ProductionandOperationsManagement

Unit15

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Unit15
Structure 15.1 Introduction

QuantitativeModelingandWorkforceManagement

15.2 QuantitativeModels 15.2.1 QuantitativeApproach 15.2.2 QuantitativeModels 15.3 QuantitativemethodsforDecisionMaking 15.4 WorkforceManagement 15.4.1 15.4.2 Introduction WorkPractices

15.4.2.1 WorkStudy 15.4.2.2 WorkMeasurement 15.4.2.3 MethodsStudy 15.4.2.4 MachineWorkerInteraction 15.4.3 15.4.4 15.4.5 Ergonomics WorkEnvironment WorkforceProductivity

15.4.5.1 LearningCurve 15.4.5.2 IncentiveSchemes 15.5 Summary TQ AnswertoSAQandTQ

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SikkimManipalUniversity 202

ProductionandOperationsManagement

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15.1 Introduction

Whenever we have to make decisions in management, we have two

approachestoarriveatadecision.Oneistoconsiderfactsavailable,variousoptionsforactionand thelikelyconsequencesevaluateallthesebasedontheexperienceswehadandthegutfeelingas towhatmighthappenandtakeadecision.Thequalityofthedecisiondependsontheindividuals knowledge, analytical capability and judgment. When the matters concerned small or personal in nature, this process may be sufficient as the consequences are not very serious. However, the decision involves complex issues and the data is varied i.e. factors are different fields having different impacts on the result, we try to quantify the data, devise some models for predicting the likelyconsequencesandsometechniquestoarriveatdecisions.Historicaldataguideusformulate the relationships between the variables. Uncertainties about the activities and results can be anticipatedbasedonprobabilitiesandchoicesmade.Themodelswechoosedependonthetypeof situations. In theoperationsfield, we need to schedulevarious activitiesfor completionofa jobor project.Thetimeforeachactivityisknownapproximatelyonly.Ataparticularstage,anumberof activitieshavetobecompletedforfurtherprogress.Delayinoneoftheactivitiescreatesinventoryof materials whichhave arrivedfromanother stream. Some materials or machinesor menor all will idlingastheyhavenotreceivedthematerialsscheduledtohaveatthatplace.Rateofproduction, absenteeism, breakdown of equipment, delayed arrival of material, uncertain lead times cause imbalanceintheproductionsystem.Butplanningwillhavetobedonewithresourcesallocated,to andproductspromised.Wemakemodels,applyquantitativetechniquesandtrytoconductactivities so that minimum disruptions take place. The workforce that conduct activities have to allocated work, trained and motivated for improving performance. We will go into detail about the various aspectsoftheseinthefollowingpages.

Learningobjectives Afterstudyingthisunit,youwillunderstand
1. 2. 3. 4. thekeyelementsofQuantitativeModeling howmodelsareformedandusedtounderstandbusinessprocesses thevariousquantitativemethodsandtheirutilityindecisionmaking theprocessofmanagingworkforceandeffectingimprovementinvariousfunctioningof management.

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SikkimManipalUniversity 203

ProductionandOperationsManagement

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15.2

QuantitativeModels Hereweconsiderthewaysofsolvingproblemsusingquantitative

approachandthevariousmodelsweuse.Thebusinessimplicationsarewideasthesolutionsare used for decision making in all aspect of business procurement of material, allocating funds, scheduling production, carryingof inventory etc. Theaim is tooptimize sothat costsare reduced andprofitsareincreased.

15.2.1 Quantitative approach

steps:

Solving a problem using models consists of the following

1. Definitionoftheproblem Inthebeginning,wehavetodeterminethepurposeofstudying the problem, the various factors that have to be considered like resources, constraints, the uncertainties involving them, the costs involved, time available, the issues that have utmost importance,etc.Wewilldeterminewhichproblemneedsourattentionmostandthefactorsthat affectitandtheinterrelationships. 2. Constructing a mathematical model We reformulate the physical problem into a form

whichcanbeanalysed.Weconvertitintoamodel.Themodelsplayavitalroleinengineering, science and business. We make models of dams, a steel structure, chemical reactions, organisation structure,graphs showing variationof shareprices,etc. Manyof these are being capable of being expressed in terms of mathematical equations which can be solved and the valuesofsomethevariablesareknownorpresumed.Bysolvingtheseequations,wewillsolve theproblem.

3. Testingthemodelanditssolution Inbusinesswedonothavecompleteorreliabledata most of the times. We would haveformulated the equations with presumptions. So we verify whetherthesolutionwehaveobtainedisacceptablebytestingthesolutionsbyusingsome knownoutcomesforknownvariables.Thisteststhemodelaswellthepresumptions,wemight havemade.Wemayhavetochangethemodelorthepresumptions.

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SikkimManipalUniversity 204

ProductionandOperationsManagement

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15.2.2QuantitativeModels Thedifferentmodelsareasunder:
1. LinearProgramming Thistechniqueisoftenusedforoptimizingagivenobjectivelikeprofit

orrevenuemaximizationorcostoroutgominimization.Whentherearelimitedresourcesandthey havetomeetcompetingdemands,distributionoftheresourcesisthecriticalissue. 2. Transportation Model This is concerned goods with from manufacturing centres or warehouseswhichhavetobesuppliedtodepotsorretailoutlets.Thedemandandsupplyposition oftheplaceswheretheyarerequiredorproducedandthecostoftransportationisconsideredinthe model.Toeconomiseweusethismodel. 3. Assignment Model : Allocating jobs or persons to machines, awarding different projects to contractors, so that maximum returns occur or less expenses are incurred callsfor the use of this model. 4 .Inventory Control Model : Inventory models consider the frequency of placing orders, the quantitiesperorderconsideringthecostofplacinganorder,thenumberofpiecesthataretobekept inreserve,therateofconsumption,theleadtimerequiredforthesupplier,costsinvolvedinstorage. Dependingupontheprobabilitiesofpatternsofconsumptionandsupply,wehavedifferentmodels whichgivesolutionstooptimize. 5.WaitingLineModels Queuesareformedwhentherateofserviceisatvariancewiththerateof arrival.Theyareformedwhenrateofproductionislessatparticularpointscomparedtotheprevious ones. Some times we see multiple service points anda single queue isformedfor feeding them. Number of items including people to be serviced, the rate of service and the type of queue discipline that is intended to be followed, policy of priority, tolerable amounts of waiting etc. are studiedwithsomespecialtechniques.

6.SimulationModels Thesemodelsareusedwhenwewillnotbeabletoformulatemathematical models.So,wedevelopamodelwhichresemblesareallifesituation.Andbasedonthepattern,we predictandplanourprocurement,production,deliveryetc.

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SikkimManipalUniversity 205

ProductionandOperationsManagement

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7. PERT and CPM Models : When projects are undertaken with a number of activities some happening in sequence, with gaps of weeks or months and some happening simultaneously and resources are of great variety needing a lot of coordination, it is important to estimate the time required for completion. It is also equally important to identify the bottlenecks and smoothen resourcessothattimeschedulesaremaintained.Delayedcompletionmayentailpenalties.Inthis modelweadoptspecialmethodstomakethesystemefficient.

SelfAssessmentQuestions1:
1. The_____________modelisusedwhenwearenotabletoformulateamathematicalmodel 2.___________areformedwhentherateofserviceisatvariancewiththerateofarrival.

15.3

Quantitative methods for Decision Making We choose the model which closely

resembles the situation which we want to analyse for making decisions like providing funds, assigningpeople,placeorderforcertainquantities,delayorhastensomeactivities,openonemore counterorbuymachines,changelocationofmanufacturingunits,shiftdistributioncentres,postpone thelaunchofaproduct.Decisionsmayvaryfrombuyingtwodozenboltstoimportequipmentfora few crores or even launch a new product requiring investment of a few hundred crores. The decisionsaretakenwithsomerisksarisingoutofanumberofuncertaintieswithnoperfectanswers. Historicaldataactonlyasaguideforprojectingintothefuture.Weuseanumberofstatisticaltools like regression, forecasting, decision trees, probability theory, game theory, Markov Analysis to establishrelationshipsbetweenfactorsthataffectdecisions.Onemoremajorlimitationtomakeour decision process effective is the quantum of data that we can collect. For example, we cannot inspectall dimensions of all components we manufacture in a plant. Nevertheless, we want tobe certainall the parts that gofor assembly are ofhigh quality. So we take samples at random and inspectthem.Thenumberofsamples,numberofdefects,therangewithinwhichtheyareexpected tolietobecertifiedthattheyaregood,thefrequencyofinspection,theconfidencelevelwhichwe needtohave statisticaltools.Thenweneedtobesurethattheprocessesareundercontrol.So, quantitativemethodsconsistofusingmodelsforaparticularsituationandapplyingstatisticaltoolsto analysedataandmakedecisionswhichhelpusinmeetingourobjectives.

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SikkimManipalUniversity 206

ProductionandOperationsManagement

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_________________________________________________________________________________ SelfAssessmentQuestions2

1. Modelsrepresenttheobjectinallrespects.TRUE/FALSE 2. DecisionstakenwiththehelpofStatisticalToolsareperfectTRUE/FALSE
15.4

Workforce Management In this section we will consider the various concepts of

workers contribution for productivity. We will also study the way work is measured, and how the workersgetthebenefitforsuperiorperformanceandproductivityisinfluencedbytheenvironmentin theorganisation.

15.4.1

Introduction Productivity is achieved by creating an environment which is

conducive for efficient working. By adopting good practices which instill a sense of purpose, cooperative behaviours and openness, workers become willing partners in the process of manufacturing, which gives them life and pride. Rewards are important for recognizing good workthataredone.Forthatpurposemeasurementofworkanddeterminingefficiencylevelsare important.

15.4.2

Work Practices Workpracticesarewaysofdoinganyworkwhichhasbeenin

vogueandfoundtobeuseful.Thesearedeterminedbymotionandtimestudyconductedover yearsandfoundtobeefficientandpracticed.Anymethodimprovementthatisconductedmay changethepracticebutonlyaftertrialshaveshownthattheyincreasethecomfortoftheworker andgetthejobdonefaster.

15.4.2.1 WorkStudy

Whenanalysisofworkmethodsisconductedduringtheperiod

whenajobisdoneonamachineorequipment,wesaythatworkstudyisbeingconducted. The study helps in designing the optimum work method and standardization of the work method. This study enables the methods engineer to search for better methods, higher utilizationofmanandmachineandaccomplishmentofhigherproductivity.Thestudygives an opportunity to the workmen to learn the process of study and will be able to offer suggestionsforimprovedmethods.Thisencouragesworkmenparticipationandtheycanbe permittedtomakechangesandreporttheadvantagesthatcanbederivedfromthose.This

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SikkimManipalUniversity 207

ProductionandOperationsManagement

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course is in alignment with the principle of continuous improvement and helps the organisation in the long run. Reward systems may be implemented for recognizing contributionsfromtheworkmen.WorkstudycomprisesofWorkMeasurementandMethod study.Workmeasurementfocusesonthetimeelementofwork,whileMethodstudyfocuses onthemethodsdeployedanddevelopmentofbettermethods.

15.4.2.2 Work Measurement Work measurement can be defined as a systematic applicationofvarioustechniquesthataredesignedtoestablishthecontentofworkinvolved inperformingaspecifictask.Thetaskisperformedbyaqualifiedworker.ILOdefinesa qualified worker as one who is accepted as having the necessary physical attributes, possessing the required intelligence andeducation andhavingacquired thenecessary skill andknowledgetocarryouttheworkinhandtosatisfactorystandardsofsafety,quantityand quality.Withthiswearriveatthestandardtimeforatask.Thiswillusedfixperformance ratingofotherworkers.Itformsthebasisofincentives,promotionandtrainingforworkmen andassessmentofcapacityfortheplant.

15.4.2.3 Methods Study

Here thefocus ison studying the method currentlybeing

usedanddevelopinganewmethodofperformingthetaskinabetterway.OperationFlow charts, Motion Charts, FlowProcess charts are studiedtofindthepurpose ofeachactivity, (anelementofthetask),thesequenceinwhichtheyaredoneandtheeffectoftheseonthe work. The study may help in changing some of them and even eliminate some of them to effectimprovements.Thenewmethodshouldresultinsavingoftime,reducedmotionsand simpleractivities. 15.4.2.4 MachineWorkerInteraction Thisstudyconsistsofstudyingtheamountof timeanoperatorspendsonthemachinebeforeitisactivatedandtimehehasnothingtodo. In many modern manufacturing centres, where we have automated systems of manufacturing,theroleoftheworkerislimitedtoobservingvariousscreens,dials,indicator lampstoseethattheprocessisgoingonsmoothly.Insomecases,hisjobmaybeloadthe jobsonthemachinesandcheckthesettings.Whatisofconcerntousistoseewhetherthe

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SikkimManipalUniversity 208

ProductionandOperationsManagement

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operations permit for enabling an operator to look after two or three machines, without affectingtheperformanceofthemachineorman.

15.4.3

Ergonomics Ergonomicsisthestudyofphysicalhumanfactorsforhisfunctioning.

We study the movements, the amount of energy that is available for certain activities and the coordinationamongthem.Inoperationsmanagementweusethesefactorsattwoplaces.Thefirst is when we design the machines which are operated, the way the operator does the tasks on the machineusingdifferentcontrols.Levers,wheels,switches,pedalsetc.havetobepositionedsothat hehasmaximumcomfortforworkinglonghours.Theotheristheconsiderationgivenforthetypeof loadsthebodycantakeatvariousposition.Whenliftingjobs,clampingthem,movingthem,holding themenergyisexpendedbydifferentorgans.Racks,tables,pallets,arepositionedanddesignedto suitworkersphysicalfeatures.

15.4.4 Work Environment

The work environment in which tasks are performed affects

productivitygreatly.Thecombinationtemperature,humidityandairmovementsproducealevelof comfortordiscomfortconsideringwhethertheyarewithinarange.Thesedependontheconditions towhichemployeesareaccustomed.Atemperaturerangeof24to32degreesCelsiuswouldbe suitable.Goodilluminationattheworkplacehelpsproductivity.Usingpleasingcolorsforthewalls andsurroundingsmayalsohelpproductivity.Noiselevels,whentheyarecontinuousandhighaffects the concentration of the employeesandaffects their work. They even become irritableand their interactionwithotherpeopleproducesconfusionandconflict.Ifnoiseofthemachinesisinevitable, earplugsshouldbesuppliedtotheworkmen.

15.4.5 WorkforceProductivity Productivityistheratioofthenumberofpiecesproducedto

thenumberofhoursspentonthem.Thisfiguretakesintoconsiderationanumberofthingslike machine capability, workers skill, his motivation, the environment. There are various methods by whichproductivityissoughttobeimproved.Someofthemare 1. Measureallaspectsacrossallfunctionsoftheorganisation,sothatallpersonnelthatnobodyis sparedorfavoured.Uniformityandfairnessareguaranteedtoensureperformance.

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SikkimManipalUniversity 209

ProductionandOperationsManagement

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2. Establishreasonablegoalsofproduction.Theyshouldbeneithertolowforlettingcomplacency ortoohightobeattempted. 3. Treatcomplaintsabouttheworkingconditionsasopportunitiestomakecorrectionsandseek higherproductivity.

15.4.5.1

Learning Curve The principle is that people take less time to do the same job

subsequently,astheeffortandskillexpendedinearlieractivitieshasresultedinlearning.Learning improves performance. But the rate of improvement declines as the repetitive acts increase. Supposeajobtakes15minutesforthefirstpiece,ittakes13forthesecond,12forthethirdandso
th on.Butthisimprovementisnotcontinuous.Ifthe100 piecetakes6minutes,the101thpiecewill

nottakeanylesstime.Itistoachievethat6minuteperformance,thattraininghelps.Forimproving productivity,trainingnecessary. 15.4.5.2 Incentive Schemes

These are monetary and nonmonetary benefits that the

management gives in recognition of superior performance. They canbe calculated on individual, team, group, department or the plant basis. Most of the times, these are negotiated with labour unions. There are many ways the incentives are calculated where in the basis will be a standard levelofproduction.Aproportionoftheadditionalproductionisdistributedasincentives.Thisisa motivationalfactorforincreasingproductivity.

SelfAssessmentQuestions4:
1. Performanceofworkforcecanbeachievedbyestablishing____________________of production. 2. Therangeoftemperaturewhichisconsideredtomakeitcomfortableforworkmenisbetween ________and______degreesCelsius.

15.5 Summary
Models represent a physical system in a mathematical form so that by changing the variables, dependingonthefactorsunderconsideration,wewillbeableto predicttheeffectontheoutcomes.

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SikkimManipalUniversity 210

ProductionandOperationsManagement

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Theseareusedtotakedecisionsfordeploymentofresourcessothatoptimizationisachieved.We haveseenafewpopularandusefulmodelsthathelpustounderstandthebusinessprocess.We have also discussed the concept of Learning Curve and the utility of the same in understanding workforceproductivity.

Terminal Questions 1. Whatarethedifferentmodelsusedinquantitativeanalysis?roach. 2.Howdostatisticaltoolshelpinimprovingdecisionmaking 3, Whatdoyouunderstandbyergonomics?Howdoesithelptheproductionmanager? 4.HowisthestudyofLearningCurvehelpinWorkStudymethods? AnswerstoSelfAssessmentQuestionsandTQs SelfAssessmentQuestions1 1. 2. Simulation Queues

SelfAssessmentQuestions2

1. False 2. False
SelfAssessmentQuestions3 1. Creatinganenvironment 2. Operation,Motion,Process SelfAssessmentQuestions4 1. Reasonablegoals 2. 24and32

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SikkimManipalUniversity 211

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AnswerstoTerminalQuestions 1Refer tounit 15.2.2 2.Refer tounit 15.3 3.Refer tounit 15.4.3 4.Refer tounit15.4.5.1

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