Midterm Exam

ADVANCED PRODUCTION AND
OPERATIONS MANAGEMENT
MIDTERM EXAMINATION
INSTRUCTIONS TO EXAMINEE
1. Answer any FOUR of the THIRTEEN questions.
2. All questions carry equal marks.
3. Refer to the literature* in your answer and use concrete examples to support your
Submitted by: Kristel L. Cruz
Submitted to: Dr.Edgar Moreno Sr.
Advanced Production and Operations Management
Sat/ 9:00 AM -12:00PM
Questions:
6. Many firms are adopting the just-in-time inventory system as a way of
minimizing stock holding costs. Explain the conditions necessary for such a system
to work.
Answer:
Traditionally manufacturers have forecasted demand for their products into the future and
then have attempted to smooth out production to meet that forecasted demand. At the
same time, they have also attempted to keep everyone as busy as possible producing
output so as to maximize "efficiency" and (hopefully) reduce costs. Unfortunately, this
approach has a number of major drawbacks including large inventories, long production
times, high defect rates, production obsolescence, inability to meet delivery schedules,
and (ironically) high costs. Non of this is obvious-if it were, companies would long ago
have abandoned this approach.
Just in Time Manufacturing (JIT) - also known as "lean manufacturing" refers to a system
of manufacturing in which products are not built until the product is ordered and paid for.
Some companies that have successfully implemented JIT include Toyota, Dell and Harley
Davidson.
JIT's main philosophy is to eliminate waste - wasted inventory, wasted stock and wasted
time. By creating and delivering products quickly when consumers request them excess
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inventory is eliminated, customers receive their orders quicker and the manufacturer
doesn't need to keep a large inventory of stock parts.
Below are just a few examples of successful JIT implementations.
Examples:
1. PCs Just In Time Management:
Dell Computer Corporation has finally tuned its Just-in-Time system so that an order for
a customized personal computer that comes in over the internet at 9 AM. can be on a
delivery truck to the customer by 9 P.M. In addition, Dell's low cost production system
allows it to under price its rivals by 10% to 15%. This combination has made Dell the
envy of the personal computer industry and has enabled the company to grow at five
times the industry rate. How does the company's just in time system deliver lower costs?
"While machines from Compaq and IBM can languish on dealer shelves for two months
Dell does not start ordering components and assembling computers until an order is
booked. That may sound like no biggie, but the price of PC parts can fall rapidly in just a
few months. By ordering right before assembly, Dell figures it s parts, on average, are 60
days newer than those in an IBM or Compaq machine sold at the same time. That can
translate into a 6% profit advantage in components alone."
Dell has also leveraged JIT principles to make its manufacturing process a success. Dells
approach to JIT is different in that they leverage their suppliers to achieve the JIT goal.
They are also unique in that Dell is able to provide exceptionally short lead times to their
customers, by forcing their suppliers to carry inventory instead of carrying it themselves
and then demanding (and receiving) short lead times on components so that products can
be simply assembled by Dell quickly and then shipped to the customer.
Important Factors to Dells Success:
A dependable supplier with the ability to meet Dells demanding lead time
requirements.
A seamless system that allows Dell to transmit its component requirements so that
they will arrive at Dell in time to fulfill its lead times.
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A willingness of suppliers to keep inventory on hand allowing Dell to be free of

this responsibility.
2. Toyota the Developer of JIT System
Toyota is considered by many to be the poster child for JIT success. The Toyota
production strategy is highlighted by the fact that raw materials are not brought to the
production floor until an order is received and this product is ready to be built. No parts
are allowed at a node unless they are required for the next node, or they are part of an
assembly for the next node. This philosophy has allowed Toyota to keep a minimum
amount of inventory which means lower costs. This also means that Toyota can adapt
quickly to changes in demand without having to worry about disposing of expensive
inventory.
Important Factors to Toyota Success:
Small amounts of raw material inventory must be kept at each node in production,
so that production can take place for any product. These parts are then replenished
when they are used.
Accuracy of forecasting is important so the correct amount of raw materials can be
stocked.
3. Harley Davidson
Harley Davidson Harley Davidsons use of JIT is mostly characterized by its
transformation in the late World War 2 era from an inefficient manufacturer that solved
all of its problems with extra inventory to a nimble manufacturer able to meet demand
and provide short lead times.
Results of Harley Davidsons JIT Implementation:
Inventory levels decreased 75 percent.
Increased productivity.
Harley Davidsons success with the implementation of JIT had a lot to do with the fact
that when JIT was put into practice, process problems could no longer be hidden by
costly inventory that helped to meet ship dates. The inefficiencies in the processes were
quickly identified and solved.
3. Production is considered as a process of adding value to the final product.
Describe the processes that contribute to the addition of value to the final product.
Answer:
Any production process involves a series of links in a production chain. At each stage
value is added in the course of production. Adding value involves making a product more
desirable to a consumer so that they will pay more for it. Adding value therefore is not
just about manufacturing, but includes the marketing process including advertising,
promotion and distribution that make the final product more desirable.
It is very important for businesses to identify the processes that add value, so that they
can enhance these processes to the ongoing benefit of the business.
10. In setting up the plant lay out, the operations manager should consider certain
physical conditions that may influence the performance of the workers. Outline
these conditions.
Answer: For an organization to have an effective and efficient manufacturing unit, it is
important that special attention is given to facility layout. Facility layout is an
arrangement of different aspects of manufacturing in an appropriate manner as to achieve
desired production results. Facility layout considers available space, final product, safety
of users and facility and convenience of operations.
An effective facility layout ensures that there is a smooth and steady flow of production
material, equipment and manpower at minimum cost. Facility layout looks at physical
allocation of space for economic activity in the plant. Therefore, main objective of the
facility layout planning is to design effective workflow as to make equipment and
workers more productive.
11. One of the earliest analytical methods in production is the motion study.
Highlight the merits of such analysis in the development of work method for an
organization.
Answer:Like time study, motion study is also useful tool to increase the efficiency. Here,
we are defining it. You know that workers can do any work with many ways or method.
But to choose the best way out of alternatives is called motion study. For this, cost
accountant has to maintain the data of all the activities of workers. With this study,
productivity can be enlarged and inefficiency and wastage can be diminished.
In motion study, we first of all, note the activities of laborers in work place. With the help
of stop watch equipment, spending time on per activity is noted. After this, we have to
take decision of activities which we have to stop. This study or analysis determines prime
method of doing any activity in factory. Sometime software engineer can make the work
design relating to workplace arrangement and adjustable chair for workplace.
Benefits of Motion Study

1. It grows the ability of workers because apply of good methods, using of good tools
and stopping of unnecessary activities.
2. Life of machine can be increased.
3. It reduces exhaustion of workers.
4. It decreases labor cost due to less wastage in factory or plant.
References:
http://businesscasestudies.co.uk/business-theory/operations/productionprocess.html#ixzz3moP8WNhb
http://www.accountingdetails.com/just_in_time.htm
MIDTERM EXAM: PRODUCTION OPERATIONS MANAGEMENT

Submitted by: ARCEGA, ZARVIE-AN P
Sat/ 9:00 AM -12:00PM
1. Outline the circumstances under which a manufacturing firm would choose to
redesign its
production process.
Because supply chain redesigns are expensive and time-consuming, they often get
deferred. But if your company shows any of these warning signs, then you probably can't
afford to put it off any longer.
A supply chain redesign is the type of project that often gets deferred, especially when
budgets are tight. It is complex and time-consuming, and many organizations lack the
needed skills and experience. Moreover, a thorough analysis may be expensive, which
can be hard to justify in the current economic climateeven though in our experience,
such analyses typically identify savings ranging from 12 percent to 20 percent of total
warehousing and transport costs. In addition, it is difficult to determine before embarking
on the project what benefits a supply chain redesign project will uncover.
These potential drawbacks deter many companies from initiating a supply chain redesign
project. But there are times when a redesign deserves a higher priority. Here are seven
signs that it's probably time to rethink your supply chain network, along with some ideas
about alternative network configurations.
1. You have objectives rather than strategies. The first sign that it may be time for a
redesign is that you are focused on supply chain objectives but lack a clear strategy.
2. People ask: Why do we do things this way? The second sign that it may be time for a
redesign is that few people in your organization recall exactly why your company's
warehouses are located where they are. It may mean that the current supply chain
configuration is no longer fit for today's requirements.
3. The number of products and customers is growing faster than your budget. The
third sign is that your budget is not growing as fast as your product range and customer
base.
4. Consolidation or collaboration is coming. An impending acquisition, collaboration
with another company to share resources, or centralization of previously decentralized
supply chain functions all suggest that a network redesign is probably in order.
5. You experience a major service failure. An important customer has just called and
expressed dissatisfaction concerning a service failure. If this is not the first time that
problem has occurred, then you may have a systemic problem, and a redesign could help
prevent it from happening again.
6. Fear is in the air. Your company's own practices and processes are in good shape, yet
the CEO is nervous. What's worrying him or her? The things the company can't control,
like supply chain disruptions that will affect profits and investors' earnings. When that's
the case, it's time for an assessment (or a reassessment) of potential risks to your supply
chain and perhaps a network revision that will reduce the potential for disruption.
Conducting such an evaluation will require you to identify risk factors and assess each
one's probability of occurrence and its likely impact. Having that information will focus
management's attention on developing appropriate mitigation plans for the key risks.
7. It's time to renew a third-party logistics contract. It is difficult to revise your supply
chain when your company is tied into long-term contracts with third-party logistics (3PL)
partners. Best practice, however, is to review your network design every three to five
years, which tends to be in line with the length of third-party logistics contracts. Thus,
about a year before a contract is scheduled for renewal is a good time to begin
reconsidering your supply chain configuration. This gives you time to obtain support for
change within the organization and to negotiate contracts for new lanes or locations.
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When looking at the value of the product or service, the goal is to have the value of the
end-product or services exceed the cost of producing the product or providing the
service. The cost of the product or service includes all resources used to produce it (e.g.,
raw materials, labour, storage, transportation, and overhead costs).
We need to examine each activity within the process and determine the value-added
assessment of the activity. The value added by an activity, in an accounting sense, is
simply:
(Value of the product after the activity) - (Value of the product prior to the activity).
The value added by an activity should be a positive value. Ideally, the value added by the
activity is equal to or greater than the costs incurred during the activity.
Value from the customer's point of view is independent of the cost to produce the product
or provide the service. It is based on the customer's expectations, as identified by the
effectiveness indicators for the process.
How to Assess Value

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When looking at activities in a process, we must determine if the activity is effective and
efficient. We must also determine if the activity can be improved to provide a better
product or service for the customer. Refer to the effectiveness indicators selected for the
process to determine how the activity rates on the effectiveness indicator scale. Look at
the efficiency indicators of the activity. Wide variances in the efficiency (cost or times)
of the activity can indicate problems in the activity. Analyze the cost and times collected
for the activity to determine the value added by the activity versus the cost of the activity.
Tips and Hints
The aim for productivity improvement is to reduce the BVA activities and to eliminate the
NVA activities. Often attempts are made to improve the efficiency of the waste activity
rather than to eliminate the waste. For example, rather than improving the inspection
activity so that it can be completed more efficiency; the process should be re-designed to
eliminate the need to inspect the product.
By removing waste activities, the cost of the product to the organization is reduced,
because the unnecessary resources are not used. The cycle time of the process is also
reduced when waste activities are removed. Reducing the cycle time of the process
improves customer service, because the product is available to the customer sooner.
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When looking for ways to reduce BVA activities and to eliminate NVA activities, be
creative and innovative. The current environment should not be considered a constraint.
9. Describe the features of an appropriate process technology for a small-scale

industry.
The requirements for chemical and food production technologies will change in the future
as a result of shorter time to market and increasing market volatility. Especially the rising
use of renewable resources will require the implementation of flexible and fast to install
small-scale production technologies. The increasing number of necessary apparatuses and
their distributed operation, however, will constitute major challenges, both economically
and procedurally.
The proposed solution to face the economic challenge is modularization and
standardization. For food production, dewatering represents a key issue. Thus, biomass
processing should first be divided into small-scale water separation steps and then into
further large-scale processing steps. As dewatering usually happens thermally and heat
exchangers often benefit from the economies of scale, heat supply and energy
consumption or heat transfer with little capital investment are further issues. Therefore,
temperature levels should be decreased and the use of solar heat increased. For the
production of biofuels and chemicals from biomass, process integration and process
simplification are proposed to improve the efficacy of production equipment and
processes. Choosing raw materials with molecular structures, similar to the desired
chemical building block, will lower the need for heat exchange and make small-scale
manufacturing of fuels and chemicals possible.
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13. Please explain some terms of Operations Research (production engineers)?

a. Demand Management
Demand Management is a planning methodology used to forecast [predict], plan for and
manage the demand for products and services. This can be at macro levels as in
economics and at micro levels in public service organizations both governmental and
NGO, industries including energy. Demand Management has a very defined set of
processes, capabilities and recommended behaviors for companies that produce all
manner of goods and services. Consumer electronics and goods companies often lead in
the application of demand management practices to their demand chains; demand
management outcomes are a reflection of policies and programs to influence demand as
well as competition and options available to users and consumers. Effective demand
management follows the concept of a "closed loop" where feedback from the results of
the demand plans is fed back into the planning process to improve the predictability of
outcomes. Many practices reflect elements of the theory of Systems Dynamics.
Increasingly volatility is being recognized as significant an issue as the focus on variance
of demand to plans and forecasts.
b. Shop Floor Control
Shop Floor Control are methods and systems used to prioritize, track, and report against
production orders and schedules. They include the procedures used to evaluate current
resource status, and the update of labor, machine hour, and other associated information
as required to support the overall planning, scheduling, and costing systems.
c. MRP I & MRP II
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MRP stands for material requirements planning and deals with bringing in the right
amount of raw material at the right time to support production. MRPII stands for
manufacturing resource planning and builds on MRP by adding shop floor production
planning and tracking tools. A third-generation system available at time of publication is
called ERP, or enterprise resource planning, which integrates all departments of the
business, not just manufacturing and purchasing.
Material Requirements Planning, or MRP, was developed in the 1970s to help
manufacturing companies better manage their procurement of material to support
manufacturing operations.
MRP
systems translate the master production schedule into component- and raw material-level
demand by splitting the top level assembly into the individual parts and quantities called
for on the bill of materials, which reports to that assembly, and directs the purchasing
group when to buy them based on the component lead time which is loaded in the MRP
system.
MRPII
Manufacturing Resource Planning, or MRPII, goes several steps beyond MRP. While
MRP stopped at the receiving dock, MRPII incorporates the value stream all the way
through the manufacturing facility to the shipping dock where the product is packaged
and sent to the end customer. That value stream includes production planning, machine
capacity scheduling, demand forecasting and analysis modules, and quality tracking
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tools. MRPII also has tools for tracking employee attendance, labor contribution and
productivity.
d. Master Production & Scheduling
A master production schedule (MPS) is a plan for individual commodities to produce in
each time period such as production, staffing, inventory, etc.[1] It is usually linked to
manufacturing where the plan indicates when and how much of each product will be
demanded.[2] This plan quantifies significant processes, parts, and other resources in order
to optimize production, to identify bottlenecks, and to anticipate needs and completed
goods. Since an MPS drives much factory activity, its accuracy and viability dramatically
affect profitability. Typical MPS's are created by software with user tweaking.
Due to software limitations, but especially the intense work required by the "master
production schedulers", schedules do not include every aspect of production, but only key
elements that have proven their control effectivity, such as forecast demand, production
costs, inventory costs, lead time, working hours, capacity, inventory levels, available
storage, and parts supply. The choice of what to model varies among companies and
factories. The MPS is a statement of what the company expects to produce and purchase
(i.e. quantity to be produced, staffing levels, dates, available to promise, projected
balance).[1][3]
The MPS translates the customer demand (sales orders, PIRs), into a build plan using
planned orders in a true component scheduling environment. Using MPS helps avoid
shortages, costly expediting, last minute scheduling, and inefficient allocation of
resources. Working with MPS allows businesses to consolidate planned parts, produce
master schedules and forecasts for any level of the Bill of Material (BOM) for any type of
part.
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e. Production planning and aggregate planning

Production planning is the means by which we prepare our production quantities for the
medium term (generally one year). Aggregate planning refers to the fact that the
production planning is usually carried out across product lines. The main difficulty is that
demands vary from month to month. We want to keep production as stable as possible yet
maintain no inventory and experience no shortages. We must balance the costs of
production, overtime, subcontracting, inventory, shortages and changes in production
levels. In some case aggregate planning problems might require the use of the
transportation or linear programming modules.
Production planning problems are characterized by a demand schedule, a corresponding

production schedule and various costs. In addition, we have the following considerations.
Shortage handling. In production planning there are two models for handling shortages.
In one model shortages are backordered. That is, demands can accumulate and be met in
later periods. In another model the shortages become lost sales. That is, if you can not
satisfy the demand in the period in which it is requested the demand disappears. This
option is above the data table.
Initial Inventory. Often times we have a starting inventory from the end of the previous
month
Production costs - regular time, overtime and subcontracting. These are the per unit
production costs depending on when and how the unit is made.
Inventory (Holding) cost. This is the amount charged for holding one unit for one period.
The total holding cost is charged against the ending inventory. Be careful because while
most textbooks charge against the ending inventory some textbooks charge against
average inventory during the period.
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Shortage cost. This is the amount charged for each unit that is short in a given period. It
is assumed that the shortages are backlogged and satisfied as soon as stock becomes
available in a future month or are lost sales as indicated by the option box above the data
table. Shortage costs are charged against end-of-month levels.
Cost to increase production. This is the cost due to having changes in the production
schedule. It is given on a per unit basis. The cost for increasing production entails hiring
costs. It is charged only against regular time production changes. If the initial production
level is 0 then there will be no charge for increasing production in the first period.
Cost to decrease production. This is similar to the cost of increasing production and is
also given on a per unit basis. However, this is the cost for reducing production. It is
charged only against regular time production changes.
f. Just in- time ( ToyotaKanban System)

Just-in-time
The Toyota Production System fulfils customer demand efficiently and promptly by
linking all production activity to real marketplace demand. Just-in-time
production relies on finely tuned processes in the assembly sequence using only the
quantities of items required, only when they are needed. Imagine a process designed to
produce six different types of product, where the total weekly demand for the range of
products varies up and down by 25%, and the daily mix of product types is continuously
changing.
A planning challenge, but also a typical scenario in many types of business in which the
process (manufacturing or otherwise) has to continuously respond to demand. Toyota
Production System has responded to this reality of life by developing an approach that
can meet the challenge in an efficient, cost-effective way.
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How Just-in-time benefits your organization.

Just-in-time offers a smooth, continuous and optimized
workflow, with carefully planned and measured work-cycle
times and on-demand movement of goods, reduces the cost of
wasted time, materials and capacity. Team members can
concentrate on their tasks without interruption, which leads
to better quality, timely delivery, and peace-of-mind for
Toyotas customers.
In order to have this flexibility it is necessary to have the right things in the right place at
the right time.
The kanban card is a simple, highly visible device that the Toyota Production System
uses to call-up components as they are required, meaning only a minimal stock of
components is held in the assembly area. Before stocks need replenishing a kanban card
instruction from the operator ensures a just-in-time delivery.

Submitted by: JOSHUA V. DE VERA,
Submitted to: Dr. Edgar Moreno Sr.
Sat/ 9:00 AM -12:00PM
1. There are certain aspects that make up a system design. Describe these aspects.
The system design is very important in the business industry ,especially, in production
and operation management and these aspects that make up a systems design is necessary
to the process of defining the architecture, components of system design and data for a
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system to satisfy specified requirements and also systems design could be seen as the
application of system theory to product development and the strategic decisions of
selecting the kind of production process to have in a manufacturing plant and then system
design is the act of taking the marketing information and creating the design of the
product to be manufactured. Systems design is therefore the process of defining and
developing systems to satisfy specified requirements of the user.
Aspects of System Design
The architectural design of a system emphasizes on the design of the system
architecture which describes the structure, behavior, and more views of that system and
analysis.
The logical design of a system pertains to an abstract representation of the data flows,
inputs and outputs of the system. This is often conducted via modeling, using an overabstract model of the actual system. In the context of systems design are included.
The physical design relates to the actual input and output processes of the system. This is
explained in terms of how data is input into a system, how it is verified or authenticated,
how it is processed, and how it is displayed as In Physical design.
The system design affects quality, cost, and satisfaction it depends on the cases. If is not
well designed or if the manufacturing process is not true to the system design, the quality
of the system may suffer. For me when we think of design we usually think of car design
or computer design and envision engineers working on diagrams. The examples of
aspects that make up a system design are the object oriented and analysis design methods
are becoming the most widely used methods for system design. The UML has become the
standard language in object-oriented analysis and design. It is widely used for modeling
software systems and is increasingly used for high designing non-software systems and
organizations.
Physical design
explained in terms of how data is input into a system, how it is verified/authenticated,
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how it is processed, and how it is displayed as In Physical design, the following

requirements about the system are decided.
1.
Input requirement,
2.
Output requirements,
3.
Storage requirements,
4.
Processing Requirements,
5.
System control and backup or recovery.
Put another way, the physical portion of systems design can generally be broken down
into three sub-tasks:
1.
User Interface Design
2.
Data Design
3.
Process Design
User Interface Design is concerned with how users add information to the system and
with how the system presents information back to them. Data Design is concerned with
how the data is represented and stored within the system. Finally, Process Design is
concerned with how data moves through the system, and with how and where it is
validated, secured and/or transformed as it flows into, through and out of the system.
2. a lot of time can be wasted during machine set up stage within a man- machine
operational system. Highlight the ways in which this set up time can be minimized.
As MBA Student we need to know and understand the process of eliminating
nonconformities or to reduce a lot of time can be wasted during machine set up stage
within a man-machine operational system, one must first understand the sources of
nonconformities and the most effective ways to eliminate or control this issue, Actually,
the goal of every operation or production system is to generate a useful product and also
to reduce set up. The product may be a service, information, or physical object. Each
production cycle begins with inputs that are transformed by a process into a more desired
state or into the product. In each process, excessive variations and errors can cause
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nonconformities, with three undesirable consequences: scrapped or wasted

resources; degraded process throughput; contamination from undetected nonconformities,
reducing the value of the product to the customer.
The goal of quality control in every production system is to eliminate nonconformities
and their consequences, eliminate rework and wasted resources, and achieve these goals
at the lowest possible cost. Most quality-control methods were initially developed to aid
manufacturing. This is not surprising because high- volume production typically requires
many repetitions involving a controlled sequence of operations. Where operations are
frequently repeated, it is easier to recognize processing errors and identify appropriate
control measures. In this situation its very important to know the nonconformities in
production and operation, so that we will reduce the wasted time during machine set up
and also to be aware to the cost of production being used by the organization and
management.
3. Company XLT has put in place elaborate plant maintenance programmed.

Highlight the reasons why the organization way has established such maintenance
programmed.
I think one of the reasons of the organization is to have an effective maintenance
programmed will make plant and equipment more reliable. Fewer breakdowns will mean
less dangerous contact with machinery is required, as well as having the cost benefits of
better productivity and efficiency. Additional hazards can occur when machinery
becomes unreliable and develops faults. Maintenance allows these faults to be diagnosed
early to manage any risks. However, maintenance needs to be correctly planned and
carried out. Unsafe maintenance has caused many fatalities and serious injuries either
during the maintenance or to those using the badly maintained or wrongly maintained and
repaired equipment. Establishing a planned maintenance programmed may be a useful
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step towards reducing risk, as well as having a reporting procedure for workers who may
notice problems while working on machinery.
industry.
For me the features of process technology is a component part to support for small-scale
industry, most of the process technology has a broader focus, dealing with management,
organization, sales, employment, income and general quality issues. It contains technical
details about upgrading of products, processes and organization, the support needed to
bring about such improvements and the effectiveness of delivery mechanisms. Yet
technological competence is an especially important determinant of small manufacturers
ability to hold their own in a context of liberalization and increasing integration of
manufacturing into global networks.
Potential benefits of institutional support to small firms are large. By improving access to
information, finance and suitable technologies, support can help fill the missing middle
observed in the manufacturing size structure in poor countries. Dynamic small firms
could also contribute significantly to national exports. Moreover, clusters of
geographically close producers may create significant positive dynamic externalities.
References:
https://en.wikipedia.org/wiki/Systems_design
http://www.referenceforbusiness.com/management/Int-Loc/Lean-Manufacturing-andJust-in-Time-Production.html
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Submitted by: ARNOLD L. DACUMA
Sat/ 9:00 AM -12:00PM
redesign its production process.
Process redesign methodologies have several conditions that enterprises must
reach to obtain a more efficient implementation process. Up to now, there is not a clear
definition of these requirements. These conditions include five organization aspects:
strategy, process, people, control and information systems.
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The methodologies of process redesign present the improvement process as a

strategic option that contributes to increase productivity and business competitiveness. It
also considers that the strategy should be complemented with elements like appropriate
information systems, mechanisms for control and monitoring processes. The redesign
presents an evolutionary approach, which permits the organization to move forward in a
managed way, it also permits to achieve an average impact, and visible and forceful
profits. Understanding that redesign is a way to achieve a high performance process.
The concept of process redesign was initially developed with the approaches of
Taylor in 1911 and the Gilbreth spouses in 1917, which decomposed each task into an
ordered series of movements, in order to identify those that should be removed,
simplified or merged with others. Davenport and Short focused the concept on the
description of the processes, defining critical processes and analyzing them, to reduce
cycle times, to strengthen the value chain and to improve competitiveness. Tenner and De
Toro argue that process redesign is focused not only on small improvements to solve
problems, but also on the improvement of all organization processes
There are at least three distinct situations in which redesign is important:
1. In the original design of an engineering system where we have come up with a first
version of the design which needs to be improved.
2. An existing design has to be changed to accommodate a new manufacturing or
assembly environment.
3. An existing design has to be redesigned for improved performance, lower cost, higher
reliability etc.
2. There are certain aspects that make up a systems design. Describe these aspects.
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Systems design is the process of defining the architecture, components, modules,

interfaces, and data for a system to satisfy specified requirements. Systems design could
be seen as the application of systems theory to product development. There is some
overlap with the disciplines of systems analysis, systems architecture and systems
engineering. If the broader topic of product development "blends the perspective of
marketing, design, and manufacturing into a single approach to product development,
then design is the act of taking the marketing information and creating the design of the
product to be manufactured. Systems design is therefore the process of defining and
Architectural design
The architectural design of a system emphasizes on the design of the systems architecture
which describes the structure, behavior, and more views of that system and analysis.
Logical design
inputs and outputs of the system. This is often conducted via modeling, using an overabstract (and sometimes graphical) model of the actual system. In the context of systems
design are included. Logical design includes ER Diagrams i.e. Entity Relationship
Diagrams.
Physical design
explained in terms of how data is input into a system, how it is verified/authenticated,
how it is processed, and how it is displayed as In Physical design, the following
requirements about the system are decided.
1. Input requirement,
2. Output requirements,
25
3. Storage requirements,
4. Processing Requirements,
5. System control and backup or recovery.
Put another way, the physical portion of systems design can generally be broken down
into three sub-tasks:
1. User Interface Design
2. Data Design
3. Process Design
validated, secured and/or transformed as it flows into, through and out of the system. At
the end of the systems design phase, documentation describing the three sub-tasks is
produced and made available for use in the next phase
3. A lot of time can be wasted during machine set up stage within a man-machine
a) Have everything ready for the changeover next to the machine ahead of time. This
means everything material, tooling, tools, fixtures, paperwork, check gages, etc. Our
goal is not to leave the machine to search for anything while doing a changeover. No
more walking around and searching.
b) Fix broken equipment. Find what is broken and repair it.
26
c) Double up the changeover team. Most setups are done by a single person, which can
add to the wasted time in a setup, especially when we need to work on both sides of the
machine. More likely, we can cut our setup time in half and do tasks in parallel if we used
two-person team for changeovers.
d) Dont skimp on the tooling. Invest in additional sets of tool holders so the tooling can
be pre-set ahead of time.
Setup reduction should be approached in four phases or stages as illustrated below.
It is usually best to repeat the process through several iterations spaced several months
apart. The initial phases of setup reduction (SMED) are straightforward and easy, yet
often bring the greatest benefits. People are constantly amazed at how much time is
wasted through disorganization and general messiness. Improving elements and
eliminating adjustments will require more imagination, time and cost.
The "Kaizen Event" or "Blitz" is an excellent vehicle for setup reduction. It generates
enthusiasm and fast results which make the efforts less mundane.
1. Maintenance, Organization and Housekeeping
It often happens that setup problems are related to poor maintenance such as worn parts,
worn tooling, dirt, or damaged threads. Disorganization and poor housekeeping are also
contributors to setup problems. These are easy to fix and should be a first step.
2. Internal Elements to External
Internal elements occur when the machine is down. Examine each internal element and
see if it cannot be done externally. For example, the pre-heating of an injection molding
die could be done before it goes into the machine.
27
3. Improve Elements
Here we examine every element to see how we can eliminate it, simplify it, reduce the
time required or improve it in some other way.
4. Eliminate Adjustments
Adjustments are often the most time consuming, frustrating and error prone parts of a
setup. There are many ways to eliminate them entirely and this is the ultimate goal.
minimizing stock holding coasts. Explain the conditions necessary for such a system
to work.
Associated with Japanese management techniques, just-in-time production (JIT) is
a set of principles and practices based on the philosophy that firms should hold little or no
inventory beyond that required for immediate production or distribution. That is, a
manufacturer should receive raw materials or parts from its suppliers perhaps just hours
before they will be used in production, and the firm's output should be shipped to its
customers as soon after completion as possiblewithout holding onto a stock of either
raw goods or finished products.
In practice, JIT has often been expressed as a holistic management system aimed
at reducing waste, maximizing cost efficiency, and securing a competitive advantage.
Thus, a number of additional conditions are considered necessary for the successful
implementation of JIT. These include small lot sizes, short setup and changeover times,
efficient and effective quality controls, and perhaps most of all, designing the whole
production process to minimize backups and maximize the efficiency of human and
machine labor.
28
Considerations
Japans auto industry meant JIT to operate within a culture of continuous
improvement, as one way to eliminate waste. JIT may be a good way to introduce
continuous improvement or quality management, but it is very difficult to implement as a
stand-alone process. Managers in charge of ordering or purchasing may need to
familiarize themselves with alternative shipping methods such as less-than-truckload
(LTL) carriers who consolidate loads and routes to fill a trailer. This may even require
coordinating with other companies operating within the area, as in an industrial park.
Personnel managers need to communicate with staff, stressing the importance of JIT to
providing quality products and services and reducing costs, as well as convincing staff of
the benefits in rounding out skill sets by taking on different tasks.
Resolution
Conventional wisdom holds that inventory provides a buffer to ensure smooth
operation against supply chain disruptions, from delivery delays through individual
workstation breakdowns to unanticipated consumer demand. However, a carefully
planned and systematically executed JIT system can eliminate waste and encourage
higher-quality output. Workers take ownership as they comprehend that nothing goes to
waste and that they control the processthere is no cushion or margin of error to fall
back on. All workers, tools and processes work with one purpose: gaining and keeping
customers. Anything or anyone not contributing to that purpose can be whittled away.
References:
http://repository.cmu.edu/cgi/viewcontent.cgi?article=1003&context=meche
https://en.wikipedia.org/wiki/Systems_design
29
http://www.reliableplant.com/Read/24172/reduce-changeovers-plant
http://www.strategosinc.com/setup_reduction2.htm
http://www.referenceforbusiness.com/management/Int-Loc/Lean-Manufacturing-andJust-in-Time-Production.html
http://smallbusiness.chron.com/pros-cons-jit-inventory-system-3195.html

Submitted by: JANICE T. BUENAVISTA
Sat/ 9:00 AM -12:00PM
1. Outline the circumstances under which a manufacturing firm would

choose to redesign its production process.
Redesigning a business process requires complete overhaul of the key production
30
process in order to achieve performance measures, such as Return on Investment (ROI),

cost reduction, increasing throughput, and of providing quality service. This entails the
analysis and redesign of workflows to optimize end-to end process and automate non-value
added tasks. Customers pay for non-value added tasks which should be eliminated because
it only add up to our products without the benefit accruing to them. For example, is the
moving of large batch of inventories from one workstation to the other, this non-value
added cost should be eliminated by redesigning the factory layout.
A manufacturing firm will redesign its production process for the following reasons:
1. Technological changes- with the advancement of technology, many companies
shifted from manual production to automated one.
2. Competitive market- when a rival enters the industry with a more advanced
technology and production process
3. Environmental and legal aspects
4. Economic and demographic changes
5. Safety
2. Many firms are adopting the just-in-time inventory as a way of minimizing holding
costs. Explain the conditions necessary for such a system to work.
Companies use a Just-in-Time manufacturing and inventory management
system to improve the efficiency of the company and reduce costs. This system requires
manufacturers to purchase only when customer orders create a demand. It means that
companies purchase materials and produce units only as needed to meet actual cost of
demand. Raw materials are received just in time to go into production, manufactured parts
are completed just in time to be shipped to customers. As a result, inventory is reduced to
minimum and in some cases are zero.
It is because inventory is tied up in money.
Furthermore, large amount of inventory encourages inefficient and sloppy work results in
too many defects.
Conditions for such system to work is through the use of pull approach. This approach
works like this: At the final assembly stage, a signal is sent to the preceding workstation as
to the exact amount of materials that will be needed for the next few hours to assemble
31
products to fill customer orders, and only that amount of materials is provided. The same
signal is sent back through each preceding workstation so that a smooth flow of parts is
maintained. Thus all workstations respond to the pull exerted by the final assembly stage,
which in turn respond to customer orders.
Another condition is that, the company should entail JIT Purchasing. Under this,
the company relies on a few ultra reliable suppliers and dependable suppliers with longterm contracts. Dependability is needed because if a part is unavailable, the entire operation
may shut down. Second, deliveries are frequent and in small lots just as the materials are
needed. Third, suppliers must deliver defect-free goods. Defects cannot be tolerated.
In addition, is the improvement to plant layout. This is done by arranging the flow
line, such that all machines needed to make a particular product are brought together in one
location to reduce moving time and handling time. By this way, we improve our
throughput.
Another is to reduce setup time. Set up time includes moving materials, changing
machine settings, setting up equipment and running time in case production is switched
when making one type to another. This is done by producing in large batches and by
having a dedicated flow line so that if equipment is dedicated to a single product, setups are
largely eliminated and products are produced in any batch size desired.
Still another condition is that, there must be zero defects because when completed
units contain defective product, this would result to delivering of units with less than the
required or may result in the delay of shipping.
Lastly, there must be flexible workforce. They should be multi tasking.
a. Demand management
b. Shop floor control
c. MRP I & MRP II
f.
Just in- time ( ToyotaKanban System)

32
TERMS FOR OPERATIONS RESEARCH:

A. DEMAND MANAGEMENT
The function of recognizing all demands for goods and services to support the market
place. It involves prioritizing demand when supply is lacking. Proper demand management
facilitates the planning and use of resources for profitable business results.
The last few decades have seen an increasing demand for enterprise software applications
that can streamline supply chain processes and provide lean manufacturing capabilities. At
the other end of the supply chain, companies have been moving towards outsourcing their
product distribution in order to keep sales overhead in check without sacrificing revenue.
These recent trends have resulted in a unique dilemma. While companies can produce
products more efficiently, they have little knowledge regarding what to produce, for whom
and when. They now have better visibility into their supply chains but they lack the same
kind of visibility into their often-fragmented demand chain.
The current economic slowdown and huge inventory write-offs resulting from this lack
of visibility have highlighted the need for a systematic way to predict and manage demand.
New technologies provide the capability to extend supply chain visibility that can support a
truly dynamic collaborative internal environment; but companies are looking beyond
sources within the enterprise, such as sales and promotions groups, to include customers in
the demand management cycle.
Accurate forecasting remains central to the success of a demand management initiative,
but demand management is much more than just forecasting. Traditionally, forecasting
involves looking at past demand data to predict future demand. Demand management goes
beyond the static forecasting of yesterday, replacing it with a more fluid, ongoing view of
determining demand that involves all demand-chain constituents. Currently there is a thrust
towards real-time synchronization of the supply chain to the demand signals. This
collaborative method enhances the accuracy of forecasting since all factors affecting that
33
forecast can be viewed by all stakeholders, including customers.

B. SHOP FLOOR CONTROL are methods and systems used to prioritize, track, and
report against production orders and schedules. It includes the procedures used to
evaluate current resource status, labor, machine usage, and other information required to
support the overall planning, scheduling, and costing systems related to shop floor
operation. Shop floor control typically calculates work in process based on a percentage of
completion for each order and operation that is useful in inventory valuations and materials
planning.
Shop floor control is responsible for the detailed management of activities and the flow
of materials inside the plant, including employees, materials, machines, and production
time. Shop floor control activity typically begins after planning (e.g., with MRP, ERP);
once planned, orders and purchase requisitions are created. Shop floor control attends to the
following functions (sequentially):
Planned orders
Conversion of planned orders to process/production
Production and process order scheduling
Capacity requirements planning
Material availability assessment
Release of production/process orders
Material withdrawals
Order confirmations
34
Goods receipt documentation

Order settlement
Shop floor control may also include identifying and assessing vulnerabilities and risks
due to the shop floor environment, employees, process, and the technologies employed at
the shop-floor level. Based on the assessment of these factors, shop floor control initiates
measures to keep risk at an acceptable minimum level.
Best practices for shop floor control include:
Efficiently execute, prioritize, and release work orders to the shop floor with realtime status of progress and completion.
Deliver accurate and up-to-date information on materials consumption and
availability, which is essential for reliable inventory planning and costing.
Effectively execute change management processes to ensure that the proper revision
of products, bills of materials, and processes are always in place for production.
Automate shop floor equipment control and data collection to reduce human errors
and increase productivity.
Provide the correct manufacturing SOPs, technical drawings, and diagnostics to
shop floor operators to reinforce training and ensure proper processing.
Download setup programs directly to equipment based on product and process
specifications.
With fully interactive access to shop floor control software, supervisors can monitor shop
activities and make better decisions on the spot, especially using mobile computing
35
equipment.
In summary, shop floor control within a manufacturing execution system (MES) can
improve the productivity of any shop, regardless of its manufacturing style or capacity.
Assembling, cutting metal, or fabricating all require common functions; shop floor control
programs can adapt to the operation. When evaluating the need for shop floor control,
remember that the driving force is data. Properly executed, shop floor control should
deliver the right information at the right time to the right placewithout fail.
Consequently, shop floor efficiency and productivity rise appreciably.
C. MRP 1 and MRP 2.
MRP stands for material requirements planning and deals with bringing in the right
amount of raw material at the right time to support production. MRPII stands for
manufacturing resource planning and builds on MRP by adding shop floor production
planning and tracking tools. A third-generation system available at time of publication is
called ERP, or enterprise resource planning, which integrates all departments of the
business, not just manufacturing and purchasing
MRP is a computer program that translates finished product requirements into time-phased
requirements for each dependent demand items. The Bill of Materials, one of the three
primary inputs of MRP, is useful because it is a list of all the assemblies, sub-assemblies,
parts, and raw materials that are needed to produce one unit of a finished product.
manufacturing companies better manage their procurement of material to support
manufacturing operations. MRP systems translate the master production schedule into
component- and raw material-level demand by splitting the top level assembly into the
individual parts and quantities called for on the bill of materials, which reports to that
assembly, and directs the purchasing group when to buy them based on the component lead
time
which
is
loaded
in
the
MRP
system.
36
In addition to MRP, ERP or "Enterprise Resource Planning" provides an expanded

effort to integrate standardized record keeping that will permit information sharing among
numerous dimensions of a business in order to direct the system more effectively. An ERP
system typically has modular hardware and software units and "services" that communicate
on a local area network.
MRP enables managers to: determine the quantities for a given order size, know when
to release orders for each component, and to be alerted when items need attention.
Other benefits of MRP include:
1) Low levels of in process inventories
2) The Ability to keep track of material requirements
3) The ability to evaluate capacity requirements generated by a given
master schedule
4) A means of allocating production time
5) The ability to easily determine inventory usage by backflushing.
Backflushing is a procedure in which an end item's bill of materials (BOM) is periodically
exploded to determine the quantities of the various components that were used to make the
item. The people who are typical users of a MRP system in a typical manufacturing
company are production managers, purchasing managers, inventory managers, and
customer representatives. The benefits of MRP depend primarily on the use of computer to
maintain up-to-date information on material requirement.
MRP stopped at the receiving dock, MRPII incorporates the value stream all the way
through the manufacturing facility to the shipping dock where the product is packaged and
sent to the end customer. That value stream includes production planning, machine capacity
scheduling, demand forecasting and analysis modules, and quality tracking tools. MRPII
also has tools for tracking employee attendance, labor contribution and productivity.
A discussion of MRP and MRPII would be incomplete without mentioning Enterprise
Resource Planning. ERP is the next evolution of the MRP system. While MRP helped
37
companies plan material purchases, and MRPII added in-plant scheduling and production
controls, ERP attempts to integrate the information flow from all departments within a
company: finance, marketing, production, shipping, even human resources. While some
argue that ERP does not deliver on its promise, according to an article on CIO.com, a
properly set up ERP system allows better communication and monitoring than ever before,
giving all departments access to the exact
D. MASTER PRODUCTION SCHEDULING
Master Production Scheduling or MPS is a manufacturing planning tool that is used to
capture a number of variables from different elements of the organization (customer
demand, capacity, inventory levels, material flows, etc) and then describe which parts the
organization will manufacture and at what frequency.
MPS is a fairly standard tool within manufacturing companies its usually administered
through the operations/planning function and controlled by a team headed by a Master
Production Scheduler. Its typically administered through the MRP system. The MPS
process stops the business being led by the he who shouts loudest gets their parts
syndrome and delivers a manufacturing plan that not only targets meeting the needs of the
customer but also the broader capabilities of the manufacturing organization.
Five key benefits of Master Production Scheduling are: First, It can help to smooth the
demand signal. Most customer demand signals will contain peaks and troughs of demand
this profile can result in planning problems and inefficiency for manufacturers. A
significant benefit of MPS is that since it decouples the customer demand from what is
manufactured batch sizes can be tuned to optimize the production process. Where
demand is particularly spiky (ie. Peeks and troughs of demand) this can be of enormous
assistance producing a steady drum beat of manufacture (taking advantage of batch sizes
and minimal setup times) which can then ripple through the supply chain. Second, It
protects lead time and helps book future deliveries. A common complaint for many
38
organizations is that demand is loaded within lead time i.e. if a part takes 100 days to
manufacture its no good taking a customer demand for delivery in 50 days where there is
no stock you are struggling before youve even started the manufacturing process. This
can create panic amongst the staff throwing existing priorities into disarray. Whilst there
are a variety of methods that can be used to stop this MPS can be a very effective method
as it is the production schedule that drives the manufacturing not the customer demand.
This enables the organization to protect its lead time but also assists planning in looking at
when future customer requirement is best supported by manufacturing output. Third, it acts
as a single communication tool to the business. A major benefit to any organization that
adopts MPS is that it acts as a single communication tool for the business regarding its
manufacturing plans. The MPS schedule is typically available via the MRP system however
whatever the method its imperative that its communicated in an easily understandable
form that can be used throughout the organization. Fourth, It helps the Supply chain
prioritize requirement. Having a fixed schedule enables the supply chain team in
particular the procurement function to communicate priorities and requirements effectively.
One of the key problems many manufacturing organizations face where they are led by
changing customer requirement is where the supply chain gets reprioritized depending on
the problem of the week. Its no surprise that suppliers work best to regular smoothed
demand where that demand in unstable it can often lead to missed deliveries (of what was
planned) let alone the detrimental affect to relationships with suppliers that struggle to keep
up with whats really required. Fifth, it helps stabilize production. Master production
schedules are best reviewed as part of a formal business process which includes the
relevant stakeholders and often requires senior sign off before it is either loaded into the
MRP system or is passed to production for action. Typically master production schedules
do not allow planning in arrears so where failures have happened and product has not
been manufactured as planned these items are re-planned to a relevant point in the future.
Another common attribute of a master production schedule is that there is usually a
fixed planning window whereby plans do not get changed. For example the first 6 weeks of
39
the plan maybe termed fixed. This enables production to concentrate on whats ahead of
them without worrying about reprioritizations. Additions may be added to this fixed period
but usually such amendments are tightly controlled.
While, as with any business process, there are challenges associated with deploying a
master production schedule there are some enormous and tangible benefits. Manufacturing
plants can get themselves into chaos by not administering the manufacturing demand signal
appropriately and this can have huge affects on the supply chain driving reprioritizations,
excess inventory and causing untold grief to the relationships to key suppliers. Used
correctly MPS can right many of these problems generating a stable and considered plan to
drive the business.
E. AGGREGATE PLANNING AND PRODUCTION PLANNING
Aggregate/production planning or intermediate planning balances supply and demand by
minimizing the production cost, adjustment cost, and opportunity cost of a system. Planners
are concerned with the quantity and the timing of both the supply and demand. Special
challenge comes from uneven demand within the planning horizon.
For example, in a department store, space allocation is often an aggregate decision.
That is, the manager might decide to allocate 20 percent of the available space in the
clothing department to women's sportswear, 30 percent to juniors, and so on, without
regard for what brand names will be offered or how much of juniors will be slacks. The
aggregate measure might be square feet of space or racks of clothing. The allocation might
change over time. Aggregate planning typically covers a time horizon of 2 to 18 months,
i.e., a rolling planning horizon covering the next 2-18 months. It is essentially a "big
picture" approach to planning. Planners focus on a group of similar products or services, or
sometimes an entire product or service line. The aggregate planning is particularly useful
for organizations that experience seasonal or other fluctuations in demand or capacity.
40
Two major reasons of doing intermediate-range planning are time and level of
accuracy. It takes time to develop and implement a plan. It is also not possible to predict
the timing and volume of demand for individual items with any degree of accuracy.
The goal is to achieve a production plan that will effectively utilize an organization's
resources to meet expected (forecasted) demand. Planners must make decisions on output
rates, employment levels and changes, inventory levels and changes, back orders, and
subcontracting.
Inputs to aggregate planning include demand forecast, available resources, policies
regarding employment levels, and so on. The output of the aggregate planning is a
production plan or an operations plan with overall decisions on level of output, capacity,
employment, and inventory.
Kanban is one of the Lean tools designed to reduce the idle time in a production process.
The main idea behind the Kanban system is to deliver what the process needs exactly when
it
needs
it.
In Japanese, the word Kan means "visual" and "ban" means "card," so Kanban
refers to visual cards. Lean uses visual cards as a signaling system that triggers an action to
supply the process with its needs either from an external supplier or from a warehouse.
F.TOYOTAKANBANSYSTEM
Kanban was originally invented as a part of the famous Toyota Production System. It is
associated with the design of pull systems and the concept of delivering just-in-time goods.
A pull system is where processes are based on customer demand. The concept is that each
process manufactures each component in line with another department to build a final part
to the exact expectation of delivery from the customer. Because your production process is
designed to produce only what is deliverable, your business becomes leaner as a result of
not holding excessive stock levels of raw, partly-finished, or finished mate Just-in-time is a
pull system of production, so actual orders provide a signal for when a product should be
41
manufactured. Demand-pull enables a firm to produce only what is required in the correct
quantity and at the correct time. This means that stock levels of raw materials, components,
work in progress and finished goods can be kept to a minimum. This requires a carefully
planned
scheduling
and
flow
of
resources
through
the
productionprocess.
Modern manufacturing firms use sophisticated production scheduling software to plan

production for each period of time, which includes ordering the correct stock. Information
is exchanged with suppliers and customers through an Electronic Data Interchange (EDI) to
help
ensure
that
every
detail
is
correct.
The most common form of Kanban is a card with data printed on it. The card can vary in
shape, size and content, and its sometimes replaced by other devices, such as golf balls.
To ensure a proper setup of Kanban in the workplace, Toyota has provided us with six
rules for an effective Kanban system:
1. Customer (downstream) processes withdraw items in the precise amounts specified
by the Kanban.
2. Supplier (upstream) produces items in the precise amounts and sequences specified
by the Kanban.
3. No items are made or moved without a Kanban.
4. A Kanban should accompany each item, every time.
5. Defects and incorrect amounts are never sent to the next downstream process.
6. The number of Kanbans is reduced carefully to lower inventories and to reveal
problems.
To conclude, establishing a Kanban system in your workplace is very useful in terms of
waste reduction and effective utilization of resources.
4.Describe the features of an appropriate process technology
of a small-scale
42
industry.
Small Scale Industries (SSI) constitute an important and crucial segment of the
industrial sector. They play an important role in employment creation, resource utilization
and income generation and helping to promote changes in a gradual and phased manner.
Small-scale industry as a unit employing less than 50 employees if using power and less
than 100 employees. Small scale enterprises are generally more labor intensive than larger
organizations. Every country has set its own parameters in defining small-scale sector.
Generally, small-scale sector is defined in terms of investment ceilings on the original value
of the installed plant and machinery. Fixed capital investment in a unit has also been
adopted as the other criteria to make a distinction between small-scale and large-scale
industries. This limit is being continuously raised up. The technological characteristics of
small scale industry in developing countries is measured in terms of six specific variables:
(a) economies of scale; (b) the technological base; (c) technological disparity; (d)
infrastructural base; (e) learning; (f) industry differentials; (g) labor intensity; and (h)
linkage pattern. First, Economies of scale. Small industrial units are, by assumption,
limited scale manufacturing operations that do only selectively, demonstrate the typical
impact of scale on productivity and output. They emerge and persist in industries where
scale economies are either relatively unimportant or are associated with limited levels of
employment and investment. They also decline whenever scale economies become
significant. Breaking the size barrier is, in fact, a measure of success of the small industry
entrepreneur. Second, Technological base. Small industries are dependent for their
equipment and process technology on a limited number of resources that start with the
entrepreneurs' own technical expertise probably gained during earlier stages of paid
employment. Large firms that provide the technology as a component within a subcontracting arrangement. Government institutions desirous to support a measure of
indigenous technology. And although the level of technology associated with any small
industry initiative is a function of all three variables, there is sufficient evidence to suggest
that the first is the prime source of technology in small industry in a significant number of
43
developing countries. Third, Technological disparity. The generic term small-scale industry
conceals, in fact, three levels of technological sophistication each related to a specific type
of activity: craft production, cottage industries and small manufacturing. Each of those
three is, in fact, a distinct mode of production with different scale and level of technology
parameters. The simplest and least problematic level of technology is that of crafts.
Carpentry, furniture etc demand relatively limited technological input. Cottage industry
demands a relatively higher level while small-scale industry could demand again
comparatively, the highest level of technological input in the sector. Fourth, Infrastructural
base. Experience of a large number of countries in both Africa and Asia has shown that
small industry usually needs a strong infrastructural base, although this need may vary
according to the size and nature of industry. The smaller the unit and the less formal is its
frame, the less the need for this infrastructure. The larger the unit and the more complex the
product or the process, the greater the need for this infra structural base. Very small and
artisanal establishments provide their own power and can adapt to different types of
physical location and shelter. The larger small industries are very much dependent on the
existence of the facilities usually contained within an industrial estate. Those could be
technically oriented services as central repair workshops, facilities for the bulk purchase of
raw material and warehousing facilities or common facilities as foundries, electroplating
shops, tool and die shops, heat treatment shops, woodworking shops, a quality control
laboratory and a special machine shops. Fifth, Industry differentials. The term forest-based
industries conceals, in fact, a number of different industries with different characteristics.
They differ in terms of labor input, proximity to the raw material base, nature of raw
materials used and their utilization pattern, sensitivity to scale, resort to technology,
marketability of output etc. Sixth, Learning. Technology is prime among these factors while
dexterity, learning and quality of management follow by not too far a distance. This so
called learning or experience impact was traced in large manufacturing operations
producing a wide variety of products from integrated circuits to baby. Small industries in
most developing countries are not susceptible to the learning or experience impact just
44
described. Seventh, Labor intensity. Aggregate data consistently show that increasing size
is associated with decreasing numbers of workers relative to capital. This labor intensity of
small industry is a favorite argument in favor of the industry and a frequently cited
rationale for its stimulation. Several determinants could actually lead to this labor intensity.
One of these could be the degree of sophistication of utilized technology. Differences in
labor intensity may simply reflect the impact of differences in the wage/rental ratios facing
small and large firms on their choice of both technique and industry. Another determinant
may be the degree of informality of the enterprise, with informal sector enterprises more
inclined towards substituting capital with labor and employing low-skill, minimum wagetied labor. And a third possible determinant of this labor intensity could he the economies
of scale that we have mentioned earlier and the fact that certain industries and industrial
branches require considerable capital outlay within a wider span of scale than that
reachable by a small industry. Lastly, Linkage pattern. The probability is high that the
forward linkage of small-scale forest based industries to large scale industries is lower than
their backward linkage.

Submitted by: Camille L. Gonzales
Sat/ 9:00 AM -12:00PM
45
QUESTION NO. 1
There are certain aspects that make up a system design. Describe these aspects.
ANSWER:
An aspect is a way of viewing a complex system. It is a perspective of a system. Aspects
provide the basis for inquiry to understand and define systems. Predefined aspects are the
'preconceived notion' required as a starting point for an inquiry process.
The four basic aspects -A. environment-purpose,
B. function,
C. process, and
D. resources& structure
Derived from the most basic attributes of a system - outputs, process, and inputs with
a purpose in the context of its environment.
For inquiry purposes, these aspects are then defined as variables of a system. To be the
basis for effective inquiry, these variables must be - mutually exclusive, interdependent,
and collectively exhaustive in explaining the system. The inquiry to find the 'truth of the
matter' regarding a system is analogous to solving a multivariate equation.
These variables co-produce one another, therefore, technically, no one variable dominates
others.
QUESTION NO. 2
Production is considered as a process of adding value to the final product. Describe the
processes that contribute to the addition of the final product.
ANSWER
The value-add assessment of the activity identifies an activity as one of the following:
46
Real-value-add (RVA) activity if it is effective

Business-value-add (BVA) activity if it satisfies the business requirement
Non-value-add (NVA) activity if it do not enhance the customers image of the
product or service
and do not support the business processes.
Value of Storage Activities
Storage activities add no value to the product in the customer's eyes. Storage
activities are not required to support the business process. The storage of the
product (either finished or work-in-progress) indicates problems in the design of the
process, and the organization's ability to anticipate supply and demand for the
product.
Value of Transportation Activities
The transport of the product, within a business process, adds nothing to the product in the
customer's view and is not necessary to support the business process. The movement of
work-in-progress is probably due to inefficient process design. The goal in designing the
process is to minimize the amount of movement required in the process.
47
Value of Inspection Activities
Organizations may view inspection type activities as valuable activities. However, from
the customer's viewpoint it is wasteful. The activity only verifies that the product meets the
specification. The need to inspect the product indicates the organization's inability to
produce a good product. Inspection activities may indicate a flaw in the design of the
business process.
Most approval processes are also considered wasteful from the customer's point of
view. This is especially true of activities that review and then approve another person's
work (e.g., supervisor approval required for a cashier to accept a customer cheque over a
specified threshold).
Value of Production Activities
Many production activities contribute to the value of the product or support the business
process. Any real-value-add (RVA) or business-value-add (BVA) activity is a value-add
activity. In value-add activities, there may be possibilities for improving the efficiency and
effectiveness of the activity.
48
QUESTION NO. 3
One of the earliest analytical methods in production is the motion study. Highlight the
merits of such analysis in the development of work method for an organization.
ANSWER
Time and motion studies are analyses of the movements made by workers as they go about
their daily routine duties. The studies' purpose is to determine if there are wasted
movements that are repeated and which therefore waste time and reduce the productivity of
the worker. The studies are used to try to set up workspaces in such a way that a worker
can do his/her routine duties as quickly and efficiently as possible.
Small changes, big benefits
Small savings quickly mount up. At the same time, we spend a lot of time in our lives
doing stuff that is not very useful. For example, in your life you spend two months driving
the street in front of your house. Reducing useless tasks or at least doing them more
efficiently can free up huge amounts of time for whats important. Heres a table to help
you work out how much time you could save with modest gains repeatedly regularly:
The advantages of time and motion study in hospital industry are same as that in any other
industry. These include the following.
1.
2.
3.
4.
It improves the methods or procedures adopted in performance of various jobs.

Improving the lay out of the facility.
To improve utilization of resources.
To reduce human effort by proper design of processes.
QUESTION NO. 4
Describe the features of an appropriate process technology for a small scale industry.
49
ANSWER
Technological characteristics of small scale industry in developing countries
The technological characteristics of small scale industry in developing countries could, in
the author's view, be measured in terms of six specific variables: (a) economies of scale; (b)
the technological base; (c) technological disparity; (d) infrastructural base; (e) learning; (f)
industry differentials; (g) labour intensity; and (h) linkage pattern. The list is by no means
exhaustive but it provides as complete a view as can be, of the different factors at play in
the determination of the technological characteristics of the sector. We now examine each
of those variables closely.
Economies of scale
Small industrial units are, by assumption, limited scale manufacturing operations that do
only selectively, demonstrate the typical impact of scale on productivity and output. They
emerge and persist in industries where scale economies are either relatively unimportant or
are associated with limited levels of employment and investment. They also decline
whenever scale economies become significant. Breaking the size barrier is, in fact, a
measure of success of the small industry entrepreneur.
The experience of Korea and Taiwan (Ho, 1980) could probably be of assistance in
throwing some light on what could be considered, for various industries, the minimum
efficient plant size and in what industries could small scale manufacturing units be
considered efficient.
Korea and Taiwan have experienced a shift from small low technology content industries in
the late fifties and early sixties to large high technology content industries in the seventies
and eighties. Both countries had a strong small industry sector in the sixties that declined in terms of total employment - gradually but measurably, over the last two decades. The
50
share of Korean small enterprises (5-49 employees) declined from 54% in 1958 to 17% in
1975. The identical share of Taiwan small industrial units demonstrated a parallel decline
from 45% 1954 to 26% in 1961 (Ibid).
Technological base
Small industries are dependent for their equipment and process technology on a limited
number of resources that start with (a) the entrepreneurs' own technical expertise probably
gained during earlier stages of paid employment (Schmitz, 1982); (b) large firms that
provide the technology as a component within a sub-contracting arrangement (Ibid); (c)
government institutions desirous to support a measure of indigenous technology. And
although the level of technology associated with any small industry initiative is a function
of all three variables, there is sufficient evidence to suggest that the first is the prime source
of technology in small industry in a significant number of developing countries.
Technological skill, know-how development, and their promotion in developing
countries
Technology, for the small entrepreneur, is simply knowledge essential for the conduct of a
productive function. It includes: (a) Industry specific knowledge; (b) Product-systemrelated knowledge; (c) Firm-specific knowledge; and, finally, (d) On-going problemsolving capability or skill essential for solving management problems.
Technology viewed within this context has a soft as well as a hard component. The soft
component relates to the human capability generation process linked to the absorbtion and
management of the technology. The hard components focuses on the essential technological
processes and equipment utilized in the manufacturing process. Both components are of
equal significance. They could be either transferred or generated domestically. Transfer has
provided the answer for decades. Development and generation receive contemporary
attention. The following discussion treats technological skill as a function of both the
51
transfer as well as the domestic development process.

Revenue and Profitability
Small-scale business revenue is generally lower than companies that operate on a larger
scale. The Small Business Administration classifies small businesses as companies that
bring in less than a specific amount of revenue, depending on the business type. The
maximum revenue allowance for the small business designation is set at $21.5 million per
year for service businesses.
Lower revenue does not necessarily translate into lower profitability. Established smallscale businesses often own their facilities and equipment outright, which, in addition to
other factors, helps to keep costs lower than more leveraged businesses.
Employees
Small-scale businesses employ smaller teams of employees than companies that operate on
larger scales. The smallest businesses are run entirely by single individuals or small teams.
A larger small-scale business can often get away with employing fewer than one hundred
employees, depending on the business type.
Market Area
Small-scale businesses serve a much smaller area than corporations or larger private
businesses. The smallest-scale businesses serve single communities, such as a convenience
store in a rural township. The very definition of small-scale prevents these companies from
serving areas much larger than a local area, since growing beyond that would increase the
52
scale of a small business's operations and push it into a new classification.

Ownership and Taxes
The corporate form of business organization is not well-suited to small-scale operations.
Instead, small-scale businesses prefer to organize as sole proprietorships, partnerships or
limited liability companies. These forms of organization provide the greatest degree of
managerial control for company owners, while minimizing the hassle and expense of
business registration.
These businesses generally do not file their own taxes; instead, company owners report
business income and expenses on their personal tax returns.
Locations
A small-scale business, by definition, can be found only in a limited area. These companies
are not likely to have sales outlets in multiple states or countries, for example. A large
number of small-scale businesses operate from a single office, retail store or service outlet.
It is even possible to run a small business directly out of your home, without any company
facilities.
53

Submitted by: Joel M. Manalo
Sat/ 9:00 AM -12:00PM

Have you ever wondered how an organization decides which products and services to
develop, price, promote, and sell? Organizations typically develop plans and strategies that
outline how they want to go about this process. Such a plan must take into account a
companys current internal conditions, such as its resources, capabilities, technology, and
so forth. The plan must also take into account conditions in the external environment, such
as the economy, competitors, and government regulations that could affect what the firm
54
wants to do. Just as your personal plans such as what you plan to major in or where you
want to find a job are likely to change, organizations also have contingency plans.
Individuals and organizations must develop long term (longer than a year) strategic plans,
match their strengths and resources to available opportunities, and adjust their plans to
changing circumstances as necessary
Individual buyers and organizational buyers both evaluate products and services to see if
they provide desired benefits. For example, when youre exploring your vacation options,
you want to know the benefits of each destination and the value you will get by going to
each place. Before you (or a firm) can develop a strategy or create a strategic plan, you first
have to develop a value proposition. A value proposition is a thirty-second elevator
speech stating the specific benefits a product or service offering provides a buyer. It shows
why the product or service is superior to competing offers. The following is an example of
a value proposition developed by a sales consulting firm: Our clients grow their business,
large or small, typically by a minimum of 30 50% over the previous year. They accomplish
this without working 80 hour weeks and sacrificing their personal lives.
Note that although a value proposition will hopefully lead to profits for a firm, when the
firm presents its value proposition to its customers, it doesnt mention its own profits.
Thats because the goal is to focus on the external market, or what customers want.
2. There are certain aspects that make up a systems design.
Describe these aspects.
In order to determine whether or not a given project is feasible, there must be some form of
investigation into the goals and implications of the project. For very small scale projects
this may not be necessary at all as the scope of the project is easily understood. In larger
projects, the feasibility may be done but in an informal sense, either because there is not
time for a formal study or because the project is a must-have and will have to be done
one way or the other.
55
When a Project is carried out, there are four main areas of consideration:
Technical is the project technically possible?Financial can the business afford to carry
out the project?Organizational will the new system be compatible with existing practices?
Ethical is the impact of the new system socially acceptable?
To answer these questions, the feasibility study is effectively a condensed version of a fully
blown systems analysis and design. The requirements and users are analyzed to some
extent, some business options are drawn up and even some details of the technical
implementation. The product of this stage is a formal feasibility study document. SSADM
specifies the sections that the study should contain including any preliminary models that
have been constructed and also details of rejected options and the reasons for their
rejection.
Stage 1 Investigation of the current environment
The developers of SSADM understood that in almost all cases there is some form of
current system even if it is entirely composed of people and paper. Through a combination
of interviewing employees, circulating questionnaires, observations and existing
documentation, the analyst comes to full understanding of the system as it is at the start of
the project. This serves many purposes.
Stage 2 Business system options
Having investigated the current system, the analyst must decide on the overall design of the
new system. To do this, he or she, using the outputs of the previous stage, develops a set of
business system options. These are different ways in which the new system could be
produced varying from doing nothing to throwing out the old system entirely and building
an entirely new one. The analyst may hold a brainstorming session so that as many and
various ideas as possible are generated.
The ideas are then collected to options which are presented to the user. The options
consider the following:
The degree of automation
56
The boundary between the system and the users

The distribution of the system, for example, is it centralized to one office or spread out
across several?
Cost/benefit
Impact of the new system
Where necessary, the option will be documented with a logical data structure and a level 1
data-flow diagram.
The users and analyst together choose a single business option. This may be one of the ones
already defined or may be a synthesis of different aspects of the existing options. The
output of this stage is the single selected business option together with all the outputs of the
feasibility stage.
Stage 3 Requirements specification
This is probably the most complex stage in SSADM. Using the requirements developed in
stage 1 and working within the framework of the selected business option, the analyst must
develop a full logical specification of what the new system must do. The specification must
be free from error, ambiguity and inconsistency. By logical, we mean that the specification
does not say how the system will be implemented but rather describes what the system will
do.
To produce the logical specification, the analyst builds the required logical models for both
the data-flow diagrams (DFDs) and the Logical Data Model(LDM), consisting of the
Logical Data Structure (referred to in other methods as entity relationship diagrams) and
full descriptions of the data and its relationships. These are used to produce function
definitions of every function which the users will require of the system, Entity LifeHistories (ELHs) which describe all events through the life of an entity, and Effect
Correspondence Diagrams (ECDs) which describe how each event interacts with all
relevant entities. These are continually matched against the requirements and where
necessary, the requirements are added to and completed.
57
The product of this stage is a complete requirements specification document which is made
up of:
the updated data catalogue
the updated requirements catalogue
the processing specification which in turn is made up of
user role/function matrix
function definitions
required logical data model
entity life-histories
effect correspondence diagrams
Though some of these items may be unfamiliar to you, it is beyond the scope of this unit to
go into them in great detail.
Stage 4 Technical system options
This stage is the first towards a physical implementation of the new system. Like the
Business System Options, in this stage a large number of options for the implementation of
the new system are generated. This is narrowed down to two or three to present to the user
from which the final option is chosen or synthesized.
However, the considerations are quite different being:
the hardware architectures
the software to use
the cost of the implementation
the staffing required
the physical limitations such as a space occupied by the system
the distribution including any networks which that may require
the overall format of the human computer interface
All of these aspects must also conform to any constraints imposed by the business such as
58
available money and standardization of hardware and software.

The output of this stage is a chosen technical system option.
Stage 5 Logical design
Though the previous level specifies details of the implementation, the outputs of this stage
are implementation-independent and concentrate on the requirements for the human
computer interface. The logical design specifies the main methods of interaction in terms of
menu structures and command structures.
One area of activity is the definition of the user dialogues. These are the main interfaces
with which the users will interact with the system. Other activities are concerned with
analyzing both the effects of events in updating the system and the need to make inquiries
about the data on the system. Both of these use the events, function descriptions and effect
correspondence diagrams produced in stage 3 to determine precisely how to update and
read data in a consistent and secure way.
The product of this stage is the logical design, which is made up of:
Data catalogue
Required logical data structure
Logical process model includes dialogues and model for the update and inquiry processes
Stress & Bending moment.
Stage 6 Physical design
This is the final stage where all the logical specifications of the system are converted to
descriptions of the system in terms of real hardware and software. This is a very technical
stage and a simple overview is presented here.
The logical data structure is converted into a physical architecture in terms of database
structures. The exact structure of the functions and how they are implemented is specified.
The physical data structure is optimized where necessary to meet size and performance
requirements.
59
The product is a complete Physical Design, which could tell software engineers how to
build the system in specific details of hardware and software and to the appropriate
standards.
3. Production is considered as a process of adding value to the final product. Describe
the processes that contribute to the addition of value to the final product.
A good way to think of a business is to imagine inputs entering an imaginary black box.
What come out of the box are outputs. The black box is the business what is does how it
does it and so on.
A business needs resources in order to trade. The activities of a new business should be
designed to turn those resources into products and services that customers are willing to
pay for. This process is known as the "transformation process".
If the value of what customers pay for the outputs is more than the cost of the inputs, then
the business can be said to have "added value".
So, in summary, the transformation process is about adding value.
That sounds pretty theoretical. So, let's take a look at some practical examples of what is
involved in the transformation process.
Inputs to the transformation process
In order to make products and deliver services, a business needs resources i.e. inputs. The
textbooks often refer to these as "factors of production", which is a slightly boring way of
describing real resources such as:
Labor the time and effort of people involved in the business: employees, suppliers etc
Land think of this as the natural resources that are used by the business e.g. actual land,
60
energy, and other natural resources

Capital capital includes physical assets such as machinery, computers, transport which
are used during production. Capital can also include finance the investment that is
required in order for the business activities to take place.
Enterprise enterprise is the entrepreneurial "fairy-dust" that brings together or organizes
the other inputs. The entrepreneur takes the decisions about how much capital, what kind of
labor etc and how & when they are needed in the business. You will probably agree that
enterprise is the most important input for a successful business.Inputs by themselves are
rarely enough for a start-up to succeed. They need to be the right kind of inputs, in the right
mix. So, for example, a successful entrepreneur will be keen to ensure:
High quality people are employed (the best the business can afford at each stage of
development) and that these people are retained and invested in (training)
Capital investment is focused on efficiency and quality use of modern machinery or IT
systems of the right kind can have a significant effect whether a small business is able to
compete
Outputs from the transformation process
The outputs of business activities are reflected in the products and services sold to
customers. It is quite useful to think of ways in which similar business activities can be
grouped based on those outputs.
Economists and business examiners alike have traditionally categorized the outputs from
the transformation process into these three groups:
61
Increasing market demand towards higher product and process quality and efficiency forces
companies to think of new and innovative ways to optimize their production. In the area of
high-tech manufacturing products, even slight variations of the product state during
production can lead to costly and time-consuming rework or even scrap age. Describing an
individual products state along the entire manufacturing programmed, including all
relevant information involved for utilization, e.g., in-process adjustments of process
parameters, can be one way to meet the quality requirements and stay competitive. Ideally,
the gathered information can be directly analyzed and in case of an identified critical trend
or event, adequate action, such as an alarm, can be triggered. Traditional methods based on
modeling of cause-effect relations reaches its limits due to the fast increasing complexity
and high-dimensionality of modern manufacturing programmed. There is a need for new
approaches that are able to cope with this complexity and high-dimensionality which, at the
same time, are able to generate applicable results with reasonable effort. Within this paper,
the possibility to generate such a system by applying a combination of Cluster Analysis and
Supervised Machine Learning on product state data along the manufacturing programmed
will be presented. After elaborating on the different key aspects of the approach, the
applicability on the identified problem in industrial environment will be discussed briefly.
62

Submitted by: Ma Cristina C. Santos
Sat/ 9:00 AM -12:00PM

Have you ever wondered how an organization decides which products and services to
develop, price, promote, and sell? Organizations typically develop plans and strategies that
outline how they want to go about this process. Such a plan must take into account a
companys current internal conditions, such as its resources, capabilities, technology, and
so forth. The plan must also take into account conditions in the external environment, such
as the economy, competitors, and government regulations that could affect what the firm
wants to do. Just as your personal plans such as what you plan to major in or where you
want to find a job are likely to change, organizations also have contingency plans.
63
Individuals and organizations must develop long term (longer than a year) strategic plans,
match their strengths and resources to available opportunities, and adjust their plans to
changing circumstances as necessary
Individual buyers and organizational buyers both evaluate products and services to see if
they provide desired benefits. For example, when youre exploring your vacation options,
you want to know the benefits of each destination and the value you will get by going to
each place. Before you (or a firm) can develop a strategy or create a strategic plan, you first
have to develop a value proposition. A value proposition is a thirty-second elevator
speech stating the specific benefits a product or service offering provides a buyer. It shows
why the product or service is superior to competing offers. The following is an example of
a value proposition developed by a sales consulting firm: Our clients grow their business,
large or small, typically by a minimum of 30 50% over the previous year. They accomplish
this without working 80 hour weeks and sacrificing their personal lives.
Note that although a value proposition will hopefully lead to profits for a firm, when the
firm presents its value proposition to its customers, it doesnt mention its own profits.
Thats because the goal is to focus on the external market, or what customers want.
2. There are certain aspects that make up a systems design.
Describe these aspects.
In order to determine whether or not a given project is feasible, there must be some form of
investigation into the goals and implications of the project. For very small scale projects
this may not be necessary at all as the scope of the project is easily understood. In larger
projects, the feasibility may be done but in an informal sense, either because there is not
time for a formal study or because the project is a must-have and will have to be done
one way or the other.
When a Project is carried out, there are four main areas of consideration:
Technical is the project technically possible?Financial can the business afford to carry
64
out the project?Organizational will the new system be compatible with existing practices?
Ethical is the impact of the new system socially acceptable?
To answer these questions, the feasibility study is effectively a condensed version of a fully
blown systems analysis and design. The requirements and users are analyzed to some
extent, some business options are drawn up and even some details of the technical
implementation. The product of this stage is a formal feasibility study document. SSADM
specifies the sections that the study should contain including any preliminary models that
have been constructed and also details of rejected options and the reasons for their
rejection.
Stage 1 Investigation of the current environment

The developers of SSADM understood that in almost all cases there is some form of
current system even if it is entirely composed of people and paper. Through a combination
of interviewing employees, circulating questionnaires, observations and existing
documentation, the analyst comes to full understanding of the system as it is at the start of
the project. This serves many purposes.
Stage 2 Business system options
Having investigated the current system, the analyst must decide on the overall design of the
new system. To do this, he or she, using the outputs of the previous stage, develops a set of
business system options. These are different ways in which the new system could be
produced varying from doing nothing to throwing out the old system entirely and building
an entirely new one. The analyst may hold a brainstorming session so that as many and
various ideas as possible are generated.
The ideas are then collected to options which are presented to the user. The options
consider the following:
The degree of automation
The boundary between the system and the users
65
The distribution of the system, for example, is it centralized to one office or spread out
across several?
Cost/benefit
Impact of the new system
Where necessary, the option will be documented with a logical data structure and a level 1
data-flow diagram.
The users and analyst together choose a single business option. This may be one of the ones
already defined or may be a synthesis of different aspects of the existing options. The
output of this stage is the single selected business option together with all the outputs of the
feasibility stage.
Stage 3 Requirements specification
This is probably the most complex stage in SSADM. Using the requirements developed in
stage 1 and working within the framework of the selected business option, the analyst must
develop a full logical specification of what the new system must do. The specification must
be free from error, ambiguity and inconsistency. By logical, we mean that the specification
does not say how the system will be implemented but rather describes what the system will
do.
To produce the logical specification, the analyst builds the required logical models for both
the data-flow diagrams (DFDs) and the Logical Data Model(LDM), consisting of the
Logical Data Structure (referred to in other methods as entity relationship diagrams) and
full descriptions of the data and its relationships. These are used to produce function
definitions of every function which the users will require of the system, Entity LifeHistories (ELHs) which describe all events through the life of an entity, and Effect
Correspondence Diagrams (ECDs) which describe how each event interacts with all
relevant entities. These are continually matched against the requirements and where
necessary, the requirements are added to and completed.
The product of this stage is a complete requirements specification document which is made
66
up of:
the updated data catalogue
the updated requirements catalogue
the processing specification which in turn is made up of
user role/function matrix
function definitions
required logical data model
entity life-histories
effect correspondence diagrams
Though some of these items may be unfamiliar to you, it is beyond the scope of this unit to
go into them in great detail.
Stage 4 Technical system options
This stage is the first towards a physical implementation of the new system. Like the
Business System Options, in this stage a large number of options for the implementation of
the new system are generated. This is narrowed down to two or three to present to the user
from which the final option is chosen or synthesized.
However, the considerations are quite different being:
the hardware architectures
the software to use
the cost of the implementation
the staffing required
the physical limitations such as a space occupied by the system
the distribution including any networks which that may require
the overall format of the human computer interface
All of these aspects must also conform to any constraints imposed by the business such as
available money and standardization of hardware and software.
67
The output of this stage is a chosen technical system option.

Stage 5 Logical design
Though the previous level specifies details of the implementation, the outputs of this stage
are implementation-independent and concentrate on the requirements for the human
computer interface. The logical design specifies the main methods of interaction in terms of
menu structures and command structures.
One area of activity is the definition of the user dialogues. These are the main interfaces
with which the users will interact with the system. Other activities are concerned with
analyzing both the effects of events in updating the system and the need to make inquiries
about the data on the system. Both of these use the events, function descriptions and effect
correspondence diagrams produced in stage 3 to determine precisely how to update and
read data in a consistent and secure way.
The product of this stage is the logical design, which is made up of:
Data catalogue
Required logical data structure
Logical process model includes dialogues and model for the update and inquiry processes
Stress & Bending moment.
Stage 6 Physical design
This is the final stage where all the logical specifications of the system are converted to
descriptions of the system in terms of real hardware and software. This is a very technical
stage and a simple overview is presented here.
The logical data structure is converted into a physical architecture in terms of database
structures. The exact structure of the functions and how they are implemented is specified.
The physical data structure is optimized where necessary to meet size and performance
requirements.
The product is a complete Physical Design, which could tell software engineers how to
build the system in specific details of hardware and software and to the appropriate
68
standards.
3. Production is considered as a process of adding value to the final product. Describe
the processes that contribute to the addition of value to the final product.
A good way to think of a business is to imagine inputs entering an imaginary black box.
What come out of the box are outputs. The black box is the business what is does how it
does it and so on.
A business needs resources in order to trade. The activities of a new business should be
designed to turn those resources into products and services that customers are willing to
pay for. This process is known as the "transformation process".
If the value of what customers pay for the outputs is more than the cost of the inputs, then
the business can be said to have "added value".
So, in summary, the transformation process is about adding value.
That sounds pretty theoretical. So, let's take a look at some practical examples of what is
involved in the transformation process.
Inputs to the transformation process
In order to make products and deliver services, a business needs resources i.e. inputs. The
textbooks often refer to these as "factors of production", which is a slightly boring way of
describing real resources such as:
Labor the time and effort of people involved in the business: employees, suppliers etc
Land think of this as the natural resources that are used by the business e.g. actual land,
energy, and other natural resources
Capital capital includes physical assets such as machinery, computers, transport which
69
are used during production. Capital can also include finance the investment that is
required in order for the business activities to take place.
Enterprise enterprise is the entrepreneurial "fairy-dust" that brings together or organizes
the other inputs. The entrepreneur takes the decisions about how much capital, what kind of
labor etc and how & when they are needed in the business. You will probably agree that
enterprise is the most important input for a successful business.Inputs by themselves are
rarely enough for a start-up to succeed. They need to be the right kind of inputs, in the right
mix. So, for example, a successful entrepreneur will be keen to ensure:
High quality people are employed (the best the business can afford at each stage of
development) and that these people are retained and invested in (training)
Capital investment is focused on efficiency and quality use of modern machinery or IT
systems of the right kind can have a significant effect whether a small business is able to
compete
Outputs from the transformation process
The outputs of business activities are reflected in the products and services sold to
customers. It is quite useful to think of ways in which similar business activities can be
grouped based on those outputs.
Economists and business examiners alike have traditionally categorized the outputs from
the transformation process into these three groups:
Increasing market demand towards higher product and process quality and efficiency forces
companies to think of new and innovative ways to optimize their production. In the area of
high-tech manufacturing products, even slight variations of the product state during
70
production can lead to costly and time-consuming rework or even scrap age. Describing an
individual products state along the entire manufacturing programmed, including all
relevant information involved for utilization, e.g., in-process adjustments of process
parameters, can be one way to meet the quality requirements and stay competitive. Ideally,
the gathered information can be directly analyzed and in case of an identified critical trend
or event, adequate action, such as an alarm, can be triggered. Traditional methods based on
modeling of cause-effect relations reaches its limits due to the fast increasing complexity
and high-dimensionality of modern manufacturing programmed. There is a need for new
approaches that are able to cope with this complexity and high-dimensionality which, at the
same time, are able to generate applicable results with reasonable effort. Within this paper,
the possibility to generate such a system by applying a combination of Cluster Analysis and
Supervised Machine Learning on product state data along the manufacturing programmed
will be presented. After elaborating on the different key aspects of the approach, the
applicability on the identified problem in industrial environment will be discussed briefly.
1. (#6). Many firms are adopting the just-in-time inventory system as a way of
minimizing stock holding cost. Explain the conditions necessary for such a system
to work.
Just-in-time (JIT) is an inventory strategy used by companies to increase good
inventory system and decrease wastages by having stocks that are just needed in the
production. Using a JIT system the purchaser or manager must have good and
accurate forecasting on demand. He must know the days and month that needs a
greater inventory level and to when is the slack season.
For instance in a fast-food establishment specifically who offers pizza and pasta. As a new
manager I must know when to order big inventory for my bulk orders, and also I have to
know when I am going to order a minimal inventory in order to avoid shortage of stocks. In
order to forecast correctly I need to know the history of orders from last year, I need to
know the history of this store in terms of purchasing. And one thing I need to know how
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frequent the delivery of wet goods and dry goods is in a week. I also have to know how
long the chicken, dough, cheese, bacon, sauces and drinks last. For instance on ber
months especially October to December I need to order more stocks due to demand is high
because of different parties. For the history of my history I need to have a stocks of at least
5 crates of chicken and 2 caseof noodles and 5 case of every size of dough except for 15
inches because delivery of wet products are very other day and no delivery on Sundays. On
November to December I need to have a more stocks of chicken and noodles due to more
bulk orders of set meals than pizza for schools Christmas party and company parties. And
on December there are times that delivery of goods are delayed due to pick season. Here
comes January up to April purchase of goods need to lessen in order for us to avoid high
wastages because demands also decrease. However in preparation for February 14, the
Hearts day celebration we need to increase orders to meet the demand on that date. We
usually have a good dale on this date. After this date the next month that has a big sale is on
May and June, we have to order a little higher compare to the regular order from the first
months of the year. And after those months we go back on our regular inventory level.
2. (#7). Company XLT has put in place elaborate plant maintenance programmed.
Highlight the reasons why the organizations way has established such maintenance
programmed.
Maintenance programmed has been implemented to overcome the problems which is
related to equipment breakdown. Many management personnel or owners often view
maintenance works as an expense, unknowing its longer positive effect. Proper
maintenance of plant equipment can significantly reduce the overall operating cost, while
productivity is boosting. Maintenance efficiency can affect the business effectiveness and
integrity. Just for instance if you dont schedule plant or equipment maintenance for a year
and on the time of your peak season the machine breakdown will be more costly for the
company due to production delay or we will not meet the lead time given. There are
different kinds of maintenance programmed. Breakdown maintenance take effect only
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when the machine or equipment needs to be fixed. There is also what we call preventive
maintenance where there is a predetermined period. In this kind of maintenance there is an
overhaul check-up of all equipment. They inspect the equipment for fixing and changing of
parts. In our company (fast-food that offers pizza and pasta), we have a preventive
maintenance schedule. They have specific date and frequency when a maintenance of our
equipment will be done. The usual equipment that needs a frequent preventive maintenance
are the retarder where pizza are done, our freezer, chiller and air condition units. This are
the main equipment of the store that will cost us big when they breakdown. For instance if
the freezer has malfunction the sauces, chicken, pan and the dough will be wasted because
they cant be store longer outside the freezer. The chiller is also very important in the store
because it gives the right temperature in thawing the frozen chicken, dough and sauces.
And the retarder needs to be maintained every month because it where the pizza is cooked
to taste its freshness. And one of the important thing are POS (point of sale machine), it is
where we monitor sale and if it breakdown it will be a very difficult task to work back sale
and inventory that is why it also has a software and hardware maintenance schedule every
month. However some tools and equipment are on the breakdown maintenance strategy,
such as the blender, dispenser and other. They are given much attention when they are
needed to repair and replace because there still have an alternative. This are the importance
of maintenance programmed. They may cost us however it is for our companys
effectiveness and efficiency in meeting the demands. We have to take good care of them
because they are the materials in doing our business well.
3. (#9) Describe the features of an appropriate process technology for a small-scale
industry.
Small scale industry is described according into what country you are
referring to.
For instance in India, small scale industry is an industrial under taking
in which investment in fixed assets in plant and machinery, whether held on
ownership term, lease or hire purchase should not be more than Rs 10
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million. It must have less than 150 employees per unit. However they
produce more employment opportunities because the job is more on labor
intensive such as handicraft. Small scale industry is light and limited capital
that is why the return of investment has a quick return. It also requires less
machines and technical skills.
Small scale industry support and promote exportation and mobilization
of local resources.
Appropriate process technology for small scale industry fits flexible
manufacturing systems. Markets now a day become more intense in
competition. They become more complex, quality is not only they required
but also speed of delivery. We have to be more flexible which means that we
have to produce more goods, affordable and high quality.
4. (#11) One of the earliest analytical methods in production is the motion study.
organization.
Motion study involves the study of motion of an operation (time study notes
the time involved in carrying out each element of operation).
Motion study aims to reduce wastage of time and materials scrapping
the unnecessary movements (time study aims of fixing the standard time for
carrying out a job).
Motion study is suitable for all types of jobs (time study is not suitable
for workers where quality is prime consideration).
Motion study offers a great potential for savings in any area of human
effort. We can reduce the cost by combining elements of one task with
elements of another. It uses the principle of motion economy to develop work
stations that are friendly to the human body and efficient in their operation. It
considers the operators safety. Motion study is a detailed analysis of the
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work methods in an effort to improve it.

For instance, a manufacturing company using motion study will
develop the best work method. They also develop motion consciousness on
the part of all employees to avoid accident, stoppage or delay of work. They
also develop economical and efficient tools, fixtures and production aids to
help the production. It will assist them in selecting new machines and
equipment for production and train new employees in the preferred method.
This will reduce the effort to be exerted and the cost to be incurred or
expended.
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Submitted by: Reynaldo S. Angara
Sat/ 9:00 AM -12:00PM
3. Production is considered as a process of adding value to the final product. Describe the
processes that contribute to the addition of value to the final product.
There are three main types of process: job, batch and flow production.
a. Job production the creation of single items by either one operative or a team of
operatives. It requires the complete attention of the operative before he or she passes
on to the next job.This is beneficial to the customer as it exactly matches the
expectations of the customer. As the work is concentrated on a specific unit,
supervision and inspection of work are relatively simple. It will also provide
employees with a greater level of satisfaction in their job because they are a part of a
team working towards the same aim.
b. Batch production refers to a specific group of components, which go through a
production process together. As one batch finishes, the next one starts. For
example, on production of mannequin, one starts with the heads on Monday, on
Tuesday, another batch works on the body and so on. This method is sometimes
referred to as intermittent production as different job types are held as work-inprogress between the various stages of production. It is suitable for a wide range of
almost similar goods, which use the same machinery on different settings.
c. Flow production a continuous process of parts and sub-assemblies passing on from
one stage to another until completion. Units are worked upon in each operation and
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then passed straight on to the next work stage without waiting for the batch to be
completed.
6. Many firms are adopting the just-in-time inventory system as a way of minimizing stock
holding costs. Explain the conditions necessary for such a system to work.
Just-in-time (JIT) inventory refers to an inventory management system with objectives
of having inventory readily available to meet demand, but not to a point of excess where
you must stockpile extra products. Maintaining inventory takes time and has costs,
which is what motivates companies to implement JIT programs. Balancing the goals of
avoiding stock outs while minimizing inventory costs is at the heart of just-in-time
inventory. One of the main benefits of automated and efficient inventory replenishment
systems is that you can quickly respond to reduced inventory levels. Companies are
now equipped to pull back on stock in a given product category and ramp up inventory
in another as customer needs and interests change. Minimization of inventory
management costs is a primary driver and benefit of just-in-time practices. Inventory
management has costs, and when you reduce the amount of holding space and staff
required with JIT, the company can invest the savings in business growth and other
opportunities, points out the Accounting for Management website. You also have less
likelihood of throwing out product that gets old or expires, meaning reduced waste.
physical conditions that may influence the performance of the workers. Outline these
conditions.
Certain physical conditions that may influence the performance of the workers are:
a. environment considerations such as employees safety, light conditions, ventilation,
temperature, noise, etc.
b. building if it has been already selected, its characteristic will be a constraint at the
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moment of designing the layout, which is different if the building has to be built
c. materials size, shape, volume, weight and the physical-chemical characteristics
will influence the manufacturing methods and storage and material handling
processes. The sequence and order of the operations will affect plant layout as well,
taking into account the variety and quantity to produce
d. machinery, tools and necessary equipments we have to consider the space
required, shape, height, weight, quantity and type of workers required, risks for the
personnel, requirements of auxiliary services, etc.
11. One of the earliest analytical methods in production is the motion study. Highlight the
merits of such analysis in the development of work method for an organization.
Motion study was developed by Frank B. Gilbreth and Lillian M. Gilbreth and
consists of a wide variety of procedures for the description, systematic analysis, and
means of improving work methods. It is difficult to separate these two aspects
completely. Therefore, the combined term usually refers to all three phases of the
activity: method determination, time appraisal, and development of material for the
application of these data. Frank and Lillian also broadened scientific management by
including the human element, therefore using psychology to gain the cooperation of
employees. Motion and time analysis could be used to help find a preferential way
of doing the work and could assist in effectively managing or controlling the
activity. This approach has been successfully applied to factories, hospitals,
department stores, housework, banks, cafeteria work, libraries, music, and to many
other human activities. For instance, factories have used it to reduce wasted time and
improve the time to compete a task, while banks use it to help team members reach
their sales goals. However, the goal of a time and motion study is not simply
efficiency. These studies are done to create a baseline that can be used in the future
when evaluating procedural, equipment, or personnel changes. The goal can be to
understand the skills required to enable individuals to perform the work and, thus, to
provide the correct training. Another may be to reduce the discomfort experienced,
especially in the case of surgical proceduresa goal such as this, namely, to create
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less tissue damage, may run counter to efficiency. In the case of athletes, the goal
may be faster speed or more endurance, which may be achieved not necessarily by
the most efficient way.
Submitted by: Sally Nino
Sat/ 9:00 AM -12:00PM
1. There are certain aspects that make up a systems design. Describe these
aspects.
interfaces, and data for a system to satisfy specified requirements. Systems design could
be seen as the application of systems theory to product development. There is some
overlap with the disciplines of systems analysis, systems architecture and systems
engineering.
If the product development "blends the perspective of marketing, design, and
manufacturing into a single approach to product development, then design is the act of
taking the marketing information and creating the design of the product to be
manufactured. Systems design is therefore the process of defining and
Until the year 1990s, systems design had a crucial and respected role in the data
processing industry. In the 1990s standardization of hardware and software resulted in
the ability to build modular systems. The increasing importance of software running on
generic platforms has enhanced the discipline of software engineering.
The architectural design of a system emphasizes on the design of the systems

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architecture which the structure, behavior, and more views of that system and analysis.
One example is the system we use in collecting past due acct. We are using CAMS
(Collections and Assets Management System). Thru this system, by searching the
account name, we can easily get the details we need in order to relay it to client the
amount due , no. of days delayed, total amount due, and total outstanding balance.
We were able to note all the conversation made by the clients.
Logical design
inputs and outputs of the system. This is often conducted via modelling, using an overabstract (and sometimes graphical) model of the actual system..
Physical design
1. The physical design relates to the actual input and output processes of the system.
This is explained in terms of how data is input into a system, how it is
verified/authenticated, how it is processed, and how it is displayed as In Physical
design, the following requirements about the system are decided
2. Input requirement, - such as the details needed to fill up the box in order to know the
identity of each account. Example of this is the system using in collection dept. of
course the very important details are personal information of clients, product of
loans, amount of loans terms, description of loans depending what products.
3. Output requirements, - referring to the details needed to come out upon searching an
account. If the system will be used in collecting past due account, the very
important detail needed to arise should be present.
4. Storage requirements, - The loading capacity of a system that can store
5. Processing Requirements Refers to the information that the users want to search.
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6. System control and backup or recovery. Refering to the control of IT department ,

that no such information can be edited by the users./ back up of recovery is
important so that when the system is down, we can recover the data and not totally
lost.
The physical portion of systems design can generally be broken down into three
sub-tasks:
1. User Interface Design - is concerned with how users add information to the system
and with how the system presents information back to them.
2. Data Design - Data Design is concerned with how the data is represented and stored
within the system.
3. Process Design - Process Design is concerned with how data moves through the
system, and with how and where it is validated, secured and/or transformed as it
flows into, through and out of the system. At the end of the systems design phase,
documentation describing the three sub-tasks is produced and made available for
use in the next phase.
Physical design, in this context, does not refer to the tangible physical design of an
information system. To use an analogy, a personal computer's physical design involves
input via a keyboard, processing within the CPU, and output via a monitor, printer, etc.
It would not concern the actual layout of the tangible hardware, which for a PC would
be a monitor, CPU, motherboard, hard drive, modems, video/graphics cards, USB slots,
etc. It involves a detailed design of a user and a product database structure processor
and a control processor. The H/S personal specification is developed for the proposed
system.
1) Benchmarking is the process of comparing one's business processes
and performance metrics to industry bests or best practices from other companies.
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Dimensions typically measured are quality, time and cost. In the process of best practice
benchmarking, management identifies the best firms in their industry, or in another
industry where similar processes exist, and compares the results and processes of those
studied (the "targets") to one's own results and processes. In this way, they learn how
well the targets perform and, more importantly, the business processes that explain why
these firms are successful.
Benchmarking is used to measure performance using a specific indicator (cost per unit
of
measure, productivity per unit of measure, cycle time of x per unit of measure or
defects per unit of measure) resulting in a metric of performance that is then compared
to others.[1]
Also referred to as "best practice benchmarking" or "process benchmarking", this
process is used in management and particularly strategic management, in which
organizations evaluate various aspects of their processes in relation to best practice
companies' processes, usually within a peer group defined for the purposes of
comparison. This then allows organizations to develop plans on how to make
improvements or adapt specific best practices, usually with the aim of increasing some
aspect of performance. Benchmarking may be a one-off event, but is often treated as a
continuous process in which organizations continually seek to improve their practices.
2) Computer programming (often shortened to programming) is a process that leads
from an original formulation of a
computing problem to executable computer
programs. Programming involves activities such as analysis, developing understanding,

generating algorithms, verification of requirements of algorithms including their
correctness and resources consumption, and implementation (commonly referred to as
coding[1][2]) of algorithms in a target programming language. Source code is written in
one or more programming languages. The purpose of programming is to find a
sequence of instructions that will automate performing a specific task or solving a given
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problem. The process of programming thus often requires expertise in many different
subjects, including knowledge of the application domain, specialized algorithms
and formal logic.
Related tasks include testing, debugging, and maintaining the source code,
implementation of the build system, and management of derived artifacts such
as machine code of computer programs. These might be considered part of the
programming process, but often the term "software development" is used for this
larger process with the term "programming", "implementation", or "coding"
reserved for the actual writing of source code. Software
engineering combines engineering techniques with software development practices.
3) Design is the creation of a plan or convention for the construction of an object or
a system (as in architectural blueprints, engineering drawings, business
processes, circuit diagrams and sewing patterns).[1] Design has different connotations
in different fields (see design disciplines below). In some cases the direct
construction of an object (as in pottery, engineering, management, cowboy
coding and graphic design) is also considered to be design.
Designing often necessitates considering the aesthetic, functional, economic and
sociopolitical dimensions of both the design object and design process. It may
involve considerable research, thought, modeling, interactive adjustment, and redesign. Meanwhile, diverse kinds of objects may be designed,
including clothing, graphical user interfaces, skyscrapers, corporate
identities, business processes and even methods of designing.
4) Requirements analysis in systems engineering and software engineering,
encompasses those tasks that go into determining the needs or conditions to meet for
a new or altered product or project, taking account of the possibly
conflicting requirements of the various stakeholders, analyzing, documenting,
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validating and managing software or system requirements.

Requirements analysis is critical to the success of a systems or software project.
[3]
The requirements should be documented, actionable, measurable, testable,
traceable, related to identified business needs or opportunities, and defined to a level

of detail sufficient for system design.
5) A system architecture or systems architecture is the conceptual model that
defines the structure, behavior, and more views of a system. An architecture
description is a formal description and representation of a system, organized in a
way that supports reasoning about the structures and behaviors of the system.
A system architecture can comprise system components, the externally visible
properties of those components, the relationships between them. It can provide a
plan from which products can be procured, and systems developed, that will work
together to implement the overall system. There have been efforts to formalize
languages to describe system architecture, collectively these are called architecture
description languages.
6) System testing of software or hardware is testing conducted on a complete,
integrated system to evaluate the system's compliance with its
specified requirements. System testing falls within the scope of black box testing,
and as such, should require no knowledge of the inner design of the code or logic.
As a rule, system testing takes, as its input, all of the "integrated" software
components that have passed integration testing and also the software system itself
integrated with any applicable hardware system(s). The purpose of integration
testing is to detect any inconsistencies between the software units that are integrated
together (called assemblages) or between any of the assemblages and the hardware.
System testing is a more limited type of testing; it seeks to detect defects both within
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the "inter-assemblages" and also within the system as a whole.

System testing is performed on the entire system in the context of a Functional
Requirement Specification(s) (FRS) and/or a System Requirement Specification
(SRS).
System testing tests not only the design, but also the behaviour and even the
believed expectations of the customer. It is also intended to test up to and beyond the
bounds defined in the software/hardware requirements specification(s)
Describe the processes that can contribute to the addition of value to the final
product.
Any production process involves a series of links in a production chain. At each
stage value is added in the course of production. Adding value involves making a
product more desirable to a consumer so that they will pay more for it. Adding value
therefore is not just about manufacturing, but includes the marketing process
including advertising, promotion and distribution that make the final product more
desirable.
It is very important for businesses to identify the processes that add value, so that
they can enhance these processes to the ongoing benefit of the business.
There are three main types of process: job, batch and flow production.
Job production:
Job or 'make complete' production is the creation of single items by either one
operative or a team of operative's . It is possible for a number of identical units to be
produced in parallel under job production. Several frigates of a similar type. Smaller
projects can also be seen as a form of job production, Job production is unique in the
fact that the project is considered to be a single operation, which requires the
complete attention of the operative before he or she passes on to the next job. A
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good example of this is producing a vehicle. Assembling of this vehicle consist of

different parts and accessories. Labor for installing parts and accessories that work
consist of three or more mechanics to complete product. The cost of materials that
used in producing vehicle and the cost of labor be added to the value of a vehicle.
Batch production
The term batch refers to a specific group of components, which go through a
production process together. As one batch finishes, the next one starts.
For example on Monday, Machine A produces a type 1 engine part, on Tuesday it
produces a type 2 engine part, on Wednesday a type 3 and so on. All engine parts
will then go forward to the final assembly of different categories of engine parts.
Batches are continually processed through each machine before moving on to the
next operation. This method is sometimes referred to as 'intermittent' production as
different job types are held as work-in-progress between the various stages of
production.
The benefits of batch production are :
1. It is particularly suitable for a wide range of almost similar goods, which can use
the same machinery on different settings. For example batches of letters can be
sent out to customers of an insurance company.
2. It economises upon the range of machinery needed and reduces the need for a
flexible workforce.
3. Units can respond quickly to customer orders by moving buffer stocks of workin-progress or partly completed products through the final production stages.
4. It makes possible economies of scale in techniques of production, bulk
purchasing and areas of organisation.
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minimizing stock holding costs. Explain the conditions necessary for such a
system to work.
Just-in-time (JIT) manufacturing requires making a product or service only when the
customer, internal or external requires it. It uses a product layout with a continuous
flow, one with no delays once production starts. This means a substantial reduction
in setup costs is necessary to eliminate the need to produce in batches; therefore,
processing systems must be reliable. Just-in-time manufacturing is simple in theory
but hard to achieve in practice. Some organizations hesitate to implement JIT
because with no work in-process inventory a problem anywhere in the system can
stop all production. For this reason, organizations that use just-in-time
manufacturing must eliminate all sources of failure in the system. The production
process must be redesigned so that it is not prohibitively expensive to process one or
a small number of items at a time. This usually means reducing the distance over
which work-in-process has to travel and using very adaptable people and equipment
that can handle all types of jobs.
At the core of the JIT process is a highly trained work force whose task is to carry
out activities using the highest standards of quality. When an employee discovers a
problem with a component he or she has received. It is the responsibility of that
employee to call immediate attention to the problem so that it can be corrected.
Suppliers must be able to produce and deliver defectfree materials or components
just when they are required. In many instances, companies compete with suppliers
of the same components to see who can deliver the best quality. At the end of a
performance period, the supplier who performs the best will obtain a long term
contract. Preventive maintenance is also employed so that equipment failure is a rare
event.
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industry.
The technological characteristics of small scale industry in developing countries
could be measured in terms of six specific variables: (a) economies of scale; (b) the
technological base; (c) technological disparity; (d) infrastructural base; (e) learning;
(f) industry differentials; (g) labour intensity; and (h) linkage pattern.
Economies of scale
Small industrial units are, by assumption, limited scale manufacturing operations
that do only selectively, demonstrate the typical impact of scale on productivity and
output. They emerge and persist in industries where scale economies are either
relatively unimportant or are associated with limited levels of employment and
investment. They also decline whenever scale economies become significant.
Breaking the size barrier is, in fact, a measure of success of the small industry
entrepreneur.
Technological base
Small industries are dependent for their equipment and process technology on a
limited number of resources that start with (a) the entrepreneurs' own technical
expertise probably gained during earlier stages of paid employment; (b) large firms
that provide the technology as a component within a sub-contracting arrangement;
(c) government institutions desirous to support a measure of indigenous technology.
And although the level of technology associated with any small industry initiative is
a function of all three variables, there is sufficient evidence to suggest that the first is
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the prime source of technology in small industry in a significant number of

developing countries. Thorough knowledge of the production process tends to be the
small producers' strong point. The most important source of skill and know how
found was previous wage employment. The training and experience gained in this
way varied with the job previously held, but generally it provided a sufficient basis
to pick up the missing technical aspects through a process of learning by doing,
which was an integral part of the small producers' struggle for survival or
expansion.
Technological disparity
The generic term small-scale industry conceals, in fact, three levels of technological
sophistication each related to a specific type of activity: craft production, cottage
industries and small manufacturing. Each of those three is, in fact, a distinct mode of
production with different scale and level of technology parameters.
Infrastructural base
Experience of a large number of countries in both Africa and Asia has shown that
small industry usually needs a strong infrastructural base, although this need may
vary according to the size and nature of industry. The smaller the unit and the less
formal is its frame, the less the need for this infrastructure. The larger the unit and
the more complex the product or the process, the greater the need for this infra
structural base. Very small and artisanal establishments provide their own power
(mechanical, hand or generator) and can adapt to different types of physical location
and shelter. The larger small industries are very much dependent on the existence of
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the facilities usually contained within an industrial estate. Those could be technically
oriented services as central repair workshops, facilities for the bulk purchase of raw
material and warehousing facilities or common facilities as foundries, electroplating
shops, tool and die shops, heat treatment shops, woodworking shops, a quality
control laboratory and a special machine shops. Although industrial estates are
usually the focus of all these facilities, a UNIDO exploration of the relevance and
effectiveness of industrial estates for small industry development has revealed,
however, that industrial estates had little success in attracting industry to rural areas
Industry differentials
The term forest-based industries conceals, in fact, a number of different industries
with different characteristics. They differ in terms of labour input, proximity to the
raw material base (the forest), nature of raw materials used and their utilization
pattern, sensitivity to scale, resort to technology, marketability of output etc.
Learning
Contemporary and not that distant research has revealed the existence of a measure
of correlation between average total or partial cost of production of a product and
the cumulative volume of production. Average total cost declines with increase in
volume not only as a result of economies of scale but also as a response to four other
factors that have proved instrumental in causing a cost decline. Technology is prime
among these factors while dexterity, learning and quality of management follow by
not too far a distance. This so called learning or experience impact was traced in
large manufacturing operations producing a wide variety of products from integrated
circuits to baby food.
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The author strongly feels, although admittedly has yet to accumulate empirical
evidence, that small industries in most developing countries are not susceptible to
the learning or experience impact just described. The reasons for that are the
following: first is the fact that many small scale industries, also in the forest sector,
do not lend themselves to large scale operations. Second is the frequently observed
low level of technological input and technological adaptation in many of those
industries. Third is the long established high labour intensity and low labour
dexterity, in many of those industries.
Fourth is the often cited constrained managerial performance of the great majority of
these units. And fifth, and last, is the limited scope for learning given the
environmental constraints of the industries. As said earlier, precious little empirical
evidence is there to support the suggested relationship between learning and the
small scale industry sector in developing countries. Suggestive evidence is, however,
there.
Labour intensity
Aggregate data consistently show that increasing size is associated with decreasing
numbers of workers relative to capital. This labour intensity of small industry is a
favourite argument in favour of the industry and a frequently cited rationale for its
stimulation. Several determinants could actually lead to this labour intensity. One of
these could be the degree of sophistication of utilized technology. Differences in
labour intensity may simply reflect the impact of
differences in the wage/rental ratios facing small and large firms on their choice of
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both technique and industry. Another determinant may be the degree of informality
of the enterprise, with informal sector enterprises more inclined towards substituting
capital with labour and employing low-skill, minimum wage-tied labour. And a third
possible determinant of this labour intensity could he the economies of scale that we
have mentioned earlier and the fact that certain industries and industrial branches
require considerable capital outlay within a wider span of scale than that reachable
by a small industry.
Linkage pattern
The probability is high that the forward linkage of small-scale forest based industries
to large scale industries is lower than their backward linkage. This is due to the nonforest-based raw material purchase by SSI manufacturers. The extent of the linkage
may depend on the level of subcontracting that exists between small and large scale
manufacturers although links through the open market could also be.
An ever elusive technology

Technology is a scarce commodity in small industry in most developing countries.
Barriers, and there are many of them, restrain the flow and inhibit the access of the
entrepreneur to this technology. There are source-related barriers, investment-related
barriers, market-related barriers, development-related barriers and access-related
barriers. A source related barrier is that resulting from a reluctance of the large
industry to provide essential production technologies to the small firm out of a
restrictive attitude towards technology dissemination or fear of outright competition
or rivalry. Some of these source-related barriers are institutionalized and have deep
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roots in developed country technology export restriction regulations. Investment

related barriers arise from the existence of a prohibitive price for the technological
input, a price that is beyond the financial capabilities of the small enterprise. Market
structure barriers reflect a high measure of concentration that converts the small
industrial unit into a marginal player with no virtual impact on technology transfer
or development. For small enterprises the adoption of the latest technology means a
discontinuous leap from their previous technology
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Submitted by: Richneil dela Torre
Sat/ 9:00 AM -12:00PM
1. Many firms are adopting the just-in-time inventory system as a way of minimizing
stock holding coasts. Explain the conditions necessary for such a system to work.
Just-in-time manufacturing was a concept introduced to the United States by the
Ford motor company. It works on a demand-pull basis, contrary to hitherto used
techniques, which worked on a production-push basis. To elaborate further, under just-intime manufacturing (colloquially referred to as JIT production systems), actual orders
dictate what should be manufactured, so that the exact quantity is produced at the exact
time that is required.
Just-in-time manufacturing goes hand in hand with concepts such as Kanban,
continuous improvement and total quality management (TQM). Just-in-time production
requires intricate planning in terms of procurement policies and the manufacturing process
if its implementation is to be a success. Highly advanced technological support systems
provide the necessary back-up that Just-in-time manufacturing demands with production
scheduling software and electronic data interchange being the most sought after.
Conditions:
Management buy-in and support at all levels of the organization are required; if a
just-in-time manufacturing system is to be successfully adopted.
Adequate resources should be allocated, so as to obtain technologically advanced
software that is generally required if a just-in-time system is to be a success.
Building a close, trusting relationship with reputed and time-tested suppliers will
minimize unexpected delays in the receipt of inventory.
Just-in-time manufacturing cannot be adopted overnight. It requires commitment in
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terms of time and adjustments to corporate culture would be required, as it is starkly

different to traditional production processes.
The design flow process needs to be redesigned and layouts need to be re-formatted,
so as to incorporate just-in-time manufacturing.
Lot sizes need to be minimized.
Workstation capacity should be balanced whenever possible.
Preventive maintenance should be carried out, so as to minimize machine
breakdowns.
Set-up times should be reduced wherever possible.
Quality enhancement programs should be adopted, so that total quality control
practices can be adopted.
Reduction in lead times and frequent deliveries should be incorporated.
Motion waste should be minimized, so the incorporation of conveyor belts might
prove to be a good idea when implementing a just-in-time manufacturing system.
Advantages
Just-in-time manufacturing keeps stock holding costs to a bare minimum. The
release of storage space results in better utilization of space and thereby bears a
favorable impact on the rent paid and on any insurance premiums that would
otherwise need to be made.
Just-in-time manufacturing eliminates waste, as out-of-date or expired products; do
not enter into this equation at all.
As under this technique, only essential stocks are obtained, less working capital is
required to finance procurement. Here, a minimum re-order level is set, and only
once that mark is reached, fresh stocks are ordered making this a boon to inventory
management too.
Due to the aforementioned low level of stocks held, the organizations return on
investment (referred to as ROI, in management parlance) would generally be high.
As just-in-time production works on a demand-pull basis, all goods made would be
sold, and thus it incorporates changes in demand with surprising ease. This makes it
especially appealing today, where the market demand is volatile and somewhat
unpredictable.
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Just-in-time manufacturing encourages the 'right first time' concept, so that

inspection costs and cost of rework is minimized.
High quality products and greater efficiency can be derived from following a just-intime production system.
Close relationships are fostered along the production chain under a just-in-time
manufacturing system.
Constant communication with the customer results in high customer satisfaction.
Overproduction is eliminated when just-in-time manufacturing is adopted.
Disadvantages
Just-in-time manufacturing provides zero tolerance for mistakes, as it makes reworking very difficult in practice, as inventory is kept to a bare minimum.
There is a high reliance on suppliers, whose performance is generally outside the
purview of the manufacturer.
Due to there being no buffers for delays, production downtime and line idling can
occur which would bear a detrimental effect on finances and on the equilibrium of
the production process.
The organization would not be able to meet an unexpected increase in orders due to
the fact that there are no excess finish goods.
Transaction costs would be relatively high as frequent transactions would be made.
Just-in-time manufacturing may have certain detrimental effects on the environment
due to the frequent deliveries that would result in increased use of transportation,
which in turn would consume more fossil fuels.
physical conditions that may influence the performance of the workers. Outline these
conditions.
The main objective of plant layout is to optimize the workflow of people as well as
product. Only through a good layout, the company can attain the following objectives:
Providing comfort to the workers
Giving good and improved working condition by eliminating causes of excessive
noise, objectionable odor smoke, etc
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Minimizing delays in production and making efficient use of the space that is
available
Easy supervision and better production control
Greater flexibility for changes in product design and for future expansion
Allow easy maintenance of machines and plants
There are several principles in order to get good plant layout. They are:
Integration. A good plant layout is able to integrate its workmen, materials,
machines in the best possible way
Minimum movement. A good layout is one that permits the minimum movement
between the operation
Uni-direction flow. A good layout is one that makes the materials move only in the
forward direction, toward stage of completion
Effective use of available space. Utilization of both horizontal and vertical spaces
and height is very important to use the space as much as possible
Maximum visibility. A good layout is one that makes men, machines, and materials
ready observable all the times
Maximum accessibility. All servicing and maintenance points should be readily
accessible. For example, equipment should not be placed against the wall because
necessary servicing or maintenance cannot be performed readily
Safety security. A good plant layout is the one which ensures proper security
Maximum flexibility. A good layout should be one that is adaptable or flexible
enough to take care of probable future changes in the volume of production, in the
range of products manufactured, and changes in the method/processes of production
3. One of the earliest analytical methods in production is the motion study. Highlight
the merits of such analysis in the development of work method for an organization.
Time study is the method of measurement of laborers' work. In time study, we determine
the time for completing the work. There are many activities are included in time study. For
calculating time for doing work, we include the average time of normal laborer. We also
care of rest time and other spare time for drinking water and refreshment.
Benefits of Time Study:
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To develop an ideal time for each process.

To provide a base for incentive schemes.
To provide the best method for completing a particular job.
Increased productivity.
Provides a standard of performance to measure labor efficiency
It helps in exercising cost control through proper production control.
When standard time is taken management can be kept attention on causes of idle time.
Like time study, motion study is also useful tool to increase the efficiency. Here, we are
defining it. You know that workers can do any work with many ways or method. But to
choose the best way out of alternatives is called motion study. For this, cost accountant has
to maintain the data of all the activities of workers. With this study, productivity can be
enlarged and inefficiency and wastage can be diminished.
In motion study, we first of all, note the activities of laborers in work place. With the help
of stop watch equipment, spending time on per activity is noted. After this, we have to take
decision of activities which we have to stop. This study or analysis determines prime
method of doing any activity in factory. Sometime software engineer can make the work
design relating to workplace arrangement and adjustable chair for workplace.
Benefits of Motion Study
1. It grows the ability of workers because apply of good methods, using of good tools and
stopping of unnecessary activities.
2. Life of machine can be increased.
3. It reduces exhaustion of workers.
4. It decreases labor cost due to less wastage in factory or plant.
a. Demand management - Demand management is the supply chain management process
that balances the customers requirements with the capabilities of the supply chain. With
the right process in place, management can match supply with demand proactively and
execute the plan with minimal disruptions. The process is not limited to forecasting. It
includes synchronizing supply and demand, increasing flexibility, and reducing variability.
98
In this paper, we describe the demand management process in detail to show how it can be
implemented within a company and managed across firms in the supply chain.
b. Shop floor control - Shop floor control comprises the methods and systems used to
prioritize, track, and report against production orders and schedules. It includes the
procedures used to evaluate current resource status, labor, machine usage, and other
information required to support the overall planning, scheduling, and costing systems
related to shop floor operation. Shop floor control typically calculates work in process
based on a percentage of completion for each order and operation that is useful in inventory
valuations and materials planning.
c. MRP I & MRP II - Materials requirements planning and manufacturing resource
planning are interchangeable computer-driven systems for organizing and tracking
production processes. MRP schedules production and controls the flow of inventory to
match customers quantity orders and delivery targets. MRP II is ideally an upgrade of
MRP that comes with advanced functionalities for optimizing production resources. MRP
and MRP II are commonly used in manufacturing and fabrication businesses.
MRP is manufacturing-centric: It focuses the scheduling and materials control
aspects of production to orders placed by customers. This limits its capacity to base
production on demand forecasts. This distinguishes it from MRP II, which tracks additional
aspects of production, such as personnel requirements, financial estimates, demand
forecasts and business planning. MRP II is actually more integrative and strategically
oriented than MRP, considering that it goes beyond the short term to weigh the mediumterm and long-term impacts of all production resources.
d. Master Production & Scheduling - A Master Production Schedule is a Schedule of the
completions of the end items and these completions are very much planned in nature.
Master production schedule acts as a very distinct and important linkage between the
planning processes. With the help of this schedule, one can know the requirements for the
individual end items by date and quantity. In companies, MPS are generally produced in
order to know the number of each product that is to be made over some planning horizon.
99
This schedule forms a very unique part of the companys sales program which deals with
the planned response to the demands of the market.
A master production schedule is also in management language referred to as the master of
all the schedules as this schedule provides the production, planning, purchasing & top
management, the most needed information required for planning and control of the whole
manufacturing process or the operation.
Master production scheduling plays an important role in the balancing of demand with the
supply i.e. satisfying customers according to the limits of the factory and the suppliers
base. MPS is used to know the number of the items that are to be produced, the planned
inventories of raw materials, finished products and parts etc. MPS tells the company what
is to be made or produced and also refers to the time in which this production of the
products is to be completed. It must be kept in mind that MPS does not act as a sales
forecast or as a manufacturing schedule or a wish list or a final assembly schedule. MPS
can be linked only with the final products and not with the planning involving the
production of parts or the components, as these listings require very detailed planning so
these are left to the other plans that will follow this schedule.
e. Production planning and aggregate planning - Production planning is the means by
which we prepare our production quantities for the medium term (generally one year).
Aggregate planning refers to the fact that the production planning is usually carried out
across product lines. The main difficulty is that demands vary from month to month. We
want to keep production as stable as possible yet maintain no inventory and experience no
shortages. We must balance the costs of production, overtime, subcontracting, inventory,
shortages and changes in production levels. In some case aggregate planning problems
might require the use of the transportation or linear programming modules.
f. Just in- time ( ToyotaKanban System) - "Just-in-Time" means making "only what is
needed, when it is needed, and in the amount needed." For example, to efficiently produce
a large number of automobiles, which can consist of around 30,000 parts, it is necessary to
create a detailed production plan that includes parts procurement. Supplying "what is
needed, when it is needed, and in the amount needed" according to this production plan can
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eliminate waste, inconsistencies, and unreasonable requirements, resulting in improved

productivity.
In the TPS (Toyota Production System), a unique production control method called
the "kanban system" plays an integral role. The kanban system has also been called the
"Supermarket method" because the idea behind it was borrowed from supermarkets. Such
mass merchandizing stores use product control cards upon which product-related
information, such as a product's name, code and storage location, are entered. Because
Toyota employed kanban signs for use in their production processes, the method came to be
called the "kanban system." At Toyota, when a process refers to a preceding process to
retrieve parts, it uses a kanban to communicate which parts have been used.
References:
The Demand Management Process Keely L. Croxton, Douglas M. Lambert and Sebastin
J. Garca-Dastugue The Ohio State University Dale S. Rogers University of Nevada, Reno
http://camstar.industrysoftware.automation.siemens.com/en/resources/glossary/shop-floorcontrol/
http://www.ehow.com/facts_7664435_difference-mrp-mrp-ii-systems.html
http://www.mbaofficial.com/mba-courses/operations-management/what-is-masterproduction-schedule-mps/
http://www.toyota-global.com/company/vision_philosophy/toyota_production_system/justin-time.html
http://www.prenhall.com/weiss_dswin/html/aggregat.htm
http://www.answers.com/Q/Advantages_of_time_and_motion_study
http://www.svtuition.org/2010/08/what-is-motion-study.html
http://www.svtuition.org/2010/08/what-is-time-study.html
http://missrifka.com/works/plant-layout-consideration.html
http://www.tutorialspoint.com/management_concepts/just_in_time_manufacturing.htm
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Submitted by: NUR-AYRA A. PEBANCO
Sat/ 9:00 AM -12:00PM
QUESTION
(1) Outline the circumstances under which a manufacturing firm would choose
to redesign its production process.98iu
Some small Facility layout and design is an important component of a business's
overall operations, both in terms of maximizing the effectiveness of the production process
and meeting the needs of employees. The basic objective of layout is to ensure a smooth
flow of work, material, and information through a system. The basic meaning of facility is
the space in which a business's activities take place. The layout and design of that space
102
impact greatly how the work is donethe flow of work, materials, and information through
the system. The key to good facility layout and design is the integration of the needs of
people (personnel and customers), materials (raw, finishes, and in process), and machinery
in such a way that they create a single, well-functioning system.
Ease of future expansion or changeFacilities should be designed so that they can
be easily expanded or adjusted to meet changing production needs. "Although redesigning
a facility is a major, expensive undertaking not to be done lightly, there is always the
possibility that a redesign will be necessary," said Weiss and Gershon in their book
Production and Operations Management. "Therefore, any design should be flexible'.
Flexible manufacturing systems most often are highly automated facilities having
intermediate-volume production of a variety of products. Their goal is to minimize
changeover or setup times for producing the different products while still achieving close to
assembly line (single-product) production rates."
Flow of movementThe facility design should reflect a recognition of the
importance of smooth process flow. In the case of factory facilities, the editors of How to
Run a Small Business state that "ideally, the plan will show the raw materials entering your
plant at one end and the finished product emerging at the other. The flow need not be a
straight line. Parallel flows, U-shaped patterns, or even a zig-zag that ends up with the
finished product back at the shipping and receiving bays can be functional. However,
backtracking is to be avoided in whatever pattern is chosen. When parts and materials
move against or across the overall flow, personnel and paperwork become confused, parts
become lost, and the attainment of coordination becomes complicated."
QUESTION
(3) Production is considered as a process of adding value to the final product.
Aim of production function is to add value to product or service which will create a
strong and long lasting customer relationship or association. And this can be achieved by
healthy and productive association between Marketing and Production people. Marketing
function people are frontline representative of the company and provide insights to real
103
product needs of customers.

An effective planning and control on production parameters to achieve or create
value for customers is called production management.
Production management refers to the application of management principles to the
production function in a factory. In other words, production management involves
application of planning ,organising , directing and controlling to the production process .
The application of the management to the field of the production has been the result
of at least three development. First is the development of factory system of production.
until the emergence of the concept of the manufacturing , there was no such things as
management as we know it .it is true that people operated business of one type or another ,
but for the most part , these people were owners of business and did not regard themselves
as manager as well.
The very essence of any business is to cater needs of customer by providing services
and goods, and in process create value for customers and solve their problems. Production
and operations management talks about applying business organization and management
concepts in creation of goods and services.
Production and operations management concern with the conversion of inputs into
outputs, using physical resources, so as to provide the desired utilities to the customer
while meeting the other organizational objectives of effectiveness, efficiency and
adoptability. It distinguishes itself from other functions such as personnel, marketing,
finance, etc., by its primary concern for 'conversion by using physical resources.
QUESTION
(6) Many firms are adopting the just-in-time inventory system as a way of
minimizing stock holding coasts. Explain the conditions necessary for such a system to
work.
These firms that are adopting the just-in-time inventory system established these
kind of program that prevents over-stockings. In a production firm that do production
every hour and every day during weekdays, quick and fast inventory almost every day is
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important to avoid over stockings. This will enable them to continuously deliveries of the
goods or finish products to conduct further inventory of their stocks. Over Production is
one issue in the absence of just-in-time inventory, this kind of inventory will thoroughly
find quick relief on problems in re-stocking. Deliveries will be monitored well in applying
this kind of process.
Minutes are important for the production firm, every manpower is needed, it should
not be wasted if over production is on-going. This kind of system will make the company
more systemic in their production and will be successful for future issues. Inventory
system has been a regular help since institutions exist in the world.
From the past manual inventory system is done by these manufacturing company,
whereas over production is observed and technically rushed production is adopted if bulk
order is placed. As time goes by, people increase their knowledge in a very fast and easy
system in inventory. Manual inventories have been set by hundreds and thousands in
count, after manual inventories, automated inventory system has been discovered. From
this the easiest way for the inventory system is thru computers.
Manual counting has always been a culture, with estimated production numbers to
stocks holding. The adaptation of just in time inventory has helped many manufacturing
company especially the ones that produces food for fast and accurate inventory of their
productions and stocks. Just in time inventories reduces production cost and increases
sales. Inventories further helps the accounting department on their estimation of sales and
expenses.
When manufacturing firm minimize stocks holding, production also reduces, with
this the company shall reduces expenses in production, manpower and in equipment. Not
just the materials expenses but also the utilities.
Minimizing production also means
minimizing electricity and water bills and salaries of workers for overtime.
Reduction of production will not affect the companys standing, it will be rewarded
by increase in sales and decrease in expenses. Adopting the just-in-time inventory system
analyze the needs of the company whether they need more production to supply the needs
for re-stockings or to minimize production after the inventory is fit or is just right.
105
QUESTION
(9) Describe the features of an appropriate process technology for a small-scale
industry.
Features of a company is very important, it is required to give justice for consumers
to seek their service or to buy their products. Small-scale industry is a very important part
of the business industry. They allowed entrepreneur to push business on their own and to
contribute to the country and to the business industry.
First thing comes first a view of the business main product or service, and because
they have limited number of resources that starts with the entrepreneurs own technical
expertise which they probably trained during their earlier stages of paid employment.
Small industry usually needs a strong infrastructural base, although this need may
vary according to the size and nature of industry. the smaller the unit and the less formal is
its frame, the less the need for this infrastructure.
Impact on employee morale and job satisfactionSince countless studies have
indicated that employee morale has a major impact on productivity, Weiss and Gershon
counsel owners and managers to heed this factor when pondering facility design
alternatives: "Some ways layout design can increase morale are obvious, such as providing
for light-colored walls, windows, space. Other ways are less obvious and not directly
related to the production process. Some examples are including a cafeteria or even a
gymnasium in the facility design. Again, though, there are costs to be traded off. That is,
does the increase in morale due to a cafeteria increase productivity to the extent that the
increased productivity covers the cost of building and staffing the cafeteria."
Layout requirements can also differ dramatically by industry. The needs of serviceoriented businesses, for instance, are often predicated on whether customers receive their
services at the physical location of the business (such as at a bank or pet grooming shop,
for instance) or whether the business goes to the customer's home or place of business to
provide the service (as with exterminators, home repair businesses, plumbing services, etc.)
In the latter instances, these businesses will likely have facility layouts that emphasize
106
storage space for equipment, chemicals, and paperwork rather than spacious customer
waiting areas. Manufacturers may also have significantly different facility layouts,
depending on the unique needs that they have. After all, the production challenges
associated with producing jars of varnish or mountaineering equipment are apt to be
considerably different than those of making truck chassis or foam beach toys. Retail outlets
comprise yet another business sector that has unique facility layout needs. Such
establishments typically emphasize sales floor space, inventory logistics, foot-traffic issues,
and overall store attractiveness when studying facility layout issues.

Submitted by: Luningning A. Mercado
Sat/ 9:00 AM -12:00PM
1.
Many firms are adopting the just-in-time inventory system as a way of minimizing
stock holding costs. Explain the conditions necessary for such a system to work.
Just-in-time (JIT) inventory refers to an inventory management system with objectives of having
inventory readily available to meet demand, but not to a point of excess where you must
stockpile extra products. Maintaining inventory takes time and has costs, which is what
motivates companies to implement JIT programs.
Explain the conditions necessary for such a system to workUnder ideal conditions a
company operating at JIT manufacturing system would purchase only enough materials
each day to meet that day needs. Moreover, the company would have no goods still in process
at the end of the day, and all goods completed during the day would have been shipped
immediately to customers. As this sequence suggests, "just-in-time" means that raw materials are
received just in time to go into production, manufacturing parts are completed just in time to be
assembled into products, and products are completed just in time to be shipped to customers.
107
Although few companies have been able to reach this ideal, many companies have been able to
reduce inventories only to a fraction of their previous level. The result has been a substantial
reduction in ordering and warehousing costs, and much more efficient and effective operations.
In a just in time environment, the flow of goods is controlled by a pull approach. The pull
approach can be explained as follows. At the final assembly stage a signal is sent to the
preceding work station as to the exact amount of parts and materials that would be needed over
the next few hours to assemble products to fill customer orders, and only that amount of
materials and parts is provided. The same signal is sent back to each preceding workstation so a
smooth flow of parts and materials is maintained with no appreciable inventory buildup at any
point. Thus all workstations respond to the pull exerted by the final assembly stage, which in turn
respond to customer orders. As one worker explained, "Under just in time system you don't
produce anything, anywhere, for anybody unless they ask for it somewhere downstream.
Inventories are evil that we are taught to avoid".
The pull approach described above can be contrasted to the push approach used in conventional
manufacturing system. In conventional system, when a workstation completes its work, the
partially completed goods are pushed forward to the next work station regardless of whether that
workstation is ready to receive them. The result is an unintentional stockpiling of partially
completed goods that may not be completed for days or even weeks. This ties up funds and also
results in operating inefficiencies. For one thing, it becomes very difficult to keep track of where
everything is when so much is scattered all over the factory floor.
Another characteristics of conventional manufacturing system is an emphasize on "keeping every
one busy" as an end on itself. This inevitably leads to excess inventories particularly work in
process inventories. In Just in time manufacturing, the traditional emphasize of keeping everyone
busy is abandoned in favor of producing only what customers actually want. Even if that means
some workers are idle.
2. Production is considered as a process of adding a value to the final product.
Describe the process that contribute to the addition value to the final product.
When looking at the value of the product or service, the goal is to have the value of the endproduct or service exceed the cost of producing the product or providing the service. The cost of
108
the product or service includes all resources used to produce it (e.g., raw materials, labor,
storage, transportation, and overhead costs).
We need to examine each activity within the process and determine the value-added assessment
of the activity. The value added by an activity, in an accounting sense, is simply:
(Value of the product after the activity)
minus (Value of the product prior to the activity).
The value added by an activity should be a positive value. Ideally, the value added by the
activity is equal to or greater than the costs incurred during the activity.
Value from the customer's point of view is independent of the cost to produce the product or
provide the service. It is based on the customer's expectations, as identified by the effectiveness
indicators for the process.
How to Assess Value:
When looking at activities in a process, we must determine if the activity is effective and
efficient. We must also determine if the activity can be improved to provide a better product or
service for the customer. Refer to the effectiveness indicators selected for the process to
determine how the activity rates on the effectiveness indicator scale. Look at the efficiency
indicators of the activity. Wide variances in the efficiency (cost or times) of the activity can
indicate problems in the activity. Analyze the cost and times collected for the activity to
determine the value added by the activity versus the cost of the activity.
3. Describe the factors of an appropriate process technology for a small scale
industry.
Though the nuances of appropriate technology vary between fields and applications, it is
generally recognized as encompassing technological choice and application that is small-scale
industry, decentralized, labor-intensive, energy-efficient, environmentally sound, and locally
controlled.
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Systems design is the process of defining the architecture, components, modules, interfaces, and
data for a system to satisfy specified requirements. Systems design could be seen as the
application of systems theory to product development. There is some overlap with the disciplines
of systems analysis, systems architecture and systems engineering.
If the broader topic of product development "blends the perspective of marketing, design, and
manufacturing into a single approach to product development," then design is the act of taking
the marketing information and creating the design of the product to be manufactured. Systems
design is therefore the process of defining and developing systems to satisfy specified
requirements of the user.
Describe the aspects:
The architectural design of a system emphasizes on the design of the systems architecture which
describes the structure, behavior, and more views of that system and analysis.
Logical design
The logical design of a system pertains to an abstract representation of the data flows, inputs and
outputs of the system. This is often conducted via modeling, using an over-abstract (and
sometimes graphical) model of the actual system. In the context of systems design are included.
Logical design includes ER Diagrams i.e. Entity Relationship Diagrams.
Physical design
explained in terms of how data is input into a system, how it is verified/authenticated, how it is
processed, and how it is displayed as In Physical design, the following requirements about the
system are decided.
Process Design
User Interface Design is concerned with how users add information to the system and with how
the system presents information back to them. Data Design is concerned with how the data is
represented and stored within the system. Finally, Process Design is concerned with how data
110
moves through the system, and with how and where it is validated, secured and/or transformed as
it flows into, through and out of the system. At the end of the systems design phase,
documentation describing the three sub-tasks is produced and made available for use in the next
phase.

Submitted by: Mr. Jerome G. Sison.
Sat/ 9:00 AM -12:00PM
1. There are certain aspects that make up a systems design. Describe these aspects
interfaces, and data for a system to satisfy specified requirements. Systems design could be seen
as the application of systems theory to product development. There is some overlap with the
disciplines of systems analysis, systems architecture and systems engineering. If the broader
topic of product development "blends the perspective of marketing, design, and manufacturing
into a single approach to product development,"[3] then design is the act of taking the marketing
information and creating the design of the product to be manufactured. Systems design is
therefore the process of defining and developing systems to satisfy specified requirements of the
user.
`
Until the 1990s systems design had a crucial and respected role in the data
processing industry. In the 1990s standardization of hardware and software resulted in the ability
to build modular systems. The increasing importance of software running on generic platforms
111
has
enhanced
the
discipline
of software
engineering.
Object-oriented
analysis
and
design methods are becoming the most widely used methods for computer systems
design. The UML has become the standard language in object-oriented analysis and design. It is
widely used for modeling software systems and is increasingly used for high designing nonsoftware systems and organizations.
The architectural design of a system emphasizes on the design of the systems
architecture which describes the structure, behavior, and more views of that system and analysis.
Logical design
inputs and outputs of the system. This is often conducted via modelling, using an over-abstract
(and sometimes graphical) model of the actual system. In the context of systems design are
included. Logical design includes ER Diagrams i.e. Entity Relationship Diagrams.
Physical design
explained in terms of how data is input into a system, how it is verified/authenticated, how it is
processed, and how it is displayed as In Physical design, the following requirements about the
system are decided.
1. Input requirement,
2. Output requirements,
3. Storage requirements,
4. Processing Requirements,
5. System control and backup or recovery.
Put another way, the physical portion of systems design can generally be broken down into three
sub-tasks:
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1. User Interface Design

2. Data Design
3. Process Design
validated, secured and/or transformed as it flows into, through and out of the system. At
the end of the systems design phase, documentation describing the three sub-tasks is
produced and made available for use in the next phase.
Physical design, in this context, does not refer to the tangible physical design of an
information system. To use an analogy, a personal computer's physical design involves
input via a keyboard, processing within the CPU, and output via a monitor, printer, etc. It
would not concern the actual layout of the tangible hardware, which for a PC would be a
monitor, CPU, motherboard, hard drive, modems, video/graphics cards, USB slots, etc. It
involves a detailed design of a user and a product database structure processor and a
control processor. The H/S personal specification is developed for the proposed system.
2. Highlight the product aspects that would be addresed by product design research.
Product design as a verb is the process of creating a new product to be sold by a business
to its customers. A very broad concept, it is essentially the efficient and effective generation and
development of ideas through a process that leads to new products
Due to the absence of a consensually accepted definition that reflects the breadth of the topic
sufficiently, two discrete, yet interdependent, definitions are needed: one that explicitly defines
product design in reference to the artifact, the other that defines the product design process in
relation to this artifact.
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Product design as a noun: the set of properties of an artifact, consisting of the discrete properties
of the form (i.e., the aesthetics of the tangible good and/or service) and the function (i.e., its
capabilities) together with the holistic properties of the integrated form and function.
Product design process: the set of strategic and tactical activities, from idea generation to
commercialization, used to create a product design. In a systematic approach, product designers
conceptualize and evaluate ideas, turning them into tangible inventions and products. The
product designer's role is to combine art, science, and technology to create new products that
people can use. Their evolving role has been facilitated by digital tools that now allow designers
to communicate, visualize, analyze and actually produce tangible ideas in a way that would have
taken greater manpower in the past.
Product design is sometimes confused with (and certainly overlaps with) industrial design, and
has recently become a broad term inclusive of service, software, and physical product design.
Industrial design is concerned with bringing artistic form and usability, usually associated with
craft design and ergonomics, together in order to mass-produce goods. Other aspects of product
design include engineering design, particularly when matters of functionality or utility (e.g.
problem-solving) are at issue, though such boundaries are not always clear.
There are various product design processes and many focus on different aspects. The
process shown below, for example, is "The Seven Universal Stages of Creative ProblemSolving," outlined by Don Koberg and Jim Bagnell. It helps designers formulate their product
from ideas. This process is usually completed by a group of people, i.e. industrial designers, field
experts (e.g. prospective users), engineers, etc. depending upon the products involved. The
process focuses on figuring out what is required, brainstorming possible ideas, creating mock
prototypes, and then generating the product. However, that is not the end of the process. At this
point, product designers would still need to execute the idea, making it into an actual product and
then evaluate its success by seeing if any improvements are necessary.
The product design process has experienced huge leaps in evolution over the last few
years with the rise and adoption of 3D printing. New consumer-friendly 3D printers can produce
dimensional objects and print upwards with a plastic like substance opposed to traditional
printers that spread ink across a page.
The design process follows a guideline involving three main sections:
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Analysis
Concept
Synthesis
The latter two sections are often revisited, depending on how often the design needs touch-ups,
to improve or to better fit the criteria. This is a continuous loop, where feedback is the main
component. To break it down even more, the seven stages specify how the process works.
Analysis consists of two stages, concept is only one stage, and synthesis encompasses the other
four.
Analysis
Accept Situation: Here, the designers decide on committing to the project and finding a solution
to the problem. They pool their resources into figuring out how to solve the task most efficiently.
Analyze: In this stage, everyone in the team begins research. They gather general and
specific materials which will help to figure out how their problem might be solved. This can
range from statistics, questionnaires, and articles, among many other sources.
Concept
Define: This is where the key issue of the matter is defined. The conditions of the
problem become objectives, and restraints on the situation become the parameters within
which the new design must be constructed.
Synthesis
Ideate: The designers here brainstorm different ideas, solutions for their design problem.
The ideal brainstorming session does not involve any bias or judgment, but instead builds on
original ideas.
Select: By now, the designers have narrowed down their ideas to a select few, which can
be guaranteed successes and from there they can outline their plan to make the product.
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Implement: This is where the prototypes are built, the plan outlined in the previous step is
realized and the product starts to become an actual object.
Evaluate: In the last stage, the product is tested, and from there, improvements are made.
Although this is the last stage, it does not mean that the process is over. The finished
prototype may not work as well as hoped so new ideas need to be brainstormed.
Demand-pull innovation and invention-push innovation

Most product designs fall under one of two categories: demand-pull innovation or invention-push
innovation.
Demand-pull happens when there is an opportunity in the market to be explored by the design of
a product. This product design attempts to solve a design problem. The design solution may be
the development of a new product or developing a product that's already on the market, such as
developing an existing invention for another purpose.
Invention-push innovation happens when there is an advancement in intelligence. This can occur
through research or it can occur when the product designer comes up with a new product design
idea
Product design expression
Design expression comes from the combined effect of all elements in a product. Colour tone,
shape and size should direct a person's thoughts towards buying the product. Therefore, it is in
the product designer's best interest to consider the audiences who are most likely to be the
product's end consumers. Keeping in mind how consumers will perceive the product during the
design process will direct towards the products success in the market. However, even within a
specific audience, it is challenging to cater to each possible personality within that group.
The solution to that is to create a product that, in its designed appearance and function, expresses
a personality or tells a story. Products that carry such attributes are more likely to give off a
stronger expression that will attract more consumers. On that note it is important to keep in mind
that design expression does not only concern the appearance of a product, but also its
function. For example, as humans our appearance as well as our actions is subject to people's
judgment when they are making a first impression of us. People usually do not appreciate a rude
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person even if they are good looking. Similarly, a product can have an attractive appearance but
if its function does not follow through it will most likely drop in regards to consumer interest. In
this sense, designers are like communicators, they use the language of different elements in the
product to express something.
Product design considerations
Product design is not an easy task. The stakeholders involved all demand something different
from the product designer and from the design process.
The manufacturer is concerned with production cost; in the end, the manufacturer wants
an economically produced product.
The purchaser looks at price, appearance, and prestige value.
The end user is concerned with usability and functionality of the final product.
The maintenance and repair department focuses on how well the final product can be
maintained: is the product easily reassembled, disassembled, diagnosed, and serviced?
Stakeholders' needs vary from one another and it is the product designer's job to incorporate
those needs into their design.
Trends in product design
Product designers need to consider all of the details: the ways people use and abuse objects,
faulty products, errors made in the design process, and the desirable ways in which people wish
they could use objects. Many new designs will fail and many won't even make it to
market. Some designs eventually become obsolete. The design process itself can be quite
frustrating usually taking 5 or 6 tries to get the product design right. A product that fails in the
marketplace the first time may be re-introduced to the market 2 more times. If it continues to fail,
the product is then considered to be dead because the market believes it to be a failure. Most new
products fail, even if it's a great idea. All types of product design are clearly linked to the
economic health of manufacturing sectors. Innovation provides much of the competitive impetus
for the development of new products, with new technology often requiring a new design
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interpretation. It only takes one manufacturer to create a new product paradigm to force the rest
of the industry to catch up - fueling further innovation. Products designed to benefit people of all
ages and abilitieswithout penalty to any groupaccommodate our swelling aging population
by extending independence and supporting the changing physical and sensory needs we all
encounter as we grow older.
Sources: https://en.wikipedia.org/wiki/Product_design
13. Terms of Operations Management

Demand Management is a planning methodology used to forecast [predict], plan for and
manage the demand for products and services. This can be at macro levels as in economics and at
micro levels in public service organizations both governmental and NGO, industries including
energy. Demand Management has a very defined set of processes, capabilities and recommended
behaviors for companies that produce all manner of goods and services. Consumer electronics
and goods companies often lead in the application of demand management practices to their
demand chains; demand management outcomes are a reflection of policies and programs to
influence demand as well as competition and options available to users and consumers. Effective
demand management follows the concept of a "closed loop" where feedback from the results of
the demand plans is fed back into the planning process to improve the predictability of outcomes.
Many practices reflect elements of the theory of Systems Dynamics. Increasingly volatility is
being recognized as significant an issue as the focus on variance of demand to plans and
forecasts.
Demand Management in economics
In macroeconomics, demand management is the art or science of controlling aggregate
demand to avoid a recession. Demand Management at the macroeconomic level involves the use
of discretionary policy and is inspired by Keynesian economics, though today elements of it are
part of the economic mainstream. The underlying idea is for the government to use tools
like interest rates, taxation, and public expenditure to change key economic decisions like
consumption, investment, the balance of trade, and public sector borrowing resulting in an
'evening out' of the business cycle. Demand management was widely adopted in the 1950s to
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1970s, and was for a time successful. However, it did not prevent the stagflation of the 1970s,
which is considered to have been precipitated by the supply shock caused by the 1973 oil crisis.
Theoretical criticisms of demand management are that it relies on a long-run Phillips Curve for
which there is no evidence, and that it produces dynamic inconsistency and can therefore be noncredible. Today, most governments relatively limit interventions in demand management to
tackling short-term crises, and rely on policies like independent central banks and fiscal policy
rules to prevent long-run economic disruption.
Natural resources and environment
In natural resources management and environmental policy more generally, demand
management refers to policies to control consumer demand for environmentally sensitive or
harmful goods such as water and energy. Within manufacturing firms the term is used to describe
the activities of demand forecasting, planning, and order fulfillment. In the environmental
context demand management is increasingly taken seriously to reduce the economy's throughput
of scarce resources for which market pricing does not reflect true costs. Examples include
metering of municipal water, and carbon taxes on gasoline.
Welfare economics
Demand Management in economics focuses on the optimal allocation resources to affect
social welfare.
Welfare economics uses the perspective and techniques of microeconomics, but they can be
aggregated to make macroeconomic conclusions. Because different "optimal" states may exist in
an economy in terms of the allocation of resources, welfare economics seeks the state that will
create the highest overall level of social welfare.
Some people object to the idea of wealth redistribution because it flies in the face of pure
capitalist ideals, but economists suggest that greater states of overall social good might be
achieved by redistributing incomes in the economy. Because welfare economics follows the
techniques of microeconomics, where demand planning is part of the process especially the
redistribution of the funds through government taxes, fees and royalties to programs for societal
good, such as roads, services, income support and agriculture support programs.
5.4 Demand management and forecasting
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Demand management and forecasting is recognizing all demand for goods and services to
support the marketplace. Demand is prioritized when supply is lacking. Proper demand
management facilitates the planning and use of resources for positive and profitable results and
may involve marketing programs designed to increase or reduce demand in a relatively short
time.[3]
5.4.1 Planning horizon
The planning horizon is how far a plan extends into the future and is dictated by tactical
and strategic degrees of uncertainty. The tactical horizon may be based on the cumulative lead
time needed to procure or produce low-level components. The strategic horizon is based on the
time needed to adjust capacity. A greater degree of uncertainty requires a longer planning
horizon.[a]
Demand Management is both a stand alone process and one that is integrated into Sales
and Operations Planning (S&OP) or Integrated Business Planning (IBP). The definition of the
process and components covered in this section describe the current best practices encompassing
the methods and competencies that have a track record of success with leading companies today.
Much effort is put into more esoteric financial or academic approaches; however their practical
value is limited by the ability of business practitioners to use on a regular basis. As those
methods become more accessible and part of regular use they join the best practices, "predictive
forecasting" covered in this section is a great example. Demand Management in its most
effective form has a broad definition well beyond just developing a "forecast" based on history
supplemented by "market" or customer intelligence, and often left to the supply chain
organization to interpret. Philip Kotler, a noted expert and professor of marketing management
notes two key points: 1. Demand management is the responsibility of the marketing organization
(in his definition sales is subset of marketing); 2. The demand "forecast" is the result of planned
marketing efforts. Those planned efforts, not only should focus on stimulating demand, more
importantly influencing demand so that a company's [business'] objectives are achieved. George
Palmatier a noted expert on the practical approach to demand management calls this "Marketing
with a Big M".
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The components of effective demand management, identified by George Palmatier and Colleen
Crum, are: 1. Planning Demand; 2. Communicating Demand; 3. Influencing Demand and 4.
Prioritizing Demand.
Understanding the elements of Demand Management
1. Planning Demand: Which involves a full multiple-view process or work flow; including
statistical forecast as a baseline from clean "demand history" [not shipments], using the most
effective statistical models. Kai Trepte, developed the excel add-in "Forecast X" to provide
practitioners with a workstation capability to assess the best matches between data and forecast
models. Increasingly "predictive forecasts" have moved from a limited use to becoming best
practice for more companies. Predictive forecasts use simulation of potential future outcomes
and their probabilities rather than history to form the basis for long range (5-10+ years) demand
plans. Baseline forecasts are typically developed by demand planners and analysts, who may be
regional or centrally located. They work under the guidance of the Demand Manager. Baseline
forecasts are communicated to members of the demand management team. This usually includes:
regional sales leaders, market managers, and product managers. The team may include customer
service leads who manager orders under service agreements with customers and have direct
insight into customer demand. For major retailers this is often Point of Sale data provided to
suppliers.
Demand management in IT[edit
IT / IS demand managers seek to understand in advance how to best meet the needs and
expectations of customers, clients, partners, and enablers. Thus, proper forecast and sizing of
demand is required in order to deliver a stable and effective technology environment.
1.1 System Integration

The Shop Floor Control system integrates with other JD Edwards World systems to take
advantage of single entries, information sharing, and data consistency across systems.
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Figure 1-1 Shop Floor Control System
Description of "Figure 1-1 Shop Floor Control System"
The Product Data Management system provides information about bills of material, work
centers, and routings.
The Inventory Management system allows you to track materials between inventory or
storage locations and the shop floor. You can perform inventory issues, commitments, and
completions, and track order quantities throughout the production process.
The Sales Order Management system allows you to generate work orders when you enter
a sales order and updates sales information from within the Shop Floor Control system.
The Capacity Requirements Planning system reads the routings for work orders and rate
schedules and monitors the load on the work centers involved. This allows you to
effectively manage the loads on your work centers to maximize production and meet
scheduled demand.
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The Payroll system interface allows single entry of employees' hours. You can record
hours and quantities per work request or per employee to accommodate both piece-rate
and hourly rate employees.
The Procurement system allows you to automatically generate purchase orders for
subcontracted operations on your routings.
The Distribution Requirements Planning, Master Production Scheduling, and Material

Requirements Planning systems provide suggested purchase and manufacturing orders
required to maintain a valid production schedule.
The Warehouse Management system allows you to originate picking requests through
Manufacturing systems, which further enhances the automated method of tracking
inventory movement within a warehouse.
1.2 Features
The following graphic illustrates the features available to you in the Shop Floor Control system.
These features are described in detail following this graphic.
Figure 1-2 Shop Floor Control System Features

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Description of "Figure 1-2 Shop Floor Control System Features"

Hours and Quantities Tracking
Enter and track time and quantities completed and scrapped by work order and by
employee
Allocate and track resource usage by work center per calendar month
Review and analyze reports of work orders with detail by operation of standard versus
actual for:
Setup, labor, and machine time
Quantity complete and scrapped
Charge actual hours and quantities to a work order as each manufacturing step is
completed
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Process or Routing Instructions
Generate a routing automatically when a work order is processed
Use master routings or non-standard routings for items and indicate when to use each
item
Change the work centers and procedures for each operation on the routing
Modify the sequence and status of each operation on the routing
Make real-time modifications to routing instructions
Display quantity ordered, completed, and scrapped for each operation
Work Order and Rate Creation
Enter work orders and rates manually
Create work orders and rates automatically from Material Requirements Planning (MRP)
by answering action messages, or from sales order entry and select kits for assemble-toorder environments
Generate shop floor paperwork automatically, including standard parts lists and routing
instructions
Differentiate work orders and rates by type, priority, and status
Group work orders by a parent number (a useful feature for job numbers that contain
many work order numbers)
Automatically generate purchase orders for sub-contracted operations on the routing for
work orders and rates
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Blending, Filling, and Packaging
Produce and track work orders for the filling and packaging of lube oil finished goods
when:
Blending products requires more than one co- or by-product
Blending and filling on the same work order
A flushing step is required that produces a by-product
Using Super Backflush to complete products in separate steps
Production Scheduling and Tracking
Schedule work center production for rate schedules, work orders, or both
Track and compare planned production schedules against actual schedules
Use the online scheduling workbench to review, dispatch, and update production
scheduling information in real-time
Calculate start and complete dates for each work order by operation from the Shop Floor
Control Routing Instructions table (F3112)
Maintain the rate schedule after using rate based MRP
Manufacturing Accounting
Plan and track costs for setup, labor, material, and overhead
Compare planned costs against actual costs and calculate a variance amount
Use feature cost percent for co-/by-product costing
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Create journal entries to charge actual and variance costs to a work order or rate schedule
in the general ledger
Material Tracking
Create a parts list automatically when you process a work order
Display the quantity on order, on hand, and available for each part
Access detailed information about supply and demand quantities
Check the availability of the components required to manufacture a parent item and
generate a shortage list
Issue the parts to a work order using a manual, preflush, or backflush method
Backflush both quantities of components issued to a work order and the labor expended
with pay point operations
Enter and track completions to inventory when parent items are completed
Attach the parts list and routing instructions to the work order and print shop floor
paperwork
Track where lots are used, and split and trace where lots come from with advanced lot
control
Maintain and monitor work orders created from the Configuration Management system
for configured items
Process work orders that produce co-products or by-products and process the necessary
transactions
Generate an inventory shortage list by work order and item

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Enter issue transactions for inventory items associated with a work order
Generate a picking request in the Warehouse Management system to select a location and
move the inventory (this occurs after the Manufacturing system creates a parts list
without a work center attached, and checks availability)
Reporting
Run reports that compare actual values with planned values and indicate the variance
between the two
Run shortage reports by item or work order to identify potential manufacturing

constraints due to a lack of availability of required components
Print shop floor paperwork, such as work orders, parts lists, and routings for items
Review daily shop work lists to monitor job status, identify queue problems at work
centers, and flag other areas, such as engineering changes or lost material
1.3 Process Flow

The following graphic illustrates all of the processes involved in the Shop Floor Control system.
The arrows show the flow from process to process, beginning with a work order and ending with
an inventory completion.
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Figure 1-3 Shop Floor Control System Processes
Description of "Figure 1-3 Shop Floor Control System Processes"

1.4 Tables for Shop Floor Control
The following is a list of the tables used throughout the Shop Floor Control system:
Table
Description
Business Unit Master (F0006)
Identifies branch, plant, warehouse, and business unit (entity)

information, such as company, description (name), and category codes
assigned to that entity.
Generic
Message/Rate Contains codes that correspond to a text message. In the Shop Floor
(F00191)
Control system, this is used for routing text on a work order.
Account Master (F0901)
Maintains the account data for the general ledger.
Account Ledger (F0911)
Stores the transaction records for the general ledger.
Work Center Master (F30006)
Contains detail data about all defined work centers.

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Table
Bill
Description
of
Materials
Master Defines and maintains warehouse (plant level) information about bills
(F3002)
of materials, such as quantities of components, as well as features,

options, and levels of detail for each bill.
Item Cost Component Add- Contains frozen standard costs for journal entry creation for work
Ons (F30026)
orders.
Routing Master (F3003)
Stores routing information, including operation sequences, and work

centers, as well as run, setup, and machine time.
Job
Shop
Manufacturing Contains general branch/plant information.
Constants (F3009)
Kanban Master (F3016)
Contains the set of kanban cards associated with an item. Each kanban
defines the supplying location, consuming location, quantity, and unit
of measure. The system uses next numbers to control the kanban
identification number. If the system pulls the item from an external
source, the supplier's number is included.
Work Order Variance (F3102)
Stores the work order variance that shows the difference in costs from
when the standards were set at the beginning of the accounting period.
Work Order Serial Numbers Contains the fields that identify work order assemblies with lot serial
(F3105)
numbers.
Item/Line Relationship Master Stores the relationships between items and production lines. The
(F3109)
Schedule
system uses one of the records as the default rate generation rule.
Quantity
(F31091)
Detail Contains the daily quantities making up a work order or a rate. The
system uses this file for scheduling and sequencing production lines
and work centers.
Shop Floor Control Parts List Contains the components used on a work order.
(F3111)
Shop Floor Control Routing Contains the specific instructions for manufacturing work orders.
Instructions (F3112)
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Table
Description
Work Order Time Transactions Stores the labor transactions reported on a work order.
(F31122)
Shortage Maintenance Master Contains component shortages for work orders.
(F3118)
MPS/MRP/DRP
Message Contains the source of gross requirements that are posted to items
(F3411)
from parent items.
Forecast (F3460)
Contains the forecast data that Resource Requirements Planning

(RRP) validates. It is then used as input to MPS/MRP/DRP.
Inventory Constants (F41001)
Used to control day-to-day transactions that occur within the Inventory

Management system. Directs the nature of certain integrated
operations between Inventory Management and other systems, such as
Sales Order Management, Procurement, and General Accounting.
Item Master (F4101)
Stores basic information about each item defined for inventory, such as
description, search name, and units of measure.
Item Branch (F4102)
Defines and maintains warehouse or plant level information, such as

costs, quantities, category codes, and physical locations.
Item Location (F41021)
Specifies all inventory locations for an item.
Item Cross Reference (F4104)
Enables you to relate item numbers for a specific purpose.
Lot Master (F4108)
Defines the actual potency of a lot.
Item Ledger (F4111)
Stores the transaction history for all items.
Item History (F4115)
Stores usage data for items optional in some Shop Floor Control
system transaction programs.
Warehouse Requests (F4600)

Warehouse
Stores putaway, picking, and replenishment movement requests.
Suggestions Contains the warehouse requests after they have been processed by
(F4611)
putaway, picking, or replenishment.
Work Order Master (F4801)
Stores the work order information, such as item numbers, quantities,
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Table
Description
and dates.
Work
Order Contains text and instructions specific to work orders that are
Instruction/Disposition
identified by different record types.
(F4802)
3. MRP
manufacturing companies better manage their procurement of material to support manufacturing
operations. MRP systems translate the master production schedule into component- and raw
material-level demand by splitting the top level assembly into the individual parts and quantities
called for on the bill of materials, which reports to that assembly, and directs the purchasing
group when to buy them based on the component lead time which is loaded in the MRP system.
3.1 MRPII
MRP stopped at the receiving dock, MRPII incorporates the value stream all the way through the
manufacturing facility to the shipping dock where the product is packaged and sent to the end
customer. That value stream includes production planning, machine capacity scheduling, demand
forecasting and analysis modules, and quality tracking tools. MRPII also has tools for tracking
employee attendance, labor contribution and productivity.
4. Master Production Scheduling (or MPS as its often referred to) is a manufacturing planning
tool that is used to capture a number of variables from different elements of the organization
(customer demand, capacity, inventory levels, material flows, etc) and then describe which parts
the organization will manufacture and at what frequency. MPS is a fairly standard tool within
manufacturing companies its usually administered through the operations/planning function and
controlled by a team headed by a Master Production Scheduler. Its typically administered
through the MRP system. The MPS process stops the business being led by the he who shouts
loudest gets their parts syndrome and delivers a manufacturing plan that not only targets
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meeting the needs of the customer but also the broader capabilities of the manufacturing
organization.
Five key benefits of Master Production Scheduling
1/ Can help to smooth the demand signal
Most customer demand signals will contain peaks and troughs of demand this profile can result
in planning problems and inefficiency for manufacturers. A significant benefit of MPS is that
since it decouples the customer demand from what is manufactured batch sizes can be tuned to
optimize the production process. Where demand is particularly spiky (ie. Peeks and troughs of
demand) this can be of enormous assistance producing a steady drum beat of manufacture
(taking advantage of batch sizes and minimal setup times) which can then ripple through the
supply chain.
2/ Protects lead time and helps book future deliveries
A common complaint for many organizations is that demand is loaded within lead time i.e. if a
part takes 100 days to manufacture its no good taking a customer demand for delivery in 50
days where there is no stock you are struggling before youve even started the manufacturing
process. This can create panic amongst the staff throwing existing priorities into disarray.
Whilst there are a variety of methods that can be used to stop this MPS can be a very effective
method as it is the production schedule that drives the manufacturing not the customer demand.
This enables the organization to protect its lead time but also assists planning in looking at when
future customer requirement is best supported by manufacturing output.
3/ Acts as a single communication tool to the business
A major benefit to any organization that adopts MPS is that it acts as a single communication
tool for the business regarding its manufacturing plans. The MPS schedule is typically available
via the MRP system however whatever the method its imperative that its communicated in an
easily understandable form that can be used throughout the organization.
4/ Helps the Supply chain prioritize requirement
Having a fixed schedule enables the supply chain team in particular the procurement function
to communicate priorities and requirements effectively. One of the key problems many
manufacturing organizations face where they are led by changing customer requirement is where
the supply chain gets reprioritized depending on the problem of the week. Its no surprise that
suppliers work best to regular smoothed demand where that demand in unstable it can often
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lead to missed deliveries (of what was planned) let alone the detrimental affect to relationships
with suppliers that struggle to keep up with whats really required.
5/ Helps stabilize production
Master production schedules are best reviewed as part of a formal business process which
includes the relevant stakeholders and often requires senior sign off before it is either loaded into
the MRP system or is passed to production for action. Its common the production schedule to be
outputted from a formal SIOP review.
Typically master production schedules do not allow planning in arrears so where failures have
happened and product has not been manufactured as planned these items are re-planned to a
relevant point in the future.
Another common attribute of a master production schedule is that there is usually a fixed
planning window whereby plans do not get changed. For example the first 6 weeks of the plan
maybe termed fixed. This enables production to concentrate on whats ahead of them without
worrying about reprioritizations. Additions may be added to this fixed period but usually such
amendments are tightly controlled.
Whilst, as with any business process, there are challenges associated with deploying a master
production schedule there are some enormous and tangible benefits. Manufacturing plants can
get themselves into chaos by not administering the manufacturing demand signal appropriately
and this can have huge affects on the supply chain driving reprioritizations, excess inventory
and causing untold grief to the relationships to key suppliers. Used correctly MPS can right many
of these problems generating a stable and considered plan to drive the business.
Sources: http://supplychain-mechanic.com/?p=204
5. Production Planning
The administrative process that takes place within a manufacturing business and which
involves making sure that sufficient raw materials, staff and other necessary items are procured
and ready to create finished products according to the schedule specified. A typical large
manufacturing
business
engaging
in
production
planning
will aim to
maximize profitability while maintaining a satisfied consumer base.

Production planning is the planning of production and manufacturing processes in a
company
or
industry.
It
utilizes
the resource
allocation of
activities
of
employees, materials and production capacity, in order to serve different customers.[1]

134
Different
types
of
production
methods,
such
as
single
item
manufacturing, batch
production, mass production, continuous production etc. have their own type of production
planning. Production planning can be combined with production control into production planning
and control, or it can be combined and or integrated into enterprise resource planning.
Production planning is used in companies in several different industries, including agriculture,
industry, amusement industry, etc.
5.1 Aggregate
planning is
an operational activity
that
does
an
aggregate
plan
for
the production process, in advance of 6 to 18 months, to give an idea to management as to what

quantity of materials and other resources are to be procured and when, so that the total cost of
operations of the organization is kept to the minimum over that period..
The quantity of outsourcing, subcontracting of items, overtime of labour, numbers to be hired
and fired in each period and the amount of inventory to be held in stock and to be backlogged for
each period are decided. All of these activities are done within the framework of the
company ethics, policies, and long term commitment to the society, community and the country
of operation.
Aggregate planning has certain prerequiredinputs which are inevitable. They include:
Information about the resources and the facilities available.
Demand forecast for the period for which the planning has to be done.
Cost of various alternatives and resources. This includes cost of holding inventory,
ordering cost, cost of production through various production alternatives like
subcontracting, backordering and overtime.
Organizational policies regarding the usage of above alternatives.
"Aggregate Planning is concerned with matching supply and demand of output over the medium
time range, up to approximately 12 months into the future. The term aggregate implies that the
planning is done for a single overall measure of output or, at the most, a few aggregated product
categories. The aim of aggregate planning is to set overall output levels in the near to medium
135
future in the face of fluctuating or uncertain demands. Aggregate planning might seek to
influence demand as well as supply.
Sources: https://en.wikipedia.org/wiki/Aggregate_planning
6. Just in Time (Toyota Kanban System)
Kanban ( ( )?) (literally signboard or billboard in Japanese) is a scheduling
system
for lean and just-in-time (JIT)
production.
Kanban
is
system
to
control
the logistical chain from a production point of view, and is an inventory control system. Kanban
was developed by Taiichi Ohno, an industrial engineer at Toyota, as a system to improve and
maintain a high level of production. Kanban is one method to achieve JIT.
Kanban became an effective tool to support running a production system as a whole, and
an excellent way to promote improvement. Problem areas are highlighted by reducing the
number of kanban in circulation. One of the main benefits of kanban is to establish an upper limit
to the work in progressinventory, avoiding overloading of the manufacturing system. Other
systems with similar effect are for exampleCONWIP.[5] A systematic study of various
configurations of kanban systems, of which CONWIP is an important special case, can be found
in Tayur (1993), among other papers.
In the late 1940s, Toyota started studying supermarkets with the idea of applying shelfstocking techniques to the factory floor. In a supermarket, customers generally retrieve what they
need at the required timeno more, no less. Furthermore, the supermarket stocks only what it
expects to sell in a given time, and customers take only what they need, since future supply is
assured. This observation led Toyota to view a process as being a customer of one or more
preceding processes, and to view the preceding processes as a kind of store. The "customer"
process goes to the store to get required components, which in turn causes the store to restock.
Originally, as in supermarkets, signboards guided "shopping" processes to specific shopping
locations within the store.
Kanban aligns inventory levels with actual consumption. A signal tells a supplier to
produce and deliver a new shipment when material is consumed. These signals are tracked
through the replenishment cycle, bringing visibility to the supplier, consumer, and buyer.
136
Kanban uses the rate of demand to control the rate of production, passing demand from
the end customer up through the chain of customer-store processes. In 1953, Toyota applied this
logic in their main plant machine shop.https://en.wikipedia.org/wiki/Kanban - cite_note-10
Toyota's Six Rules
Later process picks up the number of items indicated by the kanban at the earlier process.
Earlier process produces items in the quantity and sequence indicated by the kanban.
No items are made or transported without a kanban.
Always attach a kanban to the goods.
Defective products are not sent on to the subsequent process. The result is 100% defectfree goods.
Reducing the number of kanban increases the sensitivity.
Kanban cards
Kanban cards are a key component of kanban and they signal the need to move materials within
a production facility or to move materials from an outside supplier into the production facility.
The kanban card is, in effect, a message that signals depletion of product, parts, or inventory.
When received, the kanban triggers replenishment of that product, part, or inventory.
Consumption, therefore, drives demand for more production, and the kanban card signals
demand for more productso kanban cards help create a demand-driven system.
It is widely held[citation
needed]
by proponents of lean production and manufacturing that demand-
driven systems lead to faster turnarounds in production and lower inventory levels, helping
companies implementing such systems be more competitive.
137
In the last few years, systems sending kanban signals electronically have become more
widespread. While this trend is leading to a reduction in the use of kanban cards in aggregate, it
is still common in modern lean production facilities to find use of kanban cards. In Oracle ERP
(enterprise resource planning) software, kanban is used for signalling demand to suppliers
through email notifications. When stock of a particular component is depleted by the quantity
assigned on kanban card, a "kanban trigger" is created (which may be manual or automatic), a
purchase order is released with predefined quantity for the supplier defined on the card, and the
supplier is expected to dispatch material within a specified lead-time.[13]
Kanban cards, in keeping with the principles of kanban, simply convey the need for more
materials. A red card lying in an empty parts cart conveys that more parts are needed.
Three-bin system[edit]
An example of a simple kanban system implementation is a "three-bin system" for the supplied
parts, where there is no in-house manufacturing. One bin is on the factory floor (the initial
demand point), one bin is in the factory store (the inventory control point), and one bin is at the
supplier. The bins usually have a removable card containing the product details and other
relevant informationthe classic kanban card.
When the bin on the factory floor is empty (because the parts in it were used up in a
manufacturing process), the empty bin and its kanban card are returned to the factory store (the
inventory control point). The factory store replaces the empty bin on the factory floor with the
full bin from the factory store, which also contains a kanban card. The factory store sends the
empty bin with its kanban card to the supplier. The supplier's full product bin, with its kanban
card, is delivered to the factory store; the supplier keeps the empty bin. This is the final step in
the process. Thus, the process never runs out of productand could be described as a closed
loop, in that it provides the exact amount required, with only one spare bin so there is never
oversupply. This 'spare' bin allows for uncertainties in supply, use, and transport in the inventory
system. A good kanban system calculates just enough kanban cards for each product. Most
factories that use kanban use the coloured board system (heijunka box).
Electronic kanban
138
Many manufacturers have implemented Electronic kanban (sometimes referred to as Ekanban systems. These help to eliminate common problems such as manual entry errors and lost
cards. E-kanban systems can be integrated into enterprise resource planning (ERP) systems,
enabling real-time demand signaling across the supply chain and improved visibility. Data pulled
from e-kanban systems can be used to optimize inventory levels by better tracking supplier lead
and replenishment times.
E-kanban is a signaling system that uses a mix of technology to trigger the movement of
materials within a manufacturing or production facility. Electronic kanban differs from
traditional kanban in that it uses technology to replace traditional elements such as kanban cards
with barcodes and electronic messages.
A typical electronic kanban system marks inventory with barcodes, which workers scan at
various stages of the manufacturing process to signal usage. The scans relay messages to
internal/external stores to ensure restocking of products. Electronic kanban often uses the
internet as a method of routing messages to external suppliersand as a means to allow a real time
view of inventory, via a portal, throughout the supply chain.
Organizations such as the Ford Motor Companyand Bombardier Aerospace have used electronic
kanban systems to improve processes. Systems are now widespread from single solutions or bolt
on modules to ERP systems.
In a kanban system, adjacent upstream and downstream workstations communicate with each
other through their cards, where each container has a kanban associated with it. The two most
important types of kanbans are:
Production (P) Kanban: A P-kanban, when received, authorizes the workstation to

produce a fixed amount of products. The P-kanban is carried on the containers that are
associated with it.
139
Transportation (T) Kanban: A T-kanban authorizes the transportation of the full container
to the downstream workstation. The T-kanban is also carried on the containers that are
associated with the transportation to move through the loop again.
https://en.wikipedia.org/wiki/Kanban
4. In setting up the plant lay out, the operations manager should consider certain physical such
analysis in the development of work method for an organization.
After deciding above the proper site for locating an industrial unit, next important point
to be considered by an entrepreneur is to decide about the appropriate layout for the plant. Plant
layout is primarily concerned with the internal set up of an enterprise in a proper manner. It is
concerned with the orderly and proper arrangement and use of available resources viz., men,
money, machines, materials and methods of production inside the factory. A well designed plant
layout is concerned with maximum and effective utilisation of available resources at minimum
operating costs.
The concept of plant layout is not static but dynamic one. It is on account of continuous
manufacturing and technological improvements taking place necessitating quick and immediate
changes in production processes and designs. A new layout may be necessary because of
technological changes in the products as well as simple change in processes, machines, methods
and materials. A new layout also becomes necessary when the existing layout becomes
ineffective and poor or is not conducive to the changed circumstances. There are certain
indications which raise alarm for immediate changes in the existing layout of plant.
These indications may be in the form of excessive manufacturing time, improper storage,
lack of control over materials and employees, poor customer service, excessive work in progress
and work stoppages etc.
From these definitions it is clear that plant layout is arrangement and optimum utilisation
of available resources in such a manner so as to ensure maximum output with minimum input.
Objectives of Plant layout:
A properly planned plant layout aims at achieving the following objectives:
140
1. To achieve economies in handling of raw materials, work inprogress and finished goods.
2. To reduce the quantum of work-in-progress.
3. To have most effective and optimum utilisation of available floor space.
4. To minimise bottlenecks and obstacles in various production processes thereby avoiding the
accumulation of work at important points.
5. To introduce system of production control.
6. To ensure means of safety and provision of amenities to the workers.
7. To provide better quality products at lesser costs to the consumers.
8. To ensure loyalty of workers and improving their morale.
9. To minimise the possibility of accidents.
10. To provide for adequate storage and packing facilities.
11. To workout possibilities of future expansion of the plant.
12. To provide such a layout which permits meeting of competitive costs?
The objectives of plant layout have been nicely explained by Shubin and Madeheim. Its
objective is to combine labour with the physical properties of a plant (machinery, plant services,
and handling equipment) in such a manner that the greatest output of high quality goods and
services, manufactured at the lowest unit cost of production and distribution, will result.
Sources:
http://www.yourarticlelibrary.com/industries/meaning-and-objectives-of-plant-layout-
industrial-management/26163/
Plant layout is a mechanism which involves knowledge of the space requirements for the
facilities and also involves their proper arrangement so that continuous and steady movement of
the production cycle takes place.
141
Types of layouts
1. Process layout These layouts are also called the functional layouts and are very suitable in
the conditions, when the products being prepared are non standard or involve wide variations
in times of processing of the individual operations.
Such layouts are able to make better utilization of the equipment that is available, with greater
flexibility in allocation of work to the equipment and also to the workers. Imbalance caused in
one section is not allowed to affect the working of the other sections.
2. Product layout These layouts are also known as the line layouts or the layout by sequence. In
such layouts, the manufacturing cycle is small with minimum material handling. The space
required is small and quality control is easy to exercise.
3. Project layout Such layouts are also referred to as the fixed position layouts. In these layouts,
the components, heavy materials, sub assemblies all remain fixed at one place and the job is
completed by movement of machines, men and tools to the location of the operations.
Sources:http://www.mbaofficial.com/mba-courses/operations-management/what-are-theobjectives-principles-and-types-of-plant

Submitted by: Asiya S. Al-Hammoush
Sat/ 9:00 AM -12:00PM
142
QUESTIONS:
3. Production is considered as a process of adding value to the final product. Describe the
processes that contribute to the addition of value to the final product.
Production is considered as a process of adding value to the product because
customers/consumers checking/investigating where the product came from? Process/How &
When is the product made? And so on. This aspects is very important and its under the
production, important in a way that buyer will be loyal to the product if the production process is
all positive or in other words the customer/consumer wants the production process of a product.
Example:
The production process of gardenia is the best because in their production of making breads all
are machine process no hand used except to their reject product (along the process of
production) this thing is addition of value to the final product.
After the very basic explanation about the question, I want to add more information, all
about value chain. It is the ultimate production process of an organization. A value chain
describes all of the activities that an organization undertakes to produce a product. The manager
of the company can add all of the costs of producing the product, subtract those costs from the
income received from the sale of the product, and determine the profitability of the product line
and these activities under the value chain adds value to the final product. The same with Porters
value chain is that there is a sequence of activities, each of which adds incremental value.
7. Company XLT has put in place elaborate plant maintenance programmed. Highlight the
reasons why the organization way has established such maintenance programmed.
A company established maintenance programs to overcome the problems which is related to
equipment breakdown and this reasons will benefits the company:
reduce the overall operating cost
boost the productivity of the plant
maintain the plant production
reduce defects
143
Some of the common maintenance strategies are as follows:

1. Breakdown Maintenance - This is one of the earliest maintenance program being implemented
in the industry. The approach to maintenance is totally reactive and only act when the equipment
needs to be fixed.
2. Preventive Maintenance - This is a time-based maintenance strategy where on a predetermined
periodic basis, equipment is taken off-line, opened up and inspected. Based on visual inspection,
repairs are made and the equipment is then put back on-line.
3. Predictive Maintenance - a more condition-based approach to maintenance. The approach is
based on measuring of the equipment condition in order to assess whether an equipment will fail
during some future period, and then taking action to avoid the consequences of that failures.
4. Proactive Maintenance - Unlike the three type of maintenance strategies which has been
discussed earlier, proactive maintenance can be considered as an another new approach to
maintenance strategy. Dissimilar to preventive maintenance that based on time intervals or
predictive maintenance that based on condition monitoring, proactive maintenance concentrate
on the monitoring and correction of root causes to equipment failures. The proactive
maintenance strategy is also designed to extend the useful age of the equipment to reach the
wear-out stage by adaptation a high mastery level of operating precision.
a. Demand management
It is focused on a fast and adequate integration of supplier needs in order to balance and
strategically align demand with operational capability in the supply chain. Lack of
accurate information is among some of the progressive demand alignment problems in a
supply chain, which leads to inefficient customer service, poor stock rotation, and high
obsolescence rate aggravated by the wide diversity of product.

Its function is recognizing all demands for goods and services to support the market
place. It involves prioritizing demand when supply is lacking. Proper demand
management facilitates the planning and use of resources for profitable business results
144
b. Shop floor control

Shop floor control comprises the methods and systems used to prioritize, track, and report
against production orders and schedules. It includes the procedures used to evaluate current
resource status, labor, machine usage, and other information required to support the overall
planning, scheduling, and costing systems related to shop floor operation. Shop floor control
typically calculates work in process based on a percentage of completion for each order and
operation that is useful in inventory valuations and materials planning.
Article
Shop floor control is responsible for the detailed management of activities and the flow of
materials inside the plant, including employees, materials, machines, and production time. Shop
floor control activity typically begins after planning (e.g., with MRP, ERP); once planned, orders
and purchase requisitions are created. Shop floor control attends to the following functions
(sequentially):
Planned orders
Conversion of planned orders to process/production
Production and process order scheduling
Capacity requirements planning
Material availability assessment
Release of production/process orders
Material withdrawals
Order confirmations
Goods receipt documentation
Order settlement
Shop floor control may also include identifying and assessing vulnerabilities and risks due to the
shop floor environment, employees, process, and the technologies employed at the shop-floor
level. Based on the assessment of these factors, shop floor control initiates measures to keep risk
at an acceptable minimum level.
145
Best practices for shop floor control include:
Efficiently execute, prioritize, and release work orders to the shop floor with real-time
status of progress and completion.
Deliver accurate and up-to-date information on materials consumption and availability,

which is essential for reliable inventory planning and costing.
Effectively execute change management processes to ensure that the proper revision of
products, bills of materials, and processes are always in place for production.
Automate shop floor equipment control and data collection to reduce human errors and
increase productivity.
Provide the correct manufacturing SOPs, technical drawings, and diagnostics to shop
floor operators to reinforce training and ensure proper processing.
Download setup programs directly to equipment based on product and process

specifications.
With fully interactive access to shop floor control software, supervisors can monitor shop
activities and make better decisions on the spot, especially using mobile computing equipment.
In summary, shop floor control within a manufacturing execution system (MES) can
improve the productivity of any shop, regardless of its manufacturing style or capacity.
Assembling, cutting metal, or fabricating all require common functions; shop floor control
programs can adapt to the operation. When evaluating the need for shop floor control, remember
that the driving force is data. Properly executed, shop floor control should deliver the right
information at the right time to the right place without fail. Consequently, shop floor efficiency
and productivity rise appreciably.
c. MRP I & MRP II

MRP I stands for material requirements planning and deals with bringing in the right amount of
raw material at the right time to support production. MRPII stands for manufacturing resource
planning and builds on MRP by adding shop floor production planning and tracking tools.
146
MRP I systems translate the master production schedule into component and raw material level
demand by splitting the top level assembly into the individual parts and quantities called for on
the bill of materials, which reports to that assembly, and directs the purchasing group when to
buy them based on the component lead time which is loaded in the MRP system. MRP II goes
several steps beyond MRP. While MRP stopped at the receiving dock, MRPII incorporates the
value stream all the way through the manufacturing facility to the shipping dock where the
product is packaged and sent to the end customer. That value stream includes production
planning, machine capacity scheduling, demand forecasting and analysis modules, and quality
tracking tools. MRPII also has tools for tracking employee attendance, labor contribution and
productivity.
Master Production &Scheduling is a comprehensive product manufacturing schedule that covers
what is to be assembled or made, when, with what materials acquired when, and the cash
required translated into a business plan. Material requirements planning (MRP) has MPS as an
essential component
Five key benefits of Master Production Scheduling
1. Can help to smooth the demand signal - Most customer demand signals will contain
peaks and troughs of demand this profile can result in planning problems and
inefficiency for manufacturers. A significant benefit of MPS is that since it decouples the
customer demand from what is manufactured batch sizes can be tuned to optimize the
production process. Where demand is particularly spiky this can be of enormous
assistance producing a steady drum beat of manufacture (taking advantage of batch sizes
and minimal setup times) which can then ripple through the supply chain.
2. Protects lead time and helps book future deliveries - A common complaint for many
organizations is that demand is loaded within lead time i.e. if a part takes 100 days to
manufacture its no good taking a customer demand for delivery in 50 days where there is
no stock you are struggling before youve even started the manufacturing process. This
can create panic amongst the staff throwing existing priorities into disarray. Whilst
there are a variety of methods that can be used to stop this MPS can be a very
effective method as it is the production schedule that drives the manufacturing not the
customer demand. This enables the organization to protect its lead time but also assists
147
planning in looking at when future customer requirement is best supported by

manufacturing output.
3. Acts as a single communication tool to the business - A major benefit to any organization
that adopts MPS is that it acts as asingle communication tool for the business regarding
its manufacturing plans. The MPS schedule is typically available via the MRP system
however whatever the method its imperative that its communicated in an easily
understandable form that can be used throughout the organization.
4. Helps the Supply chain prioritize requirement - Having a fixed schedule enables the
supply chain team in particular the procurement function to communicate priorities
and requirements effectively. One of the key problems many manufacturing organizations
face where they are led by changing customer requirement is where the supply chain gets
reprioritized depending on the problem of the week. Its no surprise that suppliers work
best to regular smoothed demand where that demand in unstable it can often lead to
missed deliveries (of what was planned) let alone the detrimental effect to relationships
with suppliers that struggle to keep up with whats really required.
5. Helps stabilize production - Master production schedules are best reviewed as part of a
formal business process which includes the relevant stakeholders and often requires
senior sign off before it is either loaded into the MRP system or is passed to production
for action. Its common the production schedule to be outputted from a formal SIOP
review. Typically master production schedules do not allow planning in arrears so
where failures have happened and product has not been manufactured as planned these
items are re-planned to a relevant point in the future. Another common attribute of a
master production schedule is that there is usually a fixed planning window whereby
plans do not get changed.
Example
The first 6 weeks of the plan maybe termed fixed. This enables production to concentrate on
whats ahead of them without worrying about reprioritizations. Additions may be added to
this fixed period but usually such amendments are tightly controlled. Whilst, as with any
business
process,
there
are
challenges
associated
with
deploying
master
production schedule there are some enormous and tangible benefits. Manufacturing plants
can get themselves into chaos by not administering the manufacturing demand signal
appropriately and this can have huge affects on the supply chain driving reprioritizations,
148
excess inventory and causing untold grief to the relationships to key suppliers. Used
correctly MPS can right many of these problems generating a stable and considered plan to
drive the business.
Production planning involves the means by which a manufacturing plan is determined,
information issued for its execution, data collected and recorded, which will enable the plant to
be controlled through all its stages. A few definitions are given here in order to have clear
understanding of the term Production Planning.
Objectives of Production Planning:
1. To achieve coordination among various departments relating to production.
2. To make adequate arrangement of men, money, materials, machines tools, implements
and equipment relating to production.
3.
To decide about the production targets to be achieved by keeping in view the sales
forecast.
4. To keep production operation continuous.

5. To achieve desired share of the market.
6. To fix right type of man for right type of job.
7. To achieve the desired level of profit.
8. To make all arrangements to remove possible obstacles in the way of smooth production.
9. To achieve economy in production cost and time.
10. To initiate production on modern lines.
11. To operate the plant at planned level of efficiency.
149
12. To develop alternative plans in order to meet any emergency or contingency.

Aggregate planning is the process of developing, analyzing, and maintaining a preliminary,
approximate schedule of the overall operations of an organization. The aggregate plan generally
contains targeted sales forecasts, production levels, inventory levels, and customer backlogs.
This schedule is intended to satisfy the demand forecast at a minimum cost. Properly done,
aggregate planning should minimize the effects of shortsighted, day-to-day scheduling, in which
small amounts of material may be ordered one week, with an accompanying layoff of workers,
followed by ordering larger amounts and rehiring workers the next week. This longer-term
perspective on resource use can help minimize short-term requirements changes with a resulting
cost savings. In simple terms, aggregate planning is an attempt to balance capacity and demand
in such a way that costs are minimized. The term "aggregate" is used because planning at this
level includes all resources "in the aggregate
Example
As a product line or family. Aggregate resources could be total number of workers, hours of
machine time, or tons of raw materials. Aggregate units of output could include gallons, feet,
pounds of output, as well as aggregate units appearing in service industries such as hours of
service delivered, number of patients seen, etc.
f. Just in- time (Toyota Kanban System)
Just-in-Time Philosophy of complete elimination of waste
"Just-in-Time" means making "only what is needed, when it is needed, and in the amount
needed." For example, to efficiently produce a large number of automobiles, which can consist of
around 30,000 parts, it is necessary to create a detailed production plan that includes parts
procurement. Supplying "what is needed, when it is needed, and in the amount needed"
according to this production plan can eliminate waste, inconsistencies, and unreasonable
requirements, resulting in improved productivity.
Kanban System
150
In the TPS (Toyota Production System), a unique production control method called the "kanban
system" plays an integral role. The kanban system has also been called the "Supermarket
method" because the idea behind it was borrowed from supermarkets. Such mass merchandizing
stores use product control cards upon which product-related information, such as a product's
name, code and storage location, are entered. Because Toyota employed kanban signs for use in
their production processes, the method came to be called the "kanban system." At Toyota, when a
process refers to a preceding process to retrieve parts, it uses a kanban to communicate which
parts have been used. Evolution of the kanban through daily improvements through continuous
technological improvements, the kanban system has evolved into the "e-kanban," which is
managed using IT methodologies and has increased productivity even further.
Why use a supermarket concept? A supermarket stocks the items needed by its customers when
they are needed in the quantity needed, and has all of these items available for sale at any given
time.
TaiichiOhno (a former Toyota vice president), who promoted the idea of Just-in-Time, applied
this concept, equating the supermarket and the customer with the preceding process and the next
process, respectively. By having the next process (the customer) go to the preceding process (the
supermarket) to retrieve the necessary parts when they are needed and in the amount needed, it
was possible to improve upon the existing inefficient production system. No longer were the
preceding processes making excess parts and delivering them to the next process.
4. a lot of time can be wasted during machine set up stage within a man-machine
Single Minute Exchange of Dies - It is a method to reduce set up time. This method was
developed by Shigeo Shingo in Japan and was applied first in the automotive industry.
151
Example: JET-MACHINE SETUP TIME REDUCTION

The manufacturing management decided that the company would test the SMED
workshop in order to reduce machine setup time.
Step 1: SELECTION OF THE MACHINE
The manufacturing management used the following criteria during machine selection:
machine setup times in the last three months,

number of machine setups in the last three months.
Using a weighted-scoring method, the manufacturing management decided that a reduction of

setup time would be tested on a KM 800 CNC Injection Molding Machine, CraussMaffei KM
800-CNC injection molding machine
Step 2: DEFINITION OF TARGET SETUP TIME
The time recorder operator measured the time required for machine setup: 119.97 minutes. The
manufacturing management decided that the target reduced setup time would be 60 minutes
i.e., 50% of the current value.
Step 3: SELECTION OF TEAM MEMBERS
The manufacturing management selected an 8-member team for the SMED workshop:
A team leader from the operation logistics department,

A team moderator from the technology department,
Team members,
A setup operator from the manufacturing department,
152
A protocol writer from the planning department,

A time recorder operator from the manufacturing department
A photographer from the manufacturing department
A cameraman from the supply department
A drawer of paths made by the setup operator from the process control department.
The manufacturing management sent the "SMED-workshop order" form to departmental

heads and team members for them to confirm their agreement with participation in the
workshop.
Step 4: DOCUMENTING ELEMENTS AND MICROELEMENTS OF JET-MACHINE
SETUP (existing procedure)
During the actual machine setup, the protocol writer entered the sequence of elements and
microelements of machine setup into his notebook. He also noted exact setup times, reported
by the time recorder operator. After recording the machine setup elements, the protocol writer
entered the data on the monitoring paper. The drawer of the paths made by the setup operator
made a drawing of the operator's movements.
Step
5:
TRANSFORMATION
OF
JETMACHINE
SETUP
ELEMENTS
AND
MICROELEMENTS INTO A VISUAL FORM

The data obtained on the jet-machine setup elements and microelements were copied from
the notebook to stickers to be affixed to a panel during the next step. The stickers were
labeled as X - if there was another microelement after the current one, E - if the current
microelement was the last one.
Step 6: ANALYSIS OF JET-MACHINE SETUP ELEMENTS AND MICROELEMENTS
Phase 0: Analysis of the current situation of jet-machine setup At the beginning of the
session, the moderator projected the analytical card for entering the current situation onto the
panel. By affixing stickers to the panel (in agreement with other team members) the current
situation of jet machine setup was obtained.
Phase 1: Separation of internal and external setup microelements the moderator presented
each microelement of the current machine setup and the team decided whether the
microelement was internal or external.
153
The team members found that it would be possible to carry out 76.2 minutes (out of the
total 119.97 minutes) of setup during the jet-machine operationthis is the duration of the
external microelements of machine setup.
Phase 2: Transformation of internal microelements into external ones The moderator
moved (in agreement with team members) the green stickers (external microelements) either
to column 1 (starting activities) or to column 5 (completion activities) (Table 5).
Phase 3: Improvements of internal and external microelements After the separation of
internal and external microelements of machine setup, the team made some suggestions for
improvements of internal and external microelements. The results of the creativity workshop
are presented in Table 6.
Phase 4: Standardization of microelements The team also carried out a standardization of
internal and external microelements and entered the results on the form "Operating
instructions for jet-machine setup". The new operating instructions had to be tested, so the
day after the first SMED workshop the setup operator carried out machine setup according to
the new operating instructions and completed internal microelements within 39 minutes,
which is an additional improvement of 4.77 minutes.
Step 7: REPEATED ANALYSIS OF MICROELEMENTS
The target setup time defined in step 2 was not achieved, so the team decided to repeat the
analysis of machine setup microelements. Before the second SMED workshop, the team
leader organized a creativity workshop in order to obtain suggestions for improvements, the
realization of which would additionally reduce setup time. The creativity workshop indicated
that setup time could be significantly reduced if the following improvements were made:
introduction of fast hydraulic chuck-andcenter system for tool fixing,

introduction of fast hydraulic multi-joints.
CONCLUSION
The manufacturing management decided that the KM 800 jet-machine setup time should
be reduced. They selected team members to carry out a SMED workshop with the goal of
reducing the setup time. The target value was a reduction of 50%. The team first documented the
elements of the existing jet-machine setup, recorded microelement setup times, drew the path
made by the setup operator, took photos of setup details and filmed the whole setup procedure
154
with a video camera. An analysis of setup microelements was then made, which indicated that
some internal microelements could be transformed into external ones. The team leader organized
a creativity workshop, the goal of which was to make improvements to internal and external
microelements. The creativity workshop yielded two suggestions for improvements that should
significantly reduce the setup time. The SMED workshop on the reduction of jet-machine setup
time will be repeated until the goal has been achieved: a setup time shorter than 10 minutes.
http://www.makigami.info/cms/smed
file:///C:/Documents%20and%20Settings/BUDGET/My
%20Documents/Downloads/08_2010_090_Kusar_3khttp://scm.ncsu.edu/scmarticles/article/lessons-in-demand-management.pdf
http://scm.ncsu.edu/scm-articles/article/lessons-in-demand-management
http://camstar.industrysoftware.automation.siemens.com/en/resources/glossary/shop-floorcontrol/
http://smallbusiness.chron.com/mrp-vs-mrpii-15365.html
http://supplychain-mechanic.com/?p=204
http://www.referenceforbusiness.com/management/A-Bud/Aggregate-Planning.html
http://www.yourarticlelibrary.com/production-management/production-planning-its-meaningand-objectives/26168/
http://www.toyota-global.com/company/vision_philosophy/toyota_production_system/just-intime.html
155

Submitted by: John Eric O. Estrellado
Sat/ 9:00 AM -12:00PM
6.
Many firms are adopting the just-in-time inventory system as a way of
minimizing stock holding costs. Explain the conditions necessary for such a
system to work.
Just-in-time inventory system permits enterprises to reduce their overhead
expenses, especially stock holding costs while always ensuring that parts are available
to manufacture their products. Many companies use some sort of just-in-time inventory
management to serve their customers better while lowering the cost of doing business
as it lessens warehouse costs, creates better supply chain management and would
create better customer and management satisfaction by reducing waste and improves
efficiency.
Just-in-time inventory approach can be referred as a production scheme which is
employed to upturn the level of efficiency and reduce waste by receiving goods only in
the form they are required in the production process, thus reducing the inventory costs.
This method calls for the producers to be capable of forecasting demand accurately.
Example
A machine manufacturer operates with a very low level of inventory, depending
upon the supply chain to deliver the parts which are required for manufacturing
machines. The parts required for manufacturing such machine do not arrive before or
after they are required, but just at the time they are required or needed.
But what are the conditions necessary for this kind of system of work? The
following should be considered:
156
Management buy-in and support at all levels of the organization are vital; if a justin-time manufacturing system is to be successfully adopted.
Sufficient resources should be distributed, so as to obtain technologically

advanced software, program or process, (especially in todays technological
trend) that is generally required if a just-in-time system.
Example:
Nowadays, accessible software for JIT System are being used by some
multinational companies, one of which is SAP Inventory System.
Building a close, trusting relationship with reputed and time-tested suppliers will
minimize unexpected delays in the receipt of inventory.
Example:
A manufacturing company is urgently in need of a supply for the completion of its
assembly line, in order to get immediate supply, the company should have close
workmanship and established relationship with its suppliers.
Just-in-time manufacturing cannot be adopted overnight. It requires commitment

in terms of time and adjustments to corporate culture would be required, as it is
starkly different to traditional production processes.
The design flow process needs to be redesigned and layouts need to be reformatted, so as to incorporate just-in-time manufacturing.
Lot sizes need to be minimized.
Workstation capacity should be balanced whenever possible.
Preventive maintenance should be carried out, so as to minimize machine

breakdowns.
Example:
Breakdowns might hinder urgent manufacturing so as to affect commitments for
delivery. To avoid this pitfall, companies need to establish maintenance
measures.
Set-up times should be reduced wherever possible.
157
Quality enhancement programs should be adopted, so that total quality control

practices can be adopted.
Reduction in lead times and frequent deliveries should be incorporated.
Motion waste should be minimized, so the incorporation of new system might

prove to be a good idea when implementing a just-in-time manufacturing system.

industry.
Early makers inclined to suffer from a number of weaknesses, stemming from a
limited conceptualization of technology and an inadequate understanding of the role of
the small-scale sector in industrial development more broadly. There was also a lack of
practical experience with project implementation. However, in recent years important
advances have been made on all these fronts. Four features of recent technology
assistance programs that have tended to be associated with success are discussed,
and illustrated with evidence from different projects.
Here are the features of an appropriate process technology for a small-scale
industry:
Embrace the notion that durable competitiveness of small producers in a

competitive economic environment requires that they develop internal capabilities
to effectively assimilate, use and adapt product and process technologies.
Are demand-driven
Example
A small scale enterprise has heard that there will be a vigorous growth in the
demand of its product for the next years. In order for this company to come along
with the identified opportunity, this company might consider an automation or
adaptation of a process technology to improve and increase its production
system.
158
Include appropriate incentive structures based on market principles.
Target the assistance to groups of producers with common interests and

problems, and help them to organize themselves in collective bodies that can
evolve into self-help institutions.
Example
We know that process technology installation can be very expensive and small
scale businesses may find it hard to invest for it. This is a substantial reason why
some businesses are hesitant to use process technology, however, if this small
scale industries will realize how partnership would work for them, they are more
likely to form a cooperative or an association that advocates sharing of resources
for greater capitalization. They would like to share investment for a process
technology and proportionally divide the return among themselves.
11. One of the earliest analytical methods in production is the motion study.
organization.
Motion studies are analyses of the activities made by workers as they go about
their daily routine duties. The studies' purpose is to determine if there are wasted
movements that are repeated and which therefore waste time and reduce the
productivity of the worker. The studies are used to try to set up workspaces in such a
way that a worker can do his/her routine duties as quickly and efficiently as possible.
Time and motion studies are a core set of tools which are used by the managers
in the industrial sector to enhance the performance or the operational efficiency. This is
done by breaking down the work into simpler units and setting the execution
benchmarks. The time and motion studies were initially used to improve productivity in
manufacturing units but later saw tremendous use even in the service industries.
159
Time and motion studies can be used to determine the best possible method to
perform the sub tasks in a workers job. This is the original piece-rate compensation
model to maximize the workers productivity and to identify and train the employees on
the basis of personality and skills analysis.
There are many merits accrued by the right implementation of time studies in the
development of work method in organizations. Some of the key merits are:
To improve the methods or procedures adopted in performance of various jobs.
Improving the lay out of the facility.

Example
In a manufacturing company it may include lay out for facilities such as overall
plant layout, lay out of workstations, layout of support facilities such as
administrative offices and reception area.
To improve utilization of resources.

Example
Resources like human resource/staff, machineries, equipment and financial.
To reduce human effort by proper design of processes.

Example
In hospitals this can also include reducing the efforts patients need to make for
different actions involved in their treatment as well as for their routine hospital
treatment and care.
To develop suitable working conditions.

Example
In construction sites, this would include design to suit the requirements of
construction workers as well as the supervisors.
160
12. Highlight the product aspects that would be addressed by product design
research.
Product design research is the method of finding opportunities in creating a new
product to be sold by a business to its customers. A very comprehensive concept, it is
essentially the efficient and effective generation and development of ideas through a
process that leads to new products.
It is a set of strategic and tactical undertakings, from idea generation to
commercialization, used to create a product design. In a systematic approach, product
designers conceptualize and evaluate ideas, turning them into tangible inventions and
products. The product designer's role is to combine art, science, and technology to
create new products that people can use. Their evolving role has been facilitated by
digital tools that now allow designers to communicate, visualize, analyze and actually
produce tangible ideas in a way that would have taken greater manpower in the past.
There are several product aspects that would be addressed by product design
research:
(a) Production cost
In the end, the manufacturer wants an economically produced product.
Example
Businesses that know their production costs know the total expense to the
production line, or how much the entire process will cost to produce or develop
the item. If costs are too high, these can be decreased or possibly eliminated.
Production costs can be used to compare the expenses of different activities
within the company. In production, there are direct costs and indirect costs. For
example, direct costs for manufacturing an automobile are materials such as the
plastic, metal or labor incurred to produce such an item. Indirect costs include
161
overhead such as rent, salaries or utility expense. Since we are into product
development, a company would likely to cut expenses in direct costs.
(b) Price, Appearance, and Value

Example
The appearance attributes of designed products noted in the literature often
reflect what designers themselves perceive in a product design. This present
research, however, provides knowledge on how consumers perceive product
appearance by identifying appearance attributes that consumers use to
distinguish the appearances of durable products. Descriptions of appearance
were generated by consumers in a free categorization task. Knowledge of what
appearance attributes are perceived by consumers in a product design can help
a designer to communicate certain pre-specified meanings in a product.
Customers might look and refer to what they just barely see, and they often
relate what they see to the price of the product and its value.
(c) Usability and Functionality of the Final Product
Example
Usability is sometimes reduced to "easy to use," but this over-simplifies the
problem and provides little guidance for the user interface designer. A more
specific definition can be used to understand user requirements, formulate
usability goals and decide on the best techniques for usability evaluations. An
understanding of the five characteristics of usability effective, efficient,
engaging, error tolerant, easy to learn helps guide the user-centered design
tasks to the goal of usable products. Consumers, as they use new products, they
more likely to realize how usable and functional a certain product is.
(d) Maintenance & Support Services
162
How well the final product can be maintained: is the product easily reassembled,
disassembled, diagnosed, and serviced? Stakeholders' needs vary from one
another and it is the product designer's job to incorporate those needs into their
design.
Example:
A software companys maintenance and support services provide customers and
partners with access to expert advice, timely problem resolution and software
updates as well. This company offer a number of different support packages,
ranging from basic web-only support services to premium solution support and
maintenance services, offered on a 247 basis. These support offerings are
bundled to match the needs and expectations of our different customers and
partners. This support also includes regular product check-up and updates,
warranty and other essential services.
***
Resources:
Product Design, Research and Development @ www.ic.gc.ca
How to Do a Time and Motion Study to Make Real Change @

blog.idonethis.com
Advantages and disadvantages of a time and motion study @ eNotes.com
Time & Motion Studies: Overview @ study.com
New Product Development, Product Design & Engineering @

www.paramountind.com
Product design @ Wikipedia.com
Technology Support for Small-scale Industry in Developing Countries @

www.researchgate.net
Technology in small-scale rural manufacturing enterprises @ www.fao.org
Use JIT For Controlling Costs, Reducing Waste @ www.brighthubpm.com
163
The Benefits Of Using Just-In-Time In The Manufacturing Process @

www.valuestreamguru.com
Just-in-time Inventory Systems @ www.readyratios.com
The Advantages of Just-in-Time Inventory Systems @ smallbusiness.chron.com
Management Concepts/ JIT manufacturing @ www.tutorialspoint.com

Submitted by: Rowell C. Marasigan
Sat/ 9:00 AM -12:00PM
Systems design is the process of defining the architecture, components, modules, interfaces,
and data for a system to satisfy specified requirements. One could see it as the application
of systems theory to product development. There is some overlap with the disciplines of systems
analysis, systems
architecture and systems
engineering. If the broader topic of product
development "blends the perspective of marketing, design, and manufacturing into a single
approach to product development," then design is the act of taking the marketing information and
creating the design of the product to be manufactured. Systems design is therefore the process of
defining and developing systems to satisfy specified requirements of the user. Until the 1990s
systems design had a crucial and respected role in the data processing industry. In the
1990s standardization of hardware and software resulted in the ability to build modular systems.
The increasing importance of software running on generic platforms has enhanced the discipline
of software engineering.
Object-oriented analysis and design methods are becoming the most widely used methods for
computer systems design. The UML has become the standard language in object-oriented
analysis and design. It is widely used for modeling software systems and is increasingly used for
high designing non-software systems and organizations. Production is considered as a process of
164
adding value to the final product. Describe the processes that contribute to the addition of value
to the final product.
4. A lot of time can be wasted during machine set up stage within a man-machine operational
system. Highlight the ways in which this set up time can be minimized.
The Man-Machine (German Language Edition: Die Mensch-Maschine) is the seventh studio
album by German electronic band Kraftwerk, released in May 1978. It contains the song "The
Model" which was a chart-topping single in the UK in 1982. This was the first Kraftwerk album
to see Karl Bartos co-credited with songwriting along with Htter & Schneider. Emil Schult cowrote the lyrics for "The Model".
Musically, it builds on Trans-Europe Express. The initial recording had been made at Kraftwerk's
own Kling Klang studio, but further work was done at nearby Studio Rudas, where Detroit sound
engineer Leanard Jackson of Whitfield Records, who had worked on Rose Royce's second album
the previous year, was hired to work on the final sound-mix.
The cover design imitates the graphic style of the 1930s Modernist movement, particularly that
of the designer/architect El Lissitzky, whose inspiration is acknowledged in the album credits.
The rear cover of the album is actually an adaptation one of his geometric page designs for a
children's book, From Two Quadrants (specifically, the upper right quarter of the page captioned
"And on the Black was established Red Clearly").
Coloured vinyl pressings
The first pressings of the album distributed in Germany (with tracks sung in German) and in
France (the English language version) were manufactured with translucent red vinyl, that carried
through the dominant colour scheme of the front cover design. The French red vinyl version was
pressed in a larger quantity, with the less numerous German red vinyl becoming a rarer and much
165
sought after collectible item as a consequence. In the rest of the world the album was only ever
released on black vinyl, but in the UK a 12" single of the track Neon Lights was eventually
released in 1979 pressed on an appropriately luminous vinyl.
11. One of the earliest analytical methods in production is the motion study. Highlight the merits
of such analysis in the development of work method for an organization.
A time and motion study (or time-motion study) is a business efficiency technique combining
the Time Study work of Frederick Winslow Taylor with the Motion Study work
of Frank and Lillian Gilbreth (not to be confused with their son, best known through the
biographical 1950 film and book Cheaper by the Dozen). It is a major part of scientific
management (Taylorism). After its first introduction, time study developed in the direction of
establishing standard times, while motion study evolved into a technique for improving work
methods. The two techniques became integrated and refined into a widely accepted method
applicable to the improvement and upgrading of work systems. This integrated approach to work
system improvement is known as methods engineering and it is applied today to industrial as
well as service organizations, including banks, schools and hospitals.
Time and motion study have to be used together in order to achieve rational and reasonable
results. It is particularly important that effort to be applied in motion study to ensure equitable
results when time study is used. In fact, much of the difficulty with time study is a result of
applying it without a thorough study of the motion pattern of the job. Motion study can be
considered the foundation for time study. The time study measures the time required to perform a
given task in accordance with a specified method and is valid only so long as the method is
continued. Once a new work method is developed, the time study must be changed to agree with
the new method.
12. Highlight the product aspects that would be addressed by product design research.
Design research was originally constituted as primarily research into the process of design,
developing from work in design methods, but the concept has been expanded to include research
embedded within the process of design, including work concerned with the context of designing
166
and research-based design practice. The concept retains a sense of generality, aimed at
understanding and improving design processes and practices quite broadly, rather than
developing domain-specific knowledge within any professional field of design. Design Research
emerged as a recognizable field of study in the 1960s, initially marked by a conference
on Design methods at Imperial College London, in 1962. It led to the founding of the Design
Research Society (DRS) in 1966. John Christopher Jones (who initiated the 1962 conference)
founded a postgraduate Design Research Laboratory at the University of Manchester Institute of
Science and Technology, and L. Bruce Archer founded the postgraduate Department of Design
Research at the Royal College of Art, London, becoming the first Professor of Design Research.
The Design Research Society has always stated its aim as: to promote the study of and research
into the process of designing in all its many fields. Its purpose therefore is to act as a form of
learned society, taking a scholarly and domain independent view of the process of designing.
Some of the origins of design methods and design research lay in the emergence after the 2nd
World War of operational research methods and management decision-making techniques, the
development of creativity techniques in the 1950s, and the beginnings of computer programs for
problem solving in the 1960s. A statement by Bruce Archer encapsulated what was going on:
The most fundamental challenge to conventional ideas on design has been the growing
advocacy of systematic methods of problem solving, borrowed from computer techniques and
management theory, for the assessment of design problems and the development of design
solutions. Herbert Simonestablished the foundations for a science of design, which would be
a body of intellectually tough, analytic, partly formalizable, partly empirical, teachable doctrine
about the design process.
167

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ADVANCED PRODUCTION AND

A willingness of suppliers to keep inventory on hand allowing Dell to be free of

Benefits of Motion Study

MIDTERM EXAM: PRODUCTION OPERATIONS MANAGEMENT

3. Production is considered as a process of adding value to the final product.

How to Assess Value

Tips and Hints

9. Describe the features of an appropriate process technology for a small-scale

13. Please explain some terms of Operations Research (production engineers)?

c. MRP I & MRP II

e. Production planning and aggregate planning

Production planning problems are characterized by a demand schedule, a corresponding

f. Just in- time ( ToyotaKanban System)

How Just-in-time benefits your organization.

MIDTERM EXAM: PRODUCTION OPERATIONS MANAGEMENT

how it is processed, and how it is displayed as In Physical design, the following

System control and backup or recovery.

User Interface Design

nonconformities, with three undesirable consequences: scrapped or wasted

3. Company XLT has put in place elaborate plant maintenance programmed.

MIDTERM EXAM: PRODUCTION OPERATIONS MANAGEMENT

The methodologies of process redesign present the improvement process as a

Systems design is the process of defining the architecture, components, modules,

MIDTERM EXAM: PRODUCTION OPERATIONS MANAGEMENT

1. Outline the circumstances under which a manufacturing firm would

process in order to achieve performance measures, such as Return on Investment (ROI),

It is because inventory is tied up in money.

Just in- time ( ToyotaKanban System)

TERMS FOR OPERATIONS RESEARCH:

forecast can be viewed by all stakeholders, including customers.

Goods receipt documentation

In addition to MRP, ERP or "Enterprise Resource Planning" provides an expanded

Modern manufacturing firms use sophisticated production scheduling software to plan

MIDTERM EXAM: PRODUCTION OPERATIONS MANAGEMENT

Real-value-add (RVA) activity if it is effective

and do not support the business processes.

Value of Storage Activities

Value of Transportation Activities

Value of Inspection Activities

Value of Production Activities

It improves the methods or procedures adopted in performance of various jobs.

transfer as well as the domestic development process.

scale of a small business's operations and push it into a new classification.

MIDTERM EXAM: PRODUCTION OPERATIONS MANAGEMENT

1. Outline the circumstances under which a manufacturing firm would choose to

The boundary between the system and the users

available money and standardization of hardware and software.

energy, and other natural resources

MIDTERM EXAM: PRODUCTION OPERATIONS MANAGEMENT

2. Outline the circumstances under which a manufacturing firm would choose to

Stage 1 Investigation of the current environment

The output of this stage is a chosen technical system option.

work methods in an effort to improve it.

MIDTERM EXAM: PRODUCTION OPERATIONS MANAGEMENT

The architectural design of a system emphasizes on the design of the systems

6. System control and backup or recovery. Refering to the control of IT department ,

computing problem to executable computer

programs. Programming involves activities such as analysis, developing understanding,

validating and managing software or system requirements.

The requirements should be documented, actionable, measurable, testable,

traceable, related to identified business needs or opportunities, and defined to a level

the "inter-assemblages" and also within the system as a whole.