couldn't do under these circumstances.
Introduction
In this essay I will be achieving the outcomes 3 a, b &c as well as 4 a, b &c for Unit 44: Operations Management, BTEC Higher National-H2.
Identifying the key factors affecting the design of the product & Benefits gained from a good design
The processes and strategies affecting product design:
As noted from the following:
- Personnel:
- The operator for the filling process had just been transferred without any formal training which leads to unqualified people performing processes.
- Also the operator was nowhere to be found when the Inspector tested the cans and that the inspector used a sample testing procedure which was not foolproof (as learnt from the quality control manager) showing a total lack of proper inspection procedures and that there are loops in the feedback process of the inspections.
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Plant Maintenance: They had 12 work orders for repairs and adjustments on a machine which was being used to do something that it was not originally designed to do, that there was no scheduled preventive maintenance for the equipment and it was running 15% downtime of the actual running times shows a lack in management of proper maintenance records, production line processes i.e. traceability of the performance of the equipment and that nothing is being done to make any improvements.
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Purchasing: The plastic nozzle heads were a rush order, had burrs on the inside rim and the solution to this problem was by forcing the nozzle heads on in spite burrs and to talk to the sales representative of the supplier the next time he came in shows how market share and forecasting above quality and safety lack of quality focus and quality being seen as a hindrance to do their job. It also shows poor purchasing processes and inventory management systems. Leading to poor performance and synchronization of the entire supply chain.
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Product Design & Packaging: The new contoured can a design was instigated by marketing research and was pressed into manufacturing without testing the effects of the new can shows that market share is put before quality and safety and also lack of good design and testing processes.
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Manufacturing: Statements like “Wayne was being strongly considered for promotion” and “the rework area would have just vented with their pressure gauges what Wayne did by hand” show that meeting schedule time i.e. forecasting is viewed above safety even though it might pose as potential legal complications for the company in future.
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Marketing: That even if the product was a little off spec was tolerable and that the company needed market share at that point of time shows a visible lack of quality focus right through the company and also that forecasting i.e. meeting schedule time was more important.
Course of action to improve quality:
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The company is using a market pull strategy for new product introduction i.e. Greastex, where market is their primary basis for determining the product the firm should make with little regard for existing technology (the new contoured can instigated by market research without actually testing its effects). Though the market will “pull” through the products (new contoured can) that are made, in long term it might affect the company’s reputation and market share due to its safety issues. They should rather consider an interfunctional view strategy to encourage new production development teams by following a simultaneous development process such as concurrent engineering for cross functional integration in product designing. This strategy would ensure that the product design for new products is cross-functional and that new products are not only suitable for the market but also of improved quality and stringently tested (better engineered product), thereby improving safety.
- They should consider focusing on maintenance of machinery and equipment in the short term. Perform a cost-buy analysis in the long term to determine as to whether they need to invest in any automation or better equipment. This would be a step in the right direction to improve both the quality and the processes.
- They could perform a make-buy analysis and contract the production to another company. This strategy would help solve the quality issues, reduce delivery times and thus achieve the required level of production. Analysis of cost and quality issues regarding the product and opposition to competitive contracting amongst the workforce should be considered before these measures are implemented.
- They could implement a continuous improvement programme wherein they consider steps such as specific process control, benchmarking with other superior companies, staff training and development and ISO 9000 series standards introduction. This would address lack of quality attitude issues in the company and to set clear goals to strive for in terms of quality and elite standards for the company.
- They could focus on initiating better inventory and supply chain management as well as integrating quality measures in their purchasing practices. This will help them not only to buffer against any uncertainty in the supply chain but also help to improve delivery times & quality, simultaneously helping them to synchronise with their suppliers more efficiently.
Advantages of a good design:
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High quality: Error-free designs which fulfil their purpose in an effective and creative way.
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Speedily produced: designs which have moved from concept to detailed specification in short time.
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Dependability delivered: designs which are delivered when promised.
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Produced flexibly: designs which include the latest ideas to emerge during the process.
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Low cost: designs produced without consuming excessive resources. [1]
Identifying & discussing the possible layouts for Greastex line [2]
Fixed-position Layout:
Fixed-position layout is in some ways a contradiction in terms, since the transformed resources do not move between the transforming resources. Instead of materials, information or customers flowing through an operation, the recipient of the processing is stationery and the equipment, machinery, plant and people who do the processing move as necessary. This could be because the product or the recipient of the service is too large to be moved conveniently, or it might be too delicate to move, or perhaps it could object to being moved.
E.g.:
- Motorway construction- object is too large to move.
- Open-heart surgery- patients are too delicate to move.
- High-class service restaurant- customers would object to being moved to where food is prepared.
Process Layout:
Process layout is so called because the needs and convenience of the transforming resources which constitute the processes (or processes with similar needs) are located together. This may be because it is convenient to group them together, or that the utilization of transforming resources is improved. It means that when products, information or customers flow through the operation, they will take a route from activity to activity according to their needs. Different products or customers will have different needs and therefore take different routes. Usually this makes the flow pattern in the operation very complex.
E.g.:
- Machining the parts which go into aircraft engines- some processes (e.g. heat treatment) need specialist support (heat and fume extraction); some processes (e.g. machining centres) require the same technical support from specialist setter- operators; some processes (e.g. grinding machines) get high machine utilization as all parts which need grinding pass through a single grinding section.
Cell Layout:
A cell layout is one where the transformed resources entering the operation are preselected (or preselect themselves) to move to one part of the operation (or cell) in which all the transforming resources, to meet their immediate processing needs, are located. The cell itself may be arranged in either a process or a product layout. After being processed in the cell, the transformed resources may go to another cell. In effect, cell layout is an attempt to bring some order to the complexity of flow which characterizes process layout.
E.g.:
- Some computer component manufacture- the processing and assembly of some types of computer parts may need a special area dedicated to manufacturing of parts for one particular customer who has special requirements such as particularly high quality levels.
Product Layout: (Proposed Layout for Greastex)
Product layout involves locating the transforming resources entirely for the convenience of the transformed resources. Each product, piece of information or customer follows a prearranged route in which the sequence of activities that are required matches the sequence in which the processes have been located. The transformed resources ‘flow’ along a ‘line’ of processes. This is why this type of layout is sometimes called flow or line layout. Flow is clear, predictable and therefore relatively easy to control. Usually, it is the standardized requirements of the product or service which lead to operation choosing product layouts.
E.g.:
- Automobile assembly- almost all variants of the same model require the same sequence of processes.
The decision as to which layout type to adopt will be influenced by the understanding of their advantages and disadvantages. The volume-Variety characteristics of the manufacturing operations would narrow the choice down to one or two options. This is demonstrated diagrammatically by the figure below.
The decision as to which layout type to adopt will be influenced by an understanding of their relative advantaged and disadvantages.
Cost implications of the various layout types are a significant factor. The total cost, fixed and variable will depend on the volume of products produced as shown in the figure below:
Analysing a Capacity Planning & Control Approach [3]
(I) Facility planning & control strategy:
- Amount of capacity (in relation to expected demand):
Capacity cushion = capacity – average demand
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Try not to run out strategy (positive capacity cushion): This is the optimal strategy for the company to consider as the market for greastex is expanding thus it will allow them to capture more market share ahead of their competitors. Also, since in growth markets there is a less risk of having idle capacity fro long since the market is expanding.
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Build to forecast strategy (assuming a symmetrical probability of demand): The Company can consider this strategy if the firm is more conservative with respect to capacity provided. It will provide a 50 percent probability of running out of capacity and a 50 percent probability of having excess capacity. The company should consider this strategy if the cost (or consequences of running out is approximately in balance with the cost of excess capacity.
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Maximize utilization strategy (planning a small or a negative capacity cushion): This strategy is appropriate for the firm if the capacity is very expensive, relative to stockouts, as in the case of oil-refineries, paper mills, and other capital-intensive industries i.e. if the facility operates at very high capacity rates approaching 90-100%.
The firm is currently using this strategy for Greastex Line where it has maximised its utilisation for fulfilling the demand. While this strategy tends to maximize short run earnings it could damage the long run market share, especially if the demand develops in excess of capacity (as in the case of Greastex) or if the competitors adopt larger capacity cushions.
- Size of units facilities:
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Economies of scale: Scale economies are based on the notion that large units are more economical because fixed costs can be spread over more units of production. The company may consider using a large unit of capacity in two cases: Firstly if the cost of building and operating large production equipment does not increase linearly with volume. A machine with twice the output rate generally costs less than twice to as much to buy and operate. Also, in larger facilities the overhead due to managers and staff can be spreads over more units of production. As a result, the unit cost of production falls as facility size increases, when scale economies are present.
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Diseconomies of scale: “Diseconomies of scale are the forces that cause larger firms to produce goods and services at increased per-unit costs.” These occur as the facility gets larger for several reasons. Firs, there are transportation diseconomies present. For e.g., a large facility incurs more transportation costs than two smaller facilities that are closer to their markets. Diseconomies of scale also occur because communications, co-ordination, and control costs increase in large bureaucratic organizations. As more layers of staff and management are added to manage the organization, the cost ultimately increases faster than the output level. Furthermore, costs of complexity and confusion arise as more products are added and facility becomes larger.
- Timing of facility additions:
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Pre-empt the competition strategy: This is the optimal strategy for the company as the firm will lead the market by building capacity in advance of the need. This strategy tends to provide a positive capacity cushion; it may actually stimulate the market and could prevent competition from coming in for a while.
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Wait and see strategy: (As in the case of Greastex) the firm is waiting to add capacity until demand develops and the need is clear. As a result, the company would be following the leader and is taking a low risk strategy. A small or negative capacity cushion could develop, and a loss of potential market share may result.
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Product-focused facilities (optimal strategy for greastex): produce one family or type of product, usually for a large market. Product-focused plants are generally used when transportation costs are low or scale economies are high. This tends to centralize facilities into one location or a few.
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Market- focused facilities: are located in the market they serve. Many service operations fall into this category since services cannot be transported. Plants that require quick customer response or customized products or that have high transportation charges tend to be market-focused. International facilities also tend to be market-focused because of tariffs, trade barriers, and potential currency fluctuations.
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Process-focused facilities: have one technology, or at most two. These facilities frequently produce components or parts that are shipped to other facilities for further processing or assembly. Process plants can also supply plants outside the company, and they can make a wide variety of products within the given process technology. Process-focused facilities are not widely used compared with product or market facilities, but they are nonetheless important in certain cases.
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General-purpose facilities: may produce several types of products and use several different processes. They tend to be used by thousands of small companies that do not have sufficient volume to justify more than one facility. Larger companies usually specialize their facilities according to product, market, or process. The disadvantage of a general-purpose facility, of course is that it can be unfocused, unless a plant-within-a-plant strategy can be used.
[II] Aggregate planning:
- Planning options to modify supply (Decisions) for Greastex:
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Hiring and layoff of employees: the use of this variable differs a great deal between companies and industries. Some companies will do almost anything before reducing the size of the workforce through layoffs. Other companies routinely increase and decrease their workforce as demand changes. These practices affect not only costs but also labour relations, productivity, and worker morale. As a result, company hiring and layoff practices may be restricted by union contracts or company policies.
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Using overtime and under time: overtime is sometimes used for short- or medium-range labour adjustments in lieu of hiring and layoffs, especially if change in demand is considered temporary. Overtime labour usually costs 150% of regular time, with double time on weekends or Sundays. Because of its high costs, managers are sometimes reluctant to use overtime. Furthermore, workers are reluctant to work more than 20% weekly overtime for duration of several weeks. “Under time” refers to planned underutilization of workforce rather than layoffs or perhaps a shortened workweek. Under time can be thought of as the opposite of overtime. Another term for under time is “idle time.”
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Using part-time or temporary labour: in some cases, it is possible to hire part time or temporary employees to meet peak or seasonal demand. This option may be particularly attractive because part-time employees are often paid significantly less in wages and benefits. Unions, of course, frown on the use of part-time employees because the latter often does not pay union dues and may weaken union influence.
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Carrying inventory: in manufacturing companies, inventory can be used as a buffer between supply and demand. Inventories for later use can be built up during periods of slack demand. Inventory thus uncouples supply from demand in manufacturing operations, thereby allowing for smoother operations. Inventory can be used as a way to store labour for future consumption.
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Subcontracting: This option, which involves the use of other firms, is sometimes an effective to increase or decrease supply. The subcontractor may supply the entire product or only some of the components. The manufacturer may furnish the moulds and specify the materials and methods to be used.
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Making co-operative arrangements: these arrangements are very similar to subcontracting in that other sources of supply are used.
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Level strategy: with this strategy the rate of regular-time output will be constant. Any variations in demand must then be absorbed by using inventories, overtime, temporary workers, subcontracting, co-operative arrangements, or any of the demand influencing options.
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Chase strategy: with this strategy the workforce level is changed to meet, or chase, demand. In this case, it is not necessary to carry inventory or to use any of the other variables available for aggregate planning; the workforce absorbs all the changes in demand.
Basic Strategy for Greastex Line:
The company may consider the chase demand strategy to meet the demand for Geastex line, wherein they will have to use the workforce to absorb all the changes in the demand; until the demand of the product stabilizes.
But in the long run the company should definitely consider implementing the level strategy although the level of skill and training required will be high and the company might have to make training a prerequisite to start work and will have to improve staff training and development terms; the regular output of the company will be stable and constant and all the changes in the demand will be absorbed by using any of the demand influencing options motioned above.
Inventory Planning & Control
The key issue in the case of Hank Kolb is that the demand for Greastex has increased thus the company can take the following steps to protect against uncertainties to cover the changes in demand:
- The company needs to synchronise better with their suppliers to enhance the quality of the raw materials used in production of the can as well as to support the speed, dependability and flexibility objectives of the dependant demand inventory.
- The company also needs to maintain a certain amount of finished stock i.e. buffer or safety inventory to compensate for any unexpected fluctuations in supply and demand as well as to slow or speed the production rate according to the demand.
The various methods of inventory planning and control: [4]
(EOQ)Economic Order Quantity:
Assumptions:
- Demand Rate is Constant, recurring, and known.
- Lead time is constant and known.
- No stock outs allowed.
- Material is ordered or produced in a lot or batch and the lot is received all at once.
- Unit cost is constant (no quantity discounts).
- Carrying cost depends linearly on the average level of inventory.
- Ordering (setup) cost per order is fixed.
- The item is a single product.
EOQ Lot Size Choice:
There is a trade-off between frequency of ordering (or the size of the order) and the inventory level.
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Frequent orders (small lot size) lead to a lower average inventory size, i.e. higher ordering cost and lower holding cost.
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Fewer orders (large lot size) lead to a larger average inventory size, i.e. lower ordering cost and higher holding cost.
D = Demand rate, units per year
S = Cost per order placed, or setup cost, pounds per order
C = Unit cost, dollars per unit
i = Carrying rate, percent of value per year
Q = Lot size, units
TC= total of ordering cost plus carrying cost
Continuous Review System:
Assumptions:
- Relax assumption of constant demand. Demand is assumed to be random.
- Check inventory position each time there is a demand (i.e. continuously).
- If inventory position drops below the reorder point, place an order for the EOQ.
- Also called fixed-order-quantity or Q system (the fixed order size is EOQ).
Amount to order = EOQ
Order when inventory position = reorder point.
R = Reorder Point
Q = Order Quantity
L = Lead time
Reorder point = lead time * demand/period
= R = lead time demand (when demand is constant)
Reorder point is independent of EOQ!
EOQ tells how much to order.
Reorder point tells when to order.
Periodic Review System:
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Instead of reviewing continuously, we review the inventory position at fixed intervals. For example, the bread truck visits the grocery store on the same days every week.
- Also known as “P system”, “Fixed-order-interval system” or “Fixed-order-period system”
- Each time we review the inventory, we either order or don’t. The decision depends upon our reorder point.
- The amount we order may be fixed, or may be the amount needed to bring us up to a target (T).
- All assumptions of EOQ (except that demand is constant and “no stock out”) remains in effect.
(Since the demand for Greastex is variable) The company can use the continuous review system as the assumption of constant demand is relaxed contradictory to EOQ and periodic review systems.
One of the most important prerequisites is an understanding of the cost structure. Inventory cost structures incorporate the following types of costs:
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Cost of placing the order. Every time that an order is placed t replenish stock, a number of transactions are needed. These include the clerical tasks of preparing the order and all the documentation associated with it, arranging for the delivery to be made, arranging to pay the supplier for the delivery, and the general costs of keeping all the information which allows us to do this. Also if we are placing an “internal order” on behalf of our own operation, there are still likely to be the same types of transactions concerned with internal administration. In addition there could also be a “change over” cost incurred by the part of the operation which is to supply the items, caused by the need to change from producing one type of item to another.
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Price discount costs. In many industries suppliers offer discounts on normal purchase price for large quantities; alternatively they might impose extra costs for small orders.
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Stock-out costs. If we misjudge the order-quantity decision and our inventory runs out of stock; there will be costs to us incurred by falling to supply our customers. If the customers are external, they may take their business elsewhere; if internal, stock outs could lead to idle time at the next process, inefficiencies and eventually, again, dissatisfied external customers.
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Working capital costs. Soon after we receive a replenishment order, the suppliers will demand payment for their goods. Eventually, when (or after) we supply our own customers, we in turn will receive payment. However, there will probably be a lag time we will have to fund the costs of inventory. This is called the working capital of inventory. The costs associated with it are the interest we pay the bank for borrowing it, or the opportunity costs of not investing it elsewhere.
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Storage costs. These are the costs associated with physically storing the goods. Renting, heating and lighting the warehouse, as well as insuring the inventory, can be expensive, especially when special conditions are required such as low or high storage temperature or high-security.
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Obsolescence costs. When we odder large quantities, this usually results in stocked items spending a long time stored in inventory. Then there is a risk that the items might either become obsolete (in case of change or advancement in technology for example) or deteriorate with age (leakage from cans, for example).
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Production inefficiency costs. According to just-in time philosophies, high inventory levels prevent us seeing the full extent of problems within the operation.
There are two points to be made about these lists of costs. The first is that some of the costs will decrease as order size is increased; the first three costs are like this. Whereas the other costs generally increase as order size is increased. The second point is that it may not be the same organisation that incurs the costs. For example, sometimes suppliers agree to hold consignment stock. This means that they deliver large quantities of inventory to their customers to store but will only charge for the goods as and when they are used. In the meantime they remain the supplier’s property so do not have to be financed by the customer, who does however provide storage facilities. [5]
Quality Improvement Project
Problems in Processes:
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Cause-and-Effect Diagram (Problems): [6]
Solutions:
- They company should focus on initiating better inventory and supply chain management as well as integrating quality measures in their purchasing practices. This will help them not only to buffer against any uncertainty in the supply chain but also help to improve delivery times & quality, simultaneously helping them to synchronise with their suppliers more efficiently. The company should also consider continuous review system method for inventory planning and control.
- The company should also consider implementing a continuous improvement programme wherein they consider steps such as specific process control, benchmarking with other superior companies and staff training & development. This would address lack of quality attitude issues in the company (by infiltrating the attitudes of all employees across the company) and to set clear goals to strive for in terms of quality and elite standards for the company.
- The company should also consider the above suggested capacity planning and control approach.
- They should also consider an interfunctional view strategy to encourage new production development teams by following a simultaneous development process such as concurrent engineering for cross functional integration in product designing. This strategy would ensure that the product design for new products is cross-functional and that new products are not only suitable for the market but also of improved quality and stringently tested (better engineered product), thereby improving safety.
- The company should also analyse the best suitable layout and consider the above suggested layout.
- Lastly, the company should also focus on the implementing a quality system such as ISO 9000 wherein they develop policies and processes for purchasing, design, and testing.
Scheduling Operations (Using Gantt charting):
Gantt chart showing the initial planning and development stage of the product; and the planning of the processes producing it; before the production (manufacturing) begins:
At the end of 12 weeks all functions of the company and the operation processes will be ready to manufacture a quality product efficiently.
The Gantt chart should be reviewed frequently as the plan is implemented.
- They should also consider focusing on maintenance of machinery and equipment regularly once the production commences and perform a cost-buy analysis in the long term to determine as to whether they need to invest in any automation or better equipment.
- The company should also consider improving their testing procedures before, during and after production.
Different perceptions of work study in relation to improving productivity
Objectives of work study (Improve Productivity) [7]
The object of applying Work Study is to obtain the optimum use of the human and material resources, which are available to it. The benefits may stem from improvements in one or more of the following:
- Increased production and productivity
- Reduced costs - labour, material, overheads
- Improvement of conditions, which involve an element of excessive fatigue or danger
- Improved quality
- Better control of costs
- The Benefits of Work Study
Work Study can considerably increase productivity. People can benefit from, less tiring work, better working conditions and, because an efficient company can meet competition successfully, better employment prospects.
Work Study raises efficiency by RE-ORGANISATION OF WORK. It therefore need involve little or no capital expenditure. Yet, where such an outlay is desirable, Work Study can ensure that it is spent to the best advantage.
Work Study is systematic; its procedures are designed to ensure that no factors affecting the situation are overlooked.
It is the best means available for setting STANDARDS OF PERFORMANCE, and although often seen as the basis for incentives, the real value lies in the information provided for work scheduling, estimating deliveries and for accurate costing.
Work Study produces savings very quickly and these gains continue as long as the improved methods evolved are maintained.
Work Study is a UNIVERSAL TOOL, it is not confined to the workshops but can be equally effective in the office, warehouse, and in distribution, etc.
Work Study is the most searching technique available because it takes every fact into account. It reveals weaknesses often overlooked in the day to day working.
Costs of work study: [8]
- Large firm/employer and large engineered systems only.
- Work study is obsolete.
- It is exploitative of workers.
- It has never been and never will be accepted here.
Main processes of a company [9]
A company can be divided into sub-processes in different ways; yet, the following five are identified as main process, each with a logic, objectives, theory and key figures of its own. It is important to examine each of them individually, yet, as a part of the whole, in order to be able to measure and understand them. The main processes of a company are as follows:
- real process
- income distribution process
- production process
- monetary process
- market value process
Productivity is created in the real process, productivity gains are distributed in the income distribution process and these two processes constitute the production process. The production process and its sub-processes, the real process and income distribution process occur simultaneously, and only the production process is identifiable and measurable by the traditional accounting practices. The real process and income distribution process can be identified and measured by extra calculation, and this is why they need to be analyzed separately in order to understand the logic of production performance
Real process generates the production output, and it can be described by means of the production function. It refers to a series of events in production in which production inputs of different quality and quantity are combined into products of different quality and quantity. Products can be physical goods, immaterial services and most often combinations of both. The characteristics created into the product by the manufacturer imply surplus value to the consumer, and on the basis of the price this value is shared by the consumer and the producer in the marketplace. This is the mechanism through which surplus value originates to the consumer and the producer likewise. Surplus value to the producer is a result of the real process, and measured proportionally it means productivity.
Income distribution process of the production refers to a series of events in which the unit prices of constant-quality products and inputs alter causing a change in income distribution among those participating in the exchange. The magnitude of the change in income distribution is directly proportionate to the change in prices of the output and inputs and to their quantities. Productivity gains are distributed, for example, to customers as lower product prices or to staff as higher pay. Davis has deliberated (Davis 1955) the phenomenon of productivity, measurement of productivity, distribution of productivity gains, and how to measure such gains. He refers to an article (1947, Journal of Accountancy, Feb. p. 94) suggesting that the measurement of productivity shall be developed so that it”will indicate increases or decreases in the productivity of the company and also the distribution of the ’fruits of production’ among all parties at interest”. According to Davis, the price system is a mechanism through which productivity gains are distributed, and besides the business enterprise, receiving parties may consist of its customers, staff and the suppliers of production inputs. In this article, the concept of”distribution of the fruits of production” by Davis is simply referred to as production income distribution or shorter still as distribution.
The production process consists of the real process and the income distribution process. A result and a criterion of success of the production process is profitability. The profitability of production is the share of the real process result the producer has been able to keep to himself in the income distribution process. Factors describing the production process are the components of profitability, i.e., returns and costs. They differ from the factors of the real process in that the components of profitability are given at nominal prices whereas in the real process the factors are at fixed prices.
Monetary process refers to events related to financing the business. Market value process refers to a series of events in which investors determine the market value of the company in the investment markets.
Main processes of a company (Saari 2006)
Increases in productivity: [10]
Companies can increase productivity in a variety of ways. The most obvious methods involve automation and computerization which minimize the tasks that must be performed by employees. Recently, less obvious techniques are being employed that involve ergonomic design and worker comfort. A comfortable employee, the theory maintains, can produce more than a counterpart who struggles through the day. In fact, some studies claim that measures such as raising workplace temperature can have a drastic effect on office productivity. Experiments done by the Japanese Shiseido Corporation also suggested that productivity could be increased by means of perfuming or deodorizing the air conditioning system of workplaces.
Increases in productivity also can influence society more broadly, by improving living standards, and creating income. They are central to the process generating economic growth and capital accumulation.
A new theory suggests that the increased contribution that productivity has on economic growth is largely due to the relatively high price of technology and its exportation via trade, as well as domestic use due to high demand, rather than attributing it to micro economic efficiency theories which tend to downsize economic growth and reduce labor productivity for the most part.
Many economists see the economic expansion of the later 1990s in the United States as being allowed by the massive increase in worker productivity that occurred during that period. The growth in aggregate supply allowed increases in aggregate demand and decreases in unemployment at the same time that inflation remained stable. Others emphasize drastic changes in patterns of social behaviour resulting from new communication technologies and changed male-female relationships.
Labour productivity: [11]
Labour productivity USA, Japan, FRG
(http://en.wikipedia.org/wiki/Image:LabourProdComparison.PNG)
Labour productivity USA, Japan, FRG
Labour productivity is generally speaking held to be the same as the "average product of labour" (average output per worker or per worker-hour, an output which could be measured in physical terms or in price terms).
It is not the same as the marginal product of labour, which refers to the increase in output that results from a corresponding increase in labour input.
However, some aspects of labour productivity may be very difficult to measure exactly, or in an unbiased way, such as:
- The intensity of labour-effort, and the quality of labour effort generally.
- The creative activity involved in producing technical innovations.
- The relative efficiency gains resulting from different systems of management, organisation, co-ordination or engineering.
- The productive effects of some forms of labour on other forms of labour.
One important reason is that these aspects of productivity refer mainly to its qualitative, rather than quantitative, dimensions. (Should this not be the other way around?) We might be able to observe definite increases in output, even though we do not know what those increases should be attributed to.
This insight becomes particularly important when a large part of what is produced in an economy consists of services. Management may be very preoccupied with the productivity of employees, but the productivity gains of management itself might be very difficult to prove.
This may mean that a lot of what is said about productivity is based on opinion, rather than empirical evidence. Modern management literature emphasizes the important effect of the overall work culture or organizational culture that an enterprise has. But again the specific effects of any particular culture on productivity may be unprovable. Tavalis, in his book "Popular Culture Today", wrote that the constant increase in productivity during the 90's into present day is leading our culture to disaster. The family life of many is suffering and true happiness is being questioned.
Marx on productivity: [12]
In Karl Marx's labour theory of value, the concept of capital productivity is rejected as an instance of reification, and replaced with the concepts of the organic composition of capital and the value product of labor.
A sharp distinction is drawn by Marx for the productivity of labor in terms of physical outputs produced, and the value or price of those outputs. A small physical output might create a large value, while a large physical output might create only a small value - with obvious consequences for the way the labor producing it would be rewarded in the marketplace.
Moreover if a large output value was created by people, this did not necessarily have anything to do with their physical productivity; it could be just due to the favorable valuation of that output when traded in markets. Therefore, merely focusing on an output value realized, to assess productivity, might lead to mistaken conclusions.
In general, Marx rejected the possibility of a concept of productivity that would be completely neutral and unbiased by the interests or norms of different social classes. At best, one could say that objectively, some practices in a society were generally regarded as more or less productive, or as improving productivity - irrespective of whether this was really true. In other words, productivity was always interpreted from some definite point of view.
Typically, Marx suggested in his critique of political economy, only the benefits of raising productivity were focused on, rather than the human (or environmental) costs involved. Thus, Marx could even find some sympathy for the Luddites, and he introduced the critical concept of the rate of exploitation of human labour power to balance the obvious economic progress resulting from an increase in the productive forces of labor.
Self Reflection & Evaluation:
I found this both an interesting engrossing assignment. I particularly felt it provided me with an opportunity to gain a deeper knowledge and understanding of the subject; in that it was again necessary to examine in depth the organisation of operations procedures. Also, in analysing and understanding how planning and control are used and implemented within operations, by using what I had been taught in the classroom, the course textbooks (both those purchased personally and those borrowed from the college library), course work Materials, the internet and discussion with the lecturer. These all enabled me to research and gain an understanding of key factors affecting the design of products; identify possible layouts; and different perceptions of work study. Simultaneously selecting a capacity planning approach; discussing various methods of inventory planning; identify approaches used for project management & quality control and then to apply this to a company with the help of the given case study Hank Kolb.
I began the assignment by reading the course notes, then relevant course text books.
I used the internet and conversation with the course lecturer for further resources.
I found “Operations Management” by Schroeder and “Operations Management” by Slack et al a useful guide to the completion of this assignment.
Internet sites (search engines) I personally found most useful where:-
www.google.com
www.starware.com
www.wikipedia.com
www.yahoosearch.com
www.ask.com
Upon reflection I think used an adequately wide range of sources to research the subject proficiently. I made use of all material provided by the college and all that was reasonably available to me.
I have found it very difficult to keep within the word count while covering all of the criteria to a good standard given that this assignment encompasses a wide area.
I have met with the completion time, and have endeavoured to produce work of a standard which is above average.
Timetable:
References:
[1] Operations Management, 4th Ed, Prentice Hall, Nigel Slack, Stuart Chambers, Robert Johnston, 2004, 0-273-67906-6.
[2] Operations Management, 4th Ed, Prentice Hall, Nigel Slack, Stuart Chambers, Robert Johnston, 2004, 0-273-67906-6.
[3] Operations Management, 3rd Ed, McGraw Hill International, Roger g. Schroeder, 2007, 007-125436-6.
[4] Operations Management, 3rd Ed, McGraw Hill International, Roger g. Schroeder, 2007, 007-125436-6.
[5] Operations Management, 4th Ed, Prentice Hall, Nigel Slack, Stuart Chambers, Robert Johnston, 2004, 0-273-67906-6.
[6] (http://cobhomepages.cob.isu.edu/jeffstreet/mgt329/Chapter08TN%5Bstreet05%5D.PPT#423,2,Slide 2)
[7] (http://www.workstudy.co.uk/definition.htm)
[8] Managing Efficiency Processes & Productivity, Chris Jarvis, Rod Aldred (Wirral Metropolitan College), 2008.
[9] Author:Seppo Saari
Source:Saari, S.: Productivity. Theory and Measurement in Business. European Productivity Conference. Espoo, Finland
Date:30 August-1 September 2006
Location: (http://www.mido.fi/index_tiedostot/Productivity_EPC2006_Saari.pdf)
(http://en.wikipedia.org/wiki/Productivity#Main_processes_of_a_company)
[10] (http://en.wikipedia.org/wiki/Productivity#Main_processes_of_a_company)
[11] (http://en.wikipedia.org/wiki/Productivity#Main_processes_of_a_company)
[12] (http://en.wikipedia.org/wiki/Productivity#Main_processes_of_a_company)
Bibliography:
Books:
-
Operations Management, 4th Ed, Prentice Hall, Nigel Slack, Stuart Chambers, Robert Johnston, 2004, 0-273-67906-6.
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Operations Management, 3rd Ed, McGraw Hill International, Roger g. Schroeder, 2007, 007-125436-6.
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Operations Management, Wirral Metropolitan College, Rod Aldred, 2008, Lecture Handouts.
Websites: