Production Management Principles - Assignment Example

Production Management Principles 509801) Introduction Production Management Principles essentially entails guidelines to be followed in the distribution of limited available resources in terms of raw materials or services and how best these could be utilised to satisfy customer demands in a certain period of time. These principles help the service provider meet its demand at minimum cost at the same time generating a certain percentage of profit to sustain its growth. (The Principles of Scientific Management 1910, 2005) Taylors Contribution One of the early contributors towards the evolvement of scientific production management principles was F.W. Taylor. He put forward ideas and developed a theory of organization by which managers could optimize their production and increase efficiency. Till that point of time there was no scientific back up for the workers engaged in production activity and the methods and tools that were used were outdated. In 1881, Taylor brought out a study on the science of metal cutting. (The Principles of Scientific Management 1910, 2005) Later on, different shovels were tested and the optimum shape of shovel was designed which would allow the worker shovel without any hindrance for the entire day. This improved efficiency as the number of people required to do a certain kind of work like shovelling reduced considerably. Source: Library of Congress, 2005 Other areas of research included the moving of pig iron. If workers were usually moving 12.5 tonnes of pig iron per day, he conducted experiments which later on proved that given sufficient rest timings in between lifts, a certain percentage of people could transport 47.5 tonnes per day. This generated the idea that workers should be selected as to how they were suited for a particular job. Objectives There are four tenets that encapsulate the principles of production management which are as follows 1. Each and every process was backed up with a scientific explanation. This provided for a comprehensive method of optimizing work efficiency rather than go by an outdated thumb rule. This is because each process has definite character constraints affected by geographical locations and work culture. 2. There should be a scientific method of selecting an individual to do a certain kind of work. After the right person has been selected proper training and guidance should be provided to make his transition into the job easier. There should always be development programmes to enhance his skills while on the job. 3. There should be a list of procedures laid down by the company commonly called QAP (Quality Assurance Procedures). These define the methods and the check lists to be followed while carrying out a certain procedure. The company should ensure that there is complete co-operation between the management and the employees when carrying out processes as per the QAP. 4. The decision to take up the works that form the part of the project does not rest upon the workers. The onus of designating the share of work to each group considered competent enough to do the work rested upon the manager in charge of each section. Production management Principles The organizational theorists have used the principles laid down by Taylor and formulated certain guidelines on which Production Management for an organization works. This framework included (Ballard Glen, n.d) 1. Proper delegation of authority 2. The worker in charge of his section to take responsibility for the job done. 3. There should be a clear demarcation between planning and operations to avoid time delay during actual work operations. The planning and all associated works should take place prior to execution. (Ballard Glen, n.d) 4. There should be incentives provided to workers who excel in their job or show a certain degree of excellence over a time period. This acts as a morale booster and inspires others to follow suit. 5. Personnel handling their respective tasks should be qualified to do so. Training should be imparted to these workers so that they hone their skills more effectively. In the current global context it is but inevitable that the production process needs to be effectively optimized to survive competition in the construction industry. Transportation of raw materials or finished structures to the work site involves a good percentage of the total cost involved. With fuel prices rising by the day affecting the cost of transportation, it is very important that the construction sector optimizes its output in other areas of production by following certain principles of management. These include 1. Reduction of Cycle Time Over the years there has been a gradual shift from mass production to custom made batch production. This has been compounded by the constraints of on-time delivery and reducing cycle time. Lead times are not fixed and change with work situations and among individuals. Lead time includes the set up time required for each batch of production, processing time required for each batch, the amount of time that is required in between in each process and in case of minor bottlenecks; the time required for the batch to be in queue. It is considered that the set up time and processing time could easily be monitored. (Agrawal Ashutosh, 2000) The time in between operations could also be controlled by easing out material handling operations negating bottlenecks. However one does not have any control over the queuing time since this depends on the availability of material resources. It is also to be considered that raw materials to be used in construction related activities be it steel plates, cement or mortar cannot be stocked up beyond a certain limit in advance. This is due to the volatile nature of the market where proposed projects might not even materialise. Overstocking of materials also leads to problems encountered in storage. A planning department is usually constituted to work out the following before embarking on the project (i) The capability of the machines that would be used for the manufacturing of prefabricated parts to be used in civil structures. Source: Agrawal Ashutosh, 2000 (ii) The maximum capacity of each machine that would be involved in this exercise. (iii) The speed of the machine attained for reducing processing time. (iv) The sizing of the lots for each batch. This is very critical since each and every product cannot be tested for its quality and adherence to the product requirement. In a batch a certain number of items from the batch are selected depending upon statistical constraints and checked for quality assurances. If this passes the quality test the batch is deemed fit. Hence selecting a right batch is critical component of production management. (v) Management of inventory and proper utilization of available stock. Material bills to be raised in time so that stock could be available without delay for production. This would reduce time delay at shop.( Agrawal Ashutosh, 2000) (vi) In between all this the routine planned maintenance and breakdown maintenance needs to be carried out without causing any problems in production. Source: Hetzel William, 1998 Various analyses have been carried out to check how best the cycle time can be reduced. These involve (a) The single Product analysis- It studies the time constraints and the batch sizes that need to be allocated and the amount of inventory that needs to be maintained when fabricating only one product at a time. (Hetzel William, 1998) (b) The single machine analysis- it studies the time parameters when a number of products are manufactured using the same machine. Capacity constraints are noted and optimum batch sizes are found out. (c) The supply chain analysis-This evaluates how the performance of one department in the manufacturing chain has an effect on the suppliers on one hand and the potential customers on the other. (Hetzel William, 1998) 2. Variability Variability is defined as the number of variants of a particular product that is available in the market. It is common knowledge that a company producing identical components have lower lead times since the time of setting up the machinery to account for the other features in the new product involve a certain amount of set up time. Variability to a certain extent is good since it offers more options to the customer who is ever inquisitive in trying out new products. (Managing Variability, 2006) Source: Managing Variability, 2006 Variability can be bad in the event of a breakdown of a machinery that has been set up to match the features of the new product. Cancellation of an order for a new variant can also lead to severe manufacturing delays. It is important for the management to decide how much of good variability is required by a manufacturer to survive in the market and generate brand interest in their product. It is also important to ascertain what percentage of buffer like inventory and time are required to ensure that bad variability does not affect the performance of brand in the market. In an ideal scenario the supply and demand are perfectly synchronized and variability tends to zero. The tendency is to keep variability in check and be in a position that enables the manufacturer or the service provider satiate the needs of a market in case of an increased demand and at the same time not get overstocked in case there is a drop in demand. The three buffers that are managed to keep variability in check are inventory, time and capacity. Since variability cannot be totally done without, it is assessed as to what best can be done to keep it in check. Variance or Standard deviation (square root of Variance) is a defined as the deviation that the process has taken from its usual mean or average measurement.( Managing Variability, 2006) Maintaining this close to the mean improves work efficiency. Other management methods like Six sigma Methods and Lean Manufacturing are being incorporated into manufacturing tools to improve performance and reduce cycle time. 3. Increase in Transparency When an economic cycle goes through a period of recession, it is but natural for companies to identify areas where costs can be saved. The first casualty in such a scenario is budget cuts, freezing or reducing salaries or laying off people. These are the usual knee jerk reactions adopted by companies. (The Power of Cost Transparency, 2009) However, if one were to engage in a detailed cost analysis one could find several areas where taking proper decisions could avoid going for such extreme reactions. Some of these include controlling overheads and other miscellaneous items that add to project cost. A check on the manhours spent in actual sourcing and procurement of brought out items is essential since these delays affect the actual work at the site. This indirectly contributes to cost increase. Designs and drawings with minimum number of revisions need to be generated to reduce the time lost in unnecessary correspondence delays between the client and the manufacturer. The drawings should be complete in all aspects and should satisfy client specifications in all aspects so that these errors, during actual manufacturing do not affect the work schedule on site. A detailed analysis of each worksite is essential to understand the concerns and problems faced by the unit. The market economics, the location of the plant and the allocation of available resources need to be considered before carrying out this study. If a plant is going to be downsized or restructured one should ensure that this is feasible in all aspects and loss of productivity during the process is covered. Locating certain plants at locations where there are prime civil projects coming up offer a direct advantage in terms of transport of materials, services and infrastructure. Also, allocating the available resources in terms of capital and human personnel is an important facet to this exercise. (The Power of Cost Transparency, 2009) It is often queried that how can the cost of a product manufactured at one unit be different from that made at another plant. This is because of the below factors (a) The volume of units produced per machine is different affecting net unit cost (b) The process efficiency is different at each site. (c) The shipping cost and the operating labour costs are different at each location. Therefore instead of closing down plants to survive tough times it is critical that companies compare costs at each stage of the manufacture whether direct or indirect to ensure complete cost transparency. This would make them more competitive in the global market. (The Power of Cost Transparency, 2009) 4. Tools of Continuous Improvement This management principle was introduced by the United States and is a management method based on inputs provided by the employee. The company usually keeps on improving on its products through a kind of evolutionary change. This built up is usually from an existing standard. By conforming to the standard a minimum acceptable design criteria is set. Thereafter one needs to build on these standards by continuous innovations. (Tid Joe et al, 2005) If the innovations are a constant feature of one’s improvement then the effort in terms of capital to bring about a major change in design is minimal. This tool therefore encourages all employees to participate in the process. Few of the continuous improvement techniques involve the Just-In-Time Technology (JIT) and Lean manufacturing. (a) Just in Time Technology (JIT)-This is a principle according to which no unit is manufactured until there is a requirement does so from the customer. Source: Continuous Improvement Tools-JIT,n.d The flexibility to respond to this demand is critical and difficult to attain. The requirement to go for such an activity is to reduce the amount of inventory. This was first adopted by Toyota in the early 60’s by which the right product was delivered at the correct quantity in the right location at the required quality. (b) Lean manufacturing is the method of reducing waste and eliminating scarp during production. (Tid Joe et al, 2005) The seven common wastes that were identified and reduced were (i) Producing items in quantities that is not required. (ii) Increase of inventory by several work in progress projects. (iii) Irregular product shapes that hamper production. (iv) Machines that have not been identified as remaining idle and work operators that have not been adequately loaded. Continuous improvement also incorporated activities to be carried out in the workplace to achieve excellence in product improvement. Some of these activities include (Tid Joe et al, 2005) (i) Cleaning and organizing the workplace (ii) Rationalizing of the process. (iii) Improving team interaction between different departments and better sharing of process and product ideas. (iv) Continuously remain updated regarding latest technologies and try to incorporate the same in the process at hand. (v) Using current information technology to upgrade the system and also to keep a better tab on inventory. (vi) The process of creating an efficient database of suppliers so that raw materials can be sourced at very short notice. This also reduces the delay in looking out for new suppliers on short notice. (vii) Adopting quick changeover technology in the event of the product undergoing a major design change during manufacture. (Tid Joe et al, 2005) (viii) It is also very important to maintain the equipments from possible errors and breakdowns that may creep into the system with time. Conclusion Implementation of this production management principles lead to overall improvement in quality of production. The lead times are reduced and the company is capable of containing costs to survive in the fierce global environment. Reference Lists 1. Agrawal Ashutosh, 2000, Cycle Time reduction by improved MRP-based planning, International Journal of Production Research 2. Ballard Glen, n.d, Production Control Principles, Available at http://constructingexcellence.org.uk 3. Hetzel William, 1998, Cycle Time Reduction and Strategic Inventory Placement across a Multistage Process, Massachusetts Institute of Technology. 4. Managing Variability, 2006, Principles for managers, Factory Physics Inc 5. Tid Joe et al, 2005, Continuous Improvement: Specific Techniques, Managing Innovation 6. The Power of Cost Transparency, 2009, BCG Focus,The Boston Consulting Group 7. The Principles of Scientific Management 1910, 2005, National Humanities Center Read More