Concept of Production Planning and Control the Operations Management

Production Planning and Control

4.0.    OBJECTIVES:

After studying this unit, you will be able to

  • Understand the concept of production planning and control
  • Explain PPC techniques
  • Examine the role of Job, Batch, Mass production systems.

 

STRUCTURE:

  • Objectives
  • Introduction
  • Production Planning
  • Factory Planning
  • Process Planning
  • Operating Planning
  • Procedure for the Production plan
  • Production Planning vs Production Control
  • Objectives of PPC
  • The master Production Scheduling process
  • Production Planning categories
  • Routing
  • Scheduling
  • Selection Criteria
  • Advantages of scheduling
  • Classification of Schedules
  • Techniques of Schedules
  • Loading
  • Job Production
  • Mass Production
  • Batch Production
  • Summary
  • Review questions
  • References

 

INTRODUCTION

‘Production Planning’ implies formulation, coordination and determination of activities in a manufacturing system necessary for the accomplishment of desired objectives. Production control is the process of maintaining a balance between various activities evolved during production providing the most effective and efficient utilization of resources

DEFINITIONS:

  • Alford and Beatty define “Production planning” as “the technique of foreseeing or picturing ahead, every step in a long series of separate, operations, each step to be taken in the right place, of right degree and the right time and each operation to be done at maximum efficiency”.
  • Ray Wild defines “Production planning” as the determination, acquisition and arrangement of all facilities necessary for future production of items”.
  • Lawrence L Bethel, Franklin S. Atwater, George H.E. Smith and Harvey. A Stackman Jr.3 defined “Production Planning” takes a given product or line of products and organizes in advance the manpower, material, machines and money required for a predetermined output in a given period of time. It starts with a product concept capable of being manufactured, a general idea of the process by which it can be made and a sales forecast for the desirable future.”

4.1.2    NEED & SIGNIFICANCE OF PPC:

Professor Franklin G. Moore Franklin Moore, considered as an authority in production indicates idle facilities. Further, a poorly organised system of production control must result in inefficiency as all the direct and auxiliary factory costs are rendered difficult to control and wastes which are sure to stem will not be detected. Thus, the manufacturing unit fails to maintain its competitive standing in the consumer field. In short, production control serves as an effective measure of cost control.

STAKEHOLDERS IN PPC:

  • Customers: Customer is an important stakeholder in any economic system that believes in successful marketing mechanism. The success of an organisation lies in meeting the expectations of consumers effectively.
  • Employees: Production planning and control guarantee good working conditions both physical and psychological creating a congenial atmosphere for efficient and effective working. They put their heart and soul together to contribute their best and in return get higher wages and perks. They have both jobs security and job- satisfaction. This work culture binds employees together. The employee morale will be high resulting in loyalty.
  • Producers: A scientifically designed production planning and control system results in giving a better or decent return for their investment, better price for their products and better name and fame in the product, labour and capital markets. The employer-employee relations will be sweeter less labour turnover and absenteeism, strikes and lockouts, least damage to physical facilities, least industrial in house accidents and therefore, least personnel costs. This makes producers enjoy high creditworthiness.
  • Investing Class: The persons who have savings will come forward to invest their hard earned money in such companies that guarantees security of funds invested, regular and adequate rate of return and the units which are socially responsible as much importance is given to environmental factors: It is eco- friendly units that attract the funds among other things.
  • Community: Production planning control activity plan the work of manufacturing and distribution and works the plan where the community has the benefits like 1) Optimum utilization of resources at its command, 2) Aiming at least cost production of quality which results in a higher standard of living of members, 3) Creation of more employment opportunities.

PRODUCTION PLANNING:

‘Production Planning’ is the function of the management, which decides about the resources the firm, will require for its future manufacturing operations and of allocating these resources to produce the desired output in a required amount at the lowest cost. Production planning sets the framework within which detailed schedules and inventory control schemes must operate. It is necessary for directing and controlling the methods used for production and deals with the setting up of production facilities in building, machine equipment in available space.

Factory Planning:

At this level of planning, the sequence of work tasks is planned in terms of buildings, machines and equipment required for manufacturing the desired goods and services. The relationship of workplaces in terms of departments is also planned at this stage taking into consideration the space available for the purpose. This stage deals with plant location and layout.

Process Planning:

There are many operations involved in factory planning for transforming the inputs into some desired end product. In Process Planning these operations are located, and the sequence of these operations in the production process is determined. Plans are also made for the layout of work centres in each process.

Operation Planning:

It is concerned with planning the details of the methods required to perform each operation viz. selection of work centres, designing of tools required for various operations. Then the sequence of work elements involved in each operation is planned. Specifications about the transfer, work centres, nature of tools required and the time necessary for the completion of each operation are prescribed.

PROCEDURE FOR PRODUCTION PLANNING:

Production plans are designed to fix some (or) all of the characteristics of manufacturing and distribution operations by determining the general size of labour force, setting plant and equipment capacity, etc. The following steps to be taken by the production manager as part of the procedure for production planning.

  1. Collecting the information regarding product design, the nature of the production process to get the desired product
  2. Drafting the details about the quality & quantity of raw materials required to reduce the product
  3. Identifying the specifications of various types of tools, machines & other equipment needed for production
  4. Estimating the average & maximum plant capacity under different circumstances
  5. Estimating the rate of obsolescence and also a loss in storage
  6. Analyzing the information about work analysis and a performance rating of workers
  7. Calculating the rate of interest on capital invested
  8. Examining the details of new development in production technology, if any
  9. Finding the prices of materials, wages of labour and overhead expenditure per unit of output
  10. Calculating the output rate per Hourly, weekly and monthly.
  11. Estimating the training requirements of the product and due date and the training requirements for workers.

“PRODUCTION  PLANNING” vs. “PRODUCTION CONTROL”

Criteria PRODUCTION          PLANNING PRODUCTION CONTROL
1.Meaning : It encompasses collection and maintenance of data regarding time standards, materials and their specifications, machines and their quantities, tools and then process as capacities, drawings and operational layouts. Production control involves dissemination               of            data, preparation of reports regarding output, machine and labour efficiency, percentages of defectives, scrap waste and  so on.
2. Functions This is to do with seeing that the requirements such as tools, machines, men, instructions, authorization and the like will be available at the right time and in the right quantities and are of proper, quality. Production control is to do with seeing that the requirements are actually made available at the right place and in the right quantities
3. Involvement It involves the preparation of load charts and fitting various work orders into un committed time available on the company’s facilities—especially men and machine It involves the actual setting that the jobs are started and completed as per schedule prepared by the scheduling cell of the production planning and control.
4. Feedback It involves designs of a suitable feedback

a. what may happen in the course of operations.

It is more concerned with keeping track of what is happening and collect information as to what has actually happened.

 

OBJECTIVES OF PPC

  1. It aims at planning production related activities systematically to meet the targets of production with the available resources of the firm.
  2. It is committed to providing for manufacturing requirements such as men machines, materials and money of right quality, in the right quantity and the right time.
  3. Scheduling has the time dimension of each part of each operation in a sequence. That, it decides the starting and finishing time for each task, work and work order that guarantees is integrated functioning. These timings are coinciding with routes on which workflows.
  4. It targets at coordinating -timing, balancing and integrating – the activities of different departments relating to production to achieve regular steady and balanced flow of production.
  5. It strives hard to ensure conformance to delivery commitments and to inform the sales department regarding any difficulties and snags, any. In case it is not done the organisation has no right to survey
  6. It determines the nature and magnitude of various input factors to manufacture the desired output
  7. It coordinates labour, machines and equipment in the most effective and economical manner.
  8. It establishes targets and checking these against performance.
  9. It ensures a smooth flow of material by eliminating bottlenecks if any in the production
  10. It aims at manufacturing of the desired output of the right quality & quantity at the right time.
  11. It provides systematic coordination and regulation of various activities keeping in view the capacity of resources
  12. It helps in decisions relating to the determination of raw material, machines, equipment, etc. and other input requirements for desired output
  13. It anticipates business changes & reacting to them in a proper manner
  14. It provides alternative production strategies in the case of emergencies

MASTER PRODUCTION SCHEDULING PROCESS

The ‘Operations management’ department needs information from other functional areas to develop an MPS that achieves production plan objectives and organisational goals. Although master production schedules are continually subject to revision, changes should be made with a full understanding of their consequences. Often, changes to the MPS require additional resources, as in the case of an increase in the order quantity of a product. Many companies face this situation frequently, and the problem is amplified when an important customer is involved. Unless more resources are authorized for the product, fewer resources will be available for other products, putting their schedules in jeopardy. Some companies require the vice-presidents of marketing and manufacturing jointly to authorize significant MPS changes to ensure mutual resolution of such issues. Other functional areas can use the MPS for routine planning.

PRODUCTION PLANNING CATEGORIES

 

PRODUCTION PLANNING CATEGORIES

ROUTING:

Routing is defined as “the determination of path or route over which each piece is to travel being transformed from raw material into finished product.” Routing of a production order contains a complete description of the item to be manufactured, details of each operation involved in the process the setup time and the standard time required to complete the work. It also prescribes the amount of material, types of equipment and machines and the number of skilled & unskilled workers required to perform a particular job (or) operation.

Routing consists of the following five decisions:

  1. Whether to Make or Buy?
  2. What are the form and shape the material?
  3. How the division of work to be done into operations?
  4. What is the choice of machines on which each operation should be done?
  5. How are the jobs sequenced in which operations are to be performed?

Advantages:

  • Efficient use of available resources
  • Reduction in manufacturing costs
  • Improvement in the quality & quantity of the output
  • Provides a basis for scheduling & loading

SCHEDULING:

Scheduling is a primary technique of production control. Schedules are made for the effective use of materials and manpower. It can be further categorized into several groups depending on the Job flow pattern, Job processing style, job release pattern and configuration of the work center. As stated above scheduling techniques are further classified according to their criterion, which is mentioned below:

  1. Job Flow Pattern: The job flow of production process requires either a flow shop or job sop pattern. In the earlier case all the jobs have similar process flows, whereas the latter case, jobs have variant process flows.
  2. Job Processing Style: The production process can be taken up according to job processing requirement. It is also called as ‘Job Processing Style’. This may be either a Unit processing style or Batch processing style.
  3. Job Release pattern: According to the nature of the product, the jobs are to be scheduled. The pattern of this schedule is called a job release pattern. Some jobs can be executed immediately whereas some jobs are commenced during the processing time.
  4. The configuration of Work Centre: This technique is useful for deciding suitable machines in accordance with the nature of work and work center. The machines may be identical, uniform or unrelated.

SELECTION CRITERIA: The scheduling process and selection are dependent on various issues like:

  1. Machine capacity.
  2. Plant layouts like Process and Product Type
  3. Volume requirement either low volume or high volume of production.
  4. Nature of product.
  5. Prioritization of jobs.
  6. Cost-related issues
  7. Nature of Production systems like Job, Batch, Mass production.

ADVANTAGES OF SCHEDULING: Scheduling aims at optimum utilization of resources as well as control of production. The following are some of the advantages of the implementation of schedules in the production department.

  1. Minimization of production cost
  2. Reduction of conflicts in the production process.
  3. Optimum utilization of plant capacity
  4. Optimum Utilization of Manpower.
  5. Planning for over-time, shifts and maintenance programs.
  6. Reduction in idle time, storage costs, and wastage.
  7. Proper control of the production process.
  8. Maintain delivery within deadlines.
  9. Performance appraisal in right time
  10. Achieving customer satisfaction

CLASSIFICATION OF SCHEDULES:

  1. Operation schedule: It determines the total time required to do a piece of work with a given machine (or) process. It indicates the time required to perform as well as other details of the type of materials, machines, labour etc. required to each and every operation.
  2. Master schedule: It is a list showing how many of each item to make in each period of time in future. These are usually changed as time moves along in response to change in conditions. After finalizing master schedule, each customer’s can be verified for the proposed delivery date and the promises made. The nature of the master schedule depends on whether the manufacturer is to order or to stock. In this, one must know approximately how many man hours workload is already there in each major department. If an item is needed to be handled on time, the work in later stage departments will be delayed even if they have open time earlier.
  3. Sequential scheduling: A best or optimum schedule can rarely be recognized, even assuming the optimum to be known here the problem is to define a sequence for a multi-product plant which passes through a number of departments. If the sequence is varied in each department, the number of sequences will increase, and there is no known technique to identify the optimum sequence even assuming that the optimum can be explicitly defined.

TECHNIQUES OF SCHEDULING:

  1. Gantt charts: These charts portray planned production and actual performance over a period of time any (or) all of the factors that require planning and control. It is a rectangular chart divided by parallel, horizontal and vertical lines. Some other types of charts, viz. machine record charts showing the available machines and the time at which various jobs are planned, order charts indicating the time to start various orders and the time of compilation can be used for scheduling.
  2. CPM and PERT Method: To analyze the efficiency and effectiveness of any project will be based on two important tools viz., Critical Path Method (CPM), and Program Evaluation Review Techniques (PERT) methods will be based on network analysis. Here the job is first broken into basic elements, and a network is constructed. The network is then analyzed to prepare the schedule. These have become powerful scheduling devices.
  3. The RUN-OUT Approach: This method is applicable to production that is geared up to inventory level. It is demand-oriented and tries to maximize stock outs by assigning the highest priority to items most in danger of running out. The run-out time for each product is calculated, and a monthly forecast for future monthly usage is developed. The method is easy, quick and inexpensive. It also minimizes stock outs and helps to improve the consumer service.

TECHNIQUES OF SCHEDULING

PLANNING AND SCHEDULING IN GARMENT INDUSTRY

PLANNING AND SCHEDULING IN GARMENT INDUSTRY

LOADING:

Loading can be defined as the study of the relationship between load and capacity at the places where work is done. Loading is designed to assist in the efficient and systematic planning of work loading provides complete and correct information about the number of machines available and their operating characteristics such as speed, capacity, capability, etc. This information can be used to calculate the difference between workload and actual capacity and then to determine whether customer order can be completed on the due date (or) not.

Objectives:

  • To plan new work orders on the basis of spare capacity available.
  • To balance the workload in a plant
  • To maintain the delivery processes
  • To check the feasibility of production programs

PROCEDURE FOR LOADING:

  • Find the earliest date and the hours required that can be scheduled onto each operation
  • Determine the hours required at each operation and the time thereafter to complete the job if no loading delay occurs
  • Schedule the bottleneck operation as early as possible
  • Schedule subsequent operations s early as possible

MACHINE LOADING:

Using information from schedules, weekly/periodic load in hours is determined for each machine and is then recorded on the machine load chart. The chart also gives the time for which the machine is busy for parts pertaining to different work orders. A machine load chart for all the machines in the production department shows the future spare capacity of machines. The machines should be loaded to full capacities as idle capacities of machines are sources of loss to the organization and also increase the cost of production.

Load charts:

Load charts show the work assigned to various departments, machines or components of an organization. During periods of peak/heavy loads of information from the load, charts can be used to determine

*    Priorities to future orders and to decide whether to subcontract (or) refuse new orders

*    Provision of overtime (or) multi-shift operations

*    Acquisition of extra men (or) equipment for additional capacity.

production planning graph

Source:http://joycedayton.com/technical-help/column-loading-capacity/using-loading-charts

JOB PRODUCTION

Job or make complete production is the production of a single complete unit by one operator or a group of operators. E.g. Bridge building, dam construction, shipbuilding etc. The whole project is considered as one operation & work is completed on each product before passing onto the next. Each product is a class by itself and requires a distinct and separate job for production purposes. The system requires versatile and highly skilled labour with high capital investments. In this system, the goods are produced to definite customers’ orders.

Characteristics:

  • The whole project is taken as a single operation.
  • Work is to be completed on each product before processing the next item.
  • Versatile and skilled labour is needed.
  • High capital investment.
  • Control operators are relatively simple.
  • The high unit cost of production.

CRITERIA FOR OPTIMIZATION OF PERFORMANCE:

  1. Total processing time or makes pan
  2. Mean flow time (or mean time in the job shop)
  3. The idle time of machines
  4. Mean lateness of jobs (lateness of a job is defined as the difference between the actual completion time of the job and its due date)
  5. Mean earliness of job (if a job is completed before its due date, then its lateness value is negative, and it is referred to as earliness instead)
  6. Mean tardiness of jobs (if a job is completed after its due date, then its lateness value is positive, and it is referred to as tardiness instead)
  7. Number of tardy jobs
  8. Mean queue time
  9. Mean number of jobs in the system

FACTORS TO BE CONSIDERED:

  1. The number of jobs to be scheduled
  2. The number of machines in the machine shop
  3. Type of manufacturing facility (flow shop or job shop)
  4. The manner in which the jobs arrive in the facility (static or dynamic)
  5. The criterion by which scheduling alternatives are to be evaluated

If the number of jobs (n) and the number of the machines (m) increase, the scheduling problem becomes more complex. In fact, no exact or optimal solutions exist for sequencing problems with large n & m. simulation and heuristic algorithms seem to be the solution techniques for real-life scheduling problems. We initiate the discussion on job shops with some very simple one machine and two machine cases for which exact solutions exist. Many practical situations would fit into these categories as you would see. Next, a graphical procedure for scheduling of 2 jobs to minimize the total time of processing is proposed. And, finally, some scheduling rules and results from simulation studies are presented.

MASS PRODUCTION

The mass production system is based on the application of the assembly line technique. This method is applied for material processing and material handling. For example Conveyers, Cranes and elevators. Hence, for continuous flow of production, ‘mass production system and its techniques are adopted.

Mass production is a system of production where manufacturing is carried out continuously. Otherwise, it can also be stated as ‘flow of production’ is maintained in a mass production system. In this system, a huge volume of a limited variety of products is manufactured. This is useful to achieve a high rate of productivity per worker as complete mechanization is introduced. However, it requires a huge amount of investment in machines so as to minimize the routine- operating expenses. This system is useful on single purpose type of machines and where standardized products are manufactured through a standardized production process. Production of limited varieties at large scale may be possible. Material handling may be easy because fixed path material handling equipment can be used such as conveyors, belt etc. high skilled machine operators are not required because plants and machineries are mostly standardized.

JOB PRODUCTION:

A job shop typically consists of general purpose machines clubbed different info departments. Each job is governed by its unique technological requirements, demands to process on machines in a certain order. Because of the variety of tasks, the job shop becomes a complex queuing system: a job leaves one machine and proceeds on its route to another for the next operation, only to find other jobs already waiting for the machine to complete its current task, so that a queue of jobs in front of that machine is formed; alternatively, a machine may finish its task and be ready to take the next job, but no jobs are available, so that the machine becomes idle. Planning for the job shop essentially involves deciding the order or priority for jobs waiting to be processed at each machine to achieve the desired objectives.

In job production a stream of orders has to be processed on common facilities or production centres, each job has its own unique specifications and requirements in terms of production resources. A job may consist of a single item or a batch of identical items. The scheduling problem here is concerned with setting the sequence in which jobs should be processed at each production centre.

  1. .11. BATCH PRODUCTION:

Batch Production is the extension of Job Production. Hence, Prof. Drucker has grouped these two types of production systems as ‘ Unique Product Production’. In this type of production system, two or more types of products are manufactured in batches ( or lots) at regular intervals. Different products are manufactured and stacked and then sold on receipt of orders. In batch production, machines and equipment are made available for the next batch as soon as the production of first batch is completed. For instance, Chemical industry, Paint industry, Pharmaceuticals industry, Clothes, Metal sheet industry. etc.

SUMMARY:

This unit deals with Production Planning. It implies formulation, coordination and determination of activities in a manufacturing system necessary for the accomplishment of desired objectives. Production control is the process of maintaining a balance between various activities evolved during Production providing the most effective and efficient utilization of resources. In an organization, the Production Manager has to administer a great variety of activities. He assembles appropriate resources and directs the use of these resources, be they people, machines processing, etc. The objective should be to produce goods at least costs and to the maximum satisfaction of the buyer. The manager has to respond also to other forces from the external environment such as Government regulation, a labour organization as well as local, regional, national economic conditions. The manager should be able to channelize the production process in a manner, which ensures the most efficient use of the resources to the best advantage for the enterprise.

QUESTIONS

  1. What is meant by ‘Job Production’ and its performance criteria?
  2. What do you understand by the term ‘Batch Production’? What are its advantages?
  3. Explain the important characteristics of Job Production.
  4. Explain the objectives and importance of ‘PRODUCTION PLANNING AND CONTROL (PPC)’.
  5. Explain the Procedures for Production Planning:
  6. What are the important categories of Production planning? Explain their role in production planning.
  7. Define ‘Production control’ and write a note on the objectives of production control.
  8. Explain the important techniques of Production Control:
  9. Write a short note on ‘Master Production Scheduling Process’.

REFERENCES:

  1. Russell Staylor, “Operations Management”, Seventh Edition, Wiley India Pvt. Ltd., New Delhi.
  2. Franklin Moore, Production Management , Homewood, Il: Richard D. Irwin, (1973)
  3. Mahadevan, “Operations Management Theory and Practice” Second Edition, Pearson, New Delhi.
  4. James R. Evans, David A. Collier, “Operations Management Concepts, Techniques and Applications”, Latest Edition, Cengage Learning India Pvt. Ltd., New Delhi.
  5. Alford, L.P., and Beatty, H.R., (1 95 1 ), “Principles of Industrial Management”, Ronald P, U.S.
  6. Ray Wild,” Production and Operations Management: Text and Cases” Cassell, 1995
  7. Lawrence L Bethel, Franklin S. Atwater, George H.E. Smith and Harvey. A Stackman Jr, Industrial Organization and Management, McGraw-Hill Book Company (1962)

Part og Operations Management Questions

Production and Operations Management Assignment Question and Answers

Type of Production and Manufacturing Systems Management

Productivity and Product Selection Management Questions

What Is Concept of Maintenance Management in Production Department?

Concept of Aggregate Planning in Operations Management Questions