Pom

PRODUCTION & OPERATIONS MANAGEMENT

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Manufacturing sector bounced back with strong contribution to up lift the economic power of the country. In 90’s Made in India tag was not exactly sought after . In last 15 years, 16 manufacturing companies have won Deming award from JIPM & 92 companies have awarded TPM certificates by JIPM . India & Japan have largest number of Deming prize winners . World renowned TQM expert Mr Nasutoshi Washio predicts that Indian manufacturing sector will take over Japan by 2018 in terms of Quality Mangement .

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Mr Baba Kalyani Chairman “ BHarat Forge ranked world’s largest forging company . It derives its 70% of the business from overseas market having buyers like Daimler Chrysler, Ford GM , Volks wagen , Toyota Caterpillar etc . The four countries which are being watched by the world economist are BRIC ( Brazil, Russia , India China) .These countries are going to play a bigger role in the coming decades. India is the only country that has global manufacturing competitiveness. ( Dr .V Krishnamurthy Chairman -National manufacturing competitiveness. ) We expect India’s competence in manufacturing to increase dramatically in the coming years through flexible & Lean manufacturing practices that match global standards. ( A. Zutushi President Frost & Sullivn ) 3

Mr Suresh krishna - Chairman Sundram Fastners says” Touching export of auto part a 2 Bn $ business by 2006 is not any more an unlikely target. Sundram Fasteners Have won GM’s best supplier's award for three years . Indian Auto ancillaries – Global suppliers of components to GM , Ford, Skoda etc. Sona Koyo Steering System is a key supplier of steering wheels & rods to Suzuki. India is set to become the hub for global market in automobile sector. Nissan of Japan is using Maruti’s manufacturing facility to make cars. Many more ……………………..

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Outlook for manufacturing Sector in India

Global

Acceptance issue of Made in India Image & quality Issue.

WCM Global competitiveness

Market Domestic

Local

Mass scale production

Manufacturing Process Excellence Global

Local Competition

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Conventional Operation system of an organization. Production system INPUT RM Labor Machinery Capital

Demand Forecast

Location & plant Layout

OUT PUT

Product design & analysis Work study Production planning & Control Aggregate Capacity Flow shop Planning planning & scheduling , BOM & production MRP Job scheduling Scheduling line balancing

Maintenance management, Quality Control ,Inventory control 6

Traditional Manufacturing Process. Causal Diagram.

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Theory of Constraints Eli Goldratt is the creator of the Theory of Constraints (TOC) Theory of Constraints (TOC) is an overall management philosophy that aims to continually achieve more of the goal of a system. If that system is for-profit business, then the goal is to make more money, both now and in future. TOC consists of two primary collections of work: 1) The five focusing steps and their application to operations; 2) The Thinking Processes and their application to project management and human behavior . 8

According to TOC, every organization has one key constraint which limits the system's performance relative to its goal . These constraints can be broadly classified as either an internal constraint or a market constraint. In order to manage the performance of the system, the constraint must be identified and managed correctly. Theory of Constraints is based on the premise that the rate of revenue generation is limited by at least one constraining process (i.e. a bottleneck). Only by increasing throughput (flow) at the bottleneck process or elminating the bottleneck , can overall throughput be increased. 9

The key steps in implementing an effective TOC approach are: 1. Articulate the goal of the organization. 2. Identify the constraint (the thing that prevents the organization from obtaining more of the goal. 3. Decide how to exploit the constraint (make sure the constraint is doing things that the constraint uniquely does, and not doing things that it should not do) Subordinate all other processes to above decision (align all other processes to the decision made above) 10

Within manufacturing operations , the solution to TOC seeks to pull materials through the system, rather than push them into the system. The primary methodology in use is Drum-Buffer-Rope (DBR). Drum-Buffer-Rope is a manufacturing execution methodology, named for its three components. 1. The drum is the physical constraint of the plant: the work center or machine or operation that limits the ability of the entire system to produce more. The rest of the plant follows the beat of the drum.

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2.The buffer protects the drum, so that it always has work flowing to it. Buffers in DBR have time as their unit of measure, rather than quantity of material. This makes the priority system operate strictly based on the time . 3. The rope is the work release mechanism for the plant. ( Trigger ). It Pulls work into the system just when required rather than earlier than a buffer time which creates high work-in-process and slows down the entire system.

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Marching to the Drum Beat of the Drummer S-DBR Traditional DBR usually calls for buffers at several points in the system: the constraint, synchronization points and at shipping. S-DBR requires only a single buffer at shipping. Drum - The constraints, linked to market demand, is the drumbeat for the entire plant. Buffer - Time/inventory that ensures that the constraint is protected from disturbances occurring in the system. Rope - Material release is "tied" to the rate of the constraint. 13

The Simplified- Drum, Buffer Rope ( S-DBR) provide the basis for building a production schedule that is highly immune to disruption, avoids creating excess inventory, and uses small batches to minimize overall lead time. Thus S-DBR is used to mitigate and often prevent those disruption which happens in Production process.

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If the operational system suffers from 3. 4. 5. 6. 7. 8. 9.

Poor on-time performance Long production lead-times High WIP and/or finished goods inventory High overtime Lots of expediting and rescheduling Wandering or stationary bottlenecks Reluctance to take on new business

. . . then it implies that your organization's production process has constraints. 15

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Objective :

Manufacturing time

Less than

Customer Required Lead Time

Efficiency, Effectiveness, Cycle time reduction in manufacturing operation Key Drivers

Outcome

Minimal Inventory

Faster High Response Quality Time

Reduced over head

Low Faster High No waste , sustained High cost delivery flexibility quality morale Exceed customer expectation Increase market share & profitability 17

In today’s business world, competitiveness defines an industry leader. The drive toward maximum efficiency is constantly at the forefront of all organization. Global competitiveness is key success factor . Organizations across the country are striving to adopt lean manufacturing practices to help address worries about their bottom line. Cellular Manufacturing is one staple of lean manufacturing. 18

•In a lean manufacturing processes all non value adding processes are squeezed out. •In a lean manufacturing process a cell consists of close arrangements of people, machines , or workstation in a processing sequence. •A one piece flow of product or service through various operations with a least amount of delay & waste. 19

WCM Mantra : Best quality , lowest cost of manufacturing , Shortest Lead Time , Highest Safety , High Morale. Lean manufacturing Model ( TPS House ) Integrated SCM Just In Time Continuous flow Pull system Quick change over

People & Team Work Common Goal , Cross Trained high morale Continuous Improvement

Self triggered stops Process driven Error proofing In station quality Control

Waste reduction Problem solving 5 Why;s Leveled production Standard manufacturing process Visual Management 20

Toyota, the foremost lean manufacturer in business today (Toyota Production System –TPS ) views value as a combination of cost; quality, and time. Cost is the total expense involved in the delivery of the product. Quality is any deviation from standard. Time is best captured as the total elapsed process time from the start of a part, or transaction, to its delivery. (If this process is the order fulfillment process or cashto-cash process then executives have a complete picture of where time is being effectively spent, or wasted, in the organization) . It is the key fundamental differentiator between lean and traditional practices. 21

Waiting time

Waste Reduction Process.

Value Added time

Value added time

Value added time

Transport Staging Set up

Staging

machining Assembly

Casting

RM

Inspection

FG

Value added time is only a small % of the total time . Lean thinking focuses on the value stream to eliminate non value adding items. 22

Waste caused in Manufacturing Process. According to Toyota ‘s production system , seven important causes of waste in manufacturing are : 1. The Process : Wrong process create high quantity of scrap . Wrong type or size of the machines are used or if the process is not being operated correctly it causes waste. 2. Methods : Unnecessary motions of operator, machine & tool or material creates in efficiency & leads to waste . 3. Movement. Poorly planned production plan layout creates back tracking of the process looses efficiency. 23

4. Re work due to product defect , sorting process due to scrap not being identified, leads to interruption in the smooth flow of work leading to waste. 5. Waiting Time: Operator waiting & material waiting time in the shop floor / work center on account of no material , no work etc is a waste. 6. Over Production : It increases the cost of carrying inventory , locks the capital creates quality problem. 7. Inventory : Excess stocking of RM & WIP inventory brings down cost efficiency of the organization thereby reducing its competitive bargaining power . Puts the organization in stress to liquidate the inventory at lower price . 24

7 Essential principles of Lean manufacturing 1. Pull Inventory Control. Work moves based on the needs of the downstream operation starting from the customer need. 3. Automation: Equipment intelligently recognizes & eliminates process variation with human like intervention. Technology support from ERP, CAD/CAM etc 5. JIT Inventory : WIP & supplies arrive at the process location as they are needed. 25

1. Visual control. : Management by sight of equipment & process Variation. 3. Standardized work process & procedures. All activities are defined in advance & characterizes by process consistency. 5. Pursuit of perfection. There is no end to the process of reducing , waste , time cost & mistake. 6. Continuous work flow : Alignment of machines are such that it drives continuous work flow without interruption. 26

Queue set-up versus Cellular layout. In the traditional ‘queue' set-up , similar equipment are put in the same area. Thus RM that need to undergo processing under a certain equipment need to be transported to the area where the equipment are located. There they are queued for processing in batches. Such a system results in transport and batching delays. In a single process flow set-up, the products simply transfer from one equipment to the next along the same production line in a free-flowing manner, avoiding transport and batching delays.

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Cellular Manufacturing (CM) for Lean manufacturing system It refers to a manufacturing system wherein the equipment and workstations are arranged in an efficient sequence that allows a continuous and smooth movement of inventories and materials to produce products from start to finish in a single process flow, while incurring minimal transport or waiting time, or any delay for that matter. In order to set up a single process flow (or single product flow) line, it is necessary to locate all the different equipment needed to manufacture the product together in the same production area. This calls for a improved production layout.

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Benefits of Cellular manufacturing system 1. CM helps eliminate overproduction and reduce waste. 2. Cellular manufacturing helps reduce waste by reducing defects that result from processing and product changeovers. Since products or components move through a cell one piece at a time, operators can quickly identify and address defects. 3. Allowing operators to stop production when defects occur (known as automation or jidoka in lean circles) prevents wasted material and time. 29

4. In a conventional queue process, it is difficult to identify and respond to defects until the entire batch is produced or numerous pieces are processed. 5.Reducing defects has several benefits such as : •Fewer defects decreases the number of products that must be scrapped. •Fewer defects also means that the raw materials, energy, and resulting waste associated with the scrap are eliminated. •Fewer defects decreases the amount of energy, raw material, and waste used or generated to fix defective products that can be re-worked. 30

6.C M layouts typically require less floor space for equal levels of production. Reductions in square footage can reduce energy use for heating, air conditioning and lighting. It can also reduce the resource consumption and waste associated with maintaining the unneeded space (e.g., fluorescent bulbs, cleaning supplies). 7.Cellular manufacturing layouts and automation can free workers to focus more closely on equipment maintenance and pollution prevention, reducing the likelihood of spills and accidents. 31

A work cell is defined as a collection of equipment and workstations arranged in a single area that allows a product or group of similar products to be processed completely from start to finish. It is, in essence, a self-contained miniproduction line that caters to a group of products that undergo the same production process. Cellular manufacturing involves the use of work 'cells.

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Since differently-processed products need different work cells, a large company with diversified products needs to build several, different work cells . Having enough volume of products to work with, work cells have been proven by experience to be faster and more efficient in manufacturing than 'queue' systems. Because of the free flow of materials in CM, it has the ability to produce products just in time.

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Production Process. Standardization

Mass Production

MTS

Batch production

ATO

Variation

Job production

MTO/ BTO

Project/ Turn key production

ETO

Plant Layout

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Managing Manufacturing Lead time ( MLT ) is an essential task in any organization to deliver the goods as per the customer order lead time. MLT depends on the nature of manufacturing process. The four types of manufacturing process are : ETO ( Engineer to Order) MTO ( Manufacture to Order ) ATO ( Assemble to Order ) MTS (Made to Stock ) Design

Procure

Manufacture

Assemble Ship

ETO

Lead Time 35

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Plant layout Plant layout is a floor plan of the physical facilities used for ease in production system. It is an spatial arrangement of physical facilities to increase the productivity in the shop floor. Key objectives are : Minimize investment in equipment . Maximize effective production time High space utility Build safety & comfort Create flexibility in the operation Minimize Material handling cost 37

Classification of layout are : Product layout : Machines & auxiliary service are located according to the processing sequence of the product . Process Layout ( Machines performing similar operations & service are grouped & positioned at one place. Group layout : A combination of product & process layout. It provides the benefits of both layout to the business.

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Advantages of layout : Product layout production Planning & control

: Simple

For high volume standard outputs, machine & work force utilization is high. Operator skill can be relatively low as he is trained for one kind of operation. 6. Limitation : Breakdown of one machine will cause stoppage of work in down /up stream level. 7. Last minute change in product design will require major alteration in layout . 8. Heavy investment is required in material handling equipments , machinery etc. 39

1. A high degree of flexibility in terms of task allocation to machines exists. 2. Relatively low investment in machines . 3. Operators are multi skilled. 4. Handles diversity in task better. Limitation 8. High care in PP&C required. 9. WIP inventory will be large. 10.High grades of skilled work force will be required. 11.Material handling cost will be high 40

Group layout will provide standardization & rationalization of products , good estimates , effective machine operation , high productivity , reduce set up time, less down time , better through put etc. Group layout will not be feasible for all kinds of operations. When the product mix manufactured is very dissimilar it will not be advisable to have group layout.

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Plant types There are four primary types of plants in the TOC lexicon. They specify the general flow of materials through a system, and they provide hints about where to look for typical problems. The four types can be combined in many ways in larger facilities. 3. I-Plant: Material flows in a sequence, such as in an assembly line. The primary work is done in a straight sequence of events (one-to-one). The constraint is the slowest operation. 4. A-Plant: The general flow of material is many-to-one, such as in a plant where many sub-assemblies converge for a final assembly. The primary problem in A-plants is in synchronizing the converging lines so that each supplies the final assembly point at the right time. 42

V-Plant: The general flow of material is one-to-many, such as a plant that takes one raw material and can make many final products. Classic examples are meat rendering plants or a steel manufacturer. The primary problem in V-plants is "robbing" where one operation (A) immediately after a diverging point "steals" materials meant for the other operation (B). Once the material has been processed by A, it cannot come back and be run through B without significant rework. T-Plant: The general flow is that of an I-Plant (or has multiple lines), which then splits into many assemblies (many-tomany). Most manufactured parts are used in multiple assemblies and nearly all assemblies use multiple parts. 43

Customized devices, such as computers, are good examples. T-plants suffer from both synchronization problems of A-plants (parts aren't all available for an assembly) and the robbing problems of V-plants (one assembly steals parts that could have been used in another).

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Layout Design Procedures. 1) Manual Method : 1.Travel chart 2. Systematic Layout planning 2) Computerized Method. ( Using algorithms ) 7. Automated Layout Design Algorithm ( ALDEP) 9. Computerized Relationship Layout Planning (CORELAP) 3 Computerized Relative Allocation of Facilities Technique.( CRAFT)

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Plant layout variables 1.Flow of material

2.Process flow Relationship of 1&2

Space Requirement

Space Available

Practical Constraints

Develop layout alternatives

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Structure of Manufacturing Function Product Design / ERC

Production planning

Production Scheduling

QC Maintenance & Parts.

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Production Planning & Control Production planning function is responsible for planning of resources like Material , Machine , Manpower , Method & Money for production activity. Production planning function deals with two levels of planning : Prior Planning : All activities such as product development & design , production cost estimation , vendor identification , sourcing mechanism , Material planning , creating BOM , Order writing etc. Active planning includes Process planning , & routing, work force allocation , machine allocation, Tool planning Material handling & movement etc. 48

PP&C function is responsible for managing the overall cycle time during production process since Cycle time is directly related o production rate . CT ( Cycle Time ) = Productive time /

Demand per period If the demand per day from a manufacturing shop is 24 cylinders , then in a shift of 8 hrs , the CT = 8 X60/24 = 20 Min Since the actual time available would be less than the ideal time ie 8hrs on account of set up time for machine, operator efficiency , break etc , the effective cycle time would be less than 20 min . As demand increases & lead time need to be minimized to be competitive in the market , PP&C has to manage Effective cycle time. 49

PP&C function in a manufacturing organization directly supervises the following activities :

1.Material Planning Estimating individual requirements of parts ( BOM ) •Preparing material budget •Forecasting inventory •Raising material indent •Make or buy decision analysis

•2.Inventory Control •ABC analysis •Lead time analysis •Fix Economic Order Quantity •Building safety stock & re-order level. 50

3.Subcontract Activity •Vendor evaluation ( value engineering ) •Monitor out source activity •Outsource to subcontractors •Make vendor inspection schedules

4. Store management •Maintenance of store record •Handling & movement of materials •Disposal of scrap inventory

5.Maintenance Planning & Scheduling •Preventive & corrective maintenance schedule •Spares planning 51

6.Machine scheduling •Job Scheduling •Productivity study

7.Quality Control.

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Production Control Work Scheduling ( Loading ) Progress reporting Corrective action

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Demand estimation Aggregate planning Material Requirement Planning Creating BOM

Sourcing & Confirmation of Lead time

MPS Production Lead time Confirmation

Production As per production Schedule

Final Inspection & dispatch 54

Cost trade off. When orders are placed more frequently, the ordering cost is high but carrying cost lost is low , on the other hand if less frequent orders are placed ordering cost will be low but carrying cost will be high. Total cost

Cost

Carrying cost Total cost

Ordering cost

Order Qty

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Assumption : Demand Constant & No lead time

Q

Q/2

Time Annual Demand = D Average Inventory = Q/2 Cc = Carrying cost Co = Ordering cost P= Price per unit. 56

Total cost = Carrying cost + Ordering cost + demand per unit/ yr per order TC= Cc x Q/2 + Co x D/Q + DxP For optimum quantity at minimum cost differentiate TC w.r.t Q d (TC) & satisfy the minimum condition dq Cc/2 – CoxD/q2 =0 Q=

2CoxD/Cc

Q is Economic Order Quantity

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Economic Order Quantity with quantity discount When material is bought in bulk firm enjoy the benefit of volume discount at slab level . The procedure to compute optimal order size in such situation can be : Q=

2CoxD/iPn

Q is Economic Order Quantity, is nth price for a volume , is inventory carrying cost of purchase price /unit/year 58

Annual demand of an item is 4800 units. Ordering cost is Rs 500 per order. Inventory carrying cost is 2.4% of the purchase price /unit /year . Price slab is as follows: Find optimal order size. ? Quantity ( units)

0 to 1200 1200 to2000 > 2000

Price( Rs)

10 9 8

I = 24/1000 x 10 = .24 At price = Rs 8, Q3 = 2x500x4800/ .24 x8 = 1581 units Q2 = 1491 units TC = 9 x 4800 + 500X4800/1491 + . 24 x 9 x 1491/ 2

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Purchase Inventory review system : Review process is administered on the basis of Fixed order quantity ( Q system ) and fixed period quantity system . ( P system ) In Q system , whenever the stock level reaches the RoL , order is placed for a fixed quantity of material . RoL is calculated as a sum of demand during the lead time & variation in demand during lead time ( safety stock ) and average demand during delivery delays. ( reserve stock ) In p system , stock position is reviewed after every fixed period & order is placed according to stock position .

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Inventory Control Techniques

Inventory control techniques are used to prevent : 1. financial leakage due o excessive stock & poor demand , 2.shortage of inventory 3. Inventory Obsolescence Plan safety stock for critical & essential items Build selective control on fast & slow moving inventory . Various Inventory control technique used are : ABC : Always Better Control VED : Vital Essential & Desirable SDE : Scarce Difficulty & Easy 61 FNSD Fast moving , Normal , Slow moving , Dead

ABC Classification

100 CLASS C Low annual consumption value

90

CLASS B Moderate annual Consumption value

Usage % 70 (Inventory Value )

0

CLASS A High annual consumption value items

10

% items

30

100 62

VED analysis : Vital : Without which production process will come to halt. Essential : Non availability of such item will affect the efficiency . Desirable : It is good if it is available , however alternate option can be done. SDE : Scarce ( Short supply ) Difficult ( Imported components ) easily ( Short lead time )

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V

E

D

A

B

C

The building safety stocks & re order level decision can be formed Considering the above situations. 64

The goal of JIT in manufacturing organization is to continuously reduce the cost associated with requirement material resource. Its objective is to achieve zero ( minimal ) inventory through out the supply chain, hence implement good material control. The goal of JIT process is to reduce excess working capital held-up on account of material , minimal inventory at WIP . The constraints for implementing JIT are : •Unpredictable quality of supply of material •Inability to hold tolerances. •Shortcoming in lead time. ( Erratic delivery ) •Short supply of quantity of material •Inaccurate forecasting •Non standard materials being used ( Increased variety ) 65 •Last minute product changes.

Steps for implementing JIT in an organization. 1.Symptoms Situation leading to overstocking ( Poor demand forecast 2.Causes (Excess stock of RM inventory in anticipation of demand ) 3.Remedy Implement process to overcome the constraints ( Produce on Demand Pull production system ) Build pull inventory mechanism . •Do detailed analysis of inventory requirement of all types at every stage of production process. •Estimate the market fluctuations on account of price, supply , quality demand etc. •Identify reliable source of suppliers who are capable of supplying material as when required. 66

•Take supplier in to confidence & sensitize them the importance of JIT & build healthy business relationship with suppliers to have high commitment & ownership . •Conduct periodic vendor appraisal & follow vendor rating system of evaluation . •Give instant feed back on the supply & suggest improvement steps. •Sign rate contract , Blanket order . • Leverage on IT (Web ordering system , ERP ) end to end.

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Value Engineering or Value Analysis It is a technique of cost reduction and cost prevention. It focuses on building necessary functions at minimum cost with out compromising on quality, reliability ,performance & appearance. It helps in identifying unnecessary costs associated with any material , part components or service by analysis of function and efficiently eliminating them with out impairing the quality functional reliability or its capacity to provide service. It is a preventive process. 68

When to apply VE • Raw material cost increases suddenly . • Vendors are unreliable & organization is highly dependent on a few select vendor . • Cost of manufacturing is disproportionate to volume of production . Value analysis is done w.r.t cost associated at: • • • •

Cost Value (Labour , Material & overhead). Use Value Esteem Value ( Look & finish ) Performance Value ( Reliability , Safety , Service & Maintenance )

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Value = Performance ( Utility) Cost Vendor analysis is done to minimize the cost incurred due to a supplier Inefficiency or inability . Vendor cost to be considered are : •Opportunity loss due to poor quality ( High rejection cost ) •leading to machine & labour idle time. •High re-work cost •Inconsistent lead time •Inability to meet the demand of the manufacturer •Poor Credit terms 70

Value engineering procedure: Constantly evaluate the costs associated with VE & benchmark against the best in practice. As & when the cost of manufacturing increases disproportionately, identify an alternate source for contract manufacturing & monitor the quality & standards. Use more standard parts which can be sourced easily Develop more suppliers ( atleast 4 to5 for one part.) & minimize dependency on one supplier. Audit the supplier’s work premise & rate them on the performance . Conduct quarterly vendor meet & share the highlights & concerns .

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Material requirement Planning : MRP is a technique for determining the quantity & timing for procuring of dependent items needed to satisfy MPS . The inputs for MRP are : Product structure or BOM Final Assembly details EOQ Stock in hand. On the basis of the above inputs MRP calculation is carried out. The calculations are : Projected requirement Planned order release EOQ Scheduled Receipts Safety stock. Material waste on account of machining allowance 72

Production Control . It involves work scheduling Reporting & corrective action. Work order - Production Planning  Scheduling Corrective Action

Reporting

Objective : Manufacture & deliver the work order within the committed time within the resource constraints provided. •Effective utilization of time . •Eliminate stress during the production activity •Cent percent plant capacity utilization •Minimize cost on waste like overtime, scrap , down time etc. •Proactive reporting of issues at shop floor , like absenteeism of workers , non availability of material on account of rejection , unplanned breakdown , daily reporting of production status as per the target plan. 73

Machine scheduling : A process created for effective utilization of machine in the shop floor on the basis of actual available time for processing . It involves Set up time required Startup time Routine maintenance time ( Cooling time, Tool trail ) Operator efficiency Total Machine Hr – Delay = Actual Hrs Process scheduling : A method of establishing most economic & shortest path for production . Process scheduling requires an understanding the flow of the work process & create a process sheet or route sheet to optimize the time. 74

Process sheet gives the optimum method to do a job , thereby fixing the sequence of the operation , link the ancillary or parallel process to be accomplished . It gives the details & specification of the machines tools , operator to be deployed for the job. Delays on account of set up maintenance etc is communicated to the operator.

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Process sheet includes the following details of a process. • Part name to be machined & its engineering drawing & specification . •Sequence of the operation to be performed . •Specify the the machine & tools to be used. ( cutting tools ,jigs, fixtures ) •Operating machine details like Speed , ,load , cooling time set up time ) •Operating skill required •Productivity norm •Maintenance schedule of the machine •Subsequent operations

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Process scheduling differs depending upon the nature of production . Continuous or mass production : It is done by industrial engineers at the plant layout stage. It is difficult to alter the plan & incurs heavy expenditure. Batch production : In this case a master process sheet is created & is communicated to the shop floor . As & when the product line changes it is altered. Job order. In this case the process sheet is created more often as the nature of operation varies . Process schedule acts as a standard operating manual for process engineers to refer incase of any emergency or 77 accidents.

Reporting of the production progress in the plant. It is done using the following reports :

•Job Schedule •Load chart •Gannt Chart •M.S project software •Pending , backlog order status

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Managing large & complex project work. A large complex project comprising of multiple activities to be performed while manufacturing to delivery viz ship building , commissioning of power plant , installation & commissioning of turn key projects involves coordination & monitoring of activities from start to end for timely completion of work to avoid monetary loss & high customer satisfaction.

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Projects of such nature is planned & executed for time efficiency & optimum cost . Project management techniques like: critical path method ( CPM ) & Project Evaluation & Review Technique ( PERT ) . In CPM activities timings are deterministic in nature . However in case of PERT the activity time are estimated from three time estimates like ( a = Pessimistic time , m= Most likely time & b = Optimistic Time. ) 5. Optimistic time is the time when the execution goes extremely good. 6. Pessimistic time is when the execution goes very badly. 7. Most likely time is when execution is with in normal expectation. µ = Mean time ( a+ 4m+b) / 6 80

² ² (Variance ) = [(b-a)/6] Guide lines for network construction. 3. Start & end of an activity is represented with a node . 4. Activities are represented by forward moving arrows & consumes time. 5. Dummy activities are shown for logical relationship in the network diagram & do not consume time. 6. All activities of the network should be tied to the network. 5 Relationship between activities should be decided like preceding , concurrent , succeeding to establish the network. 81

Critical Path of a Project : Critical path of a project network is the longest path in the network . It is identified by listing all possible path of the network & selecting the path having maximum sum of the activity time. Total Floats of the project: Total time that a project completion time of an activity can be delayed without affecting the actual project completion time. Free Floats : Total time that an activity can be delayed with out affecting earliest start time. Of immediate successor activity .

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Maintenance Planning & Control

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Continuous use of machinery causes wear & tear leading to disruption production process. • •

Maintenance function’s objective is to keep the machines in best operating conditions with economical cost. Maintenance function has to take a timely decision to repair or replace the equipment to avoid the excessive cost incurred in the maintenance. (Maintenance Plan & cost control )

•

Overcome accidents & unsafe work conditions in the shop floor.

•

Enhance machine utilization & productivity .

•

Maxim mum availability of machines ( UP TIME) for production.

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Impact of poor maintenance function in a manufacturing organization. 3. High down time cost. Incurred loss due to the inability of the machine to produce the goods. 4. Down time cost = cost /unit X no. of units X total idle Hrs 6. If the manufacturing processes are interdependent activities , the financial loss goes exponential as all other dependent activities come to a halt. 8. Idle wage : Wages to be paid to the work force & loss of productivity , leading to the in efficiencies of the machine shop . 10. High wastage & scrap due to poor performance of the 85 machine leading to high input material cost.

1. High cost of rework due to inferior quality of finish . Loss of customer confidence. 7 Expediting cost to meet the dead line in the form of overtime, hiring of equipment , shifting of work to another plant. etc. 8 Accident cost incurred due to partial disability or or loss of life. 9

Opportunity cost of the business 86

Performance measure of machines for maintenance decision Overall Equipment Efficiency ( OEE) : It is the combination of uptime ( availability of the machine for production ) , cycle time efficiency ( production efficiency ) & quality of the equipment. OEE% = Uptime % X Speed % X ( MTBF – MTTR ) Where Uptime % = ______________ MTBF

X 100

Quality %

MTBF= Meantime between Failure MTTR = Mean time to repair MTBF = Total Running Time Number of Failure

Actual Cycle Time X 100 Speed % ( Efficiency) = Design Cycle Time 87

Good Parts Produced Quality ( %) efficiency = __________________ Total parts produced

X 100

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Reliability of Machines . Reliability is the probability that an equipment will satisfactorily perform the function for which it is designed when operated under a specified condition for a given period. 5. Reliability is a function of time . 7. It is function of condition of use .

λ

= Failure rate is defined as the number of times a part fails in a given interval of time. λ =

No of Failures Total units of Operating Hours 89

Reliability of Machines. Weibull Distribution Graph It helps to decide an appropriate maintenance strategy for high productivity in the shop floor.

Rate Of Failure Infant Morality Zone

Reliability Zone

EOL Zone ( Aging out of Machinery)

Time Reliability 90

Reliability of the equipments depends on the design parameters , operating conditions , Probability of performance ( Mean time between failure MTBF & MTTR ( Mean time to repair ) Infant mortality : failure rate at the beginning is high & reduces with passage of time exponentially . Reliability zone : Failure rate reduces drastically & predictable to some extend EOL : Failure rate increases due to aging of the equipments & increases un predictability .

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Maintenance required at infant mortality stage is high due to poor set-up of the machine , idea ling of the machine, non trained users etc even tough the machine is new. During the reliability stage, the failure rate is minimum as the workers are now trained to operate it efficiently, machine set up issues & idea ling problems have been handled by the maintenance team. As the machine starts aging , the failure rate increases due to high failure rate of the parts & components. At this stage, the reliability of the machine is low.

92

Reliability of an equipment under infant mortality stage means that the product will last for a period of time “T” with out break down . Since the curve at this stage follow a exponential distribution : Reliability is represented as _ T/ MTBF R = e Where T = Length of service before failure , e = Natural log value ( 2.71 ) MTBF = Mean time between failure

λ

= 1/ MTBF Hence

R=

e

-T λ

93

Types of Maintenance followed in a shop floor 1. Preventive maintenance( PM) : It involves cleaning , inspection, oiling & retightening of parts after equal interval of time in anticipation of the condition of the machine , irrespective of the problem. Hence PM is further classified in to Predictive( Condition based ) & periodic ( Time based ) maintenance. 2 Corrective Maintenance (CM) . Two types of corrective maintenance are : Design in maintenance , where Equipment with design weakness are redesigned to improve reliability & 94 maintainability .

Design out maintenance to install new equipments of superior technology or scrapping of aged out machines, replacing manual to fully automatic machines. 3 . Break Down Maintenance : Repair of machines due to sudden or unforeseen breakdown. 4. Total Productive Maintenance( TPM ) : Systematic equipment maintenance process in the shop floor for high productivity , High employee morale & high job satisfaction. It is belied on the premise that maintenance is not just the responsibility of a single department but a collective responsibility of top management to lower level operators. 95

Objective of TPM : Make the plant operation maintenance- free , working on maintainability & improvement .

Preventive Maint TPM Predictive Maint

Maintenance Prevention & Maintainability Improvement

Maintenance Free Service

96

Objective of TPM : 1. Build a collective culture of maintenance to attain maximum efficiency through out the production process. 2. Create Zero accident, Zero defect & Zero Breakdown manufacturing process. 3. Make Problems visible Benefits : Increased equipment productivity •

Lower Maintenance cost

•

Reduced accident & waste

•

High employee commitments 97

Pillars of TPM to enhance the success are : 5 S strategy of maintenance : Seri ( Sort ) Seiton ( Systematic ) Seiso ( Sweep. Keep the place clean ) Seiketsu ( Standardize ) Shitsuke ( Self Discipline ) Kaizan [ Plan, Do Check , Act ] ( PDCA ) Autonomous Maintenance : Prepare operators for routine maintenance so that core maintenance team can focus on High end maintenance activities. It aims to achieve OEE & OPE ( Overall production efficiency ) . Planned & Quality maintenance Training , Safety & Environment

98

Cost analysis for maintenance planning Total maint Cost curve. Maint Cost

Average operating & maintenance Cost.

Capital Recovery cost Economic life 0

1

2 3 4 Life of the machine

5

6

Scheduled maintenance is carried out periodically ( after fixed interval of time )irrespective of the failure. This increases the cost Break down maintenance is carried out as & when there is a sudden failure of the machine or part. If PM is planned regularly , the break 99 down cost can be controlled.

Optimum cost decision needs to be achieved if the maintenance function has to be profitable to the organization. In other words it is an optimum mix of planed & un planned maintenance decision . Beyond the optimum cost a machine replacement decisions have to be taken. Replacement decisions are to be taken when the parts are deteriorating at the faster rate leading to poor efficiency , high frequency of failure , high maintenance cost etc. Deteriorating efficiency of the machine can be either gradual ( mechanical parts) or abrupt ( Electrical & electronic parts.) Economic replacement policy decision: deteriorate with time & fail suddenly.

when equipment

100

Let C = Capital cost of equipment , n = No of years equipment is in use. S= Scrap value f(t) = Maint cost function A(n) = Average total annual cost When time is a continuous variable , Total cost = Cap cost – Scrap value + Maintenance cost

Prob;1

A firm is considering of replacement of machine whose cost is Rs 1750& the scrap value is negligible. The running maint cost is as follow: Yr 1 2 3 4 5 6 7 8 R cost 0 100 200 300 400 500 600 700 800 When should the equipment be replaced ? If the scrap value is Rs 200, & straight line depreciation allowed is 20% PA , what should be the replacement policy . 101

Yr

Maint Cost

Cumm maint Cost

Av Maint Av M/c cost cost

Av Total cost

1

o

0

0

1750

1750

2

100

100

50

875

925

3

200

300

100

583

683

4

300

600

150

438

588

5

400

1000

200

350

550

6

500

1500

250

292

542

7

600

2100

300

250

550

8

700

2800

350

219

569

9

800

3600

400

194

10

900

4500

450

175

102

In case of probabilistic model replacement policy used are : Individual replacement Policy & Group replacement policy

103

Spares Management Spares management has to be done by the organization to ensure that maintenance job can be conducted smoothly with out any down time on the machine on account of spares non availability. However the challenge is to ensure that the maintenance department keeps minimum level of spares so that the holding cost, obsolesce cost etc can be reduced . In order to decide the spares requirement planning , organization should know the reliability factor of the installed machine( failure rate of the components of the machine. )

104

Classification of Spares Parts 1. Maintenance & breakdown spares ( Critical spares parts ) 2. Insurance Spares 3. Capital investment spares ( High value spares) 4. Rotable spares ( Reusable & standard parts ) 5 Consumable spares 105

Quality Management

106

Quality Management Quality is a measure of how closely a goods or service confirms to specified standards. The standards can be a combinations of one or more attributes or variables of product or service being manufacture delivered . Variable data are continuous in nature are measured on a sliding scale , ie deviation from standard. The data can have range in terms of upper & lower limit within which the samples of acceptance are supposed to be lying. Attributes : Attributes are the data discrete in nature are binary . Attribute data samples are accepted or rejected. 107

Strategic Areas of Quality Control in manufacturing Area

Quality Control

Material Planning

SUPPLIER

Procurement Incoming Material

Incoming RM Inspection

Manufacturing Process

Process Control

Final Assembly , Testing & dispatch

Final Inspection

108

Quality Assurance : Design optimum quality standards, which a manufacturing function at design stage , incoming material stage production stage ,FG dispatch stage after sales are to be followed in a manufacturing firm. Quality Control: The process of measuring defects ( quality ) in the product & process beyond acceptable level of defined standard. Quality control technique. 1 Acceptance sampling for variables & attributes 2 Control charts for variables & attributes . Variables Mean Chart & Range Chart 109

Mean chart gives the idea of the central tendency of the observations . I gives the Variation between the sample observations. Range Chart : It gives the spread ( dispersion ) of observation . It shows variation within the samples. Attributes Percent Defective Chart P- Chart

Defective per sample area C - Chart

To identify the average proportion of non confirming part submitted for inspection 110 Over a period of time. ( P Chart )

It identifies the number of non confirming parts in a given sample of constant size. C – Chart It is used to control the final defects in a final assembly . Acceptance sampling is used for taking decision to accept or reject a lot on the basis of a lot’s sample characteristics. Identify the supplier’s risk or customer’s risk in acceptance sampling & decide the mutually acceptable level . Sampling technique can be single sampling , double sampling.

111

Acceptance Sampling: Objective of Acceptance sampling is to accept or reject a lot on the basis of sample characteristics. Accurate method is 100% inspection. However in large manufacturing firms this approach could lead to time consumption, delay, money ( Destructive testing methods ) , manpower etc. Hence it is necessary to take decision based on the characteristics of a sample size picked from a given lot of material . This is known as acceptance sampling . In this process there are chances of two types of error. Type 1 Error( α) . ( Supplier or producer risk) : If the lot sample picked is bad ,but the lot size is good , it get rejected. 112

Type II Error ( β) or manufacturer’s/ buyer’s risk : If the lot sample picked is good , but the lot size is bad , when such lot is accepted , then manufacturer incurs great loss . Hence both parties are expected to jointly agree at a level where the risk level is minimal . This is explained using Operating Characteristic Curve .

Probability of Acceptance Of a lot for a given percent defective .

α

The value for percent defective Indicates the quality level of the lot β inspected . AQL = Accepted Quality Level. AQL LTPD: Quality level of the lot submitted LTPD 113 for inspection Lot Tolerance Percent Defective