PRODUCTION &

OPERATIONS
MANAGEMENT
Paper code: 2.24/5.84/3.25

Preeti Nigam
Faculty, Rai University
Acknowledgements

These slides have been prepared with the help of information

provided by the following authors:

 Chase, Jacobs & Aquilano

 William J. Stevenson
 Panneerselvam
 N.G. Nair
 www.fotosearch.com/clip-art
Unit-I
 Meaning, nature, scope and major decision areas
of production management;
 production system: meaning and types
(production to order & production to stock);
 facilities location;
 facilities layout and materials handling;
 line balancing.
 The Organization

The Three Basic Functions

Organization

Finance Operations Marketing

Definition
Production/Operations Management is the
process which combines and transforms various
resources of the organization into value added
products/services in a controlled manner as per
the policies of the organization.

E.g. manufacturing of car, radio

travel booking, arranging food for parties
Decisions at Different Levels of
Management

Strategic decisions

Tactical decisions

Operational decisions
Key Decisions of Operations
Managers
 What
What resources/what amounts
 When
Needed/scheduled/ordered
 Where
Work to be done
 How
Designed
 Who
To do the work
Responsibilities of Operations Managers
 Planning
 Capacity
 Location
 Products and services
 Make or buy
 Layout
 Projects
 Scheduling
Responsibilities of Operations Managers
 Controlling
 Inventory Control
 Quality Control

 Organizing
 Degree of Centralization
 Subcontracting
Responsibilities of Operations Managers
 Staffing
 Hiring/Layoff
 Use of Overtime

 Directing
 Incentive Plans
 Issuance of work orders
 Job assignments
Why Study Operations Management
1. Business Education is incomplete without
understanding modern concepts
2. A systematic way of looking at
organizational processes is enabled
3. Interesting job opportunities present
4. Concept ad tools of OM are used to
manage other functions of a business
Operations Consulting
Defined

 Operations consulting involves assisting

clients in developing operations strategies
(i.e., product leadership, operational
excellence, customer intimacy, etc.) and in
improving production (and service delivery)
processes.
 Operations Consulting & the 5 Ps
 Plants- - Factories or service branches where production is
carried out
 Adding and locating new plants
 Expanding, contracting, or refocusing facilities

 Parts- Materials or the supplies that go through the system

 Make or buy decisions
 Vendor selection decisions

 Processes- Equipment and steps by which production is

accomplished
 Technology evaluation
 Process improvement and reengineering
 Operations Consulting & the 5 Ps
(Continued)
 People- Direct and indirect workforce
 Quality improvement
 Setting/revising work standards
 Learning curve analysis

 Planning and Control Systems- Procedures and

information management uses to operate the system
 Supply chain management
 MRP
 Shop floor control
 Warehousing and distribution
 Theory of Slack Ropes
Time

Service
Quality
By pulling on one
priority, the others tend
to get pulled along with
it.

Flexibility Price

Source: Duncan McDougall

 Types of Transformation
A production system uses resources to transform inputs
into desirable outputs.

1. Physical (as in manufacturing)

2. Location (as in transportation)
3. Exchange (as in retailing)
4. Storage (as in warehousing)
5. Physiological (as in Healthcare)
6. Informational (as in Telecommunications)
 Examples of Transformation Processes
System Input Resource Transform Output
Function
Hospital Patients Nurses, Healthcare Healthy
supplies individuals
Airline Traveler Airplane Move to Timely safe
destination delivery
Hotel Hungry Food, chef Well prepared Satisfied
customer food customers

Automobile Steel, engine Tools, Assembly of High quality

workers cars cars
Dept Store Shoppers Stock of Promote Sales to
goods products satisfied
customers
Inter relationship of production
management with other areas of
management
A Marketing
 Identifying customer requirements
 Product Life Cycle
 Distribution
 Product
 Price
 Customer Feedback on Products
Inter relationship of production
management with other areas of
management
B Finance
 The Operation Budget
 Break Even Point Analysis
 Working Capitol
 Provision of finance for improvements
 Provision of info. on general condition of
firm
Inter relationship of production
management with other areas of
management
C Accounting
 Cost Data
 Special Reports
 Data Processing Services

D Industrial Engineering
 Methods
 Work Measurement Information
 Plant Layout & Material Handling Info.
Inter relationship of production
management with other areas of
management
E Procurement (Materials Management)
 Determination of Items to be Purchased
 Delivery Schedules
 Updating info. On new products,
materials and process
 Inventory planning & Control
Inter relationship of production
management with other areas of
management
F Personnel
 Recruitment, hiring and firing of people
 Training
 Labour relations
 Motivation to workers & Safety factors

G Research & Development

 For ideas concerning new products, process
and new tools for production
Techniques and Procedures in OM
1. Forecasting
2. Location and Layout Techniques
3. Product design and analysis, work study
4. Production control techniques
1. Aggregate Planning
2. Master Production Schedule
3. Materials Requirement Planning
4. Capacity Planning
5. Scheduling and control
5. Maintenance management
6. Feedback and control techniques
1. Quality Control
2. Inventory Control
Plant
 The Physical means of production such as
buildings, machineries, dies tools, jigs
fixtures, service machineries and/or
workshop equipments erected and
equipped at a given location for the
purpose of converting the raw materials to
finished goods using men, machineries and
materials is called plant.
Location
 Location may be defined as a particular
area/site/place selected for setting up of a
manufacturing/production unit or plant.
Need for Location Decisions
 Marketing Strategy
 Cost of Doing Business
 Growth
 Depletion of Resources
Nature of Location Decisions
 Strategic Importance of location decisions
 Long term commitment/costs
 Impact on investments, revenues, and operations
 Supply chains
 Objectives of location decisions
 Profit potential
 No single location may be better than others
 Identify several locations from which to choose
 Location Options
 Expand existing facilities
 Add new facilities
 Move
Making Location Decisions
 Decide on the criteria
 Identify the important factors
 Develop location alternatives
 Evaluate the alternatives
 Identify general region
 Identify a small number of community
alternatives
 Identify site alternatives
 Evaluate and make selection
 Issues in Facility Location
1. Proximity to customers
2. Business Climate
3. Total costs
4. Infrastructure
5. Quality of Labour
6. Suppliers
7. Other facilities
8. Free trade zone
9. Political Risk
10. Government barriers
11. Trading blocks
12. Environment regulations
13. Host community
14. Competitive advantage
Location Decision Factors
Community
Regional Factors Considerations

Multiple Plant Site-related

Strategies Factors
Regional Factors
 Location of raw
materials
 Location of markets
 Labor factors
 Climate and taxes
Community Considerations
 Quality of life
 Services
 Attitudes
 Taxes
 Environmental
regulations
 Utilities
 Developer support
Site Related Factors
 Land
 Transportation
 Environmental
 Legal
Multiple Plant Strategies
 Product plant strategy
 Market area plant
strategy
 Process plant strategy
 Service and Retail Locations
 Manufacturers – cost focused
 Service and retail – revenue focused
 Traffic volume and convenience most important
 Demographics
 Age
 Income
 Education
 Location, location, location
 Good transportation
 Customer safety
Globalization
 Facilitating Factors
 Trade agreements
 Technology
 Benefits
 Markets
 Cost savings
 Legal and regulatory
 Financial
 Globalization
 Disadvantages
 Transportation costs
 Security
 Unskilled labor
 Import restrictions
 Criticisms
 Risks
 Political
 Terrorism
 Legal
 Cultural
Foreign
Governmen
Designing and Operating
Production Systems
 System Design involves decisions that
relate to system capacity, the geographic
location of facilities, arrangement of
departments and placement of equipment
within physical structures, product and
service planning and acquisition of
equipment. The decisions may require
long term commitments.
Designing and Operating
Production Systems
 System Operation involves management of
personnel, inventory planning and control,
scheduling, project management and
quality assurance.
Degree of standardization
 Standardized Output means that there is
high degree of uniformity in goods or
services.
 Standardized goods include radio, television,
computers, newspapers, canned foods,
automobile tires, pens and pencils.
 Standardized services include automatic car
washes, televised newscasts, taped lectures
and commercial airline service.
Degree of standardization
 Customized Output means that the product
or service is designed for a specific case or
individual.
 Customized goods include eyeglasses, custom
fitted clothing, window glass cut to order and
customized draperies.
 Customized services include tailoring, taxi
rides and surgery.
Types of Operations
 Project- is a set of activities directed
toward a unique goal, usually large scale
with a limited time frame.
 Job Shop is an organization that renders
unit or lot production or service with
varying specifications, according to
customer needs. E.g. organizations that do
repair work
Types of Operations
 Batch Processing is a system used to produce
moderate volumes of similar items.
 Repetitive Production is a system that renders one
or a few highly standardized products or services.
 Continuous Processing is a system that produces
highly uniform products or continuous services
often performed by machines.
The Use of Models
 A Model is an abstraction of reality; it represents
a simplified version of a real phenomenon.
 Physical Model – e.g.s miniature cars, trucks,
airplanes and scale model buildings
 Schematic Model- e.g.s graphs, charts, blue
prints, pictures, drawings
 Mathematical Model- e.g.s numbers, formulas
and symbols
Recent Trends
 Global marketplace
 Operations Strategy
 TQM
 Flexibility
 Time Reduction
 Technology
 Worker Involvement
 Reengineering
 Environmental Issues
TYPES OF PRODUCTION
SYSTEMS
TYPES OF PRODUCTION SYSTEMS

Intermittent Continuous

Job Batch Mass Process

JOB TYPE PRODUCTION
SYSTEM
 Job production is the manufacture of a single complete
unit by an operator or a group of operators.
 Goods are produced according to definite customer
requirements
 Manufacturing status depends on the receipt of specific
items
 There is no assurance of continued demand
 This type of production is intermittent in nature

Examples: Bridge building, ship building, installing a

capital plant in factories
Job Production has following
specific characteristics
 Resources in a job shop are general rather than
specialized
 Basic materials with different specifications can
be used in many different jobs
 Equipments should be adoptable to different
users/customers
 The skills of employees/operators would be wide
enough to enable them to work on any job
Limitations of Job Production
 Since each job is distinct in nature hence
machines are general purpose and may not be
economical or efficient
 Machines need to be set up very frequently to suit
needs of variety of jobs. This may result in loss of
production time
 Job execution location many times may be out of
manufacturing unit
 As the resources such as manpower, process
machine tools are employed on varieties of non
standard jobs it may not be used economically
 Productive techniques like work study, value
analysis etc. may not be possible to be introduced
BATCH TYPE PRODUCTION
SYSTEM
 In the batch production the work on any
production is divided into operations, it means
that the work content of each unit is broken
into a number of operations not necessarily of
equal work content, and the operators are again
divided into groups. The first group will then
complete the first operations of all the units,
passing the batch as a whole on the next group
and so on until the manufacture is complete on
that operation.
Salient features of Batch Production
 Some degree of specialization of labor is
possible.
 Capital investment is low
 The planning required to ensure freedom from
idle and waste time is considerable.
 The planning of resources can be done
sufficiently and adequately, however possibility
of underutilization of certain machines and man
power can not be ruled out
 Cost minimization is one of the criteria for
considering the size of a batch
 The production control department can derive
greatest benefits
 Example: Pharmaceutical production.
MASS PRODUCTION SYSTEM
 This type is adopted when one or a few
standard products are to be
manufactured on large scale. In this
system demand for the product is
continuous and ongoing. As demand
pattern is known well in advance all the
resources can be planned very well.
Salient features of Mass Production
 Planning for optimum utilization of resources can be
ensured.
 A product wise layout and balance production line can be
designed
 Semiskilled or even unskilled labor can be utilized; very
small numbers of skilled workers are required.
 High output rating automatic machines can be utilized.
 Maintenance or breakdown must be attended most
efficiently and promptly otherwise it may result into
heavy loss of production
 There is lot of scope for introducing productive
techniques to increase productivity
 Product quality can be better controlled in this system

Example: Various Electrical appliances, Electronic

components, Dry battery cells. Etc.
PROCESS PRODUCTION
 This system is an extended form of mass
production in which manufacturing is
carried on continuously through a
uniform sequence of operations.
Salient features of Process
Production
 Process production calls for the setting up of
highly sophisticated automatic machines as far as
possible
 In this system usually one principal raw material
is transferred in to several products at different
stages of the operations.
 Example: Petroleum Refining, Heavy
Chemicals etc.
Process Selection Decisions
 Make-to-stock aims to produce products in
advance and helps to have ready stock
when demands occur. This is applicable
for a product which has no specific
customer at the time of manufacturing.
 E.g. toothpaste, soap etc.
Process Selection Decisions
 Make-to-order aims to manufacture
products only on orders. For e.g. crane
manufacturing, ship, boiler etc.
Six Factors Influencing Process
Selection
1. Market conditions
2. Capital requirements
3. Labor
4. Management skills
5. Raw materials
6. Technology
Process Characteristics Matrix
Make to Stock Make to Order

Line Flow Soap, paste, fertilizer, Automobile

cement assembly line,
Dumpers,
Railway coaches
Intermittent Medicines, fasteners, Automobile
Flow furniture assembly line,
hospital, custom
jewellery
Project Real estate Buildings, dams,
development, bridges, boilers
commercial paintings
Functions of Production
Management & Production Cycle
 The functions of production management were
limited and also simple in the earlier days
where production was conducted on a low
scale using very simple methods and
techniques and products manufactured were
very simple.
 With the progress of time new technologies
have developed resulting into advance
products with large volume being produced.
This has necessarily increased the importance
of the production management at the same
time added responsibilities.
Classification of decision areas
Production and operations management
functions can broadly be divided into the
following four areas:
 Technology selection & Management
 Capacity Management
 Scheduling/Timing/Time Allocation
 System Maintenance
Basic Functions of Production
Management
 Design and development of production process
 Production planning and control
 Implementation of plan and related activities to
produce the desired output
 Administration and co-ordination of the activities of
various components and departments responsible for
producing the necessary goods and services.
 Monitoring and controlling of men, machineries and
materials.
 Developing system of monitoring through feed back
 Comparing results and
 Taking corrective actions.
Production Cycle

Production Operations

Control
1. PLANNING
 Effectiveness and economy while
engineering the production can be studied
as manufacturing the required quantity of a
product of required quality in tune with the
required time by the best and economical
method.
 To realize this objective the tool employed
is known as production planning.
2. OPERATIONS
The production plan set the standard. The actions are performed in tune with
these pre-set details in this phase.
 QUALITY: it is an important operations responsibility, which requires total
organizational support. Quality decisions must ensure that quality is built into
the product in all stages of production.
 PROCESS: these decisions determine the physical process or facility
utilized to produce the product. The decisions include type of equipment and
technology, process flows, layout of facilities etc.
 CAPACITY: capacity decisions are aimed at providing the right amount of
capacity of the right place, at the right time. In short run, available capacity
must be allocated to specific tasks and jobs in operations b scheduling
people, equipment and facilities. Long run capacities are determined by the
size of the physical facilities, which are built.
 INVENTORY: these decisions determine what to order, how much to order
and when to order. Inventory control systems are used to manage materials
from purchasing, raw materials through semi-finished products or work in
process to finished products.
 WORK FORCE: people who make the product are ultimate to any
production system without which nothing will be produced. Hence this is
area of very crucial decisions. It includes selection, hiring, firing,
supervision, training, and above all compensation. Managing work force in a
creative productive and humane way is key task for operation.
3. CONTROL
 It is always desirable to compare where
we are standing at present and where we
want to go and accordingly corrective
action can be initiated to bridge the gap
 STAGES OF PRODUCTION
1. Market research: it probes the market in attempt to ascertain the
need for a new product

2. Design for a prototype is prepared based on technical research and

information

3. Design work to start to produce as basic unit.

4. Development work to start to develop a designed product

5. Prototype production done to evaluate the product design, prepare,

catalogues etc., getting market feed back, experimenting and testing.

6. Pre-production: during this stage all the components of product as

nearly as designed are produced under as much as possible. Actual
factory conditions using the tools, equipments, raw materials, which
ultimately are to be used on the production, line. These samples are
very critically tested with micro accuracies for type tests and
performances. Some of them are sent to customers for field trials and
feedbacks and criticisms.
STAGES OF PRODUCTION
7. Manufacturing: the product after all the above steps
and after all the corrections are frozen for design and
other parameters and then put into full production,
 Initially a predetermined build up of finished product is
manufactured to ensure and take care of contingence,
rejection etc. This is a confidence building stage for all
concerned.
 Marketing can simultaneously start of the initial orders
 The goods then leave for the warehouse and become the
responsibility of the sales organization.
 Even after all the above steps and pre-production stage
all bugs are not ironed out and it is advisable to plan for
initially low level to have the damage control within
manageable limits.
PRODUCT & PROCESS DESIGN
 Design indicates the determination of size, shape,
standard and pattern of the products to be produced. It
also includes functional parameters and technical
specifications.
 Functional designs are transformed to product design so
as to make manufacturing easy and feasible. Product
designs are further integrated to process designs to
establish production systems.
 Computers have proved to be boon to the designing
industry and CAD (Computer Aided Designs) and other
specially developed soft wares are available to help the
product designers and drafts men. It not only helps in
efficiency of designing but also for better accuracies and
selection of best designs apart from storing and retrieving
of the drawings.
Factors to be considered in
designing of the product
 Product should be fashion leader and not fashion follower.
 It should utilize as far as possible standard parts and aim at
simplifications and diversification of the product.
 It should be attractive enough to draw the attention of the customers
and have utility, cost effectiveness & salient USP (Unique Selling
Points).
 Introduction of New Models at regular interval helps in expanding
customer base and establishing better Brand equity and good will
for the company. Normally it is seen that products are designed by
adoption of concepts from leaders in the industries, however large
industries have their own R & D departments and do huge
investments to be innovative and industry leader.
 Selection and optimizing of varieties & models of products to
support the marketing and yet remaining economic in production is
a challenge to be met by the production management. It is a
corporate decision and involves discussions with marketing,
finance, procurement & engineering departments. It takes care of
factors like product life cycle and break-even point analysis.
STEPS INVOLVED IN PRODUCT DESIGN
1. Visualization of need for the product in
consultancy with the marketing department and
market research done. Marketing department
makes and submits a brief on the product to be
designed to the design department.
2. Preparation of schematic drawings and aesthetic
design and design’s portfolios prepared to take
corporate feedback and approvals.
3. Preparations of engineering drawings, technical
specifications, short listing of components and
preparing of bill of inventories with cost
projections and other details. Preparations for
proto type designs.
STEPS INVOLVED IN PRODUCT DESIGN
4. Reviewing the design in relation to Cost
analysis, value analysis, maintenance and
reparability. Improvements, corrections and
freezing of the designs.
5. Design & development of tools, jigs, fixtures
and other production accessories and
preparations of drawings and specifications etc
for the same.
6. Preparation of PERT (Programme Evaluation &
Review Techniques) charts and CPM (Critical
Path Method) charts also known as network
analysis are drawn to have overall control on the
product development work.
STEPS INVOLVED IN PRODUCT DESIGN

7. Designing of packaging and marketing

portfolios and literature etc. to start
simultaneously with other developments.
8. Final cost studies and pricing carried out
in consultancy with the procurement and
costing departments.
PROCESS DESIGN
 While product design concerns itself with the
Design & Development of the product, Process
Designs defines the steps and processes in
sequential order, detailing all the inputs and
specifications of tools, machines, operations
and/or processes to produce the desired product
with the shortest possible route and best of
engineering practices so as to meet the objects of
quality, quantity and economy in the defined time
frame.
PROCESS DESIGN
 It also ensures best possible layout for the
machines, material and men power to achieve
highest degree of efficiency in the production
process with the least degree of rejections and
wastages of material, labor and time. Thus
ensuring optimum utilization of production
capacities.
 Process design is the most important step of the
production system and requires best of the
engineering expertise, knowledge and
management. It must take care of all the
marketing needs including short term and long
term corporate goals and visions of the company.
 Facilities Layout
 Layout: the configuration of departments,
work centers, and equipment, with
particular emphasis on movement of work
(customers or materials) through the
system
 Objective of Layout Design
1. Facilitate attainment of product or service quality
2. Use workers and space efficiently
3. Avoid bottlenecks
4. Minimize unnecessary material handling costs
5. Eliminate unnecessary movement of workers or
materials
6. Minimize production time or customer service time
7. Design for safety
Importance of Layout Decisions
 Requires substantial investments of
money and effort
 Involves long-term commitments
 Has significant impact on cost and
efficiency of short-term operations
 The Need for Layout Decisions

Inefficient operations
For Example: Changes in the design
High Cost of products or services
Bottlenecks

Accidents
The introduction of new
products or services

Safety hazards
 The Need for Layout Design
Changes in
environmental Changes in volume of
or other legal output or mix of
requirements products

Morale problems
Changes in methods
and equipment
Basic Production Layout Formats
1. Process Layout
2. Product Layout
3. Group Technology (Cellular) Layout
4. Fixed Position Layout
5. Computerized Layout
 Basic Layout Types
 Product layout
 Layout that uses standardized processing
operations to achieve smooth, rapid, high-
volume flow
 Process layout
 Layout that can handle varied processing
requirements
 Fixed Position layout
 Layout in which the product or project remains
stationary, and workers, materials, and
equipment are moved as needed
 Product Layout
Raw Finished
Station Station
Station Station
Station Station
Station
materials 1 22 33 44 item
or customer
Material Material Material Material

and/or and/or and/or and/or

labor labor labor labor

Used for Repetitive or Continuous Processing

Advantages of Product Layout
 High rate of output
 Low unit cost
 Labor specialization
 Low material handling cost
 High utilization of labor and equipment
 Established routing and scheduling
 Routing accounting and purchasing
Disadvantages of Product Layout
 Creates dull, repetitive jobs
 Poorly skilled workers may not maintain
equipment or quality of output
 Fairly inflexible to changes in volume
 Highly susceptible to shutdowns
 Needs preventive maintenance
 Individual incentive plans are impractical
 A U-Shaped Production Line
In 1 2 3 4

Workers

Out 10 9 8 7
Process Layout
Process Layout
(functional)

Dept. A Dept. C Dept. E

Dept. B Dept. D Dept. F

Used for Intermittent processing

Job Shop or Batch Processes
Process Layout
Milling

Assembly
Grinding
& Test

Drilling Plating
Process Layout - work travels
to dedicated process centers
 Advantages of Process Layouts
 Can handle a variety of processing
requirements
 Not particularly vulnerable to equipment
failures
 Equipment used is less costly
 Possible to use individual incentive plans
Disadvantages of Process Layouts
 In-process inventory costs can be high
 Challenging routing and scheduling
 Equipment utilization rates are low
 Material handling slow and inefficient
 Complexities often reduce span of supervision
 Special attention for each product or customer
 Accounting and purchasing are more involved
 Fixed Position Layouts
 Fixed Position Layout: Layout in which the product
or project remains stationary, and workers, materials,
and equipment are moved as needed.
 Nature of the product dictates this type of layout
 Weight
 Size
 Bulk
 Large construction projects
Cellular Layouts
 Cellular Production
 Layout in which machines are grouped into a
cell that can process items that have similar
processing requirements
 Group Technology
 The grouping into part families of items with
similar design or manufacturing characteristics
 Functional Layout

222 222 222

111

2
Mill Drill Grind

22
444 3333
444

22
33

1111
2222 Assembly
33

44
111333

33
33

44
33

4
33

111 111
33
Heat 111 Gear
3

333Lathes
treat cutting 444
 Cellular Manufacturing Layout
Heat Gear
-1111 Lathe Mill Drill -1111
treat cut

Heat
Mill Drill Grind - 2222

Assembly
222222222 treat

Heat
3333333333 Lathe Mill Grind - 3333
treat

44444444444444 Mill Drill Gear - 4444

cut
 Functional vs. Cellular Layouts
Dimension Functional Cellular
Number of moves many few
between departments
Travel distances longer shorter
Travel paths variable fixed
Job waiting times greater shorter
Throughput time higher lower
Amount of work in higher lower
process
Supervision difficulty higher lower
Scheduling complexity higher lower

Equipment utilization lower higher

Service Layouts
 Warehouse and storage layouts
 Retail layouts
 Office layouts
 Service layouts must be aesthetically
pleasing as well as functional
Assembly lines
It refers to progressive assembly linked by some material
handling device. The usual assumption is that some form
of pacing is present ad the allowable processing time is
equivalent to all workstations.

The most common assembly line is a moving conveyor

that passes a series of workstations in a uniform time
interval
 Line Types
Material Handling Devices Belt or roller conveyor, overhead crane

Line configuration U shape, straight, branching

Pacing Mechanical, human

Product Mix 1 product or multiple products

Workstation characteristics Workers may sit, stand, walk with the line
or ride the line

Length of the line Few or many workers

Assembly Line Balancing
Assembly Line Balancing would occur when for balance purposes
workstation size or the no. used would have to be physically
modified.

The assembly line balancing problem is one of assigning all tasks to a

series of workstations so that each workstation has no more than can
be done in the workstation cycle time and so the unassigned (idle)
time across all workstations is minimized.

Line Balancing is the process of assigning tasks to workstations in

such a way that the workstations have approximately
equal time requirements.
Terms
 Workstation Cycle Time
Time between successive units coming off at the end of
the line
C = Production Time/ day
Required output/ day (units)

 Precedence Relationship
It specifies the order in which tasks must be performed in
the assembly process. Circles represent individual tasks
and arrows indicate the order of task performance
 Precedence Diagram

0.1 min. 1.0 min.

A Simple Precedence
a b Diagram

c d e
0.7 min. 0.5 min. 0.2 min.
Steps In Line Balancing
1. Draw a precedence diagram.
2. Determine Workstation Cycle Time (C)
C = Production Time/ day
Required output/ day (units)
1. Determine the no. of workstations required to satisfy
the workstation cycle time
Nt = Sum of task times (T)
Cycle time (C)
1. Select a primary rule by which tasks are to be assigned
to workstation and a secondary rule to break ties
Steps In Line Balancing
5. Assign tasks one at a time to the first WS
until the sum of the task time is equal to
the WS cycle time. Repeat for all WS.
6. Evaluate the efficiency of the balance
Efficiency = Sum of task times (T)
Actual No. of WS (Na)* WS Cycle Time (C)
5. If Efficiency is unsatisfactory, rebalance
using a different decision rule
Numerical
Q- The Model J Wagon is to be assembled on
a conveyor belt. 500 wagons are required/
day. Production time/day is 420 mins and
the assembly steps and times for the wagon
are given in the exhibit. Find the balance
that minimizes the no. of workstations
subject to cycle time and precedence
constraints.
Task Task time (secs) Task that must precede

A 45 -

B 11 A

C 9 B

D 50 -

E 15 D

F 12 C

G 12 C

H 12 E

I 12 E

J 8 F,G,H,I

K 9 J
Splitting Tasks
 Often the longest required task time forms the shortest
Workstation cycle time for the production line. This task
time is the lower time bound unless it is possible to split
the task into 2 or more workstations
 E.g. suppose an assembly line contains following task
time in secs
40, 30, 15, 25, 20, 18, 15
The line runs for 7.5 hrs/day and demand for output is
750/day, so WS cycle time is 36 secs?
Solution
1. Split the task
2. Share the task
3. Use parallel workstations
4. Use a more skilled worker
5. Work overtime
6. Redesign
Evaluating Locations
 Break even Analysis
 Transportation Model
 Decision based on movement costs of raw
materials or finished goods
 Factor Rating
 Decision based on quantitative and qualitative
inputs
 Center of Gravity Method
 Decision based on minimum distribution costs
Location Problems
1. Breakeven Analysis
Determine FC and VC for each location, select location with
lowest TC
1. Single Facility location problem
Set of existing facilities with coordinates on X-Y plane
and the movement of materials from a new facility to all
these existing facilities
3. Multi facility Location problem
Locate several new facilities in relation to a set of existing
facilities such that the total cost of transportation between
the new facilities and the set of existing facilities is minimized.
Location Problems
4. Centroid Method
Technique for locating single facilities that considers the existing
faculties, the distance between them and the volume of goods to be
shipped. This technique is often used to locate intermediate or
distribution warehouses. The method assumes that inbound and
outbound transportation cost are equal and it does not include
special shipping costs for less than full loads. E.g radio, TV, cell
phone towers

Cx= ∑dixVi Cy= ∑diyVi

∑Vi ∑Vi
Numerical- Breakeven Analysis
Q- Potential locations A, B Site FC (Rs.) VC/unit (Rs.)
& C have cost structures
as shown for
manufacturing a product A 6,000,000 1500
expected to sell for Rs.
2700/unit. Find the most
economical location for B 7,000,000 500
an expected volume of
2000 units/yr.
C 5,000,000 4000
Numerical- Single Facility
Q- Consider location of a new plant which will
supply raw materials to a set of existing plants in a
group of companies. Suppose there are 5 existing
plants with locations (400, 200), (800, 500),
(1100, 800), (200, 900) and (1300, 300). Suppose
that the no. of tons of material transported per year
from new plant to various existing plants are 450,
1200, 300, 800 and 1500. Determine the optimum
location of the new plant such that the cost is
minimized.
Numerical- Centroid Method- Centre
of Gravity Method
Location CoordinaGallons of
tes Gas/mth
Q- The Hi Octane Refining
company needs to locate
intermediate holding facility Long Beach 325,75 1500
between its refining plant in
Long Beach and its major
Anaheim 400,150 250
distributors. Coordinates are
given. The amount of
gasoline shipped to and fromLa Habra 450,350 450
the plant and distributors
appears as
Glendale 350,400 350

Thousand 25,450 450

Oaks
Class Notes
 Delphi Method is covered in Qualitative Method
of Forecasting.

 Please refer to additional notes and explanations

written on the white Board alongside the slides.

 Please make note of the Several practice numerical

done in the class.
Suggested Readings:
 1. Paneerselvam, Production and Operations
Management, Prentice Hall of India, N.Delhi.
 2. Krajewski Lee J. & Ritman, Larry P.; Operations
Management: Strategy & Analysis; 5th edition; Pearson
Education; New Delhi; 1999.
 3. Chase Richard B., Aquilano, Nicholas J, et al;
Production & Operations Management- Manufacturing
& Services; 8th edition; Tata McGraw Hill., New Delhi;
1999.