MODULE 1

• Operations management is the management of that part of an organization that

is responsible for producing goods and/or services. There are examples of these
goods and services all around you. Every book you read, every video you watch,
every e-mail you send, every telephone conversation you have, and every
medical treatment you receive involves the operations function of one or more
organizations. So does everything you wear, eat, travel in, sit on, and access the
Internet with.
• However, in order to have a clear idea of Operations Management, one must
have an idea of ‘Operating Systems’.
• An Operating System is defined as a configuration of resources combined for the
provision of goods or services. Retail organizations, hospitals, bus and taxi
services, tailors, hotels and dentists are all examples of operating systems. Any
operating system converts inputs, using physical resources, to create outputs,
the function of which is to satisfy customers wants. The creation of goods or
services involves transforming or converting inputs into outputs. Various inputs
such as capital, labour, and information are used to create goods or services
using one or more transformation processes (e.g., storing, transporting, and
cutting). To ensure that the desired output are obtained, an organization takes
measurements at various points in the transformation process (feedback) and
then compares with them with previously established standards to determine
whether corrective action is needed (control).
• It is important to note that goods and services often occur jointly. For example, having the oil
changed in your car is a service, but the oil that is delivered is a good. Similarly, house painting is a
service, but the paint is a good. The goods-service combination is a continuum. It can range from
primarily goods, with little service, to primarily service, with few goods. Because there are
relatively few pure goods or pure services, companies usually sell product packages, which are a
combination of goods and services. There are elements of both goods production and service
delivery in these product packages. This makes managing operations more interesting, and also
more challenging.
 OBJECTIVES OF OPERATIONS MANAGEMENT

Objectives of operations management can be categorised into

(i) Customer service and
(ii) Resource utilization.

(iii) Customer service:

The first objective is the customer service which means the service for the
satisfaction of customer wants. Customer service is therefore a key objective
of operations management.
The Operations Management must provide something to a specification which can
satisfy the customer in terms of cost and timing. Thus, primary objective can
be satisfied by providing the ‘right thing at the right price at the right time’.
These three aspects of customer service - specification, cost and timing - are
described in a little more detail for the four functions in Table 1. They are the
principal sources of customer satisfaction and must, therefore, be the
principal dimension of the customer service objective for operation
managers.
OBJECTIVES OF OPERATIONS MANAGEMENT
 OBJECTIVES OF OPERATIONS MANAGEMENT
(ii) Resource Utilization
Another major objective is to utilize resources for the satisfaction of customer wants effectively,
i.e., customer service must be provided with the achievement of effective operations through
efficient use of resources. Inefficient use of resources or inadequate customer service leads
to commercial failure of an operating system.
Operations management is concerned essentially with the utilization of resources, i.e., obtaining
maximum effect from resources or minimizing their loss, under utilization or waste. The
extent of the utilization of the resources’ potential might be expressed in terms of the
proportion of available time used or occupied, space utilization, levels of activity, etc. Each
measure indicates the extent to which the potential or capacity of such resources is utilized.
This is referred as the objective of resource utilization.
Operations management is also concerned with the achievement of both satisfactory customer
service and resource utilization. An improvement in one will often give rise to deterioration in
the other. Often both cannot be maximized, and hence a satisfactory performance must be
achieved on both objectives. All the activities of operations management must be tackled
with these two objectives in mind, and many of the problems will be faced by operations
managers because of this conflict. Hence, operations managers must attempt to balance
these basic objectives.
Below Table 2 summarizes the twin objectives of operations management. The type of balance
established both between and within these basic objectives will be influenced by market
considerations, competitions, the strengths and weaknesses of the organization, etc. Hence,
the operations managers should make a contribution when these objectives are set.
 What is operations management?

Operations management is the planning, organizing, and oversight of

business practices that maximize efficiency and assure company
processes are driving value. It involves preparing and supervising
the practices that turn resources such as labor, equipment, and raw
materials into goods and services.
Operations managers work to ensure a company achieves the highest
operating profit by carefully balancing cost and revenue. They work
closely with other teams to increase productivity, deliver high-
quality products and services, and ensure customers are satisfied.
Large organizations usually have a chief operations officer (COO) while
smaller businesses might assign the duties to another high-level
role. Either way, it’s a highly strategic position involving strong
planning, organizational, and communication skills.
Operations management is closely associated with supply chain
management: Managing the process of sourcing material, turning it
into product, and delivering it to customers.
 What Are Types Of Operations Management Activities?

There are many types, or aspects, of operations

management. An operations manager role can vary
widely, depending on business size and industry. They
might have a broad range of responsibilities or focus on
one area.
 Product Design And Development
 Planning And Management Of Manufacturing Facilities
 Purchasing/Procurement
 Forecasting
 Capacity Planning
 Inventory Management
 Quality Control
 Delivery To Customers
 Examples Of Managing Business Operations

Given that every business needs to operations management to function, there are
many examples across industries. Moreover, every industry can have a wide range
of operations functions.
Here are a few examples:
• Healthcare – An operations manager of a healthcare facility is generally responsible
for ensuring efficiency in delivery of high-quality care. That can include overseeing
administrative costs, managing claims and billing, and legal compliance.
• Manufacturing – A company that makes home appliances, for example, has
processes for sourcing materials, managing factories, maintenance, overseeing
inventory, and ensuring quality.
• Restaurant – An operations manager for a restaurant or chain of restaurants is
usually responsible for facility maintenance, employee training and supervision,
financial planning, inventory management, compliance, and payroll.
• Retail – In an industry that can span multiple environments, from brick-and-mortar
to e-commerce and single stores to chains, business operations can encompass
many functions, including sourcing, inventory, staffing, logistics, store management,
and customer service.
• Transportation – Operations management for a transportation company includes
overseeing vehicle maintenance, fuel supply, routing, staffing, and communication,
among other functions.
 Functions of Operations Management
• Finance- Finance plays a main function in operations management. The operation
manager should not waste finance in unproductive tasks. He should ensure that all
finance of the organization is utilized for the manufacturing of useful goods or
services which may satisfy consumer wants.
• Operation– The function of operation management is basically concerned with
planning, organizing, directing and controlling of daily routine operations of an
organization. The operation manager ensures that all activities are going effectively
and efficiently.
• Strategy– The strategy formulation is also the main function of operation
management. The operation manager should have pre-planned tasks. Formulation
of plans and tactics helps the organization in optimizing their resources and
developing a competitive edge over competitors.
• Product Design– It is the duty of operations manager to design the product
according to the market trends and demands. He should ensure that innovative
techniques are incorporated within the product and its quality is maintained.
• Maintaining Quality– Operations managers should ensure a better quality of
products. The manager should not compromise with the quality of Products. They
should work on quality management and should supervise all tasks. If any defects
are found they should take steps to rectify such defects.
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 Scope of Operations Management

 Location of Facilities
 Product Design
 Process Design
 Plant Layout
 Material Handling
 Material Management
 Quality Control
 Maintenance Management
Location of Facilities: The most important decision with respect to the operations
management is the selection of location, a huge investment is made by the
firm in acquiring the building, arranging and installing plant and machinery.
And if the location is not suitable, then all of this investment will be called as a
sheer wastage of money, time, and efforts.
So, while choosing the location for the operations, company’s expansion plans,
diversification plans, the supply of materials, weather conditions,
transportation facility and everything else which is essential in this regard
should be taken into consideration.
 Scope of Operations Management

• Product Design: Product design is all about an in-depth analysis of the

customer’s requirements and giving a proper shape to the idea, which
thoroughly fulfils those requirements. It is a complete process of identification
of needs of the consumers to the final creation of a product which involves
designing and marketing, product development, and introduction of the
product to the market.
• Process Design: It is the planning and decision making of the entire workflow
for transforming the raw material into finished goods, It involves decisions
regarding the choice of technology, process flow analysis, process selection,
and so forth.
• Plant Layout: As the name signifies, plant layout is the grouping and
arrangement of the personnel, machines, equipment, storage space, and other
facilities, which are used in the production process, to economically produce
the desired output, both qualitywise and quantitywise.
• Material Handling: Material Handling is all about holding and treatment of
material within and outside the organisation. It is concerned with the
movement of material from one godown to another, from godown to machine
and from one process to another, along with the packing and storing of the
product.
 Scope of Operations Management

• Material Management: The part of management which deals with the

procurement, use and control of the raw material, which is required during the
process of production. Its aim is to acquire, transport and store the material in
such a way to minimize the related cost. It tends to find out new sources of
supply and develop a good relationship with the suppliers to ensure an
ongoing supply of material.
• Quality Control: Quality Control is the systematic process of keeping an
intended level of quality in the goods and services, in which the organization
deals. It attempts to prevent defects and make corrective actions (if they find
any defects during the quality control process), to ensure that the desired
quality is maintained, at reasonable prices.
• Maintenance Management: Machinery, tools and equipment play a crucial
role in the process of production. So, if they are not available at the time of
need, due to any reason like downtime or breakage etc. then the entire
process will suffer.

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 The Principles of Operations Management

The management principles were presented by Randall Schaeffer, an experienced

production and operations manager, an industry philosopher, and a regular
speaker at conferences organized by APICS, the leading association of supply
chain and operations management in the United States.
 Reality: Operations managers must focus on problems, not techniques
because there are no tools that provide universal solutions.
 Organization: Processes in manufacturing are interconnected. All elements
must be predictable and consistent, to achieve the same outcome in profits.
 Fundamentals: Operations managers must know how to comply with all
fundamentals because this is the key to production success. It is important to
ensure the accuracy of inventory data, BOMs, and other general tasks to
achieve the desired results.
 Accountability: Managers are expected to set rules and metrics, determine the
responsibilities of their subordinates, and regularly check if objectives are
achieved.
 Variance: The variance of processes needs to encourage because if managed
properly, differences can be a source of creativity.
 The Principles of Operations Management

 Causality: Sometimes, problems will still arise even when the best efforts have
done. Managers need to find the root cause of the problem so that it won’t get
worse.
 Managed Passion: Employee morale can be a major driver of company
growth. Managers must be able to inspire their subordinates to be passionate
at work.
 Humility: No one wants to work with an aggressive know-it-all. Thus,
operations managers need to position themselves as ordinary people who
don’t know everything and can also make mistakes.
 Success: Managers have clearly defined what they consider successful so that
everyone in the company will have the parameters to work within the process
of achieving targets.
 Change: Everyone in the company must learn to adapt to market changes. This
includes understanding customers, target clients, and what they want. This of
course also involves the use of automated solutions so that the company is
always one step ahead.
OBJECTIVES OF OPERATIONS MANAGEMENT
 SCOPE OF OPERATIONS MANAGEMENT

Operations Management concerns with the conversion of inputs into

outputs, using physical resources, so as to provide the desired utilities to
the customer while meeting the other organizational objectives of
effectiveness, efficiency and adoptability. It distinguishes itself from
other functions such as personnel, marketing, finance, etc. by its
primary concern for ‘conversion by using physical resources’.
Following are the activities, which are listed under Production and
Operations Management functions:
1. Location of facilities.
2. Plant layouts and Material Handling.
3. Product Design.
4. Process Design.
5. Production Planning and Control.
6. Quality Control.
7. Materials Management.
8. Maintenance Management
Production and Operations Management

INTRODUCTION
The systems aspects of manufacturing are more important than ever
today. The word ‘manufacturing’ was originally derived from two
Latin words ‘manus’ (hand) and ‘factus’(make), so that the
combination means ‘make by hand’.
In this way manufacturing was accomplished when the word first
appeared in English around 1567. Commercial goods of those times
were made by hand. The methods were handicraft, accomplished in
small shops and the goods were relatively simple. As many years
passed, the products become more complex along with processes.
Thus factories were developed with many workers at a single site;
the work was organized using machines
Production and Operations Management

Modern manufacturing enterprises that manage these

production systems must cope with the economic realities
of the modern world. These realities include the following:
• Globalization
• International outsourcing
• Local outsourcing
• Contract manufacturing
• Trend toward the service sector
• Quality expectations
• Operational efficiency
Production and Operations Management
 Production
• Production is a scientific process which involves transformation of
raw material (input) into desired product or service (output) by
adding economic value. Production can broadly categorize into
following based on technique:
• Production through separation: It involves desired output is
achieved through separation or extraction from raw materials. A
classic example of separation or extraction is Oil into various fuel
products.
• Production by modification or improvement: It involves change
in chemical and mechanical parameters of the raw material
without altering physical attributes of the raw material. Annealing
process (heating at high temperatures and then cooling), is
example of production by modification or improvement.
• Production by assembly: Car production and computer are
example of production by assembly.
Production
Production/Operations Management
• Production/operations management is the process, which
combines and transforms various resources used in the
production/operations subsystem of the organization into
value added product/services in a controlled manner as per
the policies of the organization. Therefore, it is that part of an
organization, which is concerned with the transformation of a
range of inputs into the required (products/services) having
the requisite quality level.
• The set of interrelated management activities, which are
involved in manufacturing certain products, is called
as production management. If the same concept is extended
to services management, then the corresponding set of
management activities is called as operations management.
Production/Operations Management
 Production System
• System: It consists of elements or components. The elements
or components are interlinked together to achieve the
objective for which it exists. Eg: human body, educational
institutions, business organizations.
• Components of a system: The input, processing, output and
control of a system are called the components of a system.
• Control: There are two types of control, namely Proactive
Control and Reactive Control. There are three types of
feedback mechanisms such as feed forward control, feedback
control and concurrent control
 Production System in Production and Operation
Management
The production system of an organization is that part, which
produces products of an organization. It is that activity
whereby resources, flowing within a defined system, are
combined and transformed in a controlled manner to add
value in accordance with the policies communicated by
management. A simplified production system is shown above.
The production system has the following characteristics:
 Production is an organized activity, so every production
system has an objective.
 The system transforms the various inputs to useful outputs.
 It does not operate in isolation from the other organization
system.
 There exists a feedback about the activities, which is essential
to control and improve system performance.
Distinction between Manufacturing Operations
and Service Operations
Following characteristics can be considered for distinguishing
manufacturing operations with service operations:
 Tangible/Intangible nature of output
 Consumption of output
 Nature of work (job)
 Degree of customer contact
 Customer participation in conversion
 Measurement of performance.
 Operation System in Operation Management
• Operating system converts inputs in order to provide outputs
which are required by a customer. It converts physical
resources into outputs, the function of which is to satisfy
customer wants i.e., to provide some utility for the customer.
In some of the organization the product is a physical good
(hotels) while in others it is a service (hospitals). Bus and taxi
services, tailors, hospital and builders are the examples of an
operating system.
• Everett E. Adam & Ronald J. Ebert define operating system as,
“An operating system (function) of an organization is the part
of an organization that produces the organization’s physical
goods and services.”Ray Wild defines operating system as,
“An operating system is a configuration of resources
combined for the provision of goods or services.”
Classification of Production System
 JOB SHOP PRODUCTION
Job shop production are characterized by manufacturing of one
or few quantity of products designed and produced as per the
specification of customers within prefixed time and cost. The
distinguishing feature of this is low volume and high variety of
products.
• A job shop comprises of general purpose machines arranged
into different departments. Each job demands unique
technological requirements, demands processing on machines
in a certain sequence.
JOB SHOP PRODUCTION
JOB SHOP PRODUCTION
 Characteristics of JOB SHOP PRODUCTION
Characteristics
The Job-shop production system is followed when there is:
• High variety of products and low volume.
• Use of general purpose machines and facilities.
• Highly skilled operators who can take up each job as a challenge
because of uniqueness.
• Large inventory of materials, tools, parts.
• Detailed planning is essential for sequencing the requirements of each
product, capacities for each work centre and order priorities.
Limitations
Following are the limitations of job shop production:
• Higher cost due to frequent set up changes.
• Higher level of inventory at all levels and hence higher inventory cost.
• Production planning is complicated.
• Larger space requirements.
 BATCH PRODUCTION
• Batch production is defined by American Production and
Inventory Control Society (APICS) “as a form of manufacturing
in which the job passes through the functional departments in
lots or batches and each lot may have a different routing.” It is
characterized by the manufacture of limited number of
products produced at regular intervals and stocked awaiting
sales.
BATCH PRODUCTION
 BATCH PRODUCTION
Characteristics
Batch production system is used under the following circumstances:
1. When there is shorter production runs.
2. When plant and machinery are flexible.
3. When plant and machinery set up is used for the production of item in
a batch and change of set up is required for processing the next batch.
4. When manufacturing lead time and cost are lower as compared to job
order production.
Limitations
Following are the limitations of batch production:
• Material handling is complex because of irregular and longer flows.
• Production planning and control is complex.
• Work in process inventory is higher compared to continuous
production.
• Higher set up costs due to frequent changes in set up.
 MASS / ASSEMBLY LINE PRODUCTION
Mass production is
production of a large number of products that are the same,
or very similar.
This type of production often uses assembly lines where
either people or machines perform the same tasks repeatedly
to create as many of a single product as possible, as quickly as
possible, and with as few variations or defects as possible.
The concept has been around for a very long time, but it really
became a standard way of doing business when Henry Ford
and the Ford Motor Company began mass producing vehicles
in the 1920's. This is also where the term was originated.
Manufacture of discrete parts or assemblies using a continuous
process are called mass production. This production system is
justified by very large volume of production. The machines
are arranged in a line or product layout. Product and process
MASS / ASSEMBLY LINE PRODUCTION
 MASS / ASSEMBLY LINE PRODUCTION
Characteristics
Mass production is used under the following circumstances:
• Standardization of product and process sequence.
• Dedicated special purpose machines having higher production capacities and output
rates.
• Large volume of products.
• Shorter cycle time of production.
• Lower in process inventory.
• Perfectly balanced production lines.
• Flow of materials, components and parts is continuous and without any back
tracking.
• Production planning and control is easy.
• Material handling can be completely automatic.
Limitations
Following are the limitations of mass production:
• Breakdown of one machine will stop an entire production line.
• Line layout needs major change with the changes in the product design.
• High investment in production facilities.
• The cycle time is determined by the slowest operation.
 CONTINOUS / FLOW PRODUCTION
Continous/Flow Production facilities are arranged as per the sequence
of production operations from the first operations to the finished
product. The items are made to flow through the sequence of
operations through material handling devices such as conveyors,
transfer devices, etc.
Flow production involves a continuous movement of items through
the production process. This means that when one task is finished
the next task must start immediately. Therefore, the time taken on
each task must be the same.
 CONTINOUS / FLOW PRODUCTION
Characteristics
Continuous production is used under the following circumstances:
• Dedicated plant and equipment with zero flexibility.
• Material handling is fully automated.
• Process follows a predetermined sequence of operations.
• Component materials cannot be readily identified with final
product.
• Planning and scheduling is a routine action.
Limitations
Following are the limitations of continuous production:
• Flexibility to accommodate and process number of products
does not exist.
• Very high investment for setting flow lines.
• Product differentiation is limited.
CONTINOUS / FLOW PRODUCTION
 Objectives of Production/Operations Management

1. To produce the goods as per the quality demanded by the

customers in most economic manner.
2. To sustain as well as to increase the level of customer
satisfaction.
3. To make improvement in existing goods and services by
regular innovations.
4. To maintain inventory at such levels that there may not be the
blockage of working capital due to excessive stock and the
production may not hamper due to unavailability of stock.
5. To ensure uninterrupted supply of goods and services in right
quantity at right time and at rightplace.
6. To produce the goods as per market demand.
7. To keep proper maintenance of plant and machinery.
SCOPE OF PRODUCTION AND OPERATIONS MANAGEMENT
 Location of facilities
 Plant layouts and material handling
 Product design
 Process design
 Production and planning control
 Quality control
 Materials management
 Maintenance management.
SCOPE OF PRODUCTION AND OPERATIONS MANAGEMENT
 SCOPE OF PRODUCTION AND OPERATIONS MANAGEMENT
LOCATION OF FACILITIES
• Location of facilities for operations is a long-term capacity decision which
involves a long term commitment about the geographically static factors that
affect a business organization. It is an important strategic level decision-
making for an organization. It deals with the questions such as ‘where our
main operations should be based?’
• The selection of location is a key-decision as large investment is made in
building plant and machinery.
PLANT LAYOUT AND MATERIAL HANDLING
• Plant layout is a plan of an optimum arrangement of facilities including
personnel, operating equipment, storage space, material handling
equipments and all other supporting services along with the design of best
structure to contain all these facilities. Plant layout refers to the physical
arrangement of facilities. It is the configuration of departments, work centers
and equipment in the conversion process.
• ‘Material Handling’ refers to the ‘moving of materials from the store room to
the machine and from one machine to the next during the process of
manufacture’. It is also defined as the ‘art and science of moving, packing and
storing of products in any form’.
 SCOPE OF PRODUCTION AND OPERATIONS MANAGEMENT

PRODUCT DESIGN
• Product design deals with conversion of ideas into reality.
Every business organization has to design, develop and
introduce new products as a survival and growth strategy.
Developing the new products and launching them in the
market is the biggest challenge faced by the organizations.
PROCESS DESIGN
• Process design is a macroscopic decision-making of an overall
process route for converting the raw material into finished
goods. These decisions encompass the selection of a process,
choice of technology, process flow analysis and layout of the
facilities. Hence, the important decisions in process design are
to analyze the workflow for converting raw material into
finished product and to select the workstation for each
included in the workflow.
 SCOPE OF PRODUCTION AND OPERATIONS MANAGEMENT
PRODUCTION PLANNING AND CONTROL
• Production planning and control can be defined as the process of
planning the production in advance, setting the exact route of each
item, fixing the starting and finishing dates for each item, to give
production orders to shops and to follow up the progress
• Main functions of production planning and control includes
Planning, Routing, Scheduling, Dispatching and Follow-up. of
products according to orders.

QUALITY CONTROL
• Quality Control (QC) may be defined as ‘a system that is used to
maintain a desired level of quality in a product or service’. It is a
systematic control of various factors that affect the quality of the
product. Quality control aims at prevention of defects at the source,
relies on effective feed back system and corrective action
procedure.
 SCOPE OF PRODUCTION AND OPERATIONS MANAGEMENT

MATERIALS MANAGEMENT
• Materials management is that aspect of management
function which is primarily concerned with the acquisition,
control and use of materials needed and flow of goods and
services connected with the production process having some
predetermined objectives in view.
MAINTENANCE MANAGEMENT
• In modern industry, equipment and machinery are a very
important part of the total productive effort. Therefore, their
idleness or downtime becomes are very expensive. Hence, it
is very important that the plant machinery should be properly
maintained.
 Automation
Automation is a technology concerned with the application of
mechanical, electronic, and computer- based systems to
operate and control production.
This technology includes automatic machine tools to process
parts, automatic assembly machines, industrial robots,
automatic material handling and storage systems, automatic
inspection systems for quality control, feedback control and
computer process control, computer systems for planning,
data collection and decision-making to support manufacturing
activities.
 Automation
• We define automation as "the creation and application of
technology to monitor and control the production and
delivery of products and services.”
• Defines automation as “the technique of making an
apparatus, a process, or a system operate automatically.”
 Automation provides benefits to virtually all of industry
Here are some examples:
 Manufacturing, including food and pharmaceutical, chemical
and petroleum, pulp and paper
 Transportation, including automotive, aerospace, and rail
 Utilities, including water and wastewater, oil and gas, electric
power, and telecommunications
 Defense / Navy / AirForce
 Facility operations, including security, environmental control,
energy management, safety, and other building automation
 And many others…
 Reasons for Automation in Manufacturing
 Increased productivity
 High cost of labor
 Labor shortages
 Trend of labor toward the service sector
 Safety
 High cost of raw materials
 Improved product quality
 Reduced manufacturing lead time
 Reduction of in-process inventory
 Types of Automation System
Automated production systems can be classified into three basic types:
 Fixed Automation
 Programmable Automation
 Flexible Automation
 Types of Automation System
FIXED AUTOMATION
It is a system in which the sequence of processing (or assembly)
operations is fixed by the equipment configuration. The
operations in the sequence are usually simple. It is the
integration and coordination of many such operations into
one piece of equipment that makes the system complex.
The typical features of fixed automation are:
• High initial investment for custom–Engineered equipment;
• High production rates; and
• Relatively inflexible in accommodating product changes.
FIXED AUTOMATION
 Types of Automation System
PROGRAMMABLE AUTOMATION
In this the production equipment is designed with the capability to
change the sequence of operations to accommodate different
product configurations. The operation sequence is controlled by a
program, which is a set of instructions coded so that the system can
read and interpret them. New programs can be prepared and
entered into the equipment to produce new products.

Some of the features that characterize programmable automation

are:
• High investment in general-purpose equipment;
• Low production rates relative to fixed automation;
• Flexibility to deal with changes in product configuration; and
• Most suitable for batch production.
PROGRAMMABLE AUTOMATION
 Types of Automation System
FLEXIBLE AUTOMATION
It is an extension of programmable automation. A flexible automated
system is one that is capable of producing a variety of products (or
parts) with virtually no time lost for changeovers from one product
to the next. There is no production time lost while reprogramming
the system and altering the physical setup (tooling, fixtures, and
machine setting). Consequently, the system can produce various
combinations and schedules of products instead of requiring that
they be made in separate batches.
The features of flexible automation can be summarized as follows:
• High investment for a custom-engineered system.
• Continuous production of variable mixtures of products.
• Medium production rates.
• Flexibility to deal with product design variations.
Types of Automation System
 Benefits of Automation
 Lower operating costs
 Improved worker safety
 Reduced factory lead times
 Faster ROI
 Ability to be more competitive
 Increased production output
 Consistent and improved part production and quality
 Smaller environmental footprint
 Reduce need for outsourcing
 Optimal utilization of floor space / Resources
 Easy integration
 Maximize labor
 Disadvantages of Automation
• Less versatility – by having a machine that can perform a
certain task limits to the flexibility and variety of tasks that an
employee could do.
• More pollution – different types of machines operate using
motor which may require gases or chemicals in order to
operate. This can cause an increase in pollution in the
workplace.
• Large initial investment – automated machines can be one of
the most costly operating costs for a company. With
automated machines running anywhere between thousands
and millions of dollars depending on the type and degree of
automation.
 Disadvantages of Automation
• Increase in unemployment – by increasing the amount of
automation, there are less employees required causing high
unemployment rates.
• Unpredictable costs – there can be several unpredictable
costs that may exceed the actual cost saved by the
automation itself. Some of these costs could include research
and development costs of automating a process, preventative
maintenance costs, and the cost of training employees to
operate automated machines.