the automated process, quality control is a lot easier, and unit costs are low. 7.3 CHARACTERISTICS FOR MANUFACTURING Manufacturing is essentially risky, because it presumes there is enough market for a product to make it on a large scale. Managing that risk is the most important part of manufacturing. To manage that risk, manufacturing needs: Productivity: Balancing efficiency with productivity translates to profit. Low productivity means higher costs, due to wasted manpower and overhead. Understanding and balancing the ideal ratio between costs of labor, overhead, materials and demand is critical for any manufacturer. Quality Control: If products are not made with consistent quality, a company may not survive. Customer experiences must be positive across the all branded products, or the entire company could suffer. For example, Samsung’s Galaxy Note could have been a disaster for Samsung when its batteries famously caught fire, causing airlines to ban them from planes. Good Design: Manufacturers must ensure their product is well-designed, so their product can beat out competitors. When designed with quality and innovation, a product stands out from the crowd. It is industry-changing, high-quality design and innovation that have made Apple into a global electronics powerhouse. 145 CU IDOL SELF LEARNING MATERIAL (SLM)

Cost Effectiveness: From labor allocation to robotic support through to material quality and price per unit, there is much that affects the cost effectiveness in manufacturing. Without being cost effective, a product will fail and jeopardize the entire company's bottom line. The car industry makes production more cost-effective by creating different models of cars based on shared platforms. Chrysler-Daimler, for instance, has used the same platform for both the Jeep Cherokee and the Mercedes-Benz M-Class, meaning production costs are lower. That’s the benefit of smart design. These, among other waste-reducing, efficiency-increasing methods are products of a movement toward \"lean\" manufacturing, which Toyota's efficient strategies have helped pioneer for over 40 years. 7.4 PRODUCTION PLANNING AND CONTROL Production planning and control is an important task of Production Manager. It has to see that production process is properly decided in advance and it is carried out as per the plan. Production is related to the conversion of raw materials into finished goods. This conversion process involves a number of steps such as deciding what to produce, how to produce, when to produce, etc. These decisions are a part, of production planning. Merely deciding about the task is not sufficient. The whole process should be carried out in a best possible way and at the lowest cost. Production Manager will have to see that the things proceed as per the plans. This is a control function and has to be carried as meticulously as planning. Both planning and control of production are necessary to produce better quality goods at reasonable prices and in a most systematic manner. Production planning is the function of looking ahead, anticipating difficulties to be faced and the likely remedial steps to remove them. It may be said to be a technique of forecasting ahead every step in the long process of production, taking them at a right time and in the right degree and trying to complete the operations at maximum efficiency. Production control, on the other hand, guides and directs flow of production so that products are manufactured in a best way and conform to a planned schedule and are of the right quality. Control facilitates the task of manufacturing and see that everything goes as per the plans. Goldon B. Carson: “Production planning and control involves generally the organization and planning of the manufacturing process. Specifically, it consists of the planning of the routing, scheduling, dispatching and inspection, co-ordination and the control of materials, methods, machines, tooling and operating times. The ultimate objective is the organization of the supply and movement of materials and labour, machine utilization and related activities, in order to bring about the desired manufacturing results in terms of quantity, time and place.” 146 CU IDOL SELF LEARNING MATERIAL (SLM)

James L. Lundy: “Basically, the production control function involves the co-ordination and integration of the factors of production for optimum efficiency. Overall sales orders or plans must be translated into specific schedules and assigned so as to occupy all work centres but overload none. The job can be done formally in which case elaborate charting and filing techniques are used ; or it can be done informally, with individuals’ thoughts and retention there of supplanting tangible aids.” Charles A. Koepke: “Production planning and control is the coordination of a series of functions according to a plan which will economically utilize the plant facilities and regulate the orderly movement of goods through the entire manufacturing cycle, from the procurement of all materials to the shipping of finished goods at a predetermined rate.” 7.5 CHARACTERISTICS OF PRODUCTION PLANNING AND CONTROL The forgoing discussion brings out the following traits of production planning and control:  It is the planning and control of manufacturing process in an enterprise. The questions like—What is to be manufactured? When it is to be manufactured? How to keep the schedule of production etc.? —are decided and acted upon for getting good results.  All types of inputs like materials, men, machines are efficiently used for maintaining efficiency of the manufacturing process.  Various factors of production are integrated to use them efficiently and economically.  The manufacturing process is organized in such a way that none of the work centres is either overworked or under worked. The division of work is undertaken very carefully so that every available element is properly utilized.  The work is regulated from the first stage of procuring raw materials to the stage of finished goods. 7.6 OBJECTIVES OF PRODUCTION PLANNING AND CONTROL Planning of production precedes control. Whatever is planned needs to be controlled. The ultimate objective of both planning and control is to use various inputs in an efficient way and to have a proper control over various targets and schedules fixed earlier. 147 CU IDOL SELF LEARNING MATERIAL (SLM)

Production Planning: 1. To determine the requirements for men, materials and equipment. 2. Production of various inputs at a right time and in right quantity. 3. Making most economical use of various inputs. 4. Arranging production schedules according to the needs of marketing department. 5. Providing for adequate stocks for meeting contingencies. 6. Keeping up-to-date information processes. Production Control: 1. Making efforts to adhere to the production schedules. 2. Issuing necessary instructions to the staff for making the plans realistic. 3. To ensure that goods produced according to the prescribed standards and quality norms. 4. To ensure that various inputs are made available in right quantity and at proper time. Functions of PPC Like other manufacturing industry, Production planning and Control (PPC) department is one of the most important department in garment manufacturing industry. It plays an important role in apparel export business. It helps to build-up strong relationship with the other departments to obtain maximum output from the export order. To cope with the short lead time and small but frequent orders, apparel manufacturers strive to improve their production processes in order to deliver finished products within the expected time frame at the lowest production cost. Production planning is therefore gaining importance in contemporary apparel manufacturing. Production control is the activity of monitoring and controlling garment production or operation. It ensures that quantities booked into warehouse match cut quantities. It influences to ensure having goods made on time, of adequate quality, and at reasonable cost. Production control is the key tool for reduce wastage and cost. In this article we will discuss on functions or activities of production planning and control of clothing industry. Functions of production planning and control of apparel industry: 148 The functions of PPC could be discussed in two individual stages as shown in CU IDOL SELF LEARNING MATERIAL (SLM)

Figure 7.2 PPC Functions of production planning: Production planning involves everything from scheduling each task in the process to execution and delivery of products. The production planning functions include the following: 1. Estimating: It involves determining the quantity of garments to be produced and associated cost involved for the same based on the sales forecast. Determinations of raw materials and labour required to meet the planned targets and machine capacity are the vital activities prior to budgeting for resources. 2. Routing It is the method of determining the chain of operations to be carried out in the production line to complete the assembling of garments. This information is given by a product engineering function and is beneficial to make machine loading charts. A route sheet is a document giving the guidelines and information for conversion of raw materials into finished products. Route sheets contain the following information: The necessary operations and their sequence.  Machine has to be used for every operation. 149 CU IDOL SELF LEARNING MATERIAL (SLM)