POM COMPREHENSIVE EXAMINATION POINTERS

1. Factors that Affect Productivity

a.      Money and Resources

                                                              i.      Capital

                                                            ii.      Raw Materials

                                                          iii.      Scrap rates

b.      Quality

                                                              i.      Raw Materials

                                                            ii.      Finish Product

c.       Processes

                                                              i.      Standardization

                                                            ii.      Safety

                                                          iii.      Technology

                                                           iv.      Use of internet

d.      Leadership

                                                              i.      Management

                                                            ii.      Incentive plans that reward productivity

e.      Time and Management

                                                              i.      Computer viruses

                                                            ii.      5S, Searching for lost or misplaced items

                                                          iii.      Design of the workspace

f.        Human Resource

                                                              i.      New workers

                                                            ii.      Shortage of IT workers

                                                          iii.      Layoffs

                                                           iv.      Labor turnover

2. Objectives of Product/Service Design

	Manufacturing	Service
Output	Tangible	Intangible
Uniformity in input and output	High	Low
Opportunity to correct quality problems before delivery to customers	High	Low
Customer contact	Low	High
Labor content	Low	High
Measurement of productivity	Easy	Difficult

3. Difference Between Service Design and Product Design or

Manufacturing Operation vis-à-vis Service Operation

a.      Types of Processing System

b.      Continuous – very high volume of non-discrete goods

c.       Repetitive/ assembly line (semi-continuous) – high volume of standardized good or services

d.      Batch (intermittent) – moderate volume

e.      Job shop (intermittent) – small scale

f.        Projects – complex jobs consisting of unique, non-repetitive sets of activities with limited life spans

4. Definition/Dimensions of Quality

Quality is the ability of a product or service to consistently meet or exceed customer expectations. It can refer to a grade of a product, materials, workmanship or special features

Quality management – to manage all aspects of the organization in order to excel in all dimensions that are important to customers

2 aspects: features that meet customer needs and fewer defects

Determinants of quality

1)      Design

2)      How well it conforms to the design

3)      Ease of use

4)      Service after delivery

Costs of quality

1)      Prevention cost – prevent defects from occuring

2)      Appraisal cost – inspection, testing

3)      Internal failure cost – during production

4)      External failure cost – after delivery to customer

5)      Opportunity cost – to identify poor quality products after they occur but before shipment to customers

Dimensions:

a)      Performance – main characteristics of a product

b)      Special features – extra characteristics

c)      Conformance –how well a product or service corresponds to the customer’s expectations

d)      Reliability – consistency of performance

e)      Durability – useful life of the product

f)       Perceived quality – indirect evaluation of quality

g)      Service after sale – handing of complaints or checking on customer satisfaction

5. Importance of Capacity Planning

a.      Impacts ability to meet future demands

b.      Affects operating costs

c.       Major determinant of initial costs

d.      Involves long-term commitment

6. Ways to Define and Measures of Capacity

a)      Design capacity – maximum output rate or service capacity an operation, process or facility is designed for

b)      Effective capacity – design capacity minus allowances such as personal time, maintenance and scrap

c)      Actual output – rate of output actually achieved (cannot exceed effective capacity)

Efficiency = actual output/ effective capacity

Utilization = Actual output / Design capacity

7.  Types of Facility Layout /  Objectives of Facility layout

Importance:

a.      Require substantial investments of money and effort

b.      Involve long-term commitments

c.       Has a significant impact on the cost and efficiency of short-term operations

Lay-out types:

a)      Product Layouts – used to achieve smooth and rapid flow of large volume of products or customers through a system, highly standardized products or services that require highly standardized processing operations, advantages: high rate of output, low unit cost due to high volume, labor specialization, low material handling cost per unit, high utilization of labor and equipment, disadvantages: creates dull repetitive job, little opportunity for advancement, system is fairly inflexible, highly susceptible to shutdowns, etc.

b)      Process Layouts – designed to facilitate processing items or providing services that represent a variety of processing requirements, features departments or other functional groupings in which similar kinds of activities are performed. Advantages: systems can handle a variety of processing requirements, the system is not particularly vulnerable to equipment failures, general-purpose equipment is often less costly and is easier and less costly to maintain, it is possible to use individual incentive systems Disadvantages: In-process inventory costs can be high if batch processing is used in manufacturing systems, routing and scheduling pose continual challenges, equipment utilization rates are low, material handling is more costly per unit, result in higher supervisory costs, higher unit costs due to special attention necessary for each product or customer & low volumes produced, accounting, inventory control, & purchasing are much more involved

c)      Fixed position Layouts - The item being worked on remains stationary, and workers, materials, and equipment are moved about as needed, attention is focused on timing of material and equipment deliveries so as not to clog up the work site and to avoid having to relocate materials and equipment around the work site; Advantages: Very high mix and product flexibility, product or customer is not moved, high variety of tasks for staff; Disadvantages: Very high unit costs, scheduling space and activities can be difficult

d)      Hybrid layouts

8.  Understanding Line Balancing

The process of assigning tasks to workstations in such a way that the workstations have approximately equal time requirements.; This minimizes the idle time along the line and results in a high utilization of labor and equipment.

9.            Behavioral Approaches to Job Design

Deal with improving the worker’s attitude towards their jobs.  Over the last few years advancement has been made to empower employees by giving the worker more responsibility by giving the worker more responsibility for their work

Theory X – worker who do not like to work and have to be controlled and punished

Theory Y – workers who enjoy their work and is committed in doing a good job

Theory Z – workers who are empowered to control their work will develop an ownership attitude

Job enlargement – giving a worker a larger portion of the total task by increasing the variety of skills

Job rotation – worker periodically exchange jobs

Job enrichment – increasing responsibility for planning and coordination tasks along with other responsibilities

         10.  Differentiating Features in the Design of Production System

·         Degree of Standardization (Highly Standardized vs highly customized)

·         Type of Operation (project, job shop, batch, repetitive, continuous)

·         Manufacturing vs Service

  12.  Factors/measures to enhance Success of Business

         Organization

• People – those who make up the organization
• Purpose – a reason for organizing and working together
• Processes – activities which the people undertake to fulfill their purpose
• Physical Resources – a place to work, the right equipment, money to pay the bills and the people who work there
• Customers – people outside the organization who are willing to pay money in return for the products and services the organization provides; for government organizations taxpayers are the customers; many nonprofits depend on contributions from donors who believe in the value of what the organization is doing.

  13.  Understanding POM Concept.

Introduction

The very essence of any business is to cater needs of customer by providing services and goods, and in process create value for customers and solve their problems. Production and operations management talks about applying business organization and management concepts in creation of goods and services.

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.

Importance of Production Function and Production Management

Successful organizations have well defined and efficient line function and support function. Production comes under the category of line function which directly affects customer experience and there by future of organization itself.

Aim of production function is to add value to product or service which will create a strong and long lasting customer relationship or association. And this can be achieved by healthy and productive association between Marketing and Production people. Marketing function people are frontline representative of the company and provide insights to real product needs of customers.

An effective planning and control on production parameters to achieve or create value for customers is called production management.

Operations Management

As to deliver value for customers in products and services, it is essential for the company to do the following:

1. Identify the customer needs and convert that into a specific product or service (numbers of products required for specific period of time)
2. Based on product requirement do back-ward working to identify raw material requirements
3. Engage internal and external vendors to create supply chain for raw material and finished goods between vendor → production facility → customers.

Operations management captures above identified 3 points.

Production Management v/s Operations Management

A high level comparison which distinct production and operations management can be done on following characteristics:

• Output: Production management deals with manufacturing of products like (computer, car, etc) while operations management cover both products and services.
• Usage of Output: Products like computer/car are utilized over a period of time whereas services need to be consumed immediately
• Classification of work: To produce products like computer/car more of capital equipment and less labour are required while services require more labour and lesser capital equipment.
• Customer Contact: There is no participation of customer during production whereas for services a constant contact with customer is required.

Production management and operations management both are very essential in meeting objective of an organization.

 

  15.  Quality Evolution from Less Progressive to Highly

         Progressive or from Past Practices to Present Practices

  16.  Factors Affecting Location Decision

a)      Regional factors – location of raw materials, markets, labor factors and climate and taxes

b)      Community considerations – quality of life, services, attitudes, taxes, environmental regulations, utilities, developer support

c)      Multiple Plant Strategy – product plant strategy, market are plant strategy. Process plant strategy

d)      Site-related factors – land, transportation, environmental, legal

  17.  EOQ and ROP concepts

Economic order quantity (EOQ) answers the question of how much to order. It is used to determine what the optimal order size is or how much to order that minimizes the total cost (carrying and ordering costs). The assumptions of the basic EOQ model are (1) only one product is involved, (2) annual demand requirements are known, (3) demand is spread evenly throughout the year so that demand rate is reasonably constant, (4) lead time does not vary, (5) each order is received in a single delivery, and (6) there are no quantity discounts.

Reorder Point (ROP) answers the question of when to order. This occurs when the quantity on hand drops to a pre-determined amount. The determinants of ROP are:

   (a) Rate of demand

   (b) Lead-time*

   (c) Extent of demand and/or lead-time variability*

  (d) Degree of stockout risk acceptable to management

  18.  Aggregate Planning concept, procedure and techniques

Aggregate planning establishes general levels of employment, output and inventories for periods of 2 to 12 months. It begins with an overall forecast for the planning horizon and ends with preparations for applying the plans to specific products and services. The essence of aggregate planning is the aggregation of products or services into one “product” or service. This permits planners to consider overall levels of employment and inventories without having to become involved with specific details that are better left to short-range planning. The purpose of aggregate planning is to develop a feasible production plan on an aggregate level that achieves a balance of expected demand and supply. Moreover, planners are usually concerned with minimizing the cost of the production plan.

Procedures and techniques in aggregate planning

1) Determine demand for each period

2) Determine capacities for each period

3) Identify policies that are pertinent

4) Determine units costs

5) Develop alternative plans and costs

6) Select the best plan that satisfies objectives. (Otherwise, return to step 5)

Planning Techniques:

Informational Techniques

a) Spreadsheet – its approach is heuristic or thru trial and error; intuitively appealing, easy to understand; solution not necessarily optimal

Mathematical Techniques

b) Linear Programming – its approach is optimizing resources; Computerized; linear assumptions not always valid

c) Linear decision rules – optimizing technique that seeks to minimize combined cost, using a set of cost-approximating functions to obtain a single quadratic equation

d) Simulation – its solution approach is heuristic or thru trial and error; computerized models can be examined under a variety of conditions

  19.  Understanding JIT and its goals

Is used to refer to a production system in which both the movement of goods during production and deliveries are carefully timed so that at each step of the process the next batch arrives for process just as the preceding batch is completed. Making “only what is needed, when it is needed, and in the amount needed.”

JIT approach was developed at the Toyota Motors company by Taiichi Ohno and several of his colleagues. They regard scrap and rework as WASTE and inventory as an evil because it takes up space and ties up resources.

The ultimate goal of JIT is a balanced system; that is, one that achieves a smooth, rapid flow of materials through the system. The idea is to make the process time as short as possible by using resources in the best possible way. The degree to which the overall goal is achieved depends on how well certain supporting goals are achieved. The supporting goals are: (a) Eliminate disruptions, (b) Make the system flexible, (c) Reduce setup times and lead times, (d) Minimize inventory, and (e) Eliminate waste.

Just in time building blocks

a) Product Design - Three elements of product design are key to JIT systems:

   (1) Standard parts,

   (2) Modular Design, and

   (3) Quality. The first two elements refers to simplicity and speed. Standard parts means that workers have fewer parts to deal with, and training times and costs are reduced. Modular design is an extension of standard parts. Modules are cluster of parts treated as a single unit. Quality is crucial to JIT systems because poor quality can create major disruptions

b) Process Design – Seven aspects of process design are particularly important for JIT systems:

   (1) Small lot sizes

   (2) Setup time reduction

   (3) Manufacturing cells

   (4) Limited work in process 

   (5) Quality improvement

   (6) Production flexibility

   (7) Little inventory storage

c) Personnel Organizational Elements – There are five elements of personnel and organization that are particularly important for JIT systems:

   (1) Workers as assets

   (2) Cross-trained workers

   (3) Cost accounting

   (4) Leadership/ project management

d) Manufacturing Planning and Control – There are five elements of manufacturing planning and control that are particularly important for JIT systems:

   (1) Level loading

   (2) Pull systems

   (3) Visual systems

   (4) Close vendor relationships

   (5) Reduced transaction processing

  20.  PERT and CPM

Program Evaluation and Review Technique (PERT) and Critical Path Method (CPM) help managers to plan the timing of projects involving sequential activities. PERT/CPM charts identify the time required to complete the activities in a project, and the order of the steps. Each activity is assigned an earliest and latest start time and end time. Activities with no slack time are said to lie along the critical path–the path that must stay on time for the project to remain on schedule.

Expected Completion Time

A strength of PERT/CPM charts is their ability to calculate exactly how long a project will take. PERT/CPM provides managers with a range of time in which the project should be completed, based on the total of all minimum and maximum time limits for all activities. This gives companies a number of advantages, such as the ability to tell customers exactly when their orders will be filled, or to know exactly when to order new supplies. The expected completion time of the project is based on ideal situations, however, and does not take into account the possibility of unforeseen events. The expected completion time of all subsequent activities and the project as a whole can become skewed when things go wrong, which can cause problems if the company has made plans that rely on the timely completion of the project. Another weakness of PERT/CPM is that the technique relies on past data and experience to formulate completion time predictions. New companies may not have any past experience to lean on, putting them at a disadvantage.

Efficiency

Businesses can share PERT/CPM charts among all key employees, letting employees at each station know exactly when they will be required to begin work processes, where the required inputs will come from, where the outputs must go, and when their task must be completed. This can help dispersed employees to operate efficiently by having a common understanding of the expected work flow. When things go wrong, however, the very thing that encouraged efficiency might suddenly cause confusion. When a project is held up due to an unforeseen circumstance, workers at all subsequent stations must delay their own progress while explaining to subsequent stations' employees why outputs are not flowing.

Critical Path

The critical path identified in a PERT/CPM chart shows managers which activities are the most time-critical. This allows managers to focus process improvements on the tasks that are most vital to the timely completion of the project. More slack time can be created by reducing the processing time at critical points in the project, or the project schedule can be tightened up for a quicker turnaround. Managers may place too much emphasis on activities along the critical path, however. A weakness of CPM is that it focuses primarily on the time aspect of activities, neglecting other concerns, such as quality and cost control. Focusing too much attention on the critical path can cause managers not to notice possible production improvements in other activities.

  21.  Six Sigma concept and methodology

Six sigma is 3.4 defects per 1,000,000 opportunities. That means a process efficiency of 99.99966%. DMAIC (Define, Measure, Analyze, Improve and Control) is one of the methodologies of six sigma. This applies to an existing process that needs an improvement. It’s best applicable to continuous defect reduction in cross-functional /uni-functional environment. So under define, we establish CTQ and define a project. For measure, we establish performance parameters. For analyze, we establish process baseline, define performance goals and identify variation sources. For improve, we Explore Potential Causes, Establish Variable Relationship, and Design Operating Limits. And lastly, control, which is to Verify Process Improvement and Institutionalize New Capability.

The focus of six sigma is all critical characteristics (Y) are driven by factors (x) which are “upstream” from the results, attempting to manage results (Y) only causes increased costs due to rework, test and inspection. Thus, understanding and controlling the causative factors (x) is the real key to high quality at low cost..

Six Sigma is

A performance goal, representing 3.4 defects for every million opportunities to make one, that means a process efficiency of 99.99966%. A series of tools and methods used to improve or design products, processes, and/or services. A means to promote greater awareness of customer needs, performance measurement, and business improvement.

5 Phases of Six Sigma:

DMAIC (is used for projects aimed at improving an existing business process.)

D - Define the problem/Opportunity

M - Measure current performance

A - Analyze the root cause of the problem

I - Improve the process to eliminate root causes

C - Control the process to sustain the gains

DMADV (is used for projects aimed at creating new product or process designs.)

D - Define design goals that are consistent with customer demands and the enterprise strategy.

M - Measure and identify CTQs (characteristics that are Critical To Quality)

A - Analyze to develop and design alternatives

D - Design an improved alternative, best suited per analysis in the previous step

V - Verify the design, set up pilot runs, implement the production process and hand it over to the process owner(s).

  22.  TPM Pillars and paradigm change

TPM IS PRODUCTIVE MAINTENANCE CARRIED OUT BY ALL EMPLOYEES THROUGH SMALL GROUP ACTIVITIES. It is a combination of breakdown maintenance, preventive maintenance and predictive maintenance. AS A MANUFACTURING PHILOSOPHY, IT FOCUSES ON THE EFFECTIVE RELATIONSHIP OF WORKERS TO THE EQUIPMENT AND THE MEANING OF WASTE AND ITS ELIMINATION. TPM EFFECTIVELY IMPROVES THE COMPANY BY IMPROVING ITS PERSONNEL AND ITS EQUIPMENT

Eight pillars:

a) Autonomous Maintenance - operator not only operates the equipment but also takes care of the equipment’s health by proper maintenance

b) Focused Improvement (Kobetsu Kaizen) - try to thoroughly eliminate 16 major losses. 

c) Planned maintenance

d) Quality maintenance

e) Initial Flow control - equipment designing should be reflected with problems or experiences on the same or similar equipment installed in the plant  to have an initial control.

f) Safety, Health and Environment

g) Education and training

h) office TPM