Notes on Entrepreneurship & Management Concepts: Unit IV (Productivity & Operations)

Productivity & Operations (Unit IV)

• Productivity, standard of living and happiness, types of productivity,
• Operations (goods and services) Vs project management, Production processes and layouts,
• Steps in method improvement,
• Time measurement, rating and various allowances; standard time and its utility,
predetermined motion and time method, product and process specification,
• TQM, cost of quality, introduction to lean manufacturing (JIT), QFD, TPM & six sigma quality.

Q1. Define Productivity. Explain it with an example. How is it related to thestandard of living?

Ans. Productivity is a measure of output from a production process, per unit of input.
For example, labor productivity is typically measured as a ratio of output per labor-hour, an input.
Productivity may be defined as follows:

PRODUCTIVITY = OUTPUT / INPUT

This definition applies in an enterprise, a sector of economic activity or the economy as a whole.
The term "productivity" can be used to assess or measure the extent to which a certain output can
be extracted from a given input. While this appears simple enough in cases where both the output
and the input are tangible and can be easily measured, productivity can be more difficult to
estimate once intangibles are introduced.
Let us take an example.
A potter working eight hours a day produces 400 pots a month using a wood-fired kiln.
• Let us assume that as a result of a change in the method of work he was able to produce 500 pots a month
instead of 400 with the same equipment and hours of work. His productivity calculated in terms of number of
pots produced will then have increased by 25 per cent.
• Let us now assume that as a result he was unable to sell all 500 pots and had to lower his price from $2 a pot
to $1.80 a pot. If he wants to assess his productivity gain, the potter may be more interested in using
monetary terms rather than simply the number of pots produced. He could then argue that the value of his
output used to be 400 X 2 = $800 a month and is now 500 X 1.80 = $900 a month. His input has not changed.
Hence his productivity gain is
(900-800)/800 = 12.5 per cent.
From this deliberately simple example, one can make two observations.
First, productivity was used to measure increase in output expressed in numbers of pots produced, in the first case, and
in monetary terms in the second, giving different values in each case. In other words, depending on what one is
interested in measuring, the nature of the output and input will vary accordingly. Second, while actual production
increased in this example from 400 to 500 pots, productivity in monetary terms did not show the same corresponding
increase. This means that we have to distinguish between increased production and increased productivity, which in
this example was measured in terms of monetary gains.

Productivity may be conceived of as a metric of the technical or engineering efficiency of production. As

such, the emphasis is on quantitative metrics of input, and sometimes output.
Productivity is distinct from metrics of allocative efficiency, which take into account both the monetary
value (price) of what is produced and the cost of inputs used, and also distinct from metrics of profitability,
which address the difference between the revenues obtained from output and the expense associated with
consumption of inputs.

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What does Labor Productivity mean?

A measurement of economic growth of a country.
Labor productivity measures the amount of goods and services produced by one hour of labor.
More specifically, labor productivity measures the amount of real GDP produced by an hour of
labor.
Growing labor productivity depends on three main factors:
• investment and saving in physical capital,
• new technology and
• human capital.
For example, suppose the real GDP of an economy is Rs10 trillion and the aggregate hours of labor
in the country was 300 billion. The labor productivity would be Rs10 trillion divided by 300 billion,
equaling about Rs33 per labor hour.
Growth in this labor productivity number can usually be interpreted as improvements or rising
standards of living in the country.
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Standard of Living
The level of wealth, comfort, material goods and necessities available to a certain socioeconomic
class in a certain geographic area.
The standard of living includes factors such as-
Income,
Quality and availability of employment,
Class disparity,
Poverty rate,
Quality and affordability of housing,
Hours of work required to purchase Necessities,
Gross domestic product,
Inflation rate,
Number of vacation days per year,
Incidence of disease,
Affordable (or free) access to quality healthcare,
Quality and availability of education,
Life expectancy,
Cost of goods and services, infrastructure,
National economic growth,
Economic and political stability,
Political and religious freedom, environmental quality,
Climate and safety.
The standard of living is closely related to quality of life.

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Q2. Compare Project and Operations Management.

Project v/s Operations Management

1. Scope Constraints

The typical view of project management is that a project is temporary while operations have more
permanence or business as usual.

For instance, renovating a store is a project while procuring goods and selling these are operations.

Considering management style perspective, from the point of view of the store owner who hires a
contractor to renovate a store, the renovation is a project. However, from the point of view of the
contractor who specializes in store renovations, the contract for the store's renovation is part of its
operations as a service suite.

2. Time Constraints

Projects have definite beginnings and endings while operations are typically repeated over time.

For instance, a business owner who hires a systems integrator to install, customize and roll-out a
customer relationship management system or CRM in several of his/her office branches in 4 states
will usually require a definite date of deployment and a definite date of turnover after the roll-out.

3. Budget Constraints

The traditional view of the budget in project management is that a project has to stick with a
definite budget while operations have to maintain a specific profit margin.

For instance, an institutional client who hires a consulting firm to implement a specialized system
for its operations will allot a specific cost for the project as detailed in its Request for Proposals. On
the other hand, the consulting firm will need to ensure a 30% profit margin on the project and work
on the remaining 70% as its cost of operations with taxes and all as part and parcel of its cost
structure.

4. Critical Analysis Questions

Note that the real difference between project management and operations management appears
in the perspective whether an organization is doing an activity for the first time or whether it is
doing an activity for the nth time.

For the business owner, is it safer to hire a company who has done several 'projects' of the same
nature with clients that he/she can verify with or to undertake the project for the first time and
instead hire personnel who have several experiences in doing similar projects?

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Q3. Write a short note on Production Processes & Layouts

The production process is concerned with transforming a range of inputs into those outputs that
are required by the market.

This involves two main sets of resources –

the transforming resources, and
the transformed resources.

The transforming resources include the buildings, machinery, computers, and people that carry out
the transforming processes.
The transformed resources are the raw materials and components that are transformed into end
products.
Any production process involves a series of links in a production chain. At each stage value is added
in the course of production. Adding value involves making a product more desirable to a consumer
so that they will pay more for it. Adding value therefore is not just about manufacturing, but
includes the marketing process including advertising, promotion and distribution that make the
final product more desirable.

It is very important for businesses to identify the processes that add value, so that they can
enhance these processes to the ongoing benefit of the business.
There are three main types of process: job, batch and flow production.
The basic objective of layout design is to facilitate a smooth flow of work, material, and information
through the system. Supporting objectives generally involve the following:
▪ To facilitate attainment of product or service quality.
▪ To use workers and space efficiently.
▪ To avoid bottlenecks.
▪ To minimize material handling costs.
▪ To eliminate unnecessary movements of workers or materials.
▪ To minimize production time or customer service time.
▪ To design for safety.

Product layouts are most conducive to repetitive processing.

Process layouts are used for intermittent processing.
Fixed-position layouts are used when projects require layouts.

Product layouts are most conducive to repetitive processing.

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Manufacturing example:
A tool and die shop that is able to produce one-of-a-kind tools.
Service example:
A veterinarian’s office, which is able to process a variety of animals and a variety of injuries
and diseases.

An alternative to the process layout is the product layout, also called the assembly-line layout, in
which the main production process occurs along a line, and products in progress move from one
workstation to the next. Materials and subassemblies of component parts may feed into the main
line at several points, but the flow of production is continuous. Electronics and personal-computer
manufacturers are just two of many industries that typically use this layout.

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Process layouts are used for intermittent processing.

A process layout is also called a functional layout because it concentrates everything needed to
complete one phase of the production process in one place. Specific functions, such as drilling or
welding, are performed in one location for different products or customers. The process layout is
often used in machine shops as well as in service industries.

A cellular layout groups dissimilar machines into work centers (or cells) to process parts that have
similar shapes and processing requirements. Arranging work flow by cells can improve the
efficiency of a process layout while maintaining its flexibility. At the same time, grouping smaller
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numbers of workers in cells facilitates teamwork and joint problem solving. Employees are also
able to work on a product from start to finish, and they can move between machines within their
cells, thus increasing the flexibility of the team. Cellular layouts are commonly used in computer
chip manufacture and metal fabricating.

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Fixed-position layouts are used when projects require layouts.

The fixed-position layout is a facility layout in which labor, materials, and equipment are brought
to the location where the good is being produced or the customer is being served. Buildings, roads,
bridges, airplanes, and ships are examples of the types of large products that are typically
constructed using a fixed-position layout. Service companies also use fixed-position layouts; for
example, a plumber goes to a job site bringing the tools, material, and expertise needed to repair a
broken pipe.

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Q4. What are Product Specification (2 marks question)

Written statement of an product's required characteristics documented in a manner that
facilitate its procurement or production and acceptance.
This includes-

• Dimensional specifications,
• Material specifications,
• Finish requirements,
• Heat treatment specs.,
• Strength specs.,
• Fitment specifications, and like.

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Q5. What are Process Specification (2 marks question)

Process means the service performed on a product or material.
Process specifications cover manufacturing techniques which require a specific procedure in order
that a satisfactory result may be achieved.
Where specific processes are essential to fabrication or procurement of a product or material, a
process specification is the means of defining such specific processes.
Normally, a process specification applies to production but may be prepared to control the
development of a process.

Q6. What are steps in Time Study (3 marks question)

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Q7. How to Calculate Standard Time for the Job (3 marks question)
The readings of any time study are taken over a relatively short period of time. The normal time
arrived at, therefore does not include unavoidable delay and other legitimate lost time, for
example, in waiting for materials, tools or equipment; periodic inspection of parts; interruptions
due to legitimate personal need, etc. It is necessary and important that the time study person
applies some adjustment, or allowances to compensate for such losses, so that fair time standard
are established for the given job.
Allowances are generally applied to total cycle time as some percentage of it, but sometimes these
are given separately as some % for machine time and some other % for manual effort time.
However, no allowance are given for interruptions which may be due to factor which are within the
operator's control or which are avoidable.
The various allowances are added to the normal time as applicable to get the standard time. Thus
basic constituents of standard time are-
I. Elemental (observed time).

2. Performance rating to compensate for difference in pace of working.

3. Relaxation allowance.

4. Interference and contingency allowance.

5. Policy allowance.

Q8. What are Allowances? Types? (3 to 7 marks question)

ALLOWANCES

The normal time for an operation does not contain any allowances for the worker, It is impossible to work
throughout the day even though the most practicable, effective method has been developed. Even under
the best working method situation, the job will still demand the expenditure of human effort and some
allowance must therefore be made for recovery from fatigue and for relaxation. Allowances must also be
made to enable the worker to attend to his personal needs. The allowances are categorized as: (1)
Relaxation allowance, (2) Interference allowance, and (3) Contingency allowance.

Relaxation Allowance

Relaxation allowances are calculated so as to allow the worker to recover from fatigue. Relaxation
allowance is a addition to the basic time intended to provide the worker with the opportunity to recover
from the physiological and psychological effects of carrying out specified work tinder specified
conditions and to allow attention to personal needs. The amount of allowance will depend on nature of
the job. Relaxation allowances are of two types—fixed allowances and variable allowances. Fixed
allowances constitute:
(a) Personal needs allowance. It is intended to compensate the operator for the time necessary to
leave, the workplace to attend to personal needs like drinking water, smoking, washing hands.

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Women require longer personal allowance than men. A fair personal allowance is 5% for men and
7% for women.

(b) Allowances for basic fatigue. This allowance is given to compensate for energy expended during
working. A common figure considered as allowance is 4% of the basic time.

Variable Allowance

Variable allowance is allowed to an operator who is working under poor environmental conditions that
cannot be improved, added stress and strain in performing the job.
The variable fatigue allowance is added to the fixed allowance to an operator who is engaged on medium
and heavy work and working under abnormal conditions. The amount of variable fatigue allowance varies
from organization to organization.

Interference Allowance

It is an allowance of time included into the work content of the job to compensate the operator for the
unavoidable loss of production due to simultaneous stoppage of two or more machines being operated
by him. This allowance is applicable for machine or process controlled jobs.
Interference allowance varies in proportion to number of machines assigned to the operator. The
interference of the machine increases the work content.
Contingency Allowance

A contingency allowance is a small allowance of time which may be included in a standard time to meet
legitimate and expected items of work or delays, the precise measurement of which is uneconomical
because of their in frequent or irregular occurrence.
This allowance provides for small unavoidable delays as well as for occasional minor, extra work,
Some of the examples calling for contingency allowance are;
• Tool breakage involving removal of tool from the holder and all other activities to insert new tool
into the tool holder.
• Power failures of small duration.
• Obtaining the necessary tools and gauges from central tool store. Contingency allowance should not
exceed 5%.

Q9. Basic procedure of Method study (SREDDIM)

Method study is the systematic recording and critical examination of existing and proposed ways of
doing work, as a means of developing and applying easier and more effective methods and
reducing costs.
There are seven steps in performing a complete method study. They are:
(1) Select the job or process to be studied.
(2) Record or collect all relevant data about the job or process, using the most suitable data
collection techniques (explained in Part Two), so that the data will be in the most convenient
form to be analysed.

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(3) Examine the recorded facts critically and challenge everything that is done, considering in turn:
the purpose of the activity; the place where it is performed; the sequence in which it is done;
the person who is doing it; the means by which it is done.
(4) Develop the most economic method, taking into account all the circumstances and drawing as
appropriate on various production management techniques (explained in Part Three), as well as
on the contributions of managers, supervisors, workers and other specialists with whom new
approaches should be explored and discussed.
(5) Define the new method and the related time and present it to all those concerned, either
verbally or in writing, using demonstrations.
(6) Install the new method, training those involved, as an agreed practice with the allotted time of
operation.
(7) Maintain the new standard practice by monitoring the results and comparing them with the
original targets.

It is possible that after a certain time the new method may prove to be in need of modification, in
which case it would be re-examined again using the above sequence.

Q10. What do you understand by Work measurement or Time measurement?

Work measurement refer to the estimation of standard time, that is the time allowed for
completing one piece of job using the given method. This is the time taken by an average
experienced worker for the job with provisions for delays beyond the workers control.

There are several techniques used for estimation of standard time in industry. These include time
study, work sampling, standard data, and predetermined time systems.

Definition:
Time study is a technique to estimate the time to be allowed to a qualified and well-trained worker
working at a normal pace to complete a specified task.
This technique is based on measuring the work content of the task when performed by the
prescribed method, with the allowance for fatigue and for personal and unavoidable delays.

Objectives and Applications:

Standard times for different operations in industry are useful for several applications like-
• Estimating material machinery and equipment requirements.
• Estimating the production cost per unit as an input to
• Preparation of budgets
• Determination of selling price
• Make or buy decision
• Estimating manpower requirements.
• Estimating delivery schedules and planning the work
• Balancing the work of operators working in a group.
• Estimating performance of workers and use as basis for incentive payment to those
direct and in director labor who show greater productivity.

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Time Study is the most versatile and the most widely used work measurement technique.

Time Study Equipment

The following equipment is needed for time study work-
Timing device
Time study observation sheet
Time study observation board
Other equipment

Timing Device
The stop watch and the electronic timer are the most widely used timing devices used for time
study. The two perform the same function with the difference that electronics timer can measure
time to the second or third decimal of a second and can keep a large volume of time data in
memory.

Time Study Observation Sheet

It is a printed form with space provided for nothing down the necessary information about the
operation being studied like name of operation, drawing number, name of the operator, name of
time study person, and the date and place of study. Space are provided in the form for writing
detailed description of the process (element-wise), recording stop-watch readings for each element
of the process, performance rating(s) of the operator, and computation.

Time Study Board

It is a light -weight board used for holding the observation sheet and stopwatch in position. It is of
size slightly larger than that of observation sheet used. Generally, the watch is mounted at the
center of the top edge near the upper right-hand corner of the board. The board has a clamp to
hold the observation sheet. During the time study, the board is held against the body and the
upper left arm by the time study person in such a way that the watch could be operated by the
thumb/index finger of the left hand. Watch readings are recorded on the observation sheet by the
right hand.

Other Equipment
This includes pencil, eraser and device like tachometer for checking the speed, etc.

Time Study Procedure:

The procedure for time study can best be described step-wise, which are self explanatory.
Step 1: Define objective of the study. This involves statement of the use of the result, the precision
desired, and the required level of confidence in the estimated time standards.
Step 2: Analyse the operation to determine whether standard method and conditions exist and
whether the operator is properly trained. If need is felt for method study or further training of
operator, the same may be completed before starting the time study.
Step 3: Select Operator to be studied if there is more than one operator doing the same task.
Step 4: Record information about the standard method, operation, operator, product, equipment,
quality and conditions.

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Step 5: Divide the operation into reasonably small elements.

Step 6: Time the operator for each of the elements. Record the data for a few number of cycles.
Use the data to estimate the total numbers of observations to be taken.
Step 7: Collect and record the data of required number of cycles by timing and rating the operator.
Step 8: For each element calculate the representative watch time. Multiply it by the rating factor to
get normal time.
Normal time = Observed time * Rating factor
Add the normal time of various elements to obtain the normal time for the whole operation.
Step 9: Determine allowances for various delays from the company's policy book or by conducting
an independent study.
Step 10: Determine standard time by adding allowances to the normal time of operation.
Standard time = Normal time + allowances

Q11. Write a short note on Rating

Different jobs require different human abilities. For example, some demand mental alertness,
concentration, visual acuity; others, physical strength; most, some acquired skill or special
knowledge. Not all workers will have the abilities required to perform a particular job, though if the
management makes use of sound selection procedures and job training programmes, it should
normally be possible to arrange that most of the workers engaged on it have the attributes needed
to fit them for the task. The definition of a qualified worker is here:
A qualified worker is one who has acquired the skill, knowledge and other attributes to carry out
the work in hand to satisfactory standards of quantity, quality and safety.

It is not always possible to time a job on an average qualified worker; moreover, even if it were,
people do not work consistently from day to day or even from minute to minute. The work study
person has to have some means of assessing the rate of working of the operative he or she is
observing and of relating it to standard pace. This process is known as rating.
Rating is the assessment of the worker's rate of working relative to the observer's concept of the
rate corresponding to standard pace.
By definition, rating is a comparison of the rate of working observed by the work study person with
a picture of some standard level in mind. This standard level is the average rate at which qualified
workers will naturally work at a job, when using the correct method and when motivated to apply
themselves to their work. This rate of working corresponds to what is termed the standard rating,
and is denoted by 100 on the rating scale recommended to readers. If the standard pace is
maintained and the appropriate relaxation is taken, a worker will achieve standard performance
over the working day or shift.
Standard performance is the rate of output which qualified workers will naturally achieve
without over-exertion as an average over the working day or shift, provided that they know and

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adhere to the specified method and provided that they are motivated to apply themselves to their
work This performance is denoted as 100 on the standard rating and performance scales.
Scales of rating
In order that a comparison between the observed rate of working and the standard rate may be made
effectively, it is necessary to have a numerical scale against which to make the assessment. The rating can
then be used as a factor by which the observed time can be multiplied to give the basic time, which is the
time it would take the motivated, qualified worker to carry out the element at standard rating.
There are several scales of rating in use, the most common of which are those designated the 60-80, 75-100
and 100-133 scales, and the British Standard scale used in this book (essentially a restatement of the 75-100
scale), which is termed the 0-100 scale.

How the rating factor is used

If the study person decides that the observed operation is being performed with less effective
speed than a particular concept of standard, a factor of less than 100 will be used, say 90 or 75 or
whatever is considered as representing a proper assessment. If, on the other hand, the study
person decides that the effective rate of working is above standard, it will be given a factor greater
than 100 — say, 110, 115 or 120.
It is usual practice to round off ratings to the nearest multiple of five on the scale; that is to say, if
the rate is judged to be 13 per cent above standard, it would be put down at 115. During the first
weeks of their training, study persons are unlikely to be able to rate more closely than the nearest
ten.
If the study person's ratings were always impeccable, then however many times an element were
rated and timed the results should be that:
observed time x rating = a constant
provided that the element is of the type described as a constant element in section 6 of the
previous chapter, and that it is always performed in the same way.
An example, expressed numerically, might read as follows:

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Q12.Numerical Problem 1: The elemental times (in minutes) for 4 cycles of an operation using a
stop watch are presented below:

Elememts Cycle time in minutes

1 2 3 4

1 1.5 1.5 1.3 1.4

2 2.6 2.7 2.4 2.4

3 3.3 3.2 3.4 3.4

4 1.2 11 1.1 1.2

5 0.31 0.51 0.52 0.49

Calculate standard time for the operation if:

i. Elements 2 and 4 are machine elements.

ii. For other elements the operator is rated at 110%.
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iii. Total allowances are 15% of the normal time.

Solution: The normal times are shown in Table.

Table: Computation of Normal Time

___
Element Cycle time Avg. cycle Rating (4) Normal time=Avg.

No. (min) time (3) time X rating

1 2 3 4

________________________________________________________________________

1 1,5 1,5 1.3 1.4 1.425 110% 1.425 x 1.1 = 1.568

2 2,6 2.7 2.4 2.6 2.575 m/c elem. = 2.575
3 3.3 31 3.4 3.4 3.325 110% 3.323 x 1.1 = 3.658
4 1.2 1.2 1.1 1.2 1.175 m/c elem. = 1.175
5 0.51 0.51 0.52 0.4 0.505 110% 0.505 x 1.1 - 0.535

________________________________________________________________________

Normal time for the cycle = (1.568 + 2375 +3.658 + 1.175 + 0.535) = 9.531
Now,
Standard time = Normal Time + Allowances
= NT + 15% of NT
= NT + 0.15NT
= (9.531 + (0.15 x 9.531))
= 10.434 minutes

Q13.Numerical Problem 2: A worker operating on a machine performs the following elements. The
description of element, their observed time and ratings are given. Compute the standard time
for the component.

Element Description Observed time Rating Relaxation Allowance

A Position the job 0.25 80 10%
Switch 'ON' and tower drill 0 09 100 11%
B Drill hole 2.8 90 12%
Rest drill and switch 'OFF’ 0.05 80 10%
C Remove job from jig 0.15 110 11%

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Solution: The relaxation allowance is given separately for each element so the element wise standard
time is to be computed and then added to together to get the standard time for the job. The
computation of standard time is shown the table:

Element Observed time Rating Normal time Relaxation Time Std Time (min.)
A 0.25 80 0.25 X 0.8 0.10 0.22
0.09 100 0.09 X 1 0.11 0.099
B 2.80 90 0.08 X 0.9 0.9 2.746
0.05 80 0.05 X 0.8 0.8 0.043
C
0.15 110 0.15 X 1.1 1.1 0.183

Standard time for the job = 0.22 + 0.099 + 2.746 + 0.043 + 0.183

=3.251 minutes

14. What is quality function deployment (QFD)?

In the world of business and industry, every organization has customers. Some have only internal
customers, some just external customers, and some have both. When you are working to determine
what you need to accomplish to satisfy or even delight your customers, then the tool of choice is
quality function deployment or QFD.
Background
Quality professionals refer to QFD by many names, including matrix product planning, decision
matrices, and customer-driven engineering. Whatever you call it, QFD is a focused methodology for
carefully listening to the voice of the customer and then effectively responding to those needs and
expectations.
First developed in Japan in the late 1960s as a form of cause-and-effect analysis, QFD was brought to the
United States in the early 1980s. It gained its early popularity as a result of numerous successes in the
automotive industry.
Methodology
In QFD, quality is a measure of customer satisfaction with a product or a service. QFD is a structured
method that uses the seven management and planning tools to identify and prioritize customers’
expectations quickly and effectively.
Beginning with the initial matrix, commonly termed the house of quality, depicted in Figure 1, the QFD
methodology focuses on the most important product or service attributes or qualities. These are
composed of customer wows, wants, and musts. (See the Kano model of customer perception versus
customer reality.)

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Once you have prioritized the attributes and qualities, QFD deploys them to the appropriate
organizational function for action, as shown in Figure 2. Thus, QFD is the deployment of customer-
driven qualities to the responsible functions of an organization.

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Many QFD practitioners claim that using QFD has enabled them to reduce their product and service
development cycle times by as much as 75 percent with equally impressive improvements in measured
customer satisfaction.

While the Quality Function Deployment matrices are a good communication tool at each step in the
process, the matrices are the means and not the end. The real value is in the process of communicating
and decision-making with QFD. QFD is oriented toward involving a team of people representing the
various functional departments that have involvement in product development: Marketing, Design
Engineering, Quality Assurance, Manufacturing/ Manufacturing, Engineering, Test Engineering, Finance,
Product Support, etc.

15. What is total productive maintenance (TPM)?

Total productive maintenance (TPM) is a system of maintaining and improving the integrity of production
and quality systems through the machines, equipments, processes and employees that add business value
to the organization.

TPM (Total Productive Maintenance) is a holistic approach to equipment maintenance to achieve perfect
production:

• No Breakdowns
• No Small Stops or Slow Running
• No Defects

In addition it values a safe working environment:

• No Accidents

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TPM emphasizes proactive and preventative maintenance to maximize the operational efficiency of
equipment. It blurs the distinction between the roles of production and maintenance by placing a strong
emphasis on empowering operators to help maintain their equipment.

One of the main objectives of TPM is to increase the productivity of plant and equipment with a modest
investment in maintenance. Total quality management (TQM) and total productive maintenance (TPM) are
considered as the key operational activities of the quality management system. In order for TPM to be
effective, the full support of the total workforce is required. This should result in accomplishing the goal of
TPM: "Enhance the volume of the production, employee morale and job satisfaction."
Implementation of Total Productive Maintenance

The implementation of a TPM program creates a shared responsibility for equipment that encourages
greater involvement by plant floor workers. In the right environment this can be very effective in improving
productivity (increasing up time, reducing cycle times, and eliminating defects).
Following are the steps involved by the implementation of TPM in an organization: Initial evaluation of TPM
level, Introductory Education and Propaganda (IEP) for TPM, formation of TPM committee, development of
master plan for TPM implementation, stage by stage training to the employees and stakeholders on all eight
pillars of TPM, implementation preparation process, establishing the TPM policies and goals and
development of a road map for TPM implementation.
According to Nicholas, the steering committee should consist of production managers, maintenance
managers, and engineering managers. The committee should formulate TPM policies and strategies and give
advice. This committee should be led by a top-level executive. Also a TPM program team must rise, this
program team has oversight and coordination of implementation activities. As well, it's lacking some crucial
activities, like starting with partial implementation. Choose the first target area as a pilot area, this area will
demonstrate the TPM concepts. Lessons learned from early target areas/the pilot area can be applied
further in the implementation process.
Management

Another factor that is crucial for the success of TPM, is the support of top management: "Lack of top
management commitment, lack of middle management support and employee resistance to change, as well
for the status-conscious and hierarchy-bound middle level executives lacking initiatives" are the main
barriers against succeeding.
Objectives of Total productive maintenance

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The main objective of TPM is to increase the Overall Equipment Effectiveness of plant equipment. TPM
addresses the causes for accelerated deterioration while creating the correct environment between
operators and equipment to create ownership.
OEE has three factors which are multiplied to give one measure called OEE
Performance x Availability x Quality = OEE
Each factor has two associated losses making 6 in total , these 6 losses are as follows:
Performance = (1) running at reduced speed (2) Minor Stops
Availability = (3) Breakdowns (4) Product changeover
Quality = (5) Startup rejects (6) Running rejects
the objective finally is to identify then prioritise and eliminate the causes of the losses, this is done by self
managing teams that problem solve, employing consultants to create this culture is common practice.
The Eight Pillars
The eight pillars of TPM are mostly focused on proactive and preventative techniques for improving
equipment reliability.

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16. What is DMAIC in the context of 6 sigma?

DMAIC is a data-driven quality strategy used to improve processes. It is an integral part of a Six
Sigma initiative, but in general can be implemented as a standalone quality improvement
procedure or as part of other process improvement initiatives such as lean.

DMAIC is an acronym for the five phases that make up the process:

• Define the problem, improvement activity, opportunity for improvement, the project goals, and
customer (internal and external) requirements.

• Measure process performance.

• Analyze the process to determine root causes of variation, poor performance (defects).

• Improve process performance by addressing and eliminating the root causes.

• Control the improved process and future process performance.

The DMAIC process easily lends itself to the project approach to quality improvement encouraged
and promoted by Juran.

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17. What is DMADV in the context of 6 sigma?

Some Six Sigma methodologies are aimed at reducing the errors in a product line by looking at all the
processes contributing to the com pletion and delivery of an item or service. Improving the effectiveness of
these processes and omitting redundancies are ways to make the entire manufacturing process more
efficient. This leads to shortened lead times, improvements in gross margin and more reliable production
lines.

Coupling improvements in the manufacturing processes with those that govern custo mer service can help to
deliver a more complete and profitable product or service. The Six Sigma processes that look at the
customer service aspects of a business are outlined in the acronym “DMADV” which refers to Define,
Measure, Analyze, Design, and Verify.

An Overview of Six Sigma’s DMAD V processes:

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The application of DMADV is used when a client or customer requires product improvement, adjustment, or
the creation of an entirely new product or service. The application of these methods is aimed at creating a
high-quality product keeping in mind customer requirements at every stage of the game. In general, the
process can be outlined as:

Define

Project leaders identify wants and needs believed to be considered most important to customers. Wants
and needs are identified through historical information, customer feedback and other information sources.

o Teams are assembled to drive the process.

o Metrics and other tests are developed in alignment with customer information.

Measure

The second part of the process is to use the defined metrics to collect data and record specifications in a
way that can be utilized to help drive the rest of the process.

o All the processes needed to successfuly manufacture the product or service are assigned
metrics for later evaluation.
o Technology teams test the metrics and then apply them.

Analyze

The result of the manufacturing process (i.e. finished product or service) is tested by internal teams to
create a baseline for improvement.

o Leaders use data to identify areas of adjustment within the processes that will deliver
improvement to either the quality or manufacturing process of a finished product or service.
o Teams set final processes in place and make adjustments as needed.

Design

The results of internal tests are compared with customer wants and needs. Any additional adjustments
needed are made.

o The improved manufacturing process is tested and test groups of customers provide feedback
before the final product or service is widely released.

Verify

The last stage in the methodology is ongoing. While the product or service is being released and
customer reviews are coming in, the processes may be adjusted.

o Metrics are further developed to keep track of on-going customer feedback on the product or
service.

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o New data may lead to other changes that need to be addressed so the initial process may
lead to new applications of DMADV in subsequent areas.

The applications of these methodologies are generally rolled out over the course of many months,
or even years. The end result is a product or service that is completely aligned with customer
expectations, wants and needs.

The steps DMA (expands as Define, Measure, Analyze) – are similar to DMAIC, (remember similar
but not the same). The activities in DEFINE (Define the problem, Set up the goal) – is evidently the
same as DMAIC. But in Measure and Analyze, there is a slight difference in what you measure and
what and how you analyze. Finally, D & V stand for Design and Validate/Verify, respectively, clearly
indicating that a Process Design is undertaken to meet Six Sigma levels of Performance. Hence,
DMADV is alternatively also called as DFSS (Design for Six Sigma).

18. When is DMADV used?

DMAIC is used, when the problem you want to solve is for a process that is already existing but not
meeting the expected levels of performance. DMAIC is used when you want to correct an existing
process that has not been performing up to the expectations.

Alternatively, DMADV is used when you want to set up/design a whole new process, that should be
meeting the desired level of performance from the beginning. DMADV may also be used when
there is a need to redesign an existing product or process, rather than constantly correcting the
process. The soul of DMADV is in understanding the customer’s requirements and the CTQs which
are mostly expressed qualitatively.

For example, a Telecom service provider who wants to introduce a new Customer service
improvement team may use DMADV to design:

1. What are all the areas the Customer service improvement team will cover?
2. What would be the TAT (Turn-around time) that the team can fix up to respond to its customers?
3. What would be the working hours (window) required to maintain the TAT?
4. What skills are required by the team members processing the complaints?
5. How many staff is required to be present in each interval/day/time/shift?
And so on…

The same service provider may take up DMAIC approach, when the already existing customer
service team’s TAT Target fixed is 3 hours but majority of the complaints are resolved in 6-7 hours.
The solution to the DMAIC project taken could be a change in one or more of the five points
discussed above.

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19. What is the difference between DMAIC & DMADV?

DMADV and DMAIC are two tools adopted for same mission/vision: Achieve Six Sigma
Performance; Two different approaches and methodology used to attain a single goal under
different circumstances and problem areas.

Table 2: DMAIC Vs DMADV

But the objective of both DMADV and DMAIC is the same: a) Variation reduction and b) Adherence
to customer’s requirements.

Below is a table that provides an overview of the tools that are used in each phase of DMAV. (This
table is just an indication/example and not an exhaustive list)

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Table 3: DMADV – List of some Tools

There is no hard and fast rule that DMAIC should only use statistical tools and DMADV should only
use Qualitative tools. It is based on the need and scenario that we choose the right tool to apply.
(Example: Design of Experiments is a statistical tool to identify the significant variables from a list of
‘n’ variables; DOE is used both in DMAIC and DMADV)

20. What is Lean manufacturing? Write about each waste in maximumtwo lines.
The concept of lean manufacturing was based on the philosophy of Toyota’s Production System
(TPS), developed post World War II during reconstruction of automobile industry in Japan. Lean
Manufacturing refers to the process which manufactures better quality products with a lower
defect rate and at a greater speed than its competitors. However, the term “lean” was promoted
only in 1996 by James P. Womack and Daniel T. Jones in their book ‘Lean Thinking’. Lean
manufacturing is much more flexible than its predecessors, craft production (highly skilled workers
but flexible tools) and mass production (narrowly skilled professionals and expensive machinery)
and combines the positive aspects of both.

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Principles of Lean Manufacturing

▪ Reduction of waste – Lean manufacturing involves never ending efforts to eliminate waste
using tools like 5s, one piece flow, Kanban, Kaizen, Poke-yoke and several others. They have
developed an acronym for waste – CLOSED MITT, where CLOSED stands for Complexity, Labor,
Overproduction, Space, Energy, Defect and MITT stands for Materials, Inventory, Time and
Transport.
▪ Respect for human resource – Lean Manufacturing philosophy respects humanity as the
biggest resource in any company is the people that work there. It also emphasizes respect for
the workers at all levels, the customers and suppliers, as well as the environment
Benefits of Lean Manufacturing-
• Shorter lead time
• Reduced inventory
• Pull based manufacturing
• Production in smaller batch sizes
• Line balancing or Takt timing
• Lower process time
• Cellular Manufacturing

The seven wastes

One of the key steps in Lean and TPS is the identification of which steps add value and which don't.
These waste were identified by Toyota's Chief Engineer, Taiichi Ohno as part of the Toyota
Production System:

There can be more forms of waste in addition to the seven. The 8 most common forms of waste
can be remembered using the mnemonic "DOWNTIME" (Defective Production, Overproduction,
Waiting, Non-used Employee Talent (the 8th form), Transportation, Inventory, Motion and
Excessive (Over) Processing)

The Eight Wastes – (DOWNTIME)

Transportation
Each time a product is moved it stands the risk of being damaged, lost, delayed, etc. as well as
being a cost for no added value. Transportation does not make any transformation to the product
that the consumer is willing to pay for.

Inventory
Inventory, be it in the form of raw materials, work-in-progress (WIP), or finished goods, represents
a capital outlay that has not yet produced an income either by the producer or for the consumer.
Any of these three items not being actively processed to add value is waste.

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Motion
In contrast to transportation, which refers to damage to products and transaction costs associated
with moving them, motion refers to the damage that the production process inflicts on the entity
that creates the product, either over time (wear and tear for equipment and repetitive strain
injuries for workers) or during discrete events (accidents that damage equipment and/or injure
workers).

Waiting
Whenever goods are not in transport or being processed, they are waiting. In traditional processes,
a large part of an individual product's life is spent waiting to be worked on.

Over-processing
Over-processing occurs any time more work is done on a piece than is required by the customer.
This also includes using components that are more precise, complex, higher quality or expensive
than absolutely required.

Over-production
Overproduction occurs when more product is produced than is required at that time by your
customers. One common practice that leads to this muda is the production of large batches, as
often consumer needs change over the long times large batches require. Overproduction is
considered the worst muda because it hides and/or generates all the others. Overproduction leads
to excess inventory, which then requires the expenditure of resources on storage space and
preservation, activities that do not benefit the customer.

Defects
Whenever defects occur, extra costs are incurred reworking the part, rescheduling production, etc.
This results in labor costs, more time in the "Work-in-progress". Defects in practice can sometimes
double the cost of one single product. This should not be passed on to the consumer and should be
taken as a loss.

Mnemonics
An easy way to remember the 7 wastes is TIMWOOD.

T: Transportation
I: Inventory
M: Motion
W: Waiting
O: Over-processing
O: Over-production
D: Defect

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21. Define facility layout and list the objectives of good layout?
Facility layout and design is an important component of a business's overall operations, both in
terms of maximizing the effectiveness of the production process and meeting the needs of
employees. The basic objective of layout is to ensure a smooth flow of work, material, and
information through a system. The basic meaning of facility is the space in which a business's
activities take place. The layout and design of that space impact greatly how the work is done—the
flow of work, materials, and information through the system. The key to good facility layout and
design is the integration of the needs of people (personnel and customers), materials (raw, finishes,
and in process), and machinery in such a way that they create a single, well-functioning system.

The basic objective of layout design is to facilitate a smooth flow of work, material, and information
through the system. Supporting objectives generally involve the following:

▪ To facilitate attainment of product or service quality.

▪ To use workers and space efficiently.
▪ To avoid bottlenecks.
▪ To minimize material handling costs.
▪ To eliminate unnecessary movements of workers or materials.
▪ To minimize production time or customer service time.
▪ To design for safety.

Product layouts are most conducive to repetitive processing.

Process layouts are used for intermittent processing.
Fixed-position layouts are used when projects require layouts.

22. What is cost of quality? Write about types of cost of quality.

23. What is failure prevention cost with respect to cost of quality?

Cost of quality is a term that's widely used – and widely misunderstood.

The "cost of quality" isn't the price of creating a quality product or service.
It's the cost of NOT creating a quality product or service.
Every time work is redone, the cost of quality increases.
Obvious examples include:
• The reworking of a manufactured item.
• The retesting of an assembly.
• The rebuilding of a tool.
• The correction of a bank statement.
• The reworking of a service, such as the reprocessing of a loan operation or the replacement
of a food order in a restaurant.
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In short, any cost that would not have been expended, if, quality were perfect, contributes to
the cost of quality.

Total Quality Costs

Quality costs are the total of the cost incurred by:
• Investing in the prevention of nonconformance to requirements.
• Appraising a product or service for conformance to requirements.
• Failing to meet requirements.
Let us see what these costs are…..

1. Prevention Costs
The costs of all activities specifically designed to prevent poor quality in products or services.
Examples are the costs of:
• New product review
• Quality planning
• Supplier capability surveys
• Process capability evaluations
• Quality improvement team meetings
• Quality improvement projects
• Quality education and training

2. Appraisal Costs
The costs associated with measuring, evaluating or auditing products or services to assure
conformance to quality standards and performance requirements.
These include the costs of:
• Incoming and source inspection/test of purchased material
• In-process and final inspection/test
• Product, process or service audits
• Calibration of measuring and test equipment
Associated supplies and materials

3. Failure Costs
The costs resulting from products or services not conforming to requirements or customer/user
needs. Failure costs are divided into internal and external failure categories.

24. What is six sigma?

In most cases Six Sigma is a method to measure process quality with the end goal of near-total
perfection. The goal of using Six Sigma is to improve the end product (what a surprise!) by
removing errors in the production process in any sphere where it’s applicable. It’s mostly a data-
driven approach that relies on management strategies for improving process flow and end results.
The philosophy is simple – to work smarter, not harder. Decisions are based on data, process
capability is improved, mistakes are reduced if not eliminated, sigma rating goes up.

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This is achieved by creating select groups of trained and certified professionals within any given
organization that would adopt, control and improve the Six Sigma methodology.
Each unique project within a given organization that would utilize the Six Sigma concept is going to
have a very rigid set or rules for costs involved and expected end results.
The term itself (Six Sigma) comes from manufacturing jargon and without going into specifics and
technical details you should just remember that it refers to a process that has only 3.4 defects in a
million output units– be it physical products or other particular tasks that can be measured in units:

The Six Sigma Levels and their corresponding defects

Three main differences Six Sigma has from other process improvement methodologies:

• It uses two disciplined approaches:

• DMAIC – used to develop/improve existing practice
• DMADV – used to devise/design a defect-free procedure
• Uses varied numerical and problem solving techniques and tools
• Is being run by a trained and certified professional (Black Belt) and guided by a Master Black Belt.

25. What do you understand by Kaizen?

Kaizen, also known as continuous improvement, is a long-term approach to work that
systematically seeks to achieve small, incremental changes in processes in order to improve
efficiency and quality.

Kaizen can be applied to any kind of work, but it is perhaps best known for being used in lean
manufacturing and lean programming. If a work environment practices kaizen, continuous
improvement is the responsibility of every worker, not just a selected few.

Kaizen can be roughly translated from Japanese to mean "good change."

The philosophy behind kaizen is often credited to Dr. W. Edwards Deming. Dr. Demming was
invited by Japanese industrial leaders and engineers to help rebuild Japan after World War II. He
was honored for his contributions by Emperor Hirohito and the Japanese Union of Scientists and
Engineers.

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26. Define the following terms: (questions of 2 marks)

a) Work Study
Work study is the systematic examination of the methods of carrying on activities so as to improve the
effective use of resources and to set up standards of performance for the activities being carried out.
b) Method Study
Method study is the systematic recording and critical examination of ways of doing things in order to make
improvements.
c) Work Measurement
Work measurement is the application of techniques designed to establish the time for a qualified worker to
carry out a task at a defined rate of working.
d) Work Sampling
Work sampling is a method of finding the percentage occurrence of a certain activity by statistical sampling
and random observations.
e) Work Content
The work content of a job or operation is defined as: basic time + relaxation allowance + any allowance for
additional work – e.g. that part of contingency allowance which represents work.
f) Time Study
Time study is a work measurement technique for recording the times of performing a certain specific job or
its elements carried out under specified conditions, and for analysing the data so as to obtain the time
necessary for an operator to carry it out at a defined rate of performance.
g) Qualified Worker
A qualified worker is one who has acquired the skill, knowledge and other attributes to carry out the work in
hand to satisfactory standards of quantity, quality and safety.
h) Element
An element is a distinct part of a specified job selected for convenience of observation, measurement and
analysis.
i) Work Cycle
A work cycle is a sequence of elements which are required to perform a job or yield a unit of production.
The sequence may sometimes include occasional elements.
j) Rating
Rating is the assessment of the worker’s rate of working relative to the observer’s concept of the rate
corresponding to standard pace.
k) Standard Performance
Standard performance is the rate of output which qualified workers will naturally achieve without over-
exertion as an average over the working day or shift, provided that they know and adhere to the
specified method and provided that they are motivated to apply themselves to their work.
This performance is denoted as 100 on the standard rating and performance scales.
l) Basic Time
Basic time is the time for carrying out an element of work at standard rating, i.e.
(Observed time x observed rating)/ Standard rating
m) Selected Time
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The selected time is the time chosen as being representative of a group of times for an
element or group ofelements. These times may be either observed or basic and
should be denoted as selected observed or selected basic time.
n) Relaxation Allowance
Relaxation allowance is an addition to the basic time intended to provide the worker with
the opportunity torecover from the physiological and psychological effects of carrying
out specified work under specified conditions and to allow attention to personal needs.
The amount of allowance will depend on the nature of the job.
o) Standard Time
Standard time is the total time in which a job should be completed at standard performance.
p) Predetermined Time
A predetermined time standard is a work measurement technique whereby times
established for basic human motions (classified according to the nature of the
motion and the conditions under which it ismade) are used to build up the time
for a job at a defined level of performance.
q) Work Specifications
A work specification is a document setting out the details of an operation or job, how it is
to be performed, the layout of the workplace, particulars of machines, tools and
appliances to be used, and the duties and responsibilities of the worker. The standard
time or allowed time assigned to the job is normally included.

***

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