Lecture-4 Operation Management MBA303.pptx

Lecture-4 Operation Management MBA303.pptx

1. SUBJECT MBA303: OPERATION MANAGEMENT LECTURE NO .- 4 Dr. Moiz Akhtar Faculty of Commerce & Management Integral University, Lucknow CENTRE FOR DISTANCE AND ONLINE EDUCATION INTEGRAL UNIVERSITY, LUCKNOW

2. Topics Covered Layout and Flow Process Technology

3. Topic 1 Layout and Flow

4. Content Basic layout types Selecting a layout type Detailed design of a layout

5. Layout: The layout of an operation is concerned with the physical location of its transforming resources, that is deciding where to put the facilities, machines, equipment and staff in the operation. Layout types: Fixed position layout Process layout Cell layout Product layout

6. Fixed position layout In a fixed position layout, the transformed resource does not move between its transforming resources. Equipment, machinery, plant and people who do the processing move as necessary because the product or customer is either: Too large Too delicate or Objects being moved

7. Process layout In a process layout, similar processes or processes with similar needs are located together because: It is convenient to group them together or The utilization of the transforming resource is improved Different products of customer have different requirements therefore they may take different routes within the process. The flow in a process layout can be very complex.

8. An example of a process layout in a library showing the path of just one customer Entrance Exit On-line and CD-ROM access room Loan books in subject order Enquiries Store room Counter staff Copying area Company reports To journal sack Current journals Reserve collection Reference section Study desks

9. Cell layout In a cell layout, the transformed resources entering the operation move into a cell in which all the transforming resources it requires in located. After being processed in the cell, the transformed resource may move to a different cell in the operation or it may be a finished product or service. Each cell may be arranged in either a process or product layout. The cell type layout attempts to bring order to the complex flow seen in a process layout.

10. The ground floor plan of a department store showing the sports goods shop-within-a-shop retail ‘cell’ Sports shop Menswear Women’s clothes Luggage and gifts Confectionery, newspaper, magazines and station e ry Books and videos Footwear Perfume & jewellery Elevators Entrance Entrance

11. Product layout In a product layout, the transformed resource flow a long a line of processes that has been prearranged. Flow is clear, predictable and easy to control .

12. An army induction centre with uses product layout Lecture theatre Uniform issuing area Uniform store Waiting area Waiting area Doctor Doctor Doctor Doctor Doctor Doctor Blood test Blood test Blood test X-ray X-ray X-ray Record personal history and medical details

13. A restaurant complex with all four basic layout types Fixed-position layout service restaurant Cell layout buffet Line layout cafeteria Cool room Freezer Vegetable prep Grill Preparation Oven Process layout kitchen Main course buffet Starter buffet Desert buffet Service line

14. Fixed-position layout Product layout Cell layout Process layout Volume Low High Variety Low High Flow is intermittent Regular flow more important Flow becomes continuous Regular flow more feasible Volume-variety relationship

15. Project process Jobbing process Batch process Mass process Continuous process Professional services Service shops Mass services Fixed position layout Process layout Cell layout Product layout The physical position of all transforming resources The flow of the operation’s transformed resources Process type Basic layout type Detailed design of layout Volume and variety Strategic performance objectives Decision 1 Decision 2 Decision 3 Layout selection steps

16. Selecting a layout type

17. 1) The nature of the basic layout types B asic layout types Manufacturing process types Service process types Fixed position layout Project processes Process layout Cell layout Product layout Jobbing processes Batch pro cesses Mass processes Continuous processes Professional services Service shops Mass services Project processes

18. 2) Advantages and disadvantages Fixed position layout Process layout Cell layout Product layout Disadvantages Advantages - Very high mix and product flexibility - Product/customer not moved or disturbed. - Very high unit cost. - Scheduling space and activities can be difficult. - High mix and product flexibility - Relatively robust if in the case of disruptions Low utilization of resources. Can have very high WIP Complex flow. - Good compromise between cost and flexibility - Fast throughput. - Group work can result in good motivation Can be costly to rearrange existing layout Can need more plant and equipment Lo- w unit costs for high volume - Gives Opportunities for specialization of equipment Can have low mix and flexibility Not very robust to disruption Work can be very repetitive. - High variety of tasks for staff - Easy supervision of equipment of plant - Gives Opportunities for specialization of equipment

19. (a) The basic layout types have different fixed and variable cost characteristics which seem to determine which one to use. (b) In practice the uncertainty about the exact fixed and variable costs of each layout means the decision can rarely be made on cost alone Use fixed-position Use fixed-position or process Use process Use process or cell Use process or cell or product Use cell or product Use product Volume Costs Fixed-position Process Cell Product Volume Costs Use product Use cell Use process Use fixed-position (a) (b) ? ? ? ? 3) Consider total cost

20. Cell layout design Cells in an operation can be created based on two interrelated decisions: What is the extent and nature of the cell i.e. the amount of direct and indirect resources the cell Which resources to allocate to which cell using: Cluster analysis – which process group naturally together Parts and family coding – based on similar characteristics of parts of products OR Production Flow Analysis (PFA) Examines both product requirement and process grouping

21. Types of cell High High Low Low Complete component manufacturing cell Lunch and snack produce area in supermarket Small multi-machine manufacturing cell Joint reference and copying room in a library Plant-within-a-plant manufacturing operation Maternity unit in a hospital Specialist process manufacturing cell Internal audit group in a bank Amount of indirect resources included in the cell Proportion of the resources needed to complete the transformation included in the cell e.g. e.g. e.g. e.g.

22. Product layout design Product type layout is designed based on a technique called line balancing. The technique consist of the following steps: Calculating the required cycle time . Calculating the number of stages . Producing a precedence diagram . Finally allocating activities to the stages.

23. Topic 2 Process Technology

24. Process Technology There are different process technologies. Each of these process technologies is used to create and deliver products and services. Process technology is depending on information processing technologies, customer process technologies and so as other technology. Process technology is separated by operations. Introduction

25. What is Process Technology? Process technology is the heart of all industries that involve the production of consumer goods from raw material: from soft drink bottlers to petroleum refineries to the production of electricity. Process technology is essential in the production of gasoline, airplane fuel, gas, plastic soft drink bottles, glass jars and bottles, pharmaceuticals, and even Jelly Bellies.

26. What Process Technicians do?

27. Strategy of product Strategic of process decisions Why is a product strategy important? Elements of a product strategy Creating your product strategy Power of the product strategy Process structure Customer involvement Resource flexibility Capital intensity Strategic implication of product and process decisions

28. Strategy of product

29. Why is a product strategy important?

30. Elements of a product strategy

31. Creating your product strategy

32. Power of the product strategy

33. Strategic of process decisions

34. Strategic of process decisions Process structure : determines the process type relative to the kinds of resources needed and how resources are partitioned between them. A layout, which is the physical arrangement of operations created from the various processes, puts these decisions into tangible form. Customer involvement :  reflects the extent of customers participation in the processes. Resource flexibility:   . refers to the ease with which employees and equipment can handle a wide variety of products, output levels, duties, and functions. Capital intensity :  is the mix of equipment and human skills in a process. As the relative cost of equipment increases, so does capital intensity.

35. Process Planning and Design At the time of designing a product, preliminary consideration is given to the capacity of the firm to manufacture the product. The technology required and the particular machines and processes needed are determined and compared to what is available in the firm. If production is compatible with the existing manufacturing capacity or if the needed capacity can be acquired, the decision is taken to continue designing the product .If not, the decision may be to terminate the design effort. process planning and process design must be taken up .As the process plans are firmly established, the processing time requirements of specific machinery and equipment are generated .

36. Process Planning Process planning is concerned with planning the conversion or transformation processes needed to convert the materials into finished products A production process is a series of manufacturing operations performed at workstations to achieve the design specifications of the planned output

37. Process Design

38. The sequence of operations in the manufacturing process is determined by Process Design

39. Operations Design

40. Work measurement

41. The Purpose of Work Measurement Work measurement is concerned with investigating, reducing and subsequently eliminating ineffective time, that is time during which no effective work is being performed, whatever the cause. Work measurement, as the name suggests, provides management with a means of measuring the time taken in the performance of an operation or series of operations in such a way that ineffective time is shown up and can be separated from effective time

42. The Uses of Work Measurement

43. In the process of setting standards it may be necessary to use work measurement : To compare the efficiency of alternative methods. Other conditions being equal, the method which takes the least time will be the best method. To balance the work of members of teams, in association with multiple activity charts, so that, as nearly as possible, each member has a task taking an equal time to perform. To determine, in association with man and machine multiple activity charts, the number of machines an operative can run.

44. The time standards, once set, may then be used To provide information on which the planning and scheduling of production can be based, including the plant and labor requirements for carrying out the programme of work and the utilization of available capacity. To provide information on which estimates for tenders, selling prices and delivery promises can be based. To set standards of machine utilization and labor performance which can be used for any of the above purposes and as a basis for incentive schemes ?

45. The time standards, once set, may then be used, cont….

46. Techniques of work measurement Time study Activity sampling Predetermined motion time systems

47. Time study Time Study consists of recording times and rates of work for elements of a specified job carried out under specified conditions to obtain the time necessary to carry out a job at a defined level of performance

48. Activity sampling Activity sampling is a technique in which a large number of instantaneous observations are made over a period of time of a group of machines, processes or workers .

49. Predetermined motion time systems A predetermined motion time system is a work measurement technique whereby times established for basic human motions (classified according to the nature of the motion and the conditions under which it is made) are used to build up the time for a job at a defined level of performance.

50. Thank You