The Challenge

Management of Manufacturing
Systems - An Overview

 The two most important people in an

organization are those who make the
product and those who sell them
 Historical developments in
production systems
1933, Barnes work study
1917, Harris NC, CNC
Inventory
1947, Dantzig
1913, Gantt LP
1910, Taylor Factory
Scientific Mgt. of the
future.
Autom
High
ation,
1764- Steam Automati
CIM
Engine O.R and on
Scientific quant
managementmethod
s
Industrial
Revolution

08 Feb 2003 1800 G Srinivasan, IIT Madras

1970 2020
1900 1950 2000
developments in technology
E-
ERP commerce
Flexible
automatio
n
NC Factory
of the
future.
Autom
High
ation,
Automati
CIM
O.R and on
Scientific quant
managementmethod
s
Industrial
Revolution

08 Feb 2003 1800 G Srinivasan, IIT Madras

1970 2020
1900 1950 2000
The challenge

 Changing market conditions

 Rate of change is faster
 Global competition
 Need to be proactive
 Increased Customer focus
 The Changing customer
 Once satisfied with a black car.
 Availability
 Price
 Quality
 Variety
 wants to buy frequently

 Absolutely impatient customer

 Wants more value for money

11/12/2019
Requirements of manufacturing
 Make an increasing variety of products, on
shorter lead times with smaller runs and
flawless quality.

 Improve ROI by automating and introducing

new technology in process and materials so
that price can be reduced to meet local and
foreign competition.

 Mechanize – but keep schedules flexible,

inventories low, capital costs minimal and
work force contented” (Skinner, 1985)
G Srinivasan, IIT Madras
Events in History

 The war - Resource Availability

 Computers - Cost and information control
 Quantitative methods - Doing things well
 Communication - Personal touch
 Electronic Commerce - Doorstep
 Home offices

11/12/2019
Some more History
 Adam Smith and James Watt
 Up and down motion to rotary motion
 Desirability of a factory system (capital and
labor)
 Watt showed how to do it
 Carnegie and Scale
 Steel Industry with a large stable output.
 Concept of cost control to increase profits
 Some more History
 Ford and Speed
 Take the work to the man and not man to the work.
 The moving assembly line
 Did not concentrate on variety
 Scientific Management
 Concentrate on Efficiency
 Work standards are the rate of work by a “first class
man”
 Carrot and stick – The worker who is fast and efficient is
rewarded while the inefficient is discharged
 Some more History
 Scientific Management – Gantt
 Minimum money + bonus
 Known for Gantt chart
 Emerson also agreed with Gantt.
 Emerson – dispatching Rules
 Gilbreth
 Motion Study
 Human Aspects of work study (Lillian)
 Methodology - Traditional
Approaches
 Line layout - Product Layout
Continuous high volume production

 Process layout - Batch production,

Middle volume Middle variety - focus
on utilization of resources

 Quality- SQC Focus on measurement

and conformance to specifications
11/12/2019
Requirements of manufacturing
 Make an increasing variety of products, on
shorter lead times with smaller runs and
flawless quality.

 Improve ROI by automating and introducing

new technology in process and materials so
that price can be reduced to meet local and
foreign competition.

 Mechanize – but keep schedules flexible,

inventories low, capital costs minimal and
work force contented” (Skinner, 1985)
08 Feb 2003 G Srinivasan, IIT Madras
Methodology - Process
Improvement
 Group Technology, Cellular manufacturing -
Reorganizing machines, grouping of parts
to families - Ownership and Responsibility
 Japanese Management Systems - JIT -
Waste elimination, Inventory Reduction

 Flexible Manufacturing - Automation - High

volume- Focus on technological solutions -
Reducing production time
 Methodology - Human
Resources and Processes
 Total Quality Management - Focus
on people, employee
empowerment, Quality Circles

 Business Process Reengineering,

Management Reengineering

 ISO 9000 - Certification and

recognition of a system in place
11/12/2019
Methodology - Information
Systems and Decisions
 Materials Resources Planning -
Inventory Reduction, Consistency in
BOM, Lot sizing, pull systems
 Enterprise Resources Planning -
Integrating the various functions
 Supply Chain Management - Decision
Making, integration of production and
distribution
 Methodology - Business
Perspective

 Business Process Reengineering

 Constraint Management - The Goal,

Synchronous Manufacturing

 Agility - Empowering the customer,

Cooperate and compete
 9 laws in manufacturing
 First Law: Little’ law

 “Consider an amusement park that charges $1 for

every hour. The rate at which park earns is $N per
unit time where N is the average number of
people in park at any instance. People pay at λT
per unit time where λ is arrival rate and T =
average time/person. In the long run N = λT
(Dimitri Bertsekas)”.
 WIP = Production rate * Throughput time
9 laws in manufacturing
 First Law: Little’ law
 WIP = Production rate * Throughput time

 Any increase in output requires either an increase in

work-in-process inventory or a reduction in cycle time
or both. (Here λ represents output and not arrival)
 Second Law : Matter is conserved
 Difference between material entering and
leaving is the inventory.
 Applicable to entire plant. All that comes in
must leave
9 laws in manufacturing
 Third Law: Larger the scope, less reliable is
the system
 As we add more machines, for the same system
availability, individual reliabilities become larger.
 Machine downtime has to be lesser.
 Fourth Law : Objects Decay
 The performance of the machines deteriorate with
time.
 Applicable to newer and flexible machining
systems also.
9 laws in manufacturing
 Fifth Law: Complexity of systems grow
exponentially
 Most of the time we assume a linear relationship,
which is wrong.
 Number of sequences is n! If jobs are doubles,
number of sequences is much more than double.
 Sixth Law : Technology Advances
 Decay of systems create new systems with better
performance
 New means are better than old means
(breakdown etc)
9 laws in manufacturing
 Seventh Law: System components behave
randomly
 Inherently stochastic behaviour.
 E(LTD) vs actual LTD for an instance
 Parallel processors – behave differently
 Eighth Law : Limits of human rationality
 Limited by linear thinking
 Limited by seven items at a time
 Keen on satisficing than optimizaing
9 laws in manufacturing
 Ninth Law: Combining, Simplifying and
eliminating can save time, money and
effort
 Led to CMS, JIT, kanban etc.
 Principles of IE.
Cellular Manufacturing
Systems

G SRINIVASAN
Professor
Department of Management Studies
IIT Madras

gsrini@iitm.ac.in

24
 BASIC PRINCIPLE
 SIMILAR “THINGS” SHOULD BE
DONE SIMILARLY
 “THINGS “
 PRODUCT DESIGN
 PROCESS PLANNING
 FABRICATION &ASSEMBLY
 PRODUCTION CONTROL
 ADMINISTRATIVE FUNCTIONS
25
TENETS OF GROUP
TECHNOLOGY
 DIVIDE THE MANUFACTURING
FACILITY INTO SMALL GROUPS OR
CELLS OF MACHINES

 THIS IS CALLED CELLULAR

MANUFACTURING
26
 Cellular Manufacturing
 Machines are grouped into cells and parts into families
such that the parts are manufactured completely
within the assigned cells.

 Usually, machine-part incidence data in the form of a

zero-one matrix is used

 Ease of applicability. Cost of conversion is not very

high

 Several companies have reported successful

implementation of CMS, (Wemmerlov and Johnson,
1997).
27
Figure 1.2 (a) – Functional Layout

Assembly C B A

11 12 14

13 15

4 5 8
1 2

3 6 7 9 10

A Raw Materials B C

28
 Figure 1.2 (b) – Cellular Layout

Assembly A Assembly B Assembly C

15
9 10 6 5
13

14 4 2 3

7
1 11 8 12

A Raw Materials B C

29
 SYNCHRONOUS
MANUFACTURING and
THEORY OF CONSTRAINTS

G Srinivasan
IIT Madras
gsrini@iitm.ac.in
PRINCIPLES OF SYNCHRONOUS
MANUFACTURING
 Synchronous Manufacturing refers to the
entire production system working in harmony
to achieve the goals of the firm
 It is more of a commonsense approach that
believes that careful analysis of bottleneck
resources can increase throughput without
additional investment in machinery.
 It is an off shoot of the popular book “The
Goal” by Dr Elihayu Goldratt which is said to
revolutionize American industry.
End of the month syndrome
 Production increases at the end of the
month to meet deadlines.
 beginning of the month - large batches
and fewer set ups.
 end of the month too many people
compete for the same resources -
production in small batches, too many
set ups.
Goal of the organization
 producing high quality items at
competitive price
 providing customer service,
 increasing market share,
 producing at reduced cost,
 The Goal

The actual goal is

“to make money
both now and in
the future”.
Measures of performance
• Throughput: Quantity of money
generated by a firm through sales
over a period of time.
• Inventory: Quantity of money
invested in materials that the firm
intends to sell.
• Operating Expenses: Quantity of
money spent by the firm to convert
inventory to throughput over a period
of time.
Synchronous Manufacturing
(SM)
 Production batch Vs Transfer Batch
 The advantages of SM
better quality,
better customer service
less cost of production.
lead times are smaller,
defects can be rectified quickly
STATISTICAL FLUCTUATIONS AND
RANDOM EVENTS
 Random events are those activities that take
place at irregular time intervals and disrupt
production.
 Example are non availability of raw materials,
manpower, machinery etc.
 They occur at the least opportune time and at
the most expensive spot.
 Statistical fluctuations - degree of inherent
variability in any system.
 predictable to a certain extent,
 introduce a certain instability to the process.
Analogy
 The production process -- troop of
marching soldiers.
 Initially the pace is even but as time
progresses due to fluctuations, the gap
increases.
 The slowest person in any row decides the
pace of the row and since rows cannot
pass each other,
 the gaps can only widen and rows do not
come closer.
Marching Analogy
 The lead time is the time between the first
and last soldiers in the forced march. It is the
time between the release of material and the
transformation of these into finished goods.
 In production process we have work in
process inventory. It is the distance covered
by some and not covered by others
 Throughput is the amount of product
produced and sold. It is the distance covered
by the last row of soldiers.
 Operating expense is the amount of energy
spent by the soldiers in completing the
march.
Effect of statistical fluctuations
and random events
 The simultaneous presence of statistical
fluctuations and dependent events has
a serious consequence on the
manufacturing operations.
 Because of the existence of dependent
events, the statistical fluctuations do
not average out.
 The negative variances accumulate and
disrupt the planned flow.
Definition
 supply chain is a network of facilities
and distribution options that performs
the functions of procurement of
materials, transformation of these
materials into intermediate and finished
products, and the distribution of these
finished
Total Quality Management
Introduction to TQM;
Implementation in education

G Srinivasan
Total Quality Management
 Management Approach of an
Organization centered on Quality based
on participation of all its members and
aiming at long term success through
customer satisfaction, and benefits to
all members of the organization and to
society.

 TQM is based on continuous

improvement and involves a cultural
change
What is Quality?
 Degree of Excellence (Oxford Dictionary)
 Fitness for purpose
 Conformance with requirements
 Minimum loss imparted to society from the
time the product is shipped (Taguchi)
 Quality does not happen by accident. It must
be planned (Juran)
Definition of Quality
 The totality of characteristics of an entity
that bear on its ability to satisfy the
stated and implied needs (ISO 8402 -
1994)

 Ability of a set of inherent characteristic

of a product, system or process to fulfill
requirements of customers and other
interested parties.
Vision and Mission
 A vision is a dream created in our
waking hours of how we would like our
organization to be. It is a living picture
of a future desirable state. It is the
deepest expression of what we want.

 Mission defines the business we are in.

It states the purpose of existence of an
organization. It defines WHO is the
customer, WHAT their needs are and
HOW it is to be met.
Vision and Mission
 A vision is an attempt to articulate what
a desired future for a company would
look like. It can be likened to "...an
organizational dream - it stretches the
imagination and motivates people to
rethink what is possible.“
 Visions tend to be evocative, rather
than precise
 Mission is a brief explanation of the
organizations purpose.
Characteristics of a vision
 Imaginable - conveys a picture of what the
future will look like
 Desirable -appeals to the long-term interests
of employees, customers, stockholders, and
others who have a stake in the enterprise
 Feasible -comprises realistic, attainable goals
 Focused -is clear enough to provide guidance
in decision making
 Flexible -is general enough to allow individual
initiative and alternative responses in light of
changing conditions
 Communicable -is easy to communicate; can
be successfully explained within five minutes
values/mission/vision…

VALUES:
character

MISSION: VISION:
purpose direction
What are Core values?
 What core values do you personally bring to
your work?

 Would you hold them regardless of whether

or not they were rewarded.

 What would you tell your children are the

core values that you hold at work and that
you hope they will hold when they become
working adults?
 What are Core values?
 If you awoke tomorrow morning with enough
money to retire for the rest of your life, would you
continue to live those core values?

 Would you want to hold those core values, even if

at some point one or more of them became a
competitive disadvantage?

 If you were to start a new organization tomorrow

in a different line of work, what core values would
you build into the new organization regardless of
its industry
 What are Core values?
 Walt Disney --Imagination and wholesomeness
 P&G – product excellence
 Nordstrom – Service to the customer
 HP – Respect for the individual
 Core Values define for us what we stand
for, and we would hold them even if they
became a competitive disadvantage in
certain situations.
Core purpose
 Reason for being
 3M: To solve unsolved problems innovatively
 Hewlett-Packard: To make technical
contributions for the advancement and
welfare of humanity
 McKinsey & Company: To help leading
corporations and governments be more
successful
Core purpose
 Nike: To experience the emotion of
competition, winning, and crushing
competitors
 Sony: To experience the joy of advancing and
applying technology for the benefit of the
public
 Wal-Mart: To give ordinary folk the chance to
buy the same things as rich people
 Walt Disney: To make people happy