Production and Operations in management:

Total Quality Management (TQM):

 A system of management based on the principle that every member of staff must be committed to
maintaining high standards of work in every aspect of a company's operations.
 TQM is the art of managing the whole to achieve excellence.
 TQM is a philosophy and a set of guiding principles that represent the foundation of a continually
improving firm.
 It is the application of quantitative methods to improve all processes within a firm.
 “To deliver highest value at lowest cost” is the main objective of TQM
 “Do the right things right the first time, every time.” is also an objective of TQM.

5 principles of TQM:

 Produce quality work the first time.

 Focus on the customer: The customer ultimately determines the level of quality. No matter what an
organization does to foster quality improvement—training employees, integrating quality into the
design process, upgrading computers or software, or buying new measuring tools—the customer
determines whether the efforts were worthwhile.
 Have a strategic approach to improvement: This process, called strategic planning or strategic
management, includes the formulation of a strategic plan that integrates quality as a core
component.
 Improve continuously: Continual improvement drives an organization to be both analytical and
creative in finding ways to become more competitive and more effective at meeting stakeholder
expectations.
 Encourage mutual respect and teamwork: All employees participate in working toward common
goals.

Tools of TQM:

 Right First Time: Quality conscious at start

 Bench Marking
 ISO 9000(International organization for standardization )
 Quality Circles
 Statistical Quality Control
 Kaizen
 Six Sigma

Benefits of TQM:

 Improve quality
 Employee participation and satisfaction
 Teamwork and Working relationships
 Customer satisfaction
 Productivity
 Communication
 Profitability and Market Share
Obstacles to TQM:

 Lack of management commitment

 Improper planning
 Lack of continuous training and education
 Incompatible Org structure & isolated departments and individuals
 Ineffective measurement techniques
 Paying inadequate attention to customers
 Inadequate use of empowerment and teamwork
 Failure to continually improve

TQM and Productivity:

 Traditional view: Quality cannot be improved without significant losses in productivity.

 TQM view: Improved quality leads to improved productivity.

Design Quality:

 The design of a product or service must incorporate the features & attributes that would satisfy the
customer’s need.
 It gives value to a product in the market place.
 The most important feature of the design, with regard to quality, is the specification.
 This describes the product or service in a comprehensive statement of all its aspects which are
needed to fulfill the customer’s requirement.
 The maximum tolerable variation that can be accepted from the specified attribute is to be
mentioned in the specification.
 In case of an Airline service, if on time arrival of a flight is specified as within 15 minutes of scheduled
time, the target is scheduled time and tolerance is + 15 minutes.

Dimensions of Design Quality for a product:

 Performance
 Features
 Reliability
 Durability
 Serviceability
 Response
 Aesthetics
 Reputation

Dimensions of Design Quality for a service:

 Timeliness
 Completeness
 Courtesy
 Consistency
 Accessibility & convenience
 Accuracy
Production and Operations Management meaning:

 Production and operations management (POM) is the management of an organization’s production

system.
 A production system takes inputs and converts them into outputs.
 The conversion process is the predominant activity of a production system.
 The primary concern of an operations manager is the activities of the conversion process.

Production Management vs Operations Management:

 Production management is more used for a system where tangible goods are produced. Operations
management is more frequently used where various inputs are transformed into tangible services.
 The management of manufacturing of products is referred to as production management. The
functions dealing with the operation of services are covered under operations management.

5 P’s of production:
i. Product
ii. Plant
iii. Process
iv. Programme
v. People

i. Product:

 Marketers in a business must ensure that a business sells products that meet customer needs and
wants.
 The role of POM is to ensure that the business actually makes the required products in accordance
with the plan.
 The role of Product in POM therefore concerns areas such as:
 Performance
 Aesthetics
 Quality
 Reliability
 Quantity
 Production costs
 Delivery dates

ii. Plant:

 To make Product, Plant of some kind is needed.

 This will comprise the bulk of fixed assets of business.
 In determining which Plant to use, management must consider areas such as:
 Future demand (volume, timing)
 Design and layout of factory, equipment, offices
 Productivity and reliability of equipment
 Need for (and costs of ) maintenance
 Health and safety(particularly the operation of equipment )
 Environmental issues (eg: creation of waste products)
iii.Process:

 There are many different ways of producing a product.

 Management must choose the best process or series of processes, they must consider:
 Available capacity
 Available skills
 Type of production
 Layout of plant and equipment
 Safety
 Production costs
 Maintenance requirements

iv. Programmes:

 The production programme concerns the dates and times of the products that are to be produced
and supplied to customers.
 The decisions made about programmes will be influenced by factors such as:
 Cash flow
 Need for/availability of storage
 Transportation

v. People:

 Production depends on People, whose skills, experience and motivation vary.

 Key people related decisions will consider the following:
 Wages and salaries
 Safety and Training
 Work conditions
 Leadership and motivation
 Unionization
 Communication

Systems Approach to Management:

 A system is a collection of interrelated activities. It must be studied as a whole.

 Thus there are 3 types of systems:
 production system- whose function is to convert a set of inputs into a set of desired outputs,
 conversion sub-system, is a sub system of larger production system where, inputs are transformed
into output,
 Control sub system herein a portion of output is monitored for feedback signals to provide corrective
action, if required.
 Types of Transformation Systems:

I. Continuous Production system:

 Continuous means something that operates constantly without any irregularities or frequent halts
(Stops).
 In the continuous production system, goods are produced constantly as per demand forecast.
 Goods are produced on a large scale for stocking and selling.
 They are not produced on customer's orders.
 Here, the inputs and outputs are standardized (uniform) along with the production process and
sequence.

Features:

 Volume of output is large.

 Identical products are produced.
 Machines and equipments are arranged according to Product layout or functional layout pattern.
 Special purpose automatic machines are used.
 Fixed path material handling equipment is used due to the predetermined sequence of operations.

Continuous production system is used in :

i. Food industry
ii. Fuel Industry

Merits:

 As the processing of material is continuous there is no waiting period as each work is passed to the
next stage immediately.
 Cost of materials handling are minimised.
 Quality of output is kept uniform.
 Any delay at any stage is automatically detected.

Demerits:

 Very rigid.
 If there is fault in one operation, the entire process is disturbed.

Suitability:

 Best suited to the organizations which intend to produce a limited variety of products on a large scale.

Continuous production system is of the 2 types:

i. Mass production flows:

Here, company produces different types of products on a large-scale and stock them in warehouses until
they are demanded in the market. E.g. of mass production is the production of toothpastes, soaps, pens,
etc.

ii. Process production flows:

Here, a single product is produced and stocked in warehouses until it is demanded in the market. The
flexibility of these plants is almost zero because only one product can be produced

Eg:

II. Intermittent production system:

 Intermittent means something that starts (initiates) and stops (halts) at irregular (unfixed) intervals
(time gaps).
 In the intermittent production system, goods are produced based on customer's orders.
 These goods are produced on a small scale.
 The flow of production is intermittent (irregular).
 In other words, the flow of production is not continuous. In this system, large varieties of products are
produced. (Process or functional layout pattern)
 These products are of different sizes. The design of these products goes on changing. It keeps
changing according to the design and size of the product.
 Therefore, this system is very flexible.

Egs:

 The work of a goldsmith is purely based on the frequency of his customer's orders. The goldsmith
makes goods (ornaments) on a small-scale basis as per his customer's requirements. Here, ornaments
are not done on a continuous basis.
 Similarly, the work of a tailor is also based on the number of orders he gets from his customers. The
clothes are stitched for every customer independently by the tailor as per one's measurement and
size. Goods (stitched clothes) are made on a limited scale and are proportional to the number of
orders received from customers. Here, stitching is not done on a continuous basis.

Characteristics of this system are:

 The flow of production is not continuous. It is intermittent.

 Wide varieties of products are produced.
 The volume of production is small.
 General purpose machines are used. These machines can be used to produce different types of
products.
 The sequence of operation goes on changing as per the design of the product.
 The quantity, size, shape, design, etc. of the product depends on the customer's orders

Types:

i. Project production flows:

Here, in project production flows, company accepts a single, complex order or contract.
The order must be completed within a given period of time and at an estimated cost.
ii. Jobbing production flows:
Here, in job production flows, company accepts a contract to produce either one or few units of a
product strictly as per specifications given by the customer.
The product is produced within a given period and at a fixed cost. This cost is fixed at the time of signing
the contract

iii. Batch production flows:

In batch production flows, the production schedule is decided according to specific orders or are based
on the demand forecasts.
Here, the production of items takes place in lots or batches. A product is divided into different jobs. All
jobs of one batch of production must be completed before starting the next batch of production.
Product vs Service:

Poka Yoke:

 Process that helps an equipment operator avoid (yokeru) mistakes (poka). Its purpose is to eliminate
product defects by preventing, correcting, or drawing attention to human errors as they occur.
 Japanese technique for mistake-proofing
 Poka - inadvertent (unintentional) mistake
 Yoke – prevent
 Poka Yoke states that mistakes will not turn into defects if worker errors are discovered and
eliminated beforehand.
 Poka Yoke Device Categories:
 Prevention Device - Make errors impossible
 Detection Device – Make errors visible to the operator
 Characteristics:
 they are simple and cheap.
 they are part of the process.
 they are placed close to where the mistakes occur.
 Three basic poka-yoke functions to use against defects:
1. shut down a machine or operation
2. control a process or operation
3. warn that a defect has occurred
 Recognizing that a defect is about to occur is called PREDICTION.
 Recognizing that a defect has happened is called DETECTION.

Top 10 Defects that cause errors:

1. Processing omissions (a step was forgotten)
2. Processing errors (something was done incorrectly)
3. Error in setting up the work piece
4. Assembly omissions (a part was forgotten)
5. A wrong part / item was included
6. Wrong work piece
7. Operations errors (incomplete information, procedures not followed)
8. Adjustment, measurement, dimensional errors
9. Equipment maintenance errors
10. Errors in preparation of tools, fixtures, blades, etc

Error: When any condition necessary for successful processing is wrong or absent.

Other defect causes:

• Misunderstanding instruction or procedure.
• Errors in identification (e.g.: part and/or placement recognition).
• Errors made through lack of experience
• Pace (too fast or too slow).
• Lack of standards, expectations, procedure, or instructions.
• Incomplete information adjustment or placement errors.

what does poka yoke do:

 Eliminates the cause of an error at the source;

 Detects an error as it is being made;
 Detects an error soon after it has been made but before it reaches the next operation.

2 strategies for zero defects:

Don’t make it:

 Don’t make product you don’t need.

 The more you make, the greater the opportunity for defects.
 Follow ‘just-in-time’ principles by only making what is needed, when it is needed in the amount
needed.

Build safeguards:

 The user is an expert in finding defects.

 Therefore build safeguards into the production process.
 Quality can be built into products by implementation of Poka-Yoke.

3 methods of Poka Yoke:

1. Contact
 2. Counting
3. Motion-Sequence

Types of sensing devices:

1. Physical contact devices
2. Energy sensing devices
3. Warning Sensors

Continuous Improvement Topic:

 Kaizen Management
 Deming’s PDCA Cycle

Kaizen Management:

 A Japanese business philosophy of continuous improvement of working practices, personal efficiency,

etc.
 Improvement can be broken down between innovation and Kaizen .
 Innovation involves a drastic improvement in the existing process and requires large investments.
 Kaizen signifies small improvements as a result of coordinated continuous efforts by all employees.
Kaizen (the translation of kai (change) zen (good) is “ improvement ”)
 Kaizen refers to philosophy or practices that focus upon continuous improvement of processes in
manufacturing, engineering, supporting business processes, and management.
 By improving standardized activities and processes, kaizen aims to eliminate waste.

The 5 techniques of Kaizen:

 SEIRI – Sorting – making the difference between necessary and useless things .
 SEITON – Ordering/Arrangement – the ordering of all the items after SEIRI.
 SEISO – Cleaning and disturbance detection – the working areas/equipments will be clean.
 SEIKETSU - Standardizing– the extension of the cleaning concept to each individual alongside with
the continuous practice of the three steps 3S.
 SHITSUKE – Disciplining – getting self-discipline and getting used to be each involved in the 5S
actions through standard application.

Kanban system (included in management improvement):

 a Japanese manufacturing system in which the supply of components is regulated through the use of
an instruction card sent along the production line.
 an instruction card used in a kanban system.
 Kanban control : Kanban = Card
 Production Kanban: Authorizes the manufacturing of a container of material
 Withdrawal Kanban: Authorizes the withdrawal and the move of one container

Deming’s PDCA Cycle:

 PDCA (plan-do-check-act, sometimes seen as plan-do-check-adjust) is a repetitive four-stage model
for continuous improvement (CI) in business process management. The PDCA model is also known as
the Deming circle/cycle/wheel, Shewhart cycle, control circle/cycle, or plan–do–study–act (PDSA).

Foundations of PDCA Cycle:

 The foundations of the PDCA cycle by Deming’s consist of the following three principles:

i. Customer Satisfaction: Satisfying customers’ needs should be paramount for all workers in the
organization.

ii. Management by Fact: Decision making must be made on data collected from operations and analyzed
using statistical tools. Decision makers must practice and encourage a scientific approach to problem
solving.

iii. Respect for People. A sustainable problem solving and continuous improvement approach should be
based on the belief that employees are self-motivated and are capable of coming up with effective and
creative ideas.

Steps of PDCA : The Plan step:

 Recognize the problem and establish priorities.

Problem may be outlined in very general terms based on information from several sources.

 Form the problem solving team:

Interdisciplinary teams of individuals close to the problem are best.

 Define the problem and its scope clearly:

Who, What ,Where and When.

 Analyze the problem/process.

 Identify possible solutions:

Brainstorm to find solutions.

 Evaluate potential solutions:

Focus on solutions that address root causes and prevention of problem occurrence. Solutions should
be cost-effective; achieving group consensus is important.

The Do step:

 Implement the solution or process change

 Monitor results and collect data

The Check step:

 Review and evaluate the result of the change

 Measure progress
 Check for any unforeseen consequences

The Act step:

If successful,

 Standardize process changes

 Communicate to all involved
 Provide training in new methods

Benchmarking:

 evaluate (something) by comparison with a standard.

 A method for identifying and importing best practices in order to improve performance.
 The process of learning, adapting, and measuring outstanding practices and processes from any
organization to improve performance.
 Used to compare performance between different organizations or different units within a single
organization undertaking similar processes on a continuous basis.
 A measurement of the quality of an organization’s policies, products, programs, strategies, etc., and
their comparison with standard measurements, or similar measurements of its peers.
 We compare our turnover rate against the ten largest companies in our industry when we are
benchmarking our organization.

 Measuring your performance against that of the best-in-class companies, determining how the best-
in-class achieve those performance levels, and using the information as a basis for your own
company’s targets, strategies, and implementation.
 Compare performance of an existing process against other companies’ best-in-class practices
 Determine how those companies achieve their performance levels
 Improve internal performance levels
Benchmarking in context of TQM:

TQM Key principles include:

 Comparisons with best practice
 A Strong emphasis on meeting the needs of the customer (internal and external)
 The importance of efficient, effective business processes
 The need for continuous improvement

Quality control:

 It is an activity which assures that goods or services can form to specified standards.
 The control of quality involves measurement, feedback, comparison with standards and corrections
when necessary.
 It is concerned with making things rather than discovering and rejecting those made wrong.
 Quality Control is an effective system for integrating the quality development, quality maintenance
and quality improvement efforts of various groups in an organization so as to enable production and
service, at the most economic levels which allow for full customer satisfaction.
 Basic responsibility of quality rests in the hands of top management. Daily authority and responsibility
of quality control lies in the hands of quality control staff. But quality is everybody’s job.

Method of Quality control:

i. Statistical Quality control:

 It is the application of quantitative techniques to determine how far the product confirms to the
standards of quality and to what extent its quality deviates from the standard quality.
Characteristics:
 Designed to control quality standard of goods produced.
  Exercise by the producers during production to assess the quality of goods.
 Carried out with the help of certain statistical tools like Mean Chart, Range Chart, P-Chart, C-
Chart etc.
 Designed to determine the variations in quality of the goods & limits of tolerance.

Objectives:

 To assess the quality of raw materials, semi-finished goods and finished products at various
stages of production process.
 To achieve better utilization of raw materials, equipments etc.
 To locate and identify the process faults in order to control the scrap and waste.
 To reduce the wastage of raw materials, men and machine during the process of production.
 To see whether the product confirms to the pre-determined standards and specifications and
whether it satisfies the needs of the customers.
 To take necessary corrective steps to maintain the quality of the manufactured products.
 To protect the manufacturers as well as the consumers against heavy losses due to rejection of
large quantity of products.

Advantages:

 Helpful in controlling quality of a product

 Eliminate Assignable causes of variation
 Better quality at lower inspection cost
 Useful to both consumers & producers
 It makes workers quality conscious
 Helps in earn goodwill

Limitations:

 Does not serve as a ‘solution’ for all quality evils.

 It cannot be used to all production process.
 It involves mathematical & statistical problems in the process of analysis & interpretation of
variations in quality.
 Provides only an information services.

ii. Acceptance Sampling:

 Another major area of S.Q.C. is “Product Control” or “Acceptance Sampling”.

 It is concerned with the inspection of manufactured products.
 The items are inspected to know whether to accept a lot of items conforming to standards of quality
or reject a lot as non- conforming.

Risks in Acceptance Sampling:

 Producer’s risk-: Sometimes inspite of good quality, the sample taken may show defective units as
such the lot will be rejected, such type of risk is known as producer’s risk.
 Consumer’s Risk-: Sometimes the quality of the lot is not good but the sample results show good
quality units as such the consumer has to accept a defective lot, such a risk is known as consumer’s
risk.