OPERATIONS MANAGEMENT ,ASSIGNMENT -3 Atul Kumar 19MBA1750 1

MBA SECTION -2H

Assignment No. 3

Course Name & Code:Operation Management BAT-666

MBA Sem/Year: IInd Sem Batch: 2019-2021
Date of Submission:April 7, 2020

Submitted To: Submitted By:

Faculty Name: Prof.Navjit Sir Student Names :Atul Kumar

UID (19MBA1750)

Max. Marks: ……………………………. Batch: 2019-2021

Marks Obtained: ………………………..
Faculty Signature……………………….
Date: ……………………….

• Acknowledgement by the student after viewing the evaluated copy.

Student Name:
…………………………….
Signature: …….……………….
Date: …………………..

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OPERATIONS MANAGEMENT ,ASSIGNMENT -3 Atul Kumar 19MBA1750 2

1. Explain the important elements of JIT manufacturing system.

Answer - The Just-in-Time manufacturing system is a management strategy

that aligns raw-material orders from suppliers directly with production
schedules. Companies employ this inventory strategy to increase efficiency and
decrease waste by receiving goods only as they need them for the production
process, which reduces inventory costs. This method requires producers to
forecast demand accurately.

The JIT inventory system contrasts with just-in-

case strategies, wherein producers hold sufficient inventories to have enough
product to absorb maximum market demand.

Example: DELL

Dell has also leveraged JIT principles to make its manufacturing process a
success. Dell’s approach to JIT is different in that they leverage their suppliers
to achieve the JIT goal. They are also unique in that Dell is able to provide
exceptionally short lead times to their customers, by forcing their suppliers to
carry inventory instead of carrying it themselves and then demanding (and
receiving) short lead times on components so that products can be simply
assembled by Dell quickly and then shipped to the customer.

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Important Elements of Just-In-Time manufacturing system

❖ Just-In-Time manufacturing: This element if JIT which focuses on the

production system to make this possible . Many aspects of JIT
manufacturing combine to provide a performance advantage.
❖ Total Quality Management: It is an Integrating effort designed to
improve quality performance at every level of production.
❖ Respect For People : This concept rests on the Philosophy that human
resources are the most vital and essential part of JIT Philosophy.

Continuous improvement Through:

• Product Design :Attacking fundamental problems and anything that does

not add value to the product.
• Production Planning :Devising systems to identify production and allied
problems.

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• Simplicity in supply chain integration: Simple systems are simple &

easy to understand, easily manageable and the chances of going wrong
are very low.
• A product oriented Inventory Management: oriented layout for less
time spent on materials and parts movement.
• Total Quality control: at source to ensure every worker is solely
responsible for the quality of their own produced output.

Waste minimization is one of the primary objectives of Just In Time system.

This needs effective inventory management throughout the whole supply chain.
Initially, a manufacturing entity will seek to reduce inventory and enhance
operations within its own organization. In an attempt to reduce waste attributed
to ineffective inventory management, SIX principles in relation to JIT have
been stated by ‘Schniededans’ and they are:

1. Reduce buffer inventory.

2. Try for zero inventory.
3. Search for reliable suppliers.
4. Reduce lot size and increase the frequency of orders.
5. Reduce purchasing cost.
6. Improve material handling.

2. What is Quality ? Dimensions of Quality.

Answer – Meaning & Definition

❖ The ISO 8402-1986 standard defines Quality as:

“The totality of features and characteristics of a product or service that

bears its ability to satisfy stated or implied needs.”

❖ Six Sigma: "Number of defects per million opportunities."

❖ Genichi Taguchi, with two definitions:
a. "Uniformity around a target value." The idea is to lower the standard
deviation in outcomes, and to keep the range of outcomes to a certain
number of standard deviations, with rare exceptions.

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b. "The loss a product imposes on society after it is shipped." This

definition of quality is based on a more comprehensive view of the
production system

In other words “In business, engineering, and manufacturing, quality has a

pragmatic interpretation as the non-inferiority or superiority of something; it's
also defined as being suitable for its intended purpose (fitness for purpose)
while satisfying customer expectations. Quality is a perceptual, conditional,
and somewhat subjective attribute and may be understood differently by
different people.[1][2] Consumers may focus on the specification quality of a
product/service, or how it compares to competitors in the marketplace.
Producers might measure the conformance quality, or degree to which the
product/service was produced correctly. Support personnel may measure quality
in the degree that a product is reliable, maintainable, or sustainable.”

Features and Characteristics

• Quality, measuring how well a product or service conforms to specifications;

• speed (or response time), measuring the delay between customer request
and customer receipt of a product or service;
• dependability, measuring how consistently a product or service can be
delivered to meet customer expectation;
• flexibility, measuring how quickly the business can adapt to a variety of
market changes; and
• cost, measuring the resources (and by extension, financed) required to plan,
deliver, and improve the finished good or service.

Example : Apple Inc.

Many companies, like Apple, tend to focus on producing the highest quality
products they can. Steve Jobs is famous for says, “We won’t ship junk” after he
was asked why the price of Apple computers was so high. Apple’s strategy is to
ship and sell high quality products to its customers. This creates higher
customer loyalty and satisfaction as well as returning revenue. If customers are
satisfied with their current Apple device, they will probably buy another one in
the future.

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Dimensions of Quality
In order to develop a more complete definition of quality, we must consider some
of the key dimensions of a quality product or service.

8 Dimensions of
Quality

Dimension 1: Performance
Does the product or service do what it is supposed to do, within its defined
tolerances?

Performance is often a source of contention between customers and suppliers,

particularly when deliverables are not adequately defined within specifications.

The performance of a product often influences profitability or reputation of the

end-user. As such, many contracts or specifications include damages related to
inadequate performance.

Dimension 2: Features
Does the product or services possess all of the features specified, or required for
its intended purpose?

While this dimension may seem obvious, performance specifications rarely

define the features required in a product. Thus, it’s important that suppliers
designing product or services from performance specifications are familiar with
its intended uses, and maintain close relationships with the end-users.

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Dimension 3: Reliability
Will the product consistently perform within specifications?

Reliability may be closely related to performance. For instance, a product

specification may define parameters for up-time, or acceptable failure rates.

Reliability is a major contributor to brand or company image, and is considered

a fundamental dimension of quality by most end-users.

Dimension 4: Conformance
Does the product or service conform to the specification?

If it’s developed based on a performance specification, does it perform as

specified? If it’s developed based on a design specification, does it possess all
of the features defined?

Dimension 5: Durability
How long will the product perform or last, and under what conditions?

Durability is closely related to warranty. Requirements for product durability

are often included within procurement contracts and specifications.

For instance, fighter aircraft procured to operate from aircraft carriers include
design criteria intended to improve their durability in the demanding naval
environment.

Dimension 6: Serviceability
Is the product relatively easy to maintain and repair?

As end users become more focused on Total Cost of Ownership than simple
procurement costs, serviceability (as well as reliability) is becoming an
increasingly important dimension of quality and criteria for product selection.

Dimension 7: Aesthetics
The way a product looks is important to end-users. The aesthetic properties of a
product contribute to a company’s or brand’s identity. Faults or defects in a
product that diminish its aesthetic properties, even those that do not reduce or
alter other dimensions of quality, are often cause for rejection.

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Dimension 8: Perception
Perception is reality. The product or service may possess adequate or even
superior dimensions of quality, but still fall victim to negative customer or
public perceptions.

As an example, a high quality product may get the reputation for being low
quality based on poor service by installation or field technicians. If the product
is not installed or maintained properly, and fails as a result, the failure is often
associated with the product’s quality rather than the quality of the service it
receives.

Conclusion
It should be obvious from the discussion above that the individual dimensions
of quality are not necessarily distinct. Depending on the industry, situation, and
type of contract or specification several or all of the above dimensions may be
interdependent.

When designing, developing or manufacturing a product (or delivering a

service) the interactions between the dimensions of quality must be understood
and taken into account.

While these dimensions may not constitute a complete list of relevant

dimensions, taking them into consideration should provide us with a better
understanding of the slippery concept of quality.

Continued…………

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3. Discuss the elements of TQM.

Answer – Meaning

Total Quality Management is defined as a customer-oriented process and aims

for continuous improvement of business operations. It ensures that all allied
works (particularly work of employees) are toward the common goals of
improving product quality or service quality, as well as enhancing the
production process or process of rendering of services. However, the emphasis
is put on fact-based decision making, with the use of performance metrics to
monitor progress.

Elements of TQM

As every building requires a foundation, every business philosophy requires

some value to inform its approach to the world and its own organization. TQM
institutes three foundational elements to its metaphorical building that foster
productive attitudes and atmosphere

1. Ethics

Ethics is the study of right and wrong, and TQM places importance on
understanding what is the ethical thing to do, both as an organization and as
individuals in the context of the organization. As the organization recognizes
the need to operate in a morally good way, it is expected to institute a clear code
of conduct.

2. Integrity

While ethics is more concerned with knowing what is right, integrity focuses on
acting according to the company values in a honest and open environment.
Office drama, rumors or other forms of interpersonal hostility are to be frowned
upon.

3. Trust

The successful implementation of TQM requires a relationship of trust among

the individuals that are part of the organization. In order for teams to be able to

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improve and provide a high quality product or service to the customers, they
need to work together in an atmosphere of trust. If that requirement is met,
problem recognition, problem analysis, problem solution and decision making
all become easier.

4. Training

Training is essential for employees to be able to achieve high levels of quality

and efficiency. Since TQM is an all-encompassing approach to business
management, it requires all participants to receive the needed training from their
superiors. This training should cover how to be as valuable to the organization
and its customers as possible.

5. Teamwork

Achieving common goals and providing the highest level of customer service
requires teams to work efficiently together. Individuals should know how to
work together, and the team environment should facilitate open discussions
about both problems and solutions. There are 3 types of teams in a TQM
organization: the temporarily formed Quality Improvement Teams, Problem
Solving Teams, and the more organic and long-lasting Natural Work Group
Teams.

6. Leadership

While training and teamwork are essential for making member prepared to be a
valuable part of an organization, leadership has a crucial role to play in
harnessing that potential. All supervisors and managers should understand the
TQM philosophy and methodology, and should be able to implement them
while clearly transmitting values, strategies, direction and goals to the teams
they are responsible for.

7. Communication

The all-encompassing mortar of the TQM building is communication. It starts

from the foundation, surrounds the bricks and reaches the roof. The only way to
continually improve and reach optimal performance is for information and ideas

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to flow freely. Communication should be ever-present in the organization, but it

should also involve all external entities like customers, partners, suppliers and
stakeholders.

8. Recognition

This element involves the positive feedback and encouragement that both
achievements and suggestions should result within  the organization. All
supervisors should look for and detect contributions, and should provide
recognition whenever they are made. This boosts both morale and performance.
It gives member of the organization motivation to continue to participate
productively in the TQM implementation.

Benefits of Total Quality Management

The benefits arising from the implementation of a Total Quality Management in

an organization are:

• This will increase the awareness of quality culture within the

organization.
• A special emphasis on teamwork will be achieved.
• TQM will lead to a commitment towards continuous improvement.

Conclusion

A successful TQM implementation requires a significant training for the

employees involved in it. Since the training program can take employees
away from their day to day work, this eventually can have a negative short-
term impact. Also, since Total Quality Management tends to result in a
consistent series of incremental changes, it can lead to creating an
unpleasant response from those employees who prefer existing system, or
employees who are afraid of losing their jobs because of it. Total Quality
Management works best in an environment where there are strong support
and commitment from the management.

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4. Explain the various supply chain strategy used in Supply Chain

Management .

Answer- Meaning: Supply Chain Management

Supply chain management (SCM) is the broad range of activities required to

plan, control and execute a product's flow from materials to production to
distribution in the most economical way possible.

SCM encompasses the integrated planning and execution of processes required

to optimize the flow of materials, information and capital in functions that
broadly include demand planning, sourcing, production, inventory
management and logistics or storage and transportation. Companies use both
business strategy and specialized software in these endeavors to create a
competitive advantage.

Supply Chain strategies used in SCM

The objective of supply network or SCM is to maximize the overall value.

Value is correlated to supply chain profitability. Here, profitability is the
difference between the total revenue generated from the customer and the
overall supply chain costs.
Strategies and designing of the supply chain include:

• “Deciding on the supply chain structure and the activities each stage
of the supply chain will perform” . This statement refers to design a
systematic procedure and approaching the operation with required

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planning ,Scheduling and Routing the flow of operation and their

reachability to predefined place.
• “Selecting a location and capacities of facility”. Emergence of global
markets enhanced the emergence of global firms which have plants in
different countries and implement an integrated management style. Due
to the intensive competition in global markets, manufacturing
performance is conceived as an important strategic weapon. Facility
location, capacity acquisition and technology selection decisions
constitute means to implement manufacturing strategies.
• “Deciding on the products that are to be made and the location
where they need to be stored”. Here comes the role of marketing
strategy of STP and then designing the procurement and material holding
unit known as inventory. In this process it is decided by the marketer that
to whom the product tends to reach.
• “Choosing the modes of transportation and the source from where
the information is to be collected”. At the end the materials being held
in the inventory is a cost to the company so, it is very important to see
that it does not remains there for a long time period .Carrying the
products to distribute it to target market it becomes very important to
choose a convenient and cost effective mode of transportation.

Supply chain design decisions are long term projects and are expensive to
reverse; so the manager must take into account the market uncertainty.

Example : Coca Cola Company

The Coca-Cola Company .

Main makers, marketers and distributors of drink concentrates and non-
alcoholic syrups. The main office is located in Atlanta, GA but their products
are distributed to virtually every country in the world. Their preparation,
distribution and transportation logistics are in line with a segmentation strategy
for their customers when it comes to the size and presentation of their
products. Aside from having an extremely successful supply chain, Coca-
Cola participates in sponsorships, partnerships, and alliances; thus
creating a great management and marketing of their products.

5. Describe the operation planning and scheduling system.

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Answer - Operations management, also called “operations planning” or

“operations scheduling,” is a term assigned to the planning of production in all
aspects, from workforce activities to product delivery. While this type of
planning is almost exclusively seen in manufacturing environments, many of
the techniques are used by service-oriented businesses. Simple to implement,
operations management can be applied using nothing more than a spreadsheet
program.

Operations management is primarily concerned with the efficient use of

resources. While it is sometimes referred to as production planning and
employs many of the same techniques, the primary distinguishing
characteristic is that production planning is narrowly focused on the actual
production whereas operations management looks at the operation as a whole.

Operations planning and scheduling systems concern with the volume and
timing of outputs, the utilization of operations capacity at desired levels for
competitive effectiveness. These systems must fit together activities at various
levels, form top to bottom, in support of one another, as shown in the following
fig. Note that the time orientation ranges from long to short as we progress from
top to bottom in the hierarchy. Also, the level of detail in the planning process
ranges from broad at the top to detail at the bottom.

Components of Operations Planning and Scheduling System:

❖ THE BUSINESS PLAN

The business plan is a statement of the organization’s overall level of

business activity for the coming six to eighteen months, usually
expressed in terms of outputs (in volume of sales) for its various product
groups, a set of individual products that share or consume common
blocks of capacity in the manufacturing process. It also specifies the
overall inventory and backlog levels that will be maintained during the
planning period. The business plan is an agreement between all
functional areas finance, production, marketing, engineering, R & D
about the level of activity and the products they are committed to
support. The business plan is not concerned with all the details and
specific timing of the actions for executing the plan. Instead, it

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determines a feasible general posture for competing to achieve its major

goals. The resulting plan guides the lower-level, more details decisions.

❖ AGGREGATE PRODUCTION OUTPUT PLANNING

The process of determining output levels of product groups over the

coming six to eighteen months on a weekly or monthly basis. It
identifies the overall level of outputs in support of the business plan.
The plan recognizes the division’s existing fixed capacity and the
company’s overall policies for maintaining inventories and backlogs,
employment stability and subcontracting.

❖ AGGREGATE CAPACITY PLANNING

It is the process of testing the feasibility of aggregate output plans and

evaluating overall capacity utilization. A statement of desired output is
useful only if it is feasible. Thus, it addresses the supply side of the
firm’s ability to meet the demand. As for aggregate output plans, each
plant, facility, or division requires its own aggregate capacity plan.
Capacity and output must be in balance, as indicated by the arrow
between them in Fig. 5.3. A capacity plan translates an output plan into
input terms, approximating how much of the division’s capacity will be
consumed. Although these basic capacities are fixed, management can
manipulate the short-term capacities by the ways they deploy their work
force, by subcontracting, or by using multiple work shifts to adjust the
timing of overall outputs. As a result, the aggregate planning process
balances output levels, capacity constraints, and temporary capacity
adjustments to meet demand and utilize capacity at desired levels during
the coming months. The resulting plan sets limits on the master
production schedule.

❖ MASTER PRODUCTION SCHEDULING

MPS is a schedule showing week by week how many of each product

must be produced according to customer orders and demand forecasts.
Its purpose is to meet the demand for individual products in the product

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group. This more detailed level of planning disaggregates the product

groups into individual products and indicates when they will be
produced. The MPS is an important link between marketing and
production. It shows when incoming sales orders can be scheduled into
production, and when each shipment can be scheduled for delivery. It
also takes into account current backlogs so that production and delivery
schedules are realistic.

Continued…………..

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❖ Operations planning and scheduling system

❖ RESOURCE REQUIREMENT PLANNING

Resource requirement planning (rough-cut capacity planning) is the

process of testing the feasibility of master production schedule in terms
of capacity. This step ensures that a proposed MPS does not
inadvertently overload any key department, work centre, or machine,
making the MPS unworkable.

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❖ MATERIAL REQUIREMENT PLANNING

Material requirement planning (MRP) is a system of planning and

scheduling the time phased material requirements for releasing materials
and receiving materials that enable the master production schedule to be
implemented. Thus, the master production schedule is the driving force
for material requirements planning. MRP provides information such as
due dates for components that are subsequently used for shop floor
control. Once this information is available, it enables managers to
estimate the detailed requirements for each work centers.

❖ CAPACITY REQUIREMENT PLANNING

Capacity requirement planning (CRP) is an iterative process of

modifying the MPS or planned resources to make capacity consistent
with the production schedule. CRP is a companion process used with
MRP to identify in detail the capacity required to execute the material
requirement planning. At this level, more accurate comparisons of
available and needed capacity for scheduled workloads are possible
.
❖ SHOP FLOOR CONTROL

Shop floor control involves the activities that execute and control shop
operations namely loading, sequencing, detailed scheduling and
expediting jobs in production. It coordinates the weekly and daily
activities that get jobs done. Individual jobs are assigned to machines
and work centers (loading), the sequence of processing the jobs for
priority control is determined, start times and job assignments for each
stage of processing are decided (detailed scheduling ) and materials and
work flows from station to station are monitored and adjusted
(expediting).

❖ LOADING

Each job (customer order) may have its unique product specification
and, hence, it is unique through various work centers in the facility. As
new job orders are released, they are assigned or allocated among the

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work centers, thus establishing how much of a load each work centre
must carry during the coming planning period. This assignment is
known as loading (sometimes called shop loading as machine loading).

❖ SEQUENCING

This stage establishes the priorities for jobs in the queues (waiting lines)
at the work centers. Priority sequencing specifies the order in which the
waiting jobs are processed; it requires the adoption of a priority
sequencing rule.

❖ DETAILED SCHEDULING

Detailed scheduling determines start times, finish times and work

assignments for all jobs at each work centre. Calendar times are
specified when job orders, employees, and materials (inputs), as well as
job completion (outputs), should occur at each work centre. By
estimating how long each job will take to complete and when it is due,
schedulers can establish start and finish dates and develop the detailed
schedule.

❖ EXPEDITING

Expediting is a process of tracking a job’s progress and taking special

actions to move it through the facility. In tracking a job’s progress,
special action may be needed to keep the job moving through the facility
on time. Manufacturing or service operations disruptions-equipments
breakdowns, unavailable materials, last-minute priority changes, require
managers to deviate from plans and schedules and expedite an important
job on a special handling basis.

❖ INPUT/OUTPUT CONTROL

Input/output control related to the activities to monitor actual versus

planned utilization of a work centre’s capacity. Output plans and
schedules call for certain levels of capacity at a work centre, but actual

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utilization may differ from what was planned. Actual versus planned
utilization of the work centre’s capacity can be monitored by using
input-output reports and, when discrepancies exist, adjustments can be
made.

Conclusion

The planning system must enable production operations to fulfil

the goals set in the business plan. Modern and effective planning
approaches have increased demands for a higher level of
knowledge and professionalism. Planning is carried out as a well-
established professional feature, supported by properly trained
personnel, which is equipped with appropriate software systems.

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