1. Production Planning and Control

2. Contents Meaning of production
Meaning and definition of production planning
Objectives of production planning
Production control
Objectives of production control
Factors determining production control procedure
Production planning and control
Characteristics of production planning and control
Need/ Importance of production planning and control
Limitations of production planning and control

4. Production
The processes and methods used to transform Tangible inputs (raw materials, semi-finished goods, subassemblies) and ,
Intangible inputs (ideas, information, knowledge) into goods or services.
Resources are used in this process to create an output that is suitable for use or has exchange value.
 It is done to satisfy human wants. Thus, production is a process of transformation.

5. PRODUCTION PLANNING Meaning:- Definition:-
Production planning 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.
Definition:-
"The planning of industrial operations involves four considerations, namely, what work shall be done, how the work shall be done and lastly, when the work shall be done kimball and kimball

6. TYPES OF PRODUCTION PLANNING
(capacity planning)
Long term
Up to 5 years ahead or more
Capital intensive
Ex:- Cement industries , automobile industries etc.
(aggregate planning)
Medium planning
Up to 2 years ahead
How can demand be met from existing facilities and resource inputs?
(operational planning)
Short term planning
Monitoring and correction of day-to-day activities
Moving material from one machine to another machine

9. OBJECTIVES OF PRODUCTION PLANNING
1.To determine the requirements of men, material and equipment.
2.Arranging production schedules according to the needs of marketing demand.
3.Arranging various inputs at a right time and in right quantity.
4.Making most economical use of various inputs.
5.To achieve coordination among various departments relating to production.
6.To make all arrangements to remove possible obstacles in the way of smooth production.
7.To achieve economy in production cost and time.
8.To operate plant at planned level of efficiency.
9.Making efforts to achieve production targets in time.
10.Providing for adequate stocks for meeting
contingencies.

10. PRODUCTION CONTROL
Production control guides and directs flow of production so that products are manufactured in a best way and conform to a planned schedule and are of the right quality .
Control facilitates the task of manufacturing and see that every theme goes as per the plan.
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 to rectify them and prevent recurrence.

11. It operates on everything viz. material, equipment, men, operations etc. For control to be effective, it must be applied within reasonable time and follow up sanction.
Alternately, production control is the function of management which plans, directs and controls the material supply and processing activities of an enterprise; so that specified products are produced by specified methods to meet an approved sales programme. It ensures that the activities are carried in such a way that the available labour and capital are used in the best possible way.

12. -HENRY FAYOL Definition:-
"Production control refers to ensuring that all which occurs is in accordance with the rules established and instructions issued.“
-HENRY FAYOL

13. OBJECTIVES OF PRODUCTION CONTROL
1.To implement production plans by issuing orders to those who are supposed to implement them.
2.To ensure that various inputs like men, machine , materials etc. are available in the required quantity and quality.
3.Making efforts to adhere to the production schedules.
4.To ensure that goods are produced according to the prescribed standards and quality norms.
5.To undertake the best and most economic production policies.
6.To introduce a proper system of quality control.
7.To ensure rapid turnover of production and
minimizing of inventories of raw materials
and finished products.

14. Factors determining production control procedure
Nature of the business
Scale of the business
Degree of mechanization
Type of manufacturing
Type of control

15. PRODUCTION PLANNING AND CONTROL
Meaning:-
Production planning and control is concerned with directing production along the lines set by the planning department.
Definition:-
"Production planning and control is the co-ordination of series of functions according to a plan which will economically utilize the plant facilities and regulate the orderly movement of goods through the entire manufacturing cycle from the procurement of all materials to the shipping of finished goods at a predetermined rate."
-CHARLES A. KOEPKE

17. CHARACTERISTICS OF PRODUCTION PLANNING AND CONTROL
1. It is the planning and control of manufacturing process in an enterprise.
2. Questions like-what is to be manufactured? when it is to be manufactured? etc.
3. All types of inputs like materials ,men , machines are efficiently used for maintaining efficiency of manufacturing process.
4. Various factors of production are integrated to use them efficiently and economically.
5.The manufacturing process is organized in such a way that none of the work centers is either overworked or under
worked.
6.The work is regulated from the first stage of
procuring raw materials to the stage of finished
goods.

18. Need/Importance of Production Planning and Control
For Increasing Production:- The main purpose of production planning, function is to arrange various inputs like men, materials and machines and integrating them for making their best use. When various factors of production are economically used then production will certainly go up. Efforts are made to avoid production stoppages for want of various inputs. A production control Programme will minimize the idleness of men and machines.

19. For Co-ordinating Plant Activity: - Production planning helps in controlling plant activities. Production targets are set on the basis of sales forecasts. The raw materials, men and equipment are arranged by keeping in view production plans. Different production activities are adjusted as per the plans. If production is carried out in a number of processes then their activities are synchronized for smooth working.

20. For Cost Control: - It helps in controlling various costs
For Cost Control: - It helps in controlling various costs. In the absence of a proper production plan, the idleness of men, material and equipment may not be noticed. Whenever performance is below standards then corrective measures are taken to rectify it. A properly planned system of production will help in controlling costs by not only making full utilization of various inputs but also by increasing output and lowering overhead expenses per unit.

21. For Rationalization of Production Activities: An important objective of production planning and control is also to regulate the flow of various inputs into the production system for running it smoothly. The system is planned in such a way that everything is done automatically. The supply of materials and men follows the demand for goods. The quality standards are followed in routine and sub-standard products are discarded in the processes. The process of entering of raw materials and converting them into finished

22. 5. Consumers: - The consumer is ensured good quality goods
5. Consumers: - The consumer is ensured good quality goods. The process will help in raising quality standards of products. The supply of goods is also prompt and consumer has not to wait for them . Production schedules are prepared by keeping in mind the requirements of consumers. The supplies are regulated for meeting the demand for goods. The increase in production also helps the consumer in getting sufficient supply of goods.

24. Limitations of production planning and control
Based on Assumptions: - Production planning and control is based on certain assumptions. In case the assumptions prove correct then the planning and control will go smoothly, otherwise it may not. The assumptions generally are about plant capacity, orders, availability of raw materials and power etc. if these assumptions go wrong then the process of planning and control will go weak.

25. Rigidity: - Under production planning and control the things are pre-decided and fixed. There is rigidity in the behavior of employees and it may not help in smoothening the flow of work.
Difficult for small firms-This process is time consuming and small firms may not be able to make use of production planning and control.

26. 4. Costly: - It is a costly device as its implementation requires separate persons to perform the functions of planning, dispatching, expediting etc. Small firms cannot use the services of specialists due to cost factor.
5. Dependence on External Factors: - The external factors sometimes reduce the effectiveness of production planning and control. The factors like natural calamities, change in technology, change in fashion, breakdown of power, government controls etc. limit the use of production planning and control.

27. Techniques Of Production Planning And Control
Routing
Scheduling
Loading
Despatching
Follow up and Expediting

28. 1)PLANNING
First element of production planning and control. Planning is given an important role in every business. A separate department is set up for this work. Planning is deciding in advance what is to done in future. Control devices are also decided in advance so that all activities are carried on properly.

29. Contd.
An organizational set up is created to prepare plans and policies. Various charts, manuals and production budgets are also prepared.
Planning is defective then control will also be defective. Planning provides a sound base for control.

30. 2)ROUTING
Production routing is a process concerned with determining exact route or path, a product has to follow right from raw material till its transformation into finished product.
“Routing may be defined as the selection of paths or routes over which each piece is to travel in being transformed from raw material into finished product”.

31. DEFINITIONS: —James L. Lundy “Production routing involves the planning of the exact sequence of work stations to be used in processing a part of product. Once a layout has been established the routing of an item is the determination of the path that item should follow as it is manufactured”. —Alford and Beaty “Routing is the specification of the flow or sequence of operations and processes to be followed in producing a particular manufacturing lot”.

32. Objects of routing:
The main objective of routing is to lay down the best and the most economical sequence of operations to be undertaken in the process of production.
Another objective of routing is to determine proper tools and equipments and the required number of workers required for doing or carrying total production processes in an organisation.

33. Routing Procedure: (i)Deciding what part to be made or purchased: -
The product is thoroughly analyzed to find out which parts are required for it.
The second decision is taken regarding the production or purchase of various components.
Components may be manufactured by the firm and others may be procured from the
market.
During slack periods most of the
components may be manufactured
by the firm but when industrial activity
is at its peak then supplies from
outside may be contracted.

34. (ii)Determining Materials Required: -
The analysis of the product will enable us to know the type of materials required for producing various components.
The right type of quality, quantity, and time when needed should also be decided in advance.

35. (iii)Determining Manufacturing Operations and Sequences: -
The manufacturing operations and their sequences can be determined from technical experience and layout of machines.
A sound and economical operation is selected for manufacturing various components.

36. (iv)Determining of Lot Sizes for one lot time:
A decision has to be taken about the number of units to be produced in one lot.
If production is carried on the basis of orders then size of the lot depends upon the quantity ordered plus some units for possible rejections during the process.

37. (v)Determining of Scrap Factors: -
There may be some scrap during the course of manufacture.
The finished products are generally less then the units introduced at the beginning.
The scrap during manufacturing should be anticipated so that routing is facilitated.
If products pass through three processes and a normal scrap is 5% of input at every stage then it will be easy to anticipate the units entering various processes and arrange equipments, and manpower.

38. (vi)Analysis of Cost of the Product: -
The determination of cost of products may be the duty of department but still production department makes records of direct materials, labour , direct and indirect expenses. These estimates are greatly useful to costing department also.

39. (vii)Preparation of Production Control Forms: -
The carrying out of routing will be facilitated if forms are prepared to collect information for control purpose.
The requirements are: job cards, inspection cards, move tickets, labour cards, tool tickets, etc.

40. Factors Affecting The Routing Procedure:
(i) Type of Manufacturing Process/Technique Employed:
It is the case of use of line type of layout where the production process is serialized according to the sequence of operations thus making routing automatic.

41. (ii) Plant Equipment Characteristics:
The same product may be possible to manufacture on two or many machines available in the plant. In such cases the cheapest one should be selected, whether small, heavy and automatic or mechanised machine for routing purpose.

42. (iii) Availability of Plant and Equipment etc. :
Recommended actions have to be taken in order to select that equipment or machines, which will help in production of parts at cheapest rate. But sometimes the services of such machines or processes may not be available due to machine load conditions, breakdowns or absenteeism of workers.

43. (iv) Difficulties in Routing due to Non-Availability of Requisite Skilled Manpower:
Manpower required in the plant may be highly skilled, semiskilled, or unskilled.
On certain particular machines, where high precision work is done, only services of experienced highly skilled workers can be utilized.
Routine work may affect the routing procedure in context to manpower are job incentives,
lot size, light, heavy
or medium sized work etc.

44. 3)SCHEDULING
Scheduling is the determining of time and date when each operation is to be commenced and completed. It includes the scheduling of materials, machines and all other requisites of production.

45. DEFINITIONS:
—James C. Lundy
“The detailed planning of material, labour and machine time, so that materials and parts will be at the right place and at the right time so that a job can be completed within the time planned and in accordance with the requirements.”
—Kimball and Kimball Jr.
“The determination of the time that should be required to perform each operation and also the time necessary to perform the entire series as routed, making allowance for all factors concerned.”

46. Types of scheduling: (a) Master scheduling
(b) Manufacturing or operation scheduling
(c) Detail operation scheduling

47. (a) Master scheduling:
It relates to a specified period; say a month, a week or a fortnight.
It contains production requirements of a single product or different products during the specified period of time.
It is easier to prepare master schedule for a single product, but difficulty arises where the number of products are more. It is also known as over-all schedule.

48. Contd.
The preparation of master schedule varies from industry to industry according to type of production undertaken by them.
Master schedule usually contains information pertaining to direct material requirements, estimated requirements in man-hours per product at various work centre and estimated overhead expenses etc.

49. (b) Manufacturing or operation scheduling:
Manufacturing schedules are prepared in case of process or continuous type of industries.
Mass production industries, where uniform products of same size, colour and design etc., are produced, manufacturing schedules can be easily prepared.

50. Contd.
But , where a product is produced in different sizes, quantity, colour and design, it is bit difficult to prepare manufacturing schedule.
The important information contained in this schedule relates to name, number of the product, quantity to be produced each day, week or any other stipulated time.

51. (c) Detail operation scheduling:
This type of schedule relates to allocation of time for each production operation within each machine and manufacturing process in the organisation.
i)Scheduling Devices
ii)Utility Of Charts
iii)A Gantt Chart

52. i)Scheduling Devices:
To issue the actual information to the concerned departments, sheets out in weeks or months are used.
Such sheets contain the requirement for each product under the corresponding periods.

53. ii)Utility Of Charts :
Alternatively , such information can also be set out in a graphical form such as a bar chart.

54. ii)A Gantt Chart :
It is nothing but a Bar Chart with time on the horizontal axis and the factor to be scheduled on the vertical axis.

55. Both routing and scheduling are important elements in the process of product control.
They are interdependent on each other.
Proper route cannot be assigned to a product without proper schedule, at the same time schedules cannot be prepared properly without the knowledge of exact route of production.

56. 4.LOADING
Loading refers to the function of assigning work to machine and operators, on the shop floor or to a department in advance. The production control department should have a complete and correct information pertaining to the number of machine available and their operating characteristics such as speeds, capabilities, etc.,so that it can develop an optimum plant for using plant facilities. The loading function also involves the selection of the best machine, or the best substitute machine in the event of break

57. So loading determines who will do the work as routing determines where and scheduling determines when it shall be done.

58. Various steps that can be taken :
Asking the employees to work overtime.
Introduction of shift working.
Making use of alternative machines (which may perhaps have greater productivity)
Buying additional machines.
Making improvements in the methods of work; and
Sub- contracting those works that are not completed.

59. Contents of stock record
The stock record card should contain the following information in order to prove most useful and to avoid embarrassing situation at a future date:
Specifications pertaining to the material, viz.,
Description
Code number
Price of the material
Supplier’s name
Products in which it is used and their code number.

60. Particulars of bin balance, viz.,
Receipts with amount, date and goods returned note number.
Issues with amount receiving department and requisition number.
Balance in stock
Replacement level and/ or danger level corresponding to the safety level.

61. Details of the ordering record viz.,
Data ordered as well as the order number and quantity.
Actual amount received
Date on which received
Inspection result
Net passed into stores
Outstanding amount i.e.
Amount ordered – actual receipts ( less amount rejected)

63. 5.Despatching
Despatching is a sequencing of tasks that are waiting to be worked on at a work centre and releasing them to be performed at a particular time by a specific machine.
- James B. Dilworth

64. 5. Despatching (Or Implementing)
It is the initial action of production control.
It consists of :
- issuance of orders for taking up the production work according to the priority given in the schedule by the planning section, and
- Assginment of work to be concerned operators at their machines or work places
Despatching thus determines, by whom and where the work will be done.

65. Functions of despatching
To ensure that the right materials are moved from stores to machines and from operation to operation.
To distribute machine loading and schedule charts, route sheets, operation instruction cards.
To instruct tools department to issue the right tools, accessories and fixtures in time.
To direct inspection at various stages of production for inspection report.
To inform the follow- up section that production is starting.

66. Procedure or steps followed in despatching
Issuing materials from stores to different production processes.
Assignment of work to various machines and work places.
Procuring necessary tools, equipment and fixtures to be issued to workmen as and when needed.
Issuing necessary work orders, giving instructions and other information with regard to work to workers.

67. Recording the idle time of machines and workers.
To record and maintain the time taken from starting to the completion of each job and also record the total production time.
After the completion of work, all tools, implement drawings and charts etc., to be returned to respective issuing departments.
Recording the idle time of machines and workers.
To have liaison with routing and scheduling departments for effective performance.

68. Types of despatching
Centralized despatching
Under this system there is a centralized dispatching section from where orders and instructions are directly issued to workmen and machines.
Decentralized despatching
Under this procedure all work orders are issued to the foreman or despatch clerk of the department or section. It suffers from difficulties in achieving co-ordination among different departments.

69. Various cards and forms used in carrying the functions of despatching are:
Material requisition:
These are sent by workers working on different jobs for getting supply of materials from stores.
Job cards:
These cards are issued to each individual workers who enters his performance and time taken on a job.
Move tickets:
These tickets authorize the movement of materials in between various production operations.

70. Tools and gauge tickets:
These tickets authorize the issue of various tools and equipment from stores.
Inspection cards:
These cards show the quantity of work passed and rejected at each inspection point.

71. 6.Expediting (or follow-up)
Expediting ( also called progressing) is a progress- control function. It refers to the follow- up action undertaken to check and find out whether plans are actually being executed.
Expediting is a follow-up action and ensures that production takes place in accordance with plans.

72. Need of expediting Failure to deliver the materials on time.
Machine or power break- down.
Industrial action;
Delays at an earlier point on the production list
Employees absenteeism.
Errors of design , planning of human activity and so on.

73. Procedure followed Checking the progress continuously;
Determination of the causes of deviations from programme in order to see that production planning and control department is enabled to report back to the sales organizations.
Assisting in the removal of difficulties causing the deviations.
Liaising with other departments supplying materials and components to the particular department of the progress chaser.
Authorising and signing requisitions.
Preparation of a shortage list from information obtained from returns made by producing departments.

74. Aids to progress control
Flow charts
Production schedule
Automatic control
Machine loading
Inspection schedules
Material lists

75. Role of inventory control in production control
What is “inventory”? The term inventory refers to all classes of materials including finished goods. It includes raw materials, component parts, supplies, in-process goods and finished products.

76. Effective inventory control
Eliminates the risk of having idle man or machine time due to lack of materials.
Offers maximum services and satisfaction, to all customers; and
Minimises capital investment and cost of storage.
Effective inventory control is regarded as an integral part of materials management.

77. Aspects of inventory control
The optimum amount of inventory to be carried: The optimum size of inventory depends upon the needs of the production department. It will be necessary to keep on hand certain parts, materials and completed products for absorbing discontinuities in production and to handle uncertainity.

78. THE ECONOMIC LOT SIZE:
Two groups of costs determine the economic lot size for an order from a supplier or from a production department. They are: Preparation costs: preparation costs are basically fixed costs pertaining to the starting of production or the writing of an order for a purchase. they do not vary with the number of items in the lot. Example : costs involved in the setting up of machine’s, the clerical costs for writing an order and administrative costs of executive attention in placing a lot into production.

79. Carrying costs:
Carrying costs vary directly with the number of items involved. Examples: interest on capital, insurance, obsolescene, deterioration including wastage and leakage, handling, inventory taking etc. Formula : Q = √2US I where Q stands for ‘economic lot size’ U stands for annual use of the items in units per year. S stands for ‘set up cost each time a new lot is started.’ I stands for ‘ carrying cost per unit per year’

81. Choice of an ideal system of inventory control:
This system provides with four quantities that serve as critical decision rules as mentioned below-
Maximum inventory representing most of the items ever to be stocked;
Minimum inventory representing the safety reserve below which the inventory should not fall;
The re-order point representing the level of inventory at which an order is expected to be made;
The order size indicating the standard amount to be ordered.