SUBJECT CODE: MB044

Production & Operations Management

2013

SIKKIM MANIPAL UNIVERSITY

Ques.1 what do you understand by Vendor-Managed Inventory (VMI)? Answer : Vendor-managed inventory (VMI) is a family of business models in which the buyer
of a product provides certain information to a supplier of that product and the supplier takes full responsibility for maintaining an agreed inventory of the material, usually at the buyer's consumption location (usually a store). A third-party logistics provider can also be involved to make sure that the buyer has the required level of inventory by adjusting the demand and supply gaps. As a symbiotic relationship, VMI makes it less likely that a business will unintentionally become out of stock of a good and reduces inventory in the supply chain. Furthermore, vendor (supplier) representatives in a store benefit the vendor by ensuring the product is properly displayed and store staffs are familiar with the features of the product line, all the while helping to clean and organize their product lines for the store. One of the keys to making VMI work is shared risk. In some cases, if the inventory does not sell, the vendor (supplier) will repurchase the product from the buyer (retailer). In other cases, the product may be in the possession of the retailer but is not owned by the retailer until the sale takes place, meaning that the retailer simply houses (and assists with the sale of) the product in exchange for a predetermined commission or profit (sometimes referred to as consignment stock). A special form of this commission business is scan-based trading whereas VMI is usually applied but not mandatory to be used. This is one of the successful business models used by Wal-Mart and many other big box retailers. Oil companies often use technology to manage the gasoline inventories at the service stations that they supply (see Petrol soft Corporation). Home Depot uses the technique with larger suppliers of manufactured goods (i.e. Moen, Delta, RIDGID, Paulin). VMI helps foster a closer understanding between the supplier and manufacturer by using Electronic Data Interchange formats, EDI software and statistical methodologies to forecast and maintain correct inventory in the supply chain. Vendors benefit from more control of displays and more customer contact for their employees; retailers benefit from reduced risk, better store staff knowledge (which builds brand loyalty for both the vendor and the retailer), and reduced display maintenance outlays. Consumers benefit from knowledgeable store staff who are in frequent and familiar contact with manufacturer (vendor) representatives when parts or service are required. Store staff have good knowledge of most product lines offered by the entire range of vendors. They can help the consumer choose from competing products for items most suited to them and offer service support being offered by the store.

Ques.2 Explain briefly the four classifications of scheduling strategies & its approaches. Answer: TYPES OF SCHEDULING STRATEGIES:
Scheduling strategy differs from organization to organization as it depends on the quantum of production, size and type of production, companys policy, and priorities, etc. Most of these strategies are concerned with job shop production since the problems encountered is more than on product is produced in the same plant. Following are the classifications: Detailed Scheduling Cumulative Scheduling Cumulative-detailed scheduling Priority decision rules

Detailed Scheduling
All job orders from customers are scheduled to the last details. This may not be practical in case disruptions are there in production line like machine breakdown, absenteeism, etc.

Cumulative Scheduling
The customer orders are pooled to form a cumulative work load and then matched with the capacity. The work load is then allocated in such a way that immediate periods get allocated to maximum capacity.

Cumulative-detailed combination
This combines both the earlier strategies of form and flexible nature of work load. Cumulative work load projection can be used to plan for capacity as needed. As changes happen during the week, the materials and capacity requirement are updated. The actual time allocated to the specified job at each work centre is as per the standard hours needed. This is tuned further with the requirements of the master schedule.

Priority decision rules

When a set of orders are to be executed, the questions of prioritising arises. These priority decision rules are scheduling guidelines used independently or in conjunction with any one of the above three strategies.

APPROACHES TO SCHEDULING:
These are the two types of approaches to scheduling. They are forward scheduling and backward scheduling. These are used to ensure that the lead time for manufacture is kept to a minimum and the products are supplied to the customers as quickly as possible.

Forward scheduling
Forward scheduling is an approach where the customer orders are immediately processed as soon as thy com in even if their due dates are far away. With forward scheduling, the scheduler selects a planned order release date and schedules all the activities from this point forward and ready within time.

Backward scheduling
With backward scheduling, the scheduler begins with a planned receipt date or due date and moves backward in time according to the required processing times. It is an approach where the customer orders are processed as late as possible so that they are finished and delivered exactly on their due dates. Here the starting time of the processing job is determined by setting back the number of days required for its processing, from finish date.

Q.3 Define production management. What are the various functions involved in production management? Answer: Production Management encompasses all activities that go into conversion of a set of
inputs into outputs which are useful to meet human needs. Production Management involves the Identification of the requisite materials, knowledge of the processes, and installation of equipments necessary to convert or transform the materials to products. The quantities to be produced have to be ascertained, processes established, specifications detailed out, quality maintained, and products delivered in time to meet the demands. Decisions need to be taken about: Location of the facility Variety of machineries required to be installed Technologies to be deployed Recruitment of work force with adequate training to perform the tasks These decisions will help to achieve productivity with utmost efficiency. Constraints on resources and competition demands that optimization be obtained in all functions at all levels. Different materials have to be procured, stored, and transported inside the organization for transformation using processes. Information flows throughout the cycle to instruct, to monitor and to control the processes to establish relevant costs and to look for opportunities for continuous improvement. All these functions generate their own subsystems which help in the establishment of accountability and the recognition of performance necessary for improvement. Strategies at various levels will have to be formulated with appropriate implementation procedures established with checks and balances. Flexibilitywillhavetobedesignedintothesystemtotakecareoffluctuationsin the market both for purchased items and the demand. Technological change shaves to be accommodated both as challenges and opportunities for development to be abreast of the global environment. The various functions involved in production are: Procurement of materials Moving the material for transformation, that is, to adapt processes which change their characteristics and attributes to make them suitable for the product Training and deploying the workforce

 Implementing procedures for systematic loading of machines Maintaining inventories Maintenance of machines Establishing methods of inspection Packaging the mutably Planning, both long and short term requires information about the capacities that are required. Many items need to be purchased, some partially manufactured, and some partially processed. The quantities of each of these have to be assessed for procurement, storage, inspection, and receipt. Information flow at every stage identifies the value additions that are taking place. A faithful record of the various stages, the time consumed, costs involved and their impact on other processes helps in identifying bottlenecks and opportunities for improvement. It has been widely recognized that inventories, such as raw materials, work-in-process, and finished goods, cast a heavy burden on profitability. In the modern times, when there is pressure on margins from all sides, it is mandatory to keep inventories to the minimum. So the concepts of Just-intime (JIT) and Lean Manufacturing are applied to utilize the resources to best advantage. Integrated Production Manufacturing is expected to address these concerns and offer methodologies to make the production system efficient.

Ques.4 Explain the various phases in project management life cycle. Ans. The Phases of Project Management Life Cycle are:
Project management life cycle has six phases: 1. Analysis and evaluation phase. 2. Marketing phase. 3. Design phase 4. Execution phase 5. Control-inspecting, testing, and delivery phase 6. Closure and post completion analysis phase.

1. Analysis and Evaluation Phase: Analysis and evaluation phase is the initial phase of any
project. In this phase, information is collected from the customer pertaining to the project from the collected information; the requirements of the project are analyzed. According to the customer requirement, the entire project is planned in a strategic manner. The project manager conducts the analysis of the problem and submits a detailed report to the top management.

2. Marketing Phase: A project proposal is prepared by a group of people including the

project manager. This proposal has to contain the strategic adopted to market the product to the customer. 3. Design Phase: Design phase involves the study of inputs and outputs of the various project stages. Inputs received consist of: project feasibility study, preliminary project evaluation details, project proposal, and customer interviews.

Outputs produced consist of: system design specifications, functional specifications of the project, design specifications of the project and project plan.

4. Execution Phase: In execution phase, the project manager and the term members work on the project objectives as per the plan. At every stage during the execution, reports are prepared. 5. Control- Inspecting Testing and Delivery Phase: During this phase, the project teamworks under the guidance of the project manager. The project manager has to ensure that the team working under him is implementing the project designs accurately. The project has to be tracked or monitored through its cost, manpower, and schedule. The project manager has to ensure ways of managing the customer and marketing the future work, as well as ways to perform quality control work. 6. Closure and Post Completion Analysis Phase: Upon satisfactory completion and delivery of the intended product or service the staff performance has to be evaluated. The project manager has to document the lessons from the project. Reports on project feedback are to be prepared and analyzed. A project execution report is to be prepared.

Ques.5 Explain the ingredients of a business process. Explain Physical Modeling. Ans. THE INGREDIENTS OF BUSINESS PROCESS:
The ingredients that might be used in a business process can be briefly outlined as shown below. The data which accomplishes the desired business objective. Acquisition, storage, distribution, and control of data which undertakes the process across tasks. Persons, teams, and organizational units who helps to perform and achieve the tasks. Decision which enhances the value of data during the process.

PHYSICAL PROCESS MODELLING

Physical process modeling is concerned with the actual design of data base meeting the requirement of the business. Physical modeling deals with the conversion of the logical model into a relation model. Object gets defined at the schema level. The objects here are tables created on the basis of entities and attributes. A database is defined for the business. All the information is put together to make the database software specific. This means that the objects during physical modeling vary on the database software being used. The outcomes are server model diagrams showing tables and relationships with a database.

Q.6 Define the term quality. Explain the concept of quality at source. Ans. Meaning of Quality: Quality has been defined in many ways and such there is no
commonly agreed definition of quality. Different experts and gurus have given definitions based on their observations, experience, and philosophies. As per ISO 9000 standards, quality is defined as totality of characteristics and features of a product/service that bear on its ability to satisfy the stated/ implied needs. This definition is now used in all industry and business related activities. As stated by Chartered Quality Institute, UK in its broadest sense, quality is a degree of excellence: the extent to which something is fit for its purpose. In narrow sense, product or service quality is defined as follows: Conformance with requirement Freedom from defects or contamination or A degree of customer satisfaction. In Quality management, quality is defined as all of the characteristics of a product or service that affect its ability to do its stated and implied functions.

Concept of Quality At Source:

The concept of quality makes the production worker responsible for inspecting his/hr own work and for taking corrective actions. Since inspection is done immediately after a job is done, finding the cause of the error with clarity aids in faster rectification. Every worker has the authority to stop production, if he/she finds some serious defect. This puts responsibility for quality on the workers and gives them pride in their work. Help should be available from the quality control personnel to help workers understand the implications of the above actions. This brings in cooperation and improves the achievement of quality. The information generated may be used to effect improvements at the suppliers and also. The entire process brings in openness, commitment, participation and helps in achieving quality.