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Thursday, September 30, 2010
Management Information Systems: Managing the Digital Firm [CDROM] by Kenneth C. Laudon; Jane P. Laudon
Interactive Multimedia: CD-ROM By Jane Laudon, Ken Laudon
Tuesday, December 15, 2009
Marketing Research: Within a Changing Information Environment (McGraw-Hill/Irwin Series in Marketing) by: Joseph F., Jr. Hair, Jerry M. Neff,
Marketing Research: Within a Changing Information Environment (McGraw-Hill/Irwin Series in Marketing)
by: Joseph F., Jr. Hair, Jerry M. Neff,
Synopsis
This text embodies a process approach, introducing students to an 11-step marketing research process in Chapter 3. It stresses the contemporary practice of marketing research by highlighting technological change, methodological innovation, global implications and ethical issues. By integrating SPSS for Windows Student Version, the text familiarizes students with one of the most widely-adopted statistical analysis programs available.
ALTERNATE ISBN INFO:
By Joseph F. Hair, Robert Bush, David Ortinau,
Book Description:
The direction of Marketing Research, 2e heads towards a more application-oriented approach, wonderfully enhanced by the creation of a custom website that will enable students to complete their marketing research project with our online support. In addition to this distinction, the focus of the new edition takes an application-oriented approach, providing students with the tools and skills necessary to solve business problems and exploit business opportunities. This book is also unique from any other in the market in three significant ways. First, it provides a greater balance between primary and secondary information and the techniques and methods that underpin these two important types of data. Second, it offers in-depth coverage of the critical research tools and skills that will be required of today and tomorrow’s marketing researchers and business decision-makers. Third, with its in-depth coverage of secondary research, the practice of customer-based management is highlighted as this book helps students see what real companies are doing for their marketing research. This book provides students a realistic and current view of the practice and importance of marketing research in the business world.
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by: Joseph F., Jr. Hair, Jerry M. Neff,
- Publisher: Irwin/McGraw-Hill
- Number Of Pages: 672
- Publication Date: 2003-12-31
- Sales Rank:
- ISBN / ASIN: 0072467576
- EAN: 9780072467574
- Binding: Hardcover
- Manufacturer: Irwin/McGraw-Hill
- Studio: Irwin/McGraw-Hill
- Average Rating:
- Total Reviews:
Synopsis
This text embodies a process approach, introducing students to an 11-step marketing research process in Chapter 3. It stresses the contemporary practice of marketing research by highlighting technological change, methodological innovation, global implications and ethical issues. By integrating SPSS for Windows Student Version, the text familiarizes students with one of the most widely-adopted statistical analysis programs available.
ALTERNATE ISBN INFO:
By Joseph F. Hair, Robert Bush, David Ortinau,
- Publisher: McGraw-Hill Education
- Number Of Pages: 704
- Publication Date: 2002-05
- Sales Rank: 1836482
- ISBN / ASIN: 0071195440
- EAN: 9780071195447
- Binding: Paperback
- Manufacturer: McGraw-Hill Education
- Studio: McGraw-Hill Education
- Average Rating: 5
- Total Reviews: 1
Book Description:
The direction of Marketing Research, 2e heads towards a more application-oriented approach, wonderfully enhanced by the creation of a custom website that will enable students to complete their marketing research project with our online support. In addition to this distinction, the focus of the new edition takes an application-oriented approach, providing students with the tools and skills necessary to solve business problems and exploit business opportunities. This book is also unique from any other in the market in three significant ways. First, it provides a greater balance between primary and secondary information and the techniques and methods that underpin these two important types of data. Second, it offers in-depth coverage of the critical research tools and skills that will be required of today and tomorrow’s marketing researchers and business decision-makers. Third, with its in-depth coverage of secondary research, the practice of customer-based management is highlighted as this book helps students see what real companies are doing for their marketing research. This book provides students a realistic and current view of the practice and importance of marketing research in the business world.
PDF, 3.14 MB
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Fundamentals of Futures and Options Markets (4th Edition) By John C. Hull
Fundamentals of Futures and Options Markets (4th Edition) By John C. Hull
* * * Publisher:* Prentice Hall
* * * Number Of Pages:* 512
* * * Publication Date:* 2001-06-29
* * * ISBN-10 / ASIN:* 0130176028
* * * ISBN-13 / EAN:* 9780130176028
* * * Binding:* Hardcover
Product Description:
Updated and revised to reflect the most current information, this introduction to futures and options markets is ideal for those with a limited background in mathematics. Based on Hull's Options, Futures and Other Derivatives, one of the best-selling books on Wall Street, this book presents an accessible overview of the topic without the use of calculus. Packed with numerical samples and accounts of real-life situations, the Fifth Edition effectively guides readers through the material while providing them with a host of tangible examples. For professionals with a career in futures and options markets, financial engineering and/or risk management.
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* * * Publisher:* Prentice Hall
* * * Number Of Pages:* 512
* * * Publication Date:* 2001-06-29
* * * ISBN-10 / ASIN:* 0130176028
* * * ISBN-13 / EAN:* 9780130176028
* * * Binding:* Hardcover
Product Description:
Updated and revised to reflect the most current information, this introduction to futures and options markets is ideal for those with a limited background in mathematics. Based on Hull's Options, Futures and Other Derivatives, one of the best-selling books on Wall Street, this book presents an accessible overview of the topic without the use of calculus. Packed with numerical samples and accounts of real-life situations, the Fifth Edition effectively guides readers through the material while providing them with a host of tangible examples. For professionals with a career in futures and options markets, financial engineering and/or risk management.
Rared PDF: 7.31 MB
Management Information Systems: Managing the Digital Firm [CDROM] by Kenneth C. Laudon; Jane P. Laudon
Management Information Systems: Managing the Digital Firm [CDROM] by Kenneth C. Laudon; Jane P. Laudon
Interactive Multimedia: CD-ROM By Jane Laudon, Ken Laudon
* * * Publisher:* Prentice Hall
* * * Number Of Pages:*
* * * Publication Date:* 2005-11-16
* * * ISBN-10 / ASIN:* 0131538446
* * * ISBN-13 / EAN:* 9780131538443
* * * Binding:* CD-ROM
Product Description:
An interactive CD-ROM multimedia version of the text is available with the text. In addition to the full text and bullet text summaries by chapter, the CD-ROM features simulations, audio/video overviews explaining key concepts, on-line quizzes, hyperlinks to the exercises on the Laudon Web site, the complete Running Case with required files, technology updates, and more. Students can use the CD-ROM edition as an interactive supplement or as an alternative to the traditional text.
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Interactive Multimedia: CD-ROM By Jane Laudon, Ken Laudon
* * * Publisher:* Prentice Hall
* * * Number Of Pages:*
* * * Publication Date:* 2005-11-16
* * * ISBN-10 / ASIN:* 0131538446
* * * ISBN-13 / EAN:* 9780131538443
* * * Binding:* CD-ROM
Product Description:
An interactive CD-ROM multimedia version of the text is available with the text. In addition to the full text and bullet text summaries by chapter, the CD-ROM features simulations, audio/video overviews explaining key concepts, on-line quizzes, hyperlinks to the exercises on the Laudon Web site, the complete Running Case with required files, technology updates, and more. Students can use the CD-ROM edition as an interactive supplement or as an alternative to the traditional text.
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Marketing Management Cases
Marketing Management Cases
Hey friends, have a look on the mktg management case studies of the ICFAI university
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Hey friends, have a look on the mktg management case studies of the ICFAI university
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Global Pharmaceutical Marketing: A Practical Guide to Codes and Compliance By Judith Grice
Global Pharmaceutical Marketing: A Practical Guide to Codes and Compliance By Judith Grice
Product Description:
Worldwide, there are varying Codes of Practice/Conduct for the pharmaceutical industry that ensure the industry self-regulates to promote the appropriate use of medicines by operating in a professional, ethical and transparent manner and ensuring high standards.The aim of this book is to aid the understanding of the many pharmaceutical Codes of Practice/Conduct throughout the world. It contains an overview of the guidelines for the promotion of pharmaceutical products in all geographical areas.Each section includes a "general overview" providing a discussion on that particular Code of Practice and differences/similarities with other countries.
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- Publisher: Pharmaceutical Press
- Number Of Pages: 218
- Publication Date: 2007-10-27
- ISBN-10 / ASIN: 0853697175
- ISBN-13 / EAN: 9780853697176
- Binding: Paperback
Product Description:
Worldwide, there are varying Codes of Practice/Conduct for the pharmaceutical industry that ensure the industry self-regulates to promote the appropriate use of medicines by operating in a professional, ethical and transparent manner and ensuring high standards.The aim of this book is to aid the understanding of the many pharmaceutical Codes of Practice/Conduct throughout the world. It contains an overview of the guidelines for the promotion of pharmaceutical products in all geographical areas.Each section includes a "general overview" providing a discussion on that particular Code of Practice and differences/similarities with other countries.
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How to Market, Advertise and Promote Your Business or Service in Your Own Backyard
How to Market, Advertise and Promote Your Business or Service in Your Own Backyard
Download
Marketing Management: Millennium Edition (10th Edition) By Philip Kotler
Marketing Management: Millennium Edition (10th Edition) By Philip Kotler
* * * Publisher:* Prentice Hall
* * * Number Of Pages:* 784
* * * Publication Date:* 1999-07-19
* * * ISBN-10 / ASIN:* 0130122173
* * * ISBN-13 / EAN:* 9780130122179
* * * Binding:* Hardcover
Product Description:
This world-wide best-selling book highlights the most recent trends and developments in global marketing—with an emphasis on the importance of teamwork between marketing and all the other functions of the business. It introduces new perspectives in successful strategic market planning, and presents additional company examples of creative, market-focused, and customer-driven action. Coverage includes a focus on marketing in the 21st Century that introduces the new ideas, tools and practices companies will need to successfully operate in the New Millenium. Chapter topics discuss building customer satisfaction, market-oriented strategic planning, analyzing consumer markets and buyer behavior, dealing with the competition, designing pricing strategies and programs, and managing the sales force. For marketing managers who want to increase their understanding of the major issues of strategic, tactical, and administrative marketing—along with the opportunities and needs of the marketplace in the years ahead.
* * * Publisher:* Prentice Hall
* * * Number Of Pages:* 784
* * * Publication Date:* 1999-07-19
* * * ISBN-10 / ASIN:* 0130122173
* * * ISBN-13 / EAN:* 9780130122179
* * * Binding:* Hardcover
Product Description:
This world-wide best-selling book highlights the most recent trends and developments in global marketing—with an emphasis on the importance of teamwork between marketing and all the other functions of the business. It introduces new perspectives in successful strategic market planning, and presents additional company examples of creative, market-focused, and customer-driven action. Coverage includes a focus on marketing in the 21st Century that introduces the new ideas, tools and practices companies will need to successfully operate in the New Millenium. Chapter topics discuss building customer satisfaction, market-oriented strategic planning, analyzing consumer markets and buyer behavior, dealing with the competition, designing pricing strategies and programs, and managing the sales force. For marketing managers who want to increase their understanding of the major issues of strategic, tactical, and administrative marketing—along with the opportunities and needs of the marketplace in the years ahead.
Marketing Management (12th Edition) (Marketing Management) by Philip Kotler, Kev
Marketing Management (12th Edition) (Marketing Management) by Philip Kotler, Kev
* * ** Publisher:* * Prentice Hall
* * * Number Of Pages:* 816
* * * Publication Date:* 2006-01-01
* * * ISBN-10 / ASIN:* 0131457578
* * * ISBN-13 / EAN:* 9780131457577
* * * Binding:* Hardcover
Summary: this book sucks
Rating: 1
this book has been published and republished with the only chnages being the chapters reversed and new examples. the index in the back however has not been updated so it references incorrect pages. several acronyms used are not explained. terrible book.
Summary: Tons of theoretical information
Rating: 3
Although this is the primary used textbook for MBA students in marketing classes, it lacks one major substance- practical implications. Kotler and Keller are absolutely awesome in introducing almost all theories applied to marketing (except they lack to focus on international marketing), but this text is not "applied" marketing. Therefore my only problem with this about 700-page textbook is it's missing crucial steps required to achieve mentioned goals.
Summary: Good
Rating: 4
Nice but the main weakness stands on the delivery on time especially for outside Europe
Summary: Excellent Price
Rating: 5
I purchased this text book because of price; the university's custom book was over $150. I am so glad that I was able to locate this book. Thank you so much. The book was delivered in a timely manner.
Summary: Marketing Management 12e
Rating: 5
This has always been a great book, and as good wine has only improved through the years. It is at the same time a great textbook for Marketing Management courses as well as a useful reference for practitioner.
* * * Number Of Pages:* 816
* * * Publication Date:* 2006-01-01
* * * ISBN-10 / ASIN:* 0131457578
* * * ISBN-13 / EAN:* 9780131457577
* * * Binding:* Hardcover
Summary: this book sucks
Rating: 1
this book has been published and republished with the only chnages being the chapters reversed and new examples. the index in the back however has not been updated so it references incorrect pages. several acronyms used are not explained. terrible book.
Summary: Tons of theoretical information
Rating: 3
Although this is the primary used textbook for MBA students in marketing classes, it lacks one major substance- practical implications. Kotler and Keller are absolutely awesome in introducing almost all theories applied to marketing (except they lack to focus on international marketing), but this text is not "applied" marketing. Therefore my only problem with this about 700-page textbook is it's missing crucial steps required to achieve mentioned goals.
Summary: Good
Rating: 4
Nice but the main weakness stands on the delivery on time especially for outside Europe
Summary: Excellent Price
Rating: 5
I purchased this text book because of price; the university's custom book was over $150. I am so glad that I was able to locate this book. Thank you so much. The book was delivered in a timely manner.
Summary: Marketing Management 12e
Rating: 5
This has always been a great book, and as good wine has only improved through the years. It is at the same time a great textbook for Marketing Management courses as well as a useful reference for practitioner.
Download
Fish [SPANISH] By Stephen C. Lundin, Harry Paul, John Christensen
Fish [SPANISH] By Stephen C. Lundin, Harry Paul, John Christensen
* * * Publisher:* Empresa Activa
* * * Number Of Pages:* 128
* * * Publication Date:* 2002-09-01
* * * ISBN-10 / ASIN:* 8495787113
* * * ISBN-13 / EAN:* 9788495787118
* * * Binding:* Paperback
Amazon.com:
Here's another management parable that draws its lesson from an unlikely source--this time it's the fun-loving fishmongers at Seattle's Pike Place Market. In Fish! the heroine, Mary Jane Ramirez, recently widowed and mother of two, is asked to engineer a turnaround of her company's troubled operations department, a group that authors Stephen Lundin, Harry Paul, and John Christensen describe as a "toxic energy dump." Most reasonable heads would cut their losses and move on. Why bother with this bunch of losers? But the authors don't make it so easy for Mary Jane. Instead, she's left to sort out this mess with the help of head fishmonger Lonnie. Based on a bestselling corporate education video, Fish! aims to help employees find their way to a fun and happy workplace. While some may find the story line and prescriptions--such as "Choose Your Attitude," "Make Their Day," and "Be Present"--downright corny, others will find a good dose of worthwhile motivational management techniques. If you loved Who Moved My Cheese? then you'll find much to like here. And don't worry about Mary Jane and kids. Fish! has a happy ending for everyone. --Harry C. Edwards
* * * Number Of Pages:* 128
* * * Publication Date:* 2002-09-01
* * * ISBN-10 / ASIN:* 8495787113
* * * ISBN-13 / EAN:* 9788495787118
* * * Binding:* Paperback
Amazon.com:
Here's another management parable that draws its lesson from an unlikely source--this time it's the fun-loving fishmongers at Seattle's Pike Place Market. In Fish! the heroine, Mary Jane Ramirez, recently widowed and mother of two, is asked to engineer a turnaround of her company's troubled operations department, a group that authors Stephen Lundin, Harry Paul, and John Christensen describe as a "toxic energy dump." Most reasonable heads would cut their losses and move on. Why bother with this bunch of losers? But the authors don't make it so easy for Mary Jane. Instead, she's left to sort out this mess with the help of head fishmonger Lonnie. Based on a bestselling corporate education video, Fish! aims to help employees find their way to a fun and happy workplace. While some may find the story line and prescriptions--such as "Choose Your Attitude," "Make Their Day," and "Be Present"--downright corny, others will find a good dose of worthwhile motivational management techniques. If you loved Who Moved My Cheese? then you'll find much to like here. And don't worry about Mary Jane and kids. Fish! has a happy ending for everyone. --Harry C. Edwards
Maintenance Resource Management: Adapting Materials Requirements Planning MRP By Dinesh B. Shenoy, B. Bhadbury
Maintenance Resource Management: Adapting Materials Requirements Planning MRP By Dinesh B. Shenoy, B. Bhadbury
* * * Publisher:* CRC
* * * Number Of Pages:* 144
* * * Publication Date:* 1998-02-27
* * * ISBN-10 / ASIN:* 0748406484
* * * ISBN-13 / EAN:* 9780748406487
* * * Binding:* Hardcover
Product Description:
This book is written for current and prospective users of maintenance management systems within industrial manufacturing facilities, for both discrete and continuous process industry. Whilst dealing with common resource management techniques , it focuses on material requirements management, including case studies drawn from practical experience. Even though maintenance is seen as of strategic importance (particularly in capital intensive and continuous process industries), very little attention has been paid to its effective management. Maintenance resources not only include the fitting of spare parts, but also of skilled manpower, tools and instruments, and even money. A sound resource management system is indispensable for effective management, however, a proper technique or model has not been available...until now!
* * * Number Of Pages:* 144
* * * Publication Date:* 1998-02-27
* * * ISBN-10 / ASIN:* 0748406484
* * * ISBN-13 / EAN:* 9780748406487
* * * Binding:* Hardcover
Product Description:
This book is written for current and prospective users of maintenance management systems within industrial manufacturing facilities, for both discrete and continuous process industry. Whilst dealing with common resource management techniques , it focuses on material requirements management, including case studies drawn from practical experience. Even though maintenance is seen as of strategic importance (particularly in capital intensive and continuous process industries), very little attention has been paid to its effective management. Maintenance resources not only include the fitting of spare parts, but also of skilled manpower, tools and instruments, and even money. A sound resource management system is indispensable for effective management, however, a proper technique or model has not been available...until now!
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Health Informatics (Logistics Information Management : Volume 16, Number 3/4, 2003) by Guest Editors: Sarmad Alshawi, Tillal Eldabi and Ray J. Paul [ISSN 0957-6053]*
Health Informatics (Logistics Information Management : Volume 16, Number 3/4, 2003) by Guest Editors: Sarmad Alshawi, Tillal Eldabi and Ray J. Paul [ISSN 0957-6053]
Health Informatics
By: Alshawi, Sarmad; Eldabi, Tillal
Published By: Emerald Group Publishing
Computer based information systems represent an ever-growing component within healthcare organisations. There is now more than ever a high demand to develop effective systems that will manage healthcare information. Parallel to that there is even greater need to develop more reliable and efficient ways to use information to assist in making viable decisions. The adoption of computer based information systems – largely termed health informatics – offers many healthcare organisations potential abilities to cope with the overwhelming demand for healthcare services and deals with a number of strategic and tactical issues. Health informatics is increasingly employed in a wide variety of forms, such as supporting managerial decision making, monitoring patients’ progress through the system, and enhancing clinical practice. The debate around health informatics is how to use reliable information systems to manage healthcare systems and in establishing how to use efficient systems to manage healthcare information. The introduction and use of technologies may, however, have its drawbacks, such as the debate surrounding ethical issues and the costs of re-engineering, together with a general lack of understanding of the impact of using technology as decision aids. Political and cultural issues may also be affected by the use of technology.
This special issue is intended to stimulate this debate within the healthcare management arena. Logistics Information Management was identified as an appropriate platform to launch such a debate and generate meaningful conclusions. Logistics Information Management covers a wide audience ranging from academics to industrial managers, all of who would benefit from – and could contribute to – this debate. This double issue explores the current state-of-the-art applications of health informatics by highlighting potential benefits of its application but also by stressing the importance of appropriate – rather than bandwagon – implementation. The special issue attracted 30 submissions, resulting in 11 papers being finally selected following a rigorous reviewing process. The articles included in this issue represent international experiences and give, a flavour of the current research issues in the public sector and academe. The Guest Editors of this special issue are more than willing to collaborate further with anyone who might be interested in carrying out further research. Summaries of the articles in the special issue now follow, along with some editorial views on potential debating issues.
Pemberton et al. draw upon previous research to chart the technological developments that have taken place within primary health care during the last 20 years. Their survey reveals that 96 per cent of UK practices use a clinical computer system, with repeat and acute prescribing, the collation of annual data and audits/searches being the most well used applications. The authors discuss how improvement of computing skills appears to be a major determinant of successful integration of technology within a medical practice. They argue that there is a need to develop a social architecture and learning environment that allows GPs to provide good quality health care with clinical computer systems.
Pelletier and Weil study regional health care planning deals with the regional healthcare resource location-allocation, posed to each public healthcare administration, and argue that currently the models designed to support this kind of decision fail in their application. The article produces a set of attributes meeting each dimension underlying the choice of the regional healthcare plan. More precisely, by using Keeney’s method, the authors propose a formulation in simpler terms of the overall objective of the regional health facility systems planning. Pain et al. discuss the problem of adverse drug events and medication errors that can occur because of decisions made during prescribing. The authors examine the perceptions of doctors regarding adverse drug events/reactions and their views on how they may or may not be avoided with the use of a clinical decision support system (CDSS) in a prescribing environment. The article concludes that doctors welcomed the use of a CDSS for prescribing and stated three critical factors for their use of such a system – time constraints, limited knowledge and misreading.
Ambrose et al. use medical genetics as the research context to examine how Internet technologies are useful in managing thin (amount of knowledge is low) and thinly distributed (density of expertise is low) medical knowledge. The article specifically focuses on highlighting the usefulness of the Internet in managing such knowledge and draws attention to the need to examine the semiotic process management while designing Internet-enabled solutions for managing thin and thinly distributed knowledge. Khalfan and Alshawaf discuss the concept of IS/IT outsourcing in the context of health care, and present an overview of a case study exploring the IS/IT outsourcing phenomenon in the public sector of Kuwait. The article seeks to develop a conceptual contingency model for the successful implementation of IS/IT outsourcing arrangements in the context of Kuwait. The presented model addresses many interacting variables, from national culture and social factors through to contractual issues, and argues that it is necessary to take account of all these variables to ensure successful implementation of IS/IT outsourcing arrangements.
Akber and Gough highlight the problems that still prevail in the telecommunications sector of the healthcare industry, and emphasise the need for an effective solution in this rapidly evolving technological environment. The authors define the problem within healthcare delivery worldwide and theoretically explore a typical medical scenario in Kuwait, utilising the grounded theory method. The article also describes the pay-per-use concept, and discusses the appropriateness of such a concept for the healthcare industry, and proposes a conceptual framework that is characterised by being platform and application independent for healthcare delivery. Shapiro and Shapiro discuss how in the past operational researchers used their expertise in dealing with the problems of ‘‘multi-organisations’’ to influence government policy concerning the National Health Service (NHS), itself a ‘‘multiorganisation’’. They argue that effective management of a shared system requires the commitment of all stakeholders to an agreed agenda, and that recent organisational changes and liberalised funding schemes frustrate the co-operative efforts of those working to provide good healthcare. The authors consider this work as a prompt for effective policy structures that allow informed collaboration of all NHS stakeholders. Klischewski and Wetzel discuss how exploding expenditure has led to new reimbursement regulations forcing healthcare providers to conduct their organisations as business concerns. In order to be competitive, providers have started to build networks that allow the delivery of interrelated health services in a well-adjusted and uniform manner. They argue that besides strategic agreement, successful networking requires the support of information systems in order to deliver efficient day to day service, and advocate that service flow management supports organisations in jointly delivering services that cross provider boundaries. The authors provide a general concept that is based on the exchange of XMLrepresentations of process knowledge and data between service providers. Wang et al. explore the development of a knowledge base within the European Public Health and Environment Network. The study aims to provide some insight to managers, group members within EPHEN as to how this development can bring about changes to service delivery and practice that empowers service users and involves them in the process. It seeks also to identify possible difficulties that might be anticipated.
Han and Lee describe how the public health sector in South Korea introduced district health information systems (DHIS). The authors describe how district health information systems are being implemented, and how the information generated and collected through the systems is to be used by local authorities to plan and manage health services in their areas, and further by the central government to make a health plan at the national level. The article presents the development of DHIS for health centres in Korea, and evaluates the project focusing on the problems found in implementing the systems.
Alshawi et al. discuss the problems associated with data utilisation and propose a multi-layer framework for evaluating the quality and integration of patient data for CRM applications in the health care sector. In doing so, a range of potential business benefits is highlighted. The proposed framework presents a platform and software independent architecture for data evaluation and integration operations. The authors conclude that further research needs to be carried out to refine this framework, through model testing and case study evaluation.
Acknowledgments
The Guest Editors of this special issue have been pleased by the response for the call for papers on health informatics for Logistics Information Management. Each paper was reviewed by the guest editors and at least two other referees. The Guest Editors gratefully acknowledge the support and assistance provided by Zahir Irani – the Editor-in-Chief of the journal, and the 30 anonymous referees that reviewed the manuscripts received following the call for papers. Finally, much credit goes to Mrs Carolyn Bailey, whose outstanding effort and administrative support made this issue possible and ensured it was on time.
Sarmad Alshawi
Tillal Eldabi
Ray J. Paul
Previously published in: Logistics Information Management, Volume 16, Number 3/4, 2003
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Health Informatics
By: Alshawi, Sarmad; Eldabi, Tillal
Published By: Emerald Group Publishing
Computer based information systems represent an ever-growing component within healthcare organisations. There is now more than ever a high demand to develop effective systems that will manage healthcare information. Parallel to that there is even greater need to develop more reliable and efficient ways to use information to assist in making viable decisions. The adoption of computer based information systems – largely termed health informatics – offers many healthcare organisations potential abilities to cope with the overwhelming demand for healthcare services and deals with a number of strategic and tactical issues. Health informatics is increasingly employed in a wide variety of forms, such as supporting managerial decision making, monitoring patients’ progress through the system, and enhancing clinical practice. The debate around health informatics is how to use reliable information systems to manage healthcare systems and in establishing how to use efficient systems to manage healthcare information. The introduction and use of technologies may, however, have its drawbacks, such as the debate surrounding ethical issues and the costs of re-engineering, together with a general lack of understanding of the impact of using technology as decision aids. Political and cultural issues may also be affected by the use of technology.
This special issue is intended to stimulate this debate within the healthcare management arena. Logistics Information Management was identified as an appropriate platform to launch such a debate and generate meaningful conclusions. Logistics Information Management covers a wide audience ranging from academics to industrial managers, all of who would benefit from – and could contribute to – this debate. This double issue explores the current state-of-the-art applications of health informatics by highlighting potential benefits of its application but also by stressing the importance of appropriate – rather than bandwagon – implementation. The special issue attracted 30 submissions, resulting in 11 papers being finally selected following a rigorous reviewing process. The articles included in this issue represent international experiences and give, a flavour of the current research issues in the public sector and academe. The Guest Editors of this special issue are more than willing to collaborate further with anyone who might be interested in carrying out further research. Summaries of the articles in the special issue now follow, along with some editorial views on potential debating issues.
Pemberton et al. draw upon previous research to chart the technological developments that have taken place within primary health care during the last 20 years. Their survey reveals that 96 per cent of UK practices use a clinical computer system, with repeat and acute prescribing, the collation of annual data and audits/searches being the most well used applications. The authors discuss how improvement of computing skills appears to be a major determinant of successful integration of technology within a medical practice. They argue that there is a need to develop a social architecture and learning environment that allows GPs to provide good quality health care with clinical computer systems.
Pelletier and Weil study regional health care planning deals with the regional healthcare resource location-allocation, posed to each public healthcare administration, and argue that currently the models designed to support this kind of decision fail in their application. The article produces a set of attributes meeting each dimension underlying the choice of the regional healthcare plan. More precisely, by using Keeney’s method, the authors propose a formulation in simpler terms of the overall objective of the regional health facility systems planning. Pain et al. discuss the problem of adverse drug events and medication errors that can occur because of decisions made during prescribing. The authors examine the perceptions of doctors regarding adverse drug events/reactions and their views on how they may or may not be avoided with the use of a clinical decision support system (CDSS) in a prescribing environment. The article concludes that doctors welcomed the use of a CDSS for prescribing and stated three critical factors for their use of such a system – time constraints, limited knowledge and misreading.
Ambrose et al. use medical genetics as the research context to examine how Internet technologies are useful in managing thin (amount of knowledge is low) and thinly distributed (density of expertise is low) medical knowledge. The article specifically focuses on highlighting the usefulness of the Internet in managing such knowledge and draws attention to the need to examine the semiotic process management while designing Internet-enabled solutions for managing thin and thinly distributed knowledge. Khalfan and Alshawaf discuss the concept of IS/IT outsourcing in the context of health care, and present an overview of a case study exploring the IS/IT outsourcing phenomenon in the public sector of Kuwait. The article seeks to develop a conceptual contingency model for the successful implementation of IS/IT outsourcing arrangements in the context of Kuwait. The presented model addresses many interacting variables, from national culture and social factors through to contractual issues, and argues that it is necessary to take account of all these variables to ensure successful implementation of IS/IT outsourcing arrangements.
Akber and Gough highlight the problems that still prevail in the telecommunications sector of the healthcare industry, and emphasise the need for an effective solution in this rapidly evolving technological environment. The authors define the problem within healthcare delivery worldwide and theoretically explore a typical medical scenario in Kuwait, utilising the grounded theory method. The article also describes the pay-per-use concept, and discusses the appropriateness of such a concept for the healthcare industry, and proposes a conceptual framework that is characterised by being platform and application independent for healthcare delivery. Shapiro and Shapiro discuss how in the past operational researchers used their expertise in dealing with the problems of ‘‘multi-organisations’’ to influence government policy concerning the National Health Service (NHS), itself a ‘‘multiorganisation’’. They argue that effective management of a shared system requires the commitment of all stakeholders to an agreed agenda, and that recent organisational changes and liberalised funding schemes frustrate the co-operative efforts of those working to provide good healthcare. The authors consider this work as a prompt for effective policy structures that allow informed collaboration of all NHS stakeholders. Klischewski and Wetzel discuss how exploding expenditure has led to new reimbursement regulations forcing healthcare providers to conduct their organisations as business concerns. In order to be competitive, providers have started to build networks that allow the delivery of interrelated health services in a well-adjusted and uniform manner. They argue that besides strategic agreement, successful networking requires the support of information systems in order to deliver efficient day to day service, and advocate that service flow management supports organisations in jointly delivering services that cross provider boundaries. The authors provide a general concept that is based on the exchange of XMLrepresentations of process knowledge and data between service providers. Wang et al. explore the development of a knowledge base within the European Public Health and Environment Network. The study aims to provide some insight to managers, group members within EPHEN as to how this development can bring about changes to service delivery and practice that empowers service users and involves them in the process. It seeks also to identify possible difficulties that might be anticipated.
Han and Lee describe how the public health sector in South Korea introduced district health information systems (DHIS). The authors describe how district health information systems are being implemented, and how the information generated and collected through the systems is to be used by local authorities to plan and manage health services in their areas, and further by the central government to make a health plan at the national level. The article presents the development of DHIS for health centres in Korea, and evaluates the project focusing on the problems found in implementing the systems.
Alshawi et al. discuss the problems associated with data utilisation and propose a multi-layer framework for evaluating the quality and integration of patient data for CRM applications in the health care sector. In doing so, a range of potential business benefits is highlighted. The proposed framework presents a platform and software independent architecture for data evaluation and integration operations. The authors conclude that further research needs to be carried out to refine this framework, through model testing and case study evaluation.
Acknowledgments
The Guest Editors of this special issue have been pleased by the response for the call for papers on health informatics for Logistics Information Management. Each paper was reviewed by the guest editors and at least two other referees. The Guest Editors gratefully acknowledge the support and assistance provided by Zahir Irani – the Editor-in-Chief of the journal, and the 30 anonymous referees that reviewed the manuscripts received following the call for papers. Finally, much credit goes to Mrs Carolyn Bailey, whose outstanding effort and administrative support made this issue possible and ensured it was on time.
Sarmad Alshawi
Tillal Eldabi
Ray J. Paul
Previously published in: Logistics Information Management, Volume 16, Number 3/4, 2003
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Mastering the SAP Business Information Warehouse: Leveraging the Business Intelligence C of SAP NetWeaver By Kevin McDonald, Andreas Wilmsmeier, David C. Dixon, W. H. Inmon
Mastering the SAP Business Information Warehouse: Leveraging the Business Intelligence C of SAP NetWeaver
By Kevin McDonald, Andreas Wilmsmeier, David C. Dixon, W. H. Inmon
Product Description:
"This book is the definitive guide for SAP NetWeaver BI professionals. Based on their extraordinary expertise with the product, the authors provide deep insights about key innovations in the areas of user experience, query performance, integrated planning, and enterprise-wide data warehousing."
—Stefan Sigg, Vice President, SAP NetWeaver Business Intelligence
The long-anticipated publication of this second edition reflects the growing success of SAP NetWeaver as well as the various Business Intelligence (BI) capabilities that are embedded with SAP BW version 7.0. Written by SAP insiders, this comprehensive guide takes into account the ever-changing features, functionality, and toolsets of SAP NetWeaver to bring you the most updated information on how to use SAP BW to design, build, deploy, populate, access, analyze, present, and administer data. You'll discover the options that are available in SAP NetWeaver and uncover a new means to improve business performance.
This book reflects the process an organization goes through during an implementation of the software. The authors begin with an introduction to BI and SAP NetWeaver and quickly progress to information modeling and enterprise data warehouse concepts. You'll learn how to access and deliver meaningful analytic information to the organization, as well as perform integrated planning functions. Finally, the authors share invaluable insight on warehouse administration, performance, and security.
With more than 50 percent new or revised material, this second edition of Mastering the SAP Business Information Warehouse shows you how to:
The companion Web site contains sample chapters in Wiki format and the authors' blog where readers may enter discussions about the book and SAP.
Wiley Technology Publishing Timely. Practical. Reliable.
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By Kevin McDonald, Andreas Wilmsmeier, David C. Dixon, W. H. Inmon
- Publisher: Wiley
- Number Of Pages: 720
- Publication Date: 2006-08-28
- ISBN-10 / ASIN: 0764596373
- ISBN-13 / EAN: 9780764596377
- Binding: Hardcover
Product Description:
"This book is the definitive guide for SAP NetWeaver BI professionals. Based on their extraordinary expertise with the product, the authors provide deep insights about key innovations in the areas of user experience, query performance, integrated planning, and enterprise-wide data warehousing."
—Stefan Sigg, Vice President, SAP NetWeaver Business Intelligence
The long-anticipated publication of this second edition reflects the growing success of SAP NetWeaver as well as the various Business Intelligence (BI) capabilities that are embedded with SAP BW version 7.0. Written by SAP insiders, this comprehensive guide takes into account the ever-changing features, functionality, and toolsets of SAP NetWeaver to bring you the most updated information on how to use SAP BW to design, build, deploy, populate, access, analyze, present, and administer data. You'll discover the options that are available in SAP NetWeaver and uncover a new means to improve business performance.
This book reflects the process an organization goes through during an implementation of the software. The authors begin with an introduction to BI and SAP NetWeaver and quickly progress to information modeling and enterprise data warehouse concepts. You'll learn how to access and deliver meaningful analytic information to the organization, as well as perform integrated planning functions. Finally, the authors share invaluable insight on warehouse administration, performance, and security.
With more than 50 percent new or revised material, this second edition of Mastering the SAP Business Information Warehouse shows you how to:
- Extract data from online transaction processing systems
- Store transformed data in a way that best supports reporting and analysis
- Use the various Business Explorer tools such as BEx Report Designer, BEx Analyzer, BEx Broadcaster, and BEx Web Application Designer
- Schedule, monitor, troubleshoot, and archive data loads
The companion Web site contains sample chapters in Wiki format and the authors' blog where readers may enter discussions about the book and SAP.
Wiley Technology Publishing Timely. Practical. Reliable.
Visit our Web site at www.wiley.com/compbooks/
Visit the companion Web site at www.wiley.com/compbooks/mcdonald
The companion Web site contains the sample code presented in the text of the book, plus implementation templates.
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Thursday, November 26, 2009
A Modern Approach to Operations Management by: Ram Naresh R
A Modern Approach to Operations Management
by: Ram Naresh Roy.
345 Pages
Copyright © 2005 New Age International (P) Ltd., Publishers
Published by New Age International (P) Ltd., Publishers
Preface
While teaching the course on ‘Production Operations Management (POM)’ to my students in
India and abroad, I have felt a huge shortage of books and relevant materials on this subject.
The books available are mostly written with Western world perspective. The examples included
in those books are not very relevant to the students of developing countries. This has motivated
me to write this book which is based on my own teaching experiences and the feed back of my
students.
The book includes the background, the core concepts, and the models of POM. It is readable,
comprehensive, and contemporary in its approach. The concepts of Operations Management
have been delivered to the readers in a simple, straightforward manner, and without
mincing the words to avoid dilution of the materials itself.
The layout of the book has been organized to give the readers a sense of flow: (i) Beginning
with fundamentals of Production systems, Productivity, Location of plant, layout issues;
(ii) Core issues of POM like Forecasting, Operations planning, Purchasing systems and steps
involved in it, Inventory models, and MRP, Quality control, TQM, Project Management; and
finally (iii) the attention is focused to modern concepts on the subject like JIT, OPT, Automation,
etc. This makes the book more comprehensive in nature.
Adequate number of solved problems have been included to give the readers a chance to
enhance the learning process. Examples from local industries, agriculture sector, services (banking,
airlines, hotels, transport, etc.) have been included to make the chapters interesting and
palatable to the students’ taste.
I thank my students and colleagues for their constructive comments in making the book
more useful.
Lastly, I always believe in ‘kaizen’—the continuous improvement process in everything I
do and this goes with this book as well. I invite the readers, therefore, to send their comments
and suggestions to improve this book in its next edition.
RAM NARESH ROY, PhD
Contents
1 PRODUCTION SYSTEMS AND OPERATIONS MANAGEMENT 1
1.0 Introduction...................................... .................................................. .......................... 1
1.1 Related Issues of Operations Management .................................................. ............. 1
1.1.1 Production Function .................................................. .................................... 1
1.1.2 Productivity .................................................. .................................................. 2
1.1.3 Difference between Production and Productivity ........................................ 2
1.1.4 Effectiveness .................................................. ................................................ 3
1.1.5 Efficiency .................................................. .................................................. .... 3
1.2 Operations Function in Organizations .................................................. ..................... 4
1.2.1 Manufacturing Operations Vs Service Operations ..................................... 5
1.2.2 Types of Production System .................................................. ........................ 7
1.3 Role of Models in Operations Management .................................................. ........... 10
1.3.1 Types of Models in Production Operations Management (POM) ............. 10
1.3.2 Mathematical Models in Production and Operations Management ........ 11
1.3.3 Modeling Benefits .................................................. ...................................... 11
1.4 Classifying Problems .................................................. ............................................... 11
1.4.1 Uncertainty of Outcomes .................................................. .......................... 11
1.4.2 Maximum Rule .................................................. .......................................... 13
1.4.3 Interdependence Among Decisions .................................................. .......... 14
2 LOCATION OF PRODUCTION AND SERVICE FACILITIES 17
2.0 Introduction...................................... .................................................. ........................ 17
2.1 Reasons for Location Changes .................................................. ............................... 17
2.2 General Factors Influencing Location .................................................. .................... 18
2.2.1 Rural and Urban Sites Compared .................................................. ............ 20
2.3 General Procedures for Facility Location.......................................... ....................... 21
2.3.1 Preliminary Screening .................................................. .............................. 21
2.3.2 Selection of Exact Site .................................................. ............................... 22
2.4 Some Other Facility Location Models .................................................. .................... 23
2.4.1 Simple Median Model .................................................. ................................ 23
2.4.2 Center of Gravity (GRID) Model .................................................. .............. 26
2.4.3 Linear Programming (LP) .................................................. ......................... 27
2.4.4 Simulation .................................................. .................................................. 33
2.4.5 Break Even Analysis .................................................. ................................. 33
Preface (v)
( vii )
3 LAYOUT PLANNING 36
3.0 Introduction...................................... .................................................. ........................ 36
3.1 Effects of a Plant Layout .................................................. ........................................ 36
3.2 Factors Affecting Layout .................................................. ........................................ 37
3.2.1 Types of Industries .................................................. .................................... 37
3.2.2 Types of Production System .................................................. ...................... 37
3.2.3 Type of Product .................................................. .......................................... 38
3.2.4 Volume of Production .................................................. ................................ 38
3.3 Systematic Layout Planning (SLP) .................................................. ........................ 38
3.4 Other Approaches to Plant Layout .................................................. ......................... 41
3.4.1 Principles of Plant Layout............................................ ............................... 43
3.4.2 Types of Flow Patterns .................................................. .............................. 43
3.5 Types of Layout .................................................. .................................................. ..... 43
3.5.1 Fixed Position Layout............................................ ...................................... 45
3.5.2 Process-Oriented or Functional Layout .................................................. ... 46
3.5.3 Repetitive and Product-Oriented Layout .................................................. . 51
3.5.4 Office Layout .................................................. .............................................. 55
3.5.5 Retail Layout .................................................. ............................................. 56
3.5.6 Warehousing and Storage Layouts .................................................. .......... 57
3.5.7 Combination Layout .................................................. .................................. 57
3.6 Material Handling .................................................. .................................................. . 57
3.6.1 Principles of Material Handling .................................................. ............... 58
3.6.2 Simplified Version of Principles of Material Handling ............................. 59
3.6.3 Material Handling Equipment .................................................. ................. 59
3.6.4 Relationship Between Material Handling and Factory Building
Design or Layout............................................ .............................................. 60
4 PURCHASING SYSTEMS AND VENDOR RATING 62
4.0 Introduction...................................... .................................................. ........................ 62
4.1 Functions of Material Management .................................................. ....................... 62
4.2 Objectives of Materials Management .................................................. ..................... 62
4.3 Purchasing or Procurement Function .................................................. .................... 63
4.3.1 Objectives of Purchasing Department .................................................. ..... 63
4.3.2 Activities, Duties and Functions of Purchasing Department ................... 63
4.3.3 Centralized and Decentralized Purchasing Organizations ...................... 64
4.4 Modes of Purchasing Materials......................................... ........................................ 65
4.4.1 Spot Quotations .................................................. ......................................... 65
4.4.2 Floating the Limited Inquiry .................................................. .................... 65
4.4.3 Tender .................................................. .................................................. ...... 65
4.5 Steps in One Complete Purchasing Cycle .................................................. .............. 66
4.5.1 Some Questions Related to Purchase .................................................. ....... 66
4.5.2 Tender Procedure .................................................. ...................................... 67
( viii )
4.6 Vendor Rating .................................................. .................................................. ........ 73
4.7 What is Expected of a Better Buyer .................................................. ....................... 74
4.8 Some Working Definitions .................................................. ...................................... 74
4.8.1 Quality Index (QI) .................................................. ..................................... 75
4.8.2 Delivery Reliability Index (DRI) .................................................. ............... 75
4.8.3 Flexibility Index (FI) .................................................. ................................. 76
4.8.4 Price Performance Index (PPI) .................................................. ................. 77
4.8.5 Frequency of Rating .................................................. .................................. 78
4.8.6 Use of the Indices .................................................. ...................................... 78
4.9 Stores and Material Control........................................... ........................................... 78
4.9.1 Requirements of a Material Control System ............................................. 79
4.10 Stores Management .................................................. ................................................. 79
4.10.1 Functions of Stores Department and the Duties of the Storekeeper ....... 79
4.10.2 Location and Layout of Stores .................................................. .................. 80
4.10.3 Advantages of Centralization of Stores .................................................. .... 80
4.10.4 Advantages of Decentralization of Stores .................................................. 81
5 OPERATIONS PLANNING AND CONTROL 82
5.0 Introduction...................................... .................................................. ........................ 82
5.1 Benefits of Better Operations Planning and Control .............................................. 83
5.2 Main Functions of OPC .................................................. ........................................... 83
5.2.1 Some Specific Activities of OPC............................................... ................... 83
5.3 Detailed Functions of OPC............................................... ......................................... 84
5.3.1 Planning Phases .................................................. ........................................ 84
5.3.2 Routing or Sequencing .................................................. .............................. 84
5.3.3 Loading or Assignment .................................................. ............................. 86
5.3.4 Scheduling .................................................. .................................................. 89
5.3.5 Sequencing and Disp****ing Phase .................................................. ......... 93
5.3.6 Controlling or Follow-up Phase .................................................. ................ 98
6 INVENTORY CONTROL 100
6.0 Introduction...................................... .................................................. ...................... 100
6.1 Purpose of Inventories .................................................. ........................................... 100
6.2 Objective of Inventory Management .................................................. .................... 101
6.2.1 Requirements for Effective Inventory Management ............................... 101
6.2.2 Inventory Counting Systems .................................................. .................. 102
6.2.3 A Perpetual Inventory System .................................................. ............... 102
6.2.4 Ordering Cycle System............................................ .................................. 103
6.2.5 Demand Forecasts and Lead-Time Information...................................... 104
6.2.6 Inventory Cost Information .................................................. .................... 104
6.3 Types of Inventory Control Techniques .................................................. ............... 105
6.3.1 Qualitative Techniques .................................................. ........................... 105
6.3.2 Quantitative Techniques or Models .................................................. ....... 108
6.4 Stocking of Perishables .................................................. ......................................... 125
( ix )
7 MATERIAL REQUIREMENT PLANNING 130
7.0 Introduction...................................... .................................................. ...................... 130
7.1 Need for Materials Planning .................................................. ................................. 130
7.1.1 Terms Used in MRP .................................................. ................................ 131
7.2 Basic MRP Concepts .................................................. .............................................. 131
7.2.1 Independent Demand .................................................. .............................. 132
7.2.2 Dependent Demand .................................................. ................................. 132
7.2.3 Lumpy Demand .................................................. ....................................... 132
7.2.4 Lead Time of Item .................................................. ................................... 132
7.2.5 Common Use Items .................................................. ................................. 133
7.2.6 Time Phasing .................................................. ........................................... 133
7.3 Factor Affecting the Computation of MRP............................................... .............. 134
7.3.1 Production Structure .................................................. ............................... 134
7.3.2 Lot Sizing .................................................. ................................................. 135
7.3.3 Recurrence of Requirements within Planning Horizon .......................... 136
7.4 Objectives of MRP System .................................................. .................................... 137
7.5 Prerequisites and Assumptions of MRP .................................................. ............... 138
7.5.1 Prerequisites .................................................. ............................................ 138
7.5.2 Assumptions .................................................. ............................................. 138
7.6 Inputs to MRP .................................................. .................................................. ...... 139
7.6.1 Master Production Schedule (MPS) .................................................. ....... 139
7.6.2 Bill of Material (BOM)............................................. .................................. 140
7.6.3 Inventory Record File .................................................. .............................. 141
7.7 MRP Outputs .................................................. .................................................. ....... 142
7.7.1 Primary Outputs........................................... ............................................. 143
7.7.2 Secondary Outputs .................................................. .................................. 143
7.8 MRP Logic in Brief .................................................. ................................................ 143
7.8.1 A Sample of Management Information (Output) from MRP .................. 144
7.8.2 Limitations and Advantages of MRP .................................................. ..... 152
7.9 Manufacturing Resource Planning (MRP II) .................................................. ....... 152
7.10 MRP Implementation .................................................. ............................................ 154
7.10.1 An Inventory Control System .................................................. ................. 154
7.10.2 A Production and Inventory Control System........................................... 154
7.10.3 A Manufacturing Resource Planning System .......................................... 154
7.11 How Can Industry Benefit From MRP? .................................................. ............... 156
8 JUST-IN-TIME APPROACH 160
8.0 Introduction...................................... .................................................. ...................... 160
8.1 History of Relations Between Management and Workers .................................... 161
8.1.1 Adaptation to New Production Environment .......................................... 161
8.1.2 The Kanban Control .................................................. ................................ 161
8.1.3 JIT Today .................................................. ................................................. 162
8.1.4 JIT Application Profile .................................................. ............................ 163
( x )
8.2 Keys to Successful JIT Implementation .................................................. ............... 165
8.2.1 The Kanban System .................................................. ................................ 166
8.3 Japanese Vs American Management .................................................. ................... 169
8.3.1 Downsides of Japanese Management........................................ ............... 169
8.3.2 JIT Manufacturing System Overview .................................................. .... 170
8.3.3 The Seven Wastes in JIT............................................... ............................ 172
8.3.4 Value-Added Manufacturing .................................................. .................. 172
8.4 How Japanese Manufacturing Ideally Works? .................................................. .... 173
8.4.1 Stockless Production........................................ .......................................... 173
8.5 Comparison of MRP and JIT .................................................. ................................. 174
8.5.1 Push Vs Pull System .................................................. ............................... 174
8.6 Requirements for Successful Implementation of JIT ............................................ 175
8.7 Goals of JIT Manufacturing System............................................ ........................... 176
8.7.1 Important Aspects in JIT Manufacturing ................................................ 178
8.7.2 Advantages and Disadvantages of JIT .................................................. ... 179
8.8 Theory of Constraints (TOC)............................................. ...................................... 181
8.8.1 Systems Thinking .................................................. .................................... 181
8.8.2 Five Focusing Steps of TOC .................................................. .................... 182
8.8.3 The Five Layers of Resistance .................................................. ................ 183
8.8.4 Quantifying the Improvement .................................................. ................ 183
8.9 TOC Tools .................................................. .................................................. ............. 183
8.9.1 Current Reality Tree (CRT) .................................................. .................... 183
8.9.2 Conflict Resolution Diagram (CRD) or Evaporating Cloud .................... 184
8.9.3 Future Reality Tree (FRT) .................................................. ...................... 185
8.9.4 Prerequisite Tree (PRT) .................................................. .......................... 186
8.9.5 Transition Tree (TT) .................................................. ................................ 187
9 PROJECT MANAGEMENT 188
9.0 Introduction...................................... .................................................. ...................... 188
9.1 Some Terms Related to Network Planning.......................................... .................. 188
9.2 CPM and PERT Model............................................. ................................................ 191
9.2.1 Time Estimates in PERT.............................................. ............................. 192
9.2.2 Algorithm Used in Calculating Critical Path .......................................... 193
9.3 Variability of Activity Times .................................................. ................................. 194
9.4 Probability of Completing a Project by a Given Date ............................................ 195
9.5 Project Crashing and Time-Cost Trade-off .................................................. .......... 196
9.6 Resource Leveling .................................................. .................................................. 208
9.6.1 Heuristic Methods .................................................. ................................... 208
9.7 Resource Leveling of Project Schedules .................................................. ............... 209
9.8 Project Delay .................................................. .................................................. ........ 213
( xi )
10 QUALITY CONTROL 215
10.0 Introduction...................................... .................................................. ...................... 215
10.1 Inspection .................................................. .................................................. ............. 215
10.1.1 Types of Inspection .................................................. .................................. 215
10.1.2 Purpose of Inspections .................................................. ............................. 216
10.2 Some Quality Related Terms .................................................. ................................ 216
10.3 Statistical Quality Control (SQC) .................................................. ......................... 216
10.4 Acceptance Sampling .................................................. ............................................. 217
10.4.1 Where do we use Sampling ? .................................................. .................. 217
10.4.2 Advantages and Disadvantages of Acceptance Sampling ....................... 217
10.4.3 Representative Sample .................................................. ........................... 217
10.5 Sampling Plans .................................................. .................................................. .... 218
10.5.1 Single Sampling Plan (SSP) .................................................. .................... 218
10.5.2 Double Sampling Plan (DSP) .................................................. .................. 219
10.5.3 Sequential or Multiple Sampling Plan .................................................. ... 221
10.6 Process Variability and Control .................................................. ............................ 221
10.7 Control Charts .................................................. .................................................. ..... 222
10.7.1 The p-Chart .................................................. .............................................. 223
10.7.2 The c-Chart .................................................. .............................................. 225
10.7.3 Steps in Constructing S-Chart............................................. ..................... 226
10.7.4 Steps in Constructing the X Chart .................................................. ........ 227
10.8 Use of Computers in Quality Control .................................................. ................... 233
11 TOTAL QUALITY MANAGEMENT AND ISO-9000 234
11.0 What is TQM? .................................................. .................................................. ...... 234
11.1 TQM Need Commitment .................................................. ....................................... 234
11.2 Various Approaches to TQM .................................................. ................................. 235
11.2.1 Deming’s Approach to TQM............................................... ....................... 235
11.2.2 Juran’s Approach to TQM .................................................. ....................... 236
11.2.3 Crosby’s Approach to TQM .................................................. ..................... 237
11.2.4 Feigenbaum’s Approach to TQM .................................................. ............ 238
11.2.5 Ishikawa’s Approach to TQM............................................... ..................... 239
11.3 Some Quality and TQM Related Terms .................................................. ............... 240
11.4 Relationship Between ISO 9000 and Quality .................................................. ...... 248
11.5 Relationship Between ISO 9000 and TQM .................................................. .......... 248
11.5.1 Principles of ISO 9000 .................................................. ............................. 249
11.5.2 Benefits of ISO 9000 .................................................. ................................ 249
12 LINEAR PROGRAMMING 251
12.0 Introduction...................................... .................................................. ...................... 251
12.1 The LP Formulation and Underlying Assumptions .............................................. 251
12.2 The General LP Formulation .................................................. ................................ 253
( xii )
12.2.1 Graphical Solution of 2-Variables LP .................................................. ..... 254
12.2.2 A 2-Var LP with a Unique Optimal Solution ........................................... 254
12.3 Different Forms of Linear Programs .................................................. .................... 255
12.4 The Assignment Problem .................................................. ...................................... 264
12.5 Transportation Problem .................................................. ........................................ 267
12.5.1 Transportation Algorithm (Modi Method) ............................................... 271
13 METHODS ENGINEERING 273
13.0 Introduction...................................... .................................................. ...................... 273
13.1 Objective of Work Study .................................................. ........................................ 273
13.2 Tools and Techniques of Work Study .................................................. .................. 274
13.2.1 Method Study .................................................. ........................................... 274
13.2.2 Work Measurement (Time Study) .................................................. .......... 283
13.3 Standardization .................................................. .................................................. ... 293
13.3.1 What is a Standard? .................................................. ................................ 293
13.3.2 Examples of Standards .................................................. ........................... 294
13.3.3 What is Conformity Assessment? .................................................. ........... 294
13.3.4 Standards Development, Acceptance/Implementation ........................... 294
13.3.5 Benefits of Standards to Industry .................................................. .......... 295
13.3.6 Benefits of Standards to Government .................................................. .... 295
13.3.7 Benefits of Standards to Consumers .................................................. ...... 296
13.3.8 Cardinal Principles of International Standardization ............................ 296
14 MECHANIZATION, AUTOMATION AND PRODUCTIVITY 298
14.0 Introduction...................................... .................................................. ...................... 298
14.1 Assembly Line .................................................. .................................................. ...... 298
14.1.1 History of the Assembly Line .................................................. .................. 298
14.1.2 History of Moving Assembly Line.............................................. ............... 299
14.1.3 Pre Industrial Revolution .................................................. ....................... 299
14.1.4 Industrial Robot .................................................. ....................................... 299
14.2 Postal Mechanization/Early Automation .................................................. ............. 299
14.3 The Age of Automation .................................................. .......................................... 300
14.3.1 Automation........................................ .................................................. ....... 302
14.3.2 Social Issues of Automation .................................................. .................... 303
14.3.3 The Automated Workplace......................................... ............................... 303
14.4 Productivity Improvement Stories .................................................. ....................... 305
14.4.1 Story of US Agriculture .................................................. ........................... 305
14.4.2 Automation Improves Productivity in a Tire Company .......................... 305
14.4.3 Automation Sends Productivity Soaring .................................................. 306
14.4.4 Story of Increased Productivity in Photographic Industry .................... 309
14.5 Automation Systems Today .................................................. .................................. 310
( xiii)
15 VALUE ANALYSIS AND VALUE ENGINEERING 312
15.0 Introduction...................................... .................................................. ...................... 312
15.1 Some Basic Concepts .................................................. ............................................. 312
15.1.1 Definition of Value .................................................. ................................... 312
15.1.2 Reasons Behind Poor Value .................................................. .................... 313
15.1.3 Types of Values .................................................. ........................................ 313
15.1.4 Types of Functions .................................................. ................................... 313
15.2 Value Tests .................................................. .................................................. ........... 313
15.3 Steps in Value Analysis .................................................. ......................................... 314
15.4 Examples of Value Engineering .................................................. ........................... 318
15.4.1 Some Simple Case Studies of VE................................................ .............. 318
15.5 Value Engineering and Simplification Analysis .................................................. .. 319
15.5.1 The Primary Questions .................................................. ........................... 319
15.5.2 The Secondary Questions .................................................. ........................ 320
15.5.3 Checklist .................................................. .................................................. . 321
15.6 Benefits of Value Engineering .................................................. .............................. 327
Index .................................................. .................................................. ..................... 328
Rar'd PDF ~ 1.8 MB's Bookmarked A Modern Approach to Operations Management
by: Ram Naresh Roy.
345 Pages
Copyright © 2005 New Age International (P) Ltd., Publishers
Published by New Age International (P) Ltd., Publishers
Preface
While teaching the course on ‘Production Operations Management (POM)’ to my students in
India and abroad, I have felt a huge shortage of books and relevant materials on this subject.
The books available are mostly written with Western world perspective. The examples included
in those books are not very relevant to the students of developing countries. This has motivated
me to write this book which is based on my own teaching experiences and the feed back of my
students.
The book includes the background, the core concepts, and the models of POM. It is readable,
comprehensive, and contemporary in its approach. The concepts of Operations Management
have been delivered to the readers in a simple, straightforward manner, and without
mincing the words to avoid dilution of the materials itself.
The layout of the book has been organized to give the readers a sense of flow: (i) Beginning
with fundamentals of Production systems, Productivity, Location of plant, layout issues;
(ii) Core issues of POM like Forecasting, Operations planning, Purchasing systems and steps
involved in it, Inventory models, and MRP, Quality control, TQM, Project Management; and
finally (iii) the attention is focused to modern concepts on the subject like JIT, OPT, Automation,
etc. This makes the book more comprehensive in nature.
Adequate number of solved problems have been included to give the readers a chance to
enhance the learning process. Examples from local industries, agriculture sector, services (banking,
airlines, hotels, transport, etc.) have been included to make the chapters interesting and
palatable to the students’ taste.
I thank my students and colleagues for their constructive comments in making the book
more useful.
Lastly, I always believe in ‘kaizen’—the continuous improvement process in everything I
do and this goes with this book as well. I invite the readers, therefore, to send their comments
and suggestions to improve this book in its next edition.
RAM NARESH ROY, PhD
Contents
1 PRODUCTION SYSTEMS AND OPERATIONS MANAGEMENT 1
1.0 Introduction...................................... .................................................. .......................... 1
1.1 Related Issues of Operations Management .................................................. ............. 1
1.1.1 Production Function .................................................. .................................... 1
1.1.2 Productivity .................................................. .................................................. 2
1.1.3 Difference between Production and Productivity ........................................ 2
1.1.4 Effectiveness .................................................. ................................................ 3
1.1.5 Efficiency .................................................. .................................................. .... 3
1.2 Operations Function in Organizations .................................................. ..................... 4
1.2.1 Manufacturing Operations Vs Service Operations ..................................... 5
1.2.2 Types of Production System .................................................. ........................ 7
1.3 Role of Models in Operations Management .................................................. ........... 10
1.3.1 Types of Models in Production Operations Management (POM) ............. 10
1.3.2 Mathematical Models in Production and Operations Management ........ 11
1.3.3 Modeling Benefits .................................................. ...................................... 11
1.4 Classifying Problems .................................................. ............................................... 11
1.4.1 Uncertainty of Outcomes .................................................. .......................... 11
1.4.2 Maximum Rule .................................................. .......................................... 13
1.4.3 Interdependence Among Decisions .................................................. .......... 14
2 LOCATION OF PRODUCTION AND SERVICE FACILITIES 17
2.0 Introduction...................................... .................................................. ........................ 17
2.1 Reasons for Location Changes .................................................. ............................... 17
2.2 General Factors Influencing Location .................................................. .................... 18
2.2.1 Rural and Urban Sites Compared .................................................. ............ 20
2.3 General Procedures for Facility Location.......................................... ....................... 21
2.3.1 Preliminary Screening .................................................. .............................. 21
2.3.2 Selection of Exact Site .................................................. ............................... 22
2.4 Some Other Facility Location Models .................................................. .................... 23
2.4.1 Simple Median Model .................................................. ................................ 23
2.4.2 Center of Gravity (GRID) Model .................................................. .............. 26
2.4.3 Linear Programming (LP) .................................................. ......................... 27
2.4.4 Simulation .................................................. .................................................. 33
2.4.5 Break Even Analysis .................................................. ................................. 33
Preface (v)
( vii )
3 LAYOUT PLANNING 36
3.0 Introduction...................................... .................................................. ........................ 36
3.1 Effects of a Plant Layout .................................................. ........................................ 36
3.2 Factors Affecting Layout .................................................. ........................................ 37
3.2.1 Types of Industries .................................................. .................................... 37
3.2.2 Types of Production System .................................................. ...................... 37
3.2.3 Type of Product .................................................. .......................................... 38
3.2.4 Volume of Production .................................................. ................................ 38
3.3 Systematic Layout Planning (SLP) .................................................. ........................ 38
3.4 Other Approaches to Plant Layout .................................................. ......................... 41
3.4.1 Principles of Plant Layout............................................ ............................... 43
3.4.2 Types of Flow Patterns .................................................. .............................. 43
3.5 Types of Layout .................................................. .................................................. ..... 43
3.5.1 Fixed Position Layout............................................ ...................................... 45
3.5.2 Process-Oriented or Functional Layout .................................................. ... 46
3.5.3 Repetitive and Product-Oriented Layout .................................................. . 51
3.5.4 Office Layout .................................................. .............................................. 55
3.5.5 Retail Layout .................................................. ............................................. 56
3.5.6 Warehousing and Storage Layouts .................................................. .......... 57
3.5.7 Combination Layout .................................................. .................................. 57
3.6 Material Handling .................................................. .................................................. . 57
3.6.1 Principles of Material Handling .................................................. ............... 58
3.6.2 Simplified Version of Principles of Material Handling ............................. 59
3.6.3 Material Handling Equipment .................................................. ................. 59
3.6.4 Relationship Between Material Handling and Factory Building
Design or Layout............................................ .............................................. 60
4 PURCHASING SYSTEMS AND VENDOR RATING 62
4.0 Introduction...................................... .................................................. ........................ 62
4.1 Functions of Material Management .................................................. ....................... 62
4.2 Objectives of Materials Management .................................................. ..................... 62
4.3 Purchasing or Procurement Function .................................................. .................... 63
4.3.1 Objectives of Purchasing Department .................................................. ..... 63
4.3.2 Activities, Duties and Functions of Purchasing Department ................... 63
4.3.3 Centralized and Decentralized Purchasing Organizations ...................... 64
4.4 Modes of Purchasing Materials......................................... ........................................ 65
4.4.1 Spot Quotations .................................................. ......................................... 65
4.4.2 Floating the Limited Inquiry .................................................. .................... 65
4.4.3 Tender .................................................. .................................................. ...... 65
4.5 Steps in One Complete Purchasing Cycle .................................................. .............. 66
4.5.1 Some Questions Related to Purchase .................................................. ....... 66
4.5.2 Tender Procedure .................................................. ...................................... 67
( viii )
4.6 Vendor Rating .................................................. .................................................. ........ 73
4.7 What is Expected of a Better Buyer .................................................. ....................... 74
4.8 Some Working Definitions .................................................. ...................................... 74
4.8.1 Quality Index (QI) .................................................. ..................................... 75
4.8.2 Delivery Reliability Index (DRI) .................................................. ............... 75
4.8.3 Flexibility Index (FI) .................................................. ................................. 76
4.8.4 Price Performance Index (PPI) .................................................. ................. 77
4.8.5 Frequency of Rating .................................................. .................................. 78
4.8.6 Use of the Indices .................................................. ...................................... 78
4.9 Stores and Material Control........................................... ........................................... 78
4.9.1 Requirements of a Material Control System ............................................. 79
4.10 Stores Management .................................................. ................................................. 79
4.10.1 Functions of Stores Department and the Duties of the Storekeeper ....... 79
4.10.2 Location and Layout of Stores .................................................. .................. 80
4.10.3 Advantages of Centralization of Stores .................................................. .... 80
4.10.4 Advantages of Decentralization of Stores .................................................. 81
5 OPERATIONS PLANNING AND CONTROL 82
5.0 Introduction...................................... .................................................. ........................ 82
5.1 Benefits of Better Operations Planning and Control .............................................. 83
5.2 Main Functions of OPC .................................................. ........................................... 83
5.2.1 Some Specific Activities of OPC............................................... ................... 83
5.3 Detailed Functions of OPC............................................... ......................................... 84
5.3.1 Planning Phases .................................................. ........................................ 84
5.3.2 Routing or Sequencing .................................................. .............................. 84
5.3.3 Loading or Assignment .................................................. ............................. 86
5.3.4 Scheduling .................................................. .................................................. 89
5.3.5 Sequencing and Disp****ing Phase .................................................. ......... 93
5.3.6 Controlling or Follow-up Phase .................................................. ................ 98
6 INVENTORY CONTROL 100
6.0 Introduction...................................... .................................................. ...................... 100
6.1 Purpose of Inventories .................................................. ........................................... 100
6.2 Objective of Inventory Management .................................................. .................... 101
6.2.1 Requirements for Effective Inventory Management ............................... 101
6.2.2 Inventory Counting Systems .................................................. .................. 102
6.2.3 A Perpetual Inventory System .................................................. ............... 102
6.2.4 Ordering Cycle System............................................ .................................. 103
6.2.5 Demand Forecasts and Lead-Time Information...................................... 104
6.2.6 Inventory Cost Information .................................................. .................... 104
6.3 Types of Inventory Control Techniques .................................................. ............... 105
6.3.1 Qualitative Techniques .................................................. ........................... 105
6.3.2 Quantitative Techniques or Models .................................................. ....... 108
6.4 Stocking of Perishables .................................................. ......................................... 125
( ix )
7 MATERIAL REQUIREMENT PLANNING 130
7.0 Introduction...................................... .................................................. ...................... 130
7.1 Need for Materials Planning .................................................. ................................. 130
7.1.1 Terms Used in MRP .................................................. ................................ 131
7.2 Basic MRP Concepts .................................................. .............................................. 131
7.2.1 Independent Demand .................................................. .............................. 132
7.2.2 Dependent Demand .................................................. ................................. 132
7.2.3 Lumpy Demand .................................................. ....................................... 132
7.2.4 Lead Time of Item .................................................. ................................... 132
7.2.5 Common Use Items .................................................. ................................. 133
7.2.6 Time Phasing .................................................. ........................................... 133
7.3 Factor Affecting the Computation of MRP............................................... .............. 134
7.3.1 Production Structure .................................................. ............................... 134
7.3.2 Lot Sizing .................................................. ................................................. 135
7.3.3 Recurrence of Requirements within Planning Horizon .......................... 136
7.4 Objectives of MRP System .................................................. .................................... 137
7.5 Prerequisites and Assumptions of MRP .................................................. ............... 138
7.5.1 Prerequisites .................................................. ............................................ 138
7.5.2 Assumptions .................................................. ............................................. 138
7.6 Inputs to MRP .................................................. .................................................. ...... 139
7.6.1 Master Production Schedule (MPS) .................................................. ....... 139
7.6.2 Bill of Material (BOM)............................................. .................................. 140
7.6.3 Inventory Record File .................................................. .............................. 141
7.7 MRP Outputs .................................................. .................................................. ....... 142
7.7.1 Primary Outputs........................................... ............................................. 143
7.7.2 Secondary Outputs .................................................. .................................. 143
7.8 MRP Logic in Brief .................................................. ................................................ 143
7.8.1 A Sample of Management Information (Output) from MRP .................. 144
7.8.2 Limitations and Advantages of MRP .................................................. ..... 152
7.9 Manufacturing Resource Planning (MRP II) .................................................. ....... 152
7.10 MRP Implementation .................................................. ............................................ 154
7.10.1 An Inventory Control System .................................................. ................. 154
7.10.2 A Production and Inventory Control System........................................... 154
7.10.3 A Manufacturing Resource Planning System .......................................... 154
7.11 How Can Industry Benefit From MRP? .................................................. ............... 156
8 JUST-IN-TIME APPROACH 160
8.0 Introduction...................................... .................................................. ...................... 160
8.1 History of Relations Between Management and Workers .................................... 161
8.1.1 Adaptation to New Production Environment .......................................... 161
8.1.2 The Kanban Control .................................................. ................................ 161
8.1.3 JIT Today .................................................. ................................................. 162
8.1.4 JIT Application Profile .................................................. ............................ 163
( x )
8.2 Keys to Successful JIT Implementation .................................................. ............... 165
8.2.1 The Kanban System .................................................. ................................ 166
8.3 Japanese Vs American Management .................................................. ................... 169
8.3.1 Downsides of Japanese Management........................................ ............... 169
8.3.2 JIT Manufacturing System Overview .................................................. .... 170
8.3.3 The Seven Wastes in JIT............................................... ............................ 172
8.3.4 Value-Added Manufacturing .................................................. .................. 172
8.4 How Japanese Manufacturing Ideally Works? .................................................. .... 173
8.4.1 Stockless Production........................................ .......................................... 173
8.5 Comparison of MRP and JIT .................................................. ................................. 174
8.5.1 Push Vs Pull System .................................................. ............................... 174
8.6 Requirements for Successful Implementation of JIT ............................................ 175
8.7 Goals of JIT Manufacturing System............................................ ........................... 176
8.7.1 Important Aspects in JIT Manufacturing ................................................ 178
8.7.2 Advantages and Disadvantages of JIT .................................................. ... 179
8.8 Theory of Constraints (TOC)............................................. ...................................... 181
8.8.1 Systems Thinking .................................................. .................................... 181
8.8.2 Five Focusing Steps of TOC .................................................. .................... 182
8.8.3 The Five Layers of Resistance .................................................. ................ 183
8.8.4 Quantifying the Improvement .................................................. ................ 183
8.9 TOC Tools .................................................. .................................................. ............. 183
8.9.1 Current Reality Tree (CRT) .................................................. .................... 183
8.9.2 Conflict Resolution Diagram (CRD) or Evaporating Cloud .................... 184
8.9.3 Future Reality Tree (FRT) .................................................. ...................... 185
8.9.4 Prerequisite Tree (PRT) .................................................. .......................... 186
8.9.5 Transition Tree (TT) .................................................. ................................ 187
9 PROJECT MANAGEMENT 188
9.0 Introduction...................................... .................................................. ...................... 188
9.1 Some Terms Related to Network Planning.......................................... .................. 188
9.2 CPM and PERT Model............................................. ................................................ 191
9.2.1 Time Estimates in PERT.............................................. ............................. 192
9.2.2 Algorithm Used in Calculating Critical Path .......................................... 193
9.3 Variability of Activity Times .................................................. ................................. 194
9.4 Probability of Completing a Project by a Given Date ............................................ 195
9.5 Project Crashing and Time-Cost Trade-off .................................................. .......... 196
9.6 Resource Leveling .................................................. .................................................. 208
9.6.1 Heuristic Methods .................................................. ................................... 208
9.7 Resource Leveling of Project Schedules .................................................. ............... 209
9.8 Project Delay .................................................. .................................................. ........ 213
( xi )
10 QUALITY CONTROL 215
10.0 Introduction...................................... .................................................. ...................... 215
10.1 Inspection .................................................. .................................................. ............. 215
10.1.1 Types of Inspection .................................................. .................................. 215
10.1.2 Purpose of Inspections .................................................. ............................. 216
10.2 Some Quality Related Terms .................................................. ................................ 216
10.3 Statistical Quality Control (SQC) .................................................. ......................... 216
10.4 Acceptance Sampling .................................................. ............................................. 217
10.4.1 Where do we use Sampling ? .................................................. .................. 217
10.4.2 Advantages and Disadvantages of Acceptance Sampling ....................... 217
10.4.3 Representative Sample .................................................. ........................... 217
10.5 Sampling Plans .................................................. .................................................. .... 218
10.5.1 Single Sampling Plan (SSP) .................................................. .................... 218
10.5.2 Double Sampling Plan (DSP) .................................................. .................. 219
10.5.3 Sequential or Multiple Sampling Plan .................................................. ... 221
10.6 Process Variability and Control .................................................. ............................ 221
10.7 Control Charts .................................................. .................................................. ..... 222
10.7.1 The p-Chart .................................................. .............................................. 223
10.7.2 The c-Chart .................................................. .............................................. 225
10.7.3 Steps in Constructing S-Chart............................................. ..................... 226
10.7.4 Steps in Constructing the X Chart .................................................. ........ 227
10.8 Use of Computers in Quality Control .................................................. ................... 233
11 TOTAL QUALITY MANAGEMENT AND ISO-9000 234
11.0 What is TQM? .................................................. .................................................. ...... 234
11.1 TQM Need Commitment .................................................. ....................................... 234
11.2 Various Approaches to TQM .................................................. ................................. 235
11.2.1 Deming’s Approach to TQM............................................... ....................... 235
11.2.2 Juran’s Approach to TQM .................................................. ....................... 236
11.2.3 Crosby’s Approach to TQM .................................................. ..................... 237
11.2.4 Feigenbaum’s Approach to TQM .................................................. ............ 238
11.2.5 Ishikawa’s Approach to TQM............................................... ..................... 239
11.3 Some Quality and TQM Related Terms .................................................. ............... 240
11.4 Relationship Between ISO 9000 and Quality .................................................. ...... 248
11.5 Relationship Between ISO 9000 and TQM .................................................. .......... 248
11.5.1 Principles of ISO 9000 .................................................. ............................. 249
11.5.2 Benefits of ISO 9000 .................................................. ................................ 249
12 LINEAR PROGRAMMING 251
12.0 Introduction...................................... .................................................. ...................... 251
12.1 The LP Formulation and Underlying Assumptions .............................................. 251
12.2 The General LP Formulation .................................................. ................................ 253
( xii )
12.2.1 Graphical Solution of 2-Variables LP .................................................. ..... 254
12.2.2 A 2-Var LP with a Unique Optimal Solution ........................................... 254
12.3 Different Forms of Linear Programs .................................................. .................... 255
12.4 The Assignment Problem .................................................. ...................................... 264
12.5 Transportation Problem .................................................. ........................................ 267
12.5.1 Transportation Algorithm (Modi Method) ............................................... 271
13 METHODS ENGINEERING 273
13.0 Introduction...................................... .................................................. ...................... 273
13.1 Objective of Work Study .................................................. ........................................ 273
13.2 Tools and Techniques of Work Study .................................................. .................. 274
13.2.1 Method Study .................................................. ........................................... 274
13.2.2 Work Measurement (Time Study) .................................................. .......... 283
13.3 Standardization .................................................. .................................................. ... 293
13.3.1 What is a Standard? .................................................. ................................ 293
13.3.2 Examples of Standards .................................................. ........................... 294
13.3.3 What is Conformity Assessment? .................................................. ........... 294
13.3.4 Standards Development, Acceptance/Implementation ........................... 294
13.3.5 Benefits of Standards to Industry .................................................. .......... 295
13.3.6 Benefits of Standards to Government .................................................. .... 295
13.3.7 Benefits of Standards to Consumers .................................................. ...... 296
13.3.8 Cardinal Principles of International Standardization ............................ 296
14 MECHANIZATION, AUTOMATION AND PRODUCTIVITY 298
14.0 Introduction...................................... .................................................. ...................... 298
14.1 Assembly Line .................................................. .................................................. ...... 298
14.1.1 History of the Assembly Line .................................................. .................. 298
14.1.2 History of Moving Assembly Line.............................................. ............... 299
14.1.3 Pre Industrial Revolution .................................................. ....................... 299
14.1.4 Industrial Robot .................................................. ....................................... 299
14.2 Postal Mechanization/Early Automation .................................................. ............. 299
14.3 The Age of Automation .................................................. .......................................... 300
14.3.1 Automation........................................ .................................................. ....... 302
14.3.2 Social Issues of Automation .................................................. .................... 303
14.3.3 The Automated Workplace......................................... ............................... 303
14.4 Productivity Improvement Stories .................................................. ....................... 305
14.4.1 Story of US Agriculture .................................................. ........................... 305
14.4.2 Automation Improves Productivity in a Tire Company .......................... 305
14.4.3 Automation Sends Productivity Soaring .................................................. 306
14.4.4 Story of Increased Productivity in Photographic Industry .................... 309
14.5 Automation Systems Today .................................................. .................................. 310
( xiii)
15 VALUE ANALYSIS AND VALUE ENGINEERING 312
15.0 Introduction...................................... .................................................. ...................... 312
15.1 Some Basic Concepts .................................................. ............................................. 312
15.1.1 Definition of Value .................................................. ................................... 312
15.1.2 Reasons Behind Poor Value .................................................. .................... 313
15.1.3 Types of Values .................................................. ........................................ 313
15.1.4 Types of Functions .................................................. ................................... 313
15.2 Value Tests .................................................. .................................................. ........... 313
15.3 Steps in Value Analysis .................................................. ......................................... 314
15.4 Examples of Value Engineering .................................................. ........................... 318
15.4.1 Some Simple Case Studies of VE................................................ .............. 318
15.5 Value Engineering and Simplification Analysis .................................................. .. 319
15.5.1 The Primary Questions .................................................. ........................... 319
15.5.2 The Secondary Questions .................................................. ........................ 320
15.5.3 Checklist .................................................. .................................................. . 321
15.6 Benefits of Value Engineering .................................................. .............................. 327
Index .................................................. .................................................. ..................... 328
Rar'd PDF ~ 1.8 MB's Bookmarked
345 Pages
Copyright © 2005 New Age International (P) Ltd., Publishers
Published by New Age International (P) Ltd., Publishers
Preface
While teaching the course on ‘Production Operations Management (POM)’ to my students in
India and abroad, I have felt a huge shortage of books and relevant materials on this subject.
The books available are mostly written with Western world perspective. The examples included
in those books are not very relevant to the students of developing countries. This has motivated
me to write this book which is based on my own teaching experiences and the feed back of my
students.
The book includes the background, the core concepts, and the models of POM. It is readable,
comprehensive, and contemporary in its approach. The concepts of Operations Management
have been delivered to the readers in a simple, straightforward manner, and without
mincing the words to avoid dilution of the materials itself.
The layout of the book has been organized to give the readers a sense of flow: (i) Beginning
with fundamentals of Production systems, Productivity, Location of plant, layout issues;
(ii) Core issues of POM like Forecasting, Operations planning, Purchasing systems and steps
involved in it, Inventory models, and MRP, Quality control, TQM, Project Management; and
finally (iii) the attention is focused to modern concepts on the subject like JIT, OPT, Automation,
etc. This makes the book more comprehensive in nature.
Adequate number of solved problems have been included to give the readers a chance to
enhance the learning process. Examples from local industries, agriculture sector, services (banking,
airlines, hotels, transport, etc.) have been included to make the chapters interesting and
palatable to the students’ taste.
I thank my students and colleagues for their constructive comments in making the book
more useful.
Lastly, I always believe in ‘kaizen’—the continuous improvement process in everything I
do and this goes with this book as well. I invite the readers, therefore, to send their comments
and suggestions to improve this book in its next edition.
RAM NARESH ROY, PhD
Contents
1 PRODUCTION SYSTEMS AND OPERATIONS MANAGEMENT 1
1.0 Introduction...................................... .................................................. .......................... 1
1.1 Related Issues of Operations Management .................................................. ............. 1
1.1.1 Production Function .................................................. .................................... 1
1.1.2 Productivity .................................................. .................................................. 2
1.1.3 Difference between Production and Productivity ........................................ 2
1.1.4 Effectiveness .................................................. ................................................ 3
1.1.5 Efficiency .................................................. .................................................. .... 3
1.2 Operations Function in Organizations .................................................. ..................... 4
1.2.1 Manufacturing Operations Vs Service Operations ..................................... 5
1.2.2 Types of Production System .................................................. ........................ 7
1.3 Role of Models in Operations Management .................................................. ........... 10
1.3.1 Types of Models in Production Operations Management (POM) ............. 10
1.3.2 Mathematical Models in Production and Operations Management ........ 11
1.3.3 Modeling Benefits .................................................. ...................................... 11
1.4 Classifying Problems .................................................. ............................................... 11
1.4.1 Uncertainty of Outcomes .................................................. .......................... 11
1.4.2 Maximum Rule .................................................. .......................................... 13
1.4.3 Interdependence Among Decisions .................................................. .......... 14
2 LOCATION OF PRODUCTION AND SERVICE FACILITIES 17
2.0 Introduction...................................... .................................................. ........................ 17
2.1 Reasons for Location Changes .................................................. ............................... 17
2.2 General Factors Influencing Location .................................................. .................... 18
2.2.1 Rural and Urban Sites Compared .................................................. ............ 20
2.3 General Procedures for Facility Location.......................................... ....................... 21
2.3.1 Preliminary Screening .................................................. .............................. 21
2.3.2 Selection of Exact Site .................................................. ............................... 22
2.4 Some Other Facility Location Models .................................................. .................... 23
2.4.1 Simple Median Model .................................................. ................................ 23
2.4.2 Center of Gravity (GRID) Model .................................................. .............. 26
2.4.3 Linear Programming (LP) .................................................. ......................... 27
2.4.4 Simulation .................................................. .................................................. 33
2.4.5 Break Even Analysis .................................................. ................................. 33
Preface (v)
( vii )
3 LAYOUT PLANNING 36
3.0 Introduction...................................... .................................................. ........................ 36
3.1 Effects of a Plant Layout .................................................. ........................................ 36
3.2 Factors Affecting Layout .................................................. ........................................ 37
3.2.1 Types of Industries .................................................. .................................... 37
3.2.2 Types of Production System .................................................. ...................... 37
3.2.3 Type of Product .................................................. .......................................... 38
3.2.4 Volume of Production .................................................. ................................ 38
3.3 Systematic Layout Planning (SLP) .................................................. ........................ 38
3.4 Other Approaches to Plant Layout .................................................. ......................... 41
3.4.1 Principles of Plant Layout............................................ ............................... 43
3.4.2 Types of Flow Patterns .................................................. .............................. 43
3.5 Types of Layout .................................................. .................................................. ..... 43
3.5.1 Fixed Position Layout............................................ ...................................... 45
3.5.2 Process-Oriented or Functional Layout .................................................. ... 46
3.5.3 Repetitive and Product-Oriented Layout .................................................. . 51
3.5.4 Office Layout .................................................. .............................................. 55
3.5.5 Retail Layout .................................................. ............................................. 56
3.5.6 Warehousing and Storage Layouts .................................................. .......... 57
3.5.7 Combination Layout .................................................. .................................. 57
3.6 Material Handling .................................................. .................................................. . 57
3.6.1 Principles of Material Handling .................................................. ............... 58
3.6.2 Simplified Version of Principles of Material Handling ............................. 59
3.6.3 Material Handling Equipment .................................................. ................. 59
3.6.4 Relationship Between Material Handling and Factory Building
Design or Layout............................................ .............................................. 60
4 PURCHASING SYSTEMS AND VENDOR RATING 62
4.0 Introduction...................................... .................................................. ........................ 62
4.1 Functions of Material Management .................................................. ....................... 62
4.2 Objectives of Materials Management .................................................. ..................... 62
4.3 Purchasing or Procurement Function .................................................. .................... 63
4.3.1 Objectives of Purchasing Department .................................................. ..... 63
4.3.2 Activities, Duties and Functions of Purchasing Department ................... 63
4.3.3 Centralized and Decentralized Purchasing Organizations ...................... 64
4.4 Modes of Purchasing Materials......................................... ........................................ 65
4.4.1 Spot Quotations .................................................. ......................................... 65
4.4.2 Floating the Limited Inquiry .................................................. .................... 65
4.4.3 Tender .................................................. .................................................. ...... 65
4.5 Steps in One Complete Purchasing Cycle .................................................. .............. 66
4.5.1 Some Questions Related to Purchase .................................................. ....... 66
4.5.2 Tender Procedure .................................................. ...................................... 67
( viii )
4.6 Vendor Rating .................................................. .................................................. ........ 73
4.7 What is Expected of a Better Buyer .................................................. ....................... 74
4.8 Some Working Definitions .................................................. ...................................... 74
4.8.1 Quality Index (QI) .................................................. ..................................... 75
4.8.2 Delivery Reliability Index (DRI) .................................................. ............... 75
4.8.3 Flexibility Index (FI) .................................................. ................................. 76
4.8.4 Price Performance Index (PPI) .................................................. ................. 77
4.8.5 Frequency of Rating .................................................. .................................. 78
4.8.6 Use of the Indices .................................................. ...................................... 78
4.9 Stores and Material Control........................................... ........................................... 78
4.9.1 Requirements of a Material Control System ............................................. 79
4.10 Stores Management .................................................. ................................................. 79
4.10.1 Functions of Stores Department and the Duties of the Storekeeper ....... 79
4.10.2 Location and Layout of Stores .................................................. .................. 80
4.10.3 Advantages of Centralization of Stores .................................................. .... 80
4.10.4 Advantages of Decentralization of Stores .................................................. 81
5 OPERATIONS PLANNING AND CONTROL 82
5.0 Introduction...................................... .................................................. ........................ 82
5.1 Benefits of Better Operations Planning and Control .............................................. 83
5.2 Main Functions of OPC .................................................. ........................................... 83
5.2.1 Some Specific Activities of OPC............................................... ................... 83
5.3 Detailed Functions of OPC............................................... ......................................... 84
5.3.1 Planning Phases .................................................. ........................................ 84
5.3.2 Routing or Sequencing .................................................. .............................. 84
5.3.3 Loading or Assignment .................................................. ............................. 86
5.3.4 Scheduling .................................................. .................................................. 89
5.3.5 Sequencing and Disp****ing Phase .................................................. ......... 93
5.3.6 Controlling or Follow-up Phase .................................................. ................ 98
6 INVENTORY CONTROL 100
6.0 Introduction...................................... .................................................. ...................... 100
6.1 Purpose of Inventories .................................................. ........................................... 100
6.2 Objective of Inventory Management .................................................. .................... 101
6.2.1 Requirements for Effective Inventory Management ............................... 101
6.2.2 Inventory Counting Systems .................................................. .................. 102
6.2.3 A Perpetual Inventory System .................................................. ............... 102
6.2.4 Ordering Cycle System............................................ .................................. 103
6.2.5 Demand Forecasts and Lead-Time Information...................................... 104
6.2.6 Inventory Cost Information .................................................. .................... 104
6.3 Types of Inventory Control Techniques .................................................. ............... 105
6.3.1 Qualitative Techniques .................................................. ........................... 105
6.3.2 Quantitative Techniques or Models .................................................. ....... 108
6.4 Stocking of Perishables .................................................. ......................................... 125
( ix )
7 MATERIAL REQUIREMENT PLANNING 130
7.0 Introduction...................................... .................................................. ...................... 130
7.1 Need for Materials Planning .................................................. ................................. 130
7.1.1 Terms Used in MRP .................................................. ................................ 131
7.2 Basic MRP Concepts .................................................. .............................................. 131
7.2.1 Independent Demand .................................................. .............................. 132
7.2.2 Dependent Demand .................................................. ................................. 132
7.2.3 Lumpy Demand .................................................. ....................................... 132
7.2.4 Lead Time of Item .................................................. ................................... 132
7.2.5 Common Use Items .................................................. ................................. 133
7.2.6 Time Phasing .................................................. ........................................... 133
7.3 Factor Affecting the Computation of MRP............................................... .............. 134
7.3.1 Production Structure .................................................. ............................... 134
7.3.2 Lot Sizing .................................................. ................................................. 135
7.3.3 Recurrence of Requirements within Planning Horizon .......................... 136
7.4 Objectives of MRP System .................................................. .................................... 137
7.5 Prerequisites and Assumptions of MRP .................................................. ............... 138
7.5.1 Prerequisites .................................................. ............................................ 138
7.5.2 Assumptions .................................................. ............................................. 138
7.6 Inputs to MRP .................................................. .................................................. ...... 139
7.6.1 Master Production Schedule (MPS) .................................................. ....... 139
7.6.2 Bill of Material (BOM)............................................. .................................. 140
7.6.3 Inventory Record File .................................................. .............................. 141
7.7 MRP Outputs .................................................. .................................................. ....... 142
7.7.1 Primary Outputs........................................... ............................................. 143
7.7.2 Secondary Outputs .................................................. .................................. 143
7.8 MRP Logic in Brief .................................................. ................................................ 143
7.8.1 A Sample of Management Information (Output) from MRP .................. 144
7.8.2 Limitations and Advantages of MRP .................................................. ..... 152
7.9 Manufacturing Resource Planning (MRP II) .................................................. ....... 152
7.10 MRP Implementation .................................................. ............................................ 154
7.10.1 An Inventory Control System .................................................. ................. 154
7.10.2 A Production and Inventory Control System........................................... 154
7.10.3 A Manufacturing Resource Planning System .......................................... 154
7.11 How Can Industry Benefit From MRP? .................................................. ............... 156
8 JUST-IN-TIME APPROACH 160
8.0 Introduction...................................... .................................................. ...................... 160
8.1 History of Relations Between Management and Workers .................................... 161
8.1.1 Adaptation to New Production Environment .......................................... 161
8.1.2 The Kanban Control .................................................. ................................ 161
8.1.3 JIT Today .................................................. ................................................. 162
8.1.4 JIT Application Profile .................................................. ............................ 163
( x )
8.2 Keys to Successful JIT Implementation .................................................. ............... 165
8.2.1 The Kanban System .................................................. ................................ 166
8.3 Japanese Vs American Management .................................................. ................... 169
8.3.1 Downsides of Japanese Management........................................ ............... 169
8.3.2 JIT Manufacturing System Overview .................................................. .... 170
8.3.3 The Seven Wastes in JIT............................................... ............................ 172
8.3.4 Value-Added Manufacturing .................................................. .................. 172
8.4 How Japanese Manufacturing Ideally Works? .................................................. .... 173
8.4.1 Stockless Production........................................ .......................................... 173
8.5 Comparison of MRP and JIT .................................................. ................................. 174
8.5.1 Push Vs Pull System .................................................. ............................... 174
8.6 Requirements for Successful Implementation of JIT ............................................ 175
8.7 Goals of JIT Manufacturing System............................................ ........................... 176
8.7.1 Important Aspects in JIT Manufacturing ................................................ 178
8.7.2 Advantages and Disadvantages of JIT .................................................. ... 179
8.8 Theory of Constraints (TOC)............................................. ...................................... 181
8.8.1 Systems Thinking .................................................. .................................... 181
8.8.2 Five Focusing Steps of TOC .................................................. .................... 182
8.8.3 The Five Layers of Resistance .................................................. ................ 183
8.8.4 Quantifying the Improvement .................................................. ................ 183
8.9 TOC Tools .................................................. .................................................. ............. 183
8.9.1 Current Reality Tree (CRT) .................................................. .................... 183
8.9.2 Conflict Resolution Diagram (CRD) or Evaporating Cloud .................... 184
8.9.3 Future Reality Tree (FRT) .................................................. ...................... 185
8.9.4 Prerequisite Tree (PRT) .................................................. .......................... 186
8.9.5 Transition Tree (TT) .................................................. ................................ 187
9 PROJECT MANAGEMENT 188
9.0 Introduction...................................... .................................................. ...................... 188
9.1 Some Terms Related to Network Planning.......................................... .................. 188
9.2 CPM and PERT Model............................................. ................................................ 191
9.2.1 Time Estimates in PERT.............................................. ............................. 192
9.2.2 Algorithm Used in Calculating Critical Path .......................................... 193
9.3 Variability of Activity Times .................................................. ................................. 194
9.4 Probability of Completing a Project by a Given Date ............................................ 195
9.5 Project Crashing and Time-Cost Trade-off .................................................. .......... 196
9.6 Resource Leveling .................................................. .................................................. 208
9.6.1 Heuristic Methods .................................................. ................................... 208
9.7 Resource Leveling of Project Schedules .................................................. ............... 209
9.8 Project Delay .................................................. .................................................. ........ 213
( xi )
10 QUALITY CONTROL 215
10.0 Introduction...................................... .................................................. ...................... 215
10.1 Inspection .................................................. .................................................. ............. 215
10.1.1 Types of Inspection .................................................. .................................. 215
10.1.2 Purpose of Inspections .................................................. ............................. 216
10.2 Some Quality Related Terms .................................................. ................................ 216
10.3 Statistical Quality Control (SQC) .................................................. ......................... 216
10.4 Acceptance Sampling .................................................. ............................................. 217
10.4.1 Where do we use Sampling ? .................................................. .................. 217
10.4.2 Advantages and Disadvantages of Acceptance Sampling ....................... 217
10.4.3 Representative Sample .................................................. ........................... 217
10.5 Sampling Plans .................................................. .................................................. .... 218
10.5.1 Single Sampling Plan (SSP) .................................................. .................... 218
10.5.2 Double Sampling Plan (DSP) .................................................. .................. 219
10.5.3 Sequential or Multiple Sampling Plan .................................................. ... 221
10.6 Process Variability and Control .................................................. ............................ 221
10.7 Control Charts .................................................. .................................................. ..... 222
10.7.1 The p-Chart .................................................. .............................................. 223
10.7.2 The c-Chart .................................................. .............................................. 225
10.7.3 Steps in Constructing S-Chart............................................. ..................... 226
10.7.4 Steps in Constructing the X Chart .................................................. ........ 227
10.8 Use of Computers in Quality Control .................................................. ................... 233
11 TOTAL QUALITY MANAGEMENT AND ISO-9000 234
11.0 What is TQM? .................................................. .................................................. ...... 234
11.1 TQM Need Commitment .................................................. ....................................... 234
11.2 Various Approaches to TQM .................................................. ................................. 235
11.2.1 Deming’s Approach to TQM............................................... ....................... 235
11.2.2 Juran’s Approach to TQM .................................................. ....................... 236
11.2.3 Crosby’s Approach to TQM .................................................. ..................... 237
11.2.4 Feigenbaum’s Approach to TQM .................................................. ............ 238
11.2.5 Ishikawa’s Approach to TQM............................................... ..................... 239
11.3 Some Quality and TQM Related Terms .................................................. ............... 240
11.4 Relationship Between ISO 9000 and Quality .................................................. ...... 248
11.5 Relationship Between ISO 9000 and TQM .................................................. .......... 248
11.5.1 Principles of ISO 9000 .................................................. ............................. 249
11.5.2 Benefits of ISO 9000 .................................................. ................................ 249
12 LINEAR PROGRAMMING 251
12.0 Introduction...................................... .................................................. ...................... 251
12.1 The LP Formulation and Underlying Assumptions .............................................. 251
12.2 The General LP Formulation .................................................. ................................ 253
( xii )
12.2.1 Graphical Solution of 2-Variables LP .................................................. ..... 254
12.2.2 A 2-Var LP with a Unique Optimal Solution ........................................... 254
12.3 Different Forms of Linear Programs .................................................. .................... 255
12.4 The Assignment Problem .................................................. ...................................... 264
12.5 Transportation Problem .................................................. ........................................ 267
12.5.1 Transportation Algorithm (Modi Method) ............................................... 271
13 METHODS ENGINEERING 273
13.0 Introduction...................................... .................................................. ...................... 273
13.1 Objective of Work Study .................................................. ........................................ 273
13.2 Tools and Techniques of Work Study .................................................. .................. 274
13.2.1 Method Study .................................................. ........................................... 274
13.2.2 Work Measurement (Time Study) .................................................. .......... 283
13.3 Standardization .................................................. .................................................. ... 293
13.3.1 What is a Standard? .................................................. ................................ 293
13.3.2 Examples of Standards .................................................. ........................... 294
13.3.3 What is Conformity Assessment? .................................................. ........... 294
13.3.4 Standards Development, Acceptance/Implementation ........................... 294
13.3.5 Benefits of Standards to Industry .................................................. .......... 295
13.3.6 Benefits of Standards to Government .................................................. .... 295
13.3.7 Benefits of Standards to Consumers .................................................. ...... 296
13.3.8 Cardinal Principles of International Standardization ............................ 296
14 MECHANIZATION, AUTOMATION AND PRODUCTIVITY 298
14.0 Introduction...................................... .................................................. ...................... 298
14.1 Assembly Line .................................................. .................................................. ...... 298
14.1.1 History of the Assembly Line .................................................. .................. 298
14.1.2 History of Moving Assembly Line.............................................. ............... 299
14.1.3 Pre Industrial Revolution .................................................. ....................... 299
14.1.4 Industrial Robot .................................................. ....................................... 299
14.2 Postal Mechanization/Early Automation .................................................. ............. 299
14.3 The Age of Automation .................................................. .......................................... 300
14.3.1 Automation........................................ .................................................. ....... 302
14.3.2 Social Issues of Automation .................................................. .................... 303
14.3.3 The Automated Workplace......................................... ............................... 303
14.4 Productivity Improvement Stories .................................................. ....................... 305
14.4.1 Story of US Agriculture .................................................. ........................... 305
14.4.2 Automation Improves Productivity in a Tire Company .......................... 305
14.4.3 Automation Sends Productivity Soaring .................................................. 306
14.4.4 Story of Increased Productivity in Photographic Industry .................... 309
14.5 Automation Systems Today .................................................. .................................. 310
( xiii)
15 VALUE ANALYSIS AND VALUE ENGINEERING 312
15.0 Introduction...................................... .................................................. ...................... 312
15.1 Some Basic Concepts .................................................. ............................................. 312
15.1.1 Definition of Value .................................................. ................................... 312
15.1.2 Reasons Behind Poor Value .................................................. .................... 313
15.1.3 Types of Values .................................................. ........................................ 313
15.1.4 Types of Functions .................................................. ................................... 313
15.2 Value Tests .................................................. .................................................. ........... 313
15.3 Steps in Value Analysis .................................................. ......................................... 314
15.4 Examples of Value Engineering .................................................. ........................... 318
15.4.1 Some Simple Case Studies of VE................................................ .............. 318
15.5 Value Engineering and Simplification Analysis .................................................. .. 319
15.5.1 The Primary Questions .................................................. ........................... 319
15.5.2 The Secondary Questions .................................................. ........................ 320
15.5.3 Checklist .................................................. .................................................. . 321
15.6 Benefits of Value Engineering .................................................. .............................. 327
Index .................................................. .................................................. ..................... 328
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by: Ram Naresh Roy.
345 Pages
Copyright © 2005 New Age International (P) Ltd., Publishers
Published by New Age International (P) Ltd., Publishers
Preface
While teaching the course on ‘Production Operations Management (POM)’ to my students in
India and abroad, I have felt a huge shortage of books and relevant materials on this subject.
The books available are mostly written with Western world perspective. The examples included
in those books are not very relevant to the students of developing countries. This has motivated
me to write this book which is based on my own teaching experiences and the feed back of my
students.
The book includes the background, the core concepts, and the models of POM. It is readable,
comprehensive, and contemporary in its approach. The concepts of Operations Management
have been delivered to the readers in a simple, straightforward manner, and without
mincing the words to avoid dilution of the materials itself.
The layout of the book has been organized to give the readers a sense of flow: (i) Beginning
with fundamentals of Production systems, Productivity, Location of plant, layout issues;
(ii) Core issues of POM like Forecasting, Operations planning, Purchasing systems and steps
involved in it, Inventory models, and MRP, Quality control, TQM, Project Management; and
finally (iii) the attention is focused to modern concepts on the subject like JIT, OPT, Automation,
etc. This makes the book more comprehensive in nature.
Adequate number of solved problems have been included to give the readers a chance to
enhance the learning process. Examples from local industries, agriculture sector, services (banking,
airlines, hotels, transport, etc.) have been included to make the chapters interesting and
palatable to the students’ taste.
I thank my students and colleagues for their constructive comments in making the book
more useful.
Lastly, I always believe in ‘kaizen’—the continuous improvement process in everything I
do and this goes with this book as well. I invite the readers, therefore, to send their comments
and suggestions to improve this book in its next edition.
RAM NARESH ROY, PhD
Contents
1 PRODUCTION SYSTEMS AND OPERATIONS MANAGEMENT 1
1.0 Introduction...................................... .................................................. .......................... 1
1.1 Related Issues of Operations Management .................................................. ............. 1
1.1.1 Production Function .................................................. .................................... 1
1.1.2 Productivity .................................................. .................................................. 2
1.1.3 Difference between Production and Productivity ........................................ 2
1.1.4 Effectiveness .................................................. ................................................ 3
1.1.5 Efficiency .................................................. .................................................. .... 3
1.2 Operations Function in Organizations .................................................. ..................... 4
1.2.1 Manufacturing Operations Vs Service Operations ..................................... 5
1.2.2 Types of Production System .................................................. ........................ 7
1.3 Role of Models in Operations Management .................................................. ........... 10
1.3.1 Types of Models in Production Operations Management (POM) ............. 10
1.3.2 Mathematical Models in Production and Operations Management ........ 11
1.3.3 Modeling Benefits .................................................. ...................................... 11
1.4 Classifying Problems .................................................. ............................................... 11
1.4.1 Uncertainty of Outcomes .................................................. .......................... 11
1.4.2 Maximum Rule .................................................. .......................................... 13
1.4.3 Interdependence Among Decisions .................................................. .......... 14
2 LOCATION OF PRODUCTION AND SERVICE FACILITIES 17
2.0 Introduction...................................... .................................................. ........................ 17
2.1 Reasons for Location Changes .................................................. ............................... 17
2.2 General Factors Influencing Location .................................................. .................... 18
2.2.1 Rural and Urban Sites Compared .................................................. ............ 20
2.3 General Procedures for Facility Location.......................................... ....................... 21
2.3.1 Preliminary Screening .................................................. .............................. 21
2.3.2 Selection of Exact Site .................................................. ............................... 22
2.4 Some Other Facility Location Models .................................................. .................... 23
2.4.1 Simple Median Model .................................................. ................................ 23
2.4.2 Center of Gravity (GRID) Model .................................................. .............. 26
2.4.3 Linear Programming (LP) .................................................. ......................... 27
2.4.4 Simulation .................................................. .................................................. 33
2.4.5 Break Even Analysis .................................................. ................................. 33
Preface (v)
( vii )
3 LAYOUT PLANNING 36
3.0 Introduction...................................... .................................................. ........................ 36
3.1 Effects of a Plant Layout .................................................. ........................................ 36
3.2 Factors Affecting Layout .................................................. ........................................ 37
3.2.1 Types of Industries .................................................. .................................... 37
3.2.2 Types of Production System .................................................. ...................... 37
3.2.3 Type of Product .................................................. .......................................... 38
3.2.4 Volume of Production .................................................. ................................ 38
3.3 Systematic Layout Planning (SLP) .................................................. ........................ 38
3.4 Other Approaches to Plant Layout .................................................. ......................... 41
3.4.1 Principles of Plant Layout............................................ ............................... 43
3.4.2 Types of Flow Patterns .................................................. .............................. 43
3.5 Types of Layout .................................................. .................................................. ..... 43
3.5.1 Fixed Position Layout............................................ ...................................... 45
3.5.2 Process-Oriented or Functional Layout .................................................. ... 46
3.5.3 Repetitive and Product-Oriented Layout .................................................. . 51
3.5.4 Office Layout .................................................. .............................................. 55
3.5.5 Retail Layout .................................................. ............................................. 56
3.5.6 Warehousing and Storage Layouts .................................................. .......... 57
3.5.7 Combination Layout .................................................. .................................. 57
3.6 Material Handling .................................................. .................................................. . 57
3.6.1 Principles of Material Handling .................................................. ............... 58
3.6.2 Simplified Version of Principles of Material Handling ............................. 59
3.6.3 Material Handling Equipment .................................................. ................. 59
3.6.4 Relationship Between Material Handling and Factory Building
Design or Layout............................................ .............................................. 60
4 PURCHASING SYSTEMS AND VENDOR RATING 62
4.0 Introduction...................................... .................................................. ........................ 62
4.1 Functions of Material Management .................................................. ....................... 62
4.2 Objectives of Materials Management .................................................. ..................... 62
4.3 Purchasing or Procurement Function .................................................. .................... 63
4.3.1 Objectives of Purchasing Department .................................................. ..... 63
4.3.2 Activities, Duties and Functions of Purchasing Department ................... 63
4.3.3 Centralized and Decentralized Purchasing Organizations ...................... 64
4.4 Modes of Purchasing Materials......................................... ........................................ 65
4.4.1 Spot Quotations .................................................. ......................................... 65
4.4.2 Floating the Limited Inquiry .................................................. .................... 65
4.4.3 Tender .................................................. .................................................. ...... 65
4.5 Steps in One Complete Purchasing Cycle .................................................. .............. 66
4.5.1 Some Questions Related to Purchase .................................................. ....... 66
4.5.2 Tender Procedure .................................................. ...................................... 67
( viii )
4.6 Vendor Rating .................................................. .................................................. ........ 73
4.7 What is Expected of a Better Buyer .................................................. ....................... 74
4.8 Some Working Definitions .................................................. ...................................... 74
4.8.1 Quality Index (QI) .................................................. ..................................... 75
4.8.2 Delivery Reliability Index (DRI) .................................................. ............... 75
4.8.3 Flexibility Index (FI) .................................................. ................................. 76
4.8.4 Price Performance Index (PPI) .................................................. ................. 77
4.8.5 Frequency of Rating .................................................. .................................. 78
4.8.6 Use of the Indices .................................................. ...................................... 78
4.9 Stores and Material Control........................................... ........................................... 78
4.9.1 Requirements of a Material Control System ............................................. 79
4.10 Stores Management .................................................. ................................................. 79
4.10.1 Functions of Stores Department and the Duties of the Storekeeper ....... 79
4.10.2 Location and Layout of Stores .................................................. .................. 80
4.10.3 Advantages of Centralization of Stores .................................................. .... 80
4.10.4 Advantages of Decentralization of Stores .................................................. 81
5 OPERATIONS PLANNING AND CONTROL 82
5.0 Introduction...................................... .................................................. ........................ 82
5.1 Benefits of Better Operations Planning and Control .............................................. 83
5.2 Main Functions of OPC .................................................. ........................................... 83
5.2.1 Some Specific Activities of OPC............................................... ................... 83
5.3 Detailed Functions of OPC............................................... ......................................... 84
5.3.1 Planning Phases .................................................. ........................................ 84
5.3.2 Routing or Sequencing .................................................. .............................. 84
5.3.3 Loading or Assignment .................................................. ............................. 86
5.3.4 Scheduling .................................................. .................................................. 89
5.3.5 Sequencing and Disp****ing Phase .................................................. ......... 93
5.3.6 Controlling or Follow-up Phase .................................................. ................ 98
6 INVENTORY CONTROL 100
6.0 Introduction...................................... .................................................. ...................... 100
6.1 Purpose of Inventories .................................................. ........................................... 100
6.2 Objective of Inventory Management .................................................. .................... 101
6.2.1 Requirements for Effective Inventory Management ............................... 101
6.2.2 Inventory Counting Systems .................................................. .................. 102
6.2.3 A Perpetual Inventory System .................................................. ............... 102
6.2.4 Ordering Cycle System............................................ .................................. 103
6.2.5 Demand Forecasts and Lead-Time Information...................................... 104
6.2.6 Inventory Cost Information .................................................. .................... 104
6.3 Types of Inventory Control Techniques .................................................. ............... 105
6.3.1 Qualitative Techniques .................................................. ........................... 105
6.3.2 Quantitative Techniques or Models .................................................. ....... 108
6.4 Stocking of Perishables .................................................. ......................................... 125
( ix )
7 MATERIAL REQUIREMENT PLANNING 130
7.0 Introduction...................................... .................................................. ...................... 130
7.1 Need for Materials Planning .................................................. ................................. 130
7.1.1 Terms Used in MRP .................................................. ................................ 131
7.2 Basic MRP Concepts .................................................. .............................................. 131
7.2.1 Independent Demand .................................................. .............................. 132
7.2.2 Dependent Demand .................................................. ................................. 132
7.2.3 Lumpy Demand .................................................. ....................................... 132
7.2.4 Lead Time of Item .................................................. ................................... 132
7.2.5 Common Use Items .................................................. ................................. 133
7.2.6 Time Phasing .................................................. ........................................... 133
7.3 Factor Affecting the Computation of MRP............................................... .............. 134
7.3.1 Production Structure .................................................. ............................... 134
7.3.2 Lot Sizing .................................................. ................................................. 135
7.3.3 Recurrence of Requirements within Planning Horizon .......................... 136
7.4 Objectives of MRP System .................................................. .................................... 137
7.5 Prerequisites and Assumptions of MRP .................................................. ............... 138
7.5.1 Prerequisites .................................................. ............................................ 138
7.5.2 Assumptions .................................................. ............................................. 138
7.6 Inputs to MRP .................................................. .................................................. ...... 139
7.6.1 Master Production Schedule (MPS) .................................................. ....... 139
7.6.2 Bill of Material (BOM)............................................. .................................. 140
7.6.3 Inventory Record File .................................................. .............................. 141
7.7 MRP Outputs .................................................. .................................................. ....... 142
7.7.1 Primary Outputs........................................... ............................................. 143
7.7.2 Secondary Outputs .................................................. .................................. 143
7.8 MRP Logic in Brief .................................................. ................................................ 143
7.8.1 A Sample of Management Information (Output) from MRP .................. 144
7.8.2 Limitations and Advantages of MRP .................................................. ..... 152
7.9 Manufacturing Resource Planning (MRP II) .................................................. ....... 152
7.10 MRP Implementation .................................................. ............................................ 154
7.10.1 An Inventory Control System .................................................. ................. 154
7.10.2 A Production and Inventory Control System........................................... 154
7.10.3 A Manufacturing Resource Planning System .......................................... 154
7.11 How Can Industry Benefit From MRP? .................................................. ............... 156
8 JUST-IN-TIME APPROACH 160
8.0 Introduction...................................... .................................................. ...................... 160
8.1 History of Relations Between Management and Workers .................................... 161
8.1.1 Adaptation to New Production Environment .......................................... 161
8.1.2 The Kanban Control .................................................. ................................ 161
8.1.3 JIT Today .................................................. ................................................. 162
8.1.4 JIT Application Profile .................................................. ............................ 163
( x )
8.2 Keys to Successful JIT Implementation .................................................. ............... 165
8.2.1 The Kanban System .................................................. ................................ 166
8.3 Japanese Vs American Management .................................................. ................... 169
8.3.1 Downsides of Japanese Management........................................ ............... 169
8.3.2 JIT Manufacturing System Overview .................................................. .... 170
8.3.3 The Seven Wastes in JIT............................................... ............................ 172
8.3.4 Value-Added Manufacturing .................................................. .................. 172
8.4 How Japanese Manufacturing Ideally Works? .................................................. .... 173
8.4.1 Stockless Production........................................ .......................................... 173
8.5 Comparison of MRP and JIT .................................................. ................................. 174
8.5.1 Push Vs Pull System .................................................. ............................... 174
8.6 Requirements for Successful Implementation of JIT ............................................ 175
8.7 Goals of JIT Manufacturing System............................................ ........................... 176
8.7.1 Important Aspects in JIT Manufacturing ................................................ 178
8.7.2 Advantages and Disadvantages of JIT .................................................. ... 179
8.8 Theory of Constraints (TOC)............................................. ...................................... 181
8.8.1 Systems Thinking .................................................. .................................... 181
8.8.2 Five Focusing Steps of TOC .................................................. .................... 182
8.8.3 The Five Layers of Resistance .................................................. ................ 183
8.8.4 Quantifying the Improvement .................................................. ................ 183
8.9 TOC Tools .................................................. .................................................. ............. 183
8.9.1 Current Reality Tree (CRT) .................................................. .................... 183
8.9.2 Conflict Resolution Diagram (CRD) or Evaporating Cloud .................... 184
8.9.3 Future Reality Tree (FRT) .................................................. ...................... 185
8.9.4 Prerequisite Tree (PRT) .................................................. .......................... 186
8.9.5 Transition Tree (TT) .................................................. ................................ 187
9 PROJECT MANAGEMENT 188
9.0 Introduction...................................... .................................................. ...................... 188
9.1 Some Terms Related to Network Planning.......................................... .................. 188
9.2 CPM and PERT Model............................................. ................................................ 191
9.2.1 Time Estimates in PERT.............................................. ............................. 192
9.2.2 Algorithm Used in Calculating Critical Path .......................................... 193
9.3 Variability of Activity Times .................................................. ................................. 194
9.4 Probability of Completing a Project by a Given Date ............................................ 195
9.5 Project Crashing and Time-Cost Trade-off .................................................. .......... 196
9.6 Resource Leveling .................................................. .................................................. 208
9.6.1 Heuristic Methods .................................................. ................................... 208
9.7 Resource Leveling of Project Schedules .................................................. ............... 209
9.8 Project Delay .................................................. .................................................. ........ 213
( xi )
10 QUALITY CONTROL 215
10.0 Introduction...................................... .................................................. ...................... 215
10.1 Inspection .................................................. .................................................. ............. 215
10.1.1 Types of Inspection .................................................. .................................. 215
10.1.2 Purpose of Inspections .................................................. ............................. 216
10.2 Some Quality Related Terms .................................................. ................................ 216
10.3 Statistical Quality Control (SQC) .................................................. ......................... 216
10.4 Acceptance Sampling .................................................. ............................................. 217
10.4.1 Where do we use Sampling ? .................................................. .................. 217
10.4.2 Advantages and Disadvantages of Acceptance Sampling ....................... 217
10.4.3 Representative Sample .................................................. ........................... 217
10.5 Sampling Plans .................................................. .................................................. .... 218
10.5.1 Single Sampling Plan (SSP) .................................................. .................... 218
10.5.2 Double Sampling Plan (DSP) .................................................. .................. 219
10.5.3 Sequential or Multiple Sampling Plan .................................................. ... 221
10.6 Process Variability and Control .................................................. ............................ 221
10.7 Control Charts .................................................. .................................................. ..... 222
10.7.1 The p-Chart .................................................. .............................................. 223
10.7.2 The c-Chart .................................................. .............................................. 225
10.7.3 Steps in Constructing S-Chart............................................. ..................... 226
10.7.4 Steps in Constructing the X Chart .................................................. ........ 227
10.8 Use of Computers in Quality Control .................................................. ................... 233
11 TOTAL QUALITY MANAGEMENT AND ISO-9000 234
11.0 What is TQM? .................................................. .................................................. ...... 234
11.1 TQM Need Commitment .................................................. ....................................... 234
11.2 Various Approaches to TQM .................................................. ................................. 235
11.2.1 Deming’s Approach to TQM............................................... ....................... 235
11.2.2 Juran’s Approach to TQM .................................................. ....................... 236
11.2.3 Crosby’s Approach to TQM .................................................. ..................... 237
11.2.4 Feigenbaum’s Approach to TQM .................................................. ............ 238
11.2.5 Ishikawa’s Approach to TQM............................................... ..................... 239
11.3 Some Quality and TQM Related Terms .................................................. ............... 240
11.4 Relationship Between ISO 9000 and Quality .................................................. ...... 248
11.5 Relationship Between ISO 9000 and TQM .................................................. .......... 248
11.5.1 Principles of ISO 9000 .................................................. ............................. 249
11.5.2 Benefits of ISO 9000 .................................................. ................................ 249
12 LINEAR PROGRAMMING 251
12.0 Introduction...................................... .................................................. ...................... 251
12.1 The LP Formulation and Underlying Assumptions .............................................. 251
12.2 The General LP Formulation .................................................. ................................ 253
( xii )
12.2.1 Graphical Solution of 2-Variables LP .................................................. ..... 254
12.2.2 A 2-Var LP with a Unique Optimal Solution ........................................... 254
12.3 Different Forms of Linear Programs .................................................. .................... 255
12.4 The Assignment Problem .................................................. ...................................... 264
12.5 Transportation Problem .................................................. ........................................ 267
12.5.1 Transportation Algorithm (Modi Method) ............................................... 271
13 METHODS ENGINEERING 273
13.0 Introduction...................................... .................................................. ...................... 273
13.1 Objective of Work Study .................................................. ........................................ 273
13.2 Tools and Techniques of Work Study .................................................. .................. 274
13.2.1 Method Study .................................................. ........................................... 274
13.2.2 Work Measurement (Time Study) .................................................. .......... 283
13.3 Standardization .................................................. .................................................. ... 293
13.3.1 What is a Standard? .................................................. ................................ 293
13.3.2 Examples of Standards .................................................. ........................... 294
13.3.3 What is Conformity Assessment? .................................................. ........... 294
13.3.4 Standards Development, Acceptance/Implementation ........................... 294
13.3.5 Benefits of Standards to Industry .................................................. .......... 295
13.3.6 Benefits of Standards to Government .................................................. .... 295
13.3.7 Benefits of Standards to Consumers .................................................. ...... 296
13.3.8 Cardinal Principles of International Standardization ............................ 296
14 MECHANIZATION, AUTOMATION AND PRODUCTIVITY 298
14.0 Introduction...................................... .................................................. ...................... 298
14.1 Assembly Line .................................................. .................................................. ...... 298
14.1.1 History of the Assembly Line .................................................. .................. 298
14.1.2 History of Moving Assembly Line.............................................. ............... 299
14.1.3 Pre Industrial Revolution .................................................. ....................... 299
14.1.4 Industrial Robot .................................................. ....................................... 299
14.2 Postal Mechanization/Early Automation .................................................. ............. 299
14.3 The Age of Automation .................................................. .......................................... 300
14.3.1 Automation........................................ .................................................. ....... 302
14.3.2 Social Issues of Automation .................................................. .................... 303
14.3.3 The Automated Workplace......................................... ............................... 303
14.4 Productivity Improvement Stories .................................................. ....................... 305
14.4.1 Story of US Agriculture .................................................. ........................... 305
14.4.2 Automation Improves Productivity in a Tire Company .......................... 305
14.4.3 Automation Sends Productivity Soaring .................................................. 306
14.4.4 Story of Increased Productivity in Photographic Industry .................... 309
14.5 Automation Systems Today .................................................. .................................. 310
( xiii)
15 VALUE ANALYSIS AND VALUE ENGINEERING 312
15.0 Introduction...................................... .................................................. ...................... 312
15.1 Some Basic Concepts .................................................. ............................................. 312
15.1.1 Definition of Value .................................................. ................................... 312
15.1.2 Reasons Behind Poor Value .................................................. .................... 313
15.1.3 Types of Values .................................................. ........................................ 313
15.1.4 Types of Functions .................................................. ................................... 313
15.2 Value Tests .................................................. .................................................. ........... 313
15.3 Steps in Value Analysis .................................................. ......................................... 314
15.4 Examples of Value Engineering .................................................. ........................... 318
15.4.1 Some Simple Case Studies of VE................................................ .............. 318
15.5 Value Engineering and Simplification Analysis .................................................. .. 319
15.5.1 The Primary Questions .................................................. ........................... 319
15.5.2 The Secondary Questions .................................................. ........................ 320
15.5.3 Checklist .................................................. .................................................. . 321
15.6 Benefits of Value Engineering .................................................. .............................. 327
Index .................................................. .................................................. ..................... 328
Rar'd PDF ~ 1.8 MB's Bookmarked A Modern Approach to Operations Management
by: Ram Naresh Roy.
345 Pages
Copyright © 2005 New Age International (P) Ltd., Publishers
Published by New Age International (P) Ltd., Publishers
Preface
While teaching the course on ‘Production Operations Management (POM)’ to my students in
India and abroad, I have felt a huge shortage of books and relevant materials on this subject.
The books available are mostly written with Western world perspective. The examples included
in those books are not very relevant to the students of developing countries. This has motivated
me to write this book which is based on my own teaching experiences and the feed back of my
students.
The book includes the background, the core concepts, and the models of POM. It is readable,
comprehensive, and contemporary in its approach. The concepts of Operations Management
have been delivered to the readers in a simple, straightforward manner, and without
mincing the words to avoid dilution of the materials itself.
The layout of the book has been organized to give the readers a sense of flow: (i) Beginning
with fundamentals of Production systems, Productivity, Location of plant, layout issues;
(ii) Core issues of POM like Forecasting, Operations planning, Purchasing systems and steps
involved in it, Inventory models, and MRP, Quality control, TQM, Project Management; and
finally (iii) the attention is focused to modern concepts on the subject like JIT, OPT, Automation,
etc. This makes the book more comprehensive in nature.
Adequate number of solved problems have been included to give the readers a chance to
enhance the learning process. Examples from local industries, agriculture sector, services (banking,
airlines, hotels, transport, etc.) have been included to make the chapters interesting and
palatable to the students’ taste.
I thank my students and colleagues for their constructive comments in making the book
more useful.
Lastly, I always believe in ‘kaizen’—the continuous improvement process in everything I
do and this goes with this book as well. I invite the readers, therefore, to send their comments
and suggestions to improve this book in its next edition.
RAM NARESH ROY, PhD
Contents
1 PRODUCTION SYSTEMS AND OPERATIONS MANAGEMENT 1
1.0 Introduction...................................... .................................................. .......................... 1
1.1 Related Issues of Operations Management .................................................. ............. 1
1.1.1 Production Function .................................................. .................................... 1
1.1.2 Productivity .................................................. .................................................. 2
1.1.3 Difference between Production and Productivity ........................................ 2
1.1.4 Effectiveness .................................................. ................................................ 3
1.1.5 Efficiency .................................................. .................................................. .... 3
1.2 Operations Function in Organizations .................................................. ..................... 4
1.2.1 Manufacturing Operations Vs Service Operations ..................................... 5
1.2.2 Types of Production System .................................................. ........................ 7
1.3 Role of Models in Operations Management .................................................. ........... 10
1.3.1 Types of Models in Production Operations Management (POM) ............. 10
1.3.2 Mathematical Models in Production and Operations Management ........ 11
1.3.3 Modeling Benefits .................................................. ...................................... 11
1.4 Classifying Problems .................................................. ............................................... 11
1.4.1 Uncertainty of Outcomes .................................................. .......................... 11
1.4.2 Maximum Rule .................................................. .......................................... 13
1.4.3 Interdependence Among Decisions .................................................. .......... 14
2 LOCATION OF PRODUCTION AND SERVICE FACILITIES 17
2.0 Introduction...................................... .................................................. ........................ 17
2.1 Reasons for Location Changes .................................................. ............................... 17
2.2 General Factors Influencing Location .................................................. .................... 18
2.2.1 Rural and Urban Sites Compared .................................................. ............ 20
2.3 General Procedures for Facility Location.......................................... ....................... 21
2.3.1 Preliminary Screening .................................................. .............................. 21
2.3.2 Selection of Exact Site .................................................. ............................... 22
2.4 Some Other Facility Location Models .................................................. .................... 23
2.4.1 Simple Median Model .................................................. ................................ 23
2.4.2 Center of Gravity (GRID) Model .................................................. .............. 26
2.4.3 Linear Programming (LP) .................................................. ......................... 27
2.4.4 Simulation .................................................. .................................................. 33
2.4.5 Break Even Analysis .................................................. ................................. 33
Preface (v)
( vii )
3 LAYOUT PLANNING 36
3.0 Introduction...................................... .................................................. ........................ 36
3.1 Effects of a Plant Layout .................................................. ........................................ 36
3.2 Factors Affecting Layout .................................................. ........................................ 37
3.2.1 Types of Industries .................................................. .................................... 37
3.2.2 Types of Production System .................................................. ...................... 37
3.2.3 Type of Product .................................................. .......................................... 38
3.2.4 Volume of Production .................................................. ................................ 38
3.3 Systematic Layout Planning (SLP) .................................................. ........................ 38
3.4 Other Approaches to Plant Layout .................................................. ......................... 41
3.4.1 Principles of Plant Layout............................................ ............................... 43
3.4.2 Types of Flow Patterns .................................................. .............................. 43
3.5 Types of Layout .................................................. .................................................. ..... 43
3.5.1 Fixed Position Layout............................................ ...................................... 45
3.5.2 Process-Oriented or Functional Layout .................................................. ... 46
3.5.3 Repetitive and Product-Oriented Layout .................................................. . 51
3.5.4 Office Layout .................................................. .............................................. 55
3.5.5 Retail Layout .................................................. ............................................. 56
3.5.6 Warehousing and Storage Layouts .................................................. .......... 57
3.5.7 Combination Layout .................................................. .................................. 57
3.6 Material Handling .................................................. .................................................. . 57
3.6.1 Principles of Material Handling .................................................. ............... 58
3.6.2 Simplified Version of Principles of Material Handling ............................. 59
3.6.3 Material Handling Equipment .................................................. ................. 59
3.6.4 Relationship Between Material Handling and Factory Building
Design or Layout............................................ .............................................. 60
4 PURCHASING SYSTEMS AND VENDOR RATING 62
4.0 Introduction...................................... .................................................. ........................ 62
4.1 Functions of Material Management .................................................. ....................... 62
4.2 Objectives of Materials Management .................................................. ..................... 62
4.3 Purchasing or Procurement Function .................................................. .................... 63
4.3.1 Objectives of Purchasing Department .................................................. ..... 63
4.3.2 Activities, Duties and Functions of Purchasing Department ................... 63
4.3.3 Centralized and Decentralized Purchasing Organizations ...................... 64
4.4 Modes of Purchasing Materials......................................... ........................................ 65
4.4.1 Spot Quotations .................................................. ......................................... 65
4.4.2 Floating the Limited Inquiry .................................................. .................... 65
4.4.3 Tender .................................................. .................................................. ...... 65
4.5 Steps in One Complete Purchasing Cycle .................................................. .............. 66
4.5.1 Some Questions Related to Purchase .................................................. ....... 66
4.5.2 Tender Procedure .................................................. ...................................... 67
( viii )
4.6 Vendor Rating .................................................. .................................................. ........ 73
4.7 What is Expected of a Better Buyer .................................................. ....................... 74
4.8 Some Working Definitions .................................................. ...................................... 74
4.8.1 Quality Index (QI) .................................................. ..................................... 75
4.8.2 Delivery Reliability Index (DRI) .................................................. ............... 75
4.8.3 Flexibility Index (FI) .................................................. ................................. 76
4.8.4 Price Performance Index (PPI) .................................................. ................. 77
4.8.5 Frequency of Rating .................................................. .................................. 78
4.8.6 Use of the Indices .................................................. ...................................... 78
4.9 Stores and Material Control........................................... ........................................... 78
4.9.1 Requirements of a Material Control System ............................................. 79
4.10 Stores Management .................................................. ................................................. 79
4.10.1 Functions of Stores Department and the Duties of the Storekeeper ....... 79
4.10.2 Location and Layout of Stores .................................................. .................. 80
4.10.3 Advantages of Centralization of Stores .................................................. .... 80
4.10.4 Advantages of Decentralization of Stores .................................................. 81
5 OPERATIONS PLANNING AND CONTROL 82
5.0 Introduction...................................... .................................................. ........................ 82
5.1 Benefits of Better Operations Planning and Control .............................................. 83
5.2 Main Functions of OPC .................................................. ........................................... 83
5.2.1 Some Specific Activities of OPC............................................... ................... 83
5.3 Detailed Functions of OPC............................................... ......................................... 84
5.3.1 Planning Phases .................................................. ........................................ 84
5.3.2 Routing or Sequencing .................................................. .............................. 84
5.3.3 Loading or Assignment .................................................. ............................. 86
5.3.4 Scheduling .................................................. .................................................. 89
5.3.5 Sequencing and Disp****ing Phase .................................................. ......... 93
5.3.6 Controlling or Follow-up Phase .................................................. ................ 98
6 INVENTORY CONTROL 100
6.0 Introduction...................................... .................................................. ...................... 100
6.1 Purpose of Inventories .................................................. ........................................... 100
6.2 Objective of Inventory Management .................................................. .................... 101
6.2.1 Requirements for Effective Inventory Management ............................... 101
6.2.2 Inventory Counting Systems .................................................. .................. 102
6.2.3 A Perpetual Inventory System .................................................. ............... 102
6.2.4 Ordering Cycle System............................................ .................................. 103
6.2.5 Demand Forecasts and Lead-Time Information...................................... 104
6.2.6 Inventory Cost Information .................................................. .................... 104
6.3 Types of Inventory Control Techniques .................................................. ............... 105
6.3.1 Qualitative Techniques .................................................. ........................... 105
6.3.2 Quantitative Techniques or Models .................................................. ....... 108
6.4 Stocking of Perishables .................................................. ......................................... 125
( ix )
7 MATERIAL REQUIREMENT PLANNING 130
7.0 Introduction...................................... .................................................. ...................... 130
7.1 Need for Materials Planning .................................................. ................................. 130
7.1.1 Terms Used in MRP .................................................. ................................ 131
7.2 Basic MRP Concepts .................................................. .............................................. 131
7.2.1 Independent Demand .................................................. .............................. 132
7.2.2 Dependent Demand .................................................. ................................. 132
7.2.3 Lumpy Demand .................................................. ....................................... 132
7.2.4 Lead Time of Item .................................................. ................................... 132
7.2.5 Common Use Items .................................................. ................................. 133
7.2.6 Time Phasing .................................................. ........................................... 133
7.3 Factor Affecting the Computation of MRP............................................... .............. 134
7.3.1 Production Structure .................................................. ............................... 134
7.3.2 Lot Sizing .................................................. ................................................. 135
7.3.3 Recurrence of Requirements within Planning Horizon .......................... 136
7.4 Objectives of MRP System .................................................. .................................... 137
7.5 Prerequisites and Assumptions of MRP .................................................. ............... 138
7.5.1 Prerequisites .................................................. ............................................ 138
7.5.2 Assumptions .................................................. ............................................. 138
7.6 Inputs to MRP .................................................. .................................................. ...... 139
7.6.1 Master Production Schedule (MPS) .................................................. ....... 139
7.6.2 Bill of Material (BOM)............................................. .................................. 140
7.6.3 Inventory Record File .................................................. .............................. 141
7.7 MRP Outputs .................................................. .................................................. ....... 142
7.7.1 Primary Outputs........................................... ............................................. 143
7.7.2 Secondary Outputs .................................................. .................................. 143
7.8 MRP Logic in Brief .................................................. ................................................ 143
7.8.1 A Sample of Management Information (Output) from MRP .................. 144
7.8.2 Limitations and Advantages of MRP .................................................. ..... 152
7.9 Manufacturing Resource Planning (MRP II) .................................................. ....... 152
7.10 MRP Implementation .................................................. ............................................ 154
7.10.1 An Inventory Control System .................................................. ................. 154
7.10.2 A Production and Inventory Control System........................................... 154
7.10.3 A Manufacturing Resource Planning System .......................................... 154
7.11 How Can Industry Benefit From MRP? .................................................. ............... 156
8 JUST-IN-TIME APPROACH 160
8.0 Introduction...................................... .................................................. ...................... 160
8.1 History of Relations Between Management and Workers .................................... 161
8.1.1 Adaptation to New Production Environment .......................................... 161
8.1.2 The Kanban Control .................................................. ................................ 161
8.1.3 JIT Today .................................................. ................................................. 162
8.1.4 JIT Application Profile .................................................. ............................ 163
( x )
8.2 Keys to Successful JIT Implementation .................................................. ............... 165
8.2.1 The Kanban System .................................................. ................................ 166
8.3 Japanese Vs American Management .................................................. ................... 169
8.3.1 Downsides of Japanese Management........................................ ............... 169
8.3.2 JIT Manufacturing System Overview .................................................. .... 170
8.3.3 The Seven Wastes in JIT............................................... ............................ 172
8.3.4 Value-Added Manufacturing .................................................. .................. 172
8.4 How Japanese Manufacturing Ideally Works? .................................................. .... 173
8.4.1 Stockless Production........................................ .......................................... 173
8.5 Comparison of MRP and JIT .................................................. ................................. 174
8.5.1 Push Vs Pull System .................................................. ............................... 174
8.6 Requirements for Successful Implementation of JIT ............................................ 175
8.7 Goals of JIT Manufacturing System............................................ ........................... 176
8.7.1 Important Aspects in JIT Manufacturing ................................................ 178
8.7.2 Advantages and Disadvantages of JIT .................................................. ... 179
8.8 Theory of Constraints (TOC)............................................. ...................................... 181
8.8.1 Systems Thinking .................................................. .................................... 181
8.8.2 Five Focusing Steps of TOC .................................................. .................... 182
8.8.3 The Five Layers of Resistance .................................................. ................ 183
8.8.4 Quantifying the Improvement .................................................. ................ 183
8.9 TOC Tools .................................................. .................................................. ............. 183
8.9.1 Current Reality Tree (CRT) .................................................. .................... 183
8.9.2 Conflict Resolution Diagram (CRD) or Evaporating Cloud .................... 184
8.9.3 Future Reality Tree (FRT) .................................................. ...................... 185
8.9.4 Prerequisite Tree (PRT) .................................................. .......................... 186
8.9.5 Transition Tree (TT) .................................................. ................................ 187
9 PROJECT MANAGEMENT 188
9.0 Introduction...................................... .................................................. ...................... 188
9.1 Some Terms Related to Network Planning.......................................... .................. 188
9.2 CPM and PERT Model............................................. ................................................ 191
9.2.1 Time Estimates in PERT.............................................. ............................. 192
9.2.2 Algorithm Used in Calculating Critical Path .......................................... 193
9.3 Variability of Activity Times .................................................. ................................. 194
9.4 Probability of Completing a Project by a Given Date ............................................ 195
9.5 Project Crashing and Time-Cost Trade-off .................................................. .......... 196
9.6 Resource Leveling .................................................. .................................................. 208
9.6.1 Heuristic Methods .................................................. ................................... 208
9.7 Resource Leveling of Project Schedules .................................................. ............... 209
9.8 Project Delay .................................................. .................................................. ........ 213
( xi )
10 QUALITY CONTROL 215
10.0 Introduction...................................... .................................................. ...................... 215
10.1 Inspection .................................................. .................................................. ............. 215
10.1.1 Types of Inspection .................................................. .................................. 215
10.1.2 Purpose of Inspections .................................................. ............................. 216
10.2 Some Quality Related Terms .................................................. ................................ 216
10.3 Statistical Quality Control (SQC) .................................................. ......................... 216
10.4 Acceptance Sampling .................................................. ............................................. 217
10.4.1 Where do we use Sampling ? .................................................. .................. 217
10.4.2 Advantages and Disadvantages of Acceptance Sampling ....................... 217
10.4.3 Representative Sample .................................................. ........................... 217
10.5 Sampling Plans .................................................. .................................................. .... 218
10.5.1 Single Sampling Plan (SSP) .................................................. .................... 218
10.5.2 Double Sampling Plan (DSP) .................................................. .................. 219
10.5.3 Sequential or Multiple Sampling Plan .................................................. ... 221
10.6 Process Variability and Control .................................................. ............................ 221
10.7 Control Charts .................................................. .................................................. ..... 222
10.7.1 The p-Chart .................................................. .............................................. 223
10.7.2 The c-Chart .................................................. .............................................. 225
10.7.3 Steps in Constructing S-Chart............................................. ..................... 226
10.7.4 Steps in Constructing the X Chart .................................................. ........ 227
10.8 Use of Computers in Quality Control .................................................. ................... 233
11 TOTAL QUALITY MANAGEMENT AND ISO-9000 234
11.0 What is TQM? .................................................. .................................................. ...... 234
11.1 TQM Need Commitment .................................................. ....................................... 234
11.2 Various Approaches to TQM .................................................. ................................. 235
11.2.1 Deming’s Approach to TQM............................................... ....................... 235
11.2.2 Juran’s Approach to TQM .................................................. ....................... 236
11.2.3 Crosby’s Approach to TQM .................................................. ..................... 237
11.2.4 Feigenbaum’s Approach to TQM .................................................. ............ 238
11.2.5 Ishikawa’s Approach to TQM............................................... ..................... 239
11.3 Some Quality and TQM Related Terms .................................................. ............... 240
11.4 Relationship Between ISO 9000 and Quality .................................................. ...... 248
11.5 Relationship Between ISO 9000 and TQM .................................................. .......... 248
11.5.1 Principles of ISO 9000 .................................................. ............................. 249
11.5.2 Benefits of ISO 9000 .................................................. ................................ 249
12 LINEAR PROGRAMMING 251
12.0 Introduction...................................... .................................................. ...................... 251
12.1 The LP Formulation and Underlying Assumptions .............................................. 251
12.2 The General LP Formulation .................................................. ................................ 253
( xii )
12.2.1 Graphical Solution of 2-Variables LP .................................................. ..... 254
12.2.2 A 2-Var LP with a Unique Optimal Solution ........................................... 254
12.3 Different Forms of Linear Programs .................................................. .................... 255
12.4 The Assignment Problem .................................................. ...................................... 264
12.5 Transportation Problem .................................................. ........................................ 267
12.5.1 Transportation Algorithm (Modi Method) ............................................... 271
13 METHODS ENGINEERING 273
13.0 Introduction...................................... .................................................. ...................... 273
13.1 Objective of Work Study .................................................. ........................................ 273
13.2 Tools and Techniques of Work Study .................................................. .................. 274
13.2.1 Method Study .................................................. ........................................... 274
13.2.2 Work Measurement (Time Study) .................................................. .......... 283
13.3 Standardization .................................................. .................................................. ... 293
13.3.1 What is a Standard? .................................................. ................................ 293
13.3.2 Examples of Standards .................................................. ........................... 294
13.3.3 What is Conformity Assessment? .................................................. ........... 294
13.3.4 Standards Development, Acceptance/Implementation ........................... 294
13.3.5 Benefits of Standards to Industry .................................................. .......... 295
13.3.6 Benefits of Standards to Government .................................................. .... 295
13.3.7 Benefits of Standards to Consumers .................................................. ...... 296
13.3.8 Cardinal Principles of International Standardization ............................ 296
14 MECHANIZATION, AUTOMATION AND PRODUCTIVITY 298
14.0 Introduction...................................... .................................................. ...................... 298
14.1 Assembly Line .................................................. .................................................. ...... 298
14.1.1 History of the Assembly Line .................................................. .................. 298
14.1.2 History of Moving Assembly Line.............................................. ............... 299
14.1.3 Pre Industrial Revolution .................................................. ....................... 299
14.1.4 Industrial Robot .................................................. ....................................... 299
14.2 Postal Mechanization/Early Automation .................................................. ............. 299
14.3 The Age of Automation .................................................. .......................................... 300
14.3.1 Automation........................................ .................................................. ....... 302
14.3.2 Social Issues of Automation .................................................. .................... 303
14.3.3 The Automated Workplace......................................... ............................... 303
14.4 Productivity Improvement Stories .................................................. ....................... 305
14.4.1 Story of US Agriculture .................................................. ........................... 305
14.4.2 Automation Improves Productivity in a Tire Company .......................... 305
14.4.3 Automation Sends Productivity Soaring .................................................. 306
14.4.4 Story of Increased Productivity in Photographic Industry .................... 309
14.5 Automation Systems Today .................................................. .................................. 310
( xiii)
15 VALUE ANALYSIS AND VALUE ENGINEERING 312
15.0 Introduction...................................... .................................................. ...................... 312
15.1 Some Basic Concepts .................................................. ............................................. 312
15.1.1 Definition of Value .................................................. ................................... 312
15.1.2 Reasons Behind Poor Value .................................................. .................... 313
15.1.3 Types of Values .................................................. ........................................ 313
15.1.4 Types of Functions .................................................. ................................... 313
15.2 Value Tests .................................................. .................................................. ........... 313
15.3 Steps in Value Analysis .................................................. ......................................... 314
15.4 Examples of Value Engineering .................................................. ........................... 318
15.4.1 Some Simple Case Studies of VE................................................ .............. 318
15.5 Value Engineering and Simplification Analysis .................................................. .. 319
15.5.1 The Primary Questions .................................................. ........................... 319
15.5.2 The Secondary Questions .................................................. ........................ 320
15.5.3 Checklist .................................................. .................................................. . 321
15.6 Benefits of Value Engineering .................................................. .............................. 327
Index .................................................. .................................................. ..................... 328
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345 Pages
Copyright © 2005 New Age International (P) Ltd., Publishers
Published by New Age International (P) Ltd., Publishers
Preface
While teaching the course on ‘Production Operations Management (POM)’ to my students in
India and abroad, I have felt a huge shortage of books and relevant materials on this subject.
The books available are mostly written with Western world perspective. The examples included
in those books are not very relevant to the students of developing countries. This has motivated
me to write this book which is based on my own teaching experiences and the feed back of my
students.
The book includes the background, the core concepts, and the models of POM. It is readable,
comprehensive, and contemporary in its approach. The concepts of Operations Management
have been delivered to the readers in a simple, straightforward manner, and without
mincing the words to avoid dilution of the materials itself.
The layout of the book has been organized to give the readers a sense of flow: (i) Beginning
with fundamentals of Production systems, Productivity, Location of plant, layout issues;
(ii) Core issues of POM like Forecasting, Operations planning, Purchasing systems and steps
involved in it, Inventory models, and MRP, Quality control, TQM, Project Management; and
finally (iii) the attention is focused to modern concepts on the subject like JIT, OPT, Automation,
etc. This makes the book more comprehensive in nature.
Adequate number of solved problems have been included to give the readers a chance to
enhance the learning process. Examples from local industries, agriculture sector, services (banking,
airlines, hotels, transport, etc.) have been included to make the chapters interesting and
palatable to the students’ taste.
I thank my students and colleagues for their constructive comments in making the book
more useful.
Lastly, I always believe in ‘kaizen’—the continuous improvement process in everything I
do and this goes with this book as well. I invite the readers, therefore, to send their comments
and suggestions to improve this book in its next edition.
RAM NARESH ROY, PhD
Contents
1 PRODUCTION SYSTEMS AND OPERATIONS MANAGEMENT 1
1.0 Introduction...................................... .................................................. .......................... 1
1.1 Related Issues of Operations Management .................................................. ............. 1
1.1.1 Production Function .................................................. .................................... 1
1.1.2 Productivity .................................................. .................................................. 2
1.1.3 Difference between Production and Productivity ........................................ 2
1.1.4 Effectiveness .................................................. ................................................ 3
1.1.5 Efficiency .................................................. .................................................. .... 3
1.2 Operations Function in Organizations .................................................. ..................... 4
1.2.1 Manufacturing Operations Vs Service Operations ..................................... 5
1.2.2 Types of Production System .................................................. ........................ 7
1.3 Role of Models in Operations Management .................................................. ........... 10
1.3.1 Types of Models in Production Operations Management (POM) ............. 10
1.3.2 Mathematical Models in Production and Operations Management ........ 11
1.3.3 Modeling Benefits .................................................. ...................................... 11
1.4 Classifying Problems .................................................. ............................................... 11
1.4.1 Uncertainty of Outcomes .................................................. .......................... 11
1.4.2 Maximum Rule .................................................. .......................................... 13
1.4.3 Interdependence Among Decisions .................................................. .......... 14
2 LOCATION OF PRODUCTION AND SERVICE FACILITIES 17
2.0 Introduction...................................... .................................................. ........................ 17
2.1 Reasons for Location Changes .................................................. ............................... 17
2.2 General Factors Influencing Location .................................................. .................... 18
2.2.1 Rural and Urban Sites Compared .................................................. ............ 20
2.3 General Procedures for Facility Location.......................................... ....................... 21
2.3.1 Preliminary Screening .................................................. .............................. 21
2.3.2 Selection of Exact Site .................................................. ............................... 22
2.4 Some Other Facility Location Models .................................................. .................... 23
2.4.1 Simple Median Model .................................................. ................................ 23
2.4.2 Center of Gravity (GRID) Model .................................................. .............. 26
2.4.3 Linear Programming (LP) .................................................. ......................... 27
2.4.4 Simulation .................................................. .................................................. 33
2.4.5 Break Even Analysis .................................................. ................................. 33
Preface (v)
( vii )
3 LAYOUT PLANNING 36
3.0 Introduction...................................... .................................................. ........................ 36
3.1 Effects of a Plant Layout .................................................. ........................................ 36
3.2 Factors Affecting Layout .................................................. ........................................ 37
3.2.1 Types of Industries .................................................. .................................... 37
3.2.2 Types of Production System .................................................. ...................... 37
3.2.3 Type of Product .................................................. .......................................... 38
3.2.4 Volume of Production .................................................. ................................ 38
3.3 Systematic Layout Planning (SLP) .................................................. ........................ 38
3.4 Other Approaches to Plant Layout .................................................. ......................... 41
3.4.1 Principles of Plant Layout............................................ ............................... 43
3.4.2 Types of Flow Patterns .................................................. .............................. 43
3.5 Types of Layout .................................................. .................................................. ..... 43
3.5.1 Fixed Position Layout............................................ ...................................... 45
3.5.2 Process-Oriented or Functional Layout .................................................. ... 46
3.5.3 Repetitive and Product-Oriented Layout .................................................. . 51
3.5.4 Office Layout .................................................. .............................................. 55
3.5.5 Retail Layout .................................................. ............................................. 56
3.5.6 Warehousing and Storage Layouts .................................................. .......... 57
3.5.7 Combination Layout .................................................. .................................. 57
3.6 Material Handling .................................................. .................................................. . 57
3.6.1 Principles of Material Handling .................................................. ............... 58
3.6.2 Simplified Version of Principles of Material Handling ............................. 59
3.6.3 Material Handling Equipment .................................................. ................. 59
3.6.4 Relationship Between Material Handling and Factory Building
Design or Layout............................................ .............................................. 60
4 PURCHASING SYSTEMS AND VENDOR RATING 62
4.0 Introduction...................................... .................................................. ........................ 62
4.1 Functions of Material Management .................................................. ....................... 62
4.2 Objectives of Materials Management .................................................. ..................... 62
4.3 Purchasing or Procurement Function .................................................. .................... 63
4.3.1 Objectives of Purchasing Department .................................................. ..... 63
4.3.2 Activities, Duties and Functions of Purchasing Department ................... 63
4.3.3 Centralized and Decentralized Purchasing Organizations ...................... 64
4.4 Modes of Purchasing Materials......................................... ........................................ 65
4.4.1 Spot Quotations .................................................. ......................................... 65
4.4.2 Floating the Limited Inquiry .................................................. .................... 65
4.4.3 Tender .................................................. .................................................. ...... 65
4.5 Steps in One Complete Purchasing Cycle .................................................. .............. 66
4.5.1 Some Questions Related to Purchase .................................................. ....... 66
4.5.2 Tender Procedure .................................................. ...................................... 67
( viii )
4.6 Vendor Rating .................................................. .................................................. ........ 73
4.7 What is Expected of a Better Buyer .................................................. ....................... 74
4.8 Some Working Definitions .................................................. ...................................... 74
4.8.1 Quality Index (QI) .................................................. ..................................... 75
4.8.2 Delivery Reliability Index (DRI) .................................................. ............... 75
4.8.3 Flexibility Index (FI) .................................................. ................................. 76
4.8.4 Price Performance Index (PPI) .................................................. ................. 77
4.8.5 Frequency of Rating .................................................. .................................. 78
4.8.6 Use of the Indices .................................................. ...................................... 78
4.9 Stores and Material Control........................................... ........................................... 78
4.9.1 Requirements of a Material Control System ............................................. 79
4.10 Stores Management .................................................. ................................................. 79
4.10.1 Functions of Stores Department and the Duties of the Storekeeper ....... 79
4.10.2 Location and Layout of Stores .................................................. .................. 80
4.10.3 Advantages of Centralization of Stores .................................................. .... 80
4.10.4 Advantages of Decentralization of Stores .................................................. 81
5 OPERATIONS PLANNING AND CONTROL 82
5.0 Introduction...................................... .................................................. ........................ 82
5.1 Benefits of Better Operations Planning and Control .............................................. 83
5.2 Main Functions of OPC .................................................. ........................................... 83
5.2.1 Some Specific Activities of OPC............................................... ................... 83
5.3 Detailed Functions of OPC............................................... ......................................... 84
5.3.1 Planning Phases .................................................. ........................................ 84
5.3.2 Routing or Sequencing .................................................. .............................. 84
5.3.3 Loading or Assignment .................................................. ............................. 86
5.3.4 Scheduling .................................................. .................................................. 89
5.3.5 Sequencing and Disp****ing Phase .................................................. ......... 93
5.3.6 Controlling or Follow-up Phase .................................................. ................ 98
6 INVENTORY CONTROL 100
6.0 Introduction...................................... .................................................. ...................... 100
6.1 Purpose of Inventories .................................................. ........................................... 100
6.2 Objective of Inventory Management .................................................. .................... 101
6.2.1 Requirements for Effective Inventory Management ............................... 101
6.2.2 Inventory Counting Systems .................................................. .................. 102
6.2.3 A Perpetual Inventory System .................................................. ............... 102
6.2.4 Ordering Cycle System............................................ .................................. 103
6.2.5 Demand Forecasts and Lead-Time Information...................................... 104
6.2.6 Inventory Cost Information .................................................. .................... 104
6.3 Types of Inventory Control Techniques .................................................. ............... 105
6.3.1 Qualitative Techniques .................................................. ........................... 105
6.3.2 Quantitative Techniques or Models .................................................. ....... 108
6.4 Stocking of Perishables .................................................. ......................................... 125
( ix )
7 MATERIAL REQUIREMENT PLANNING 130
7.0 Introduction...................................... .................................................. ...................... 130
7.1 Need for Materials Planning .................................................. ................................. 130
7.1.1 Terms Used in MRP .................................................. ................................ 131
7.2 Basic MRP Concepts .................................................. .............................................. 131
7.2.1 Independent Demand .................................................. .............................. 132
7.2.2 Dependent Demand .................................................. ................................. 132
7.2.3 Lumpy Demand .................................................. ....................................... 132
7.2.4 Lead Time of Item .................................................. ................................... 132
7.2.5 Common Use Items .................................................. ................................. 133
7.2.6 Time Phasing .................................................. ........................................... 133
7.3 Factor Affecting the Computation of MRP............................................... .............. 134
7.3.1 Production Structure .................................................. ............................... 134
7.3.2 Lot Sizing .................................................. ................................................. 135
7.3.3 Recurrence of Requirements within Planning Horizon .......................... 136
7.4 Objectives of MRP System .................................................. .................................... 137
7.5 Prerequisites and Assumptions of MRP .................................................. ............... 138
7.5.1 Prerequisites .................................................. ............................................ 138
7.5.2 Assumptions .................................................. ............................................. 138
7.6 Inputs to MRP .................................................. .................................................. ...... 139
7.6.1 Master Production Schedule (MPS) .................................................. ....... 139
7.6.2 Bill of Material (BOM)............................................. .................................. 140
7.6.3 Inventory Record File .................................................. .............................. 141
7.7 MRP Outputs .................................................. .................................................. ....... 142
7.7.1 Primary Outputs........................................... ............................................. 143
7.7.2 Secondary Outputs .................................................. .................................. 143
7.8 MRP Logic in Brief .................................................. ................................................ 143
7.8.1 A Sample of Management Information (Output) from MRP .................. 144
7.8.2 Limitations and Advantages of MRP .................................................. ..... 152
7.9 Manufacturing Resource Planning (MRP II) .................................................. ....... 152
7.10 MRP Implementation .................................................. ............................................ 154
7.10.1 An Inventory Control System .................................................. ................. 154
7.10.2 A Production and Inventory Control System........................................... 154
7.10.3 A Manufacturing Resource Planning System .......................................... 154
7.11 How Can Industry Benefit From MRP? .................................................. ............... 156
8 JUST-IN-TIME APPROACH 160
8.0 Introduction...................................... .................................................. ...................... 160
8.1 History of Relations Between Management and Workers .................................... 161
8.1.1 Adaptation to New Production Environment .......................................... 161
8.1.2 The Kanban Control .................................................. ................................ 161
8.1.3 JIT Today .................................................. ................................................. 162
8.1.4 JIT Application Profile .................................................. ............................ 163
( x )
8.2 Keys to Successful JIT Implementation .................................................. ............... 165
8.2.1 The Kanban System .................................................. ................................ 166
8.3 Japanese Vs American Management .................................................. ................... 169
8.3.1 Downsides of Japanese Management........................................ ............... 169
8.3.2 JIT Manufacturing System Overview .................................................. .... 170
8.3.3 The Seven Wastes in JIT............................................... ............................ 172
8.3.4 Value-Added Manufacturing .................................................. .................. 172
8.4 How Japanese Manufacturing Ideally Works? .................................................. .... 173
8.4.1 Stockless Production........................................ .......................................... 173
8.5 Comparison of MRP and JIT .................................................. ................................. 174
8.5.1 Push Vs Pull System .................................................. ............................... 174
8.6 Requirements for Successful Implementation of JIT ............................................ 175
8.7 Goals of JIT Manufacturing System............................................ ........................... 176
8.7.1 Important Aspects in JIT Manufacturing ................................................ 178
8.7.2 Advantages and Disadvantages of JIT .................................................. ... 179
8.8 Theory of Constraints (TOC)............................................. ...................................... 181
8.8.1 Systems Thinking .................................................. .................................... 181
8.8.2 Five Focusing Steps of TOC .................................................. .................... 182
8.8.3 The Five Layers of Resistance .................................................. ................ 183
8.8.4 Quantifying the Improvement .................................................. ................ 183
8.9 TOC Tools .................................................. .................................................. ............. 183
8.9.1 Current Reality Tree (CRT) .................................................. .................... 183
8.9.2 Conflict Resolution Diagram (CRD) or Evaporating Cloud .................... 184
8.9.3 Future Reality Tree (FRT) .................................................. ...................... 185
8.9.4 Prerequisite Tree (PRT) .................................................. .......................... 186
8.9.5 Transition Tree (TT) .................................................. ................................ 187
9 PROJECT MANAGEMENT 188
9.0 Introduction...................................... .................................................. ...................... 188
9.1 Some Terms Related to Network Planning.......................................... .................. 188
9.2 CPM and PERT Model............................................. ................................................ 191
9.2.1 Time Estimates in PERT.............................................. ............................. 192
9.2.2 Algorithm Used in Calculating Critical Path .......................................... 193
9.3 Variability of Activity Times .................................................. ................................. 194
9.4 Probability of Completing a Project by a Given Date ............................................ 195
9.5 Project Crashing and Time-Cost Trade-off .................................................. .......... 196
9.6 Resource Leveling .................................................. .................................................. 208
9.6.1 Heuristic Methods .................................................. ................................... 208
9.7 Resource Leveling of Project Schedules .................................................. ............... 209
9.8 Project Delay .................................................. .................................................. ........ 213
( xi )
10 QUALITY CONTROL 215
10.0 Introduction...................................... .................................................. ...................... 215
10.1 Inspection .................................................. .................................................. ............. 215
10.1.1 Types of Inspection .................................................. .................................. 215
10.1.2 Purpose of Inspections .................................................. ............................. 216
10.2 Some Quality Related Terms .................................................. ................................ 216
10.3 Statistical Quality Control (SQC) .................................................. ......................... 216
10.4 Acceptance Sampling .................................................. ............................................. 217
10.4.1 Where do we use Sampling ? .................................................. .................. 217
10.4.2 Advantages and Disadvantages of Acceptance Sampling ....................... 217
10.4.3 Representative Sample .................................................. ........................... 217
10.5 Sampling Plans .................................................. .................................................. .... 218
10.5.1 Single Sampling Plan (SSP) .................................................. .................... 218
10.5.2 Double Sampling Plan (DSP) .................................................. .................. 219
10.5.3 Sequential or Multiple Sampling Plan .................................................. ... 221
10.6 Process Variability and Control .................................................. ............................ 221
10.7 Control Charts .................................................. .................................................. ..... 222
10.7.1 The p-Chart .................................................. .............................................. 223
10.7.2 The c-Chart .................................................. .............................................. 225
10.7.3 Steps in Constructing S-Chart............................................. ..................... 226
10.7.4 Steps in Constructing the X Chart .................................................. ........ 227
10.8 Use of Computers in Quality Control .................................................. ................... 233
11 TOTAL QUALITY MANAGEMENT AND ISO-9000 234
11.0 What is TQM? .................................................. .................................................. ...... 234
11.1 TQM Need Commitment .................................................. ....................................... 234
11.2 Various Approaches to TQM .................................................. ................................. 235
11.2.1 Deming’s Approach to TQM............................................... ....................... 235
11.2.2 Juran’s Approach to TQM .................................................. ....................... 236
11.2.3 Crosby’s Approach to TQM .................................................. ..................... 237
11.2.4 Feigenbaum’s Approach to TQM .................................................. ............ 238
11.2.5 Ishikawa’s Approach to TQM............................................... ..................... 239
11.3 Some Quality and TQM Related Terms .................................................. ............... 240
11.4 Relationship Between ISO 9000 and Quality .................................................. ...... 248
11.5 Relationship Between ISO 9000 and TQM .................................................. .......... 248
11.5.1 Principles of ISO 9000 .................................................. ............................. 249
11.5.2 Benefits of ISO 9000 .................................................. ................................ 249
12 LINEAR PROGRAMMING 251
12.0 Introduction...................................... .................................................. ...................... 251
12.1 The LP Formulation and Underlying Assumptions .............................................. 251
12.2 The General LP Formulation .................................................. ................................ 253
( xii )
12.2.1 Graphical Solution of 2-Variables LP .................................................. ..... 254
12.2.2 A 2-Var LP with a Unique Optimal Solution ........................................... 254
12.3 Different Forms of Linear Programs .................................................. .................... 255
12.4 The Assignment Problem .................................................. ...................................... 264
12.5 Transportation Problem .................................................. ........................................ 267
12.5.1 Transportation Algorithm (Modi Method) ............................................... 271
13 METHODS ENGINEERING 273
13.0 Introduction...................................... .................................................. ...................... 273
13.1 Objective of Work Study .................................................. ........................................ 273
13.2 Tools and Techniques of Work Study .................................................. .................. 274
13.2.1 Method Study .................................................. ........................................... 274
13.2.2 Work Measurement (Time Study) .................................................. .......... 283
13.3 Standardization .................................................. .................................................. ... 293
13.3.1 What is a Standard? .................................................. ................................ 293
13.3.2 Examples of Standards .................................................. ........................... 294
13.3.3 What is Conformity Assessment? .................................................. ........... 294
13.3.4 Standards Development, Acceptance/Implementation ........................... 294
13.3.5 Benefits of Standards to Industry .................................................. .......... 295
13.3.6 Benefits of Standards to Government .................................................. .... 295
13.3.7 Benefits of Standards to Consumers .................................................. ...... 296
13.3.8 Cardinal Principles of International Standardization ............................ 296
14 MECHANIZATION, AUTOMATION AND PRODUCTIVITY 298
14.0 Introduction...................................... .................................................. ...................... 298
14.1 Assembly Line .................................................. .................................................. ...... 298
14.1.1 History of the Assembly Line .................................................. .................. 298
14.1.2 History of Moving Assembly Line.............................................. ............... 299
14.1.3 Pre Industrial Revolution .................................................. ....................... 299
14.1.4 Industrial Robot .................................................. ....................................... 299
14.2 Postal Mechanization/Early Automation .................................................. ............. 299
14.3 The Age of Automation .................................................. .......................................... 300
14.3.1 Automation........................................ .................................................. ....... 302
14.3.2 Social Issues of Automation .................................................. .................... 303
14.3.3 The Automated Workplace......................................... ............................... 303
14.4 Productivity Improvement Stories .................................................. ....................... 305
14.4.1 Story of US Agriculture .................................................. ........................... 305
14.4.2 Automation Improves Productivity in a Tire Company .......................... 305
14.4.3 Automation Sends Productivity Soaring .................................................. 306
14.4.4 Story of Increased Productivity in Photographic Industry .................... 309
14.5 Automation Systems Today .................................................. .................................. 310
( xiii)
15 VALUE ANALYSIS AND VALUE ENGINEERING 312
15.0 Introduction...................................... .................................................. ...................... 312
15.1 Some Basic Concepts .................................................. ............................................. 312
15.1.1 Definition of Value .................................................. ................................... 312
15.1.2 Reasons Behind Poor Value .................................................. .................... 313
15.1.3 Types of Values .................................................. ........................................ 313
15.1.4 Types of Functions .................................................. ................................... 313
15.2 Value Tests .................................................. .................................................. ........... 313
15.3 Steps in Value Analysis .................................................. ......................................... 314
15.4 Examples of Value Engineering .................................................. ........................... 318
15.4.1 Some Simple Case Studies of VE................................................ .............. 318
15.5 Value Engineering and Simplification Analysis .................................................. .. 319
15.5.1 The Primary Questions .................................................. ........................... 319
15.5.2 The Secondary Questions .................................................. ........................ 320
15.5.3 Checklist .................................................. .................................................. . 321
15.6 Benefits of Value Engineering .................................................. .............................. 327
Index .................................................. .................................................. ..................... 328
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