Unit - IV

EVOLUTION OF MARKETING CONCEPT

Since the later part of the 19th century, marketing has gradually evolved through various

marketing orientations. These stages in marketing evolution present a generalized picture

and a sufficiently significant number of companies have adopted the most modern

marketing concepts or philosophy.

The Production concept

This concept, viewed as one of the oldest of managerial orientations, typically aimed at

achieving as high an output as possible. The philosophy assumed that customers would

be more interested in acquiring conveniently available, reasonably priced, and well-made

products. Keeping in view the market behavior prevailing in times when customers did

not have much choice, it was a sound approach. The focus of managers, generally having

backgrounds in manufacturing and engineering, was to concentrate on achieving

increasingly higher efficiency in production, lower production costs, and more intensive

distribution. Even today, this approach seems to be quite sensible in relatively

underdeveloped and developing economies because customers are more interested in

owning a product and not overly concerned about finer features and aesthetic appeal.

In general, one important condition seems to be favorable to adopt production

orientation: when the masses look for a cheaper product and demand far exceeds

production. In India, The National Textile Corporation (NTC) and all its subsidiaries are

sticking to this philosophy while producing textiles for the huge, poverty-stricken

population in this country. Their philosophy and positioning is reflected in their ad,

Clothiers of the nation with affordable prices. In the global scenario, for nearly three

decades Intel Corporation focused on achieving increasingly high production output of its

successive generations of processors so as to bring down the prices of each improved

version. The production concept is unlikely to get discarded for a very long time to come,

because there would always be products and populations of such a nature that some

companies would feel comfortable with this philosophy.

The Selling concept

Sales concept seems to be based on a lurking apprehension that customers will not buy

the product in sufficient quantities unless aggressively pressurized. The selling concept

was the major means of increasing sales and profits during 1920s to 1950s in the

developed countries of that period. Companies believed that the most important

marketing activities were personal selling, advertising, and distribution.

Selling concept is geared towards converting existing product(s) into cash rather than first

finding and then satisfying customer needs. Sales concept is often observed in practice

when companies show heavy reliance on their promotional capabilities based on hard

sell approach. It is obvious that if a companys products do not match the changing

tastes and requirements of customers, with many alternative choices available, managers

might be inclined to go for aggressive promotional efforts to sell enough quantities.

Generally the purpose of marketing is to sell more stuff to more people more often for

more money in order to make profit. Of late, this has been happening in case of some

credit cards in our country. Generally hard sell is often seen in case of products or

services that people buy without giving much thought to the matter, such as non-essential

goods, and tend to postpone such purchases. The consequences of Hard sell might

harm the customer base to the extent that, in some cases, they might even bad-mouth the

product if the product fails to match up to their expectations.

The Marketing Concept

After World War II, the variety of products increased, people had more discretionary

income, and could afford to be selective and buy only those products that more precisely

met their changing needs and wants. However, these needs were not immediately

obvious. Sometime during the mid- 1950s, there was growing recognition among

American business people that merely efficient production and extensive promotion,

including hard selling, did not guarantee that customers would buy products. With the

passage of time, more knowledge, and experience, customers wanted was a must before

making a product, rather than producing products first and then persuading them to buy.

The key questions became:

What do customers really want?

Can we develop it while they still want?

How can we keep our customers satisfied?

Thus, marketing concept era began. Marketing concept proposes that an organization

should focus on customer needs and wants, coordinate its efforts, and endeavour to

accomplish organizational goals. Geraldine E Williams reported that the CEO of Nike

said, For years we thought of ourselves as a production-oriented company, meaning we

put all our emphasis on designing and manufacturing the product. But now we understand

that the most important thing we do is market the product. The major focus of all sets of

organizational activities should be satisfying customer needs.

To embrace the marketing concept as the guiding philosophy, the concerned firm must

accept certain general conditions and manage some problems. Alan Grant and Leonard

Schlesinger are of the view that market-orientation requires organization-wide generation

of market intelligence across departments, and organization wide responsiveness to it. It

means establishing a reliable information system to learn about real needs of customers

and design the right need satisfying solutions. Company-wide coordination may require

restructuring the internal operations and overall objectives in case of one or more

departments.

The marketing concept emphasizes three main principles.

Customer-oriented planning and implementations

Coordination of all organizational activities

Coordinated marketing is critically important to achieve organizational goals

The firm has to earn profits to survive, offer new and better products and services, and be

a meaningful member of society. A company might therefore choose to offer less costly

products and services to unprofitable segments, or even avoid them together. Being

market-oriented pays dividends and has a significant effect on company performance.

Relationship marketing

Companies in developed countries and many businesses in developing countries aim to

satisfy customer needs and build lasting relationships. The issue focuses on reliability and

trust between customer and organization. As a result of this customer focus, a whole new

subject, customer relationship management is now studied in marketing courses.

The new approaches to marketing such as experiential, permission, and one-to-one

marketing can all be seen as means of creating stronger relationships with customers. The

emphasis is on developing long-term bonds with customers by making them feel good

about how the firm interacts or does business with them by giving them some kind of

personal connection to the company.

Relationship marketing is based on the principle that current customers are the key to

long-term business success. According to Frederick F. Reichheld, the importance of

customer retention can be judged by observing some of the following benefits it provides:

(1) Acquiring new customers can be five times more expensive than the costs involved in

satisfying and retaining existing customers.

(2) The average company loses 10 percent of its customers each year.

(3) A decrease of 5 percent in the customer defection rate can increase profits by 25

percent to 85 percent, depending on the industry.

(4) The customer profit rate tends to increase over the life of retained customer.

The Societal Marketing concept

Marketing concept was accepted widely among companies in developed and some

developing countries and continued to evolve and take on new meanings. Not long after

this, criticism started about the nature of its social responsibility. The emphasis shifted to

how marketing affected society as a whole in an age of depleting and increasingly scarce

resources, environmental deterioration, etc. It was good enough to produce what

customers needs or wanted, and for achieving organizational objectives, but in certain

cases the concept could be in conflict with customers and societys best long-run

interests. Societal marketing concept is a management philosophy that takes into account

the welfare of society, the organization, and its customers.

Adoption of this concept requires that marketing decisions be made in an ethical and

socially responsible manner. Companies must pay attention not only to the short-term

needs of customers but also to their long-term well being. This includes, for instance,

excess fat content in ready-to-eat foods, toxic wastes, and environmental issues.

The need is to strike a balance between the interest of customers, the company itself, and

the society in which operations are conducted. Some responsible firms have started using

recyclable packaging materials and products that do not harm the environment. Among

the marketing tasks, de-marketing is an approach that reflects the societal marketing

philosophy.

MARKETING MIX

Marketing mix is a major concept in modern marketing and involves practically

everything that a marketing company can use to influence consumer perceptions

favorably towards its products or services so that consumer and organizational objectives

are attained. Marketing mix is a model of crafting and implementing marketing strategy.

There are virtually dozens of marketing mix tools. However , Prof E.Jerome McCarthy

classified the Marketing Mix Variables in terms of 4 ps: Product, Price,

Place(distribution) and promotion. These 4 Ps represent the tactical controllable factors

and vary in case of different products and target markets.

Product

In the marketing mix, the product or service is the most important element. There is an

old saying in marketing: Without a good product, you have nothing. Product is directly

related to satisfying the customer needs and wants in the target market. Customers

acquire products for the singular reason that they are perceived as the means to satisfying

their needs and wants. According to Philip kotler, A products anything that can be

offered to a market for attention, acquisition, use, or consumption that might satisfy a

need or want. In effect, according to this definition products include physical products,

services, persons, places, organizations and ideas. Various product attributes such as

quality, variety, design, brand, packaging, services, and warranties, etc., can be

manipulated depending on what the target market wants. This may ultimately affect the

product quality that can be kept high or low.

Promotion

Promotion is a key element of marketing programme and is concerned with effectively

and efficiently communicating the decisions of marketing strategy, to favorably influence

target customers perceptions to facilitate exchange between the marketer and the

consumer that may satisfy the objectives of both customers and the company. In reality,

everything that a company does has the potential to communicate something to the target

customers. For instance, the price of a product has the potential to communicate to target

customers a certain range of the product. For example, a low priced designer dress is

unlikely to attract high-profit, well-heeled target customers, while less affluent buyers

may find the designs too avant-garde for comfort. The major elements of promotion mix

include advertising, personal selling, sales promotion, direct marketing, and publicity. A

companys promotion efforts are the only controllable means to create awareness among

publics about itself, the products and services it offers, their features, and influence their

attitudes favorably.

Distribution

Decisions with respect to distribution channel focus on making the product available in

adequate quantities at places where customers are normally expected to shop for them to

satisfy their needs. The aim of the management is also to keep the physical distribution

costs (that would include inventory, transportation, and storage) as low as possible.

Depending on the nature of the product, marketing management decides to put into place

an exclusive, selective, or intensive network of distribution, while selecting the

appropriate dealers or wholesalers. The right choice of these factors can give a company

some competitive advantage. For example, a low-priced product consumed regularly on

an ongoing basis should be available at as many outlets as possible otherwise consumers

would buy any other substitutes that are more conveniently available.

Price

Pricing decisions are almost always made in consultation with marketing management.

Price is the only marketing mix variable that can be altered quickly. Price variable such

as dealer price. Retail price, discounts, allowances, credit terms, etc., directly influence

the development of marketing strategy, as price is a major factor that influences the

assessment of value obtained by customers. Price can be kept as high or low, or at any

level in between these two extremes. Too high would be the point at which any

meaningful sales are not possible because the target customers wont accept the product,

and too low would be the point at which company would incur losses instead of profits.

Price is said to be an important competitive tool, and intense price competition between

rival companies often culminates in a price war and the contestants generally end up

gaining nothing. The customers, however, enjoy the benefit of low prices till such time

that good sense prevails between contestants and prices are brought back to normal. In

case of certain products, price became the indicator of product quality and helps impart

an image to the product.

Marketing Mix elements (4Ps)

Product Decisions Price Decisions Place decisions Promotion Decisions

Brand name

Functionality

Styling

Quality

Safety

Packaging

Repairs & support

Warranty

Accessories &

Services

Pricing strategy

Suggested retail

price

Wholesale price

Various discounts

Seasonal pricing

Bundling

Price flexibility

Price discrimination

Distribution

Channels

Market coverage

- Intensive

- Selective

- Exclusive

Inventory

Warehousing

Order processing

Transportation

Push, pull

Advertising

Sales promotion

Personal selling

PR / Publicity

Promotional budget

Product Life cycle

Product life cycle (PLC) Like human beings, products also have a life-cycle. From birth

to death, human beings pass through various stages e.g. birth, growth, maturity, decline

and death. A similar life-cycle is seen in the case of products. The product life cycle goes

through multiple phases, involves many professional disciplines, and requires many

skills, tools and processes. Product life cycle (PLC) has to do with the life of a product in

the market with respect to business/commercial costs and sales measures. To say that a

product has a life cycle is to assert three things:

Products have a limited life,

Product sales pass through distinct stages, each posing different challenges,

opportunities, and problems to the seller,

Products require different marketing, financing, manufacturing, purchasing, and

human resource strategies in each life cycle stage.

There are four stages in the Product Life Cycle as depicted below;

(1) Introduction stage

This stage marks the launch of the product in a market. Organizationally, this stage is

characterized by high operational costs arising out of inefficient production levels or

bottlenecks, high learning time, unwillingness of the trade to deal in the product,

demand of higher margins or extended credit terms, and advertising. During this

stage, a firms requirement for cash is very high as all expenses have to be met.

Generally, the suppliers, media, and others are not willing to give credit so all

payments have to be made in cash.

The environment of the firm is characterized by customers who have low or no

awareness of the product. Even those who are aware and are willing to try the

product, do so in small quantities, called trial purchase. The trial demand is limited

both in the quantity bought and the number of customers buying it. Competition

either does not exist or is limited to a few firms who may also not be operating at

efficient levels. Much of the competition is indirect or from substitutes.

The marketing task for a pioneer firm is to stimulate demand for the new product and

also to reduce the break-even time.

(2) Growth Stage

Once a product crosses the introduction stage, it enters the growth stage. More than

95 percent of products fail in the introduction stage. However 5 percent of successful

products that enter the growth phase meet with a more strengthened and increased

competition. This competition now offers greater choice to the customer in the form

of different product types, packaging and prices. The market base expands as more

customers buy the product and one generally observes softening of prices.

Organizationally, the pioneer firm now operates at economical levels. There are lesser

production bottlenecks and hence costs are lower now. To remain competitive over a

period of time, the pioneer firm initiates a product improvement or modification

programme. Sales and profit grow exponentially, but profits taper off at the end of

this phase.

(3) Maturity Stage

Most products that survive the heat of competition and gain customers approval enter

the maturity stage. This stage is characterized by slowing of growth rates of sales and

profits. In fact, a decline in profits seems to appear now. This phase is also marked by

cutthroat competition which often tends to narrow down to a price and promotion

war. It is an irony that when the firm has established its product and generated

customer preferences for its brand, competition intensives and the firm has no other

alternative but to invest resources in service augmentation and also simultaneously

undertake the task of cost reduction and, hence, price reduction. The maturity stage

also sees a boom in market demand as more and more customers are now willing to

accept the product.

Internally, the firm derives benefits of economies of scale in production and

distribution. The product modification programme is at a much higher level and the

firm also introduces a modified product during this stage. Profits and margins are low

now, in fact on the decline, as the firm continues to invest resources to maintain its

competitive position in the market-place.

The marketing task is one of adopting a segmental approach. In fact, carving a niche

even within a specific market segment, service augmentation, image marketing, and

creating a new value image are critical tools to retain the competitive edge.

Strengthening the brand through repositioning or making changes in the channels of

distribution (e.g. moving from indirect to direct or shortening the length of the

channel) now become imperative for while the firm has to fight competition and take

its product nearer to the customer, it has to also make profits to remain in the

business.

(4) Decline Stage

This is the stage when sales decline because customer preferences have changed in

favor of more efficient and better products. The number of competing firms also gets

reduced and generally the industry now has limited product versions available to the

customer. Customers value perception of the product also undergoes a change.

However, the firm may see a rise in its profit curve, largely coming from people who

will be willing to pay a higher price to possess it either for its antique value or

because they resist any change. The marketing task becomes one of diverting and

gradual withdrawal of the product. To cater to a small niche, a firm may consider

generating primary demand for the product rather than the brand demand.

Nonetheless, products having entered a decline stage need to be pruned.

Why do changes occur in the product life cycle?

The most important factors leading to changes in a products life cycle are:

a. Changing customers needs

b. Better, more efficient and user-friendly products

Changing customer needs

The most fundamental of all the environmental factors that shapes the products life cycle

over a period of time is the customers needs. These needs change as customers become

more aware and have higher disposable incomes leading to a change in their lifestyles

and aspirations. Today we are noticing this change occurring all over the country, largely

because of the wider reach of television a single source of mass media that has

revolutionized markets and products. Satellite communication, dish antenna, cable TV,

cell phones, multimedia messaging service and other telecommunication products are

changing customers needs and expectations all over India and consequently many of the

products that saw their sales stagnating now find a spurt in their sales, coming largely

from hitherto unexplored markets.

Better and more efficient product

Today technology offers phenomenal opportunities to firm to develop more user-friendly,

low priced, and attractive products. Computers and user friendly packages in retail

banking. ATM machines. We find that the success of many products, be it agricultural

like nitrogen-based fertilizers or more urban products like credit cards, can be explained

by the technology that has been used to serve customers more efficiently.

PLANT LAYOUT

Plant Layout refers to the arrangement of machinery, equipment and other industrial

facilities for achieving quickest and smooth production.

A Plant layout involves:

Planning and arranging manufacturing machinery, equipment and services for the

first time in completely new plants.

To introduce new methods and improvement in manufacturing procedures.

Objectives of a good layout:

Provide enough production capacity

Reduce material handling costs

Reduce congestion (movement of people material)

Reduce hazards

Utilize labor efficiently

Increase employee morale

Reduce accidents

Utilize available space efficiently & effectively

Provide ease of supervision

Facilitate coordination

Provide for employee safety and health

Allow ease of maintenance

Allow high machine utilisation

Improve productivity

Factors influencing Plant layout

1. Materials

Every factory should levy raw materials economically, when they are available,

they should be stored properly and moved through production centres efficiently

for manual or mechanical operations

Storage and movement of raw materials require properly placed storage rooms

and material movements or handling equipments

It involves initial investment and recurring costs

Type and size of material influence:

i. Type of raw materials used

ii. Availability or scarcity of materials(affected by seasonal variations

an d market condition)

2. Product:

Layout is designed with the ultimate purpose of producing a product

Type of the product (i.e. big/small, liquid/solid)influences the layout.

In most of the cases the product moves from work station to work station

In some cases, product is stationery, but men and machinery are moved to the

product

In the same way, the size of the product should be considered in planning the

layout of a plant

The sales/demand also influences the plant layout and determines the volume of

production.

The size, quality of the equipment , area of storage space and other facilities

determine the type of layout.

The purpose of plant layout is the efficient and effective production of a product.

3. Worker

The layout designer should also consider the the, position and requirement of

employees

If women workers are employed, the layout must be planned after keeping in

mind their particular requirements

Position of employees (stationery/moving) also influences the layout.

Employee facilities such as healthy and related services, employee safety

influence the layout.

4. Machinery

The type of product, volume of its production type of its process determined the

size and type of the machinery

Production is the combination of men, machines and materials

Before laying out a plan, it is necessary to determine which of these elements are

to be stationary or fixed which will mobile during the process of production

Various alternatives are available in determining which factor to move:

1. Move the product and worker fro0m work station to work station

2. Move the worker and the machine to the product which is held at the

location

3. The layout should be planned to suit the alternative

5. Type of Industry

The type of industry and the method of the manufacturing process exercise a

significant influence on plant layout

Industries may be broadly classified into

1. Synthetic

2. Analytical

3. Conditioning(change in form)

4. Exteractive(separation of one element from another)

6. Location

The size determines the type of building

The location of the plant determines the mode of transportation, depending upon

the source of raw materials and market to the plant.

The layout plan should provide for the exact type of transportation required

Demand for future expansion influences the plant layout.

7. Managerial Policies

Volume of production and provision for expansion

Extent of automation

Making/buying a particular component

Rapid delivery of goods to customers

Purchasing policy

Personnel policies

The layout engineer must have clear and complete understanding of those top

management policies that have a bearing on plant layout objectives.

PLANT LOCATION

A Plant is a place where men, machines, materials, money, equipments etc. are brought

together for manufacturing products. Plant location means selection of suitable site, area,

place etc., where the plant or factory will start functioning. Plant location involves two

main activities

1. General location of a plant

2. Selection of specific site in that region

General Location of a Plant :

1. Availability of Raw Materials: The site is to be selected where plenty of raw

materials are available, so that the transporation costs of raw materials to the site will

be minimum.

2. Nearness to market: if a factory is situated near the market, the cost of

transportation of the finished goods, the chances of finished products getting

damaged will be greatly reduced and also it can catch a big share and the service to

the customers will be quick and easy.

3. Transport facilities: in any factiory , lot of money is spent for transporting the raw

materials and finished goods. Therefore speedy transport facilities are required to

supply the raw materials and deliver the finished products at low transportation cost

in time.

4. Availability of labour : The available labour must be stable, good quality, more skill

and must have right attitude towards work.

5. Availability of power and fuel: Electric power is required for running any industry.

Hence it should be available in proper quantity at reasonable rates. Fuel is essential

for steel plants , foundaries, diesel and gas turbine power plants etc. Therefore most

of the above plants are situated near coal mines and oil refinery stations to cut down

the fuel transportation cost.

6. Availability of water: Large quantities of water is needed for thermal power stations,

paper and chemical industries for their production processes. So these industrioes

should be generally located where abundant water supply is available like rivers,

lakes etc.

7. Climate and atmospheric conditions: Bad climate and atmospheric conditions affect

the human efficiency. Therefore the following conditions are to be considered while

selecting a site for a plant.

1. Humidity 2. Rainfall 3. Atmospheric temperature 4. Wind speed and direction 5.

Possibilities of cyclones, floods etc.

8. Land : The factors to be considered in plant location are topography, shape of the

site, drainage and other facilities, soil conditions etc . The site selected should have

access for waste disposal.

9. Waste disposal: Some industries like leather industry, paper industry, distillaries, etc

give out a large quantity of waste. These wastes are harmful to the environment so

that, they must be disposed off effectively after waste treatment.

10. Availability of capital: The supply of capital is an important factor to run any

industry. The size and capacity of the plant depends on the amount of money

invested.

11. Community attitude: The success of an industry mainly depends on the attitude and

behavior of the local people. Therefore, plant should be located where people want

to work with high morale.

12. Social and recreational facilities: Employees require some social and recreational

amenities to live comfortable and happily.

13. Labour laws and taxation: Labour laws and tax rates differ from state to state.

Therefore, these must be analysed in detail before locating a plant.

14. Existence of related industries: Repair and maintenance are the major problems in

small scale industry. Therefore such facilities should be available nearer to the

industry, so that the repairs are carried out immediately without affecting the

production.

15. Other factors: The factors like political and social environment, secutity local bye-

laws, taxes, fire proctection facilities for expansion should be considered.

Selection of specific site in that region

1. Availability of cheap and expansion facility of the factory

2. The land should be strong and flat, so that it can withstand heavy machine

installation and shock loading

3. Repair facilities and general maintenance should be available nearer to the factory

4. Facilities for housing the workers and providing transport facilities to the workers

from the residence to the factory

5. Cost of installation of electricity and gas connection facility

6. Cost of providing water supply, sweage and waste disposal etc.

7. Providing social and recreational facilities

8. Taxes, fire protection facilities

9. Postal and telegraph, e-mail, telex and internet failites

10. Any restriction forced by the local town planning department, government, local

bye laws etc.

MATERIAL HANDLING

Introduction and definition

Material enters a factory as raw material and leaves as finished product. In between, the

material is processed in a number of work stations inside the factory. During the

manufacture of various products, materials move from

1. One operator to another

2. One machine to another

3. One department to another

4. One work station to another

5. Stores to work place

6. Work place to stores etc.

This process of movin g the material from one location to another is called

material handling. it involves the movement of materials either by manually or

mechanically in batches or one at a time within the factory. The movement may

be hgorizontal, vertical or the combination of both.

Definition:

Material handling is the art and science involving the movement, packing and storing of

products in any form.

PRINCIPLES OF MATERIAL HANDLING

1. Eliminate as much handling as possible by arranging the production sequence in

order and the layout.

2. Minimize the distance of each movement by adopting shortest routes.

3. Arrange the sequence of operations so that the movement of material is smooth

and unidirectional

4. To save the power and fuel, make use of gravity for material movement wherever

possible.

5. Minimize the time of each movement.

6. Avoid back tracking and re handling of materials

7. Move the materials in lot rather than individual basis so that it will be economic.

8. Select the appropriate material handling equipments to avoid rehandling and

damage to the material during movement

9. The material handling equipment should be safe and efficient

10. Avoid interference of handling equipment with the production line.

11. Repairing and maintenance of material handling equipment should be carried

periodically to reduce their down time.

12. Reduce the non production time of handling equipments.

13. Locate the stores at the key center to reduce the material handling time.

14. Deliver the material closer to the point of use

15. Select multipurpose handling equipment instead of single purpose to optimize the

investment

16. Conduct method study to avoid the wasteful movement of handling equipments

17. Give proper training to the personnel in the operation of material handling

equipments

18. The handling system should be simple and accident proof

19. Pathways should be well illuminated and should have no obstruction

20. To avoid sudden break down in the production line, provide stand-by facilities.

FACTORS IN THE SELECTION OF MATERIAL HANDLING

EQUIPMENTS:

1. Materials to be moved

The size of material, weight, its shape, strength, nature and its chances of

getting damaged during handling etc., should be considered

2. Plant buildings and layout

Floor load capacity, ceiling heights, strength of trucks, column spacing, door

size and locations of columns etc., influence the choice of material handling

equipment.

3. Types of production machines

Different machines have different outputs per unit time. Therefore the materil

handling equipment should be able to handle the maximum output.

4. Type of material flow pattern

A horizontal flow pattern requires truck, overhead cranes, conveyors etc.,

whereas a vertical flow pattern will require conveyors, pipes, elevators etc.,

5. Type of production

Conveyors are used for mass production system where as powered trucks are

suitable for batch production. Conveyors can handle more volume of

production per unit time as compared to trucks.

6. Cost : The total cost of material handling must be minimum

7. Load capacity

The material handling equipment should have more loading capacity

8. Handling cost for periodiuc overhauling, repair and maintenance cost etc.,

9. Expected life of the equipment

10. Amount of care and maintenance required for handling the equipments.

PRODUCTIVITY

Productivity is the ratio between output of wealth and input of resources used in

production processes. Output means the quantity of products produced and inputs are the

various resources used in production. The resources may be land, building, equipment,

machinery, materials, labour etc. Productivity can be increased by the following ways.

1. Increasing the output using the same input

2. Reducing the input by maintaining the output as constant

3. Increasing the output to a maximum extent with a smaller increase in input.

Productivity techniques

1. Basic Work Content

It is the time required to produce a product if,

The design and specifications are perfect

Manufacturing method is perfect

There is no idle time from any cause.

2. Defects in design and specification

Defects in the design of product

Lack of standardization

Poor quality of standards

3. Inefficient methods of operation

Selection of wrong machines

Selection of wrong tools.

Bad layout of plant and equipments

Bad working methods of the operator.

4. Ineffective time due to management

Poor production planning

Shortage of raw materials

Poor maintenance of plant and machinery which leads to an accident

Producing variety of products to increase the setup time.

5. Ineffective time due to workers

Poor attitude toward the work

Absence, lateness and illness

accidents

MANAGEMENT TECHNIQUES TO INCREASE PRODUCTIVITY

1. to reduce the excess of any job, the following techniques are used:

market research

product development

process planning

simplification

specialization

standardization

conducting method study

proper training to the employees

2. To reduce the ineffective time of any job, the following techniques are used.

Product development

Production and material control

Standardization and specialization

Proper maintenance

Selection and training to the employees

Safety training

Good layout and good working conditions

Promotion based on results and incentives

FACTORS AFFECTING PRODUCTIVITY

Factors affecting the productivity are the following two types:

1. Factors affecting national productivity

2. Factors affecting productivity in a manufacturing industry

1.Factors affecting national productivity

Human resources:

Their general level of knowledge and education are the important factors

for improving the productivity. The latest equipments and machineries

require a well educated and well trained employees. Government can

motivate the employees to be productive by offering good pay, promotion

and providing safe working conditions. The employee-employer

relationships should be smooth enough to increase the productivity

Technology and capital investment:

The technological development in the field of engineering will demand to

purchase new machineries and thus increasing capital investment. The

new technology is mainly depends on research and development. The

government should encourage R& D in industries, reduce taxes on profits

to attract capital investment from new investors.

Government regulation:

Government should frame the rules and regulations that must be more

flexible and should have a detrimental effect on productivity. While

framing governmental regulations the necessary health and safety must be

considered and the unneeded regulations should be eliminated.

2.Factors affecting productivity in a manufacturing industry.

Product design

A product design is simoplified by eliminating unnecessary parts in a

product. Thus it saves the material cost. Value analysis is a tool which is

used in product design and improve the productivity. R&D,

standardization and group technology are the other product design factors

that improve productivity.

Equipment and machinery

The machine used to produce the products will affect the productivity.

The well maintained machines, tools conveyors, good factory layout etc.

can eliminate the unnecessary work delay , wastage scrap etc. Thus

increasing the productivity.

Skill and effectiveness of worker

The skilled and experienced worker can do the worker at a faster rate with

greater effectiveness than a new worker. Therefore the national

productivity council is conducting training and skill development program

to increase the productivity.

Energy

Eneergy conservation in an industry is also an important to be considered

in i9mproving productivity. Energy is saved by attending proper

maintenance.

Type of production

When the production process is continuous, the manufacturing time is

reduced and thus more volume of production. This increases the

productivity.

HUMAN FACTORS IN LOW PRODUCTIVITY

Improper training. Lack of experience may promote low productivity

Workers lack of faith on the management

Lack of communication regarding technical details from the management

Improper planning and scheduling of work on the management part

Lack of uni9ty of command and unity of direction on the part of management

Unsolved human conflicts among the workers.

Low morale and poor attitude towards the nature of work

Poor working conditions which results into easy fatigue of the employuees

Absenteesm ofworkers gives a great inconvenience to the supervisors during

allocation of job

Workers may feel insecure while the introduction of automatic machines.

Carelessness, lateness and idleness .

PLANT MAINTENANCE

In industry equipments and machineries are most important parts for any

productionsystem. Since a large amount of money is invested for purchasing the above

equipments and machineries, if they are kept idle it will be a great loss. As far as

possible they should be always in working condition and there should not be any

breakdown.Hence it is very important that the equipments , machineries and plants

should be properly maintained.

Plant maintenance is the process of keeping the equipment and machine in good

operating condition so that the efficiency of the machine is retained and its life increased

OBJECTIVES OF PLANT MAINTENANCE

The main objectives are

To increase the life of the plants, equipments and machineries etc., by minimizing

their wear and tear deterioration.

To maximize the productivity through planned maintenance of equipments and

machineries.

To reduce the idle time or down time of the equipments through proper plant

maintenance so that the cost of production is reduced.

To provide proper information to the management on the cost and effectiveness of

maintenance

To improve the morale of staff and workers

To reduce the accidents and ensure safety of staff through proper inspection and

maintenance.

To get the customers good will through steady supply of quality products.

To get the co-ordination and support from other departments such as design,

research and development, finance, production etc., for increasing the

productivity.

TYPES OF PLANT MAINTENANCE

Plant Maintenance

Maintenance can be classified into planned and unplanned. In planned maintenance,

maintenance. Work is carried out as per the pre determined plan based on control and

records. Unplanned maintenance is an emergency maintenance Which is done after

failure. No advanced thoughtout has been given for predicting the causes of failure. It is

necessary to take up maintenance action immediately so as to avoid loss of production

and extensive damage to the equipments. Planned maintenance is further classified into

1. Preventive maintenance

2. Scheduled maintenance

3. Corrective maintenance

Planned

Maintenance

Unplanned

Maintenance

Preventive

Maintenance

Scheduled

Maintenance

Corrective

Maintenance

Emergency

Maintenance

Running

Maintenanc

e

Productive

Maintenan

ce

Shut down

Maintenanc

e

Break down

Maintenance

Shut down

Maintenance

1.Preventive maintenance:

Preventive maintenance is the maintenance carried out in a machine or equipment at

predetermined level to perform the machine in a satisfactory operating condition . This

method of maintenance prevents major breakdown through periodic inspections. It

locates weak spots in all machineries and inspection is carried out on these parts

regularly. Minor repairs are done so as to reduce the unanticipated breakdowns This type

of maintenance is used where the breakdown will have serious losses. Generally

preventive maintenance is costly but it is essential. The principle of preventive

maintenance is Prevention is better than cure.

Preventive maintenance Is further divided into

a. Running maintenance

b. Shut down maintenance

c. Productive maintenance

Running maintenance

Refers to the maintenance work is carried out when the equipment or the machine is

in service, where as Shut down maintenance refers to the maintenance work is carried

out only when the equipment or the machine is not in service

Productive maintenance refers to the maintenance work is carried out only for the

critical machineries. Since these machineries are very essential for production

purposes, the failure of these critical machineries will affect the complete production.

The critical machines need not be costly machines.

2. Scheduled Maintenance

This is also known as routine maintenance. This is carries out as per the

recommeddation of the equipment t supplier. This is usually done periodically in

predetermined dates. The following work are done in scheduled maintenance

Cleaning of tanks

Overhauling of machines

Periodic inspection

Lubrication

Repairing and replacing or worn out parts

Adjustment of some main parts

This type of maintenance may prevent major breakdown in machines and will not

interfere the production works.

3.Corrective maintenance refers to the maintenance work carried out in a machine after

failure so that its performance is restored. Corrective maintenance involves minor repairs

due to periodical inspections. It is futher classified into

Break down maintenance and

Shutdown maintenance

Breakdown maintenance

Breakdown maintenance is also known as emergency maintenance in which a

machine is allowed to run without any attention. Repair and replacement works

are carried out only when it breaks down. No action is taken to prevent

breakdown. This type of maintenance is applicable where the breakdown of

machines will not affect the production

Causes of breakdown

Failure to replace worn out parts ion right time

Failure to apply lubrication and cooling system

Due to vibrations, excessive heat and noise etc.,

Due to voltage fluctuations, poor quality oils etc.

Shutdown maintenance under corrective nmaintenance refers to the maintenance work is

carried out only after breakdown.

TECHNIQUES OF PLANT MAINTENANCE

In an unplanned maintenance, the breakdown is unpredictable and it happened accidently.

It leads to increase they down time and thereby cost of maintenance is more. Therefore,

planned maintenance is preferable than the unplanned maintenance in most of the plant.

Hence the various techniques of plant maintenance are applicable to planned

maintenance. These techniques are the scientific methods which are used to carry out the

planned maintenance function effectively.

1. Inventory of facilities and spare parts

Prepare a list of facilities available in an organization. The facilities like plant,

buildings, equipments, machineries, material hadling devices, tools and spare parts

etc., are to be maintained

2. Identification of plant and equipment

The above listed facilities should be positively identified. Generally the typical

identification system has 6 digits. The first two digits indicate the proper location of

the department, the next two digits indicate the type of machine and the machine

number with in the particular group.

3. Marking the machine and equipment

After all allocating the identification symbols to all the equipments and

machineries, marking should be done clearly on these equipments. This aids to

carry out the maintenance work at a faster rate without delay.

4. Facility register

It is a record of all equipments, machineries, plant and buildings which are to be

maintained. To carry out the maintenance work effectively, all the abpve details

should be kept in records. The information contained in the facility register are

i. Current location

ii. Conditions

iii. Spare parts with code numbers

iv. Serviceability

v. Breakdowns if any and their dates and reasons

vi. Size and models etc

5. Maintenance schedule

A maintenance schedule indicates the following:

List and type of maintenance work to be done.

Frequency of maintenance(ie) the time between breakdowns or failures

Which worker is attending the maintenance

Estimated time required to complete the maintenance work.

This maintenance schedule is normally prepared based on the suppliers operating

manual of each equipment and the number of years the machine worked.

6. Job specification

It is a document which described the nature of work to be done. The details of

work to be carried out on each facility are to be communicated to the maintenance

workers clearly. It ensures effective maintenance and im proves the morale of the

workers.

7. Maintenance program

It is list of program which describes when the maintenance work to be carried out

and at what intervals. The techniques used are planning charts, history cards,

inspection register, log books and visible record cards etc. The facilities to be

maintained are listed and marked on the left hand side of the planning chart. The

time (days/weeks/months) required to complete the maintenance s marked on the

right side of the chart

8. Job report

It is the process of recording the work done and preparing a report of the

conditions of facilities. In planned maintenance, there should be a continuous

flow of instructions to and from the workers attending the job. These

informations are very much useful for controlling and modifying the plan.

INDUSTRIAL SAFETY

Definition:

Industrial safety is primarily a management activity which is concerned with

reducing, controlling and eliminating hazards from the industries or industrial units.

IMPORTANCE OF INDUSTRIAL SAFETY

The danger of life of human being is increasing with advancement of scientific

development in different fields.

The importance of industrial safety was realized because every millions of industrial

accidents occur which result in either death or in temporary disablement or permanent

disablement of employees and involve large amount of losses resulting from danger to

property, wasted man hours and wasted hours.

More ever, from managerial perspective the importance of industrial safety in any

organization may be concluded by following facilitation:

a) Treatment: industrial safety management provides treatment for injuries and

illness at the work place.

b) Medical Examination: it carries out medical examination of staff joining the

organization or returning to work after sickness or accident.

c) Hazards identification.

d) Provision of protective devices.

e) Consultancy: it provides medical advised on other condition potentially affecting

health e.g. works canteen etc.

f) Education: it provides safety and health training.

OBJECTIVES OF INDUSTRIAL SAFETY:

to prevent accidents in the plant by reducing the hazard to minimum.

to eliminate accident caused work stoppage and lost production.

to achieve lower workmens compensation, insurance rates and reduce all other

direct and indirect costs of accidents.

to prevent loss of life, permanent disability and the loss of income of worker by

eliminating causes of accidents.

to evaluate employees morale by promoting safe work place and good working

condition.

to educate all members of the organization in continuous state of safety mindness

and to make supervision competent and intensely safety ninded.

A safety programmed includes mainly following four Es.

Engineering: i.e safety at the design, equipment installation stage.

Education: i.e. education of employees in safe practices.

Enlistment: it concerns the attitude of the employees and management to wards

the programmed and its purpose. Ti is necessary to arouse the interest of

employees in accident prevention and safety consciousness.

Encouragement: i.e. to enforce adherence to safe rules and practices.