Production And Operations Management

Production And Operations Management

This course contains the basics of Production And Operations Management

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Production And Operations Management


Automation is a technology concerned with the application of mechanical, electronic, and computer- based systems to operate and control production. This technology includes automatic machine tools to process parts, automatic assembly machines, industrial robots, automatic material handling and storage systems, automatic inspection systems for quality control, feedback control and computer process control, computer systems for planning, data collection and decision-making to support manufacturing activities.


Automated production systems can be classified into three basic types:

  1. Fixed automation,
  2. Programmable automation, and
  3. Flexible automation.

It is a system in which the sequence of processing (or assembly) operations is fixed by the equipment configuration. The operations in the sequence are usually simple. It is the integration and coordination of many such operations into one piece of equipment that makes the system complex. The typical features of fixed automation are:

  1. High initial investment for custom–Engineered equipment;
  2. High production rates; and
  3. Relatively inflexible in accommodating product changes.

The economic justification for fixed automation is found in products with very high demand rates and volumes. The high initial cost of the equipment can be spread over a very large number of units, thus making the unit cost attractive compared to alternative methods of production. Examples of fixed automation include mechanized assembly and machining transfer lines.

In this the production equipment is designed with the capability to change the sequence of operations to accommodate different product configurations. The operation sequence is controlled by a program, which is a set of instructions coded so that the system can read and interpret them. New programs can be prepared and entered into the equipment to produce new products. Some of the features that characterize programmable automation are:

  1. High investment in general-purpose equipment;
  2. Low production rates relative to fixed automation;
  3. Flexibility to deal with changes in product configuration; and
  4. Most suitable for batch production.

Automated production systems that are programmable are used in low and medium volume production. The parts or products are typically made in batches. To produce each new batch of a different product, the system must be reprogrammed with the set of machine instructions that correspond to the new product. The physical setup of the machine must also be changed over: Tools must be loaded, fixtures must be attached to the machine table also be changed machine settings must be entered. This changeover procedure takes time. Consequently, the typical cycle for given product includes a period during which the setup and reprogramming takes place, followed by a period in which the batch is produced. Examples of programmed automation include numerically controlled machine tools and industrial robots.

It is an extension of programmable automation. A flexible automated system is one that is capable of producing a variety of products (or parts) with virtually no time lost for changeovers from one product to the next. There is no production time lost while reprogramming the system and altering the physical setup (tooling, fixtures, and machine setting). Consequently, the system can produce various combinations and schedules of products instead of requiring that they be made in separate batches. The features of flexible automation can be summarized as follows:

  1. High investment for a custom-engineered system.
  2. Continuous production of variable mixtures of products.
  3. Medium production rates.
  4. Flexibility to deal with product design variations.

The essential features that distinguish flexible automation from programmable automation are:

  1. the capacity to change part programs with no lost production time; and
  2. the capability to changeover the physical setup, again with no lost production time.

These features allow the automated production system to continue production without the downtime between batches that is characteristic of programmable automation. Changing the part programs is generally accomplished by preparing the programs off-line on a computer system and electronically transmitting the programs to the automated production system. Therefore, the time required to do the programming for the next job does not interrupt production on the current job. Advances in computer systems technology are largely responsible for this programming capability in flexible automation. Changing the physical setup between parts is accomplished by making the changeover off-line and then moving it into place simultaneously as the next part comes into position for processing. The use of pallet fixtures that hold the parts and transfer into position at the workplace is one way of implementing this approach. For these approaches to be successful; the variety of parts that can be made on a flexible automated production system is usually more limited than a system controlled by programmable automation.

The relative positions of the three types of automation for different production volumes and product varieties are depicted in the following figure.

Types of production automation


The computers had done a dramatic impact on the development of production automation technologies. Nearly all modern production systems are implemented today using computer systems. The term computer integrated manufacturing (CIM) has been coined to denote the pervasive use of computers to design the products, plan the production, control the operations, and perform the various business related functions needed in a manufacturing firm. Computer Aided Design and Computer Aided Manufacturing (CAD/CAM) in another term that is used synonymously with CIM.

The good relationship exists between automation and CIM with a conceptual model of manufacturing. In a manufacturing firm, the physical activities related to production that take place in the factory can be distinguished from the information-processing activities. The physical activities include all of the manufacturing processing, assembly, materials handling and inspections that are performed on the product. These operations come in direct contact with the physical activities during manufacture. Raw materials flow in one end of the factory and finished products flow out the other end. The physical activities (processing, handling, etc.) take place inside the factory. The information-processing functions form a ring that surrounds the factory, providing the data and knowledge required to produce the product successfully. These information processing functions include:

  1. business activities
  2. product design
  3. manufacturing planning
  4. manufacturing control.

These four functions form a cycle of events that must accompany the physical production activities


Following are some of the reasons for automation:

  1. Increased productivity: Automation of manufacturing operations holds the promise of increasing the productivity of labor. This means greater output per hour of labor input. Higher production rates (output per hour) are achieved with automation than with the corresponding manual operations.
  2. High cost of labor: The trend in the industrialized societies of the world has been toward ever-increasing labor costs. As a result, higher investment in automated equipment has become economically justifiable to replace manual operations. The high cost of labor is forcing business leaders to substitute machines for human labor. Because machines can produce at higher rates of output, the use of automation results in a lower cost per unit of product.
  3. Labor shortages: In many advanced nations there has been a general shortage of labor. Labor shortages stimulate the development of automation as a substitute for labor.
  4. Trend of labor toward the service sector: This trend has been especially prevalent in India. There are also social and institutional forces that are responsible for the trend. There has been a tendency for people to view factory work as tedious, demeaning, and dirty. This view has caused them to seek employment in the service sector of the economy government, insurance, personal services, legal, sales, etc. Hence, the proportion of the work force employed in manufacturing is reducing.
  5. Safety: By automating the operation and transferring the operator from an active participation to a supervisory role, work is made safer.
  6. High cost of raw materials: The high cost of raw materials in manufacturing results in the need for greater efficiency in using these materials. The reduction of scrap is one of the benefits of automation.
  7. Improved product quality: Automated operations not only produce parts at faster rates but they produce parts with greater consistency and conformity to quality specifications.
  8. Reduced manufacturing lead time: With reduced manufacturing lead time automation allows the manufacturer a competitive advantage in promoting good customer service.
  9. Reduction of in-process inventory: Holding large inventories of work-in-process represents a significant cost to the manufacturer because it ties up capital. In-process inventory is of no value. It serves none of the purposes of raw materials stock or finished product inventory. Automation tends to accomplish this goal by reducing the time a workpart spends in the factory.
  10. High cost of not automating: A significant competitive advantage is gained by automating a manufacturing plant. The benefits of automation show up in intangible and unexpected ways, such as, improved quality, higher sales, better labor relations, and better company image. All of these factors act together to make production automation a feasible and attractive alternative to manual methods of manufacture.


Following are some of the advantages of automation:

  1. Automation is the key to the shorter workweek. Automation will allow the average number of working hours per week to continue to decline, thereby allowing greater leisure hours and a higher quality life.
  2. Automation brings safer working conditions for the worker. Since there is less direct physical participation by the worker in the production process, there is less chance of personal injury to the worker.
  3. Automated production results in lower prices and better products. It has been estimated that the cost to machine one unit of product by conventional general-purpose machine tools requiring human operators may be 100 times the cost of manufacturing the same unit using automated mass-production techniques. The electronics industry offers many examples of improvements in manufacturing technology that have significantly reduced costs while increasing product value (e.g., color TV sets, stereo equipment, calculators, and computers).
  4. The growth of the automation industry will itself provide employment opportunities. This has been especially true in the computer industry, as the companies in this industry have grown (IBM, Digital Equipment Corp., Honeywell, etc.), new jobs have been created. These new jobs include not only workers directly employed by these companies, but also computer programmers, systems engineers, and other needed to use and operate the computers.
  5. Automation is the only means of increasing standard of living. Only through productivity increases brought about by new automated methods of production, it is possible to advance standard of living. Granting wage increases without a commensurate increase in productivity will results in inflation. To afford a better society, it is a must to increase productivity.


Following are some of the disadvantages of automation:

  1. Automation will result in the subjugation of the human being by a machine. Automation tends to transfer the skill required to perform work from human operators to machines. In so doing, it reduces the need for skilled labor. The manual work left by automation requires lower skill levels and tends to involve rather menial tasks (e.g., loading and unloading workpart, changing tools, removing chips, etc.). In this sense, automation tends to downgrade factory work.
  2. There will be a reduction in the labor force, with resulting unemployment. It is logical to argue that the immediate effect of automation will be to reduce the need for human labor, thus displacing workers.
  3. Automation will reduce purchasing power. As machines replace workers and these workers join the unemployment ranks, they will not receive the wages necessary to buy the products brought by automation. Markets will become saturated with products that people cannot afford to purchase. Inventories will grow. Production will stop. Unemployment will reach epidemic proportions and the result will be a massive economic depression.


There are certain fundamental strategies that can be employed to improve productivity in manufacturing operations technology. These are referred as automation strategies.

  1. Specialization of operations: The first strategy involves the use of special purpose equipment designed to perform one operation with the greatest possible efficiency. This is analogous to the concept of labor specializations, which has been employed to improve labor productivity.
  2. Combined operations: Production occurs as a sequence of operations. Complex parts may require dozens, or even hundreds, of processing steps. The strategy of combined operations involves reducing the number of distinct production machines or workstations through which the part must be routed. This is accomplished by performing more than one operation at a given machine, thereby reducing the number of separate machines needed. Since each machine typically involves a setup, setup time can be saved as a consequence of this strategy. Material handling effort and non-operation time are also reduced.
  3. Simultaneous operations: A logical extension of the combined operations strategy is to perform at the same time the operations that are combined at one workstation. In effect, two or more processing (or assembly) operations are being performed simultaneously on the same workpart, thus reducing total processing time.
  4. Integration of operations: Another strategy is to link several workstations into a single integrated mechanism using automated work handling devices to transfer parts between stations. In effect, this reduces the number of separate machines though which the product must be scheduled. With more than one workstation, several parts can be processed simultaneously, thereby increasing the overall output of the system.
  5. Increased flexibility: This strategy attempts to achieve maximum utilization of equipment for job shop and medium volume situations by using the same equipment for a variety of products. It involves the use of the flexible automation concepts. Prime objectives are to reduce setup time and programming time for the production machine. This normally translates into lower manufacturing lead time and lower work-in-process.
  6. Improved material handling and storage systems: A great opportunity for reducing non-productive time exists in the use of automated material handling and storage systems. Typical benefits included reduced work-in-process and shorter manufacturing lead times.
  7. On-line inspection: Inspection for quality of work is traditionally performed after the process. This means that any poor quality product has already been produced by the time it is inspected. Incorporating inspection into the manufacturing process permits corrections to the process as product is being made. This reduces scrap and brings the overall quality of product closer to the nominal specifications intended by the designer.
  8. Process control and optimization: This includes a wide range of control schemes intended to operate the individual process and associated equipment more efficiency. By this strategy, the individual process times can be reduced and product quality improved.
  9. Plant operations control: Whereas the previous strategy was concerned with the control of the individual manufacturing process, this strategy is concerned with control at the plant level of computer networking within the factory.
  10. Computer integrated manufacturing (CIM): Taking the previous strategy one step further, the integration of factory operations with engineering design and many of the other business functions of the firm. CIM involves extensive use of computer applications, computer data bases, and computer networking in the company


An automated flow line consists of several machines or workstations which are linked together by work handling devices that transfer parts between the stations. The transfer of work parts occurs automatically and the workstations carry out their specialized functions automatically. The flow line can be symbolized as shown in the following figure. A raw workpart enters one end of the line and the processing steps are performed sequentially as the part moves from one station to the next. It is possible to incorporate buffer zones into the flow line, either at a single location or between every workstation. It is also possible to include inspection stations in the line to automatically perform intermediate checks on the quality of the workparts. Manual stations might also be located along the flow line to perform certain operations which are difficult or uneconomical to automate.

Configuration of an automated flow line

Automated flow lines are generally the most appropriate means of productions in cases of relatively stable product life; high product demand, which requires high rates of production; and where the alternative method of manufacture would invoice large labor content.

The objectives of the use of flow line automation are:

  1. To reduce labor costs;
  2. To increase production rates;
  3. To reduce work-in-process;
  4. To minimize distances moved between operations;
  5. To achieve specialization of operations;
  6. To achieve integration of operations.

There are two general forms that the workflow can take. These two configurations are in-line and rotary.

In-line Type
The in-line configuration consists of a sequence of workstations in a more-or-less straight line arrangement. The flow of work can take a few 90° turns, either for workpiece reorientation, factory layout limitations, or other reasons, and still qualify as a straight-line configuration. A common pattern of workflow, for example, is a rectangular shape, which would allow the same operator to load the starting workpiece and unload the finished workpiece.

Rotary Type
In the rotary configuration, the workparts are indexed around a circular table or dial. The workstations are stationary and usually located around the outside periphery of the dial. The parts ride on the rotating table and are registered or positioned, in turn, at each station for its processing or assembly operation. This type of equipment is often referred to as an indexing machine or dial index machine and the configurations.

The choice between the two types of configurations depends on the application. The rotary type is commonly limited to smaller workpieces and to fewer stations. There is no flexibility in the design of the rotary configuration. The rotary configuration usually involves a lower-cost piece of equipment and typically requires less factory floor space. The in-line design is preferable for larger work pieces and can accommodate a larger number of workstations. In-line machines can be fabricated with a built-in storage capability to smooth out the effect of work stoppages at individual stations and other irregularities.


An automated or automatic guided vehicle system (AGVS) is a materials handling system that uses independently operated, self-propelled vehicles that are guided along defined pathways in the floor. The vehicles are powered by means of on-board batteries that allow operation for several hours (8 to 16 hours is typical) between recharging. The definition of the pathways is generally accomplished using wires embedded in the floor or reflective paint on the floor surface. Guidance is achieved by sensors on the vehicles that can follow the guide wires or paint.

Types of AGVS
The types of Automated Guided Vehicles Systems (AGVS) can be classified as follows:

  1. Driverless trains:
    The type consists of a towing vehicle (which is the AGV) that pulls one or more trailers to form a train. It was the first type of AGVS to be introduced and is still popular. It is useful in applications where heavy payloads must be moved large distances in warehouses of factories with intermediate pickup and drop-off points along the route.
  2. AGVS pallet trucks:
    Automated guided pallet trucks are used to move palletized loads along predetermined routes. In the typical application the vehicle is backed into the loaded pallet by a human worker who steers the truck and uses its forks to elevate the load slightly. Then the worker who steers the truck to the guide path, programs its destination, and the vehicle proceeds automatically to the destination for unloading. A more recent introduction related to the pallet truck is the forklift AGV. This vehicle can achieve significant vertical movement of its forks reach loads on shelves.
  3. AGVS unit load carriers:
    This type of AGVS is used to move unit loads from one station to another station. They are often equipped for automatic loading and unloading by means of powered rollers, moving belts, mechanized lift platforms, or other devices. The light-load AGV is a relatively small vehicle with a corresponding light load capacity. It does not require the same large aisle width as the conventional AGV. Light-load guided vehicles are designed to move small loads through plants of limited size engaged in light manufacturing. The assembly line AGVS is designed to carry a partially completed subassembly through a sequence of assembly workstations to build the product.

AGVS technology is far from mature, and the industry. The industry is continually working to develop new systems in response to new application requirements. An example of a new and evolving AGVS design involves the placement of a robotic manipulator on an automated guided vehicle to provide a mobile robot for performing complex handling tasks at various locations in a plant.

Applications of Automated Guided Vehicle Systems
Automated guided vehicle systems are used in a growing number and variety of applications. Its applications can be categorized into the following types:

  1. Driverless train operations: These applications involve the movement of large quantities of materials over relatively large distances. For example, the moves are within a large warehouse or factory building, or between buildings in a large storage depot. For the movement of trains consisting of 5 to 10 trailers, this becomes an efficient handling method.
  2. Storage/Distribution systems: Unit load carries and pallet trucks are typically used in these applications. These storage and distribution operations involve the movement of materials in unit loads (sometimes individual items are moved) from or to specific locations. The applications often interface the AGVS with some other automated handling or storage system, such as an automated storage/retrieval system (AS/RS) in a distribution centre. The AGVS delivers incoming items of unit loads from the receiving dock to the AS/RS, which places the items in storage, and the AS/RS retrieves individual pallet loads or items form storage and transfer them to vehicles for delivery to the shipping dock. When the rates of incoming loads and the outgoing loads are in balance, this mode of operation permits loads to be carried in both directions by the AGVS vehicles, thereby increasing the handling system efficiency.
  3. Assembly line operations: AGV systems are being used in a growing number of assembly-line applications. In these applications, the production rate is relatively low and there are a variety of different models made on the production line. Between the workstations, components are kitted and placed on the vehicle for the assembly operations that are to be performed on the partially completed product at the next station. The workstations are generally arranged in parallel configurations to add to the flexibility of the line. Unit load carries and light-load guided vehicles are the type of AGVS used in these assembly lines.
  4. Flexible manufacturing systems: Another application of AGVS technology is in flexible manufacturing systems (FMS). In this application, the guided vehicles are used as the materials handling system in the FMS. The vehicles deliver work from the staging area (where work is placed on pallet fixtures, usually manually) to the individual workstations in the system. The vehicles also move work between stations in the manufacturing system. At a workstation, the work is transferred from the vehicle platform into the work area of the station for processing. At the completion of processing by that station a vehicle returns to pick up the work and transport it to the next area. AGV systems provide a versatile material handling system to complement the flexibility of the FMS operation.
    Using robots and automation together, manufacturing is carried out without using manpower (unmanned) from raw material to finished products.
  5. Miscellaneous applications: Other applications of automated guided vehicle systems include non-manufacturing and non-warehousing applications, such as, mail delivery in office buildings and hospital material handling operations. Hospital guided vehicles transport meal trays, linen, medical and laboratory supplies, and other materials between various departments in the building. These applications typically require movement of the vehicles between different floors of the hospital and will use elevators for this purpose.


An automated storage/retrieval system (AS/RS) is defined by the Materials Handling Institute as, “A combination of equipment and controls which handles, stores and retrieves materials with precision, accuracy and speed under a defined degree of automation”. AS/R systems are custom-planned for each individual application, and they range in complexity from relatively small mechanized systems that are controlled manually to very large computer-controlled systems that are fully integrated with factory and warehouse operations.

The AS/RS consists of a series of storage aisles that are serviced by one or more storage/retrieval (S/R) machines, usually one S/R machine per aisle. The aisles have storage racks for holding the materials to be stored. The S/R machines are used to deliver materials to the storage racks and to retrieve materials from the racks. The AS/RS has one or more input stations where materials are delivered for entry into storage and where materials are picked up from the system. The input/output stations are often referred to as pickup and deposit (P&D) stations in the terminology of AS/RS systems. The P&D stations can be manually operated or interfaced to some form of automated handling system, such as a conveyor system or AGVS.

Types of AS/RS
Several important categories of automated storage/retrieval systems can be distinguished. These include:

  1. Unit load AS/RS: This is typically a large automated system designed to handle unit loads stored on pallets or other standard containers. The system is computer-controlled and the S/R machines are automated and designed to handle the unit load containers. The unit load system is the generic AS/RS.
  2. Miniload AS/RS: This storage system is used to handle small loads (individual parts or supplies) that are contained in bins or drawers within the storage system. The S/R machine is designed to retrieve the bin and deliver it to a P&D station at the end of the aisle so that the individual items can be withdrawn from the bins. The bin or drawer is then returned to its location in the system. The miniload AS/RS system is generally smaller than the unit load AS/RS and is often enclosed for security of the items stored.
  3. Man-on-board AS/RS: The man-on-board AS/RS system represents an alternative approach to the problem of storing and retrieving individual items in the system. Whereas the miniload system delivers the entire bin to the end-of aisle pick station, the man-on-board system permits the individual items to be picked directly at their storage locations. This offers an opportunity to reduce the transaction time of the system.
  4. Automated item retrieval system: These systems are also designed for retrieval of individual items or small unit loads such as cases of product in a distribution warehouse. In this system, the items are stored in single-file lanes rather than in bins or drawer. When an item is to be retrieved, it is released from its lane onto a conveyor for delivery to the pickup station. The supply of items in each lane is generally replenished from the rear of the retrieval system, so that there is flow-through of the items, thus permitting first in first out (FIFO) inventory control.
  5. Deep-lane AS/RS: The deep-lane AS/RS is a high density unit load storage system that is appropriate when large quantities are to be stored but the number of separate types of material is relatively small. Instead of storing each unit load so that it can be accessed directly from the aisle, the deep-lane system stores up to 10 or so loads in a single rack, one load behind the next. Each rack is designed for ‘flow-through’ with input on one side and output  on the other side. Loads are picked from one side of the rack system by a special S/R type machine designed for retrieval and another special machine is used on the entry side of the rack system for input of loads.

Basic Components of an AS/RS
All automated storage/retrieval systems consist of certain basic building blocks. These components are:

  • Storage structure
  • Storage/retrieval (S/R) machine
  • Storage modules (e.g., pallets for unit loads)
  • Pickup and deposit stations.
  1. The storage structure is the fabricated steel framework that supports the loads contained in the AS/RS. The structure must possess sufficient strength and rigidity that it does not deflect significantly due to the loads in storage or other forces on the framework. The individual storage components in the structure must be designed so to accept and hold the storage modules used to contain the stored materials.
  2. The S/R machine (sometimes called a crane) is used to accomplish a storage transaction, delivering loads from the input station into storage, or retrieving loads from storage and delivering them to the output station. To perform these transactions, the storage/retrieval machine must be capable of horizontal and vertical travel to align its carriage with the storage compartment in the storage structure, and it must also pull the load from or push the load into the storage compartment.
  3. The storage modules are the containers of the stored material. Examples of storage modules include pallets, steel wire baskets and containers, tote pans, storage bins, and special drawers (used in miniload AS/RS systems). These modules are generally made to a standard base size that can be handled automatically by the carriage shuttle of the S/R machine.
  4. The pickup and deposit stations are used to transfer loads to and from the AS/RS. They are generally located at the end of the aisles for access by the S/R machine and the external handling system that brings loads to the AS/RS and takes loads away. The pickup stations and deposit stations may be located at opposite ends of the storage aisle or combined at the same location. This depends on the origination point of the incoming loads and the destination of the output loads. The P&D stations must be designed so that they are compatible with the S/R machine shuttle and the external handling system.


A carousel storage system is series of bins or baskets fastened to carries that are connected together and revolve around a long, oval track system. The track system is similar to a trolley conveyor system. Its purpose is to position bins at a load/unload station at the end of the oval. The operation is similar to the powered overhead rack system used by dry cleaners to deliver finished garments to the front of the store. The typical operation of the storage carousel is mechanized rather than automated. The load/unload station is manned by a human worker who activates the powered carousel to deliver a desired bin to the station. One or more parts are removed from the bin, and the cycle is repeated.

Carousels come in a variety of sizes, ranging between 10 and 100 ft in length of the oval. As the length of the carousel is increased, the storage density increases, but the average transaction time (Storage or retrieval) decreases. Accordingly, the typical carousel size ranges perhaps between 30 and 50 ft to achieve a proper balance between these opposing factors.


The carousel storage system provides for a relatively high throughout rate and is often an attractive to the miniload AS/RS in the following types of applications:

  1. Storage and retrieval operations: In certain operations individual items must be selected from the group of item stored in the bin or basket. Sometimes called ‘pick and load’ operations, this type of procedure is common for order picking of  service parts or other  items in wholesale firm, tools in a toolroom, raw materials from a stockroom, and work-in-process in a factory. In small assembly operations such as electronics, carousels are used to accomplish kitting of parts that will be transported to the assembly workstations.
  2. Transport and accumulation: These are applications in which the carousel is used to transport and sort materials as they are stored. One example of this is in progressive assembly operations where the workstations are located around the periphery of a continuously moving carousel and the workers have access to the individual storage bins of the carousel. They remove work from the bins to complete their own respective assembly tasks, and then place their work into another bin for the next operation at some other workstation.
  3. Unique applications: These involve specialized uses of carousel storage systems. Examples include electrical testing of components, where the carousel is used to store the item during testing for a specified period of time; and drawer or cabinet storage, in which standard drawer-type cabinets are mounted on the carousel.

Storage carousels are finding an increasing number of applications in manufacturing operations, where it’s relatively low cost, versatility, and high reliability have been acknowledged. It represents a competitive to the miniload AS/RS and other AS/RS configurations for work-in-progress storage in manufacturing plant.