Production Planning & Control

Recommended Books
1. Kale S. (1st Ed., 2013), Production and Operations Management,
McGraw Hill Education.
2. Mahadevan, B. (2nd Ed., 2015) Operations Management: theory
and practice, Pearson Education India.
3. Chary, S. N. (5th Ed., 2012) Production and Operations
Management, McGraw Hill Education.
4. Panneerselvam, R. (3rd Ed., 2012), Production and Operations
Management, Prentice Hall.
> There is a mini book by F C Sharma, Mahavir Book Depot
PRODUCTION PLANNING &
CONTROL
Why we need planning?
● Why we need planning?
What is Production Planning (PP)?
● Production planning / Operations planning involves the
organization of an overall manufacturing/ operating
system to produce a product.
● Various activities involved in production planning are:
○ Designing the product
○ Determining the equipment and capacity
requirements
○ Designing the layout of physical facilities and
materials handling system
○ Determining the sequence of operations and the
nature of operations to be performed along with time
requirements
○ Specifying certain quantity and quality levels of
output
Objective of PP

● Is to provide a physical system together with a set

of operating guidelines for efficient conversion of
raw materials, human skills and other inputs into
finished goods.
Factors determining PP procedures

● Volume of production
● Nature of production processes
● Nature of operations
○ Manufacturing to order which may or may not be repeated at
regular intervals e.g. catering for marriages
○ Manufacturing for stock and sell (under mass production)
E.g: automobiles, watches, computers
○ Manufacturing for stock and sell (under continuous process
manufacturing) Eg: food products, soap, synthetic yarn
Roles/ Areas of PP in Operations Management

● Product design
● Job design & process design
● Equipment selection and replacement
● Labour skills training programmes
● Input material selection including raw materials
and sub contracting
● Plant selection and layout
● Implementing & controlling the schedule
● Operating the production system
Production Planning System

● There are two inter related sub systems in the

production planning:
○ Product planning system

○ Process planning system

What is production control?
What is production control?

● It means - systematic planning, coordinating, and

directing of all manufacturing activities and
influences to ensure having goods/ services are made
on time, of adequate quality, and at reasonable cost
Benefits of Production Control

● Improvement in profits through:

○ Maintenance of a balanced inventory of materials, parts, work
in process and finished goods; Reduction in inventory costs
○ Balanced and stabilized production
○ Maximum utilization of equipment, tooling, manpower, and
manufacturing and storage space
○ Reduction in indirect costs
○ Reduction in set-up costs
○ Reduction in scrap and rework costs
Contd…….
● Competitive advantage:
○ Reliable delivery to the customers
○ Shortened delivery schedule to the customers
○ Lower production costs and greater pricing flexibility
○ Orderly planning and marketing of new or improved
products
Elements of Production Control

● Control of planning
○ Latest forecast data from sales, BOM data from product engg.,
routing information from process engg.
● Control of materials
○ Control of inventory, issue of materials to shop floor, movement
of materials
● Control of tooling
○ Availability, issue from tool stock
● Control of manufacturing capacity
○ Availability of machines, machine capacity, labour capacity,
realistic prod schedules
Elements of Production Control

● Control of activities
○ Release of orders and information at assigned times
● Control of quantity
● Control of quality
● Control of material handling
● Control of due dates/ time management
● Control of information
○ Report showing deviations from plan, so that corrective action
can be taken.
 Production Control

● The function of production control :

○ Provide for the production of parts, assemblies and finished
products of required quality and quantity at the required time.
○ Co-ordinate, monitor and feedback to manufacturing
management, the results of the production activities,
analyzing and interpreting their significance and taking
corrective action if necessary.
○ Provide for optimum utilization of all resources.
○ Achieve the broad objective of low cost production and
reliable customer service.
What is production planning and control?
What is Production Planning & Control (PPC)?

● Consists of planning production in an organisation

before actual production activities start and
exercising control over activities to ensure that the
planned production is realized in terms of quantity,
quality, delivery schedule and the cost of
production
Objectives of PPC
● To deliver quality goods in required quantities to the customer
in the required delivery schedule- to achieve maximum
customer satisfaction and minimum possible cost
● To ensure maximum utilization of all resources
● To ensure production of quality products
● To minimise the product through-put time or production cycle
time
● To maintain optimum inventory levels
● To maintain flexibility in manufacturing operations
● To ensure co-ordination among labour, machines and various
supporting departments
Cont’d

● To plan for plant capacities for future requirements

● To remove bottlenecks at all stages of production and to
solve problems related to production
● To ensure effective cost reduction and cost control
● To prepare production schedules and ensure that
promised delivery dates are met
● To produce effective results for least total cost
● To establish routes and schedules for work that will
ensure optimum utilisation of materials, labour and
machines and to provide for ensuring the operations of
the plant in accordance with these plans
● The ultimate objective is to contribute to the profit of the
organisation
Scope of PPC
● Materials
○ Planning & Controlling procurement of raw materials,
components and spare parts. (Purchasing, storage,
inventory control, standardization, value analysis and
inspection are the other activities associated with
materials)
● Methods
○ Best method of processing from alternatives, best
sequence of operations ( process plans) and planning for
tooling, etc.
● Machines & Equipments
○ Facilities planning, allocation & utilization of plant and
equipments
● Manpower
○ Planning for manpower having appropriate skills
Scope of PPC (Contd.)
● Routing
● Estimating
● Loading and Scheduling
● Dispatching
● Expediting
● Inspection
● Evaluating
○ To improve performance of machines, processes and
labour.
● Cost control
○ Manufacturing cost is controlled by wastage reduction,
value analysis, inventory control and efficient utilization
of all resources.
Advantages of PPC

● It co-ordinates all phases of production

● It ensures better utilization of resources
● It ensures production of higher quality
products
● It minimises manufacturing time
● It facilitates faster delivery of goods
● It provides higher customer satisfaction
● It ensures minimum breakdowns
● It ensures minimum investment in inventory
● It ensures higher productivity
● It enables the firm to improve its sales turnover
Limitations of PPC

● PPC function is based on certain assumptions or

forecasts of customer’s demand, plant capacity,
availability of materials, power etc. if these
assumptions go wrong, PPC becomes ineffective.
● Employees may resist changes in production levels,
if they are rigid.
● It is time consuming when it is necessary to carry out
routing and scheduling for large and complex
products consisting of a large no. of parts.
● It becomes difficult when environmental factors
change very rapidly such as technology, customer’s
taste, govt. policy, power supply breakdowns, break
in supply of raw materials.
Functions of Production Planning & Control

First Plan your

work,
then work your
plan
1. Planning

● Decides about each element of the job in anticipation that work

shall be done, where, how and when it shall be done.
● Investigation about the complete details and requirements of the
product to be manufactured.
● Pre-determination of future achievements.
● Planning the design of product going to be manufactured.
● Planning about the quantity of materials which are to be
consumed.
● Planning about the standard quality of products to be
manufactured.
● Planning about sequence of operations
● Planning about the capacity of equipments
● Planning about internal transportation.
2. Routing

● Is the determination of path or route on which

manufacturing operations will travel, establishing the
sequence of operations to be followed in manufacturing a
particular component.
● Routing is an activity of PP which determines, what work
will be done on a part or a product and where and how it
will be done.
● “It is a selection of path or route over which every piece is
to travel in being transformed from raw material into
finished product”.
● Benefits of routing:
○ Efficient use of available resources

○ Reduction in manufacturing costs

○ improvement in output ( both quality & quantity)

○ Providing a basis for scheduling and loading

Steps in Routing

● Analyse the product, its components or parts and

determine the processes involved for each of the
component to manufacture the same in a most economical
way and to decide what is to be procured to reduce the cost
● Decide the type of materials required, its quality and
quantity for the manufacture of individual components.
● Determine the number of manufacturing operations and
their sequences as indicated in the route sheet
● Work out the total process time of each of the operations
based on the timings provided by the production planning
estimation department and work out the type and number of
machines necessary to produce the product. This is called the
‘load statement’
● Decide on the normal scrap allowance, allowance for
rejections to be provided during manufacturing
● Design the forms necessary for the production department like
Job Cards, Inspection cards, Routing sheets etc.
○ The person who attends on routing function should be
fully aware of all operations, machines, materials, and
other things in a plant.
3. Loading
● Process of assigning specific jobs to men, machines and work
centres on the basis of their relative capacities.
● Required data:
○ Time required to do job
○ Total work load
○ Capacity of each worker and machine
○ Availability of labour and machines
● A loading chart is prepared showing the planned utilization of
men and machines in the plant.
● The purpose is to achieve maximum possible utilization of
productive facilities and at the same time to avoid bottlenecks in
production.
4. Scheduling

● Scheduling involves developing and assigning

specific dates/time for start and completion of the
necessary tasks or operations in a production shop
floor.
● It is concerned with the time part of planning and
decides when the work will be performed on a given
part or product.
● It is the arrangement of different operations involved
in manufacturing, to fix priorities (including time, date
for commencement and completion of operation)
Activities in scheduling

● Allocation of quantity of each of the component to

be produced
● Indication of the quality required
● Allocation of time against each operation
5. Dispatching
● It is the initial action of production control.
● It consists of :
○ Issuance of orders for taking up the production work
according to the priority given in the schedule by the
planning section, and
○ Assignment of work to the concerned operators at their
machines or work places
● Dispatching is a sequencing of tasks that are waiting to be
worked on at a work centre and releasing them to be
performed at a particular time by a specific machine
● Dispatching thus determines, by whom and where the work
will be done.
● Main activities of dispatch can be listed as:
○ Assignment of work to machines and work places
○ Issuance of orders and production forms necessary
to the performance of the work
○ Authority to move work from one operation or work
place to the next.
○ To issue inspection orders, clearly stating the type
of inspection required at various stages.
Forms used in Dispatching
○ Work orders – issued to departments to commence the desired lot of
products.
○ Time cards – each operator is supplied with this card in which he
mentions the time taken by each operation and other necessary
information.
○ Inspection Tickets – sent to inspection department. Shows the quality
of work required and stages at which inspection is to be carried out.
○ Move Tickets – used for authorising over the movement of the
material from store to shops and from operation to operation.
○ Tool and equipment Tickets – authorizes the tools department that
new tools, fixtures and other required equipment may be issued to
shops.
6. Follow up
● Follow up (Expediting) is meant to examine
whether work is going as per the plan.
● If variation is found, it is eliminated or adjusted as
quickly as possible.
● A group of people called progress chasers take up
this task.
Main functions of Follow Up

● It serves to unify the production activities and assists in co-

ordination between the different departments and sections.
● It is responsible for reporting of production data correctly to
the management
● It carries out investigation of variances from the predetermined
time schedules or the delays caused during production
● It suggests corrective steps after the trouble has occurred to
avoid repetition of the problems
● It serves as a reliable medium for the management to obtain
information about the working of various sections and acting
as a ‘watch –dog’ on their performance.
Causes of Delay

● Non availability of material or late arrival of materials, tools or

men.
● High absenteeism
● Associated depts. may not assist due to their own commitments
or behind schedule activities
● ‘Act of God’ i.e. natural disasters etc
● Labour strikes
● Power failures
● Machine breakdown
● Lack of proper tools, fixtures, and others
7. Inspection
● It is carried out for confirming that quality is of
pre-determined standard.
● During this, defective parts are rejected
● It is done at various stages starting from raw
material to finished goods.
● Tools and machines are also inspected.