Business Process Reengineering

1. TOPIC
PRODUCTION PLANNING &
CONTROL

2. INTODUCTION TO PRODUCTION
PLANNING & CONTROL
 PRODUCTION: Transformation of raw materials to
finished goods and thereby adds value to the product.
 PLANNING: Looks ahead, anticipates possible
difficulties & decides in advance as to how the production
process has to be carried out in an appropriate manner.
 CONTROL: Control phase makes sure that the
programmed production is constantly maintained.

3. PRODUCTION SYSTEM
Raw Material
Energy Finished Goods
Labor
Scrap
Equipment
Waste
Inventory
Production
System

4. Steps Involved In Production
Planning & Control
• Designing of the product.
• Determine which equipment to be used & its
capacity requirement.
• Design the layout of physical facility & material
handling system.
• Determine sequence of operation (Steps) &
nature of operation to be performed with
stipulated time.
• Specify certain production quantity & quality
levels.

5. Factors Determining PPC
• It varies from one company to other
• Either it starts from scratch for a new product
or else modified version of an existing product
using existing facilities.
• Wide difference between companies is
because of economic & technological
conditions.

6. Three Major Factors Determining PPC
• Volume of production (How much to make),
amount & intensity is determined by the
volume of product.
• Nature of production process.
• Nature of operation.

7. FACTORS DETERMINE PRODUCTION
PLANNING & CONTROL
• VOLUME OF PRODUCTION : Production planning is
expected to reduce manufacturing costs. In high volume
operations, extensive production planning is necessary in planning
for the design of both the product and the production processes in
order to achieve substantial cost reduction when large no. of
products are produced. Where as planning is limited in case of
custom order shop.
• NATURE OF PRODUCTION PROCESS : In job shop,
the production planning may be informal and the development of
work methods is left to the individual workman who is highly
skilled. In high volume production, many product designers,
equipment designers, process engineers, and method engineers
are involved and they put enormous amount of effort in designing
the product and the manufacturing processes.

8. • NATURE OF OPERATION : Detailed production
planning is required for repetitive operations, for example in
case of continuous production of single standardized product.
The variants in manufacturing approach are:
a) Manufacturing to order which may or may not be repeated
at regular intervals.
b) Manufacturing for stock and sell (under repetitive batch or
mass production). Examples: Manufacture of automobiles,
watches, typewriter etc.

9. PRODUCTION PLANNING SYATEM
Product Planning
System
Process Planning
System
Market Research Process R & D
Product Specification Process Design
Product Idea Work Flow Analysis
Product Research Work Station Schedule
Product Development Operation Design &
Content
Final Product Design Operation Method

10. Importance Of Control Functions
Co-Ordinate
Monitor
Feedback
Utilization Of
Resources
Low Cost
Production
& Reliable
Customer
Service

11. Benefits Of PPC
Improvements in profits
Through
Competitive Advantage
Maintenance of balanced
inventory of raw material,
parts & finished goods.
Reliable delivery to customers.
Balanced &stabilized
Production.
Shortened delivery schedules
to customers.
Maximum Utilization of
equipment, tooling, labor,
storage space.
Lower production cost.
Minimum investment in
inventory.
Orderly planning.
Reduction in indirect cost, set
up cost, scrap, rework cost.
Marketing of new improved
products.

12. Factors determining production control:
• NATURE OF PRODUCTION : The manufacturing firms
are classified as intermitted, continuous or composite
production firms, depending on the length of processing time
without set up changes. Production controls comparatively
simpler in continuous flow process operation than in
intermittent & multi-operation production. E.g. soap. In case of
continuous flow process operation, for example, found in
petrochemical, soap and synthetic fiber industries, routing is
standardized, quality control is highly developed and planning
for raw materials, finished goods inventory is important. The
production control becomes more complex and sophisticated in
order to ensure proper sequence of operation and performing
these operations at the right time and place.

13. • COMPLEXITY OF OPERATIONS: Generally the
complexity of production planning and control function
increases with the increase in variety of operation. Factors
affecting the complexity of production control procedures are:
a) Number of ultimate parts in the end product.
b) Number of different operation on each part.
c) Extent to which processes are dependent on completion of
previous operations.
d) Variations in productions rates of machines used in the
process.
e) Number of discreet parts and subassemblies.
f) Degree to which customer’s orders with specific delivery
dates occur.
g) Receipt of many small lot orders.

14. • MAGNITUDE OF OPERATIONS : The size of the
operation (i.e. time taken to complete an operation) and the
distance travelled by the parts form operation to operation
are important in establishing proper production control
procedures.
There are three stages in production planning and control :
1. Planning- choosing the best course of action among
alternatives.
2. Operation- Execute as per plan.
3. Control- Maintaining the performance by comparing the
actual results with performance standards set and taking
appropriate corrective action if necessary to reduce
variance.

15. Three Stages In PPC
Operation
Control
Planning
Planning: Choose the best
course of action. Consists of
two stages viz. Pre
Planning(Design) & Active
Planning (Action)i.e.
product, equipment,
material & manpower
Operation: Execution as per
plan (Progressive Function
& Dispatching).
Control: Compare actual
with performance standards
& take corrective actions.
- Materials Control
- Inventory Control
- Labor Control
- Cost Control

16. SCOPE OF PRODUCTION PLANNING &
CONTROL
PRODUCTION PLANNING PRODUCTION CONTROL
EVALUATING
ROUTING
SCHEDULING
LOADING
PLANNING DISPACTHING
FOLLOW-UP
INSPECTION

17. PRODUCTION PLANNING
• ROUTING : Under this , the operations , their path and
sequence are established. To perform these operations the
proper class of machines and personnel required are also
worked out. The main aim of routing is to determined the
best and cheapest sequence of operations and to ensure that
this sequence is strictly followed.

18. • SCHEDULING : It means working out of time that should be
required to perform each operation and also the time necessary to
perform the entire series as routed , making allowances for all
factors concerned. It mainly concerns with time elements and
priorities of a job.
• LOADING : The next step is the execution of the schedule plan
as per the route chalked out it includes the assignment of the work
to the operators at their machines or work places. So loading
determines who will do the work as routing determines where
scheduling determines when it shall be done. The usefulness of
their technique lies in the fact that they compare what has been
done and what ought to have been done.

19. • DISPACTHING : The is concerned with the execution of
planning functions. It gives authority to start a particular work
which is already been planned under routing and scheduling
function. Dispatching is release of orders and instruction for
the starting of production in accordance with the route sheets
and schedule charts.
• FOLLOW-UP : To see whether the work is being carried
on according to planning, order and instruction issued. It
stops delays or deviations from the production plans. It helps
to reveal detects in routing and scheduling , misunderstanding
of orders and instruction , under loading or overloading of
work etc.

20. • INSPECTION : This is mainly to ensure the quality goods.
It can be required as effective agency of production control.
• EVALUATING : The objective of evaluating is to improve
performance. Performance of machines, process and labour is
evaluated to improve the same.

21. • MATERIALS : Planning for procurement of raw materials, components and
spare parts in the right quantities and specifications at the right time from the
right source at the right price. Purchasing, storage, inventory control,
standardization, variety reduction, value analysis and inspection are the other
activities associated with materials.
• METHOD : Choosing the best method of processing from several
alternatives. It also includes determining the best sequence of operations
(process plans) and planning for tooling, jigs and fixtures etc.

22. • MACHINE AND EQUIPMENTS : Manufacturing
methods are related to production facilities available in production
system. It involves facility planning, capacity planning, allocation
and utilization of plants and equipment, machines etc.
• MANPOWER : Planning for manpower (labour, supervisory
and managerial levels) having appropriate skills and expertise.

23. • Cost Control: Manufacturing cost is controlled by wastage
reduction, Value analysis, Inventory control & Efficient
utilization of all resources.

24. In short PPC function is concerned
with decision making regarding:
What to
produce
How to
produce
Where to
produce
When to
produce
Who will
produce it
How much
to produce

25. Limitations of PPC
Based on
assumption
• Customer
demands
• Plant capacity
• Availability of raw
material
If plans are rigid
• Employees resist
• Production level
differs
• Time consuming
Environmental
factors
• Change in
technology
• Customer taste
• Power failures
• Natural calamities

26. MAKE OR BUY ANAYLSIS
Should I
continue to make
the part, or should
I buy it?
I suppose I
should compare
the outside purchase
price with the additional
costs to manufacture
the part.
What will I
do with my
idle facilities if
I buy the part?

27. MAKE OR BUY ANALYSIS
• The capacity of a firm to produce finished product
depends on at what stage the firm begins the
manufacturing process.
• Make or buy decisions are basically questions of
specialization & vertical integration.
• The process engineer has to make decision “ Make or
buy” after studying drawings of parts & assemblies.

28. MAKE OR BUY DECISION
When to make :
• Lower cost because the firm doesn’t have to pay for the
vendor’s overhead or profit.
• Assurances of availability because the firm doesn’t have to
be depend on vendors.
• Better control on quality.
• Availability of appropriate manufacturing equipment and
service.

29. When to buy :
• When the part can be brought from the vendors at low
cost, higher quality and faster delivery times then it would
be possible if the firm makes them in house.
• When the firm uses only few numbers of particular item
and special equipments are needed to produce it in house,
then the firm will look out for an outside vendor.
• When an outside vendor can sell a item at a lower cost than
purchasing firm would have to spend to produce it.

30. CONCLUSION & RECOMMENDATIONS
Manufacturing planning and control entails the acquisition and
allocation of limited resources to production activities so as to
satisfy customer demand over a specified time horizon. As such,
planning and control problems are inherently optimization
problems, where the objective is to develop a plan that meets
demand at minimum cost or that fills the demand that
maximizes profit keeping different factors in mind.
Thus critical factors in production planning and control should
never be ignored as they are of outmost importance for
organization’s efficiency, timely delivery and quality product and
customer satisfaction.

31. Questions & Answers