PRODUCTION_AND_OPERATION_MANAGEMENT_grp_1_procurement[1].pptx

business notes

1. INSTITUTION: MAASAI MARA UNIVERSITY SCHOOL: BUSINESS AND ECONOMICS DEPARTMENT: BUSINESS MANAGEMENT COURSE TITLE: PRODUCTION AND OPERATION MANAGEMENT COURSE UNIT: BCM 4250-1 TASK: GROUP ASSIGNMENT SPECIALIZATION: PROCUREMENT GROUP ONE STUDENT NAMES ADMISSION NUMBERS Kangethe Mary Wanjugu BB07/SR/MN/11180/2020 Ndungi Michael Munyao BB07/SR/MN/11216/2020 Odhiambo Stephen Wewo BB07/SR/MN/13288/2020 Denis Ashiono BB07/SR/MN/11293/2020 Pascal Kipleting BB07/SR/MN/8299/2018 Prisca Kwamboka Oteyo BB07/SR/MN/9029/2019 Stephen Hosea BBM/235/2015 Stephen Tikani BB07/JP/MN/13665/2021 Angeso Felix Otieno BB07/SR/MN/11304/2020 Dalmas Nzungo BB07/SR/MN/4157/2017

2. 1.a) Explain meaning of the following terms as used in production and operations Management (POM) (8 marks) Production-   Refers to the process that transforms the inputs/resources of an organization into final goods (or services) through a set of defined, controlled, and repeatable policies. By policies, we refer to the rules that add value to the final output. ii) Operations- Refers to the comprehensive management of the processes and activities involved in transforming inputs such as(raw materials, labor, and capital) into output which can be goods and services. It encompasses the planning, coordination, and control of various resources and activities within an organization to ensure the efficient and effective delivery of products or services to meet customer demand. iii)Material handling- Refers to the movement of materials and goods from one location to another. It includes protecting, storing, and controlling the materials, from manufacturing to distribution iv)Economic order quantity- (EOQ) is a calculation companies perform that represents their ideal order size, allowing them to meet demand without overspending. Inventory managers calculate EOQ to minimize holding costs and excess inventory.

3. 1.b)Discuss any four objectives of production and operations management in a firm. i ) Maximum Customer Satisfaction through Quality, Reliability, Cost, and Delivery Time : Quality: Ensuring that the products or services meet or exceed customer expectations in terms of performance, durability, and features. Reliability: Consistency in delivering products or services without defects or failures, establishing trust with customers. Cost: Striving to produce goods or deliver services at the lowest possible cost without compromising quality, to offer competitive prices to customers. Delivery Time: Meeting or exceeding customer expectations regarding the timely delivery of products or services. ii) Optimum Inventory Level: Efficient Inventory Management: Balancing the need for maintaining an adequate level of inventory to meet customer demand while avoiding excessive holding costs. Just-in-Time (JIT): Minimizing inventory levels by synchronizing production with demand, reducing storage costs and the risk of obsolescence.

4. iii) Higher Operation Efficiency: Process Optimization: Continuously improving and streamlining production processes to enhance efficiency and reduce waste. Resource Utilization: Maximizing the use of available resources, such as labor, machinery, and technology, to achieve higher productivity. Lean Manufacturing: Adopting principles to eliminate non-value-added activities, reduce lead times, and improve overall efficiency. iv) Minimum Production Cycle Time: Faster Turnaround: Striving to reduce the time it takes to complete each stage of the production process, leading to quicker delivery of goods or services. Agile Operations: Embracing flexibility and responsiveness in production processes to adapt quickly to changes in customer demands or market conditions. Time-to-Market: Accelerating the development and launch of new products or services to gain a competitive edge in the market. By focusing on these objectives, a firm can enhance its overall competitiveness, meet customer expectations, and achieve operational excellence in the dynamic business environment.

5. c) By aid of relevant examples, describe the following classification of production systems. Job-Shop Production 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. The 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. 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, part Examples of companies that would use the job shop manufacturing method are: a paint shop, a machine tool shop, a commercial printing shop, a machining center, and other factories that create customized products in small batches and offer customization.

6. ii)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. Mass Production is characterized by Standardization of product and process sequence. Dedicated special purpose machines having higher production capacities and output rates. Large volume of products. Shorter cycle time of production. Lower in process inventory. Perfectly balanced production lines.

7. Examples of mass production: Custom Furniture Manufacturing: A workshop that produces custom-made furniture is a classic example of a job shop production system. Each piece of furniture is unique, and the production process involves customization based on customer preferences, such as size, design, and materials. Machine Shop: A machine shop that produces precision components for various industries is another example. Each component may require different machining processes and specifications, and the production is organized to handle diverse orders. Print Shops: Print shops that handle custom printing orders, such as wedding invitations or business cards, operate as job shops. Each print job can have unique design elements, sizes, and materials.

8. 2. Adoption of Computer Integrated Manufacturing does result in a firm’s competitive advantage. With reference to the statement, discuss any four strategic advantages derived from such technology adoption Computer Integrated Manufacturing (CIM) refers to the use of computers and software to integrate various manufacturing processes within a single, seamless system. The adoption of CIM can indeed provide several strategic advantages for a firm, contributing to its competitive edge. Here are four key strategic advantages derived from the adoption of Computer Integrated Manufacturing: i)Improved Efficiency and Productivity: Automation of Processes: CIM facilitates the automation of various manufacturing processes, reducing manual intervention and minimizing errors. This leads to increased efficiency in production, as machines can operate continuously without the need for frequent human intervention. Optimized Workflow: CIM systems enable the optimization of production workflows by streamlining the entire manufacturing process. This results in reduced lead times, faster production cycles, and enhanced overall productivity. ii)Enhanced Quality Control: Real-time Monitoring and Control: CIM allows for real-time monitoring of manufacturing processes. With sensors and control systems integrated into the production line, any deviations from quality standards can be immediately identified and corrected. This ensures a consistently high level of product quality. Data-driven Decision-making: The collection and analysis of data generated by CIM systems provide valuable insights into the production process. This data-driven approach allows for continuous improvement in quality control, reducing defects and enhancing the overall quality of products.

9. iii)Flexibility and Responsiveness: Agile Manufacturing: CIM supports agile manufacturing practices by allowing quick reconfiguration of production processes to accommodate changes in product design or customer requirements. This flexibility enables companies to respond rapidly to market demands, introducing new products or modifying existing ones with minimal disruption to the production process. iv)Customization Capabilities : With CIM, it becomes easier to customize products on a mass scale. The ability to tailor products to specific customer needs can be a significant competitive advantage in markets where personalization and customization are valued. iv)Cost Reduction : Resource Optimization : CIM systems enable better utilization of resources, including materials, labor, and energy. By minimizing waste and maximizing efficiency, firms can significantly reduce production costs. Supply Chain Integration : Integration of CIM with supply chain management systems allows for improved coordination between manufacturing and other business processes. This integration helps in reducing inventory levels, avoiding stockouts, and optimizing the overall supply chain, leading to cost savings. In conclusion, the adoption of Computer Integrated Manufacturing provides strategic advantages by improving efficiency, enhancing quality control, providing flexibility, and contributing to cost reduction. These advantages collectively contribute to a firm's competitive edge in the dynamic and demanding manufacturing landscape.

10. 2.a)Materials management is that aspect of management function which is primarily concerned with the acquisition, control and use of materials needed and flow of goods and services connected with the production process. With reference to the statement, discuss the rationale behind effective materials management. Material management simply refers to the process of planning, procuring, storing, controlling and distributing materials used in an organization’s operations. Material management involves wide range of activities related to procurement, storage and utilization of raw materials, component and finished products Effective material management involves efficient and strategic handling throughout the supply chain and within an organization. This includes planning, procurement, storage, distribution and utilization of materials to support material processes and meet customer d demand. Below are the justification of effective material management for the success of an organization: i.) Optimal resource utilization - Effective material management ensures that resources are used efficiently. This minimizes waste, preventing overstocking or stock out thus reducing inventory levels. By optimizing the use of materials, a company can reduce cost and improve profitability.

11. 2. Production efficiency- materials management ensures that the right materials are available at the right time and in the right quantity for the production process. This contributes to efficient production schedules, minimizes downtime, and allows for smoother operation. 3. Cost control- effective materials management helps in controlling these costs by negotiating favorable prices with suppliers, minimizing carrying costs through efficient inventory control, and reducing waste. By controlling cost a company can improve its competitiveness in the market. 4. Supplier relationships- effective material management involves building and maintaining effective relationships with suppliers. Strong supplier relationships can result in better pricing, improved delivery times, and access to new and innovative materials, thus strengthening the organization’s supply chain. 5. Quality control- effective materials management ensures the availability of high-quality materials for production. This involves establishing quality standards and maintaining good relationships with suppliers, thus contributing to improved product quality and customer satisfaction. 6. Risk management- proper materials management helps mitigate risks associated with supply chain disruptions, price fluctuations, or quality issues. By having contingency plans and alternative suppliers, an organization can better handle unexpected events that could impact its materials supply.

12. 2. b)Discuss four factors determining effective production capacity planning . Capacity Planning is the process of analyzing how much production capacity organizations need to meet customer demand. Several factors play a key role in determining the effectiveness of production capacity planning. Here are four important factors: i) Resources Available- The availability of essential resources such as raw materials, labor, and machinery plays a pivotal role in production capacity planning. A careful assessment of these resources ensures that the production process can meet the demand without interruptions, optimizing efficiency. ii) Demand Forecasting- Accurate prediction of future demand is crucial for effective production capacity planning. A comprehensive understanding of market trends, customer preference, and external factors helps in estimating the demand accurately, preventing overcapacity or under-capacity issues. iii)Technology and Innovation- Incorporating advanced technologies and innovative production methods enhances efficiency and flexibility in capacity planning. Adapting technologies allows quicker adjustment to changing demands and ensures that production processes remain competitive and cost-effective. iv) Risk Management- identifying potential risks and developing contingency plans to mitigate them.

13. 3. a) An excellent design provides competitive advantage to the manufacturer, by ensuring appropriate quality, reasonable cost and expected product features. In relation to the statement, discuss any five factors that influence product design. Product design describes the process of imagining, creating, and iterating products that solves users problems or address specific needs in a given market. The factors influencing product design or factors that affect design are as follows; Functionality Customer needs and preferences Materials Costs and manufacturing efficiency Technology and innovation i) Functionality- the designed product should be functionally commanding and should extensively meet the end goal. Functionality influence the product design and it is the designers responsibility to maintain the coordination between the look and the way the product needs to work.

14. ii) Customer needs and preferences- understanding customer needs, preferences, and behaviors is essential for designing a product that meets the market demand. Factors such as usability and functionality need to be carefully considered to ensure that the product aligns with the customer’s expectations and provides value. iii) Materials- having adequate knowledge of the materials before designing a product is essential. The designer must be updated with all the materials and technology existing in the market. The quality of materials preferred while producing a product has a major impact on the factors affecting new product design. To impress the audience and to create the desired product, the designer must be aware of the availability of finer materials. iv) Cost and manufacturing efficiency- designing products that can be manufactured and cost-effectively can provide a competitive advantage. Factors such as materials, and production methods, can impact manufacturing costs and influence product affordability and profitability. v) Technology and innovation- advancement in technology and innovation can greatly influence product design. Manufacturers need to integrate the latest technologies and innovative features to stay competitive in the market. This may involve incorporating new materials, manufacturing processes, or digital capability to enhance the product’s performance and appeal.

15. 3. b) plant location may be understood as the function to determine where the plant should be located for maximum operating economy and effectiveness. By aid of relevant examples discuss the factors considered in the selection of plant location. Proximity to raw materials- choosing a location close to raw material sources reduces transportation costs and ensures a steady supply. Labor supply- the prospective plant owner has to choose the site in such a way that labor should be present in adequate numbers with low cost. The labor should be skilled to a good level. If labor is not present in sufficient numbers it will increase downtime of production and decrease plant efficiency. Government policies- in particular areas, a new plant can not be started due to some rules and regulations made by the government. There are also some subsidiaries and other facilities to support small-scale industries to grow. Environmental considerations- assessing the environmental impact and compiling with the environmental regulations is increasingly important for sustainable and responsible business practices. Supply of capital- capital is required for the industries for production, day-to-day working, expansion, marketing, etc. Large-scale production requires a large amount of capital which may be raised by shares, debentures etc.

16. 4. a) Highlight any five characteristics of a good product design. A good product design exhibits several key characteristics that contribute to its success and including; Functionality – the design should effectively perform its intended function, meeting the needs and expectations. Cost efficiency- balancing features and production costs is crucial to offer value for money and economic feasibility. Aesthetic relevance- aesthetics plays an important role in the future of product design. It brings up a positive attitude in the users. The product needs to be functional and easy to use while at the same time, it should possess aesthetic power. Durability – a durable design increases the product’s lifespan, reducing maintenance costs and enhancing customer satisfaction. Scalability- a design that allows for easy adaptation to different sizes or variations that can accommodate changes in the market demands or technological advancements.

17. 4. b) Quality control(QC) maybe defined as a system that’s used to maintain a desired level of quality in a product or service. In reference to the statement, highlight the objectives of quality control in a production and operations set-up. Cost reduction- identifying and minimizing defects, errors and rework, which ultimately reduces cost associated with scrap, rework, warranty claims, and customer complains. Improved production methods- quality control processes help streamline and improve production processes, which means improved methods and designs and often higher productivity. Ensures effective use of resources- quality control ensures that companies are effectively utilizing resources by minimizing product and material waste and increasing efficiency. Market competitiveness- enhancing the competitiveness of the organization by differentiating product and services based on superior quality, leading to increased market share and profitability To raise employee morale- when employee recognizes that they are producing high quality products that deliver value to customers, it can improve overall company morale Boost sales- consistent quality control can help the company develop a reputation for quality, which may attract more customers and increase sales.

18. 5.a) Discuss the general principles of plant layout. Plant layout is simply the physical arrangement of equipment, machinery, workstations, and other resources within an industrial facility. Plant layout involves the design and organization of the overall layout of production lines, storage areas, offices, and support facilities to optimize the flow of materials, resources, and people, as well as the efficiency and productivity of the operation. A well-designed plant layout considers factors such as workflow, safety, space utilization, material handling, and future flexibility to create an effective and efficient production environment. The goal of plant layout is to streamline processes, minimize waste, and create a safe, productive, and ergonomic working environment. The following are the general principles of plant layout Functionality : the layout should be designed to facilitate the smooth flow of materials, equipment, and personnel. This entails organizing work areas, storage, and processing facilities to minimize unnecessary movement and streamline production processes Flexibility: A good plant layout should allow for flexibility and adaptability to accommodate changes in production processes, product lines, or technological advancements. this can be achieved through modular designs, versatile workstations, and scalable infrastructure.

19. Safety: The layout should ensure clear pathways, proper ventilation, adequate workspace, and safe equipment placement to minimize hazards and prevent accidents. Material handling : the layout should consider the efficient movement of raw materials, work-in-progress, and finished goods. It should minimize material handling distances and time, utilizing the most suitable equipment and technology for transportation and storage. Environmental considerations : layouts should address environmental factors, such as waste disposal, emission control, and energy efficiency, to comply with environmental regulations and minimize the impact of operations on the surrounding area. Space utilization : efficient use of space is vital in plant layout design. The layout should optimize the use of available areas for production, storage, and support facilities while avoiding clutter and unnecessary congestion.

20. 5. b) Galagala Enterprises manufactures chicken feeds within its Limuru Premises. The hourly value in Kenya shillings of its output, including finished goods and work in progress, is Kshs. 14280. the value of inputs (labor, materials, capital) is approximately Kshs. 16528. Required i) Calculate the total hourly productivity measure for Galagala Enterprises (4 mks) Total hourly Product is calculated with the formula stated below Total productivity= Output/Input total productivity=Kshs.14,280/ Kshs. 16,528 = 0.863 The total hourly productivity measure for Galagala Enterprises is approximately 0.863.

21. 5. ii) Highlight any three importance of measuring productivity in a firm. (6mks) Performance evaluation : Measuring productivity provides a basis for evaluating the overall performance of the firm. It allows management to assess the effectiveness of their resources and identify areas for improvement. Cost control : productivity measurement helps in identifying inefficiencies and waste in the production process. This can lead to cost-saving opportunities by optimizing the use of resources. Decision-making: Productivity measurement provides valuable information for decision-making processes. It helps managers to make informed choices about resource allocation, process improvements, and strategic planning. In conclusion, measuring productivity is essential for evaluating performance, controlling costs, and making informed decisions. By understanding productivity levels, firms can achieve greater efficiency and competitiveness in the market. END OF PRESENTATION