Production & operation management

Q.1Write short notes on: (a) Outsourcing strategies for capital productivity. (b)
Implementation of operations. (c) Basic competitive priorities. (d) Market
survey method of forecasting.
Ans

Outsourcing strategies
When capacity requirements are determined, it is easy to figure out whethersome goods
or services can be outsourced. Outsourcing can reduce thecapital and manpower
requirements. Outsourcing also helps inimproved product design and even enables
better networking andcollaborations.

Lack of expertise The outsourced firm may not have the requisite expertise to do
the job required.
Quality considerations Loss of control over operations may result inlower quality.
Nature of demand When the load is uniform and steady, it may not be worthwhile
to outsource. Absence of supervision and control may be a hindrance to meet any
urgent requirements of the customer. This affects the business, especially if no
production facilities are built in theorganisation.
Cost It may not be worthwhile when the fixed costs that go along withmaking the
product does not get reduced considerably.

Implementation of operations
Implementation is the process of executing the planned operations. Whenplanning and
controlling functions are put together, we call it asImplementation of Operations.

Estimating Estimating gives the quantities to be made at each workstation

depending on the sales forecast, provision for buffer stock, quantities bought out,
services outsourced, likely shortfalls, and others.It is made on the basis of capacity.
Routing Routing determines the sequence of operations and the machines that do
them, so that work flow, as determined by theprocesses, is smooth resulting in
minimum inventory.
Scheduling Scheduling is mainly concerned with allocating time slots for different
jobs. It specifies as to when the jobs start and end at particular workstations. The
purpose is to prevent the imbalances among work centres and to utilise the labour
hours in such a way thatestablished lead times are maintained.
Dispatching Dispatching is concerned with moving of the materials with tools, jigs,
and fixtures to specific machines along with the drawings and ensuring inspections at
specific nodes, so that the materials move inthe supply chain.
Expediting Expediting ensures that all the above are being done properly. Reports
are generated and any bottleneck that gets created isremoved.

Competitive Priorities
To achive good results, a clear understanding of theoperating advantages and a good
cross functional coordination betweenfunctional areas of marketing, production, finance,
and human resourcesdepartments are required. Operating advantages depend on its
processesand competitive priorities considered while establishing the capabilities.
Thebasic competitive priorities are:

Cost
Quality
Time
Flexibility

Cost -Cost is one of the primary considerations while marketing a product or aservice.
Being a low cost producer,the product accepted by the customeroffers sustainability and
can outperform competitors. Lower price and betterquality of a product will ensure
higher demand and higher profitability
Quality -Quality is defined by the customer. The operations manager looks into
twoimportant aspects namely high performance design and consistent quality.High
performance design includes superior features, greater durability,convenience to
services, etc where as consistent design measures thefrequency with which the product
meets its design specifications andperforms best.
Time -Faster delivery time, on-time delivery, and speedy development cycle arethe time
factors that operations strategy looks into. Faster delivery time isthe time lapsed
between the customer order and the delivery. On-timedelivery is the frequency with
which the product is delivered on time.
Flexibility - Flexibility is the ability to provide a wide variety of products, and it
measureshow fast the manufacturer can convert its process line used for one productto
produce another product after making the required changes. The twotypes of flexibilities
are:

Customization
Volume flexibility

While customization is the ability of the firm to satisfy the specific needs ofeach its
customer, the volume flexibility is the ability to accelerate ordecelerate the rate of
production to handle the fluctuations in demand. Forexample, the production of fertilizers
of different specifications andapplications.

Market surveys
Conducting surveys among the prospective buyers or users is a very oldmethod of
forecasting. Here, a questionnaire is prepared and circulatedamong the people and their

responses are obtained. The responses arecollated and analyzed to reveal possible clues
towards acceptance orotherwise about a new product or service. Based on the overall
decision, theforecasting is done. This method is typically done for new products or atnew
places where a product is to be launched. In this method, the numberof respondents and
how responses are gathered like through oralinterviews, personal talks, internet based,
postal ballots, etc, have to beestablished before survey. The common limitations are the
sample size andthe way of drawing the sample like random, convenient, or
judgmental.Sample bias is not completely ruled out.

Q.2 Case study: Gujratsemergence...................................are implemented.

1) List the general factors that favour Gujarat as a destination for
automobile manufacturing.
Ans.General Factors:
Good infra facilities like connectivity, rail, road.
Affordablehousing and other amenities.
Proximity of suppliers.
Locational advantage.
Government support.
2) List the special factors that favour Gujarat as a destination for
automobile manufacturing.
Ans.
Special investment region
Various fiscal and non-fiscal benefits,
Reducing project costs, including time for completing the project cycle.
3) Explain why each of these factors favour Gujarat as automobile
manufacturing hub.
Ans. Good infra facilities like connectivity, rail, road:Gujarat provides
Timely supply of raw materials to the companyby air, road, rail, water.
Proximity of suppliers:Gujarats currently established but relatively mid-sized
auto ancillary units are getting a boost from these automakers, referred to as OE
(original equipment) procedures, asking their tier I, II and III vendors to locate
manufacturing and assembly facilities in and around their main production sites.
Locational advantage:Developing domestic and international financial services,
improving road and air connectivity and focusing on affordable housing and other
amenities could further add to Gujarats locational advantage.
Government support: Another noteworthy policy initiative is establishment of an
automotive skills development institute at Sanand on a public private partnership
basis by Gujarat government and Peugeot Citroen.
4) Compare Gujarat with other states like Tamil Nadu or Haryana in terms of
locating a automobile manufacturing plant.
Ans. Gujarat is a better investment avenue in terms of locality a automobile
manufacturing plant comparisation to Haryana and Tamil Nadu as Gujarat has larger
share of infertile land and when companies are looking for expansion any might not
face any problem in expansion whereas in other states land acquisition for expansion
would be severe problem.
5) Summarize if Gujarat is a better location for manufacturing automobiles.
Ans. Gujarat is eatianly better location for manufacturing automobiles because auto
ancillary hub which are critical for thriving auto hub are located in Rajkot, Ahmedabad
and Vadodara. The Thus Gujarat owns a larger share of non- fertile agriculture land
therefore actuation of land from owners is relatively easier.
Q.3 Write short notes on: (a) 5Ss system of waste elimination (b) Scheduling in
services (c) Vendor managed inventory (d) Subcontracting capacity
(production) option.
Ans.

5Ss system of waste elimination

Historically, production managers have used housekeeping for a neat,orderly, and

efficient workplace and as a means of reducing waste.Operations managers have
improvised housekeeping to include achecklist commonly known as the 5Ss.
The 5Ss are as follows:

Sort/segregate Keep what is needed and remove everything else from the work
area; when in doubt, throw it out. Identify non-value items and remove them. Getting
rid of these items makes space available andusually improves the work flow.

Simplify/straighten Arrange and use analysis tools to improve the work flow and
reduce wasted motion. Consider long-run and short-run ergonomic issues. Label and
display for easy use only what is needed inthe immediate work area.

Shine/sweep Clean daily; eliminate all forms of dirt, contamination,and clutter from
the work area.

Standardise Remove variations from the process by developingstandard operating

procedures and checklists; develop good standards.Standardize equipment and
tooling so that cross-training time and costare reduced. Training and retraining the
work team eliminate deviations.

Sustain/self-discipline Review periodically to recognise the effortsand motivate

the workforce to sustain progress. Use visuals whereverpossible for easy
communication and implementation.

Scheduling in Services
There are distinctive difference between the scheduling followed formanufacturing and
services. All these differences have a direct impact onscheduling. These differences are:

Service operations cannot create inventories to provide buffer fordemand

uncertainties

Demand in service operations cannot be predicted accurately

Demand for service are initiated mostly as unplanned event and hence,there may
be certain distortions in scheduling

Providing the required manpower and skills for the sudden demand in scheduling a
service activity is challenging and sometimes becomescrucial

Scheduling customer demand

Forecasting the demand in advance for service activities is difficult andscheduling
such variable demand poses certain problems.
There are three methods normally used by the scheduler in services. Theyare

Backlogs

Reservations

Appointments

Vendor-managed inventory
The very purpose of JIT is to reduce inventory at all places in the supplychain. Inventory
is considered a waste because inventory is created byusing materials, machines, and
efforts of persons. All of these are resourceswhich have already been used up and that
portion of it which is notconsumed and sent up the value chain causes a drag in the
system.To make this happen,the calculations involving the following are necessary:

Forecasts of the market demand

Capacities of the equipments

Worker absenteeism

Suppliers lead times

Quality of the produced components

The most important requirement for a successful vendor-managedinventory system is a

good communication system.

Subcontracting capacity
A firm can acquire temporary capacity bysubcontracting work during peak demand
periods. Subcontracting,however, has several pitfalls. First, it may be expensive; second,
it risksopening the clients door to a competitor. Third, it is often hard to find theperfect
subcontract supplier, one who always delivers the quality producton time. However, of
late outsourcing has become a complete businesspolicy and cost of operations may be
cited as the main reason. Thus, it ispossible to partly produce the items outside or
completely procure fromoutside. Depending on who is stronger and controlling the whole
processthe subcontracting costs will vary and could be even low.
Q.4Describe the post implementation review of a project. Explain the tools
that may be considered for post implementation review.
Ans.

Post implementation review

After every stage of a project is implemented, it may so happen that therecould be a
minor change or modification which has to be reviewed. This isknown as post
implementation review.
1. Final product review: The product obtained after every stage mustmeet the
requirements of that stage. If it completely meets the statedobjectives, then focus
on the issues of maintenance of the processesand product performance. If the final
product does not completely meetthe objectives then identify the variations in the

product and analyse thevariation. Study the factors responsible for the change and
evaluateeach one separately.
2. Outstanding project work review: Many times it is found that theremay be
some item of the project which is still not in its finished form. Itmay be insignificant
as it may be a by-product of that stage which maynot be required immediately for
the next stage. Then the items that areopen should be resolved and necessary
steps be taken to close suchopen items.
3. Project review: Every aspect of a project from start to end has to bereviewed.
The objectives, performance criteria, financial criteria, resource utilisation, slips
and gains of time, adherence to the projectdefinition, and plans have to be
reviewed. All such review details andreports have to be well documented for future
use.
4. Process review: Every process is important in any project. One mayreview the
process to see, if any changes can be made to improve itsperformance.

Tools for post implementation review

There are various tools for post project implementation review that may beconsidered for
improving and developing processes of the project. Reportsare prepared on the same
which becomes the basis for all future discussion.
1. Final product evaluation: Final product evaluation may be donethrough
regularly organised meetings and quality reviews.
2. Outstanding project work evaluation: All outstanding works of aproject can be
reviewed to check its output quality and performance.
3. Project review questionnaire: Project review questionnaire maybecome
important if the reviews are to be structured. Group discussionmay be initiated
depending upon the points to be discussed.
4. Process evaluation: Evaluation of any process is one of the key issuesof project.
Q.5Explanation of the steps to set data in a logical order.Listing of the
ingredients of a business process.
Ans.

The steps to set data in a logical order.

The purpose of setting the data in a logical order is to, locate deficienciesand remove
them. The following steps should be considered for setting the data in a logicalorder.
1. Check whether the participants in the process that is, people, teams,and electronic
applications are sufficient or, any changes and additionsneed to be made.
2. Ensure that all the data expected is included or not. Generally, we start with an initial
set of data which we have. When we check them with the requirements of the process
for the desired outcomes, we find gaps. These gaps help us in determining which
subset of the data is appropriate at each task in the process.

3. Check whether the data is sufficient for the implementation of the process. This can
be achieved by answering the following questions:
a. What is the path the process should take?
b. What decisions are to be made at any point in the process?
c. Are data available at those points?
4. State the rules used to define the various parts of the process. At this stage, the
naming conventions are also included. This is important to be included at the process
definition stage.
5. Determine the disposition of data at the end of the process and decide the following:
a. Do we plan to keep the data or delete them?
b. If they are to be stored, where and in what form will be used?
c. What are the measures of security for access?
6. Determine the other elements depending upon the business process and the need.
The elements added must be questioned to collect a detail data. It is better to go
deeper into the details and collect data, and make them available at this initial stage,
so that a better model can be prepared

The ingredients of a business process

The ingredients that might be used in a business process can be briefly outlined as
follows:

The data which accomplishes the desired business objective

Acquisition, storage, distribution, and control of data which undertakesthe process

across tasks

Persons, teams, and organisational units which helps to perform andachieve the
tasks

Decisions which enhance the value of data during the process

Q.6Explain the four dimensions of quality.
Ans.

Dimensions of quality
Quality is inherent in the product or service that is rendered to the customer.Since we
are attempting to measure the same, we will look into thoseaspects of quality, called
dimensions of quality.

Quality of design - A product is designed keeping in view thecustomers

requirement. For designing a product, the manufacturer orservice provider should be

aware of the specifications of differentfeatures required to incorporate in the product.

Some of the features tobe known for designing a product include - material,
dimensions, andcharacteristics. The quality of the product is introduced by the design
ofthese features. Inspection of the manufacturing processes is of utmostimportance in
ensuring quality of performance.

Conformance to design - Conformance to design is the degree towhich the

manufactured product or delivered service meets theparameters that have been
incorporated in the design. It verifies that thevariability in the process is within
acceptable limits so as not tocompromise the functionalities that the designer
wanted.

Utilisation conditions -Utilisation conditions refer to the necessity ofthe customer

being informed or trained so that, the purpose for which theproduct was made is
realised by the customer in total, thus enhancingthe customers satisfaction.
Instructions, manuals, help-lines, and on-sitetraining by the manufacturers personnel
improve the perception ofquality.

After sales service - There are so many reasons why products do notfunction to the
expected levels. It may be improper use, unexpected oradditional demands, improper
assembly or even manufacturing defects.There is a need to rectify these and make
products or services performup to the expected standard. The firm should put in place
a system bywhich these possibilities are anticipated and attended to give
customersatisfaction. This is an important, but often neglected dimension ofquality.