Cover

Chapter 1

 

 

2.0 Objectives

This chapter will help the students to understand the

  • Meaning of production system and its different types;
  • Concept of production planning and control;
  • Differences between production planning and production control;
  • Parameters which influence production planning and production control;
  • Constraints of production planning and control;
  • Importance of production planning and control in an organization.

 

2.1 Introduction

In the previous chapter, an attempt has been made to give you an indepth understanding of various types of production systems and the concept of production planning and control. Fundamentally, production planning and control is viewed as a managerial function which in turn becomes the nervous system of the production system. Its main objective is efficient utilization of required material resources, people and facilities in any enterprise. This is done through planning, coordinating and controlling all production activities which convert the raw material resources into finished products or components in the most optimal manner.

 

Broadly speaking, production Planning is a dynamic function which is largely concerned with the issues like required production facilities, laying down these facilities and the methods to utilize them in such a way that the desired output may be produced at the desired rate and desired cost. Production plans need to be changed according to the changes in circumstances.

 

On the other hand, production control is a mechanism to monitor the execution of the production plans. It ensures that all production operations/activities take place strictly as per the set plans. In case of any deviations, taking immediate corrective measures and informing the planning section so that they may improve the future plans accordingly. Production planning and control as a department plays a vital role in manufacturing organizations. It coordinates with other departments and provides relevant information.

 

The stages in production planning and controls are:

  1. Planning – choosing the best course of action among several alternatives.
  2. Operation – execution as per plan.
  3. Control – maintaining the performance by comparing the actual result with performance standard set and taking appropriate corrections action if necessary to reduce variance.

 

In this chapter, a detailed discussion has been made pertaining to role of production planning and control in manufacturing organization, changes in production planning and control techniques on the basis of production system, its significance and benefits for the organization, fundamental differences between production planning and production control per the its benefits, constraints of production planning and control etc

 

2.2 Factors Determining Production Planning Procedures:

Production planning keeps varying from company to company. This begins with a product idea, plan for design of the product and entire production/operating system to manufacture that product. It also includes the task of planning for the manufacturing of modified version of an existing product using the existing facilities. The main difference between the planning procedures is one company and another is principally due to the difference in the economic and technological conditions under which the companies operate. The main factors affecting production planning procedures are summarized as below:

  1. Production Volume

The purview of production planning in any organization mainly depends upon the quantity/volume of output to be produced. Its main objective is to cut the manufacturing cost. For instance, in case of custom order job shop, where volume of production is generally less, the planning of production is limited to only purchase of the raw material/ component and determination of work centers, which have the capacity of manufacturing the product.

  1. Nature of Production Process

 Nature of manufacturing process is also an important factor that determines the intensity of production planning in any organization. For example, in case of custom job shop, the production planning may be informal and development of the work methods is left to individual workman who is highly skilled. Whereas, in the high volume production, many product engineers are involved who put enormous amount of effort in the designing the product and manufacturing processes.

  • Nature of operations

Nature of required operations is again very significant parameter that determines the scope of production planning in any organization. For example, continuous production of any single standardized that is characterized by repetitive operations, detailed production planning is required.

 There are mainly two types of manufacturing approach:

  • Manufacture to order: In this, a product is manufactured when it demand arises. Therefore, product is not produced repeatedly at regular intervals. (no repetition of operations)
  • Manufacture to stock and sell: Product is produced continuously as there is a regular demand from the market or it is produced for stoking purpose. (repetition of operations)

 

2.3 Role of Production Planning and Control in Production Management

Production planning and control in operations has got great significance due to its interactive role and interdependency on all the sections of the production department. This is evident from the figure as below.

  

 

First, production planning and control receives the inputs from the design of product and nature of manufacturing process to be used. Then complete planning is done which is circulated further to manufacturing and assembly sections. When actual production takes place, a close monitoring and control is exercised at each and every step of work progress. The figure above clearly depicts the interdependency of PPC on other departments. It may be viewed that PPC needs to interact with all other departments such as sales and distribution, procurement and inventory, repair and maintenance, quality control and industrial engineering and work study in both directions to exercise its functions efficiently and effectively.

PPC requires a lot of documentation and paper work for the proper functioning of production department. The main documents include demand forecast reports, customer’s orders, estimated sales figure, long term production plans for the current and new products, production budget for each product, master production schedules for a given time, work orders with production department, inventory reports, estimates of costs, various reports from purchase department, job specifications, shortage reports and many more reports etc.

PPC is a complex phenomenon which becomes more and more complicated with the growing number of products in company’ product mix increase.

 

Shop Floor Production Planning and Control

Here, it is important to understand that the production planning is done at the highest level considering the issues mainly including product design, job design process design, equipment selection and replacement, labour skills and training programs, input material selection including raw material and sub-contracting, plant selection and layout, scheduling steps of the plan, implementing and controlling the schedule and choice of production system etc.

Shop floor production planning is done at the bottom level (usually known as shop floor) by the junior level people over a short range time span. It is concerned with the utilization of existing facilities rather than creating new facilities. It involves proper utilization of key resource such as raw materials, machine capacity, energy etc. Short-term planning takes into account current customer order, priorities, material availability, absenteeism rate, cash flows etc. and it is designed to respond quickly to change in production levels and market conditions. Short range planning establishes short range schedule which specify the quantity of specific product to be produce in each week of planning horizon which varies from weeks to few months. Machine shop planning involves the day to day issues and decision related to operations planning.

 

2.4 Difference between Production Planning and Production Control

The production planning and control essentially has two important functions namely production planning and production control. They facilitate in effective production function. These two functions are running parallel to each other. But they have very different scope and nature. The difference are shown in below

Production Planning

Production planning is one part of production planning and control dealing with basic concepts of what to produce, when to produce, how much to produce, etc. It involves taking a long-term view at overall production planning. This can be done only after assessing the customer demand for the product. Production planning focuses on the principle of meeting the targeted customer demand rate in the most efficient way possible while keeping open the capability to respond to variations in demand.

 

This assesses the requirement of different materials to fulfill your production target and their availability. An efficient production planning keeps the minimum materials as standard inventory. Planners must evaluate how much material the company needs, the lead times for orders, the delivery times for suppliers and the reliability of the suppliers/vendors. Production planners take into account the capabilities of the machines/ equipments used to produce the output. Basic stability of an equipment is ascertained on the basis of three parameters namely, its availability, its performance and its quality. This is done by Overall Equipment Effectiveness (OEE). Manpower planning needs accurately estimating the number of employees required to do the work. The capacity of the workforce must match the capabilities of the equipment to plan for the highest efficiency. Planning for the processes is done keeping in view that the processes continue to operate efficiently and safely during the entire production time. Often the normal operations of a process require occasional testing and adjustments. A final production planning puts in place controls that detect problems as soon as they occur. When controls are in place, it enables to take possible corrective actions to minimize the effects and return production to the required levels.

 

Hence, the main objectives of production planning may be summarized as below:

  • To ensure right quantity and quality of raw material, equipment, etc. are available during times of production;
  • To ensure capacity utilization is in tune with forecast demand at all the time;
  • To streamline the overall production process;
  • To ensure the timely and regular delivery of the product;
  • To provide advance information to vendors/ suppliers about the requirement of different types of raw materials and components;
  • To reduce investments in inventory;
  • To reduce overall production cost by driving in efficiency.

 

This is important to notice that the production planning is concerned with two basic strategies’ product planning and process planning. Production planning is done at three different time dependent levels i.e. long-range planning dealing with facility planning, capital investment, location planning, etc.; medium-range planning deals with demand forecast and capacity planning and lastly short term planning dealing with day to day operations often termed as shop floor planning. We have already discussed shop floor planning in the previous section.

 

Production Control

In literary sense control means action to check/regulate. According to Mary Gushing Niles, “Control is maintaining a balance in activities towards a goal or set of goals evolved during production planning.” Planning only outlines some course of action whereas control is an execution process involving standardization, evaluation and corrective functions.

 

As per Fayol, “Control consists in verifying whether everything occurs in conformity with the adopted plan and established principles. The objective of control is to point out weaknesses and shortcomings, if any, in order

Impressum

Verlag: BookRix GmbH & Co. KG

Tag der Veröffentlichung: 04.06.2019
ISBN: 978-3-7487-0627-4

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