Operations Planning and Control
PRODUCTION/ OPERATION PLANNING & CONTROL
PRODUCTION/ OPERATION PLANNING
PRODUCTION/ OPERATION CONTROL
Interrelated functions, often treated as one
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Activities of OPC
Operations planning pre-operations [Operations implementation] Operations control during operations and
post operations
Operations/Production Planning
Pre operation activity
Essential prerequisite to production &
production control
Planning all activities from what to produce,
to product delivery
5W-1H on production/operation
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Operations Planning Product planning Process planning
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Product planning (A company designing their product and making) What to produce? Market requirements, market survey Sales forecast Value engineering Product design Bill of Materials (BOM)
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Process Planning How to produce? Planning of Production Process Organization of production system?
Production/Operation System
OBJECTIVES
MATERIAL ENERGY
FACILITY
CAPAITL LABOR
INPUTS
ELEMENTS OR SUBSYSTEMS
OUTPUT
OUTSOURCING
R/M HR
QCD
OPN I
QCD
OPN II
QCD
OPN III INSP
QCD
INV
QCD
PARTS
Machines, tools, drawings, instruments, utilities
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Tooth powder can
Oval powder can
Seamed body
crimped shoulder
End component
oval shaped body
shoulder
neck
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Tin plates
Store
Inks coatings & consumables
Trim
Print
Slit
Body maker
ends
shoulders
necks
end seamer
crimping
Pack
Pack
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Roller bearings Outer race Inner race Cages Rollers
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EN31 Steel wire Coil
Cold forging
Heat treatment
Grinding
ROLLERS
Super finishing
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EN31 Steel bars
Turning
Heat treatment
Grinding
OUTER RACES
Super finishing
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EN31 Steel bars
Turning
Heat treatment
Grinding
INNER RACES
Super finishing
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EN31 Steel sheets
Punch -ing
CAGES
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INNER RACES
OUTER RACES
ROLLERS
ASSEMBLY
CAGES
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Organization of production system
Objectives?, outputs?, elements?, inputs? Objectives What to make? Quality standards How much to make? Quantity When to deliver? Lead-time
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Outputs to meet objectives as above Inputs Raw materials Bought out parts Human skills Utilities
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Subsystems or elements of production Equipment Layout Material handling Nature of operations Sequence of operations Standard times Utilities
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Factors influencing production planning
Volume & variety - Nature of the production system Product process matrix Nature of the production process Mass production? Batch production?
Job shop?
One off?
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Objectives of production planning
To provide an effective and efficient
physical system for production
On the basis of sales forecast and its
engineering analysis for high quality and cost effective production
Estimate resource requirements
Estimate when and where they are required
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Make arrangements to meet production
targets with flexibility to meet market dynamics
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Procedure for production planning 1.Demand forecast 2.Specification of production requirement Demand Vs Capacity (equipment & labour) Process of production, sequence, route etc Outsourcing Delivery schedule Production schedule Procurement schedule
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Setting production rate Sales requirement and resultant work load on the operations Daily production? Capacity of production lines? Manpower requirement? Shifts planning? Overtime?
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Production/Operations control
Post production planning, during production and post production Functions of production control (importance, role) 1. Ensuring Quality, Quantity and Delivery of parts, subassemblies and products (major assemblies)
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2. Feed back to management on production activity, C/CA/PA taken 3. Maintain high level of productivity, effective utilization of resources 4. Ensure minimum cost and high customer service
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Benefits of production/operation control Profitability through 1. Balanced inventory levels of R/M, WIP, F/G inventory cost reduction 2. Effective utilization of equipment, tooling, manpower, manufacturing and storage space - productivity 3. Reduction in setup costs lead-time & cost reduction 4. Reduction scrap & rework costs cost reduction
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Competitive advantage 1. Reliable delivery to customers 2. Shorter customer lead-time 3. Pricing flexibility through lower production costs 4. Orderly planning & control for marketing of new products
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Elements of production control 1.Control of planning availability of sales information, BOM etc. on time 2.Control of materials procurement schedules 3.Control of tooling tools & dies readiness 4.Control of manufacturing capacity utilization of equipment capacity 5.Control of activities issuing orders and schedules 6.Control of quantity at every stage
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7. Control of materials handling material movement on the floor 8. Control of due dates - monitoring of schedules 9. Control of information on C/CA/PA for future plan
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Elements of production control system
A system is a set of documented procedures
1. Preparation of Production orders what?
2. To set Lead time for production
3. To monitor and control production job card system, registers
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4. To record machine utilization, indirect labour utilization, scrap and rework to improve productivity production report, scrap report
5. An information system for collecting and processing and display of the data
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Factors determining production control procedures Nature of production Complexity of operations 1. Number of parts in the final product 2. Number of sub assemblies 3. Number of operations in each part 4. Sequence of operations 5. Variations in output rates of the machines 6. Customers orders with specific delivery dates, customers order schedule 7. Small lot orders 35
Magnitude of operations Time required for the operation Distance of material movement
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Operations Planning & Control Making a plan to organize inputs and run subsystems to meet organizational objectives and Taking C/CA/PA to ensure that the plan remains focused on objectives
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Role of OPC is to deliver customers expectations
1. OPC as a system
Set measurable objectives
Identify subsystems
Document procedures
2. Performing OPC functions
3. Maintain records
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Objectives of the company & role of OPC Expectation - customer Objective - supplier What does a customer expect? 1. Reliable yet reasonable delivery commitment 2. To be advised in case of delays 3. To be helped when he/she is in difficulty 4. Consistent good quality of products 5. Competitive rates
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Objectives of OPC
The broad objectives 1.To contribute in fulfilling corporate objectives and objectives of operations management
2.To help in setting up standards for future
3.To increase efficiency of operations
4.To increase productivity
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Specific objectives
1. Reliable yet reasonable delivery commitment Procurement Plan
Resources, available? To be procured? Interaction with materials management
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Production Plan
Capacity committed, uncommitted Tools availability Maintenance schedules Any outsourcing?
Delivery commitment based on above to be reliable yet reasonable
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2. To be advised in case of delays Monitor the plan efficiently Do C/CA/PA on deviations When delays are beyond control keep the customer informed
Major breakdown of equipment
Accidents
Strike
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Acts of God
Take full stock of the situation
convince the customer and reschedule the delivery 3. To be helped when he/she is in difficulty When another vendor fails When customer has rush orders OPC should keep some spare capacity as this is normal
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Accommodate the customer without sacrificing regular orders
4. Consistent good quality of products
Resource planning
Planning equipment as per process capability
Being committed to quality
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5. Competitive rates
Lower the price offered to the customer, higher is the order volume! But never at the cost of profit! Cost reduction areas
Time waste is most difficult to correct because it doesnt litter the floor! Henry Ford
Waiting time operator, material, tool
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Hunting time operator hunting for variety
of items!
Stalling delaying tactics by workers to
avoid starting a new job
Interrupted workloads planning
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i.
Overtime due to bad planning
Commitment of unrealistic delivery dates ii. Acceptance of too many rush orders iii. Delays in materials receipt
iv. Machine break downs due to frequent postponing of scheduled maintenance v. Manpower problems poor manpower plan
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Unproductive time of machines - Material
handling problems
Higher Overhead costs effective OPC
releases supervisory resources for value adding work
Inventory investments (blocked capital) Lowered morale frequent stoppage of
operations due to bad planning
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Role of OPC (Importance of OPC)
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Its role is advisory in achieving goals of right
quality, quantity and delivery It gives quantities of groups of major assemblies (products), subassemblies and parts in time frame OPC is an interface between marketing requirements, production requirements and materials requirements OPC is the brain of the operations function
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OPC is a staff function
OPC provides decision making
support at three levels Level I: fit aligns all resources to fit the requirements Level II: sustainability develop sustainability in market, competitive advantage Level III: risk guard against impact of uncertainty
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Scope of Operation Planning & control Areas where OPC decisions are made 1.Materials: procurement planning Purchasing Inspection Storage Inventory control Standardization Variety reduction Value analysis
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2. Methods: Process plan sequence Tooling plan for tools, jigs & fixtures 3. Machines and equipment Relevant areas are Facilities planning Replacement policy Maintenance policy Maintenance schedules Tools manufacture maintenance 4. Manpower: skills, numbers, shifts
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5.Routing: determining the flow of work Processing steps m/c 1, m/c 2, m/c 3 Materials handling Temporary storage locations 6. Estimating: establishing operations times for workers and machines 7. Loading and scheduling: Allocation of jobs to machines as per routing and estimation to get maximum utilization Fixing delivery dates (calendar)
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8. Dispatching: Release of shop orders to commit raw materials Authorizing usage of resources by operations Making plan operational 9. Expediting: Chasing, follow up 10. Inspection: To maintain quality of product To evaluate the process and labour
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11. Evaluating: Evaluation of performance of machines, labour, process for management action Performance improvement 12. Cost control: Wastage reduction Value analysis Inventory control Resource utilization
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OPC makes what kind of decisions? What to produce? product planning Where to produce? facility planning When to produce? schedules Who will produce? man power plan How to produce? process plan How much to produce? production plan
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Organization of OPC function Factors which determine the OS 1. Status of the OPC in a company (i) if the nature of the work is repetitive and number of workmen is small, line staff would handle the OPC directly (ii) if the equipment is laid out as per sequence and machine capacities are same, OPC is a sub-function of Operations
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(iii) if the product variety is very large and a batch system is followed, OPC should be an independent function in par with other functions 2. The degree of centralization Centralized OPC is handled by staff specialists Line staff is free from planning activities But line staff are deprived of using their experience and skills in planning
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Should be considered when product variety is large and planning process is complex A decentralized OPC is handled by line staff Line staff contribute their expertise Suitable if planning is less complex 2. The internal structure The functions assigned to OPC
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Requirements of effective OPC system 1.computerized, fully integrated system 2. Quick response 3. Effective, efficient and economic 4. User friendly easy to operate 5. Flexible in the light of business environment 6. Ability to highlight variations as they occur 7. There must be minimum corrective actions 8. It must be proactive 9. Result oriented
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How does OPC attempts to meet the objectives?
Three stages in functions of OPC Stage I: Planning functions Stage II: Operations
Stage III: Control function
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Measuring effectiveness of OPC Delivery OTD (number of orders delivered on time against number of orders delivered Inventory management, Inventory levels Average inventory held annually Value of obsolete inventory Non moving items Surplus inventory Inventory turn over ratio
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Production/operations management Planned production Vs actual Number of overtime hours Machine utilization ratio
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Functions of OPC
1. Order preparation Preparation of work order to operations department i. Samples, drawing or sketches ii. Engineering specifications iii. Sequence of operations
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2. Materials control
Job card preparation and issue i. Right material for the job ii. Material consumption at every stage of operation
iii. Scrap generation
3. Process planning 4. Tools control Record of available tools Tool life
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5. Scheduling
Preparing a time schedule for the process to meet commitment to customer 6. Dispatching Preparing documentation to authorize use of material 7. Progressing
8. Expediting
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Optional functions of OPC 1. Cost estimation (costing dept or Industrial Engg. dept) 2. Work measurement (Industrial Engg. dept) 3. Sub contracting (materials management) 4. Capacity planning (Engineering dept) 5. Demand forecasting (Sales dept)
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