Chapter 4

Production Planning and Control

Production consists of a sequence of operations that transform materials from a

given form to a desired form. The highest efficiency in production is obtained
by manufacturing the required quantity of products of the required quality, at
the required time, by the best and cheapest methods.

There are three stages of PPC:

• Planning—choice of best alternative of utilizing resources available to
achieve desired objective.
• Operations: Performance in accordance with details set out in plans.
• Control:--monitoring performance through feedback

Production planning and control is the process of planning or deciding on the

resources the firm will require for its future manufacturing operations and of
allocating and time-scheduling of these resources to produce desired products
on time at the least costs.

Production Planning: Meaning

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

PPC is planning, direction, co-ordination of the firm’s materials and physical

facilities towards the attainment of production objective in most economical
manner.
It involves the organization and control of an overall manufacturing system to
produce a product (services)

PPC involves both production planning and production controls. It involves

various functions like:
• Designing the product.
• Planning for production,
• Decision about the sequence of operations.
• Materials handling system.
• Working of time schedule for starting and finishing the work.
• Issue of necessary orders
• Follow-up activities
• Regulate execution to meet plan requirements.

PPC functions:
1. Materials: Raw materials, spares, components, purchasing, storage,

inventory control, standardization, variety reduction, value analysis,

inspection are the activities associated with materials.
2. Methods: choosing the best sequence of operations for manufacturing.

3. Machines and equipments: selection of appropriate machines,

maintenance policy, procedures, replacements policy and tooling.

4. Routing: prescribe the flow of work in the plant.

5. Estimating: Processing time required for the parts to be manufacturing

in-house are estimated and standard time is established.

6. Loading: Machines have to be loaded according to the capacity and

prescribed feeds and speed of the machines has to be adhered.

 7. Scheduling: It determines the starting time and completion time for each

and every operation and assembled part so that finished product is

shipped on time.
8. Dispatching: is concerned with execution of plans, authorization for

release of materials and tools to the operators to carry out the work.
9. Expediting and progressing: It is follow-up or keeping track of progress

made in completing the productions as per schedule.

10. Inspection: relates to checking the quality in production and of

evaluating the efficiency of the process, methods, and workers.

11. Evaluating and controlling: methods and facilities are evaluated to

improve their performance.

PPC functions are examined under two separate functions:

1. Production planning:

2. Production Control

Production planning:
Production planning includes activities like designing the product, determining
the equipment ad capacity requirement, designing the layout of physical
facilities and materials handling system, determining the sequence of operations
and the nature of the operations to be performed along with time requirements
and specifying production quantity and quality.
The major objective being to provide a physical system together with a set of
operating guidelines for efficient conversion of raw materials, human skill and
other inputs into finished goods.
Production planning system:
There are two inter-related sub-system in PP system:
• Product planning
• Process planning system.
Factors determining production planning:
• Volume of production:
• Nature of production process.
• Nature of operations.

Level of Product planning;

Planning can classified as:
• Strategic level: are usually long range plans done by top management
level. It is process of thinking on product lines, factories, markets,
business units, technology etc.

• Tactical planning: is done over an intermediate term by the operating

officers. They specify the employment plans, machinery and utility plans.

• Operational planning: Short term planning takes into account customer

orders, priorities, and materials availability.
• Eg. Master-production schedule together with materials requirements
planning and capacity requirements planning.

2. Production Control: is concerned with assessment of the plant performance

which operates like an automatic self-regulating mechanism that registers
events and reacts to them by adjusting parameters in the productions centers.

Elements of Production Control:

• Control of planning: assure receipt of forecast data, bills of materials data,
routing information for future planning.
• Control of materials: Control of inventory, issue of materials within the
shop.
• Control of tooling: Check the availability of tools and issue the same.
• Control of Manufacturing capacity:
• Control of activities: release orders and information at assigned times.
• Control of quantity: follow up of flow of production and ensure corrective
actions are taken when work fails to pass each stage of inspection.
• Control of materials handling: ensure availability of materials each stage.
• Control of due dates: check the actual and planned schedules and determine
the cause of delay if any.
• Control of information: Distribute timely information and reports showing
deviations from the plan so corrective actions can be planned.
Productions planning and control consists of planning production before actual
activities starts and excising control and ensure planned productions is realized
in terms of quality, quantity, delivery schedules and cost of production.

Factors determining production control:

• Nature of production.
• Complexity of operations.
• Magnitude of operations.

Objectives of PPC:
• To deliver quality goods in required quantities to the customer in delivery
schedule to achieve maximum customer satisfaction.
• To ensure maximum utilization of all resources.
• To ensure production of quality products.
• To minimize the product through-put time and manufacturing cycle time.
• To maintain optimum inventory level.
• To co-ordinate between labor and machines and various supporting
departments.
• To remove bottle-necks at all stages of production and to solve problems
related to productions.
• To ensure effective cost-reduction and cost-control.
• To prepare production schedules and ensure that promised delivery dates are
met.
• To establish routes and schedules for work that will ensure optimum
utilization of materials, labour and equipments.
• The ultimate objective to contribute to profit of the organizations.

Elements of PPC: PPC.

Production planning Production Control:

• Estimating *Dispatching
• Routing *Expediting/progressing.
• Scheduling *Inspection.
• Loading *Evaluating and corrective action.

Estimating: Involves deciding the quantity of products to be produced and

costs involved in it on the basis of sales forecast. Estimating manpower,
machines, capacity materials required to meet the planned production targets are
the key activities before budgeting for resources.

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 item.
Walter and Smith“Routing is what, how much, how, where and with which to
produce”.
Routing information is provided by product or process engineering department
and it is useful to prepare machine loading charts.

Route Sheet: is a document providing information and instruction for

converting the raw materials into finished parts. It defines each step of the
production operation and lays down the precise path or route through which the
product will flow during the conversion process.
Route sheet contains the following information:
• Machine and equipment to be used
• Estimated set up time and operations time per piece.
• Tools, jigs and fixtures required for the operations
• Detailed drawing of parts, subassemblies
• Specifications of raw materials to be used.

Scheduling involves developing and assigning specific dates for start and
completion of the necessary tasks or operations in a production shop floor.
Scheduling lays down a time table for production indicating the total time
required for the manufacture of a product and also the time required for carrying
out the operation for each part on each machine or equipment.

Objective:
1. to prevent unbalanced use of time among work centers and department.
2.To utilize labor to achieve appropriate lead time(cycle time) and deliver goods
in time at minimum costs.Scheduling consists of
• Allocation of quantity of each component to be produced.
• Indication of the quality required.
• Allocation of time.
Spriegel “ Scheduling involves establishing the amount of work to be done and
the time that each elements of the work will start or the order of work”

Types of Scheduling:
Detailed scheduling—Results in current schedule for short range planning.
Master Production schedule: specifies in detail exactly what products are to
be produced during short and long term.

Loading: is assigning to a particular center the task to be performed during

some gross scheduling period. It is process of converting operations schedules
into practice.
Machine loading (Gantt chart) is the process of assigning specific jobs to
machines, men or work centers based on relative priorities and capacity
utilization.
Loading established the amount of work load each machine or work center,
giving due consideration to the sequence of operations as per route sheet must
carry during the future period. It will ensure efficient utilizations of facilities or
work center and workers with minimum idle time.

Dispatching is setting production activities in motion through the release of

orders and instructions in accordance with previously planned time schedules
and routing.
It refers to the act of assigning specific tasks to a specific work center to be
performed.
It is concerned with issuance of orders, instructions and communications to the
workforce, demanding accountability of their performance, excising leadership
and supervision and maintaining morale of production personnel.
Dispatching provides a means for comparing actual progress with planned
production progress.

Functions of Dispatching:
• Assignment of work to individual machines work place and men.
• Giving orders, instruction and production forms to foremen and executives
before work.
• Controlling materials movement and operations during process on the basis
routing and scheduling.
• Control of progress of all operations.
• Arranging of inspection.
• Release of prints of components drawing, part lists, process sheets. etc.

Types of dispatching:
There are two types of Dispatching: 1. centralized and decentralized.

Expediting and Follow up:

Expediting is meant to examine whether work is going as per plan. It ensures
that the work is carried out as per plan and delivery schedules.
Activities include:
• Status reporting.
• Attending to bottleneck and removing them.
• Controlling variations.
• Monitoring progress of work.
Inspection: Inspection is primarily a comparison with established standards. It
is a post-mortem operation carried out after the product is manufactured. It does
not value or quality to the product, but it ensures that defective products do not
reach the customers.
Objective of inspection:
• Detect defects as they occur in processing.
• Remove defective parts from production process.
• Provide records and information about evaluation of machines or employee
performance.

Techniques adopted by PPC:

• Simple graph: It is graph to indicate and compare actual verses schedule
progress.
• PERT: Comprehensive tool used by management to evaluate and review the
project from beginning to end.
• Control Charts (Gantt chart) –charts where production output can be
recorded and compared with production plans.
• Linear programming: seek an optimum or best answer to the production
problem. It deals with optimizing desired objective.
• Control boards: where actual and planned progress is displayed, workers
take correctives action daily.

Capacity Planning: Capacity planning is the process of estimating the

requirements of machines and man to meet the targets of production. It is the
determination of capacity and adjustment of capacity to the flucations in
demand.
Capacity planning is basically concerned with matching the resources to
demand. Capacity of a plant is expressed as the rate of output (in terms of units
produced/per period of time).It can be expressed in monetary terms.

Maximum capacity concentrate on how best to utilize the available resources

to produce maximum required output and minimum capacity indicates that
output below this capacity is not economical for the company.

Licensed capacity denotes the capacity licensed by the concerned authority.

Installed capacity represents the capacity provided for at the time of
installation.
Rated capacity: is the capacity based on the highest production established by
actual trials.
Capacity planning is concerned with defining long-term and short term capacity
needs of the organization and determining how those needs will be satisfied.
Capacity decisions consider consumer demands and the available resources and
co-ordinate both and decide to estimate the required capacity.

Long term capacity:

Long-range capacity decisions take more time, these decisions deal with
accommodating major changes like expansion, constructing new plant that
effect overall level of output in the longer term. Management must assess the
market demand and implement the long decisions in accordingly and effect long
term benefits to the organizations.

There are two type of capacity:

1. Phase in capacity: High technology face unique capacity-planning problem.

Some firms commit capital and they phase in portion of the capacity on a
partial basis.
2. Phase out capacity: Planners should know how to phase out operations that

are no longer competitive. Closing of capacity will lead to socio-economical

problem.

Short term capacity: Short term capacity deals with fluctuations in demand
due to seasonal and economic factors and to match the available capacity with
demand or adjusting the demand to capacity. Some of the measures are:
• Use of overtime.
• Sub-contracting a part of order to outsiders.
• Re acting the work to alternate process.
• Higher maintenance of inventory.