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Summer 2014

MBA Semester 2

MB0044: PRODUCTION AND OPERATION MANAGEMENT

Q1. Explain the four basic varieties of layouts for manufacturing facilities.

The four basic varieties of layouts for manufacturing facilities are

Process layout
Product layout
Group technology layout
Fixed position layout

Process layout

This type of layout is concerned with the grouping of machines, process, or services
according to their function. This grouping of machines by function is characteristic of job
shops and batch type production facilities. Hence this type of layout is also called as
functional layout. Process layout typically uses general purpose machines that can be
changed over rapidly to new operations for different product designs.


Figure: Car Service Centre

Consider a car service and repair centre. There may be several departments or functional
areas which are arranged based on space and technical requirements like number of
persons working, machines installed, number of vehicles coming on an average, and other
requirements.

Product layout

Product layout commonly referred to as 'line layout', focuses on the sequence of production
or assembly operations required for manufacturing or assembling a part or a product. These
are used in mass or continuous production. Examples are automobile assembly, cement
manufacturing, oil refining.

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Figure: Component Manufacturing Layout

Group technology layout

In group technology, machines are grouped into a cell. The cell acts like a product layout
which is land within a larger process layout environment. It requires that each cell process is
a family of parts that have many common characteristics, such as machining operations,
similar machine set - ups and common raw materials. Due to these common characteristics,
the parts can be produced in a different path through a cell much like a product layout.
Figure below depicts the facilities arrangement in a group technology layout.


Figure: Facilities Arrangement in a Group Technology Layout

Fixed position layout

In this type of layout, the product is located in a fixed position and all the resources like
workers, materials, machines and equipment's are transported to that location. Missile
assembly, large aircraft assembly, ship construction and bridge construction are examples of
fixed-position layouts. These layouts are used when a product is bulky, large, heavy or
fragile. These minimise the amount of product movement required. Figure below depicts a
large aircraft assembly.



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Figure: Aircraft Assembly


Q2. The major decision areas in supply chain management have both strategic and
operational elements .Explain these decision areas in detail.

There are four major decisions areas in supply chain management: Location, Production,
Inventory, and Transportation and there are both strategic and operational elements in each
of these decision areas.

Location decision: The geographic placement of production facilities, stocking points, and
sourcing points is the natural first step in creating a supply chain. The location of facilities
involves a commitment of resources to a long term plan. Once the size, number, and
location of the production are determined, the possible paths of product supply to the final
customer can be determined. These decisions are of great significance to a firm since they
represent the basic strategy for accessing customer markets. They will have a considerable
impact on revenue, cost, and level of service.

Production decision: The strategic decisions include what products to produce and which
plants to produce, in allocation of suppliers to plants, plants to distribution control system
(DCS), and then DCS to customer markets. As said before, these decisions have a big
impact on the revenues, costs, and customer service levels of the firm. These decisions
assume the existence of the facilities, but determine the exact path through which a product
flows to and from these facilities. Another critical issue is the capacity of the manufacturing
facilities and this largely depends on the degree of vertical integration within the firm.
Inventory decisions: Inventory decisions refer to means by which inventories are managed.
Inventories exist at every stage of the supply chain as either raw material, semi-finished or
finished goods. They can also be in process between locations. Their primary purpose is to
buffer against any uncertainty that might exist in the supply chain. Since holding of
inventories can cost anywhere between 20 to 40 percent of their value, their efficient
management is critical in supply chain operations. It is strategic in the sense that top
management sets goals. However, most researchers have approached the management of
inventory from an operational perspective.

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Transportation decisions: Transportation decisions are closely linked to the inventory
decisions, since the best choice of the mode is often found by trading-off the cost of using
the particular mode of transport with the indirect cost of inventory associated with that mode.
While air shipments may be fast, reliable, and warrant lesser safety stocks, they are
expensive. Meanwhile shipping by sea or rail may be much cheaper, but they necessitate
holding relatively large amounts of inventory to buffer against the inherent uncertainty
associated with them.


Q3. Business process is a total response that a business undertakes utilising the
resources and delivering the outputs that create a value for the customer. Business
process modelling refers to a set of activities undertaken to optimise the business
process. Business process modelling can be categorised into two parts Logical
processing modelling and physical process modeling. Explain in detail of the two
processes of modeling.


Q4. Write short notes on:
a) Dimensions of quality
b) Characteristics of project mindset

Q5. It is possible to work according to the project plan only by careful monitoring of
the project progress. There are various steps involved in monitoring and controlling a
project from start to end. One of the steps is progress control of a project which can
be achieved by completing certain steps. Explain the steps of progress control.

Q6. Write short notes on
a) Pure strategies employed to assist in aggregate planning
b) Approaches to scheduling


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