Production Planning & Control

General

- Stages in PPC:
1. Planning: planning of resources, facilities etc.
a. Pre-Planning: Product planning & demand forecasting. Inputs planning, plant
& facility planning related to location & layout.
b. Planning: level of quantity, process capacity & production planning (routing,
scheduling etc.)
2. Action: Dispatching.
3. Monitoring: Inventory control, tool control, cost control, quality control
- Balanced Production Line:
1. Operation time at each station is same.
2. Constant rate of output.
3. Smoothens production flow.
4. Minimizes in-process inventory.
- Deeming Wheel/PDCA(plan do check act) cycle: Basis for implementing any TQM
tool(mostly TQM tools are graphical + TQM tools used to improve quality)
 - Aggregate planning is to determine production quantity & timing for intermediate term.
- Aggregate planning Strategy:
1. Employ Part-time workers (not a demand option): Unskilled personal to be most
effective.
2. Changing inventory level: has least impact on quality
3. Varying inventory level + back ordering during high demand: Customer goes
elsewhere.
- In the service sector, aggregate planning for the production of high-volume intangible
output is directed toward planning for human resource requirements and managing
demand.
- graphical and charting methods: non-mathematical approach for aggregate plan which is
a trial and error approach that permits many solutions.
- Yield management is of interest in organizations having the characteristic of demand can
be segmented.
- back ordering during high-demand periods: not a capacity option of aggregate planning
- The transportation method of aggregate planning requires that cost factors be linear
and positive.
- Correlation chart: graph or mathematical scheme that uses Cartesian coordinates for
display values typically of two variables for a data set.

Material Requirement Planning

 - It is material control system to handle inventory so as to ensure materials are needed
when required.
- Objectives of MRP:
1. Maintain lowest possible level of inventory.
2. Plan manufacturing activities, delivery schedule, purchasing activities.
3. Ensure availability of material, component & product for planned production activity.

- MRP II: Manufacturing resource planning (extension of MRP)

- MRP Approaches:
1. Lot for lot
- Exact amount ordered.
- Holding cost is minimized since product is produced just-in-time.
- This approach is optimum for low setup time & setup cost.
2. EOQ
- It determines the size of order for which total cost is minimized.
- Holding cost = Ordering cost
3. Fixed period quantity
- Variable quantity of materials ordered at fixed time period.
- Here EOQ is divided into annual demand that is ordered many times a year.
- Used when demand pattern has large fluctuations.
4. Base stock level
- Minimum inventory maintained above which LIFO (last in first out).
- Optimum for random demand pattern.

Inputs driving MRP

 1. Bill of Materials:
- BOM (bill of material): Listing of all the components &/or raw material to make a
product.
 - represents product structure (sub-component, their quantity, their sequential order of
buildup in end product, work center performing build-up operations)

2. Master Production Schedule:

- timetable of scheduled production. What-when-how much of a product.
- MPS is designed to meet the market demand (both firm orders & forecasted orders).
- It mainly describes the detailed delivery schedule of end products.
- Replacement parts also included.

3. Inventory Status File:

- ID no. of each inventory, quantity on hand, safety stock level, quantity already allocated,
procurement lead time of each item.

Product life cycle management

1. Introduction Stage: Product launched into market.

- Low Sales i.e. market size for the product is small (So use heavy sales promotion). This ia
the most expensive phase for a company i.e. R & D, Consumer tetsing, marketing cost
very high.
- Zero or Negative Profit (due heavy expences on production).

2. Growth Stage
- Rapid sales rise i.e. consumer accepts product.
- Increase in profits + production runs become longer + economies of scale are achieved (In
microeconomics, economies of scale are the cost advantages that enterprises obtain due to their scale
of operation, and are typically measured by the amount of output produced. A decrease in cost per unit
of output enables an increase in scale) + per-unit cost decrease

- Reduce sales promotion strategy to take advantage of heavy consumer demand.

3. Maturity Stage
-
Plant Layout planning
Planning of available physical resources so as to improve efficiency of operating systems for
better customer services.
Classification of layout:
1. Product Layout/Flow-shop Layout /Line Layout
 - When M/c & services located according to processing sequence of product i.e.
Product Flow Line.
- The work to be performed on the product is the determining factor while positioning
of the manufacturing equipment here i.e. a separate Production line.
- For Continuous & Mass Production
- A separate production line is justified for such High Production Volume & Low
Variety.
- E.g.: all small to medium assembly related work (Vehicle)

2. Process Layout /Job-Shop Layout/Functional Layout

 - Similar M/c & services located together & arranged on Functional Basis.
- Designing Technique: Block Diagramming + Relationship Diagramming
- Equipment is general purpose & labors are highly skilled.
- For Low to intermittent Volume & High Variety.

- E.g.: Multi product (High variety) company producing batch production (intermittent
production), Engineering products (Like in SCL), Part Travels, Hospitals, Refining crude
oil, Tools & Gauges (since they aren’t mass produced).
- Requires more Floor space. Production Control difficult & Costly due to high handling
cost.
**both product & process layout is efficient but not flexible**
3. Group Layout
- Sequence: product layout (first)> combination layout > process layout(last)
- Ball Bearings

4. Fixed Position/Static Product Layout

- Opposite of Process Layout. (Very Low Volume & Very Low Variety)
- For Heavy & Bulky Product: Ship, Aero plane, Rocket, Submarine, Pressure vessel
Fabrication.
5. Unit Product Layout: Same as fixed but quantity reduced to one.

6. Cellular Layout
- Charts & tools used for plant layout design:
1. Process charts (Operation chart & flow chart)
2. Travel chart
3. Diagram (flow & string diagrams)
4. REL (relationship chart)
5. Templates
6. Scaled models
Material Handling
- Principles of Material Handling:
1. Keep all handling to minimum.
2. Move heaviest weight to least distance.
3. Use only efficient handling equipment.
4. Increase quantity, size & weight of the load handled.

- Hoist: Lifting/lowering objects suspended from hook at the end of retractable

chain/cable.

Conveyors: for moving uniform loads between fixed point.

Cranes (overhead device): for vertical & lateral movement in limited height, width & length.
JIB or Boom (cranes or hoist):  A jib is an operating arm that extends horizontally from the
crane. The role of the jib is to support a movable hoist fixed to either a wall or pillar mounted
on the floor. It is mostly used in industrial premises. Not to be confused with overhead crane.

Gantt Chart (Special Bar Chart):

- Used for Production Schedule & Resource Planning to allocate resources (Staff,
Hardware & Software) to activities) for Small Projects.
- Width of horizontal Bar: represents activity, length of bar: represents timeline.
Operation Sequence
- Estimating> Routing > Scheduling > Dispatching > Follow-up/Expedition
- PPC starts with ESTIMATING

1. Routing: Deciding path of work & sequence of operations.

- Routing is Optimizing of Work/material flow through the plan.
- It determines Path, sequence of operations
- What work, where &
- Routing is essential in: Assembly Industry

2. Scheduling: Timetable/timeline of an operation from start to finish.

- When & in what sequence job to be done.
- How much work will be finished in certain duration of time.
- Scheduling starts with MASTER SCHEDUEL (number & riming of all end items to be
produced over a planning horizon)
- SEQUENCING is a subset of Scheduling. ***not routing
- Factors considered for product scheduling: Component design, time standards & route
sheet
 3. Dispatching (internal courier in an industry): It is action/Implementation stage i.e.
Starting production process.it is the actions of Operations, Planning & Control i.e.:
1. Releases work to operating division.
2. Conveys instruction to shop floor.
- Dispatching: dispatching of work order through shop floor. Dispatching is Physical
delivery of orders & instructions to all persons involved Directly (actual production) or
indirectly (supporting activities).
- work of dispatching department:
1. Trigger flow of instructions & information.
2. Issuance of Tools, Production aid & materials.

4. Follow-up: Keeps track of work, delays & bottleneck to control production.

5. Expedition:

1. The objectives of Production Planning and Control are ______.

a. Timely delivery of goods and services
b. Improving customer satisfaction
c. Coordinating with multiple departments to ensure that the production process is on track
d. All of the above
2. Production Planning and Control function is crucial for ensuring cost savings and efficiency in
___________.
a. Planning
b. Production
c. Promotion
d. None of the above
3. The control activity in Production Planning and Control is performed ________ of the plan.
a. Before execution
b. After execution
c. During execution
 d. None of the above
4. _______ involves anticipating bottlenecks in advance and identifying steps that will ensure a smooth
flow of production.
a. Production planning
b. Production control
c. Production audit
d. None of the above
5. Regulating the production process to ensure an orderly flow of materials is the objective of
_________.
a. Production planning
b. Production control
c. Production audit
d. None of the above
6. When the size of an organization increases, the functions under production control should
___________.
a. Get more decentralised
b. Get more centralised
c. Stay the same
d. None of the above
7. Production planning is essential for ________.
a. Inventory management
b. Quality management
c. Supply management
d. All of the above
8. Production control within a company depends on _______.
a. Nature of production activities within the organisation
b. Nature of the organisation
c. Size of the organisation
d. All of the above
9. ________ is responsible for the order of processing each activity under Production Planning and
Control.
a. Loading
b. Sequencing
c. Routing
d. Scheduling
10. ________ is concerned with the time required to perform each activity under the Production Planning
and Control process.
a. Loading
b. Sequencing
c. Routing
d. Scheduling

11. Procurement cycle time calculates the total duration for ________.
a. Inspecting the purchased components
b. Receiving raw materials
c. Inspection of raw materials
d. All of the above
12. Material Requirement Planning (MRP) is a computerized system to plan the requirements for
_________.
a. Finished goods
b. Raw materials
c. Work in progress
d. All of the above

Answer: d

13. The functions of Material Requirement Planning include ______.

a. Schedule materials for future production
b. Looking at present orders to determine quantities of material required
 c. Determine the timing of material requirements, calculate purchase orders based on stock levels and
place purchase orders automatically
d. All of the above

Answer: d

14. Material Requirement Planning is useful for all except ________.

a. Discrete demand items
b. Dependent demand items
c. Erratic orders
d. Independent demand items

Answer: d

15. The machines used for mass production are ___________.

a. Special purpose
b. General-purpose
c. Manually operated
d. Semi-automatic

Answer: d

16. What is the definition of loading?

a. It is the process of assigning work to the facilities
b. It is the process of sending the raw material to machines for production
c. It is the process of uploading the software to the machine control panel
d. It is the process of sending the finished material to the store

Answer: a

17. Dispatching authorises the start of production operations by_________.

a. Releasing the material and components from stores to the first process
b. Issuing of drawing instruction sheets
c. Releasing the material from process to process
d. All of the above

Answer: d

18. The purpose of preparing a master schedule is to oversee ___________.

a. Multi-product batch production
b. Single product batch production
c. Single product continuous production
d. Assembly product continuous production

Answer: d

19. __________ is the probability of a product operating efficiently within an estimated time frame.
a. Reliability
b. Durability
c. Serviceability
d. Performance

Answer: a

20. Which of the following two techniques are used for designing process layouts?
a. Block diagramming and assembly line balancing
b. Block diagramming and relationship diagramming
c. Relationship diagramming and assembly line balancing
d. None of the above

Answer: b
21. Which of the following is not an input in the Material Requirement Planning process?
a. The item master file
b. The product structure file
c. The master production schedule
d. The planned order report

Answer: d

22. Which of the following is not the primary function of statistical process control?
a. To establish control limits
b. To detect particular cause variations
c. To identify specification limits
d. To determine when a process is not in control

Answer: c

23. ______ is the probability of rejecting a lot that has an acceptable quality level.
a. Producer’s risk
b. Consumer’s risk
c. Both a and b are incorrect
d. Both a and b are correct

Answer: a

24. The process of dealing with production orders to initiate operations under the Production Planning
and Control starts with ________.
a. Dispatching
b. Routing
c. Expediting
d. Estimating

Answer: b