PRODUCTION AND OPERATION MANAGEMENT MB0028, SMU-MBA, MBA

ASSINGNMENT -1

MB0028

PRODUCTION AND OPERATION MANAGEMENT

Q.1 - Explain what is meant by capital productivity?

Ans - Capital Productivity

Capital deployed in plant, machinery, buildings and the distribution system as well as working capital is components of the cost of manufacture and need to be productive. Demand fluctuations, uncertainties of production owing to breakdowns and inventories being created drag the productivity down. Therefore, strategies are needed to maximize the utilization of the funds allotted towards capital. Adapting to new technologies, outsourcing and balancing of the workstations to reduce the proportion of idle times on equipments are the focus of this section.

1 .Outsourcing Strategies:

When capacity requirements are determined it will be easy to determine whether some goods or services can be outsourced so that the capital and manpower requirements can be reduced and the available capacities are used to augment core competencies thus reducing the cost of the product or service to the customer. However, the following factors may restrict outsourcing

(a) Lack of expertise – the outsourced firm may not have the requisite expertise to do the job required

(b) Quality considerations - Loss of control over operations may result in lower quality. This is a risk that the firm gets exposed to.

(c) Nature of demand – When the load is uniform and steady, it may not be worthwhile to outsourcing. Absence of supervision and control may be a hindrance to meet any urgent requirements of the customer.

(d) Cost - When the fixed costs that go along with making the product do not get reduced considerably

2. Methods Improvement

Methods Improvement starts with Methods analysis - the focus of this process is – how a job is done breaking it down to elemental tasks so that they are amenable for analysis.. This is done for both running jobs and new jobs. For a new job, the description becomes the input for analysis. For current jobs, the analyst depends on observations, records and suggestions of the persons involved in the job. When improved methods are suggested, they are implemented and records created for assessing the consequences of the methods improvement procedures. The analyst should involve all concerned persons in the process so that acceptance becomes possible and opportunities open up for further improvements.

3. Balancing of Workstations:

Assembly lines necessitate out stringing together workstations which carry out operations in a sequence so that the product gets completed in stages. Since the workflow has to be uniform and operations may different periods for completion the necessity of Line Balancing is felt. Capacities at workstations and the workforce to man are so adjusted that a product in the process of assembly almost approximately the same amount of time.

4.Rationalization of Packaging Methods:

With logistics becoming an important function of the supply chain and outsourcing becoming the norm, packaging has become an important aspect, packaging has become important. Space is at a premium and therefore stacking and storing have to more scientific. Movements inside the premises from one location to another location are being done with automated systems and they need that the packaging systems are designed for safe transit, continuous monitoring – both for quantities and operations.

5. Quality Circles:

Kaoru Ishikawa is generally considered to have promoted the concept of Quality Circles. It is well known that he is the originator of fishbone diagrams to identify the root cause of any problem. The causes for the existence of a problem are classified as pertaining to the material, processes or method or any factor that goes into production. The matter is further investigated and pursued till the exact cause is determined. Quality circles use these principles in solving problems. The teams select projects selected on the above basis and implement actions to achieve improvement in the processes with a view to improve quality.