PRODUCTION FACILITIES

Production Facilities and Systems are the important aspects of the production

management. Production Facilities allows the smooth transformation of the inputs into the

outputs i.e. manufacturing process with all the required machinery tools manpower etc. While

Production Systems ensures that there is the proper methods, arrangements, procedure is adopted

to produce different types of goods or services.

Before starting of any production process the organization has to decide about the facilities

to produce the same.Facilities has to be installed on the basis of the requirement and the

availability of the resources to the organization.

DETERMINANTS OF PRODUCTION FACILITIES

Production facilities required by the organization is decided by the following :

Types of product

Production quantity

Market

Product demand

Competitors for the product

Location

Product variety

FACTORS INVOLVED IN FACILITIES

Machines and equipment

Tools

Technology
 Inspection aid

Process details

Operating personnel

Production volume

PLANT LOCATION

The main aim of any business(manufacturing or services) is to maximize the profits and to

minimize the cost(efficiency). In this the plant location play the Important role. The location

selected should be such that it enables the business to achieve its objectives efficiently.

FACTORS:

1. Nearness to the raw material 2. Land and labor cost 3.Transportation

2. 4.Nearness to related and ancillary industries etc.

PLANT LAYOUT

Layout means arrangement of facilities in a particular unit to ensure the smooth and proper

flow of production. Plant layout refers to the arrangement of machines, handling equipments,

storerooms and tool-racks required for the process of production in the plant or

factory(manufacturing unit).

FACTORS:

1. Products 2. Production system 3. Purchase and inventory policy

4. Safety and personnel policies etc.

PRODUCTION SYSTEM

Production system can be defined as The methods, procedure or arrangement which

includes all functions require to accumulate(gather) the inputs, process or reprocess the inputs

and delivers the marketable outputs(goods).

 QUALITY CONTROL SYSTEM

Quality control is a process that is used to ensure a certain level of quality in a product or

service. It might include whatever actions a business deems necessary to provide for the control

and verification of certain characteristics of a product or service. Most often, it involves

thoroughly examining and testing the quality of products or the results of services. The basic

goal of this process is to ensure that the products or services that are provided meet specific

requirements and characteristics, such as being dependable,satisfactory, safe and fiscally sound.

Quality Control can also be defined as that Industrial Management technique by means of

which product of uniform acceptable quality is manufactured. It is the entire collection of

activities, which ensures that the operation will produce the optimum quality products at

minimum cost. The main objectives of Quality Control are: 1. To improve the companies

income by making the production more acceptable to the customers i.e. by providing long life,

greater usefulness, maintainability, etc. 2. To reduce companies cost through reduction of losses

due to defects. 3. To achieve interchangeability of manufacture in large-scale production. 4. To

produce optimal quality at reduced price. 5. To ensure satisfaction of customers with productions

or services or high quality level, to build customer good will, confidence and reputation of

manufacturer. 6. To make inspection prompt to ensure quality control. 7. To check the variation

during manufacturing.

Basic Tools of Quality Control

Check sheet - is a form used to collect data in real time at the location where the data are

generated. The data it captures can be quantitative or qualitative. When the information is
quantitative, the check sheet is sometimes called a tally sheet.

Control chart - also known as Shew-hart charts or process- behavior charts, in statistical process

control are tools used to determine if a manufacturing or business process is in a state of

statistical control.

Histogram - is a graphical representation showing a visual impression of the distribution of data.

Ishikawa Diagram - Common uses of the Ishikawa diagram are product design and quality

defect prevention, to identify potential factors causing an overall effect. Each cause or reason for

imperfection is a source of variation. Causes are usually grouped into major categories to

identify these sources of variation.

Pareto Chart - is a type of chart that contains both bars and a line graph, where individual

values are represented in descending order by bars, and the cumulative total is represented by the

line.

Scatter diagram - is a type of mathematical diagram using Cartesian coordinates to display

values for two variables for a set of data.

Flow chart - is a type of diagram that represents an algorithm or process, showing the steps as

boxes of various kinds, and their order by connecting them with arrows

Difference between Quality Control & Quality Assurance

Though the two are similar, but there are some basic differences. Quality control is

concerned with examining the product or service the end result and quality assurance is

concerned with examining the process that leads to the end result. A company would use

quality assurance to ensure that a product is manufactured in the right way, thereby reducing or

eliminating potential problems with the quality of the final product.

CASE 7: QUALITY CONTROL SYSTEMS

Case Title: Towards ISO Accreditation

A successful business empire here in Negros Occidental is contemplating on being

accredited as an International Organization for Standardization (ISO) organization. ISO

accreditation ensures that products and services are safe, reliable and of good quality. For

business, they are strategic tools that reduce cost by minimizing waste and errors, and increasing

productivity. They help companies access new markets, level the playing field for developing

countries and facilitate free and fair global trade. This is not to be an easy task. You were hired to

be their consultant on this matter, how will you plan out this big task ahead?

In order to have a successful accreditation the company should plan ahead of time, meet the

requirements of the new system. Follow compliance and risk assessment system. So to start, the

company should first need to understand ISO 9001, it is the world's most widely recognized

Quality Management System (QMS). It belongs to the ISO 9000 family of quality management

system standards (along with ISO 9004), and helps organizations to meet the expectations and

needs of their customers, amongst other benefits.

An ISO 9001 quality management system will help you to continually monitor and manage

quality across all operations, and outlines ways to achieve, as well as benchmark, consistent

performance and service. Internationally, it is the quality system of choice!

The benefits of ISO 9001 Quality Management

Allows you to become a more consistent competitor in your marketplace

Better quality management helps you meet customer needs

 More efficient ways of working will save time, money and resources

Improved operational performance will cut errors and increase profits

Motivate and engage staff with more efficient internal processes

Win more high value customers with better customer service

Broaden business opportunities by demonstrating compliance

Next is the implementation of ISO quality management, we should understand that each

business is unique. And each business is at a different stage in their ISO 9001 implementation

journey. Your ISO 9001 bundle can include the specific mix of services your business needs to

jumpstart quality management removing the complexity of managing multiple tasks and

overcoming particular challenges you face. Youll get from start to finish easily, shaping an ISO

9001 Project Plan that engages everyone across your business. And well work with the systems

you already have in place, guiding you step by step through implementation ready for

certification.

The company should consider the following tips for implementing ISO:

Get commitment and support from senior management.

Engage the whole business with good internal communication.

Compare your existing quality systems with ISO 9001 requirements.

Get customer and supplier feedback on current quality management.

Establish an implementation team to get the best results.

Map out and share roles, responsibilities and timescales.

Adapt the ISO 9001 principles of quality management to your business.

Motivate staff involvement with training and incentives.

 Share ISO 9001 knowledge and encourage staff to train as internal auditors.

Regularly review your ISO 9001 system to make sure you are continually improving it.

Then we go to certification process where in we should consider the following steps;

Gap analysis - This is an optional pre-assessment service where we take a closer look at

your existing quality management system and compare it with the requirements of the ISO 9001

standard. This helps identify areas that need more work before we carry out a formal assessment,

saving you time and money.

Formal assessment - This happens in two stages. First we review your organizations

preparedness for assessment by checking if the necessary ISO 9001 procedures and controls have

been developed. We will share the details of our findings with you so that if we find gaps, you

can close them. If all the requirements are in place, we will then assess the implementation of the

procedures and controls within your organization to make sure that they are working effectively

as required for certification.

Certification and beyond - When you have passed the formal assessment you will receive

an ISO 9001 certificate, which is valid for three years. Your client manager will stay in touch

during this time, paying you regular visits to make sure your system doesnt just remain

compliant, but that it continually improves.

And the last part is on how you will maintain your accreditation, here there are also some

points to consider since you are already ahead with ISO 9001 certification. Now you can achieve

even more. Discover ways to keep improving your quality management system and make the

most of your accreditation.

CASE 2: PRODUCTION FACILITIES

Case Title: Expansion Blues

The MSD Limited will be facing a number of challenges when they will push through with

their plans on expanding their production facilities on their existing site in Murcia, Negros

Occidental. The expansion is expected to be a potentially complex and sensitive issue, which

required planning consent from the local authority. If you are the production and operations

manager of the existing facility,

A. What are the possible complex problems and sensitive issues that you are expecting to face?

B. How do you plan to address them?

The first thing that the company should consider is to thoroughly evaluate the current

operations at the existing site. This is critical to preparing a detailed plan for growth. Another

critical milestone in the process is to develop a list of key criteria to help guide the companys

decision where to grow the business. Key factors, such as geographic markets to serve, tax

structure competitiveness, labor quality and cost, real estate availability and cost, and economic

development incentives are crucial in determining whether selecting a new location or expanding

in the current location would result in the most favorable outcome for the business.

If a company is located in a facility that does not have excess capacity and/or available land

to accommodate an expansion of the building, then locating a new facility is most likely

inevitable. The companys current location and new geographic areas under consideration should

now be evaluated in a variety of key areas. If there is sufficient real estate to expand, the existing

location has a good work force, and the business climate is competitive, then the existing site

should be a very attractive option. However, if there are concerns regarding any of these key
issues, a new location may make the most sense.

When significant capital investment and/or the creation of new jobs is considered, economic

development incentives should be taken into account for all finalist locations in an effort to lower

project and/or operating costs. Companies must ensure that due diligence is carried out and

options thoroughly investigated to make the most informed decision.

However if there is available space to expand and the companys operating experience

has been positive in the current location, the process for the company usually is more

streamlined. While it remains important to evaluate the key factors that affect a potential

expansion project, there are fewer areas of concern at the beginning of the process. The

continued support of the local community and state may be as important as anything else

considered during the process.

If the decision is made to locate a new facility, both the area where the existing the facility is

located and additional locations will be analyzed as part of the due diligence process. Whether

moving in close proximity or far away, key criteria must be explored, analyzed, and evaluated to

ensure that the company makes the best decision. These findings will help direct the location

decision.

Engaging an experienced site selection advisor is often beneficial to the company and

evaluation process. Not only will the site selector be able to provide and analyze the detailed data

required for the areas under consideration, but he/she can also help negotiate the most favorable

terms for the key issues in the different locations. Armed with this detailed analysis, a company

will have a much better understanding of whether an expansion at the existing site or location of

a new facility in a different geographic location makes sense.

In addition, this private adviser will have the task of completing a design statement which
was needed to accompany the planning application. He then put the whole thing together and

submitted the application to the local authority. Thus the company will wait to the decision from

the local authority. The main difference this has made to the company is that we were able to

concentrate on what we do best, which is to manufacture, market and sell high quality insulation

products.

The detailed Planning Application was outside our area of expertise and we were able to

access a professional team to satisfy the company needs. In terms of bottom-line results, we

expect that, once consent for the expansion is given, we will ultimately create more job

opportunity to the locals of Murcia and nearby towns.