Page 26 - DMGT501_OPERATIONS_MANAGEMENT

Operations Management

Notes of the resources, etc. If we could measure these wastages and have a measure of the wastage, then
it becomes a tool for measuring the efficiency of the inputs called "Wastivity".

Example: The typical examples of wastes are:
1. Idling of resources, e.g., materials waiting in the form of inventory in the stores, machines
waiting to be loaded, job orders waiting to be processed, patients waiting for service at a
doctor's clinic customers waiting for reserving a berth/seat at a reservation counter.
2. Production of defective goods and services, e.g., components/parts not conforming to
specifications, higher conversion costs resulting from inefficient/poor methods of working
or process not set correctly, poor quality of materials used, excessive maintenance delays,
etc.
For an effective and efficient production system, wastage of all kinds must be eliminated or at
least minimised.
Checklist for above can be prepared through the parameters responsible for wastage generation
and fixing standards from time to time.

Reduction of scrap or rejections, or percentage increase in yield, just by one (1) % can save an
organisation tremendously as compared to an increase in production and sales efforts by at least
10-15 %.
Productivity can be increased by any of the following three ways:
1. By increase of output, keeping input constant.
2. By decreasing inputs for producing the same output.

3. By increasing outputs proportionately higher than increases affected in inputs.
Various factors contributing to increase of productivity can be summarized as below:
1. Better utilisation of resources like men, machines and materials.
2. Using efficient and effective methods of working.

3. Through good and systematic plan-layouts using guidelines and principles of motion-
economy.
4. Reducing material handling through better layouts and using appropriate material
handling equipments/facilities.
5. Selection of appropriate technology suiting the product(s) and the production process
selected.
6. Selection of proper maintenance policy, keeping in mind the service level, preventive
maintenance and breakdown maintenance.

7. Provision of healthy and safe working conditions to workmen.
8. Through modern HRM methods; management by MBO rather than management by crisis,
counselling rather than threatening workmen – through participation of workmen in
management including quality circles etc. This shall ensure better working environment
and keep the workforce motivated.

9. Provision of fair wages and proper compensation through incentive schemes.
10. Through better quality by use of SQC techniques sampling plans in purchase and statistical
process control in production.

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