Lecture –6
Production Planning & Control
Topics Covered:
n Meaning
of production planning
n Typical
objectives of production planning
n The
Production Planning Process/Steps/Stages
n Meaning
of Production Control
n Steps/Mechanisms
of Production Control
n Problems
of Production Planning & Control
n Model
Questions
nMEANING OF PRODUCTION PLANNING
Production
Plan is a statement of production rates, workforce levels and inventory holding
based on estimates of customer requirements and capacity limitations. It is
essentially a “Big Picture” approach to planning. This statement is
time-phased, meaning that the plan is projected for several time periods into
the future.
A
production plan must balance conflicting objectives involving customer service,
workforce stability, cost and profit. A production plan is developed to guide
more detailed planning that eventually leads to master plan which is shown
below:
Figure: Layout of Production
Planning
nTYPICAL
OBJECTIVES OF PRODUCTION PLANNING
Six
objectives usually are considered during development of a production plan and
conflicts among them may have to be resolved:
1. Minimize Cost/ Maximize
Profits:
If
customer demand is not affected by the plan, minimizing cost will also maximize
profits.
2. Maximize Customer Service:
Improving
delivery time and on-time delivery may require additional work force, machine
capacity or inventory resources.
3. Minimize Inventory Investment:
Inventory
accumulations are expensive because the money could be used for more productive
investments.
4. Minimize Changes in Production
Rate:
Frequent
changes in production rates can cause difficulties in coordinating the
supplying of materials and require production line re-balancing.
5. Minimize Changes in Production
Workforce Levels:
Fluctuating
workforce levels may cause lower productivity because new employees typically
need time to become fully productive.
6. Maximize Utilization of Plant
& Equipment:
Processes
based on a line flow strategy require uniformly high utilization of plant and
equipment.
nTHE PRODUCTION PLANNING PROCESS
At
the time of preparing a production plan, the following steps can be followed:
1. Determining demand requirement
2.
Identifying alternatives constraints and cost
3.
Preparing an acceptable plan
4. Implementing and updating the plan
The process
can be shown through the following figure:
Figure: The
Production Planning Process
· Determining
Demand Requirement:
The first step in the Production
Planning Process is to determine the demand
requirement for each period for the
planning horizon. For Production Plans, the requirement represents the demand
for finished goods and the external demand for replacement parts. The planner
can deceive future requirements for finished goods from backlogs (customer’s
order that promised for delivery) or from forecasts for product families made
to stock.
· Identifying
Alternative Constraints & Costs:
The
second step is to identify the alternative constraints and cost for the plan.
Alternatives represent the consideration for solving the questions like what
options should be considered in responding to uneven demand and how can demand
be leveled to reduce operating cost.
Constraints represent physical
limitations or managerial policies associated with Production Plan. The planner
usually considers several types of cost when preparing Production Plans such as
regular time cost, overtime cost, hiring and layoff cost, inventory holding
cost and backorder (an order that the customer expected to be filled
immediately and delivered as soon as possible) and stockout (an order that is
lost and causes the customer to go elsewhere) cost.
· Preparing an
Acceptable Plan:
The third step is to prepare
an acceptable plan. Developing an acceptable plan is an iterative (repeat)
process. So a tentative plan is developed to start. The plan must then be
checked against constraints and evaluated in term of strategic objectives. When
the plan is acceptable to the representatives from all functional areas,
implementation can begin; otherwise a new prospective plan must be developed.
· Implementing
& updating the plan:
Implementation requires the
commitment of managers in functional areas. Acceptance of the plan does not
necessarily mean that everyone is in total agreement, but it does imply that
everyone will work to achieve it.
nMEANING OF PRODUCTION CONTROL
Production
control is the observation of production activities whether these are conducted
according to established standards, finding deviations and taking corrective
actions. The purpose of production control is to produce product:
Ø at
minimum cost
Ø in
the best methods
Ø of
right time
Ø of
right quality
According to Alford and Bangs,
“Production
control is the highest efficiency in production is obtained by manufacturing
the required quantity of product of required quality of the required time by
the best and cheapest method.”
nSTEPS / MECHANISMS / STAGES / PROCESS OF PRODUCTION
CONTROL:
Production
control is done on the basis of production plan. So production plan is started
as the primary requirement of production control. The stages of production
control are as follows-
Figure:
Steps in Production Control
1.Routing:
Routing
includes the planning of where and by whom the work shall be done, the
determination of the path that the work shall follow and the necessary sequence
of operations. It forms the basis for the most of scheduling and dispatching
technique. Routing is the determination of the way in which the transformation
process of raw materials is done and determining the chronological sequences of
activities and process to be followed in producing a particular manufacturing
lot.
2.Scheduling:
Scheduling
is the determination of time that should be required to perform each operation
and also the time necessary to perform the entire series as routed. It is a
plan that specifies time periods for completing specify activities. It generally
tells the start and due dates so that job can be completed when they are
promised or needed.
3.Despatching:
The
third logical step of Production control is despatching. Despatching is the
routing of setting production activities in motion through the release of order
and instructions in accordance with previously planned times and sequence,
embodied on route sheets and schedule charts.
4.Follow –
up:
Follow
up is the final stage of production control after routing, scheduling and
despatching. Follow – up is basically the observation of activities whether
these are conducted according to the production plan. Finally, Follow – up can
be defined as the process of observation concentrated on the activities if
these are conducted as on the production plan, finding out deviations and
taking corrective actions.
nPROBLEMS OF PRODUCTION PLANNING & CONTROLLING:
The problems
of Production Planning and controlling can be divided broadly in two
categories:
1. Long-term
problems:
a. Selection
of equipment of process
b. Production
design of items processed
c. Determination
of optimum size of the factory
d. Finding
out suitable locations
e. Job
designing
f. Plant
layout
g. Production
forecast
h. Preparation
of master schedule
2. Short-term
problems:
a. Preparing
procurement schedule
b. Preparing
personal schedule
c. Inventory
control
d.
Production control
e.
Preparing alternative inventory plans for production
f.
Maintenance of the system
g. Quality
control
h. Cost
control
Model Questions
1. What is the
meaning of production planning?
2. What are the typical
objectives of production planning?
3. Describe the
stages of Production Planning Process.
4. What is Production
Control?
5. What are the steps/Mechanisms
of Production Control? Discuss.
6. State the Problems
of Production Planning & Control.
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