Continuous Production System

Difference between Intermittent and Continuous Production System

Difference between intermittent and continuous production system; based on 10 points.

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1. Nature of product.
2. Flexibility of process.
3. Scale of production.
4. Per unit cost.
5. Range of products.
6. Instructions.
7. Staff.
8. Storage of final products.
9. Location change.
10. Capital invested.

Now let's distinguish intermittent and continuous production system.

1. Nature of product :
   1. In intermittent production system, goods are produced based on customer orders and not for stocking.
   2. In continuous production system, goods are produced based on demand forecast and for stocking.
2. Flexibility of process :
   1. In intermittent production system, production process is flexible. The product design goes on changing.
   2. In continuous production system, production process is not flexible. It is standardized. The same product is manufactured continuously.
3. Scale of production :
   1. In intermittent production system, goods are produced on a small scale, so there is no economies of scale.
   2. In continuous Production System, goods are produced on a large scale, so there are economies of large-scale production.
4. Per unit cost :
   1. In intermittent production system, cost per unit may be higher because production is done on a small-scale.
   2. In continuous production system, cost per unit may be lower because production is done on large-scale.
5. Range of products :
   1. In intermittent production system, wide ranges of products are manufactured.
   2. In continuous production system, normally one particular type of product is manufactured.
6. Instructions :
   1. In an intermittent production system, many detailed instructions must be provided depending upon the customer's specification.
   2. In continuous production system, single set of instructions is sufficient for operation. Here, there is no need to repeat the instructions.
7. Staff :
   1. Intermittent production system requires staff with high technical skills and abilities.
   2. Continuous production system requires more managerial skills and less technical skills.
8. Storage of final products :
   1. In an intermittent production system, there is no need to store and stock the final products, because items are produced as per customer's orders.
   2. In a continuous production system, there is a need to store and stock the final products until they are demanded in the market.
9. Location change :
   1. In an intermittent production system, change in location is easy.
   2. In a continuous production system, change in location is difficult.
10. Capital invested :
    1. In an Intermittent production system, capital invested is small.
    2. In a continuous production system, capital invested is very huge.

Eight Important Factors that Affect Productivity

Factors that affect productivity

The following chart shows eight factors that affect productivity.

Image credits © Prof. Mudit Katyani.

The eight main factors that affect productivity are:

1. Technical factors,
2. Assembly factors,
3. Authoritative factor,
4. Cadre factors,
5. Accounts factors,
6. Administration factors,
7. Government factors, and
8. Area factors.

Now let's altercate briefly aloft listed important factors that affect productivity.

1. Technical factors : Abundance abundantly depends on technology. Technical factors are the a lot of important ones. These cover able location, blueprint and admeasurement of the bulb and machinery, actual architecture of machines and equipment, analysis and development, automation and computerization, etc. If the alignment uses the latest technology, again its ability will be high.
2. Assembly factors : Abundance is accompanying to the production-factors. The assembly of all departments should be appropriately planned, accommodating and controlled. The appropriate superior of raw-materials should be acclimated for production. The assembly action should be simplified and standardized. If aggregate is able-bodied it will access the productiveness.
3. Authoritative agency : Abundance is anon proportional to the authoritative factors. A simple blazon of alignment should be used. Authority and Responsibility of every alone and administration should be authentic properly. The band and agents relationships should aswell be acutely defined. So, conflicts amid band and agents should be avoided. There should be a analysis of activity and specialization as far as possible. This will access organization's productiveness.
4. Cadre factors : Abundance of alignment is anon accompanying to cadre factors. The appropriate alone should be called for acceptable posts. After selection, they should be accustomed able training and development. They should be accustomed bigger alive altitude and work-environment. They should be appropriately motivated; financially, non-financially and with absolute incentives. Incentive allowance behavior should be introduced. Job aegis should aswell be given. Opinion or suggestions of workers should be accustomed importance. There should be able transfer, advance and added cadre policies. All this will access the ability of the organization.
5. Accounts factors : Abundance relies on the accounts factors. Accounts is the life-blood of modem business. There should be a bigger ascendancy over both anchored basic and alive capital. There should be able Financial Planning. Basic amount should be appropriately controlled. Both over and beneath appliance of basic should be avoided. The administration should see that they get able allotment on the basic which is invested in the business. If the accounts is managed appropriately the ability of the alignment will increase.
6. Administration factors : Abundance of alignment rests on the administration factors. The administration of alignment should be scientific, professional, future-oriented, aboveboard and competent. Managers should acquire imagination, judgement abilities and alertness to yield risks. They should accomplish optimum use of the accessible assets to get best achievement at the everyman cost. They should use the contempo techniques of production. They should advance bigger relations with advisers and barter unions. They should animate the advisers to accord suggestions. They should accommodate a acceptable alive environment, and should actuate advisers to access their output. Efficient administration is the a lot of cogent agency for accretion ability and abbreviating cost.
7. Government factors : Abundance depends on government factors. The administration should accept a able ability about the government rules and regulations. They should aswell advance acceptable relations with the government.
8. Area factors : Abundance aswell depends on area factors such as Law and adjustment situation, basement facilities, approximation to market, approximation to sources of raw-materials, accomplished workforce, etc.

Explain Need or Importance of Location Planning

Location planning decisions are actual important for all types of business units. This is because it affects the cost, affairs price, and appeal of the product. It is a non-recurring abundant expenditure. Large companies yield the advice of altered professionals like lawyers, accountants, environmentalist, etc. for selecting the able area of plant.

Following angel lists 8 credibility that accompany out accent of area planning.

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There is a need or importance of location planning because it aids in:

1. Expansion,
2. Cost advantages,
3. Discovery of raw-material,
4. Additional facilities,
5. Mergers,
6. Political and social changes,
7. Increasing product demand, and
8. Avail tax benefits.

Now let's altercate aloft credibility highlighting accent of area planning.

1. Expansion : If the aggregation wants to aggrandize and alter its activities, it will accept to seek for a new-location for ambience up its new business unit. In this case, it will charge a area planning.
2. Amount advantages : If an absolute bulb is not abreast a bazaar place, it will access the carriage cost. This will aswell access the amount of the product. So, to abstain this, the aggregation will seek for a new bulb area which is abreast the market. Such area of bulb accept to be acceptable to the advisers and accept to accept a approved accumulation of baptize and electricity. Overall, this will aftereffect in abridgement of the amount of production.
3. Discovery of raw-material : Generally, a bulb accept to be amid at a abode area raw-material is available. For example, if oil and gas are begin at some place, again a new petrochemical bulb has to be set up there for processing purpose.
4. Added accessories : Bulb location-related decisions will accept to be taken if the alignment wants added facilities. New accessories may be all-important to advance the superior of work, to accommodated ascent demands, etc.
5. Mergers : Mergers, joint-ventures, and Amalgamations may advance to alpha a new assemblage at a new-location. It may even crave cease of an absolute bulb unit. In mergers, assembly is mostly started at a new abode as per the new-agreement.
6. Political and amusing changes : Each political affair has its own philosophy. Political changes can advance to changes in bread-and-butter behavior of the government. This may accomplish the absolute area airedale for accomplishing business. Amusing changes may crave assembly of eco-friendly goods. This may crave a change in location.
7. Increasing artefact appeal : Appeal for the company's artefact may access at added places, abnormally in away countries. So, the aggregation will accept to alpha a annex in addition accompaniment or in adopted countries. This would advance to a seek for new area of plant.
8. Avail tax allowances : Government may advertise some tax allowances for starting a business in rural areas. This may actuate entrepreneurs to alpha their business units in limited areas.

Problems in Measuring Productivity - Difficulties

The difficulties or problems in measuring productivity are listed below

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1. Difficulty in barometer achievement : The achievement of an industry may be abstinent in agreement of aggregate (units) or amount (dollars). It is actual difficult to amalgamate both these factors.
   1. If the achievement is constant (similar), again the abundance can be abstinent in agreement of volume.
   2. If the achievement is not homogeneous, again the abundance can be abstinent in agreement of value.
   3. However, if some units are constant and added non-homogeneous, again the industry will face difficulties in barometer productivity.
   Similarly, it is actual difficult to acquisition out whether the by-products and work-in-progress should be included in achievement or not. If it is included, again it is actual harder to acquisition its value.
2. Difficulty in barometer inputs : Most industries do not accept able annal of the inputs of land, labor, basic and machines. Even if such annal are available, it is actual difficult to account the exact amount of man hours formed i.e. the ascribe of labor.
3. Factorial abundance :
   • Factorial Abundance agency to account the abundance of altered factors of assembly separately.
   • Some administration experts say that a individual agency of assembly cannot aftermath annihilation by itself. Therefore, it has no productivity. A individual agency of assembly has abundance alone if it is accumulated with added factors of production.
   • Therefore, according to these administration experts, the abstraction of factorial abundance is meaningless.
4. Changing altitude : There is a connected change in the amount of inputs and outputs, superior of raw-materials, machines and tools, superior of labor, etc. All this creates difficulties in barometer productivity.
5. Account area : It is actual difficult to admeasurement the abundance of account sectors like Banking, Insurance, Education, etc. This is because the achievement of the account area is intangible.
6. Altered periods : It is actual difficult to analyze the abundance of two altered periods. For example, allegory of abundance during a war aeon with a accord aeon is meaningless.
7. Difficulty in barometer man-hours : It is difficult to acquisition out the exact amount of advantageous man-hours. This is because accomplishment paid to the advisers aswell includes the amount of abandoned time.
8. Technological change : Changes in technology will could cause a change in the attributes and superior of output. Therefore, altitude of abundance will become difficult.
   

Nine Main Benefits of Higher Productivity

Benefits of higher productivity

The following image depicts a list of nine benefits of higher productivity.

Image credits © Prof. Mudit Katyani.

The nine main benefits of higher productivity are:

1. Higher profit,
2. Employees welfare,
3. Better return
4. Nice relations,
5. Customer satisfaction,
6. Good credit rating,
7. Goodwill,
8. Better credit terms, and
9. Low turnover.

Now let's discuss briefly these important benefits of higher productivity.

1. Higher profit : Higher productivity enables the company to produce more output. This results in more profit to it. This profit can be used for expansion and other activities.
2. Employees welfare : Higher productivity brings more profit to the company. This profit can be used to provide better facilities and working conditions to the employees. So, it results in welfare of the employees.
3. Better return : The company gets better return on investment due to higher productivity. So, they pay a better dividend (share of profit) to the shareholders. The market price of the share will also increase.
4. Nice relations : Higher productivity results in nice relations between the management and the employees. Good working conditions, facilities and incentives motivates employees to give their best to the organization.
5. Customer satisfaction : Higher productivity results in better customer satisfaction. This is because customers are provided with good-quality products at low prices. Satisfaction of customers will result in their loyalty towards the company.
6. Good credit rating : Higher productivity results in a good credit rating by financial institutions. This will enable the company to get cheap funds from the market to meet working and fixed capital requirements.
7. Goodwill : Due to higher productivity, the company will have a good corporate image (goodwill) in the minds of social entities. This includes: The shareholders, government, suppliers, financial institutions, customers, etc.
8. Better credit terms : Higher productivity helps the company to get better terms from the suppliers. The suppliers may give better credit terms due to its goodwill.
9. Low turnover : Higher productivity enables the company to provide better facilities and working conditions to the employees. This will make the employees loyal. Hence, employee turnover and absenteeism will reduce.

Steps Procedure of Routing in Production

Steps or Procedure of Routing in Production

Following image depicts main steps or procedure of routing in production.

Following important steps are involved in the procedure of routing:

1. Product analysis determines what to manufacture and purchase.
2. Product-analysis is done again to determine materials required for production.
3. Fix the manufacturing operations and their sequences.
4. Decide the number of units to be manufactured in a batch (lot).
5. Estimate the margin of scarp in each lot of production.
6. Analyze the production cost.
7. Prepare production control forms for effective routing.
8. Prepare a separate route-sheet for each order.

Now let's discuss above steps in routing.

1. Product analysis

Product analysis is the first step in the routing procedure. This is done to find out what parts (goods) should be manufactured and what parts should be purchased. This depends mainly on the relative cost. It also depends on other factors such as technical consideration, purchase policies, availability of personnel, availability of equipment, etc. Generally, during less-busy periods; most of the parts are manufactured in the factory. However, during the busy period, many parts are purchased from outside.

2. Determine required materials

Product-analysis is done again to find out what materials are required for production and their quantity and quality.

3. Fix manufacturing operations

The next step in the routing procedure is to fix (decide) the manufacturing operations and their sequences. The detailed production procedure is then scheduled (planned). Information required for this is derived from technical experience and by analyzing the machine capacity.

4. Determine size of batch

The number of units to be manufactured in any one lot (group or batch) should be decided. This is done concerning customers' orders. Necessary provision should also be made for rejections during the production process.

5. Estimate margin of scrap

The amount of scrap in each lot, should be estimated. Generally, a scrap margin is between 2% to 5% of production.

6. Analyze the production cost

Estimating the cost of manufactured goods is actually the function of costing department. However, the routing section provides necessary data to the costing department that enables it to analyze the production cost.

7. Prepare production control forms

Production Control forms such as Job Cards, Inspection Cards, Tool Tickets, etc. should be prepared. These forms should contain complete information for effective routing.

8. Prepare route sheet

Route sheet is prepared on a production control form. It shows the part number, description of the part and the materials required. It is prepared by a route clerk. Separate route-sheet is required for each part of a customer's order.

Stages Steps in Production Planning and Control

Steps in Production Planning and Control

According to the British Standards Institute, there are four stages, steps, techniques or essentials in the process of production planning and control.

The four stages or steps in production planning and control are:

1. Routing,
2. Scheduling,
3. Dispatching, and
4. Follow-up.

Initial two steps i.e. Routing and Scheduling, relate to production planning.

Last two steps i.e. Dispatching and Follow-up, relate to production control.

Now let's continue our discussion further to understand each step in detail.

1. Routing

Routing is the first step in production planning and control.

Routing can be defined as the process of deciding the path (route) of work and the sequence of operations.

Routing fixes in advance:

1. The quantity and quality of the product.
2. The men, machines, materials, etc. to be used.
3. The type, number and sequence of manufacturing operations, and
4. The place of production.

In short, routing determines ‘What’, ‘How much’, ‘With which’, ‘How’ and ‘Where’ to produce.

Routing may be either very simple or complex. This depends upon the nature of production. In a continuous production, it is automatic, i.e. it is very simple. However, in a job order, it is very complex.

Routing is affected by the human factor. Therefore, it should recognize human needs, desires and expectations. It is also affected by plant-layout, characteristics of the equipment, etc.

The main objective of routing is to determine (fix) the best and cheapest sequence of operations and to ensure that this sequence is followed in the factory.

Routing gives a very systematic method of converting raw-materials into finished goods. It leads to smooth and efficient work. It leads to optimum utilization of resources; namely, men, machines, materials, etc. It leads to division of labor. It ensures a continuous flow of materials without any backtracking. It saves time and space. It makes the work easy for the production engineers and foremen. It has a great influence on design of factory's building and installed machines.

So, routing is an important step in production planning and control. Production planning starts with it.

Read article on procedure of routing in production.

2. Scheduling

Scheduling is the second step in production planning and control. It comes after routing.

Scheduling means to:

1. Fix the amount of work to do.
2. Arrange the different manufacturing operations in order of priority.
3. Fix the starting and completing, date and time, for each operation.

Scheduling is also done for materials, parts, machines, etc. So, it is like a time-table of production. It is similar to the time-table, prepared by the railways.

Time element is given special importance in scheduling. There are different types of schedules; namely, Master schedule, Operation schedule and Daily schedule.

Scheduling helps to make optimum use of time. It sees that each piece of work is started and completed at a certain predetermined time. It helps to complete the job systematically and in time. It brings time coordination in production planning. All this helps to deliver the goods to the customers in time. It also eliminates the idle capacity. It keeps labor continuously employed.

So, scheduling is an important step in production planning and control. It is essential in a factory, where many products are produced at the same time.

3. Dispatching

Dispatching is the third step in production planning and control. It is the action, doing or implementation stage. It comes after routing and scheduling.

Dispatching means starting the process of production. It provides the necessary authority to start the work. It is based on route-sheets and schedule sheets.

Dispatching includes the following:

1. Issue of materials, tools, fixtures, etc., which are necessary for actual production.
2. Issue of orders, instructions, drawings, etc. for starting the work.
3. Maintaining proper records of the starting and completing each job on time.
4. Moving the work from one process to another as per the schedule.
5. Starting the control procedure.
6. Recording the idle time of machines.

Dispatching may be either centralized or decentralized:

1. Under centralized dispatching, orders are issued directly by a centralized authority.
2. Under decentralized dispatching, orders are issued by the concerned department.

4. Follow-up

Follow-up or Expediting is the last step in production planning and control. It is a controlling device. It is concerned with evaluation of the results.

Follow-up finds out and removes the defects, delays, limitations, bottlenecks, loopholes, etc. in the production process. It measures the actual performance and compares it to the expected performance. It maintains proper records of work, delays and bottlenecks. Such records are used in future to control production.

Follow-up is performed by ‘Expediters’ or ‘Stock Chasers’.

Follow-up is necessary when production decreases even when there is proper routing and scheduling. Production may be disturbed due to break-downs of machinery, failure of power, shortage of materials, strikes, absenteeism, etc.

Follow-up removes these difficulties and allows a smooth production.

Functions of Production Planning and Control - Importance

Functions of Production Planning and Control

Functions of production planning and control are listed and explained below.

The importance or functions of production planning and control:

1. Utilizes resources effectively.
2. Makes flow of production steady.
3. Estimates production resources.
4. Maintains necessary stock levels.
5. Coordinates departmental activities.
6. Minimizes wastage of resources.
7. Improves labor efficiency.
8. Helps to face competition.
9. Provides better work environment.
10. Facilitates quality improvement.
11. Customer satisfaction.
12. Reduces production costs.

Now let's discuss above listed functions of production planning and control.

1. Utilizes resources effectively

1. Production planning and control result in effective utilization of plant capacity, equipment and resources.
2. It results in low-cost and high-returns for the organization.

2. Makes flow of production steady

1. Production planning and control ensure a regular and steady flow of production.
2. All machines are put to their optimum use.
3. This helps in achieving a continuous production of goods.
4. This also helps to provide a regular supply of goods to consumers.

3. Estimates production resources

1. roduction planning and control help to estimate the resources like men, materials, machines, etc.
2. The estimate is made based on sales forecast.
3. So, production is planned to meet sales requirements.

4. Maintains necessary stock levels

1. Production planning and control prevent over-stocking and under-stocking of materials.
2. Necessary stocks are maintained.
3. Stock of raw-material is maintained at a proper level in order to meet production demands.
4. Stock of finished goods is also maintained to meet regular demands from customers.

5. Coordinates departmental activities

1. Production planning and control helps to co-ordinate the activities of different departments.
2. Consider, for an example, the marketing department co-ordinates with production department to sell the goods.
3. This results in profit to the organization.

6. Minimizes wastage of resources

1. Production planning and control ensure proper inventory of raw-materials and effective handling of materials.
2. This helps to minimize the wastage of raw materials.
3. It also ensures production of quality goods. This results in minimal rejects.
4. So, it results in minimum wastage.

7. Improves labor efficiency

1. There is maximum utilization of manpower.
2. Training is provided to the workers.
3. The profits are shared with the workers in form of increased wages and other incentives.
4. Workers are motivated to perform their best. This results in improved labor efficiency.

8. Helps to face competition

1. Production planning and control help to give delivery of goods to customers in time.
2. This is because of regular flow of quality production.
3. So, the company can face competition effectively, and it can capture the market.

9. Provides better work environment

1. Production planning and control provide a better work environment to workers.
2. They get better work facilities, proper working hours, leave and holidays, increased wages and other incentives.

10. Facilitates quality improvement

1. Production planning and control facilitate quality improvement because the production is checked regularly.
2. Quality consciousness is developed among the employees through training, suggestion schemes, quality circles, etc.

11. Customer satisfaction

1. Production planning and control help to give a regular supply of goods and services to consumers at competitive market price.
2. This results in customer satisfaction.

12. Reduces production costs

1. Production planning and control make optimum utilization of resources, and it minimizes wastage.
2. It also maintains an optimal level of inventories.
3. Overall, this reduces the production costs.

Relationship Between Production Planning and Control

Relationship Between Production Planning and Control

Production planning and control are closely related to one another. They go hand in hand and are supplementary in character.

Ten points explain the relationship between production planning and control:

Image credits © Prof. Mudit Katyani.

1. Meaning.
2. Goals.
3. Course of action.
4. Work performance.
5. Operations.
6. Resources.
7. Directions.
8. Weaknesses.

Let's discuss “How production planning and control are related?”

1. Meaning

According to Ray Wild,

“Production planning is concerned with the determination, acquisition and arrangement of all facilities necessary for future operations.”

Fixing goals of production and estimating resources required to achieve this goal is called production planning. It forecasts individual step in the production process. It helps to achieve production goals effectively, promptly and economically.

According to James Lundy,

“The production control function involves the co-ordination and integration of the factors of production for optimum efficiency.”

Production control is done after production planning. It implements the production plan. It directs, co-ordinates and controls the production. It helps to achieve the production goals. It helps to have maximum production at minimum cost. It also helps to have timely delivery of goods.

2. Goals

1. Production planning fixes the goals for production.
2. Production control achieves these goals.

3. Course of action

1. Production-planning fixes the plans, strategies, etc.
2. Production control puts these plans, strategies, so on; into action, i.e. it implements the plans, strategies, etc.

4. Work performed

1. Production planning decides who should do the work and when.
2. Production control ensures that each department complete its work on schedule.

5. Operations

1. Production planning decides the operations which are required for production.
2. Production control regulates and supervises the operations required for production.

6. Resources

1. Production planning estimates the resources that are required for production.
2. Production control makes available resources that are required for production.

7. Directions

1. Production planning shows the directions.
2. Production control follows these directions.

8. Weaknesses

1. Production-planning makes modifications (changes) in the production plans to remove the weakness in the production process.
2. Production control collects information about the production process. It finds out the weaknesses in the production process and informs the production planners about it.

Conclusion

The process of production planning and control is a continuous one. Since, control starts where planning ends and planning starts where control ends.

What is Productivity? Definition Meaning

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What is Productivity? Definition ↓

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According to Peter Drucker,

“Productivity means the balance between all factors of production that will give the greatest output for the smallest effort.”

The meaning of productivity is shown in the following diagram.

Image credits © Prof. Mudit Katyani.

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Meaning of Productivity ↓

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Productivity is the relationship between output and input. It is expressed or measured as a ratio of output and input.

Productivity equals output divided by input.

Two simple examples of productivity measurement:-

1. Productivity of a manufacturing unit can be measured in terms of the number of goods-produced in some fixed amount of time (usually in hours).
2. Generally, in service industry, productivity is measured in terms of income generated by an employee for his or her's organization.

Nowadays, organizations give more importance to productivity and less importance to efficiency.

Higher productivity indicates the following:-

1. Best utilization of the available human and material resources.
2. Minimum wastage and losses of materials.
3. Quantitative and qualitative production of goods at lower cost.

Guidelines for Determining Performance Dimensions

Guidelines for determining performance dimensions

Guidelines for determining performance dimensions are depicted below.

The dimensions of performance must be as follows:

1. Performance dimensions (Quantity & Quality) must be fixed in advance.
2. Dimensions must be clearly defined and easily understood by employees.
3. They must be consistent with the image or goodwill of the company.
4. Quality standards must be laid down even for inputs.
5. Workers must be properly trained about performance dimensions of company.
6. Mission statement and philosophy of an organization must include it.

Now let's discuss guidelines for determining performance dimensions.

1. Fixed in advance

Performance dimensions about quality and quantity must be specified or fixed in advance. This will guide the employees because they know exactly how much quality and quantity of output they have to produce individually and collectively, before they start making the goods.

2. Clear and easy to understand

The shape, size, quality, weight, etc. must be clearly defined. It must be simple and easy to understand for the employees who will implement it. Implementation will be effective only if the employees understand the performance dimension.

3. Consistent with image

Performance dimensions, whether quantity or quality depends on the image or goodwill of the company.

For example, a mineral water company focuses on quality by highlighting the seal of the cap nf the bottle to remove doubts that the bottle may be refilled.

4. Quality standards for inputs

If the performance dimensions for output have to be achieved it is necessary to fix standards for inputs. The suppliers must be informed about the quality standard for raw material.

5. Training of performance dimensions

It is necessary to train the workers about performance dimensions of the company. This will help them to work effectively towards achieving organizational and individual goals.

6. Must be in mission statement

Performance dimensions must be included in the mission statement and philosophy of the organization.

For example, a mission statement of a college can focus on providing good quality of education. This must be shown in the policies, programs, courses, etc. of the college.

Classification of Performance Dimensions - Quantity Quality

Classification of Performance Dimensions

A dimension is a measurable extent of any kind. It is usually measured in terms of various extends like shape, size, quality and quantity.

The performance dimensions can be classified into following:

1. Quantity - which is the primary dimension of performance.
2. Quality - which is the secondary dimension of performance.

Image below depicts this classification of performance dimensions.

Image credits © Prof. Mudit Katyani.

1. Quantity is Primary Dimension of Performance

Quantity of output is the primary dimension of performance.

Examples of “How primary dimension (Quantity) is measured?”:

1. Manufacturing unit : A primary dimension for a manufacturing unit is the quantity of output produced within a given time period. Higher the output more is the efficiency of workers.
2. Company : A primary dimension of quantity can also be applied to a measure company’s efficiency. For example, a car manufacturing company may fix the performance dimension of producing at least 10 cars in a day. If the output is more than 10 cars, then the company is considered to be operating efficiently.
3. Service sector : In a service sector, it is difficult to fix such a standard because here it is hard to measure performance in terms of quantity. However, it can be expressed as the number of customers served. For example, a hotel can measure its performance by finding out how many customers it serves daily.

2. Quality is Secondary Dimension of Performance

Quality of output is the secondary dimension of performance.

If most of the output is made as per the quality standards, then the quality of output is good.

Quality standards are expressed as a percentage of units that are allowed as defective.

Companies that want a Six Sigma standard must see that not even three units in a million are defective.

With competition increasing day by day, companies are giving a lot of importance to the quality of the product. By giving warranty/guarantee for their products, companies are using quality as a sales promotion tool.

Companies must use modern techniques to improve their product quality. They must provide better value for the consumer's money by focusing on the quality of their products.

Advantages and Disadvantages of Work Sampling Method

Advantages of Work Sampling

The benefits or advantages of work sampling method are as follows:

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1. Work sampling gives an unbiased result since workmen are not under close observation.
2. A work sampling study may be interrupted at any time without affecting the results.
3. Work sampling can be conducted by anyone with limited training. There is no need to have experts.
4. Team work can be studied by work sampling and not by the time-study.
5. Work sampling is economical and less time-consuming than time study. This is because more than one worker can be studied at the same time. Secondly, observer needs not to be present himself for a long time.

Disadvantages of Work Sampling

The limitations or disadvantages of work sampling method are as follows:

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1. Work sampling is not economical for short cycle jobs. It is also uneconomical to study a single worker or even small group of workers.
2. Unlike time study, it does not allow a small breakdown of activities and delays.
3. Working men may change their normal method of working when they see an observer. Therefore, the results from the work study may not be accurate.
4. In work sampling method, the observations are limited or insufficient. So, the results may not be accurate.
5. This method normally does not record the workers' speed of working.

Work Measurement Techniques Methods Types

Work Measurement Techniques

Image depicts different work measurement techniques, methods or types.

Work measurement techniques are listed below:

1. Historical data method - It uses the past performance data to set performance standards.
2. Time study - It uses stop watch and is best suited for short-cycle repetitive jobs.
3. Work sampling - Here, workers are observed many times at random.
4. Synthesis method - Here, the full job is divided into element or parts.
5. Predetermined motion time system (PMTS) - Here, normally, three times are fixed for one job namely; normal, fast, and very-fast.
6. Analytical estimating - It is used for fixing the standard time for jobs, which are very long and repetitive.

Now let’s discuss more above techniques of work measurement.

1. Historical data method

Historical data method uses the past-performance data. Here, past performance is used as a guideline for setting work performance standards. The main advantage of this technique is that it is simple to understand, quicker to estimate and easier to implement. However, past performance is not the best basis for fixing performance standards. This is because there may be many changes in technology, employees’ behavior, abilities, etc.

2. Time study

Time study with the help of a stop watch is the most commonly used work measurement method. This technique was developed by Frederick Winslow Taylor (1856-1915).

Time study is best suited for short-cycle repetitive jobs. Most of the production jobs can be easily timed by a time-study.

Time study procedure consists of the following steps:

1. Select the job to be timed.
2. Standardize the method of doing the job.
3. Select the worker to be studied.
4. Record the necessary details of the job and conditions of work.
5. Divide the job into elements. Here, ’element’ is a part of the job.
6. Find out the time taken to do every single element.
7. Keep provisions for relaxation, etc.
8. Fix the standard time for doing the job.

3. Work sampling

Work sampling method was original developed by Leonard Henry Caleb Tippett (1902-1985) in Britain in 1934. In this technique, the workers are observed many times at random. It is done to find out for how much time the worker is actually on the job. It checks how long he is working and how much time he is not working (idle time).

Work sampling method does not involve stop watch measurement. The purpose of work sampling technique is to estimate what proportion of a worker’s time is devoted to work-related activities.

Work sampling method involves following three main steps:

1. Deciding what activities are defined as ’working’. Non-working are those activities which are not defined as working.
2. Observe the worker at selected intervals and record (write down) whether he is working or not.
3. Calculate the portion of time (P), a worker is working.

A portion of time (P) a worker is working equals to ’Number of observations during which working occurred’ divided by ’Total Number of observations.’

The above calculation is used as a performance standard.

To know more, read advantages and disadvantages of work sampling.

4. Synthesis method

In synthesis method, the full job is first divided into elements (parts). Then the time taken to do each element of the job is found out and synthesized (totaled). This gives the total time taken for doing the full job. In this technique, the time taken to do each element of the job is found out from previous time studies. So, this technique gives importance to past-time studies of similar jobs. It also uses standard data.

Standard-data is the normal time taken for doing routine jobs. Standard data is easily available for routine-jobs like fitting screws, drilling holes, etc. So there is no need of calculating these times repeatedly. Most companies use Standard-data. They do not waste time doing studies for all elements of the job. This is because standard time is already available for most elements of a job.

For example, a job of publishing a book contains four elements viz; typing, editing, printing and binding. The time taken for doing each element is first found out. Suppose, typing takes 40 days, editing takes 30 days; printing takes 20 days and binding takes 10 days. Then the time taken to do all the elements are totaled. That is, it takes 40 + 30 + 20 + 10 = 100 days to publish a book. This information is taken from previous time studies of other printing jobs or from the standard data.

Synthesis technique also considers the level of performance. Level of performance refers to the speed of performance, which is either, normal, fast, or very-fast.

The benefits or advantages of synthesis method:

1. It provides reliable information about standard time for doing different jobs. This is because it is based on many past time studies.
2. It is economical because there is no need to conduct new time studies.

5. Predetermined motion time system

In ’Predetermined Motion Time System’ method or simply PMTS technique, the normal times are fixed for basic human motions. These time values are used to fix the time required for doing a job. Normally, three times are fixed for one job. That is, one time is fixed for each level of performance. The level of performance may be normal, fast and very-fast.

PTMS is better than motion studies because it gives the detailed analysis of the motion, and it fixes the standard time for doing that motion.

PTMS technique is used mostly for jobs, which are planned for future. However, it can also be used for current jobs as an alternative to time study.

The benefits or advantages of PMTS method:

1. It is a very accurate method. It avoids subjective judgement or bias of rater.
2. It is an effective and economical method for repetitive jobs of short duration.
3. There is no interference in the normal work routine, and so it does not face any resistance from the employees.
4. It helps to improve the work methods because it gives a detailed analysis of the motions.
5. It is more economical and fast compared to normal time studies.

6. Analytical estimating

Analytical estimating method or technique is used for fixing the standard time for jobs, which are very long and repetitive. The standard-time is fixed by using standard-data. However, if standard data is not available, then the standard time is fixed based on the experience of the work-study engineer.

The benefits or advantages of analytical estimating technique:

1. It helps in planning and scheduling the production activities.
2. It provides a basis for fixing labor rate for non-repetitive jobs.
3. It is economical because it uses standard data for fixing the standard time of each job.

One disadvantage or limitation of analytical estimating method:

1. When standard-data is not available for a job, then the standard time is fixed by the work-study engineer. He uses his experience and judgement for estimating the standard-time. This is not accurate compared to a scientific time study.

So, these are different techniques of work measurement.

Work Measurement - Definition Meaning Purpose Objectives

Definition of Work Measurement

According to International Labour Organization

“Work measurement is the application of techniques designed to establish the time taken for a qualified worker to carry out a specified job (task) at a defined level (rate) of performance.”

International Labour Organization (ILO) stated this important definition of work measurement in its publication.

Now let's proceed to know the meaning of work measurement.

Meaning of Work Measurement

The meaning of work measurement is mainly based on three key steps.

Work measurement means to:

1. Find out the different elements (parts) of the production process (job).
2. Find out the time taken by each element.
3. Fix the standard time for performing the production process.

For example, publishing a book is a production process. There are many elements, which are involved in the publication of a book. In other words, book publication involves production steps like typing a manuscript, editing the written matter, proof reading it, followed by printing and binding.

Work measurement involves finding out the time taken for doing each element. The time taken for each element is totaled. This is the standard time for publishing the book. Here, provisions are also made for relaxation, breakdown of machines, etc.

Purpose of Work Measurement

The uses, importance, objectives or purpose of work measurement data:

The main purpose of work measurement:

1. Manpower planning.
2. Production planning and scheduling.
3. Estimating productions costs.
4. Cost reduction and control.
5. Rational basis for incentives.
6. Performance appraisal.
7. Training of employees.
8. Comparing alternative methods.
9. Accepting new orders.
10. Fixing the selling cost.

Now let's discuss, "What work measurement is used for?"

1. Manpower planning

Work measurement data is used for manpower planning. This is because it gives information about the total hours required to perform the job. This helps to estimate the number and type of employees who are required to do the job. It ensures that there will not be any excess staff.

Work measurement data also helps to estimate the number of machines and equipment that will be required in the future. This helps to find out the number of employees who will be required to handle these machines and equipment.

2. Production planning and scheduling

Work measurement data is used for production planning and scheduling. This is because this data is used for making production standards. This data is also used for scheduling. Scheduling means to fix starting and finishing time for each job. This cannot be done without work measurement data.

3. Estimating productions costs

Work measurement data helps to estimate the production cost. This is because it gives management accurate data about production time. This data helps to estimate the labor costs. Secondly, indirect costs such as fuel and power consumption, rent and salaries of staff, etc. also depends on the production time factor.

4. Cost reduction and control

Work measurement data is used to reduce and control costs. It helps to reduce the labor cost. This is because it provides a guideline to the employees to work efficiently and effectively. This helps to make optimum use of the available manpower. So the labor cost will reduce.

Work measurement data helps to reduce material costs. It also helps to increase machine productivity. All these steps help to reduce and control production costs.

5. Rational basis for incentives

Work measurement data is used for making incentive schemes for the employees. Incentive schemes motivate employees to work hard. The efficient employees are rewarded by giving them a higher wage rate.

Work measurement fixes the standard-time for doing the work. Those who complete their work within a standard time or faster than the standard-time are rewarded with higher wages. This encourages all employees to work fast and efficiently.

6. Performance appraisal

Performance appraisals are done to find out whether the employees are efficient or not. It is done to find strengths & weaknesses of employees.

Work measurement helps to do performance appraisals. This is because it fixes the standard-output and standard-time for each employee. The employees who produce the standard-output within the standard-time are efficient and vice versa. Thus, it also helps to find out the strengths and weaknesses of the employees.

7. Training of employees

Work measurement helps to train the employees, especially the new employees. It divides the full job into small elements (parts). It gives complete details about each element of the job. It gives details about; how to do each element, the time taken for each element, the machines and tools involved in each element, etc. These details are used for training the employees.

8. Comparing alternative methods

There are many methods for doing a job. Work measurement data helps to choose the best method for doing a job.

9. Accepting new orders

Work measurement data tells us when will each job be completed. So, it helps the company to decide whether to accept new orders or not. In other words, it helps to find out whether the new-order will be completed within a specific time limit.

10. Fixing the selling cost

Work measurement data also helps to fix the selling cost of product. This is because it estimates the cost of production, especially the labor cost. Selling cost is decided after fixing the estimated production cost.

Standards Required at Various Levels of Production

Standards Required at Various Levels of Production

Standards are fixed at various levels of production. This is done to ensure some minimum expected output in the production process. Standards are established to maintain a production efficiency. These help to optimally utilizing various factors of production and achieve some fixed amount of output in terms of both; quality and quantity.

Important standards required at various levels of production are listed below.

1. Individual Standards.
2. Departmental Standards.
3. Plant Standards.

Following points discuss these standards in detail.

1. Individual Standards

Individual standard is the output expected from an average-worker under average working conditions for a given period of time.

Generally, individual standards are fixed for all employees in the organization, especially at the lowest level.

The individual standard of a worker is the output which he must produce in a fixed period of time. In other words, it is the time given to him for producing one unit of output.

For example, a performance standard may be four units per hour or 15 minutes per unit. Both are the same. So, a worker who is doing packing-work may be asked to pack four products per hour. In other words, he is given 15 minutes to pack a single product.

Therefore, an individual standard is a fixed number of products, which must be generated by a worker in a fixed-period. That is, it is the fixed-output of the worker per unit of time.

Individual standard also has other names like labor standard, employee standard, employee time standard, or time standard.

The concept of individual standards in terms of production is depicted below.

Image credits © Prof. Mudit Katyani.

2. Departmental Standards

The company is divided into different departments. Each department is given a specific function or work to do. Standards are fixed for each department. Here, standards are fixed for quantity of output, quality of output, costs of output, etc.

A department consists of some individuals. Departmental standards are fixed by adding individual standards of each member of the department. A department's performance is judged based on these fixed standards.

For example: Assume, the standard output of the production department is 1000 units per day. If the production department produces exactly 1000 units per day, then it is 100% efficient. If it produces more than 1000 units, its efficiency is greater than 100%. If it produces less than 1000 units, then its efficiency is below 100%.

The manager of the department is responsible for getting the work done from his workers. He must see that all the work is done in accordance with departmental standards. He must see that all his department's objectives are achieved. He must try his level best to improve the team spirit in his department. He must also improve the co-ordination and co-operation in his department.

Concept of departmental standards in production terms is depicted below.

Image credits © Prof. Mudit Katyani.

3. Plant Standards

Plant standards are fixed for an entire plant or a factory. A plant is a place or location where goods are produced and/or assembled. It consists of that place where machines, equipments, materials and workers interact with each other, directly or indirectly, with an intention to produce goods.

Plant standards are fixed for:

1. Total output in quantitative and qualitative terms.
2. Various cost in the production process.

The output depends on the level of technology, the type of employees and the estimated demand for the product.

Plant standards mean to fix the output to be produced for a given period. Here, both quantitative and qualitative output is fixed. The pant standard must be realistic. In other words, it must not be very high or too low. Generally, it is based on the output produced in the past. However, necessary adjustments are made for future demand of the product.

Various costs are involved in the production of goods, namely;

1. Labor costs.
2. Material costs.
3. Overhead costs.

Plant-standards also mean to fix the standard labor, material and overhead costs. After manufacturing a product, the actual labor, material and overhead-costs are compared with the standard-costs. After comparison, the difference found is noted down. Further, the reasons why this difference occurred are also looked upon. After this, the difference is corrected to minimize the cost in the future. Every organization wants to reduce its costs. However, costs reduction must never be done by compromising the quality of the produced goods.

The concept of plant standards in terms of production is depicted below.

Image credits © Prof. Mudit Katyani.

Production Standards Meaning Definition Advantages Demerits

Meaning of Production Standards

Production standard is a criterion or yardstick or benchmark. It is used for measuring the production of the company.

Production standards are fixed for raw materials, production process, tools and equipment, workers, conditions of work, speed of work, quantity of output, quality of output, etc.

Production standards are mostly expressed in quantitative terms. That is, it is expressed in terms of units of output, units of time, kilograms, plant capacity, so on.

Production standards give direction and guidance to the production department. It is also used for controlling the production activities. That is, the actual production can be compared with the production standards, and the difference can be found out and corrected. It is a point of reference. It helps to find out whether the work was done as per plan.

Image credits © Prof. Mudit Katyani.

Definition of Production Standards

According to Adam and Elbert, production standard is defined as follows:

"Production standard is a quantitative criterion established as a basis for comparison in measuring or judging output."

Advantages of Production Standards

The merits, benefits, or advantages of production standards are as follows:

1. Optimum use of labour.
2. Fixing wages.
3. Basis for promotion and training.
4. Customer satisfaction.
5. Less wastage.
6. Budgeting possible.
7. Effective planning.

Now let's discuss each advantage of production standards one by one.

1. Optimum use of labour

If production standards are fixed beforehand, then all the work will be planned in advance So, everyone will know exactly what to do, how much to do, how to do it, etc. The performance of the workers can be evaluated. Their mistakes, if any, can be corrected in time. There will be no wastage of labour. So, production planning helps to make optimum use of labour.

2. Fixing wages

Production standards help to fix the wages, salaries, bonus, perks, etc. of the workers and managers. The performance of each person can be evaluated with the help of production standards. So, each person will be paid according to his performance.

3. Basis for promotion and training

Production standards can be used as a basis for giving promotion, transfers, training, etc., to the employees and managers. This is because it helps to evaluate their performance. The employees having the best performance can be given promotions. The employees whose performance is bad can be sent for training to improve their performance.

4. Customer satisfaction

Production standards help to give satisfaction to the consumers. This is because production standards are fixed for quantity, quality, time, cost, etc. So, the consumers will get a regular supply of good-quality products at low prices. This will give satisfaction to the customers and profits to the company.

5. Less wastage

Production standards help to reduce the wastage of human, material and financial resources in the company. This is because standards are fixed for almost everything in the production department. There are standards for raw materials, workers, speed of work, quantity of work, quality of work, production process, etc. These standards guide the workers. It helps them to avoid mistakes. After they complete their work, it is compared with the standards. The mistakes, if any, are found out and corrected in time. Production standards help to avoid wastage of investment in unwanted machines and raw materials. It also helps to avoid having more employees than necessary. All this helps to reduce wastage in the company.

6. Budgeting possible

Production standard makes budgeting possible. That is, the production manager can prepare a budget for all the production expenses. He can prepare a budget for the materials' costs, labour costs, machine costs, repair and maintenance costs, etc. This will help to avoid wastage and to reduce the production cost. It will also reduce financial problems in the organization.

7. Effective planning

Production standards are the base of production planning. It helps to have effective production planning. Production planning helps the production to run smoothly. It sees that all the machines are utilized fully. It helps over and under stocking of materials and finished goods. It helps to deal with emergencies like the breakdown of machines.

Demerits of Production Standards

The limitations, disadvantages, or demerits of production standards are:

1. Limiting factor.
2. No improvement.
3. Individual difference not considered.
4. Difference in job methods.
5. Rigidity.

Now let's discuss each demerit of production standards one by one.

1. Limiting factor

Some experts feel that a standard is a limiting factor. A standard is a quantitative goal. Once the employee achieves this goal he will be satisfied. He will not try to work more than the standard. He will not try to increase the standard. After some time, he will become lazy.

2. No improvement

Standard are fixed for quantity, time, costs, etc. These standards are not changed for a long period of time. So, during this time the quantity of output, quality of output, speed of work, cost of production, etc., will remain the same. There will be no improvement. This is against Kaizan. Kaizan is a Japanese concept. According to this concept, there must be continuous improvements in the organisation.

3. Individual difference not considered

Standards do not consider individual difference in doing work. The same standard is made for all the employees. However, all the employees are not equally efficient in their work. So, if the standard is made too high, then the less-efficient employees will not be able to complete their work in time. Similarly, if the standards are low, efficient employees will complete their work before time.

4. Difference in job methods

Methods of doing the job are not always standardized. Most companies change their methods according to change in machines. It is difficult to fix standards if the job methods go on changing. Even if standards are fixed, comparisons become hard due to change of methods.

5. Rigidity

Standards are not changed regularly. This results in rigidity. However, flexibility is required to face competition. The product must be changed regularly as per the varying needs and wants of the consumers.