Development Team. Operation Management Characteristics of Mass and Continuous Operating System. Management. Paper Coordinator

Transcription

1 Paper Coordinator Co-Principal Investigator Principal Investigator Development Team Prof.(Dr.) S.P. Bansal Vice Chancellor, Maharaja Agreshen University, Baddi, Solan, Himachal Pradesh, INDIA Co-Principal Investigator Prof.(Dr.) YoginderVerma Prof.Vice Chancellor, Central University of Himachal Pradesh,Kangra Himachal Pradesh, INDIA Paper Coordinator Dr. Anil Gupta School of Hospitality and Tourism University of Jammu, Jammu (J&K), INDIA Content Writer Dr. Sudhanshu Joshi Head, School of, Doon University, Dehradun PIN , Uttarakhand, INDIA 1 Operation

2 Subject Name Paper Name Module Title Module Id Module- 06 Pre-requisites Objectives Keywords Quadrant-I Operation Description of Module 1. To understand the concept of manufacturing system. 2. Understanding different types of manufacturing system Manufacturing System, Job Shop, Batch Shop, Process Production, Intermittent Manufacturing System, Continuous Manufacturing System, Mass Customization. Learning Objectives: The Learning objectives of the module are to address the following questions: 1. To know the concept of manufacturing system. 2. Understanding different types of manufacturing system. 3. To know the concept of Mass and continuous Operating System 1. Introduction: A Production system is the process of arrangement and operation of machines, tools, material, people and information to produce a value-added physical, informational or service product whose success and cost is characterized by measurable parameters. Production systems interact with both internal and external environment of the organization. Internal environment includes marketing, accounts, personnel, 2 Operation

3 operations, and finance. External environment include customers, labour, unions and suppliers. A Production system is an approach to making products that is based upon several factors. These include how much of the product is needed, how quickly the product must be produced and how unique the product must be to ensure sufficient sales. Following figure shows Production System. Internal Environment Decision Maker External Environment Control Input Processing Output Figure 1: Production System 3 Operation

4 2. Types of Production System There are mainly two types of manufacturing system which is depicted in following figure: Types of Production System Continuous Manufacturing System Intermittent Manufacturing System Mass Production Process Production Project Projection Flows Job Shop Batch Shop Figure 2: Types of Manufacturing System Some of the most important types of production are: (i) Job Production (ii) Batch production and (iii) Mass or flow production. A production manager will have to choose most appropriate method for his enterprise. The final decision regarding any particular method of production is very much affected by the nature of the products and the quantity to be produced. Production methods may be broadly classified as Job Production, Batch production and Mass or Flow Production. 4 Operation

5 2.1 Job Production: Under this method peculiar, special or non-standardized products are produced in accordance with the orders received from the customers. As each product is non- standardized varying in size and nature, it requires separate job for production. The machines and equipment s are adjusted in such a manner so as to suit the requirements of a particular job. Job production involves intermittent process as the work is carried as and when the order is received. It consists of bringing together of material, parts and components in order to assemble and commission a single piece of equipment or product. Ship building, dam construction, bridge building, book printing are some of the examples of job production. Third method of plant layout viz., Stationery Material Layout is suitable for job production Characteristics: The job production possesses the following characteristics. 1. A large number of general purpose machines are required. 2. A large number of workers conversant with different jobs will have to be employed. 3. There can be some variations in production. 4. Some flexibility in financing is required because of variations in work load. 5. A large inventory of materials, parts and tools will be required. 6. The machines and equipment setting will have to be adjusted and readjusted to the manufacturing requirements. 5 Operation

6 7. The movement of materials through the process is intermittent Limitations: Job production has the following limitations: 1. The economies of large scale production may not be attained because production is done in short-runs. 2. The demand is irregular for some products. 3. The use of labor and equipment may be an inefficient. 4. The scientific assessment of costs is difficult. 2.2 Batch production: Batch production pertains to repetitive production. It refers to the production of goods, the quantity of which is known in advance. It is that form of production where identical products are produced in batches on the basis of demand of customers or of expected demand for products. This method is generally similar to job production except the quantity of production. Instead of making one single product as in case of job production, a batch or group of products are produced at one time. It should be remembered here that one batch of products may not resemble with the next batch. Under batch system of production the work is divided into operations and one operation is done at a time. After completing the work on one operation it is passed on to the second operation and so on till the product is completed. Batch production can be explained with the help of an illustration. An enterprise wants to manufacture 20 electric motors. 6 Operation

7 The work will be divided into different operations. The first operation on all the motors will be completed in the first batch and then it will pass on to the next operation. The second group of operators will complete the second operation before the next and so on. Under job production the same operators will manufacture full machine and not one operation only. Batch production can fetch the benefits of repetitive production to a large extent, if the batch is of a sufficient quantity. Thus batch production may be defined as the manufacture of a product in small or large batches or lots by series of operations, each operation being carried on the whole batch before any subsequent operation is operated. This method is generally adopted in case of biscuit and confectionery and motor manufacturing, medicines, tinned food and hardware s like nuts and bolts etc Characteristics: The batch production method possesses the following characteristics: 1. The work is of repetitive nature. 2. There is a functional layout of various manufacturing processes. 3. One operation is carried out on whole batch and then is passed on to the next operation and so on. 4. Same type of machines is arranged at one place. 5. It is generally chosen where trade is seasonal or there is a need to produce great variety of goods. (iii) Mass or flow production: This method involves a continuous production of standardized products on a large scale. Under this method, production remains continuous in anticipation of 7 Operation

8 future demand. Standardization is the basis of mass production. Standardized products are produced under this method by using standardized materials and equipment. There is a continuous or uninterrupted flow of production obtained by arranging the machines in a proper sequence of operations. Process layout is best suited method for mass production units. 2.3 Flow production: Flow production is the manufacture of a product by a series of operations, each article going on to a succeeding operation as soon as possible. The manufacturing process is broken into separate operations. The product completed at one operation is automatically passed on to the next till its completion. There is no time gap between the work done at one process and the starting at the next. The flow of production is continuous and progressive Characteristics: The mass or flow production possesses the following characteristics. 1. The units flow from one operation point to another throughout the whole process. 2. There will be one type of machine for each process. 3. The products, tools, materials and methods are standardized. 4. Production is done in anticipation of demand. 5. Production volume is usually high. 6. Machine set ups remain unchanged for a considerable long period. 8 Operation

9 7. Any fault in flow of production is immediately corrected otherwise it will stop the whole production process Application of Flow Production: 1. There must be continuity in demand for the product. 2. The products, materials and equipments must be standardized because the flow of line is inflexible. 3. The operations should be well defined. 4. It should be possible to maintain certain quality standards. 5. It should be possible to find time taken at each operation so that flow of work is standardized. 6. The process of stages of production should be continuous. Advantages of mass production: Advantages of Flow Production A properly planned flow production method, results in the following advantages: 1. The product is standardized and any deviation in quality etc. is detected at the spot. 2. There will be accuracy in product design and quality. 3. It will help in reducing direct labor cost. 4. There will be no need of work-in-progress because products will automatically pass on from operation to operation. 5. Since flow of work is simplified there will be lesser need for control. 6. A weakness in any operation comes to the notice immediately. 7. There may not be any need of keeping work-in-progress, hence storage cost is reduced. 9 Operation

10 2.4. Continuous Production System: Continuous means something that operates constantly without any irregularities or frequent halts. In continuous production system, goods are produced constantly as per demand forecast. Goods are produced on a large scale for stocking and selling. In continuous production system, goods are not produced on customer s orders. Here, the inputs and outputs are standardized along with the production process and sequence. Following figure highlights the concept of a continuous production system. Demand Forecast Continuous Production System Production is on a large Scale Food Industry Fuel Industry Figure 3: Continuous Production System Exhibit I: Production System in a Food Industry The production system of a food industry is purely based on the demand forecast. Here, a large-scale production of food takes place. It is also a continuous production system. In the food industry the production doesn t depends upon the demand of customers. Similarly, the production and processing system of a fuel industry is also purely based on, demand forecast. Crude oil and other raw sources are processed 10 Operation

11 continuously on a large scale to yield usable form of fuel and compensate global energy demand Characteristics of Continuous Production System: The characteristics of a continuous production system are as under: 1. In a continuous production system the flow of production is continuous. It is not intermittent. 2. The products produced in continuous production system are standardized products. 3. In a continuous production system the products are produced on predetermined quality standards. 4. The products are produced in anticipation of demand Types of Continuous Production System: The continuous production system has two types: Mass Production System Process Production System Mass Production System 11 Operation

12 History of Mass Production System: The mass production system was first introduced by Henry Ford. In 1910 Henry Ford laid the foundation of first highly organized assembly line system of automobile manufacturing. He organized all the elements of a manufacturing system people, machines, tooling, and products and arranged them in a continuous system called conveyor belt system. Ford Motor Company also assembled aircraft using mass production techniques. This mass production success was known as A-Bomber an Hour production during World War II when Henry Ford, upon request from US government, produced bomber air craft s for USA. YouTube animation I : How Mass Production works Following YouTube link (i)explains how Henry Ford perform incredible in the history of craft assembling (ii)explains how mass production of famous Model T was done a. Definition: Manufacture of discrete parts or assemblies using a continuous process are called mass production. It involves very large volume of production. In mass production system the machines are arranged in a line or product layout. In this system the product and process are standardized in nature. All outputs follow the same path in mass production system. 12 Operation

13 b. Scope: In mass production system generally, items are produced in large quantities. The flow of material is uniform in this system of manufacturing. Only one type of product is produced at one time. It utilizes different combination of parts to manufacture different kind of products. c. Application: Mass production refers to that manufacturing process in which large quantities of standardized products are manufactured by using assemble line technology. It refers to the process of creating large numbers of similar products efficiently. d. Characteristics of Mass Production System: Following are the main characteristics of mass production system: 1. One of the main characteristics of mass production system is that the product produced in this system is standardized. 2. The operator is able to do different kind of tasks in mass production system of manufacturing. 3. The mass production system of manufacturing requires less time to produce a product because the worker spends little time to develop material or tools. 4. In mass production system the probability of human error and variation is also reduced, as tasks are predominantly carried out by machinery. 5. In a mass production system of manufacturing the labour cost is very low and the rate of production is very high. It enables a company to produce a larger quantity of one product at a lower cost than using traditional, non-linear methods. e. Advantages of Mass Production System: The main advantages of mass production system are as under: 13 Operation

14 1. In mass production system higher rate of production with reduced cycle time. 2. It doesn t require highly skilled operators. Semi-skilled operators are sufficient for mass production system. 3. Manufacturing cost per unit is very low in mass production system. f. Disadvantages of Mass Production System: The main disadvantages of mass production system are as under: 1. In mass production manufacturing system every production line is linked with each other. Breakdown of one machine will stop an entire production line. 2. Mass production system of manufacturing requires high investment in production facilities. 3. Line layout needs major change with the changes in the product design Process Production System: Definition: Process manufacturing is the production of goods that are typically produced in bulk quantities. Process manufacturing industries include chemicals, food and beverage, gasoline, paint and pharmaceutical. The relevant factors in process manufacturing are ingredients, and bulk materials rather than individual units. Scope: Process manufacturing is a kind of manufacturing that involves the combination of supplies or ingredients according to formulas rather than assembly of discrete parts through mechanical processes. The products of 14 Operation

15 process manufacturing may include such substances as plastics, food, beverages and pharmaceuticals Intermittent Manufacturing System: Definition: Intermittent means something that starts and stops at irregular intervals. In the intermittent manufacturing system, goods are produced based on customer s orders. In this system, goods are produced on a small scale. The flow of production is irregular. In other words, the flow of production is not continuous. A variety of products are produced in intermittent manufacturing system. These products are of different sizes. The design of these products goes on changing. The intermittent production system is very flexible. Exhibit I : Ornaments Producer We can take example of ornaments producer and a tailor who stitches clothes to understand the concept of intermittent production system. It is shown in following figure: Customers Order & Customers Specific Intermittent Production System No Continuous flow of same size GoldSmith Tailor Figure 4: Intermittent Manufacturing System 15 Operation

16 Now let s first take the example of GoldSmith. 1. The work of a goldsmith is purely based on the frequency of his customer s orders. The goldsmith makes goods (ornaments) on a small scale basis as per his customer s requirements. Here, ornaments are not manufactured on a continuous basis. 2. Similarly, the work of a tailor is also based on the number of orders he gets from his customers. The tailor stitched clothes independently for every customer as per their measurement and size. Stitched clothes are made on a limited scale and are proportional to the number of orders received from customers. Here, stitching is not done on a continuous basis. Characteristics The characteristics of an intermittent production system are listed as follows: (I) (II) (III) The flow of production is not continuous. It is intermittent. Wide varieties of products are produced. The volume of production is small. (IV) The intermittent production system utilizes general purpose machines. These machines can be used to produce different types of products. (V) The sequence of operation goes on changing as per the design of the product. (VI) The quantity, size, shape, design etc. of the product depends on the customers orders. Classification The intermittent production system has three types which are as under: (A) Project Production Flows, 16 Operation

17 (B) (C) Job Shop Production System, and Batch Shop Production System. 3. Project Production Flows: A project process lies at the high-customization, low volume end of the processchoice continuum. Examples of project process are building a shopping center, planning a major event, constructing a new hospital, doing management consulting work, or developing a new technology or product. Once a project is completed it can be characterized by a high degree of job customization, scope of the project, and the release of substantial resources. Different projects have different sequence of operations and process as per their requirement. In manufacturing and service sector the process must be customer specific. Firms with project processes sell themselves on the basis of their capabilities rather than on specific products or services. Projects are large, complex and take a long time. There are many interrelated tasks in a project which requires close coordination. Therefore, firms need to focus on coordination between various interrelated tasks. Projects typically make heavy use of certain skills and resources at particular stages and then have little use for them the rest of the time. A project process is based on a flexible flow strategy. Work flows are redefined with each new project. 17 Operation

18 Job Shop Production System: Job shop production system is a system that manufactures one or few quantity of products which are designed and produced as per the specification of customers within prefixed time and cost. The distinguishing feature of this system is low volume and high variety of products. A job shop comprises of general purpose machines arranged into different departments. Each job demands unique technological requirements, demands processing on machines in a certain sequence. Job shop production system requires versatile and skilled labour force which can be utilized for multitasking by the organization. It involves high capital investment and high unit cost of production. In job shop production system the control operations are relatively simple. Job shop process is a kind of manufacturing process in which small batch of a variety of custom products are made. Job shops are typically small manufacturing systems that handle job production. Job production means, custom or semi-custom manufacturing processes such as small to medium size customer orders or batch jobs. Job shops typically move on to different jobs (possibly with different customers) when each job is completed. In job shops machines are aggregated in shops by the nature of skills and technological processes involved, each shop therefore may contain different machines. Job shop process is basically a manufacturing process which produces piece goods in small batches. A job shop is a flexible operation that has several activities through which work can pass. In a job shop, it is not necessary for all activities to be performed on all products, and their sequence may be different for different products. To illustrate the concept of a job shop, consider the case of a machine shop. In a machine shop, a variety of equipment such as drill presses, lathes, and milling machines is arranged in stations. Work is passed only to those machines required by it, and in the sequence required by it. This is a very flexible arrangement that can be used for wide variety of products. 18 Operation

19 A job shop uses general purpose equipment and relies on the knowledge of workers to produce a wide variety of products. Volume is adjusted by adding or removing labor as needed. Job shops are low in efficiency but high in flexibility. Rather than selling specific products, a job shop often sells its capabilities. A job shop process creates the flexibility needed to produce a variety of products or services in significant quantities. Customization is relatively high and volume for any one product or service is low. The work force and equipment are flexible and handle various tasks. A job shop process primarily involves the use of flexible flow strategy, with resource organized around the process. Most jobs have a different sequence of processing steps. Characteristics of Job Shop Production System: The main characteristics of job shop production system are as under: (I) (II) (III) It involves high variety of products and low volume. A job shop production system utilizes general purpose machines and facilities. The operators of job shop production system are highly skilled who can take up each job as a challenge because of uniqueness. (IV) It involves large inventory of materials, tools, parts etc. (V) Detailed planning is essential for sequencing the requirements of each product, capacities for each work centre and order priorities. Advantages of Job Shop Production System: Following are the advantages of job shop production: (I) An important advantage of the job shop production system is that a variety of products can be produced because it utilizes general purpose machines. 19 Operation

20 (II) (III) The operators of the job shop production system will become more skilled and competent, as each job gives them learning opportunities. They are capable of doing multitasking. In job shop production system the organization can utilised full potential of operators. (IV) There is an opportunity for creative methods and innovative ideas in job shop production system. Disadvantages of Job Shop Production System: Some of the disadvantages of job shop production system are as under: (I) (II) (III) The job shop production system is a costly system due to frequent set up changes. This system involves higher inventory cost as it requires higher level of inventory to operate systematically. As the job shop production system requires higher level of inventory, therefore the space requirement is very large for proper maintenance of the inventory. (IV) Job shop manufacturing will require skilled workers who will be involved in a variety of tasks. If skilled workers are not available then this system will not function properly. Batch Shop Production System: A batch process is similar to a job shop, except that the sequence of activities tends to be in a line and is less flexible. In a batch process, dominant flows can be identified. The activities, while in-line, are disconnected from one another. It means, a batch process executes different production runs for different 20 Operation

21 products. The disadvantage is the setup time required to change from one product to the other, but the advantage is that some flexibility in product mix can be achieved. As its name indicates, products are produced in batches. Batch production is most common in bakeries and in the manufacture of sports shoes, pharmaceutical ingredients, water purifying, inks, paints etc. A batch flow process differs from the job process with respect to volume, variety, and quantity. The primary difference is that volumes are higher because the same or similar products or services are provided repeatedly. The American Production and Inventory Control Society (APICS) define batch production as, a form of manufacturing in which the job passes through the functional departments in lots or batches and each lot may have a different routing. It is characterized by the manufacture of limited number of products produced at regular intervals and stocked awaiting sales. In batch production system items are processed in lot or batch and the produced product is unique. It utilizes specialized labour for each operation. Organization and planning is more complicated in batch production system. In batch production system new batch is undertaken for production only when the work on all items of a batch is completed. Characteristics of Batch Production System: Batch production system has following characteristics: (I) (II) (III) Plant and machinery utilized in batch production system are flexible. In batch production system plant and machinery set up is used for the production of item in a batch and change of set up is required for processing the next batch. The manufacturing lead time and cost are lower in batch production system as compared to job production system. Advantages of Batch Production System: 21 Operation

22 The advantages of batch production system are as under: (I) (II) (III) Better utilisation of plant and machinery is possible under batch production system. It promotes functional specialisation. In batch production system the per unit cost is lower as compared to job production system. (IV) Investment in plant and machinery is lower. Therefore it is a cost beneficiary method of manufacturing. (V) The batch production system provides flexibility to accommodate and process number of products. Disadvantages of Batch Production System: The main disadvantages of batch production system are as under: (I) (II) (III) In batch production system the material handling process is complex because of irregular and longer flows. In this system the production planning and control is complex. Work in process inventory is higher compared to continuous production. (IV) Set up cost is higher due to frequent changes in set up. 4. Mass Customization: The concept of mass customization is based on the notion of economies of scope, where advances in manufacturing and information technology, as well as new management methods i.e. just in time and lean production, enables firms to provide a variety of product and customization through flexibility and quick responsiveness in many industries. 22 Operation

23 Customization enables firms to produce a variety of products so that everyone finds exactly what he or she wants at a reasonable price. The main objective of mass customization is that to provide such kinds of products that best meet customers needs. Mass customization is very vital for companies to survive in an increasingly diversified and competitive market. Mass customization is the new concept in the field of manufacturing and marketing. The specialty of mass customization is that it provides custom made products with a low cost. Through mass customization firms are able to diversify their product ranges. Customization helps companies to improve the customer value that will provide a competitive advantage in the industry. According to Kotler (1989) the concept of mass market is dead and market segmentation has now progressed to the era of mass customization. Kotler and others argue that firms operating in the current competitive landscape can no longer produce standardized products or services for homogenous markets and still command superior returns. In this context, mass customization represents the new frontier in a world of increasingly saturated markets and sluggish growth in demand for many manufactured products. 5. Difference between Mass Production and Mass Customization: The main difference between mass production and mass customization are as under: Basis of Difference Mass Production Mass Customization Definition Mass production can be Mass customization defined as the production refers to the process by of large quantities of which customer made standardized products products are made with a Customer Needs quickly. In mass production the customer needs are homogeneous in nature. For example, in Asian countries rice is the low cost. In mass customization, the needs of the customers are heterogeneous or diverse in nature. For 23 Operation

24 staple food during lunch time. So, it is similar with large number of customers. Suitability Mass production is suitable for customers who have homogeneous kind of requirements. The market should be for standardized products. Key Features Stable demand for the product; The market is large homogeneous; The product have low cost and consistent quality; Products and services are standardized in nature; The product development cycle is long; The life cycle of the product is long. Customer Involvement In mass production customers are passively involved in the value chain. example, different customers have different requirements in a mobile phone. One may require a large screen; one may require a good camera, and so on. Mass customization is suitable for customers who have diverse kind of needs. Fragmented demand for the product; Heterogeneous niche market; The product have low cost and high quality; Products and services are customized in nature; The product development cycle is short; The life cycle of the product is short. In mass customization customers are actively involved in the value chain. 24 Operation