BASICS OF INDUSTRIAL ENGINEERING

UNIT- II: PRODUCTION PLANNING AND CONTROL

Unit II
 Introduction to PPC
• Products are manufactured by the transformation of raw materials into
finished goods. This is how the production is achieved.

• Planning looks ahead, anticipates possible difficulties and a decides in

advance as to how the production, best, be carried out.

• The control phase make sure that the planned/programmed production

is constantly maintained.
• A production planning and control system has many functions to
perform, some, before the arrival of raw materials and tools, and
others while the raw material undergoes processing. The various
functions are as follows.
• (a) Forecasting: Estimation of type, quantity and quality of future work.

• (b) Order writing: Giving authority to one or more persons to undertake a particular
Job.

• (c) Product Design: Collection of information regarding specifications, bill of

materials, drawings, etc.

• (d) Process planning and routing: Finding the most economical process of doing a
work and (then) deciding how and where the work will be done.

• (e) Material control: It involves determining the requirements and control of

materials.

• (f) Tool control: It involves determining the requirements and control of tools used.
• (g) Loading: Assignment of work to manpower, machinery, etc.

• (h) Scheduling: It is the time phase of loading and determines when and in what
sequence the work will be carried out. It fixes the starting as well as the finishing time
for the job.

• (i) Dispatching: It is the transition from planning to action phase. In this phase the
worker is ordered to start the actual work.

• (j) Progress reporting: Data regarding the job progress is collected.

• (k) Corrective action: (i) Expediting means taking action if the progress reporting
indicates the deviation of the plan from the originally set targets. (ii) Replanning of
the whole affair becomes essential, in case of expediting fails to bring the deviated
plan to its actual (right) path.
Hindustan Unilever products
Procter & Gamble Products
 Objectives of Production planning and control
1. Systematic planning of production activities to achieve the highest efficiency in production of
goods/services.

2. To organize the production facilities like machines, men, etc., to achieve stated production
objectives with respect to quantity, quality, time and cost.

3. Optimum scheduling of resources.

4. Coordinate with other departments relating to production to achieve regular balanced and
uninterrupted production flow.

5. To confirm to delivery commitments.

6. Materials planning and control.

7. To be able to make adjustments due to changes in demand and rush orders.

 Definition:
• Production systems are systems that
are used to produce goods or services.
These systems often involve multiple
steps or processes that must be
Production completed in order to produce the final
product.
systems • The production system is a
combination of three components that
are Input, Process, and Output. All
these components help to produce
goods and services.
Production: Implies the
transformation of several Inputs into
Outputs, i.e., the Product.
Production system: It is a mechanism
consisting of a set of things working
together.

It is a combination of three
significant components given below:
1. Input (Capital, Machines,
Equipment & Tools, Labour)
2. Conversion Process
3. Output (Goods and Services)
Types of production systems
Continuous Production System
 • Continuous flow: Continuous
dedicated production of large
amounts of bulk product.
• Examples include Chemical plants, Oil
refineries, steel and Cement industry.
Continuous • Mass production of discrete products:
production Dedicated production of large
quantities of one product (with
systems perhaps limited model variations).
• Examples include automobiles,
appliances, and engine blocks.
Mass Production
 • A paint shop, a machine tool shop, a
commercial printing shop, a machining
Job Shop center, and other factories that create
customized products in small batches
Production and offer customization.
• Examples: Prototypes, aircraft, bus,
System machine tools, watches, and other
equipment
Job production System
All the products manufactured under a batch are similar in terms of
type, cost, efforts, consumption of materials or specifications.

This is when the same product is made for a while, then the production
is switched to another product. They will return to the production of
the first product again later on.

Examples include books, clothing, certain industrial machinery, and

fast-moving consumer goods (FMCG) etc.
 Production Cycle
Definition:

• The production cycle is the sequence of production steps that a

product or service goes through from its planning to its delivery to the
customer. It includes the steps of product design, production planning,
raw material sourcing, manufacturing, quality control, packaging, and
distribution.
Each step of the production cycle is essential to ensure the product meets the customer’s expectations.

• Designing

• Planning

• Procurement

• Sourcing materials

• Manufacturing

• Quality Control

• Packaging and Shipping

• Distribution

• Customer Service
 Stages of the Production Cycle
• The stages of the production cycle in manufacturing can vary significantly
from one business to another depending on the type of products and services
being produced, the complexity of the production process, and the scale of
the operation.

• For example, a company producing a single product may only have a few
stages in the production cycle, such as design, fabrication, assembly, testing,
and packaging. A company with multiple product lines may have a much
longer production cycle with additional stages, such as quality control,
inventory management, and distribution.
 Forecasting
Forecast: A prediction, projection, or estimate of some future activity, event, or occurrence.

Types of Forecasts
1. Economic forecasts
o Predict a variety of economic indicators, like money supply, inflation rates, interest rates,
etc.
2. Technological forecasts
o Predict rates of technological progress and innovation.
3. Demand forecasts
o Predict the future demand for a company’s products or services.
 Types of forecasting

• Qualitative methods: These types of forecasting methods are based on

judgments, opinions, intuition, emotions, or personal experiences and are
subjective in nature. They do not rely on any rigorous mathematical computations.

• Quantitative methods: These types of forecasting methods are based on

mathematical (quantitative) models, and are objective in nature. They rely heavily
on mathematical computations.
 1. Delphi Method
Qualitative 2. Market Survey
Forecasting
3. Executive Opinion
Methods
4. Sales Force Composite
Delphi Method:

An iterative technique for obtaining a consensus agreement from a group of experts, without the
problems inherent in group decision making.

• The procedure works as follows:

• First, give a set of questions to each expert, who provides answers (forecasts) independently from
the other experts. The responses are collected, and numeric responses are statistically summarized.

• If a consensus was not obtained, return the summarized responses to the experts, along with any
comments made by the experts (anonymously), and have them revise their forecasts based on this
data.

• Repeat until either a consensus is reached (the answers converge) or else a "stalemate" occurs (no
convergence can be obtained).
Market Survey:

Approach that uses interviews and surveys to judge preferences of customer and to assess
demand.

• Market surveys are generally structured questionnaires submitted to potential customers

in the market. They solicit opinions about products or potential products, and also often
attempt to get an understanding of the likelihood of customer demand for products or
services. If structured well, administered to a good representative sample of the defined
population, and analyzed correctly, they can be quite effective, especially for the short
term. A major drawback is they are fairly expensive and time-consuming if done
correctly.
Sales Force Composite

Approach in which each salesperson estimates sales in his or her region

• It is a forecasting method used to forecast the sales by adding up individual sales agents
forecasts for sales in their respective sales territories. Sales agents have the most direct
interaction with the customers and provide many valuable insights which help the
companies boost their sales.

• Flipside of using this technique is that the company forecast will only rely on sales agents
who may use too optimistic or too pessimistic approach based on their latest experience.

• Another drawback of this technique is that some agents may give a lower forecast than
the actual potential of sales to easily achieve their target and get the bonus money from
the company on the extra sales generated.
Executive Opinion

Approach in which a group of managers meet and collectively develop a forecast .

• In executive opinion, each executive submits an estimate of the company’s sales,

which are then averaged to form the overall sales forecast. The advantages of
executive opinions are that they are low cost and fast and have the effect of
making executives committed to achieving them. However, there are
disadvantages to the method, similar to those of the sales force composites. If the
executives’ forecast becomes a quota upon which their bonuses are estimated, they
will have an incentive to underestimate the forecast so they can meet their targets.
A junior executive, for example, is not likely to forecast low sales for a product
that his or her CEO is pushing, even if low sales are likely to occur.
Functions of
Production
Planning and
control
 Product Design and Product Development

• The economic success of most firms depends on their ability to

identify the needs of customers and to quickly create products that
meet these needs and can be produced at low cost. Achieving these
goals is not solely a marketing problem, nor is it solely a design
problem or a manufacturing problem; it is a product development
problem involving all of these functions.
 Introduction to product design
• A product is something sold by an enterprise to its customers.

• It may be a consumer product such as Sugar, Laundry detergent, cigarettes, television or an industrial
product, example, a lathe , or an overhead bridge crane

• It is essential to design a product before starting its manufacture.

• The idea for new or improved products comes from many sources, such as

(a) Marketing

(b) R&B department

(c) Competitor products in the market

(d) Customer’s suggestions and complaints

• When a new idea has been conceived and then developed to the point at
which it shows itself to be both technically and commercially viable, it is
considered as how the product should be made.
• Making of a new or modified product will require the services of the
following departments of a company.
I. Marketing
II. R&D
III. Design
IV. Manufacture
V. Accounts and Sales Personnel
• Marketing: Marketing gives advice on market trends.

• R & D: R & D develops new product.

• Desing: Design department modifies and extends the range of an original idea. The
design department consists of designers, engineers, and draughtsman. Product
design deals both with form and function. Form design takes care of product’s
shape and appearance whereas functional design deals with its working.

• Manufacturing: Persons working in design department generally invite

representatives from the manufacturing and sales divisions to view the preliminary
design and collect their ideas and comments for further design modification if any.
 Product Development
Introduction to Product development

• Development is carried out after applied research which follows pure research.

• Development concerns the most economically feasible method for applying the principles identified through
research.

• Development involves design/redesign and fabrication of new or modified product and then testing it to find
its usefulness.

Product development is essential in order to,

I. Meet changing customer needs

II. Manufacture improved and low-cost products

III. Maintain (one’s) sales position and profit margin.

Product research and development are concerned with all aspects of the product
design and applications including it’s

I. Functional efficiency

II. Quality

III. Unexplored uses,

IV. Investigation of materials and possible substitutes

V. Utilization of waste products, and

VI. Standardisation and customer satisfaction

 Products can be developed by:

(i) Imitation, i.e., marketing another product similar to one in the market, example, when one concern introduced a refrigerator with
automatic defrosting unit, others imitated and marketed their own refrigerators having such a unit.

(ii) Adoption: developing an improved product for an already existing in the market, example, the introduction of electronic and
automatic clocks (against mechanically spring wound clocks)

(iii) Invention: the action of inventing something, typically a process or device. Example synthetic fibres, nylon, etc., for making
garments and other items of use.

• Product development may involve a

I. Small refinement, or
II. A major redesign

• Frequently a completely new design results, example, the development of more reliable Rotary, fuel injection pumps for diesel
engines in place of old reciprocating types of pumps.

• Product development generally involves considerable expenditure; but a concern has to meet it if it has to survive when competition
is hard.
 Product development procedure
• The various steps involved in developing a product are discussed below

a. Get new ideas

b. Separate the good and feasible ideas

c. Evaluate ideas technically

d. Evaluate ideas from market’s point of view

e. Take the final decision

f. Get into production, end

g. Introduce product into the market

(a) New ideas can be obtained

I. By imitation

II. By adoption

III. By invention

IV. From dealers and customers

V. By advertising - asking people to send their ideas announcing prices for the best idea

(b) Separate the good, Meritorious and feasible ideas from amongst the many received in above step.

I. Screening of ideas may be done by a committee consisting of managers of R&B, production, sales and other
departments related with the product development.
(c) The selected ideas are evaluated technically as regards,

I. the method of manufacture,

II. labour and equipment requirements,

III. performance characteristics of the product,

IV. cast of manufacture, etc.

(d) Selected ideas are evaluated as regards their acceptability by the customers.

• The first evaluation is simply a cursory survey by salesman

• If the idea looks promising a nationwide market survey can be conducted.

• (e) Based on the information collected on technical and market aspects of the new product it is decided finally
as weather to go ahead for production or to forget the idea.
(f) If it is decided to take up the idea

I. The product is designed

II. Equipment’s are ordered

III. Materials are procured

IV. Workers are selected and trained

V. Control systems etc., are established, and it is decided whether to manufacture the product on mass scale or
job-shop basis
(g) While the product is under manufacture, preparations are done to introduce the product into the
market and to impress the market with the developed product. The following aspects are explored.

I. Size, location and characteristics of market,

II. Advertisement policies,

III. Appealing packaging,

IV. Channels of distribution,

V. Price, discount and guarantees,

VI. Service after sale