PRODUCTION PLANNING AND

CONTROL

CONTENTS ARE…………

Introduction for planning & control.

o Production planning

o Objectives of production planning

o Production control

o Objectives of production control

o Production planning and control

o Characteristics of production planning and control

o Characteristics of production planning and control

o Need/importance of production planning and control

o Limitations of production planning and control

Techniques or Elements of Production Planning and Control

PRODUCTION PLANNING

Meaning:-

Production planning involves management decisions on the resources that the firm will require for its manufacturing operations and the selection of these resources to produce the desired goods at the appropriate time and at the least possible cost.

Definition:-

"The planning of industrial operations involves four considerations, namely, what work shall be done, how the work shall be done and lastly, when the work shall be done -kimball and kimball

OBJECTIVES OF PRODUCTION

PLANNING

1.To determine the requirements of men, material and equipment.

2.Arranging production schedules according to the needs of

marketing demand.

3.Arranging various inputs at a right time and in right quantity.

4.Making most economical use of various inputs.

5.To achieve coordination among various departments relating

to production.

6.To make all arrangements to remove possible obstacles in the

way of smooth production.

7.To achieve economy in production cost and time.

8.To operate plant at planned level of efficiency.

9.Making efforts to achieve production targets in time.

10.Providing for adequate stocks for meeting contingencies.

PRODUCTION CONTROL

Meaning:-

Production control guides and directs flow of

production so that products are manufactured in a best

way and conform to a planned schedule and are of the

right quality.Control facilitates the task of

manufacturing and see that every theme goes as per

the plan.

Definition:-

"Production control refers to ensuring that all which

occurs is in accordance with the rules established and

instructions issued.“

-HENRY FAYOL

OBJECTIVES OF PRODUCTION

CONTROL

1.To implement production plans by issuing orders

to those who are supposed to implement them.

2.To ensure that various inputs like men, machine,

materials etc. are available in the required quantity

and quality.

3.Making efforts to adhere to the production schedules.

4.To ensure that goods are produced according to the

prescribed standards and quality norms.

5.To undertake the best and most economic production

policies.

6.To introduce a proper system of quality control.

7.To ensure rapid turnover of production and minimizing

of inventories of raw materials and finished products.

PRODUCTION PLANNING AND CONTROLMeaning:-

Production planning and control is concerned with directing production along the lines set by the planning department.

Definition:-

"Production planning and control is the co-ordination of series of functions according to a plan which will economically utilize the plant facilities and regulate the orderly movement of goods through the entire manufacturing cycle from the procurement of all materials to the shipping of finished goods at a predetermined rate."

-CHARLES A. KOEPKE

CHARACTERISTICS OF PRODUCTION PLANNING AND CONTROL

1. It is the planning and control of manufacturing process

in an enterprise.

2.Questions like-what is to be manufactured? when it is tobemanufactured? etc.

3.All types of inputs like materials, men, machines are

efficiently used for maintaining efficiency of manufacturing

process.

4.Various factors of production are integrated to use them

efficiently and economically.

5.The manufacturing process is organized in such a way

that none of the work centers is either overworked or

under worked.

6.The work is regulated from the first stage of procuring

raw materials to the stage of finished goods.

Need/Importance of Production Planning and Control

For Increasing Production

For Co-coordinating Plant Activity

For Cost Control

For Rationalisation of Production Activities

Consumers

Limitations of production planning and control

1. Based on Assumptions: - Production planning and control is based on certain assumptions. In case the assumptions prove correct then the planning and control will go smoothly, otherwise it may not. The assumptions generally are about plant capacity, orders, availability of raw materials and power etc. if these assumptions go wrong then the process of planning and control will go weak.

2.Rigidity: - Under production planning and control the things are pre-decided and fixed. There is rigidity in the behavior of employees and it may not help in smoothening the flow of work.

3.Difficult for Small Firms: - This process is time consuming and small firms may not be able to make use of production planning and control.

4.Costly: - It is a costly device as its implementation requires separate persons to perform the functions of planning, dispatching, expediting etc. Small firms cannot use the services of specialists due to cost factor.

5. Dependence on External Factors: - The external factors

sometimes reduce the effectiveness of production planning

and control. The factors like natural calamities, change in

technology, change in fashion, breakdown of power,

government controls etc. limit the use of production

planning and control.

Techniques or Elements of Production Planning and

Control

The following are the techniques of production planning

and control:A. Planning B.Routing

C. Scheduling D. Dispatching

E. Follow-up and Expediting F. Inspection

Techniques or Elements of Production

Planning and Control

Planning

It is the first element of production planning and control. Planning is given an important role in every business. A separate department is set up for this work. Planning is deciding in advance what is to done in future. Control devices are also decided in advance so that all activities are carried on properly. An organizational set up is created to prepare plans and policies. Various charts, manuals and production budgets are also prepared. If production planning is defective then control will also be defective. Planning provides a sound base for control.

Routing

It is determining the exact path or routing which will be followed in production. The stages from which goods are to pass are decided after a proper thought. Routing may be compared to a train journey for reaching a particular place. If a passenger is to reach Delhi from Ambala Cantt then he has the option of going via Panipat and via Saharanpur. Both the routes will take him to Delhi. The question is –which route will be economical in time and money? The passenger will decide the route only after taking into consideration various factors affecting his journey. Similar is the case with production routing. It is the selection of the path from where each unit has to pass before reaching the final stage. The path must have the best and cheapest sequence of operations.

Routing Procedure:-

Deciding what part to be made or purchased

Determining Materials Required

Determining Manufacturing Operations and Sequences

Determining of Lot Sizes

Determining of Scrap Factors

Analysis of Cost of the Product

Preparation of Production Control Forms

SCHEDULING

Scheduling is the determining of time and date when each operation is to be commenced and completed. it includes the scheduling of materials, machines and all other requisites of production.

Types of schedules

Master scheduling

Operation scheduling

Detail operation scheduling

DESPATCHING

The term dispatching refers to the process of actually ordering the work to be

done. It involves putting the plan into effect by issuing orders. it is concerned

with starting the process and operation on the basis of route sheets and

schedule charts.

"Dispatches put production in effect by releasing and guiding manufacturing

order in the sequence previously determined by route sheets and schedule.”

PROCEDURE:

1.Moving of materials from process to process.

2.Assigning of work to machines.

3.Issuing of tools to production departments.

4.Issuing of job orders.

5.Recording of time taken.

6.Ensuring necessary changes.

7.Having proper liaison with routing

IMPORTANT DOCUMENTS

1.Material requisitions

2.work order

3.control sheet

4.Internal delivery note

5.Tool and gauge ticket

FOLLOW UP AND EXPDITING

Follow up or expediting is that branch of production control procedure which regulates the progress of materials and part through the production process".

PROCEDURE:

1.Progress should be checked

2.Causes of differences should be ascertained

3.Helping in removing the deviations

4.Report with departments supplying materials.

INSPECTION

Inspection is also an important function of control.

the purpose of inspection is to see whether the

products manufactured are of requisite quality or

not. It is carried on at various levels of production

process so that pre-determined standards of quality

are achieved. Inspection is undertaken both of

products and inputs.

CONTENTS ARE…………

o Introduction for Forecasting

o The strategic role of forecasting

o Components of forecasting demand

o Time series methods

Forecasting

FORECASTING

Forecasting is essential for number of planning

decisions and often provides a valuable input on which

operations of the business enterprises depend.

Forecasting is a process of estimating a future event

by casting forward past data. The past data are

systematically combined in a predetermined way to

obtain the estimate of the future.

Prediction is a process of estimating a future event

based on subjective considerations other than just

past data; these subjective considerations need not be

combined in a predetermined way.

THE STRATEGIC ROLE OF

FORECASTING

Supply chain Management:

Quality Management:

Strategic planning:

COMPONENTS OF FORECASTING

DEMAND Time frame

Short range forecasts

Long range forecasts

Demand Behaviour

Forecasting Methods

Quantitative Methods

Time series

Regression

Qualitative Methods

Delphi method

Forecasting process:

TIME SERIES METHODS

Moving average

Simple moving average

Weighted moving average

Exponential smoothing Method

Liner regression method

Simple Moving Average

Month Orders

June 50

July 75

August 130

September 110

October 90

The moving average is computed from the demand for

orders for the prior three months in the sequence according

to the above formula:

=

= 110 orders for November

Month Orders per Month Three-Month MovingAverage

January 120 -

February 90 -

March 100 -

April 75 103.3

May 110 88.3

June 50 95

July 75 78.3

August 130 78.3

September 110 85

October 90 105

November - 110

0

20

40

60

80

100

120

140

January February March April May June July August September October November

Orders per Month

Three-Month Moving Average

Weighted Moving Average

The Heartland Produce Company in Example wants to

compute a three-month weighted moving average with

a weight of 50% for the October data, a weight of 33%

for the September data, and a weight of 17% for the

August data. These weights reflect the company’s desire

to have the most recent data influence the forecast

most strongly.

The weighted moving average is computed as

= (0.50)(90) + (0.33)(110) + (0.17)(130)

= 103.4 orders

Exponential Smoothing

Method

The company has accumulated the demand data shown in the

accompanying table for repair and service calls for the past 12

months, from which it wants to consider exponential smoothing

forecasts using smoothing constants (α) equal to 0.30.

Month Demand

January 37

February 40

March 41

April 37

May 45

June 50

July 43

August 47

September 56

October 52

November 55

December 54

The forecast for February is

= (0.30)(37) + (0.70)(37)

= 37 service calls

The forecast for period 3 is computed similarly:

= (0.30)(40) + (0.70)(37)

= 37.9 service calls

Month Demand Forecast(Ft+1)

January 37 -

February 40 37

March 41 37.9

April 37 38.83

May 45 38.28

June 50 40.29

July 43 43.2

August 47 43.14

September 56 44.3

October 52 47.81

November 55 49.06

December 54 50.84

January - 51.79

0

10

20

30

40

50

60

Demand

Forecast(Ft+1)

Liner regression method

x (period) y (demand) xy x2

1 37 37 1

2 40 80 4

3 41 123 9

4 37 148 16

5 45 225 25

6 50 300 36

7 43 301 49

8 47 376 64

9 56 504 81

10 52 520 100

11 55 605 121

12 54 648 144

78 557 3867 650

y = 35.2 + 1.72x

To calculate a forecast for period 13, let x = 13 in the

linear regression line:

y = 35.2 + 1.72(13)

= 57.56 service cells

0

10

20

30

40

50

60

70

1 2 3 4 5 6 7 8 9 10 11 12 13

y (demand)

Linear (y (demand))

ISSUES ON PRODUCTION PLANNING AND CONTROL

Non-availability of materials (due to shortage, etc.)

facing one problem while creating process order when we do batch determination system is showing material is not available in quantity this but when we check stock through MMBE it shows there is sufficient stock in unrestricted use , also there is no safety stock , also there is no open reservation for such quantity but at the time of process order system is showing missing part message

Plant, equipment and machine breakdown

Equipment Breakdown

Machinery Breakdown, boiler and pressure vessels, spoilage of food and specific computer cover are not automatically included under LCA Property Insurance. Coverage for these incidences is available at an additional cost as requested.

Machinery Breakdown

Breakdown is defined as the actual breaking, seizing or burning out or explosion of any part of the machine whilst the machine is in use arising from either mechanical or electrical defects in the machine causing sudden stoppage, necessitating repair or replacement before further use.

Optimum utilization of resources

The closest reference to the expression "optimal utilization of resources" is

"value-for-money". According to this universally-recognized concept, all

business processes are characterized by the use of a group of inputs

(resources), which are transformed (activities) into outputs (results). The

optimization of resources is based on three characteristics: economy,

effectiveness and efficiency. The economy of resources consists of acquiring

resources of the required quality, at a reasonable cost and in a timely

manner. The effectiveness of resources is aimed at ensuring the adequacy of

resources relative to business needs and their appropriate use. The efficiency

of resources is measured by the attainment of an organization’s business

objectives.

Working capital capacity

Working capital is the money needed to fund the normal, day-to-day

operations of your business.

It ensures you have enough cash to pay your debts and expenses as they fall

due, particularly during your start-up period. Very few new businesses are

profitable as soon as they open their doors. It takes time to reach your

breakeven point and start making a profit.

Ensure the quality of products

In the manufacturing business, organization wants to make sure that their

produce a high level of quality in everything that they make! There are

many different ways to ensure the quality of products, which range from the

physical composition components of the product to the actual product

performance itself. Don't get overwhelmed when organization start to think

about ensuring quality control - there are a couple of different ways that

organization can ensure the quality of products.

How to strike the balance between demand and supply of products

Changes in demand and rush orders

Absenteeism of workers

Employee absenteeism is one of the most common workplace problems facingemployers in today’s workplace. Legitimate illnesses still account for themajority of employee absences, but some studies have shown that less than one-third of absences from the workplace are related to poor health. Mostemployers offer their workers vacation, sick leave, paid time off, or other kindsof paid and unpaid leave

Lack of coordination and communication between various functional

Coordination is a managerial function in which different activities of thebusiness are properly adjusted and interlinked.

Managers should strengthen communication across all facets of the organizationto increase the level of integration between each moving part.

If there is a lack of coordination and communication between various functionalareas of business, there is a risk that responsibility will become dispersed andtasks will be left unclaimed. Organizing accountability for every task helps toensure that efforts are tangibly coordinated and communication betweenvarious functional areas of business.

References

Operations Management by Russell & Taylor 7th edition: Pages

495- 517

Production and operation management by Dr.K.C.Arora: Pages

393-407

Production & operations management , SNCHARY 2nd edition

Operations Management by R. Dan Reid &R. Nada. Sanders

Operations Management for competitive advantage by Chase –

Jacobs - Aquilano 10th edition

http://www.tandfonline.com/toc/tppc20/current#.VTR8ktKqqko

http://en.wikipedia.org/wiki/Production_planning

http://www.worldcat.org/title/elements-of-production-planning-

and-control/oclc/744532

http://www.acsu.buffalo.edu/~nagi/courses/505/ch1.pdf

Thank you..