Punjab technical University - scheme and syllabus of Masters in Business Administration (MBA) Batch 2012 onwards, course code MBA 202, production & operation Management. UNIT 2, ch.1 Facility Layout ch. 2 Production Planning & Control(PPC), ch.3 Method Study ch. 4 Capacity Planning

1. FACILITY LAYOUT/PPC
/WORK STUDY/
CAPACITY PLANNING
UNIT 2

2. Facility layout
 For an organization to have an effective and
efficient manufacturing unit, it is important that
special attention is given to facility layout.
 Facility layout is an arrangement of different
aspects of manufacturing in an appropriate
manner as to achieve desired production results.
 Facility layout considers available space, final
product, safety of users and facility and
convenience of operations.

3. Facility Layout Objective
A model facility layout should be able to
provide an ideal relationship between
raw material, equipment, manpower and
final product at minimal cost under safe
and comfortable environment.

4. Facility Layout Objective
Efficient and Effective facility layout
 To provide optimum space to organize equipment and
facilitate movement of goods and to create safe and
comfortable work environment.
 To promote order in production towards a single objective
 To reduce movement of workers, raw material and
equipment
 To promote safety of plant as well as its workers
 To facilitate extension or change in the layout to
accommodate new product line or technology up-
gradation.
 To increase production capacity of the organization

5. An organization can achieve the
objective by ensuring the following:
Better training of the workers and supervisors.
Creating awareness about of health hazard and
safety standards.
Optimum utilization of workforce and
equipment.
Encouraging empowerment and reducing
administrative and other indirect work.

6. Design of Facility Layout
 Principles which drive design of the facility layout need to
take into the consideration objective of facility layout,
factors influencing facility layout and constraints of
facility layout. These principles are as follows:
 Flexibility: Facility layout should provide flexibility for
expansion or modification.
 Space Utilization: Optimum space utilization reduces the
time in material and people movement and promotes
safety.
 Capital: Capital investment should be minimal when
finalizing different models of facility layout.

7. Design Layout Techniques
 Two or Three Dimensional Templates: This
technique utilizes development of a scaled-down
model based on approved drawings.
 Sequence Analysis: This technique utilizes computer
technology in designing the facility layout by
sequencing out all activities and then arranging
them in circular or in a straight line.
 Line Balancing: This kind of technique is used for
assembly line.

8. Types of Facility Layout
Product/Line Layout
Process/Functional Layout
Fixed Position Layout
Cellular Technology Layout
Combined Layout
Computerized Relative Allocation of
Facility Technique

15. Production planning
 Production planning takes care of two basic
strategies’ product planning and process planning.
 Production planning is done at three different time
dependent levels
i.e.long-range planning dealing with facility
planning, capital investment, location planning,
etc.;
medium-range planning deals with demand forecast
and capacity planning.
short term planning dealing with day to day
operations.

16. Objectives of production planning
To ensure right quantity and quality of
raw material, equipment, etc. are
available during times of production.
To ensure capacity utilization is in tune
with forecast demand at all the time.

17. A well thought production planning
ensures:
Organization can deliver a product in a
timely and regular manner.
Supplier are informed will in advance for
the requirement of raw materials.
It reduces investment in inventory.
It reduces overall production cost by
driving in efficiency.

18. Production Control
Production control looks to utilize different type
of control techniques to achieve optimum
performance out of the production system as to
achieve overall production planning targets.
Production control is dependent upon the
following factors:
Nature of production( job oriented, service
oriented, etc.)
Nature of operation
Size of operation

19. Objectives of production control
Regulate inventory management
Organize the production schedules
Optimum utilization of resources
and production process

20. Advantages of robust production
control
Ensure a smooth flow of all production
processes
Ensure production cost savings thereby
improving the bottom line
Control wastage of resources
It maintains standard of quality through
the production life cycle.

25. Conclusion
 Production planning is required for scheduling,
dispatch, inspection, quality management,
inventory management, supply management and
equipment management.
 Production control ensures that production team
can achieve required production target, optimum
utilization of resources, quality management and
cost savings.

26. Work Study
Work study may be defined as the
analysis of a job for the purpose of
finding the preferred method of doing it
and also determining the standard time
to perform it by the preferred (or given)
method.
Work study, therefore, comprises of two
areas of study: method study (motion
study) and time study (work
measurement).

27. Method study and Time study
 Method study we have a systematic way of
developing human resource effectiveness,
providing high machine and equipment utilization,
and making economical use of materials.
 Time study, on the other hand, provides the
standard time, that is the time needed by worker to
complete a job by the standard method.
 Standard times for different jobs are necessary for
proper estimation of manpower, machinery and
equipment requirements, daily, weekly or monthly
requirement of materials, production cost per unit
as an input to better make or buy decision, labor
budgets, worker's efficiency and make incentive
wage payments.

28. Method study
 This can be defined as the procedure for systematic recording, analysis
and critical examination of existing or proposed method of doing work
for the purpose of development and application of easier and more
effective method.
 Method Study Procedure
1. The following general steps describe the procedure for making a method
study.
2. Select the job – on which method study is to be applied.
3. Obtain information and record.
4. Examine the information critically.
5. Develop the most practical, economical and effective method by
considering real limitations of the situation.
6. Install the new method as standard practice.
7. Maintain the standard practice by regular follow up.

29. Selecting a job for method study
 Considerations may be given to the following
factors while selecting a job for method
study
1. Economic Factors
2. Technical Factors
3. Human Factors

30. Method study Techniques
 Information Collection Techniques:
1. Observation
2. Discussion
3. Records
4. Motion Pictures & Video Films
 Information Recording Techniques:
1. Process Charts
2. Diagrams
3. Templates

31. Process Charts
 used to record a process sequence (i.e. series of events in
the order in which they occur) but do not depict the
events to time scale.
 Charts falling in this group are
1. Operation process chart
2. Flow process chart – (man / material / equipment type)
3. Operator chart (also called Two Handed Process Chart)
 record events in the sequence in which they occur on a
time scale so that the interaction of related events can be
more easily studied. Charts falling in this group are
1. Multiple activity chart
2. Simo chart

35. Operator Process Chart
It is also called Left Hand – Right Hand
chart and shows the activities of hands of
the operator while performing a task. It
uses four elements of hand work:
Operation, Delay (Wait), Move and Hold.
Its main advantage lies in highlighting un-
productive elements such as unnecessary
delay and hold so that analyst can take
measures to eliminate or shorten them.

37. Multiple Activity Chart:
 Worker-Machine process chart and gang process chart fall
in the category of multiple activity charts. A worker-
machine chart is used for recording and analyzing the
working relationship between operator and machine on
which he works. It is drawn to time scale. Analysis of the
chart can help in better utilization of both worker and
machine time. The possibility of one worker attending more
than one machine is also sought from the use of this chart.
 A gang process chart is similar to worker-machine chart,
and is used when several workers operate one machine. The
chart helps in exploring the possibility of reducing both the
operator time and idle machine time.

38. Simo Chart
 A Simo chart is another Left-Hand Right-
Hand chart with the difference that it is
drawn to time scale and in terms of basic
motions called therbligs. It is used when the
work cycle is highly repetitive and of very
short duration.

41. Developing Better Method:
 With the present method or procedure for the job in mind,
the application of ‘critical analysis' highlights the essential
part of the job, for which alternative ways for its carrying
out are developed .
 When developing alternative ways for doing a task the
following may be considered.
1. Where and how to use ‘man' in the process?
2. What better work procedure be adopted?
3. What better equipment be used?
4. What better layout of work station, shop or factory be
used?

42. Motion Study
 Motion study is a technique of analyzing the
body motions employed in doing a task in
order to eliminate or reduce ineffective
movements and facilitates effective
movements.
 By using motion study and the principles of
motion economy the task is redesigned to be
more effective and less time consuming.

43. Cycle graph and Chrono cycle graph
 These are the techniques of analyzing the
paths of motion made by an operator and
were originally developed by the Gilbreths.
 To make a cycle graph , a small electric bulb
is attached to the finger, hand, or any other
part of the body whose motion is to be
recorded.
 By using still photography, the path of light of
bulb (in other words, that of the body
member) as it moves through space for one
complete cycle is photographed.

44. Work Measurement
 Work measurement refers to the estimation
of standard time for an activity, that is the
time allowed for completing one piece of job
by using the prescribed method.
 Standard time can be defined as the time
taken by an average experienced worker for
the job with provisions for delays beyond the
worker's control.

46. Applications
 Standard times for operations are useful for several applications in
industry, like
1. Estimating material, machinery, and equipment requirements.
2. Estimating production cost per unit as an input
3. Preparation of budgets
4. Determination of selling price
5. Make or buy decision
6. Estimating manpower requirements.
7. Estimating delivery schedules and planning the work
8. Balancing the work of operators working in a group.
9. Estimating performance of workers and using that as the basis for
incentive payment to those direct and indirect or labor who show
greater productivity

47. TIME STUDY
 It is the most versatile and the most widely
used technique of work measurement.
 Time study is a technique to estimate the time
to be allowed to a qualified and well-trained
worker working at a normal pace to complete
a specified task by using specified method.
 This technique is based on measuring the
work content of the task when performed by
the prescribed method, with the allowance for
fatigue and for personal and unavoidable
delays.

48. Time Study Procedure:
 The procedure for time study can best be described step-wise,
which are self explanatory.
 Step 1: Define objective of the study. This involves statement of the
use of the result, the precision desired, and the required level of
confidence in the estimated time standards.
 Step 2: Verify that the standard method and conditions exist for
the operation and the operator is properly trained. If need is felt
for method study or further training of operator, the same may be
completed before starting the time study.
 Step 3: Select operator to be studied if there are more than one
operator doing the same task.
 Step 4: Record information about the standard method, operation,
operator, product, equipment, and conditions on the Time Study
observation sheet.
 Step 5: Divide the operation into reasonably small elements, and
record them on the Time Study observation sheet.

49. Time Study Procedure:
 Step 6: Time the operator for each of the elements. Record the data
for a few number of cycles on the Time Study observation sheet. Use
the data to estimate the total number of observations to be taken.
 Step 7: Collect and record the data of required number of cycles by
timing and rating the operator.
 Step 8: Calculate the representative watch time for each element of
operation. Multiply it by the rating factor to get normal time.
 Normal time = Observed time x Rating factor
 Calculate the normal time for the whole operation by adding the
normal time of its various elements.
 Step 9: Determine allowances for fatigue and various delays.
 Step 10: Determine standard time of operation.
Standard time = Normal time + allowances

51. Time study 2
 Time study with the help of a stop watch is the most commonly used
work measurement method. This technique was developed by Frederick
Winslow Taylor (1856-1915).
 Time study is best suited for short-cycle repetitive jobs. Most of the
production jobs can be easily timed by a time-study.
 Time study procedure consists of the following steps:
1. Select the job to be timed.
2. Standardize the method of doing the job.
3. Select the worker to be studied.
4. Record the necessary details of the job and conditions of work.
5. Divide the job into elements. Here, ’element’ is a part of the job.
6. Find out the time taken to do every single element.
7. Keep provisions for relaxation, etc.
8. Fix the standard time for doing the job.

52. Work sampling method
 Work sampling method was original developed by Leonard Henry
Caleb Tippett (1902-1985) in Britain in 1934. In this technique, the
workers are observed many times at random. It is done to find out for
how much time the worker is actually on the job. It checks how long he
is working and how much time he is not working (idle time).
 Work sampling method does not involve stop watch measurement. The
purpose of work sampling technique is to estimate what proportion of a
worker’s time is devoted to work-related activities.
 Work sampling method involves following three main steps:
1. Deciding what activities are defined as ’working’. Non-working are
those activities which are not defined as working.
2. Observe the worker at selected intervals and record (write down)
whether he is working or not.
3. Calculate the portion of time (P), a worker is working.
 A portion of time (P) a worker is working equals to ’Number of
observations during which working occurred’ divided by ’Total Number
of observations.’ The above calculation is used as a performance
standard.

53. Synthesis technique
 Synthesis technique also considers the level of
performance. Level of performance refers to the
speed of performance, which is either, normal,
fast, or very-fast.
 The benefits or advantages of synthesis
method:
1. It provides reliable information about standard
time for doing different jobs. This is because it
is based on many past time studies.
2. It is economical because there is no need to
conduct new time studies.

54. PTMS technique
 PTMS technique is used mostly for jobs, which are planned for
future. However, it can also be used for current jobs as an
alternative to time study.
 The benefits or advantages of PMTS method:
1. It is a very accurate method. It avoids subjective judgments or
bias of rater.
2. It is an effective and economical method for repetitive jobs of
short duration.
3. There is no interference in the normal work routine, and so it
does not face any resistance from the employees.
4. It helps to improve the work methods because it gives a detailed
analysis of the motions.
5. It is more economical and fast compared to normal time studies.

55. Estimating technique
 The benefits or advantages of analytical
estimating technique:
1. It helps in planning and scheduling the
production activities.
2. It provides a basis for fixing labor rate for
non-repetitive jobs.
3. It is economical because it uses standard data
for fixing the standard time of each job.

56. Capacity
Capacity: the amount of output that can
be created by, a process, with a given
level of resources over a given time
period.

57. Capacity planning
 Capacity planning is the process of determining
the production capacity needed by an
organization to meet changing demands for its
products.
 In the context of capacity planning,
design capacity is the maximum amount of work
that an organization is capable of completing in a
given period.
 Effective capacity is the maximum amount of
work that an organization is capable of
completing in a given period due to constraints
such as quality problems, delays, material
handling, etc

58. Capacity planning
 Capacity decisions affects product lead times,
customer responsiveness, operating costs and
firm’s ability to compete
 Inadequate capacity leads to lose of customers
and limits growth.
 Excess capacity can drain the firm’s resources.
 The goal of capacity planning are
1. Minimize this discrepancy
2. Better utilization of existing capacity

59. Capacity planning
 Capacity can be increased through
introducing new techniques, equipment and
materials, increasing the number of workers
or machines, increasing the number of shifts,
or acquiring additional production facilities.
 Capacity is calculated as (number of machines
or workers) × (number of shifts) × (utilization)
× (efficiency).

60. Factors Affecting Capacity Planning
 Effective capacity planning is dependent upon
factors like
1. Production facility (layout, design, and location)
2. Product line or matrix
3. Production technology
4. Human capital (job design, compensation)
5. Operational structure (scheduling, quality
assurance)
6. External structure ( policy, safety regulations)

61. Capacity Planning Strategies
 Lead Strategy
 Lag strategy
 Match strategy
 Adjustment Strategy