Operations & Production Management : Session 1

What are the essential things HR managers should know of Operations? or challenges faced by every HR Manager

1. Strategy
2. Processes - SOPs, Compliances, Resource Planning, Quality Control, Forecasting, Technology
Technology (living in exponential times)
 Rate of technology - extremely fast
 A lot of Data Analysis is happening
 Exponential Growth
 The only Constant thing is Change
 Innovation - Importance of innovation is to grow exponentially and probably the only way to Survival
 Abundance of Information - Difficult choice between Opportunity and Risk. Earlier books had curated
knowledge, today the validity of information is questionable.
 Difficult to embrace change and speed of change
Graphical representation of change across time depicting exponential change

C
H
A
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TIME
Graphical representation of rate humans can process depicting increasing but not exponential

C
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A
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TIME
 Adaptability to change in technology is unpredictable and complex - Training people is challenging with
respect to pace of change. Eg : Demonetization's effect on old people

Concept of 10/10 to 1/1 : Eg: TV/iPod/Facebook in movies with respect to time numbers
Explanation - Earlier it took 10 years to MAKE a Technology and 10 years to MARKET it.
Now, for many technologies it takes 1 year to MAKE a Technology and 1 year to MARKET it.
Which means earlier we had a lot of time to plan, to innovate and iterate but now we do not have that luxury.
So a large proportions of industries are moving from 10/10 to 1/1. Therefore, the way we manage the
operations, processes and strategies would also need to be changed consequently. Eg. Innovation challenge
faced by Paytm.

Focus of Operation Managers in 10/10 World with respect to operations management and current system :
For industries wherein strategies, operations, processes and products mostly remain unchanged
 Productivity
 Processes - Redefining in great detail, optimization of processes, creation of SOPs
 Quality
 Innovation - Strive for innovation to reap the benefits for next 10-15 years, earlier the approach was
more about analytical skills (eg . doing 6Sigma projects, improvement projects, working to improve
efficiency, drive out all wastes from the system, etc). Therefore the trainings were to enhance the
analytical skills (eg. linear programming, mathematical tools, etc)
Applying same philosophy of running operations of 10/10 in 1/1 world? - NO
Explanation - Because by the time the process is optimized, something has changed. Therefore, along with
analytical skills, one would need additional skills like agility, creativity, innovativeness, adaptability, etc. So, as
HR managers, when you are hiring personnel in 1/1 world, you would be looking for skills like quick thinking,
anticipation, etc. In short, hiring people for not what they know but for their learning ability (would they be
adaptable to learning new technology or skills), attitude. Even with all the tools, it is difficult for the HR
managers to evaluate an incumbent with new set of guidelines. So, organizations who were traditionally
thought to be in the 10/10 world, are gradually moving towards 1/1 world.

Although data analytics has a lot of value, in which circumstances will it work well? or What is the prime
premise of data analytics or machine learning?
Explanation - We are looking at the past and assuming to repeat it in the future, which does not hold to be
true in the 1/1 world. Eg. Can past year's data of Amazon/Flipkart in the Indian context be completely reliable
to predict or forecast the type of products they could or would be selling? Ans - No. Because the buying
patterns of the consumers have changed, especially post pandemic. If the past parameters for performance
and growth would have been the same, companies would have earned huge revenues. It might apply to few
industries like FMCG or Healthcare or medical space, where humans are involved because human bodies are
the constant elements. Therefore, data analytics are more on the analytical side and the operation managers
need to be more analytical to innovation, which is DESIGN THINKING.

What is Design Thinking ? (Design thinking is a process for creative problem solving. In employing design
thinking, you're pulling together what's desirable from a human point of view with what is technologically
feasible and economically viable.)
Explanation - Two aspects should be considered - 1. How to do a particular thing? 2. Why to do a particular
thing? Eg: Food brand which immediately pops up in our minds with respect to optimum operations
(McDonalds - revolutionary concept - convenience, quick service, quick response, fast food, workforce
diversity, dining at highways, etc). MCD discovered an unmet customer requirement (MYSTERY). So, MCD
created a restaurant on highways (HEURISTICS). Then MCD sold it to Kroc (who had the vision to take it
globally, franchising, etc). So Kroc started standardizing its operations through SOPs (ALGORITHM), with
operation examples, like, minimum bake time of buns, no variation in size of potato, definite machine
specifications, etc. Therefore, he converted a Heuristics into Algorithm. Therefore Design Thinking
incorporates three words - MYSTERY->HEURISTICS->ALGORITHM.
Organizations always have to make choice between embracing intuitive thinking (based on knowing without
reasoning) and logical thinking (analytical processes based on reasoning).

MYSTERY - something that is difficult or impossible to understand or explain - idea generation (exploration)
HEURISTICS - enabling someone to discover or learn something for themselves - idea implementation
(execution)
ALGORITHM - a process or set of rules to be followed in calculations or other problem-solving operations,
especially by a computer - perfection of idea implementation (exploitation)

Concept of The Knowledge Funnel - How discovery takes shape by Roger Martin:
Explanation - Seeking reconciliation
This model for value creation lies in driving out old-fashioned practices of gut feeling and instinct, replacing
them with strategy based on rigorous, quantitative analysis (optimally backed by decision-support software).
In this model, the basis of thought is analytical thinking, which harnesses two familiar forms of logic—
deductive and inductive reasoning—to declare truths and certainties about the world.

In 10/10 & 1/1 world, in which part of design thinking (A. Mystery, B. Heuristics, C. Algorithm), was/will be
most of the time spent?
 10/10 world Explanation - B & C. Taking inputs from Heuristics and playing at Algorithm. There were several
roadblocks in doing so because the ultimate goal was to create a computerized code (converting everything
into algorithm).
1/1 world Explanation - A & B. Because by the time, input from Heuristics is converted into Algorithm,
something else has come into play. Therefore, design thinking is the ability to go up and down the knowledge
funnel. If an organization only sticks to one, say algorithm (optimization of processes), it might loose on
dynamism, new discoveries may not happen, and may even loose the market. Same happened with MCD,
when new players entered the market when it was stuck in the algorithm phase for a long time, so eventually,
it lost its market share. These are barriers which needs to be overcome. In recent times, companies like
Infosys, Cognizant, Wipro, etc are buying small companies. The reason of the same being that even being the
largest players in their segment, companies like Wipro, are dominated by analytical thinking and are
structurally resistant to the idea of designing and redesigning themselves and their businesses dynamically
over time, whereas the small companies are dominated by intuitive thinking and innovation may come fast
and furious but growth and longevity might be a barrier. So, small players are better at MYSTERIES of design
thinking whereas the big players are better at converting Heuristics into Algorithm. Intuition-based firms (like
Wipro) cannot and will not systematize what they do, so they wax and wane with individual intuitive leaders
(Top-Coder). Eg. Wipro bought top coder, Microsoft bought GIT Hubs. To conclude, we can say that since this
world collectively is about Exploration and Exploitation (together it is AMBIDEXTERITY), and organizations
can not be in just any one of them to sustain. Reconciling the two modes of thought, movement along the
knowledge funnel, will help the organizations to gain a nearly inexhaustible long-term business advantage.

Exploration
A
BARRIERS

BARRIERS

Exploitation

Why is the shape of the model (knowledge funnel) figuratively conical?

Explanation - Probably because at the Mystery level, there are larger degrees of variability, while moving
towards the algorithm, the degrees of variability is reduced. Therefore, by standardization, organizations are
reducing the degrees of variability by all the extraneous factors.

Algorithm at play in different organizational set-up; A. Infosys (Every quarter they release Earning Guidance
(tell the market what are they going to earn) and B. TCS (do not release any such thing) - Ans : Infosys (A)
Explanation - Because now they want predictability and reliability as they have made a commitment. Another
example; Startups - to fulfill their capital requirements, either they can take debts from banks (option A) or
can take share market equity (option B). The preference on debt recourse by the Start-ups here would depend
on two facts:
1. Option A - payment at periodic intervals, which means start-ups have to play their game on reliability.
2. Option B - prepared to take risk, which means start-ups have to play their game on ambiguity.
CLOCK SPEED by Prof Charles Fine : Clock speed is the speed of industry change that is endogenous in a
business environment, involving both product clock speed that reflects new-product development rates and
process clock speed that represents the rates at which process technologies are replaced in an industry
In Clock speed, Charles Fine intertwines three major themes for businesses that are driven by short product
and process lifecycles: 1: no competitive advantage is permanent; 2: no capability exists in a vacuum; 3:
organizations must tear down walls and concurrently engineer products, processes and supply chains.
Mining Industry - The clock speed is slow ; IT Industry - The clock speed is fast.

Q. Why do biologists (who study on genes, medicines, etc) conduct their experiments on flies and not
human?
Ans: In words of Charles Fines, the clock speed of a fly is fast, where as the clock speed of human is slow but
the changes are almost same, it is only a question of SPEED.
Therefore, changes in all organizations are fundamentally the same, and one can learn from anywhere. Eg :
Car - A mechanical or electronic product or combination (Software on Wheels)

Example 2 # Clock Speed in Power Sector - Electricity & Telecom Sector - Mobiles
Part 1 - Generation; Part 2 - Transmission; Part 3 - Distribution (Point of discussion here)
Recent changes in Part -3, that you see as Consumers while interacting with distribution partners of electricity:
Digitization, Vendor Portability, Power Exchanges. Learning from other sectors, Open Access (Mobile Number
Portability), Prepaid card (Mobile), Time Of Day (Cinema Ticket), Smart Grid (The Internet), Banking (Virtual),
Trading (Share Market, Auto Metering)Net Banking, etc. Tesla learners from aeroplanes. Therefore, the
product has not changed in itself, but the offering has changed as they have learned from different industries
and their practices.

Intersection of ideas & innovation - MEDICI EFFECT : "You must go where these very changes are occurring—
at the intersections of industries, cultures, fields and disciplines." ― Frans Johansson. In future, all innovation
will not happen in one discipline, many disciplines will join hands together, i.e. medici effect

The Medici Effect : The term coined by Frans Johansson. It is a phenomenon of innovation that occurs at the
intersection of multiple fields, disciplines, and cultures, by combining existing concepts to create excellent,
innovative ideas :
 All ideas are combinations of existing ideas
 Not all idea combinations are created equal
 More ideas lead to better ideas
 Plan for mistakes & failures
 Stick to your passion - it's the best chance for success
 step into the intersection - unleash an explosion of ideas
Stepping into the areas of intersection of innovation leads you to :
1. Vault your competition - Open an entirely new market, fundamentally re-imagine your brand, or
transform your business model, social & technological innovation (collaboration with diversified
people), etc
2. Break out of your network - Surround yourself with diverse cultures, upbringing, backgrounds, and
ability.
3. Multi-potentialities - idea synthesis, rapid learning, adaptability
4. Paving the way for scientific breakthroughs - Using technology and science

Innovation starts with a state of mind. Innovation, combining existing concepts to create amazing
innovative ideas, will continue to occur at the intersection of multiple fields, disciplines, and cultures. There
are two key ingredients: mindset and ecosystem.
Mindset — The mindset needed is at the intersection of a growth mindset and a dark-horse mindset. You
must be aware of your superpowers, be proactive in exploring opportunities, developing strategies to
 capitalize on (or reject) the opportunity, and pick a direction rather than a destination, as you may find a
better place along the way.
Ecosystem — Create an ecosystem that embraces a diversity of thought, and lets people invest their career
capital in creating breakthrough innovation and new strategic insights.

Transformation of 'I Personality' to 'T Personality': Driving innovation through diversity

Explanation - One definitely needs to be proficient in one discipline, but as you move forward in this fast
clock speed world, one has to transform from a I personality to a T personality, wherein I stands for areas
of one's basic discipline and T stands for areas which one needs to be aware of. As HR professional, one
should identify the adjacent technologies.

Q. How many traits/ disciplines are required to build a modern day high-rise building?
Ans - roughly 18.
Explanation - You may be skilled in one discipline, but you also need to have knowledge of other disciplines,
to have a holistic understanding. Although, it is a slow process, one needs to devote some time in
identification and preparing for the adjacent technologies. As HR professionals, we need to construct
training programs in a such a manner so to inculcate the future innovations that will happen at the points of
intersections. So, one must :
Break the barriers in design thinking; To get people to match clock speed; To train & get people to believe
in medici effect.

Q. Which industry will be the most difficult to apply Operations between Tata Motors & Tata Steel?
Ans - Any industry which has more complications. Eg, Tata Steel, due to - More complications, changing
products, power exchanges, more laws of science (physics & chemistry) are applied, more uncertainties, etc.

Application Areas - Physics, Chemistry, Biology, Psychology

Example#1 - Prof. Devi Prasad Shetty (The Henry Ford of Heart Surgery): Heart Surgery based on Factory
Model of cars, cutting costs & yielding profits.
Example#2 - Dr. G. Venkataswamy (McSurgery of Cataract): Cataract Surgery based on McD's method of
making burgers.
So, to improve operations, one cannot do just one thing. One needs to perform several small activities. As
per the Japanese, only skill to understand the operation is the power of observation.

Q. What can hospitals learn from Formula One to improve their operations?
Ans - Pitstop, The skills developed during Formula 1 pit stops are now being used to save lives at a top
children's hospital. They realized the similarities between the handover disciplines from theatre to Intensive
Care Unit in their hospital and what they were seeing in the pit lane of a racing team. The doctors saw this
as analogous to the team effort of surgeons, anesthetist, and ICU staff to transfer the patient, equipment,
and information safely and quickly from operating room to ICU, which was one of the complex tasks. The
real gain for patients was safety. Results showed that the new handover procedure had broken a link
between technical and informational errors. Before the new handover protocol, approximately 30 percent
of patient errors occurred in both equipment and information. Afterward, only 10 percent occurred in both
areas.

Q. How can the same concept of Racing Formula 1 be used in Hotels?

Ans - Room Turnovers - Cover-to-cover method

Q. What are the constants in operation that will not change?

Ans - Goal of the company - to make money; People - mental skill, hand skill, relationship skill

Moravec Paradox : Things that are hard for humans, are easy for computers and vice versa. The most difficult
human skills to reverse engineer are those that are unconscious in nature. Humans are least aware of what
their minds do best. Simply put, computers are more than capable of executing solutions for difficult
 problems, they tend to solve common sense problems which are easily solved by humans. The explanation
behind Moravec paradox revolves around evolution, understanding, and perception. For example, the skills
that we define as ‘simple’ — those we learn instinctively — are products of years and years of evolution. So,
while they may appear simple, it’s only because of billions of years’ worth of tuning. In other words, the
complexity of the simple abilities we take for granted is invisible.

Plus, AI ‘learns’ through us telling it how to do things. We’ve consciously learned how to do mathematics, win
games and follow logic. We know the steps (computations) needed to complete these tasks. And so, we can
teach them to AI. But how do you tell anything how to see, hear, or move? We don’t consciously know all the
computations needed to complete these tasks. These skills are not broken down into logical steps to feed into
an AI. As such, teaching them to an AI is extremely difficult, which are called tacit knowledge. That is why it is
very difficult to fire the middle managers, because of these tacit knowledge that they hold.
Polanyi Paradox : We know more than what we can say. (Tacit Knowledge)

Q. If you were an Operations Manager in a Physical Industry, what would be the major areas that you would
focus on?
Ans - Inventory - 1. Crude (Oil) for across all industry - controls price, transportation; 2. Rare Earths (metals).

Q. What are takeaways for HR Managers from the concept of 'clock speed' and 'medici effect' and 'Design
Thinking'?
Ans- Clock Speed :-10/10 to 1/1
 Talent Management - Hiring from various sectors and backgrounds.
 Learning & Development - training programs including multi skills, training by outside experts.
Medici Effect (I to T personality - intersection of innovation) :-
 Diversified Task force
 Diversified Talent Acquisition
 Reverse Mentoring
Design Thinking :- Mystery-Heuristics-Algorithm
 Train people in Design Thinking
 Reward & Recognition

Q. What could be the common roadblocks for HR Managers to convert Heuristics to Algorithm
Ans :
1. Analytical Skills
2. Brand Management
3. Flexibility
4. Knowledge Sharing issues
5. Lack of individual component

Operations & Production Management : Session 2, 3 &4

Predictability - Reliability Vs Validity of a Process:

Reliability - Refers to the consistency of a process (whether the results can be reproduced under the same conditions).

Validity - Refer to the accuracy of a process (whether the results really do represent what they are supposed to
measure).

Example#1 - Covid test kits that result in all positive outcomes. If every test gave the same result, we call it reliable.
Validity would be does the test results ensure that Covid is there. So. the algorithm world is not asking validity question
but reliability question.

Emphasis of time outs - To reflect and to force thinking . Our mind is of two parts, one being the lazy instinctive part
and the other is the active constructive part.
Constants of Operations - Inventory, Process, Project

 Inventory - Inventory refers to all the items, goods, merchandise, and materials held by a business for selling in the
market to earn a profit. How much inventory does organizations like OYO or OLA have?
Ans - Very low. The concepts of inventory over time. The importance of inventory is coming down significantly. Eg.
Physical Books replaced with ebooks. Atoms becoming bits. Film distribution via reels in traditional days, have changed
drastically. The volume and structure of inventory may change, but there will always be inventory to be managed in any
industry.
 Process - Process refers to all the series of interrelated tasks that, together, transform inputs into a given output.
Eg, Leave Application, Loan, CV. The mode of execution of any process may change (digital or manual), but there will
always be a process to be understood and executed.
 Project - Project refers to any temporary endeavor with a definite beginning and end, carried out individually or
collaboratively depending on its complexity. It is a sequence of tasks that must be completed to attain a certain
outcome. Although every project is unique and involves unfamiliarity irrespective of the industry or organization, but
there will always be a project to be undertaken. So many new things are coming up, so the only constant body of
knowledge that can help is managing projects.

Future Implications - Importance of people who stand at the intersection of humanities and science. Eg. Steve Jobs.

Q. Which country should we be looking at in terms of their operations and skills?

Ans - China - Low cost, good quality. Ownership of rare earths, oil and water.
Confucius said - We hear but forget; We see and remember; We do and understand. More reliance on seeing and doing
to understand and retain knowledge. Retention of Learning through teaching.

Important terms to remember while designing a process :

1. Structure - Physical Layout, Technological know-how, kind of manpower employed, etc - Long term process
2. System - How to do a job, which job to do first - Rules, Policies, etc - Short term process

Example # Creating a Plant - Physical simulation of process, a manufacturing shop - What would be needed?
Ans - 1. Identification of Product - Shell (pieces of paper, 24 Nos of shells to be manufactured)
2. Raw Materials & Machinery to build the product - colors
3. Time allowed for completing the task- 10 mins
 Process ->Job (Desired)
Work Centre : Blue; Red; Green & Yellow
Shells to Apply :
Blue : 1-4; Red : 5-8; Green : 9-10; Yellow : 11-12
Work order (Steps) : Blue-Red-Green-Yellow
Actual Product
Qty to be manufactured - 24 Shells
Each Job might follow a different sequence. Therefore,
each shell may not be identical.

Constraints - Manpower (not more than 180);

Process of
Tools (crayons - each costs 1cr)
the Product
Space (Room)

Process ->Job (Planning)

Assumptions: Moving Crayons or Paper (AB Testing - Any
idea you get, you need to think diametrically opposite, to
compare between A and B)
Conclusion - SOPs (Preserve the strengths & cover the
weaknesses)
Process A - Departmentalizing for promoting efficiency,
simplification of job, accountability, work specialization(4
depts with 1 person n each dept- Blue , Red, Green &
Yellow)
Process B - Feasibility (One person doing all the jobs),
wherein constraint is paper can move but crayons
Product 1 - With specific sequencing cannot. Other things remaining the same.
AB testing is essentially an experiment where two or more variants of a page are shown to users at random, and
statistical analysis is used to determine which variation performs better for a given conversion goal. Comparing two
different ideas not just based on efficiency but also on feasibility.

Objective of AB Testing : No matter what idea you take, what process is undertaken, what job is selected, what kind of
manpower you employ, it is imperative to understand the other alternatives, do not criticize the ideas at the time it is
given. It provides a structured way of exploring new ideas and alternatives.

Power of Observation - 3 mins managers - our attention spans are reducing. It is extremely important to observe to
understand. Japanese famous term Gemba (meaning the actual place where value is created, such as shop floor in
manufacturing units, OT in hospitals, job sites in construction projects, kitchen in restaurants, etc), wherein they stand
at a particular place and just observe, observe and observe to learn by seeing. Gemba walks denote the action of going
to see the actual process, understand the work, ask deep level of questions, and learn. It is also known as one
fundamental part of Lean management philosophy. The objective of Gemba Walk is to understand the value stream
and its problems rather than review results or make superficial comments.

Comparison of Process A vs Process B - Decision Thinking vs Design Thinking (Uncovering the Blind Spots)

Basis of Comparison Process A Process B

Time Perspective Better
Workman Perspective I Personality Multi-skilled - T Personality
Management Complex SOPs Simpler SOPs
Cost Less manpower costs, less space costs
Resource Utilization Pathetic
Material Handling Not required
Quality (Consistency) Better
We will go with Process A for this scenario:

Manpower - 4 workers, 4 supervisors

Desired Functions : Quality; HR; Material Handlers; Finance; General Manager for the Plant; Consultants
Condition : Cannot change the location of the plant and the number of the people employed (Reason for the same is
we are managing the plant in the short term); No break-down of machines; Plant is managed for short-term.
Planning time allotted : 15 mins
Structure

Description of roles / functions:

Supervisor - Develop the checklists, follow protocols, inspections

Quality Personnel - inspection - total 96 (24*4) nos. of inspections to be done in 10 mins to ensure 100% inspection for
each step. This is not possible, so there has to be a strategy - delegate to the supervisor (eg. the moment it comes to
red, the supervisor tells the workers to color 1-4, the worker will not have to read the same from the work order ->
quality will be better and time consumed will be saved).

Expectation : What you would like and dislike to be the mode of operation within the plant? Investment in the process
of observation.

Like :
 Visual Control (Color coding in the plant - marking which department is red, blue, green or yellow).
 Quality Control in the middle (supervisor's responsibility)
 Fixed machine deployment
 Evidence of parallel processes
 Work scheduling (assembly line, batch processing, customization, standardization, etc)
 Work layout
 Visual element in SOP

Dislike : Too many cooks ; Wastages / improper utilization of resources (no idle resources)

Steps of Execution of Jobs:

1. Segregation - Laid out all the 24 jobs - time taken was 44 seconds
2. Distribution of jobs by material handlers- RED got the job after 56 seconds. Distribution ended at 59 seconds
with last delivery to RED
3. Operation coloring
4. Building up queues
5. GREEN gets an idea of putting sign boards
6. Urgent job given at 2 mins
Planning a process - A basic primer - Scheduling
 SPT - Shortest Processing Time
 FCFS - First Come First Serve
 LWR - Least Work Remaining
 LPT - Longest Processing Time
 Feed the idle
 EDD - Earliest Due Dates

Important Slogans
1. concept of focus
2. concept of bottlenecks
3. concept of measurements drive behavior
4. difference between resource utilization - technical efficiency and flow - financial efficiency & TAT
5. No one size fit approach

Theory of Constraints
Surprising Facts about Constraints
 You will always have a constraint, so choose wisely ... perhaps the most capital intensive, or energy
consuming, or largest batch, or longest touch time, etc.
 If you identify the wrong constraint, it is easily rectified and causes no permanent damage. The Five Focusing
Steps auto-correct for errors made over time.
 The constraint may appear to shift suddenly based on product mix, however this is often due to batching
practices rather than actual shifting of the constraint.
 Most systems typically have ONE SINGLE RESOURCE CONSTRAINT such as a machine or department. This
constraint, which may or may not be binding at any given point of time, is referred to as the Capacity-
Constrained Resource (CCR). In certain cases there may be 2-3 CCRs, but rarely more.
 Permanent constraints typically include sales/marketing (with better techniques we could always raise prices)
and R&D (with more awesome products we could make far higher margins).
 Eventually the constraint should be stabilized; frequently shifting constraints wreck havoc on policies,
procedures and people.

Process of Ongoing Improvement:

The Five Focusing Steps (POOGI) - GIESEP

  Focusing Step #0: Goal Setting.
 Focusing Step #1: IDENTIFY the system's constraint.
 Focusing Step #2: EXPLOIT the constraint.
 Focusing Step #3: SUBORDINATE everything else to the constraint. Short Term
 Focusing Step #4: ELEVATE the constraint. Long Term
 Focusing Step #5: PREVENT INERTIA from becoming the constraint!

Focusing Step #1: IDENTIFY the system's constraint

Strengthening any link of a chain (apart from the weakest) is a waste of time and energy. Similarly, the vast majority of
efforts to "improve" something in the organization fail to result in more profits for shareholders, delight for customers,
or satisfaction for employees. This is because most initiatives are not focused on the constraint of the organization.
Yet it is impossible to manage a constraint until you find out what it is! And it is surprisingly easy to find, once you know
how to look. Check out our free Constraint Checker Tool.
Focusing Step #2: EXPLOIT the constraint
The output of the constraint governs or restricts the output of the organization as a whole. It is therefore imperative to
squeeze as much as possible out of it. Maximize the utilization and productivity of the constraint (NOT utilization and
productivity of non-constraints). Rather than immediately purchasing more of the constraint (by buying machines,
hiring workers, increasing the advertising budget, etc.) we should first learn to use the resources that we already have
more efficiently.

The constraint of most organizations is not well utilized, often less than 50% on a 24x7 basis. If the reasons for under-
utilization are not immediately clear, try measuring the constraint's OEE including the breakup of
availability/quality/performance. Gather the underlying data and analyze it using Pareto techniques. Once the primary
causes are identified, use fishbone diagrams and Five Why analysis to drill down to the root cause for under-
performance.

When the root causes are clear, eliminate them on a permanent basis. Quality and productivity tools such as Six Sigma,
Poka-Yoke, design of experiments, SMED, etc. often provide the answer, depending upon the nature of the problem.
Focusing Step #3: SUBORDINATE everything else to the constraint
By definition, any non-constraint has more capacity to produce than the constraint itself. Left unchecked, this results in
bloated WIP inventory, elongated lead times, and frequent expediting/firefighting. Hence, it is crucial to avoid
producing more than the constraint can handle. In a manufacturing environment this is accomplished by choking the
release of raw material in line with the capacity of the constraint.

Equally important is ensuring that the rest of the system supports the work of the constraint at all times. It must never
ever be starved for inputs, or fed poor quality materials. This can be achieved by maintaining a reasonable buffer of
safety stock. Similarly, other established policies and habits can hamper productivity at the constraint and must be
systematically aligned to achieve maximum performance.
Focusing Step #4: ELEVATE the constraint
Once the capacity of the system is exhausted, it must be expanded by investing in additional equipment/land, hiring
people, or the like.
Focusing Step #5: PREVENT INERTIA from becoming the constraint!
Once elevated, the weak link may not remain weakest. Consider elevating other resources to retain the old constraint,
depending on where you wish to have the constraint in the long-term. A new constraint demands a whole new way of
managing the system. We therefore return to Step 1, and thus begins our journey of continuous improvement...

What is Bottleneck?
A bottleneck is a point of congestion in a production system (such as an assembly line or a computer network) that
occurs when workloads arrive too quickly for the production process to handle. The inefficiencies brought about by the
bottleneck often creates delays and higher production costs. A bottleneck can have a significant impact on the flow of
manufacturing and can sharply increase the time and expense of production. Companies are more at risk for
bottlenecks when they start the production process for a new product. This is because there may be flaws in the
process that the company must identify and correct; this situation requires more scrutiny and fine-tuning. Operations
management is concerned with controlling the production process, identifying potential bottlenecks before they occur,
and finding efficient solutions.

A bottleneck affects the level of production capacity that a firm can achieve each month. Theoretical capacity assumes
that a company can produce at maximum capacity at all times. This concept assumes no machine breakdowns,
bathroom breaks, or employee vacations.
Because theoretical capacity is not realistic, most businesses use practical capacity to manage production. This level of
capacity assumes downtime for machine repairs and employee time off. Practical capacity provides a range for which
different processes can operate efficiently without breaking down. Go above the optimum range and the risk increases
for a bottleneck due to a breakdown of one or more processes.

If a company finds that its production capacity is inadequate to meet its production goals, it has several options at its
disposal. Company management could decide to lower their production goals in order to bring them in line with their
production capacity. Or, they could work to find solutions that simultaneously prevent bottlenecks and increase
production. Companies often use capacity requirements planning (CRP) tools and methods to determine and meet
production goals.

PDCA Cycle:

Explained briefly, the Plan-Do-Check-Act cycle is a model for carrying out change. It is an essential part of the lean
manufacturing philosophy and a key prerequisite for continuous improvement of people and processes. First, proposed
by Walter Shewhart and later developed by William Deming, the PDCA cycle became a widespread framework for
constant improvements in manufacturing, management, and other areas. PDCA is a simple four-stage method that
enables teams to avoid recurring mistakes and improve processes.

PLAN: At this stage, you will literally plan what needs to be done. Depending on the project's size, planning can take a
major part of your team’s efforts. It will usually consist of smaller steps so that you can build a proper plan with fewer
possibilities of failure. Before you move to the next stage, you need to be sure that you answered some basic concerns:

What is the core problem we need to solve?

What resources do we need?
What resources do we have?
What is the best solution for fixing the problem with the available resources?
In what conditions will the plan be considered successful? What are the goals?
Keep in mind, you and your team may need to go through the plan a couple of times before being able to proceed. In
this case, it is appropriate to use a technique for creating and maintaining open feedback loops such as Hoshin Kanri
Catch ball. It will enable you to collect enough information before you decide to proceed.

DO: After you have agreed on the plan, it is time to take action. At this stage, you will apply everything that has been
considered during the previous stage. Be aware that unpredicted problems may occur at this phase. This is why, in a
perfect situation, you may first try to incorporate your plan on a small scale and in a controlled environment.
Standardization is something that will definitely help your team apply the plan smoothly. Make sure that everybody
knows their roles and responsibilities.

CHECK: This is probably the most important stage of the PDCA cycle. If you want to clarify your plan, avoid recurring
mistakes, and apply continuous improvement successfully, you need to pay enough attention to the CHECK phase.
Here, you need to audit your plan’s execution and see if your initial plan actually worked. Moreover, your team will be
able to identify problematic parts of the current process and eliminate them in the future. If something went wrong
during the process, you need to analyze it and find the root cause of the problems.

ACT: Finally, you arrive at the last stage of the Plan-Do-Check-Act cycle. Previously, you developed, applied, and
checked your plan. Now, you need to act. If everything seems perfect and your team managed to achieve the original
goals, then you can proceed and apply your initial plan.

It can be appropriate to adopt the whole plan if objectives are met. Respectively, your PDCA model will become the
new standard baseline. However, every time you repeat a standardized plan, remind your team to go through all steps
again and try to improve carefully.

The PDCA cycle is a simple but powerful framework for fixing issues on any level of your organization. It can be part of a
bigger planning process, such as Hoshin Kanri.

The repetitive approach helps your team find and test solutions and improve them through a waste-reducing cycle.

The PDCA process includes a mandatory commitment to continuous improvement, and it can have a positive impact on
productivity and efficiency.
Finally, keep in mind that the PDCA model requires a certain amount of time, and it may not be appropriate for solving
urgent issues.

PDCA has some significant advantages:

It stimulates continuous improvement of people and processes.
It lets your team test possible solutions on a small scale and in a controlled environment.
It prevents the work process from recurring mistakes

PSYCHOLOGY OF QUEING:

1. Unoccupied time feels longer than occupied time

Even if customers are in love with the product they’re queuing for, not providing a distraction during the wait can make
it seem torturous. Just like with the elevator mirrors, get creative with ways to engage your customers.

If callers are waiting to speak to your customer service, give them the chance to get called back when it’s their turn. If
fans are waiting for an artist to perform, let them join in on a game of trivia using an app like Kahoot. If customers are
waiting in an online queue, customize the queue page and embed videos or games.

Online queues actually have an advantage over physical queues as customers aren’t limited by the need to stand in
line. If your virtual waiting room can notify visitors when it’s their turn in line, they can check email, tidy up the house,
or do any number of things to occupy their time while waiting.

2. People want to get started

Think about when you enter a restaurant. Sometimes the wait until you’re first greeted by the waiter can seem worse
than the wait for your table. The start of the transaction is the end of the wait, so make sure people feel like they’ve
started.

If your business is a restaurant, let your customers preview the menu. If you’re running an online product launch, let
customers in the online queue read more about the product so they feel like they’ve started the buying process. Even
better, give them a sneak peek of upcoming products.

Adding a progress bar on the online queue page also highlights for customers that they’ve started. It shows a beginning
and an end, and waiting becomes re-conceptualized as progress.

3. Uncertain waits are longer than known, finite waits.

Communication is key because the transparency helps set expectations.
Provide information on how many other people are waiting in line. Give an estimated waiting time. If in doubt, it’s
better to overestimate the wait than underestimate it. How an experience ends (known as the peak-end rule) greatly
influences people’s assessment of the whole experience. So, being rewarded with an early exit from the queue will
pleasantly surprise your customers and leave them feeling more positively overall.

4. Unexplained waits are longer than explained waits.

Humans look for explanations behind all things. The absence of explanation is frustrating. Airline pilots know this well
and will always include the reason for a delay (whether it’s the airline’s fault or not) instead of merely stating there is a
wait.

Such explanations are even more critical during an online queue, where there are fewer contextual cues available to
your visitors. Saying your site is experiencing “technical difficulties” is a vague and unnerving description for visitors.
Make sure to provide a clear explanation of why your customers are in a queue (e.g. “Hi Sneakerhead! So that
everyone has a fair shot at getting their hands on a pair of new sneaks, we’ve reserved a place in line for you in our
virtual waiting room.”)

If possible, keep real-time communication flowing to your waiting customers to keep them up-to-date and remind
them why there is a wait.

5. Unfair waits are longer than fair waits

The perception of fairness has arguably the biggest impact on how we feel when we’re waiting in line. We’re constantly
on guard to ensure no one cuts the line. Violations can be met with queue rage.
 A first-in, first-out (FIFO) (or first-come, first-served) wait is the exemplar of fairness. Make sure your queue—whether
online or physical—operates in this way.

If you’re operating an online queue, remember to address customers who arrive early. For example, we’ve designed
our virtual waiting room to place early visitors in a pre-queue with a countdown to the official start of the queued
event. When the sale or registration begins, we assign a randomized queue number to all early visitors and then
operate the queue in a first-in, first-out fashion. This ensures early visitors don’t benefit from arriving early and gives
everyone who does a fair shot at being first in line.

6. Anxiety makes waits feel longer

Put yourself in your customers’ shoes. They really want the concert ticket or pair of sneakers they’re waiting in line for.
That in itself is already anxiety-provoking. Removing anything that could cause anxiety (e.g. warning visitors they only
have a few minutes to complete their booking) is great. Preemptively addressing any anxieties, rational or not, is even
better.

If your setup involves multiple queues, think again. A large portion of queue anxiety surrounds being unfairly overtaken
by others, what Richard Larson calls “skips and slips”. One serpentine line removes any need for your customers to
make (and constantly reassess) a decision about choosing the “right line”.

CANNOT HAVE ONE SIZE FITS ALL APPROACH:

One of the common myths and misconceptions about projects is that all projects are the same and you can use similar
tools for all your project activities. We call this the project is a project is a project syndrome, and it often leads to
project failure and delays when companies are using improper project management techniques for some of their
project efforts. While all projects have a goal, a budget, and a time-frame, there is more to project management than
just a few common elements. In reality, projects differ in numerous ways, and one size does not fit all! Yet, at present,
only a few organizations know explicitly how to classify their project efforts and how to select the best approach to a
specific project, and there is still no standard framework for distinction among projects and for selecting the right
approach to the right project.

The UCP Model

In search for a universal, context-free framework for all project types, our research identified three dimensions to
distinguish among projects: uncertainty, complexity, and pace. Together, we call them the UCP model, and they form a
context-free framework for selecting the proper management style

Hence it’s important to remember the below 5 points to design any process:

Operations & Production Management : Session 5 & 6

STEPS of Continuous Process Improvement

1. Kaizen - continuous improvement is a process - the lean way (Kai - change/improvement; zen - good)
2. Sensei (Teacher) - trains the continuous improvement manager
3. Define a Kaizen implementation plan & right resources - implementation plan with long term horizon & yearly goals
(Policy deployment, originally known as 'Hoshin Kanri')
4. Focus - Select one product family to start with - significant to the company in terms of quantity & money (mostly used
tools are Pareto Analysis & PQ Matrix)
5. Involvement of people at shop floor - Gemba (meaning the actual place where value is created) - techniques to involve
people at the shop floor are train people on continuous improvement; start giving then asking
6. Sustain by "Lean" morning meetings - Control your territory; Give meaning to actions; Motivating & driving your team;
Delegating simple problem solving; Managing the progress plan
7. Celebrate the success - Reward & recognition
8. Move to another product family but do not forget the 1st one - with new experienced people and continuous
improvement

LEAN PHILOSOPHY / JIT - by TAICIHI OHNO

Lean is a philosophical way of working which emphasizes the removal of waste within a process. Core to this
philosophy involves the principle that expenditure of resources for any goal other than the creation of value for the end
customer is wasteful and therefore should be a target for elimination. Simply put, lean means creating more value for
customers with fewer resources.” A lean organization understands customer value and focuses its key processes to
continuously increase it. The ultimate goal is to provide perfect value to the customer through a perfect value creation
process that has zero waste.

FIVE philosophies (Scientific Management; TQM, TOC, Lean, & Focus) to improve processes - LEAN PRINCIPLES for
economies of scale
1. Value ; 2. Value Stream; 3. Flow; 4. Pull; 5. Perfection

FOUR Factories - 1. Pin Factory; 2. Ford Factory; 3. Hawthrone Factory; 4. Toyota Factory

1. Pin Factory - Wealth of Nations book - Specialization of labour (Adam Smith / Babbage - 1776)
Reasons for specialization of Labour :
 Repetition of work - improvement in skill
 Development of expertise - shortcuts - quality
 Division of job into simpler jobs - identification of real constraints - Algorithm
 Matching skills to the respective tasks
Poka-yoke is a Japanese term which translates as “fail-safe” or “mistake-proofing” or "inadvertent error prevention".
Poka-yoke helps people and processes work right first time by introducing techniques that make it impossible to make
mistakes or finding a quality problem with the product. There are three types of poka-yokes: Contact method -
identifies defects by testing product characteristics. Fixed-value - a specific number of movements every time.
Sequence method - determines if procedure were followed. Example - many elevators are equipped with an electric
eye to prevent doors from shutting on people. They are also equipped with sensors and alarms to prevent operation
when overloaded.

Defining / Quantifying Information in terms of time (Claude E. Shannon - Founder of Information Theory): The
purpose of information is to reduce uncertainty

Shannon defined in mathematical terms what information is and how it can be transmitted in the face of noise. As well
as defining information, Shannon analyzed the ability to send information through a communications channel. He
found that a channel had a certain maximum transmission rate that could not be exceeded. Today we call that the
bandwidth of the channel. Shannon demonstrated mathematically that even in a noisy channel with a low bandwidth,
essentially perfect, error-free communication could be achieved by keeping the transmission rate within the
channel's bandwidth and by using error-correcting schemes: the transmission of additional bits that would enable
the data to be extracted from the noise-ridden signal - Poka Yoke.
Shannon -> 1 bit = that much amount of information required to distinguish between two equally likeable
alternatives. Eg. When you toss a coin, either you have heads or tails (which means you have two information). In the
words of Shannon, you have 1 bit of information because you have two equally likeable alternatives (head or tails).

Claude Shannon - Hick Hayman Law (by William Edmund Hick & Ray Hayman)
Meaning - the time it takes for a person to make a decision as a result of the possible choices: increasing the number
of choices will increase the decision time logarithmically. The more stimuli (or choices) people face, the longer it will
take them to make a decision.

Example - Experiment with cards (pack of 52)

Experiment 1 - Diving the entire pack in two equal parts (26 each) -> Cards Handled - 52 (1*52); No. of choices - 0;
Time taken T1
Experiment 2 - Putting the red cards (26) together and the black cards (26) together into 2 packs respectively; -> Cards
Handled - 52 (2*26); No. of choices - 2; Time taken T2
Experiment 3 - Putting the hearts (13) together, spades (13) together, clubs (13) together and diamonds (13) together
into 4 packs respectively; Cards Handled - 52 (13*4); No. of choices - 4; Time taken T3
Experiment 4 - Putting all the cards of similar value together As together, Kings together, Queens together, Jacks
together, 1s together and so on till 10s, respectively; Cards Handled - 52 (4*13);
No. of choices - 13; Time taken T4

Krug's Law : User's Experience - it is an emotion, a feeling, an intuition or a connection that an user makes while using
the product. The whole motive behind user experience is to make users feel good about the product, making it easier
to achieve what they want to do and thus ultimately make the entire process beneficial to your business.

1. First law of usability - Steve Krug points out that his first law of usability is: “Don’t make users think”. The design of
anything should be self-evident and obvious. The users should be able to “get it” instantly after looking at the screen.
More the users spend time in thinking about what all components/elements are about, the more hurdles we introduce
in their process of exploring (or experiencing) the product and costs users their precious time.

2. Design for scanning, not reading- Especially when it comes to web pages, users are most likely to only scan the web
page. They do this because they are either in a hurry or just want to muddle their way through to reach the desired
outcome. Hence, it is necessary that web pages are designed in such a way that they are easy to scan. Author suggests
to follow below principles when designing for scanning:

 Use universally accepted conventions: Similar to the ‘STOP’ sign on highways that are universally same and
understood in an instant, we should continue to use universally accepted elements on the web page. These
may include search icon, position of the site title, social networking sharing options, etc. Do not try to reinvent
the wheel on things that are accepted as conventions.
 Create visual hierarchies: This allows user to easily figure out what things are important and hence need
attention from the user and what can be skipped.
 Make obvious what’s clickable: Since most of the times users will click on a web page or tap on mobile app,
make it crystal clear to user about what elements are clickable and what are not

3. Make clicks mindless - Clicking or Tapping is one of the most widely used action on any application and hence it
makes sense that the clicks are made mindless in such a way that they do not require any thought. The number of clicks
do not matter as long as they are mindless and unambiguous. For clicks to be mindless, we need to design it in such a
way that it is unambiguous where the action will lead the user. Author calls this as ‘Scent of Information’: which tells
the user where a particular action will lead them, ultimately reaching their destination. As a thumb rule consider 3
mindless clicks equal to 1 click requiring thought.

4. Less is more - As we saw earlier, users scan and do not read the entire content. It is necessary to remove any filler
words or sentences. They distract users from searching what they are looking for. Avoid instructions on the web page.
Everything should be self-explanatory. If at all, there are certain things that need explanation then keep it short and
simple.

5. Help users to easily navigate - Web navigation is very similar to navigating through a shopping mall when you are
trying to find something. You either decide to ask someone directly about what you are looking for (in web: search) or
you scan the shelfs and look for it yourself (in web: navigation). If you decide to scan the shelfs, you generally make
your way through a hierarchy (in web: categories and sub-categories). Eventually, if you do not find what you are
looking for you exit the mall (in web: you close the website). Hence, it is necessary to implement the navigation in a
right way since they allow users to locate their positioning within the website and unlike in a mall, users do not have
any sense of scale, direction and location when browsing a web page. Following are certain things that must be present
always:

 Persistent Navigation: Consists of Site ID, sections, utilities and search

 Home Button: It should always be visible & accessible. It gives a sense of assurance in case user is lost during a
browsing session
 Page Names: Every page should have a name, it should be prominent and the link on which the user clicks to
reach the page should share the same name as that of the page
  ‘You are here’ navigation: Since users have no idea about scale and direction, it is important to indicate where
the users are within the scale of things. Breadcrumbs are also good indicators of showing users where they are
within the website.

6. Don’t argue but test - By now most of the companies have adopted Agile and Lean methodologies to product
development. This means everyone is working within a cross-functional teams with different competencies. On one
hand it brings different perspectives towards a problem but on the other hand, if not managed well, it is also a hotbed
for conflicts. Conflicts arise because everyone brings to the table their own view of how things should work or look like,
primarily biased from their own experiences and as with most conflicts: none of the arguments are right or wrong, they
are perfectly placed in the grey zone and makes it difficult to come to any rational conclusion. Hence what do you do ?
Test it. Testing with real users opens up a whole new dimension to the discussion and also helps everyone involved to
re-learn about their assumptions. Testing is a mighty tool can break even the biggest of the deadlocks.

7. Usability Testing — Do it regularly - As a member of the product team, you are already way too invested into your
solution and hence cannot see any flaws in the design. Usability tests with different people gives a completely different
perspective

 Frequency: Do it once every month. Continuous testing aids in continuous improvement of your product
 Number of users: Three users per month is a good number. The aim is to identify the most critical issues with
the design and hence would be common across any number of users.
 Testing: Have one facilitator and the user. If possible record the testing sessions so that you can refer it later
and also share with any stakeholders or team members for their enlightenment
 Focus: There will always be large number of problems than you can solve. Hence it is important to be ruthless
in prioritizing only the critical issues

8. Increase your Reservoir of Goodwill - ‘Reservoir of Goodwill’ is a feeling that the user comes along with him/her
when they visit and view the product for the first time. Depending on their experience with the product, this reservoir
either gets depleted or gets increased. Good UX will always augment the reservoir of goodwill while bad UX will
deplete it. Things that can increase your reservoir of goodwill:

 Make the most important things that your user would want to do on your site as easy as possible
 Be upfront about the information that users would want to view
 Save steps where ever you can
 It good to apologize to the user when you are not able to do what the user expects i.e.404 page or some
limiting functionality that you know user would want but for some reason you cannot provide it.

Q. Why did it take so long Adam Smith's concept of Specialization of Work / Division of Labour to be implemented in
Ford Factory? (around 200 years to put into practice)

Ans - 1. Lack of industrialization (machines were not there); 2. Change Management (mindsets, HR are the forerunners)
-> ADKAR (Awareness of the problem or need for change, Desire to improve / support the change, Knowledge of how
to change, Ability to demonstrate skills & behaviors to change & Reinforcement to make the change stick); 3. Slow
Innovation; 4. Market; 5.Lack of standardization

Eli Whitney - Concept of standardization (interchangeability of parts) - Cotton Gin Model

Cotton Gin Model - A cotton gin – meaning "cotton engine" – is a machine that quickly and easily separates cotton
fibers from their seeds, enabling much greater productivity than manual cotton separation.

Preindustrial Gun making - Gun making was considered an extremely skilled craft in the 18th century, and firearms,
including pistols and muskets, were all constructed by hand. In this way, every gun was a one-of-a-kind possession, and
a gun broken could not be easily repaired. At the very least, the process was time consuming and expensive, as the gun
had to be brought to a craftsman and repaired to order. Whitney demonstrated his new system of interchangeable
parts of gun as by disassembling ten muskets and putting ten new muskets together out of the individual pieces. His
system was a success by dividing labor efficiently among his largely unskilled work force and building precision
equipment that enabled the production of large numbers of identical parts quickly and at a relatively low cost.
Roadblocks in Interchangeability : Standardization is not possible until all the products affecting the principal product
fall in line. Because standards of one product affects the standards of many complementary products. Therefore, one
way is to own the entire ecosystem but then there is a question of which one to standardize, it has to be mutually
agreeable composite standardization. Standards do not stand alone.

Q. Who could be the stakeholders who could be involved in the standardization process?

Ans - Product Manufacturers; Banks; Suppliers, Buyers, Sellers, Government /Regulatory Bodies/Political Parties

Things to remember for standards - Since the standards influence the whole ecosystem, you need to anticipate the
standards otherwise you can be out of business- because standards affect the people, processes and products since
standards can be an opportunity as well as a threat and they can also be used to block others from entering the
competition.
Regulatory Bodies to set standards (Mandatory & Voluntary) - BIS (Indian Standards - Products); ISO (International
Standards - Process) -> Following processes ->Better Products -> Business Process Standards

Inter-organizational Processes - Super efficient companies (by Dr. Michael Hammer) - Business Process Management
(BPM) is a comprehensive system for managing and transforming organizational operations. The essential process
management cycle is: Once a process is in place, it needs to be managed on an ongoing basis.

Philosophy to improve operations - Scientific Management; TQM; TOC, Lean (JIT); Focus

Scientific Management - Frederick Taylor - Standardization of Process (Time Studies) - There is one best way to do
the job and it is the manager's job to find that best way.

Q. Why did Taylor say that it is the Manager's responsibility to find the best way to do a job?

Ans - He observes the entire process, He owns the process - Believed in theory X

Operations & Production Management : Session 7 & 8

Malcolm Baldrige Excellence Framework

In the United States, the Baldrige Award, created by Public Law 100-107, annually recognizes American businesses,
education institutions, health care organizations, and government or nonprofit organizations that are role models for
organizational performance excellence. Organizations are judged on criteria from seven categories
1. Leadership
2. Strategy
3. Customers
4. Measurement, analysis, and knowledge management
5. Workforce
6. Operations
7. Results

Equivalent Schedule - Prioritizing business operations: SEQUENCING & SCHEDULING (Creating Optimal Algorithms);
1950s - Arthur Johnson - Book binding problem - Two Machine Flow Shop Problem Solution

Explanation - There were two machines, Printing and Binding; and every book had to go through both. Johnson tried to
create some logic to be able to schedule the job.

In operations research, Johnson's rule is a method of scheduling jobs in two work centers. Its primary objective is to
find an optimal sequence of jobs to reduce make span (the total amount of time it takes to complete all jobs). It also
reduces the amount of idle time between the two work centers. The method minimizes the make span in the case of
two work centers. Furthermore, the method finds the shortest make span in the case of three work centers if
additional constraints are met. The technique requires several preconditions:
 The time for each job must be constant.
 Job times must be mutually exclusive of the job sequence.
 All jobs must be processed in the first work center before going through the second work center.
 All jobs are equally prioritized.
Johnson's rule is as follows:
1. List the jobs and their times at each work center.
2. Select the job with the shortest activity time. If that activity time is for the first work center, then schedule the
job first. If that activity time is for the second work center then schedule the job last. Break ties arbitrarily.
3. Eliminate the shortest job from further consideration.
4. Repeat steps 2 and 3, working towards the center of the job schedule until all jobs have been scheduled.

Given significant idle time at the second work center (from waiting for the job to be finished at the first work center),
job splitting may be used.

Example : Each of five jobs needs to go through work center A and B. Find the optimum sequence of jobs using
Johnson's rule.
Job times (hours)
Job Work center A Work center B
A 3.2 4.2
B 4.7 1.5
C 2.2 5.0
D 5.8 4.0
E 3.1 2.8
1. The smallest time is located in Job B (1.5 hours). Since the time is in Work Center B, schedule this job last.
Eliminate Job B from further consideration.
 ?  ?  ?  ? B
2. The next smallest time is located in Job C (2.2 hours). Since the time is in Work Center A, schedule this job first.
Eliminate Job C from further consideration.
C  ?  ?  ? B
3. The next smallest time after that is located in Job E (2.8 hours). Since the time is in Work Center B, schedule
this job last. Eliminate Job E from further consideration.
C  ?  ? E B
4. The next smallest time after is located in Job A (3.2 hours). Since the time is in Work Center A, schedule this
job first. Eliminate Job A from further consideration.
C A  ? E B
5. The only job left to consider is Job D.
CADEB

So, the jobs must be processed in the order C → A → D → E → B, and must be processed in the same order on both
work centers.

This order of work in scheduling is known as Flow Shop, to obtain the best sequence, which minimizes the make span,
flow time, idle time, tardiness, etc. In this work, make span and total flow time of the jobs are considered for
minimization - Impacts the ending time of the entire job.

Example#2: Washing (A) & Drying (B) in a Washing Machine assuming there are no external drying space

Assumption : The washing machine starts at 9am and it keeps working whereas the drying machine some time later
and end up accordingly. So one needs to maximize this overlap to have the advantage of less idle time of the machine

Normal Load - A B

Job / Load in buckets times (mins)

Job/Load Washing Machine A (mins) Drying Machine B (mins)
1 10 4
2 2 8
3 8 3
 4 6 10
5 7 7

Job Starting Time Starting Time Overall Ending Time (A+B)

2 9:00 AM 9:02 AM 9:10 AM
3 9:10 AM 9:18 AM 9:21 AM

Explanation : Scan all the numbers, if the minimum happens on the 1st machine, it is the 1st job; if the minimum
happens on the 2nd machine, it is the last job and so on

Step -1: 1st Job - Since the flow shop is A-B, first identify the minimum time required in A (2 mins in this case). Step -2:
2nd Job - Identify the minimum time required in B (3 mins in this case) and so on till last job.

Findings: Work of Henry Gantt - how to create schedules out of each job so that it can be created into an algorithm
and put it up in a computer to ensure that anybody can do it. So, there were two findings - 1. To create an algorithm; 2.
OPTMAC - Proving whether it is optimal or not.

Q. You have 10 jobs to do in your bucket list, would the total time change irrespective of your sequence of jobs
done? Ans - No

Explanation - based on different assumptions depending on one's objectives

Assuming no precedence: Criteria - The to-do list should be as small as fast (SPT); Urgent one first (EDD); etc

Assuming precedence of some importance to these 10 jobs with weight age like an order which has got money
(although no due date): Criteria - Weight age / Time (Focused)

ORDERING POINT TECHNIQUES: Ordering Point refers to the inventory amount to expedite an order, which is used in
Fixed Size Ordering System, a method for inventory control. It is also called OP for short.

2 AD
√ iC

EOQ = ; ROQ (Re-order Quantity) = 14 kgs; ROL (Re-

order Level) = 2 Kgs; Lead Time = 2 days

Assumptions:

Qty of gas in the cylinder = 14kgs ROQ Consumption = 1 kg / day

Meter Reading = On the date, it measures 14 kgs and the reading goes down progressively to zero. Day 1 - 13 kgs
Reorder Gas = From the time of placing the order over phone, the gas is reordered within 2 days. Lead Time
What should the meter read in order to prompt me to order for reorder of gas = 2 kgs ROL

Suppose: It is festive time and the Lead Time becomes 4 days, what will change - ROL, will become 4 kgs
Q. How much is the cost to order a gas cylinder? A. zero (assumed)
Q. How much to order - EOQ (Ordering Cost vs Interest) = ROQ (depending on ordering cost)
Q. When is the re-order point / When to order? - ROL - depend on lead time. When the level of inventory falls below a
specified level, you re-order.
TOTAL QUALITY MANAGEMENT (TQM - MAYO) - It is the continual process of detecting and reducing or eliminating
errors in manufacturing, streamlining supply chain management, improving the customer experience, and ensuring
that employees are up to speed with training. Anything that starts with the customer, considering the problems from
the customer's perspectives and employing people, motivating people to help sort out the problem.

Ford - Sloan : Ford Motors - General Motors ---> creation of demand for new versions of products by camouflaged
dissatisfaction among customers to increase the market share by means of producing and promoting upgraded
products - Decisions based on Customers

Ford learned from the Butchery Plant. But Ford Motors started slipping away over time. He forgot his own messages of
Flow (Financial Efficiency & TAT). He created huge systems and FLOW got reduced. Having middle class mindset, FORD
focused on COST and thought of giving affordable cars to the people. His entire focus was on Resource Utilization than
Flow.

Sloan was MD (General Motors). He came from an aristocratic background. He learned from the Fashion Industry.
He started playing around the minds of the customers and created upgraded models for the cars. As a result, people
(customers) started flocking towards GM, even took loans to buy these cars. He believed that the key to economic
prosperity is the organized creation of customer's dissatisfaction in order to force customers to buy upgraded products.
How to create dissatisfaction in the current process or current product to replace or upgrade the existing process or
product. Eg. Apple - thought that there is a way new versions can be created, get customers excited about the product
and win the market.

General Motors vs Ford Motors (Observations):

 The limits of experience curve
 Inflexibility
 The recognition of Trade-Offs
Major changes from Scientific Management Era:
 Basing business decisions based on the customers - Marketing

The key concepts in the TQM effort undertaken by the Navy in the 1980s include:
 Quality is defined by customers' requirements.
 Top management has direct responsibility for quality improvement.
 Increased quality comes from systematic analysis and improvement of work processes.
 Quality improvement is a continuous effort and conducted throughout the organization.

Total quality management benefits and advantages:

 Strengthened competitive position
 Adaptability to changing or emerging market conditions and to environmental and other government
regulations
 Higher productivity
 Enhanced market image
 Elimination of defects and waste
 Reduced costs and better cost management
 Higher profitability
 Improved customer focus and satisfaction
 Increased customer loyalty and retention
 Increased job security
 Improved employee morale
 Enhanced shareholder and stakeholder value
 Improved and innovative processes
 TQM Benefit: Methodology Creates an Adaptive Organization

The 8 universal principles of quality

management:

 Principle 1: Customer focus.

 Principle 2: Leadership.
 Principle 3: People involvement.
 Principle 4: Process approach.
 Principle 5: Systematic approach to
management.
 Principle 6: Continual improvement.
 Principle 7: Factual Approach to Decision
Making.
 Principle 8: Mutually Beneficial Supplier
Relations

Q. If we were to classify 'Brainstorming' technique as either Scientific Management or TQM, what would it be and
why?

Ans - TQM because as per Scientific Management, Taylor believed that people do not have brains and have no
incentives to contribute.

Commonly used techniques of TQM: Six Sigma; From Customer's Perspective

Six Sigma - Define - Measure - Analyze - Improve - Control From the Customer's Perspective (DMAIC)

Voice of Customer CTQ (Critical to Quality) From the Customer's Perspective, every customer will have a
different CTQ. Since CTQs are defect specific and not unit specific, hence often called as Universal Quality Metric, used
as benchmarks to measure quality across industries and products.

Define - What are the CTQs of the product from the customer's perspectives (Internal or External in nature) ; Measure
- Where am I? Is there a need to improve? - Level of Sigma;

Example#1: CTQs for a cup of tea - Taste; Temperature; Smell

Situation : Inspection of 3 cups of tea to evaluate the quality on 3 consecutive days.

Observation : As per the 6 Sigma, the quality parameters for both the Days across all the three cups are the same. It helps
to compare the quality across all products, irrespective of the nature of the product, i.e. from filing up of a form to making
an aircraft. The unifying thing are the CTQs which can serve as benchmarks for processes.
 CTQ Cup 1 Cup 2 Cup 3 Day Defects Opportunity
Taste √ √ × Explanation :
Temp √ × √
1 3 9  CTQ focuses on Defects not on Products.
Smell × √ √ Example#2: Drawing Rectangle of dimension
 As per 6-Sigma, if the CTQs are not met, it is
Score 0 0 0 4cm x 5cm. Calculate the Sigma value for this.
known as 'Defects'
Taste × √ √  Day 2 - Total no. of defects were 3 (Cup-1)
Temp × √ √  Assuming every product (Cup) did not meet
2 3 9 their respective CTQs, there would be total
Smell × √ √
Score 0 33% 67% 9 (3x3) Defects, which are known as
Opportunities (how many things can go
Taste wrong)
Temp
3
 Defects per Million Opportunity (DPMO): It
Smell represents total defects divided by total
Score opportunities. The number of defects
divided by the number of products.
Explanation : DMPO = (3/9*10 6)
 Total no. of products = 6
 No. of CTQs per product = 2
 Total no. of opportunities = 12 (CTQ x n)
P P2 P3  No of Defects in : P1 = 0; P2 = 0; P3 = 1; P4 = 1,
P5 = 1; P6 = 0
 Total no. of defects = P3 + P4 + P5 = 3
 DPMO = 3/12*10 6 = 250000
P1 P5  Sigma Value = between 2 and 3 out of 6 sigma
P6
(6 Sigma = 3.4)

Example#3: Mumbai Dubbawallas. What could be their CTQs?

Assumptions - CTQs = 5; On time delivery; Intact Food; No contamination during transit; No interchangeability of the
dubbas (delivery to the correct customer); Back Time (Schedule of delivery).

Practice = Dubbawallas have only 1 CTQ (On time delivery to the correct person)

Level of Sigma = 6 (3.4), if they deliver 10 6 Dubbas, on an average only 3 people can get it wrong (Opportunities). So,
the DPMO will be 3.4. If the DPMO exceeds 3.4, and the number of people who get it wrong increases, Dubbawallas
will not have 6 sigma level on their processes.

Q. If Maruti is 6 ∑, how many defects if 10^6 cars are inspected?

- Assume there are 100 CTQ’s
- If I inspect 10^4 with 10^2 CTQ, 10^6 opportunities are found – 3.4 DPMO

Quality Control - Deming - Statistical Quality Control / Sampling :

Example#1 - Paper Tearing. Let us assume that we are making a pen with only one dimension of interest to us, which is
the length of the pen. I want to make 1Lac pens and also ensure that the quality is also maintained with the quantity.
That means 100% inspection has to be done, i.e. 1Lac inspections. But practically it is not a cost effective way to ensure
quality. Therefore, statistics can be used to solve this issue, i.e. reduce the number of inspections to save some costs.
By taking the cumulative average of the lengths of sample pens, it will follow a normal distribution (Bell Curve). This
normal distribution gives the behavior. Deming took this property to devise statistical quality control - sampling.

A bell curve is a graph depicting the normal distribution, which has a shape reminiscent of a bell. The top of the curve
shows the mean, mode, and median of the data collected. Its standard deviation depicts the bell curve's relative width
around the mean. In probability theory, a normal distribution is a type of continuous probability distribution for a real-
valued random variable.

Example#2 - Martian Invasion in Jamshedpur

Assumptions - Average height of humans (5.6''), Martians are either very tall or very short.

Step 1 : Sample 1st of 6 people are taken, out which 3 people are 5.5'' and rest 3 people are 5.7''. Then average height
of these sample is calculated (5.5*3+5.7*3/6 = 5.6'').

Step 2: Sample 2nd of 6 people are taken, out of which 3 people are 5'' and the rest 3 people are 6''. The average
height of sample 2 = 5.5'' (5*3+6*3/6)

Step 3: Sample 3rd of 6 people are taken, out of which 3 people are 1'' and the rest 3 people are 3''. The average height
of sample 2 = 2'' (1*3+3*3/6)

Step 4: Sample 4th of 6 people are taken, out of which 3 people are 1'' and the rest 3 people are 10''. The average
height of sample 2 = 5.5'' (1*3+10*3/6) - Too high range (LCL - 1''; UCL - 10'')

In the statistical quality control, there are two charts - Averages (X); Range (R). So, both the charts should be looked at
to decide whether the process is right or wrong.

Deming's coined terms - Common Cause (Within the range, i.e. LCL, Lower Control Limit - UCL, Upper Control Limit)
AND Special Cause (below or beyond the range. Special causes give an early warning to stop the process to reduce the
costs associated with inspection and prevent further damage.

The Deming cycle, or PDSA cycle:

 PLAN: plan ahead for change. Analyze and predict the results.
 DO: execute the plan, taking small steps in controlled circumstances.
 STUDY: check, study the results.
 ACT: take action to standardize or improve the process

Benefits of the PDSA cycle:

 Daily routine management-for the individual and/or the team
 Problem-solving process
 Project management
 Continuous development
 Vendor development
 Human resources development
 New product development
 Process trials

JURAN's - Cost of poor quality (COPQ) :Control Costs (Prevention & Appraisal) ; Failure Costs (Internal & External)
Juran brought about a fundamental change in the way Managers perceived quality. He changed the focus from
detection of problems to prevention of problems and created a measure called COPQ on the underlying assumption of
costs incurred if quality is compromised. He also inferred that approximately 40% of sales value can be increased, if the
organizations focus on quality.

COPQ - costs associated with providing poor quality product or service.

Cost of quality comprises of two elements: Control Costs & Failure Costs

1. Control Costs - Prevention Cost & 2 Appraisal (Inspection) Cost

1.1 Prevention Cost - cost incurred to prevent (keep failure and appraisal cost to a minimum) poor quality ex: new
product review, quality planning, supplier surveys, process reviews, quality improvement teams, education and
training.
1.2 Appraisal (Inspection) Cost - cost incurred to determine the degree of conformance to quality requirements
(measuring, evaluating or auditing) ex: inspection, testing, process or service audits, calibration of measuring and test
equipment.

2. Failure Costs - External Failure Cost & Internal Failure Cost

2.1. External Failure Cost - cost associated with defects found after the customer receives the product or service ex:
processing customer complaints, customer returns, warranty claims, product recalls.

2.2. Internal Failure Cost-cost associated with defects found before the customer receives the product or service ex:
scrap, rework, re-inspection, re-testing, material review, material downgrades.

Example#1 : Making COPQ measures for an Automobile organization (Maruti).

Q: What are the costs that should be added up? Ans - Cost of defective cars, repair costs, Warranty expenditure, Lose
to brand, Recall costs, etc

Philip Crosby's : Do It Right First Time (DRIFT) and Zero Defects

Principles of ZERO DEFECTS :

1. Quality is conformance to requirement: Every product or service has a requirement according to the customer
needs. Hence if a product meets the requirement of the customer then it conforms the quality of the product , no
matter how costly it is.

2. Defect prevention is preferable to quality inspection and correction : It is better to prevent the defect at its origin
rather to inspect it in the process and then correct it.

3. Standard of Quality is always be ZERO DEFECT, not close enough : The product is not acceptable and categorize as
under quality product.

4. Quality is measure on the basis of Price -  Price of Non Conformance ( PONC): Every non-conformance contributes a
cost in terms of loss of revenue due to it.

Philosophical differences in quality between Deming, Juran & Crosby

Deming Juran Crosby

 Emphasized on statistical quality  Emphasized on breakthrough
control and shop-floor projects, measurement and  Emphasized on zero defects, motivation
involvement control, and quality planning and attitude change, and cost of quality
 Meeting quality from the  Meeting quality from the reporting
customers' perspectives customers' perspectives  Meeting quality with conformance to
requirement - Quality is FREE eventually
& focus on Total cost of ownership
Q. For example, if you are buying a car, there is an advertisement which focuses on Total Cost of Ownership, which ad
is it? Ans - "Kitna Deti Hai" - Operation Vistaar (Maruti)

Explanation - TCO here is an estimate of the total cost to own a car for a five year period. It includes all the expenses
spent on fuel, insurance, maintenance, repairs, service, interest on loan payments as well as the losses incurred due to
depreciation of the car at the end of the same period. If the total life time of a car is considered, 33% is the cost of the
car, 33% is the fuel cost and 33% is the maintenance, insurance, etc. Although the car manufacturers cannot do
anything about the 2nd 33%, the 1st 33% they were already working on, so they started focusing on the last 33%,
which eventually increased their profit margins. The total cost of ownership (TCO) is the purchase price of an asset
plus the costs of operation. Assessing the total cost of ownership represents taking a bigger picture look at what the
product is and what its value is over time.

Benefits of Reducing TCO - Grounds for negotiation with suppliers; Guidance tool for optimizing direct or indirect costs
(avoiding waste, exceeding quality requirements etc.); Decision-making aid for outsourcing/internalization operations;
ROI (Return on Investment) or ROTI (Return on Time Investment) evaluation; Improved long-term financial
performance.
 Operations & Production Management : Session 9 & 10

Approaches of different philosophies towards Waste :

Scientific Management - with a focus on Waste from the machine's and people's perspective

TQM - with a focus on Waste from the customer's perspective

TOC - with a focus on waste only at the bottleneck. Non-bottlenecks have excess capacities, which means the
bottlenecks will never starve.

Lean - with a focus on Waste from the process' perspective. Lean designs system to fail (eg. fuse at households) to
uncover problems (eg. Crew Resource Management, Near Miss System in Aviation industry). Inventory, excess capacity
and bench hide problems.

Theories of Scientific management best applied: When standards are defined; One best way to do the job; Managers
are responsible

Theories of TQM best applied: Customer perspective

Theories of Constraints best applied: Bottleneck

Theories of Lean best applied: Non Value added; Waste

Theories of Focus best applied: Trade off – You can’t be best in everything; FUSE is designed to fail – so that we
understand our problem area; ANDON – Japanese term meaning “light” or “lamp.” In Lean manufacturing, an andon
refers to a tool that is used to inform and alarm workers of problems within their production process. It is an integral
part of applying Jidoka (automation with human intelligence) in the workplace.

Process Management:

Benefits of defining a process - Agility; Productivity; Efficiency / Reduced Risk; Compliance & Transparency; Employee
Satisfaction; Customer Focus; Consistency, Repeatability & Transferability; Sustainability; Measurability; Technology
Integration

What is a Process - Step by step methodology repetitive in nature; quantity; presence of both input and output having
value addition; checks & measures; feedback to check on improvements; periodicity; process owner.

What is a Systematic Process - All the above in addition to suppliers; customers and other stakeholders completing the
PDCA cycle.

Business Process Management (BPM) - Inter-organizational Processes - Super efficient companies - by Michael
Hammer: Re-engineering (Do not automate the process, obliterate the process.

BPM - ERP - SAP - Dr. August Wilhelm Scheer

 Any process is better than no processes

 A process is a sequence of functions - A process should always define its start and end
 Supply Chain of the process
 Evaluation criteria of a process
 Even a good process can be improved - Effort to define an optimal process

Business Process Flow - A business process flow is a way of visualizing and documenting the steps in a business
process. Flow charts document inputs or requests for information, products or any other deliverable; the procedural
steps to satisfy that request; and the output, or deliverable, that is generated by the input.
 Process Flow Diagram - A Process Flow Diagram (PFD) is a type of flowchart that illustrates the relationships between
major components at an industrial plant. It's most often used in chemical engineering and process engineering to
indicate the general flow of plant processes and equipment. The PFD displays the relationship between major
equipment of a plant facility and does not show minor details such as piping details and designations.

Japanese define process with lot of rigidity to ensure that tracing back problems will be feasible.

Symbols used to depict the process flow diagram are:

Types of Processes:
1. Parallel - Single instruction multiple data / processes. Eg. Bread Making
2. Joining - They produce permanent joint between the parts to be assembled. Eg. Samosa Making

Types of Measures involved in any process flow: PQDSCME

P - Production; Q - Quality; D - Delivery; S - Safety; C - Cost; M - Morale; E - Environmental

Q. Which is/are the major measures that can be reflected in the process flow diagram? Ans - Production (P)

Q. What could be a 'P' related measure in Process 1 (Bread Making) and Process 2 (Packing)?

Ans - Output per hour - 100 leaves (based on two measures - 1. the cycle time (CT) of the process and 2. MLT/TAT)

Cycle Time of Process - The total time from the beginning to the end of your process, as defined by the business and
the customer. Cycle time includes process time, during which a unit is acted upon to bring it closer to an output, and
delay time, during which a unit of work is spent waiting to take the next action. Essentially, it means the average
processing time between any two products. Cycle time helps to calculate the capacity. Both are inversely proportionate
to each other.

MLT (Manufacturing Lead Time) or TAT (Turnaround time) - Average of total time taken for transforming an input to
an output for a particular product. It determines how quickly the business is turning its money around. (Eg. 1 hr 45 mins
in the above example). MLT = WIP*CT

Exercise: You are doing a Recruitment Process, involving three processes, namely, the CV verification (Process-1),
interview/assessment (Process-2) and salary negotiation (Process-3), which every applicant must go through. Time
consumed by each process is 10 mins, 30mins & 20 mins respectively. Assuming there is only one applicant at each
process.

Q. How many applicants can be interviewed in 8 hrs? Ans - 16 Nos

Explanation : Here the bottleneck is Process - 2 (Interview, as it consumes the maximum time for processing). If it takes
30 mins to interview 1 applicant, 2 applicants can be interviewed in 1 hr, subsequently, in 8 hrs, you can interview 16
applicants. (The capacity of the process is tied to its bottleneck).
Q. What will be the cycle time for Process - 2 (when will the applicants go out)? Ans - 30 mins

Q. What will be the idle time at Process -1 & Process -3?

Ans - Process -1 : 20 mins (30-10) out of 30 mins; Process -3: 10 mins (30-20) out of 30 mins

Bottleneck – Interview

Process -2 Interview
Process -1 Resume Process - 3 Salary
(Bottleneck)
1 in 10 mins 1 in 30 mins 1 in 20 mins
Capacity 6 in 60mins 2 in 60 mins 3 in 60 mins
48 in 8 hrs 16 in 8 hrs 24 in 8 hrs

Idle time 20 mins/ 30 mins 0 mins/ 30 mins 10 mins/ 30 mins

* If we have another additional interview station (two work stations / machines in Process - 3), which consumes 30
mins.
Q. How many applicants can be interviewed in 8 hrs? Ans - 32 Nos

Explanation : Here the bottleneck is Process - 3 (Salary negotiation, as it consumes the maximum time for processing
against Process -1). Process -1 can process 48 applicants in 8 hours and its idle time has reduced to 10 mins. Process-2
can process 32 applicants in 8 hours with the help of additional work station. But Process -3 can process 24 applicants
in 8 hours. The bottleneck here has shifted from Process -2 to Process- 3. Bottleneck has shifted

Q. If there is queue of 500 people, how do you ensure that applicant/s are happy (provided he/she does not have to
wait too long)? Ans - Limiting the no. of people in the system.
Explanation - Too many or too less people, idle time will increase.

Q. Assuming there are not more than 6 applicants at any given point of time in the overall system and scheduling
accordingly what will the average waiting time (MLT) for an applicant? Ans - 180 mins
Explanation - MLT = WIP (no. of applicants; 6) x CT of bottleneck (Process -2; 30 mins)

Example# There is a bank with three tellers each having a CT of 1 min, 3 mins and 2 mins respectively.

Q. How many customers can this bank process in 1 hour? Ans - 20

Explanation - 60/3 = 20

Q. What would be the Min MLT if there is only 1 customer? Ans - 6 mins (1+3+2 mins)

Q. What is the non value added time if there are 40 customers? Ans - 114 mins
Explanation - NVA Time = MLT (40*3) - Min MLT (6)

Post 2nd Interview Station

Process - 3 Salary
Process - 1 Resume Process -2 Interview
(bottleneck)
1 in 10 mins 2 in 30 mins 1 in 20 mins
Capacity 6 in 60mins 4 in 60 mins 3 in 60 mins
48 in 8 hrs 32 in 8 hrs 24 in 8 hrs

Idle time 20 mins/ 30 mins 0 mins/ 30 mins 10 mins/ 30 mins

 Project Management

Q. Building a power plant vs manufacturing a car, where can the knowledge of process management be applied more?
Ans - manufacturing a car (process management); building a power plant (project management)
Explanation - Difference between :

Project Management Process Management

 Flexible and changing; with new challenges and new  more fixed and optimized; with known challenges and
ways to overcome a common problem. applying the most effective route to solving a specific
 Bending your company resources around a problem. problem.
 Project management answers the question: What  Aligning company resources with a problem.
needs to get done in order to get where we want to  Process management answers the question: How do
be? things need to get done in order to get where we want
 A typical process management approach might look at to be?
3 different aspects of this:  A typical process management approach might look at
Maybe you’ve done this exact project before? 3 different aspects of this:
Or maybe many similar projects? In what order do tasks need to get done?
Or maybe you are discovering it for the first time? How should those tasks get done?
How do we align different tasks to fit into a working
order?

Processes in Projects - Project as a set of processes (PMBOK, PMI): 5Processe - 10 Knowledge Areas - 49 Processes:-

Process Groups :

1. Initiating Process - Define / Making Charter

2. Planning Process
3. Execution Process
4. Monitoring Process
5. Project Closure

Project Management Knowledge Areas :

1. Integration Management
2. Scope Management
3. Time Management
4. Cost Management
5. Quality Management
6. Human Resource Management
7. Communication Management
8. Risk Management
9. Procurement Management
10. Stakeholder Management
Advantages of converting projects into set of processes: Learning Curve; PDCA; Reduction in Cost of Projects

Ratan Tata's criteria for success of Tata Nano car (although commercially it was unsuccessful): Scope & Time
 Fixed Cost - 1 Lac
 Market Segment - Reach the middle class
 Differentiation - Compact Make
 Safety - People on scooters could afford safety

Q. What could be the responsible process knowledge area for shifting the Nano plant from Singur to Sanand? Ans -
Project Stakeholder Management

Criteria for a successful project - Scope; Time & Cost

Example# L&T is building a new campus for XLRI in Delhi - Contradiction in Stakeholder Management

Q. Which criteria should L&T focus on from the Trade off Triangle (Scope or Time or Cost)? Ans - Time

Q. Which criteria should XLRI focus on from the Trade off Triangle (Scope or Time or Cost)? Ans - Time & Scope

Explanation - Project management techniques only address Time & Cost, nothing to do with the scope. Therefore, the
king of the project management is the person who understands the scope. A project manager is the coordinator
between time and cost, a king pin.

Q. Why do you think that the quality of the govt projects are never good? Ans - Bias towards time and cost.
Explanation - Order is given to the lowest bidder or to some pre-qualified vendors, etc

Time & Cost processes in Project Management :

Example# A single type bulb manufacturing company with only one customer, a person soon to join this company as
Operation Head, calls a review meeting to explore the previous month's performance of the unit. Several departments
(Quality, Maintenance, Accounts, IED, Production & Safety) attend the meeting.

The findings of the meeting are:

Q. Is the above information sufficient to understand whether the company is performing well or not?
Ans - No

Explanation - Comparison with the previous month's data for monitoring trends. Plan vs Actual

4 Steps of Project Management : Eg Jamshedpur to Kolkata via train

Step -1: What is to be done? - Project Portfolio Management - Project Initiation & Conception (Selecting the train)
Step -2: When is to be done? - Project Schedule Management - Project Planning (Start & End time of journey)
Step -3: Am I on schedule? - Project On-Schedule Management - Project Execution (Reaching time of Kharagpur)
Step -4: If I am not on schedule, when is the project likely to be completed? - Project Risk Management - Project
Monitoring & Control (alternatives if the train is running late)

Step -1 Project Portfolio Management - Selecting the right project (eg. Selecting the train, Railway Time Table). Project
portfolio management (PPM) refers to a process used by project managers and project management organizations
(PMOs) to analyze the potential return on undertaking a project. Project portfolio management gives organizations and
managers the ability to see the big picture.

Step -2 Project Schedule Management - A project schedule management is listing of a project's milestones, activities,
and deliverables, usually with intended start and finish date project (eg. start time of the journey and end time at the
destinations). A project schedule indicates what needs to be done, which resources must be utilized, and when the
project is due. It's a timetable that outlines start and end dates and milestones that must be met for the project to be
completed on time.

Responsibilities of Project Managers in different Phases of Project Management

Step 1: Project initiation &  Preliminary research on project feasibility
conception  Set the tone and goals for what’s to come
 Project brief that outlines the purpose and needs of the project

Step 2 : Project Planning  Project Scope

 Project Estimation
 General Workflow & Processes
 Team Roles & Responsibilities
 Key Project Milestones
 Approval Processes
 How you’ll work with the stakeholder team to ensure you get it all done on
time and under budget

Step 3 : Project Execution  Budget Management

 Timeline Management
 Resource Planning
 Change Management
 Risk Management
 Quality Management
 Internal Deliverable Reviews
 Communication & Facilitation
 Meeting Management

Step 4 : Project Monitoring & Control  Budgets

 Timelines
 Project Goals
 Quality of Deliverable
 Team Performance

Step 5 : Project Closure  Handover the project to the stakeholder

 Finalize reporting
 Celebrate the project

Elements to remember while defining a project : A temporary endeavor to create an unique product/service
 New
 Start - End
 Project Re-planning & Re-planning - Project display progressive elaboration because of its intrinsic nature.
 Goal – Solution matrix

Progressive elaboration involves continuously improving and detailing a plan as more detailed and specific information
and more accurate estimates become available. Progressive elaboration allows a project management team to define
work and manage it to a greater level of detail as the project evolves. A failed project is one where no new ideas
came.

Example # There are two projects: A - Building a dam; B - GST software

Q. Which out of the two projects will have more progressive elaboration? Ans - B - GST software
Based on Progressive Elaboration, two families of Project Management Techniques under Goal Solution Matrix people
use:
1. Traditional Approach
2. Agile / Adaptive Approach

Goal Solution Matrix

Iterative or
Incremental

CPM / PERT SCRUM

Building Dam GST

Example# Traditional Project Management - Building a Sheik's Palace (Dream Palace at Dubai)
Q. What would be the approach of the builder for this project? Ans - Agile (Incremental / Approach ,i.e. Showing
prototypes and re-planning based on the Sheik's Feedback at each stage.

Usage Traditional Agile

Technology CPM/ PERT SCRUM

Software MS – PROJECT / PRIMAVERA JIRA/ JILE / TRELLO

Few Examples:
 Scrum
 Process-Based Project Management
 Traditional Project Management
 Extreme Project Management
 Critical Chain Project Management
 Critical Path Project Management
 PERT Project Management
 Rational Unified Process (RUP)
 Network Methods - to answer the 4th question of project management, i.e. If not on schedule, how late and
when can the project be complete? Interdependencies should me modeled.

Two Network Methods -

PERT - Program Evaluation and Review Technique (PERT) is a method used to examine the tasks that are in a
schedule and determine a variation of the Critical Path Method (CPM). It analyzes the time required to
complete each task and its associated dependencies to determine the minimum time to complete a project.

CPM - Critical path method (CPM), also known as critical path analysis (CPA), is a scheduling procedure that
uses a network diagram to depict a project and the sequences of tasks required to complete it, which are
known as paths.

Difference between PERT vs CPM: Based on how activity times are defined. Though all commercially available
project management tools are CPM
PERT CPM

 Probabilistic model  Deterministic model

 It is a technique of planning and control of time.  It is a method to control costs and time.
 It deals with unpredictable activities  It deals with predictable activities.
 When the project time estimation is presumed to  When the project time estimation is presumed to
be in a range of time (R & D) be a fixed time (Constructions)

Example #

Example # Tale of two trucks - One truck (Truck A), carrying books & glass items, is going directly from Jamshedpur to
Chennai, while the other one (Truck B), carrying steel furniture, is going from Jamshedpur to Chennai via Srinagar.
Two Trucks Route Days
Normal - A a-b-e 14+3+10 = 27
Via Srinagar - B a-c-d-e 14+7+4+10 = 35 (C.Path)
When do both trucks reach 35
Chennai

Q. Which truck driver (A or B) will get maximum calls? Ans - The one who is travelling via Srinagar
Explanation - Because if this truck driver delays for even a nano second, the entire project will get delayed, which is the
critical path here with respect to time (given by CPM software)
Q. If activity 'b' takes the following (instead of 3), by how many days can 'b' be delayed without affecting the critical
path?
Ans - from 3 - 11 days, i.e. 8 days - Float or Slack on activity b.

Days
Activity - b 6 9 11 12
Truck A 30 33 35 36
Truck B 35 35 35 35
C. Path 35 35 35 36

Q. What would be the float/slack time for activity 'a' and 'e', with a float of 8 days on activity b? Ans - zero for both.

For Delay without Scheduled Float (Actual - Scheduled)

affecting CP
Activity - b 11 3 8
Activity - a 14 14 0
Activity - e 10 10 0
Truck A 35 35
Truck B 35 35
C. Path 35 35

Critical Path - In project management, a critical path is the sequence of project network activities which add up to the
longest overall duration, regardless if that longest duration has float or not. This determines the shortest time possible
to complete the project.

Float/ Slack - The slack time for an activity is the time between its earliest and latest start time, or between its earliest
and latest finish time. Slack is the amount of time that an activity can be delayed past its earliest start or earliest finish
without affecting the critical path and delaying the project. A delay in the critical path delays the project.
 Lower the number - more important is the activity
 Higher the number - less important
 zero is the critical

Example#1 In a project, there are three activities A. B and C.

Activity Time Predecessor Critical Path Delay without Float
affecting CP
A 2 2 0
B 3 7 4
C 5 A 2+5 = 7 5 0

Example#2 In a project, there are three activities A. B and C.

Activity Time Predecessor Critical Path Delay without Float
affecting CP
A 2 2 0
B 3 A 7 4
C 9 9 9 0

Software answers:
 What are the activities?
 What is the duration?
 What is the predecessor?