Bba 2 Production

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Meaning Of Production Management

A few definitions of production management are being reproduced here under to understand the

meaning of the term clearly:

Production management is the process of effectively planning and regulating the operations

of that part of an enterprise which is responsible for actual transformation of materials into

finished products.

Elwood S. Buffa has defined the term in a broader sense as:

Production management deals with decision making related to production process so that

the resulting goods or services are produced according to specifications, in amounts and by

the schedules demanded and at a minimum cost.

Production management, thus, is assigned with the following tasks.

Specifying and accumulating the input resources, i.e., management, men, information, materials,machine and capital.

Designing and installing the assembling or conversion process to transform the inputs into output,and

Coordinating and operating the production process so that the desired goods and services may beproduced efficiently and at a minimum cost.

The production department in an enterprise is not only concerned with the full exploitation of

production facilities but also the human factor that indirectly affects the production, utilization of

latest techniques of production and the production of quality goods to the satisfaction of customers

of the product.

The various activities that form scope of production function can be studied in the following

broad areas:

Product selection and design: the product mix marks the production system either efficient orinefficient. Choosing the right products keeping the mission and overall objective of the

organization in mind is the key to success. It is the design of the product, which makes the

organization competitive or noncompetitive.

Activities relating to production system designing: decision related to the production systemdesign is one of the most important activities of the production management. This activity is related

to production engineering and includes problems regarding design of tools and jigs, the design,

development and installation of equipment and the selection of the optimum size of the firm. All

these areas require the technical expertise on the part of the production manager and his staff.

Facilities location: the selection of an optimum plant location very much depends upon thedecision taken regarding production engineering. A wrong decision may prove disastrous. Location


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should as far as possible cut down the production and distribution cost. There are diverse factors to

be considered for selecting the location of a plant.

Method study: the next decision regarding production system design concerns the use of thosetechniques, which are concerned with work environment and work measurement. Standard

method should be devised for performing the repetitive functions efficiently. Unnecessarymovements should be eliminated and suitable positioning of the workers for different processes

should be developed. Such methods should be devised with the help of time study and motion

study. The workers should be trained accordingly.

Facilities layout and materials handling: plant layout deals with the arrangements of machinesand plant facilities. The machine should be so arranged that the flow of production remains smooth.

There should not be overlapping, duplication or interruption in production flow. Product layout

where machines are arranged in a sequence required for the processing of a particular product, and

process layout, where machines performing the similar processes are grouped together are two

popular methods of layout. The departments are layout in such a way that the cost of material

handling is reduced. There should be proper choice of material handling equipment.

Capacity planning: This deals with the procurement of productive resources. Capacity refers to alevel of output of the conversion process over a period of time. Full capacity indicates maximum

level of output. Capacity is planned for short-term as well as for long term. Process industries pose

challenging problems in capacity planning, requiring in the long run, expansion and contraction of

major facilities in the conversion process. Tools for capacity planning are marginal costing (Break

Even Analysis), learning curves, linear programming, and decision trees.

Production planning: the decision in production planning include preparation of short-termproduction schedules, plan for maintaining the records of raw materials, finished and semi-finished

stock, specifying how the production resources of the concern are to be employed over some future

time in response to the predicted demand for products and services.

Production control: after planning, the next managerial production function is to control theproduction according to the production plans because production plans cannot be activated unless

they are properly guided and controlled. Acc. To Soriebal and Lansburgh Production control is the

process of planning production in advance of operations; establishing the exact route of each

individual item, part or assembly; setting, starting and finishing dates for each important item,

assembly and the finished products; and releasing the necessary orders as well as initiating the

required follow-up to effect the smooth functioning of the enterprise.

Inventory Control: inventory control deals with the control over raw-materials, work-in-progress,finished products, stores, supplies, tools, and so is included in production management. The raw

materials, supplies etc should be purchased at right time, right quality, in right quantity, from right

source and at right price.


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An operation may be defined as the process of changing inputs into outputs thereby adding value to

some entity. Right quality, right quantity, right time and right price are the four basic requirements

of the customers and as such they determine the extent of customer satisfaction. And if these can

be provided at a minimum cost, then the value of goods produced or services rendered

increases. Thus the objectives of production management are to produce goods and services ofthe right quality, in the right quantities, according to the time schedule and a minimum cost.

Objectives of production managementmay be amplified as under:

Producing the right kind of goods and services that satisfy customers needs (effectivenessobjective).

Maximizing output of goods and services with minimum resource inputs (efficiency objective). Ensuring that goods and services produced conform to pre-set quality specifications (quality

objective).

Minimizing throughput-time- the time that elapses in the conversion process- by reducing delays,waiting time and idle time (lead time objective).

Maximizing utilization of manpower, machines, etc. (Capacity utilization objective). Minimizing cost of producing goods or rendering a service (Cost objective).

Types of Production Systems

A production system can be defined as a transformation system in which a saleable product or

service is created by working upon a set of inputs. Inputs are usually in the form of men, machine,

money, materials etc. Production systems are usually classified on the basis of the following:

Type of product, Type of production line, Rate of production, Equipments used etc.

They are broadly classified into three categories:

Job shop production Batch production Mass production

Job Production

In this system products are made to satisfy a specific order. However that order may be produced-

only once or at irregular time intervals as and when new order arrives or at regular time intervals to satisfy a continuous demand


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The following are the important characteristics of job shop type production system:

Machines and methods employed should be general purpose as product changes are quitefrequent.

Planning and control system should be flexible enough to deal with the frequent changes inproduct requirements.

Man power should be skilled enough to deal with changing work conditions. Schedules are actually non existent in this system as no definite data is available on the

product.

In process inventory will usually be high as accurate plans and schedules do not exist. Product cost is normally high because of high material and labor costs. Grouping of machines is done on functional basis (i.e. as lathe section, milling section etc.) This system is very flexible as management has to manufacture varying product types. Material handling systems are also flexible to meet changing product requirements.

Batch Production

Batch production is the manufacture of a number of identical articles either to meet a specific orderor to meet a continuous demand. Batch can be manufactured either-

only once or repeatedly at irregular time intervals as and when demand arise or repeatedly at regular time intervals to satisfy a continuous demand

The following are the important characteristics of batch type production system:

As final product is somewhat standard and manufactured in batches, economy of scale canbe availed to some extent.

Machines are grouped on functional basis similar to the job shop manufacturing. Semi automatic, special purpose automatic machines are generally used to take advantage

of the similarity among the products.

Labor should be skilled enough to work upon different product batches. In process inventory is usually high owing to the type of layout and material handling

policies adopted.

Semi automatic material handling systems are most appropriate in conjunction with thesemi automatic machines.

Normally production planning and control is difficult due to the odd size and non repetitivenature of order.

Mass Production

In mass production, same type of product is manufactured to meet the continuous demand of the

product. Usually demand of the product is very high and market is going to sustain same demand

for sufficiently long time.

The following are the important characteristics of mass production system:


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As same product is manufactured for sufficiently long time, machines can be laid down inorder of processing sequence. Product type layout is most appropriate for mass production

system.

Standard methods and machines are used during part manufacture. Most of the equipments are semi automatic or automatic in nature. Material handling is also automatic (such as conveyors). Semi skilled workers are normally employed as most of the facilities are automatic. As product flows along a pre defined line, planning and control of the system is much easier. Cost of production is low owing to the high rate of production. In process inventories are low as production scheduling is simple and can be implemented

with ease.

locational decisions generally arise when:

A new manufacturing (or servicing) unit is to be set up. Existingplant operationsare difficult to expand due to poor selection of site earlier. The growth of the business makes it advisable to establish additional facilities in new territories. The product development has over weighted the advantages of the existing plant. There is emergence of new social (chronic labor problems) political (political instability or

economic conditions that suggest a change in the location of the existing plant.

The changes in the industrial Policy of the Government, favoring decentralizing and dispersal ofindustries to achieve overall development of the country, do not permit expansion of the existing

plant.

Factors governing plant location:

Plant location studies are conducted in three phases:

General territory selection Community selection Site selection

Proximity to market: Every company is in business to market and it can survive only if their

product reaches the consumers on time and at the competitive price. The ratio of selling costs to

sales generally increases with distance. Therefore, in the choice of location o the plant, the factor of

proximity to the market is given the highest priority. Locating a plant nearer to the market is

preferred if:
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The product is fragile. The product is susceptible to spoilage. The promptness of service is required. The product is relatively inexpensive and transportation costs add significantly to the cost.

Bread, soap factories, etc. require the market to be nearby. If the product is exported, location near

ports is desirable. This is particularly important for producers who sell bulky commodities, which

incur high transportation costs. Nearness to market not only lowers transportation costs but also

gives many other benefits namely:

A good many administrative problems, which cause perpetual headaches and add to costs, areavoided.

Liaison with dealers or whole sellers can be maintained economically and easily Other costs such as commission to middlemen, which at times run as high as 20 to 50 percent can

be reduced significantly.

Customers accounts do not remain outstanding for settlement. This recovery is easy and less timesaving which itself reduces selling costs.

Proximity to source of raw materials: Since raw materials usually constitute 50 to 60 percent of

the total product cost, it is important that the firm gets its requirements of raw materials at the

right time and at the reasonable price for which the plant must be located in the neighborhood of

some source which can meet the raw materials requirement of the unit Proximity to supply of raw

materials factor assumes still greater importance if raw materials are of perishable nature or if

they are expensive to transport, or if their weight is substantially reduced by processing. Proximity

to sources of raw materials is equally important for small units. This is because usually small units

are not considered important customers. They get least priority and in the event of scarcity are the

one to be struck off first from the list. The availability of materials to small units to a large extent

thus depends on their follow up and personal visits to the suppliers plant which is possible only if

the buyers plant is close by.

Infrastructure facilities: Infrastructure facilities consider availability of utilities like power water,

disposal of waste etc. These form the life-blood of many types of industries without which there

facilities may come to a stand still. Underestimating the need of any one of the utilities can be

extremely costly and inconvenient. Certain industries, for example, aluminium, steel, etc are power

intensive and must be located close to the sites of power generation failing which the shortage of, or

increase in cost of generating power may spell problems for their survival. Similarly, chemical

process industries like paper and pulp, cement, steel, sugar laundries, metal plating, food

preparation etc. requires perennial source of water. Mineral content of water may also be an


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important factor. Treatment of water is an expense to be considered while comparing economics of

different locations. Drainage facilities are important for process industries otherwise disposal of

process waster can create lot of difficulties.

Transport facilities: Transportation cost to the value added is a key determinant of the plant

location. The structure of the transportation cost depends on (i) Characteristics of the commodity(ii) average distance of shipment (iii) medium of shipment: rail, road, and air sea. The need for

transport arises because raw materials and fuel are to be moved to factory site and finished goods

are to be transported from factory to markets. Other things being equal since transport cost has a

major effect on product cost, the regions well served by transport facilities are most suitable for

industrial locations.

Labor and wages: Plant location should be such that required labor is easily available in the

neighborhood. Importing labor from outside is usually costly and it causes lot of administrative

problems. Availability of required labor locally is better since problem of arranging

accommodation and other related problems do not arise. Since normally workers with specific

skills are required, some sort of training facility should also be available in the

neighborhood. Skilled employees are easily available if ITIs, or Engineering colleges are there in

the neighborhood.

Legislation and taxation: The policies of the state Government and Local Bodies relating to issue

of licenses, building codes, labor laws, etc. are the factors in selecting/rejecting a particular

community/site. In order to disperse industries and ensure balanced economic growth, both

Central and State government offer a package of incentives for setting up industries in particular

locations. Exemption from excise duty, sales tax and octroi, soft loans from financial institutions,

subsidy in electricity charges, etc. are some of the incentives offered. Since taxes and duties levied

by the State Government and Local bodies substantially influence product cost, the incidence of

such taxes/levies must be taken into account while selecting a community/site.

Climatic conditions: Climatic factors may not have a major influence these days because of

modern air conditioning facilities available today. However, it may be important factor for certain

industries like textile mills, which require high humidity.

Industrial and labor attitudes: Community attitudes towards supporting hostile trade union

activities are an important factor. Locating facilities in a certain region/community may not be

desirable as frequent labor problems and interruptions are harmful to the plant in the long

run. Political situation in the state and attitude of the government towards labor activities also

influences selection of the site for the plant.Safety requirement: Safety factor may be important for certain industries such as: Nuclear power

plants and Explosive factories. Location of such industries close to border areas is undesirable.

Community facilities (or social infrastructure): Community facilities imply accommodation,

educational, entertainment and transport facilities. Accommodation is needed unless the employees

are local residents. Accommodation should be easily available, comparatively cheap and near some

public transport stop. The location area should be fully developed, be accessible by road and should


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have a convenient and efficient public transport system operating between the area and the

township to enable employees, officials, customers and suppliers to make easy trips for their work

Community attitudes: Community attitudes towards work (i.e. whether the people in the location

are hard working or otherwise) as well as their attitudes towards the incoming entrepreneurs

(helpful and cooperative or otherwise) can make or mar an industry. Location decisions, therefore,must take such factors also into account particularly while setting up labor-intensive units.

Supporting industries and services: Location factors should also include proximity of services

needed by the firm. A firm desirous of getting some or all parts made from outside or some of the

operations done from outside must see that such sub-contractors are located in the

neighborhood. Getting a job done from units located at far off places will mean not only additional

transportation cost but also time consuming and costly. Also if units are too far off, the control on

quality of work done by them cannot be exercised.

Suitability of the land: Site selection should also take into account topography and soil structure

of the land. The soil structure must be capable of bearing loads of foundations. Though modern

building techniques can overcome the limitations of the soil, but if considerable improvement is

required then selection of a low cost and may ultimately turn out to be expensive.

Availability and cost of the land: Site size (Plot size) must be large enough to accommodate the

present production facilities, parking and access facilities but also leave sufficient room for future

expansion. As a general rule, a site five times the actual plant size is considered minimum for all

these things including future expansion.

Economy survey of the site selection: An ideal location is one where the cost of obtaining

materials and processing them into finished product plus the cost of distributing the finished

product to customers is minimum.

One of the most commonly used approaches consists of following steps:

Prepare a list of all relevant factors. Estimate expenses on materials, transport, wages, power etc for each location on each of the above

factors.

Collect data on intangible factors like community facilities, community attitudes etc. Analyze the tangible data for each location and calculate rate of return on investment. Select provisionally a locational based on financial data. Compare the intangible data for the different locations and select the optimal location considering

intangible data.

Plant layout means the disposition of the various facilities (equipments, material, manpower

etc.) within the areas of the site selected. Plant layout begins with the design of the factory building

and goes up to the location and movement of work. All the facilities like equipment, raw material,


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machinery, tools, fixtures, workers etc. are given a proper place. In the words of James Lundy, It

identically involves the allocation of space and the arrangement of equipment in such a manner that

overall cost are minimized. According to MoNaughton Waynel, A good layout results in comforts,

convenience, appearance, safety and profit. A poor layout results in congestion, waste, frustration

and inefficiency.

Plant layout is very complex in nature as it involves concept relating to such fields as engineering,

architecture, economics and business administration. Hence a plant layout, with proper design,

encompasses all production and service facilities and provides for the most effective utilization of

men, with materials and machines constituting the process, is a master blue print for coordinating

all operations.

Objectives of a Good Plant Layout

The principal objective of a proper plant layout is to maximize the production at the minimum of

the costs. This objective should be kept in mind while designing a layout for a new plant as well as

while making the necessary changes in the exiting layout in response to change in management

polices and processes and techniques of production with the production system, i.e. workers,

supervisors and managers.

If a layout is to fulfill this goal, it should be planned with the following clear objectives in mind.

There is the proper utilization of cubic (i.e. length, width and height). Maximum use of volumeavailable should be made. For example, conveyors can be run above head height and used as

moving work in progress or tools and equipments can be suspended from the ceiling. The principle

is particularly true in stores where goods can be stored at considerable height without

inconvenience.

Waiting time of the semi-finished products is minimized. Working conditions are safer, better (well ventilated rooms etc.) and improved Material handling and transportation is minimized and efficiently controlled. For this , one has to

consider the movement distances between different work areas as well as the number of times such

movements occur per unit period of time.

The movements made by the worker are minimized. Suitable spaces are allocated to production centers. Plant maintenance is simpler.


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There is increased flexibility for changes in product design and for future expansion. It must becapable of incorporating, without major changes, new equipment to meet technological

requirement or to eliminate waste.

A good layout permits material to move through the plant at the desired speed with the lowest cost. There is increased productivity and better product quality with reduced capital cost. Boosting up employee morale by providing employee comforts and satisfaction. The work should be so arranged the there is no difficulty in supervision, coordination and control.

There should be no hiding-places into which goods can be mislaid. Goods raw materials and

ready stocks must be readily observed at all times. It will reduce the pilferage of material and

labour.

It should be noted here that the above stated objectives of plant layout are laudable in themselves;

it is often difficult to reconcile all of them in a practical situation. And as such, the highest level of

skill and judgment are required to be exercised. For this, close association between the

entrepreneurs and experienced engineers is a must.

There are three basic types ofplant layoutsand these correspond to the three types ofprocessing

systems.Product layouts are most conducive tocontinuous processing,process layouts are used

forintermittent processingand fixed position layouts are used whenprojects require layouts.

Product Layout

Product layout is used toachieve a smooth and rapid flow of large volumes of productsor

customers through a system. This is made possible by highly standardized products or serviceswhich require highly standardized, repetitive processing operations. A job is divided into a series of

standardized tasks, permitting specialization of both labor and equipment. The large volumes

handled by these systems usually make it economical to invest substantial sums of money in

equipment and in job design. Because only one or few very similar items are involved, it is feasible

to arrange an entire layout to correspond to the technological processing requirements of the

product or service involved.

This layout is for product focused systems, and are popularly known as Assembly Line. The work

centers are arranged in the job sequence. The raw materials enters at one end of the line and

individual operations are performed in the pre-fixed sequence and get converted to the final shape.

There is one flow for each product. The work in-process and the material handling are minimum.

Following conditions favor the selection of product layout.

High volume of production Standardization of product Reasonably stable product demand
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Uninterrupted supply of material Holding up of inventory is possible.

Product layouts achieve a high degree of both labor and equipment utilization, and this offsets the

high equipment costs. the investment in work-in-process is minimum because the items movequickly from operation to operation. This also reduces congestion and ensures smooth flow of

items in the shop floor. Overall supervision and control are effective.

2. Process Layout

These layout are designed to facilitate processing items or providing services which present

variations in their processing requirements. The processing units are organized by functions into

departments on the assumption that certain skills and facilities are available in each department.

Similar equipments and operations are grouped together. For example, turning, milling, foundry,

heat treatment. Items which require these operations are frequently moved in batches to the

departments in a sequence dictated by technical considerations. Different products may cal for

different processing requirements and different sequence of operations. Consequently, variable

path material handling equipment is needed to handle variety of routes and items.

These layouts, also known as Functional Layout is process focused systems and are used widely in

manufacturing and service sectors. The use of general purpose machines provides flexibility

necessary to handle a wide range of processing requirements. Workers who operate the

equipments are usually skilled or semi-skilled. The example of process layout includes hospitals,

colleges and universities, banks, airlines and public libraries. For instance, hospitals have many

departments like surgery, maternity, emergency, etc. Similarly universities have separatedepartments that concentrate on different areas of study as engineering, business management,

mathematics, and physics. In business organization, there will be departments like accounts,

personnel, and systems.

Because process layouts arrange equipments by type rather than according to processing sequence,

the system is much less vulnerable to shutdown caused by either mechanical failure or

absenteeism. Material handling in inefficient and unit handling costs are generally much higher

than in product layouts. The investment in work-in-process is high and material movements will

take a zig-zag route. The equipment utilization comparatively will be less. Hence, this layout is more

suited for low volumes of production and particularly when the product is not standardized. It is

economical when flexibility is the basic system requirements.

3. Fixed Layout

In this layout, the material remains in a fixed position, but machinery, tools handling equipment,

workers are brought to the place the material. This is in contrast to both product and process


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layouts. Such a layout may be preferred when the equipment and the machinery is small in number

and size, and where the workmen are highly skilled to perform the various small jobs on the

product. Fixed position layouts are used in large construction projects, ship building, aircraft

manufacturing etc.

The following are some important factors, which influence the planning of effective layout to a

significant degree.

1. Nature of the product: The nature of the product to be manufactured will significantly affect the

layout of the plant. Stationary layout will be most suitable for heavy products while line layout will

be best for the manufacture for the light products because small and light products can be moved

from one machine to another very easily and, therefore, more attention can be paid to machine

locations can be paid to machine locations and handling of materials.

2. Volume of production: Volume of production and the standardization of the product also affect

the type of layout. If standardized commodities are to be manufactured on large scale, line type of

layout may be adopted.

3. Basic managerial policies and decisions: The type of layout depends very much on the

decisions and policies of the management to be followed in producing the commodity with regard

to the size of plant, kind and quality of the product, scope for expansion to be provided for, the

extent to which the plant is to be integrated, amount of stocks to be carried at anytime, the kind of

employee facilities to be provided etc.

4. Nature of plant location: The size shape and topography of the site at which the plant is located

will naturally affect the type of layout to be followed in view of the maximum utilization of the

space available .For e.g., if a site is near the railway line the arrangement of general layout forreceiving and shipping and for the best flow of production in and out the plant may be made by the

side of the railway lines .If space is narrow and the production process is lengthy, the layout of plant

may be arranged on the land surface in the following manner:

5. Type of industry process: This is one of the most important factors influencing the choice of

type of plant layout. Generally the types of layout particularly the arrangement of machines and

work centers and the location of workmen vary according to the nature of the industry to which the

plant belongs. For the purpose of lay out, industry may be classified into two broad

categories:
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(i) Intermittent and (ii) continuous. Intermittent type of industries is those, which manufacture

different component or different machines.

Such industries may manufacture the parts, when required according to the market needs.

Examples of such industries are shipbuilding plants. In this type of industry functional layout may

be the best. The second type of industry in continuous industry. in this type of industry rawmaterial are fed at one end and the finished goods are received at another end. A continuous

industry may either be analytical or synthetic . A analytical industry breaks up the raw material into

several parts during the course of production process or changes its form, e.g. oil and sugar

refineries. A synthetic industry on the other hand mixes the two or more materials to

manufacture one product along with the process of production or assembles several parts to get

finished product. Cement and automobiles industries are the examples of such industry. Line layout

is more suitable in continuous process industries.

6. Types of methods of production: Layout plans may be different according to the method of

production proposed to be adopted. Any of the following three methods may be adopted for

production- (1) Job order production, (2) batch production, and (3) mass production. Under job

production goods are produced according to the orders of the customers and therefore,

specification vary from customer to customer and the production cannot be standardized. The

machines and equipment can be arranged in a manner to suit the need of all types of customers.

Batch production carries the production of goods in batches or group at intervals. In this type of

manufacturing the product is standardized and production is made generally in anticipation of

sales. In such cases functional or process layout may be adopted. In case of mass production of

standardized goods, line layout is most suitable form of plant layout.

7. Nature of machines: Nature of machines and equipment also affects the layout of plants. If

machines are heavy in weight or create noisy atmosphere, stationery layout may reasonably be

adopted. Heavy machines are generally fixed on the ground floor. Ample space should be provided

for complicated machines to avoid accidents.

8. Climate: Sometimes, temperature, illumination and air are the deciding factors in the location of

machines and their establishments. For example, in lantern manufacturing industry, the spray-

painting room is built along the factory wall to ensure the required temperature control and air

expulsion and the process of spray painting may be undertaken.

9.Nature of material: Design and specification of materials, quantity and quality of materials and

combination of materials are probably the most important factors to be considered in planning alayout. So, materials storage, space, volume and weight of raw materials, floor load capacity, ceiling

height ,method of storing etc. should be given special consideration. This will affect the space and

the efficiency of the production process in the plant. It will facilitate economic production of goods

and prompt materials flow and soundly conceived materials handling system.

10. Type of machine: Machines and equipment may be either general purpose or special purpose.

In addition certain tools are used. The requirements of each machine and equipment are quite


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different in terms of their space; speed and material handling process and these factors should be

given proper consideration while choosing out a particular type of layout. This should also be

considered that each machine and equipment is used to its fullest capacity because machines

involve a huge investment. For instance, under product layout, certain machines may not be used

to their full capacity so care should be taken to make full use of the capacity of the machines andequipment.

12.Human factor and working conditions: Men are the most important factor of production and

therefore special consideration for their safety and comforts should be given while planning a

layout, specific safety items like obstruction-free floor, workers not exposed to hazards, exit etc.

should be provided for. The layout should also provide for the comforts to the workers such as

provision of rest rooms, drinking water and other services etc. sufficient space is also to be

provided for free movement of workers.

13. Characteristics of the building: Shape of building, covered and open area, number of storeys,

facilities of elevators, parking area and so on also influence the layout plan. In most of the cases

where building is hired, layout is to be adjusted within the spaces available in the building.

Although minor modification may be done to suit the needs of the plants and equipment. But if any

building is to be constructed, proper care should be given to construct it according to the layout

plan drawn by experts. Special type of construction is needed to accommodate huge or technical or

complex or sophisticated machines and equipment.

Planning and control are interrelated and interdependent. Planning is meaningless unless control

action is taken to ensure the success of the plan. Control also provides information feedback which

is helpful in modifying the existing plans and in making new plans. Similarly, control is dependent

on planning as the standards of performance are laid down under planning. Therefore, production

and control should be considered an integrated function of planning to ensure the most efficient

production and regulation of operations to execute the plans successfully.

Production planning and control may be defined as the direction and coordination of the firmsmaterial and physical facilities towards the attainment of pre-specified production goals in the most

efficient available way .It is the process of planning production in advance of operations,

establishing the exact route of each individual item, part or assembly, setting starting and finishing

dates for each important item or assembly and finished products, and releasing the necessary

orders as well as initiating the required follow up to effectuate the smooth functioning of the

enterprise. Thus, production planning and control involves planning, routing, scheduling,


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dispatching and expediting to coordinate the movements of materials, machines and manpower as

to quantity, quality, time and place. It is based upon the old adage of first plan your work and then

work your plan.

Objectives of Production Planning and Control

The main objective of production planning and control is to ensure the coordinated flow of work so

that the required number of products are manufactured in the required quantity and of required

quality at the required time at optimum efficiency. In other words, production planning and control

aims at the following purposes:

Continuous Flow of Production: It tries to achieve as smooth and continuous production byeliminating successfully all sorts of bottlenecks in the process of production through well-planned

routing and scheduling requirements relating to production work.

Planned Requirements of Resources: It seeks to ensure the availability of all the inputs i.e.materials, machines, tools, equipment and manpower in the required quantity, of the required

quality and at the required time so that desired targets of production may be achieved.

Co-ordinated work Schedules: The production activities planned and carried out in amanufacturing organization as per the master schedule. The production planning and control tries

to ensure that the schedules to be issued to the various departments/units/supervisors are in co-

ordination with the master schedule.

Optimum Inventory: It aims at minimum investment in inventories consistent with continuousflow of production.

Increased Productivity: It aims at increased productivity by increasing efficiency and by beingeconomical. This is achieved by optimizing the use of productive resources and eliminatingwastage and spoilage.

Customer Satisfaction :It also aims at satisfying customers requirements by producing the itemsas per the specifications or desires of the customers. It seeks to ensure delivery of products on time

by co-ordinating the production operations with customers orders.

Production and Employment Stabilisation: Production planning and control aims at ensuringproduction and employment levels that are relatively stable and consistent with the quantity of

sales.

Evaluation of Performance: The process of production planning and control is expected to keep aconstant check on operations by judging the performance of various individuals and workshops

and taking suitable corrective measures if there is any deviation between planned and actual

operations.


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Ppc is one of the most important phases ofproduction management, it is, as a matter of fact, the

nervous system of a manufacturing organization. In manufacturing organization, it is essential that

production is carried on in the best manner at the lowest cost, and the goods are of right quality and

are produced at the proper time. This can be ensured only through properplanning of production.

but mereplanning of productionwill not solve the problem becauseproduction plansare notcapable of self-actuating and do not lead to automatic accomplishment. For that the production

manager has to take certain steps like, he has to regulate work assignment, review the work

progress, and devise methods to bring conformity between the actual performance and planned

performance so that plans chalked out are adhered to and the standards set at the planning stage

are properly attained and improved. This is the function of production control.Production

control, therefore, is a directive function which involves the coordination and integration of

operations and activities of different factors of production with a view to optimizing efficiency.

Optimum efficiency is attainable by proper planning of work, laying down of exact routes which

operations shall follow, correct fixing of time-table within which productive operations shall start

and come to a close, uninterrupted releasing of orders and work facilities, and timely initiation of

appropriate follow-up steps toensure smooth functioning of the enterprise. In other words,

production control involves planning, routing, scheduling, dispatching and follow-up.

Steps in Production Planning and Control

1. Planning

The first important step inproduction planning and controlis concerned with the careful

preparation of production plans. Production plans determine what will be produced and where, at

what type, by whom, and how. For detailed planning of operations, the relevant information may be

obtained from several sources in the enterprise. Information about quantity and quality of products

to be manufactured may be obtained from customers orders and the sales budget, and information

about production facilities may be obtained from the management and the engineering department.

Thus, the planning function formulates production plans, and translates them into requirements for

men, machinery and materials.

Whatever be the planning period,production planninghelps in avoiding randomness in production,

providing regular and steady flow of production activities, utilizing production facilities to its

maximum for minimizing operating costs and meeting delivery schedules; coordinating various

departments of the enterprise for maintaining proper balance of activities, and above all, providing

the basis for control in the enterprise.

2. RoutingThe next important function of production planning and control is routing which involves the

determination of the path (i.e. route) of movement of raw materials through various machines and

operations in the factory. Routing includes the planning of where and by whom work shall be

done, the determination of the path that work shall follow, and the necessary sequence of

operations. To find this path, emphasis is placed on determining operating data, which usually

includes planning of where and by whom work should be done, the determinations of the path
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that work shall follow, and the necessary sequence of operations. These operating data are

contained in the standard process sheet which helps in making out a routing in the standard

process sheet which helps in making out a routing chart showing the sequence of operations and

the machines to be used. If the machine loan chart indicates the non-availability of certain

machines, alternate routing may also be included on the routing chart. The most efficient routingmay have to be compromised with the availability of the machines at a particular time. In other

words, routing establishes the operations, their path and sequence, and the proper class of

machines and personnel required for these operations.

From the above, it can be inferred that routing is one of the highly essential elements and prime

considerations of production control because many production control functions are closely related

processes and are dependent on routing functions. Thus, it is essential to solve the different

problems concerning: appropriate personnel;full utilization of machines; anddetermining with

precise degree the time required in the production process.

4. Scheduling

Scheduling is planning the time element of production i.e. prior determination of when work is

to be done. It consists of the starting and completion times for the various operations to be

performed. In other words, scheduling function determines when an operation is to be performed,

or when work is to be completed, the difference lies in the details of the scheduling procedure. To

work out effectively, the scheduling, as a part ofproduction control function, determines the time

when each operation called for on the route sheet is to be done on the specified machine in order to

meet the desired delivery dates. Good control function directs not only the time that each particular

operation should start but also indicates the progress of each manufacturing part, the amount of

work ahead of each machine, and the availability of each machine for the assignment of new work.

Schedules are of two types: Master schedule and Detailed schedule. Activities, if recorded on plant-

wise basis, would be preparing master schedule, while mere detailed schedules are employed to

plan the manufacturing and assembly operations required for each product.

5. Dispatching

Dispatching is the part of production control that translates the paper work into actual

production. It is the group that coordinates and translates planning into actual production.

Dispatching function proceeds in accordance with the details worked out under routing and

scheduling functions. As such, dispatching sees to it that the material is moved to the correct work

place, that tools are ready at the correct place for the particular operations, that the work is moving

according to routing instructions. Dispatching carries out the physical work as suggested by

scheduling. Thus, dispatching implies the issuance or work orders. These work orders represent

authority to produce. These orders contain the following information:

The name of the product;
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The name of the part to be produced, sub-assembly or final assembly; The order number; The quantity to be produced; Descriptions and numbers of the operations required and their sequence, The departments involved in each operation The tools required for particular operation; and Machines involved in each operation and starting dates for the operations.

6. Expediting

Expedition or follow-up is the last stage in the process of production control. This function is

designed to keep track of the work effort. The aim is to ensure that what is intended and planned is

being implemented. Expediting consists in reporting production data and investigating variances

from predetermined time schedules. The main idea behind expedition is to see that promise is

backed up by performance. It includes the following functions:

1. Check-up to ensure that all materials, tools, component parts, and accessories are available at allwork centers in specified quantities for starting and carrying out manufacturing operations.

2. Check-up on the status of work-in-progress and completed work at various work stations. Thisincludes collecting information relating to the starting and completion time and date of work

completed, status of work-in-progress relative to scheduled completion dates, position of

movements of materials, component parts, and sub-assemblies within the plant, and inspection

results.

3. Preparation of progress records and keeping the control boards up-to-date.4. Reporting to manufacturing management on all significant deviations so that corrective action may

be taken. It also includes reporting to production planning department so that future plans may be

adjusted.

Thus production planning and control by completing the above discussed phases ensures the

manufacturing of goods of right quality, quantity and at competitive market rates. One thing mustbe borne in mind that production planning and control is a never-ending process, and its various

functions are inter-dependent.


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he principal advantages of production planning and control are summarized below:

Better Service to Customers: Production planning and control, through proper scheduling andexpediting of work, helps in providing better services to customers is terms of better quality of

goods at reasonable prices as per promised delivery dates. Delivery in time and proper quality, both

help in winning the confidence of customers, improving relations with customers and promoting

profitable repeat orders.

Fewer Rush Orders : In an organization, where there is effective system of production planningand control, production, operations move smoothly as per original planning and matching with the

promised delivery dates. Consequently, there will be fewer rush orders in the plant and less

overtime than, in the same industry, without adequate production planning and control.

Better Control of Inventory : A sound system of production planning and control helps inmaintaining inventory at proper levels and, thereby, minimizing investment in inventory. It

requires lower inventory of work-in-progress and less finished stock to give efficient service to

customers. It also helps in exercising better control over raw-material inventory, which contributes

to more effective purchasing.

More Effective Use of Equipment : An efficient system of production planning and control makesfor the most effective use of equipment. It provides information to the management on regular

basis pertaining to the present position of all orders in process, equipment and personnel

requirements for next few weeks. The workers can be communicated well in advance if any

retrenchment, lay-offs, transfer, etc. is likely to come about. Also, unnecessary purchases of

equipment and materials can be avoided. Thus, it is possible to ensure proper utilization of

equipment and other resources.

Reduced Idle Time : Production planning and control helps in reducing idle time i.e. loss of timeby workers waiting for materials and other facilities; because ensures that materials and other

facilities are available to the workers in time as per the production schedule. Consequently, less

man-hours are lost, which has a positive impact on the cost of production.

Improved Plant Morale : An effective system of production planning and control co-ordinates theactivities of all the departments involved in the production activity. It ensures even flow of work

and avoids rush orders. It maintains healthy working conditions in the plant thus ,there is improve

plant morale as a by-product.

Good public image: A proper system of production planning and control is helpful in keepingsystematized operations in an organization .Such an organization is in a position to meet its ordersin time to the satisfaction of its customers. Customers satisfaction leads to increased

sales,increased profits ,industrial harmony and, ultimately, good public image of the enterprise .

Lower capital requirements: Under a sound system of production planning and control ,everything relating to production is planned well in advance of operations. Where, when and what

is required in the form of input is known before the actual production process starts .Inputs are

made available as per schedule which ensures even flow of production without any bottlenecks


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.Facilities are used more effectively and inventory levels are kept as per schedule neither more nor

less .Thus ,production planning and control helps, in minimizing capital investment in equipment

and inventories.

Documents

Bba 2 Production