Production Planning & Control

Unit - I
 Introduction

• Production: Production is the process by

which goods or services are created.

• Production can also be defined as a means of

converting the raw materials into finished
products by performing a set of
manufacturing operations in a pre-determined
sequence that transforms material from a
given to a desired form.
 The transformation may be done in one or in a
combination of the following ways:

• Transformation by disintegration, having

essentially one ingredient as input and producing
several outputs.
• Examples:
– making components from standardized materials on
machine tools,
– rolling steel bars from cast ingots,
– making components by smithy and forging operations
etc.
• Transformation by integration or assembly, using
several components as inputs and obtaining
essentially one product as output.

Examples:
• producing machines,
• household appliances,
• automobiles,
• radio and television sets etc.
• Transformation by service, where virtually no
change in the object under consideration is
perceptible but where certain operations may be
performed to change one of the parameters
which define the object.
• Examples:
– sizing and coining in press work,
– servicing and light repairs of automobiles,
– loading and unloading of trucks,
– transportation from one place to another which gives
place utility etc.
Planning

• Planning means preparing the scheme in advance

before the actual work is started.

• It may also be defined as the pre-determination of

future achievement to meet the desired objectives.

• Planning begins with an analysis of the given data, on

the basis of which a scheme for the utilization of the
firm’s resources can be outlined so that the desired
target may be most efficiently attained.
• Before starting the production, it is necessary to
decide in advance what to produce, how much to
produce, where to produce and where to sell.

• Therefore production planning is the pre-

determination of future achievements in type of
product, volume of production, quality, time,
price in manufacture and the resources required.

• It analyses all the problems likely to arise in

manufacture and decides in advance how these
difficulties can be overcome.
Control
• Control means the supervision of all the relevant
operations with the help of control mechanism that feeds
back the progress of the work.

• Controlling is made by comparing the actual performance

with the present standards (plan) and deviations are
analysed.

• The control mechanism is also responsible for subsequently

adjusting, modifying, and redefining plans and targets, in
order to ensure attainment of pre-specified production
goals, in the most efficient and effective manner.
DEFINITIONS OF PPC

• “Production planning and control may be

defined as the direction and co-ordination of
the firm’s material and physical facilities
towards the attainment of pre-specified
production goals, in the most efficient and
economical manner”.
• According to Samuel Elion: “The highest
efficiency in production is obtained by
manufacturing the required quantity of the
product, of the required quality, at the
required time, by the best and cheapest
method.”
• According to Charles A Koepke: “Production
planning and control may be defined as the
coordination of the series of functions
according to a plan which will economically
utilize the plant facilities and regulate the
orderly movement of goods during the entire
manufacturing cycle, from the procurement of
all materials to the shipping of finished goods
at a predetermined rate.”
 In simple words, production planning and
control means:

• A complete plan.
• A follow up procedure for determining how
closely the plans are being followed.
• A means to regulate the mechanism to meet
the requirements of proposed plan.
• A procedure to employ right quantity and
right type of personnel at the right place.
OBJECTIVES OF PPC

• There are 4M’s of production viz, men,

materials, machines and methods without
which production cannot be carried out.

• The production planning and control (P.P.C.)

system integrates and coordinates the use of
manpower, machines and materials for the
efficient production to meet the sales
requirements.
 The major objectives of PPC can be stated as:
• To design a system and plan, by which
production may be carried out with a view to
meet promised delivery date consistent with
minimum cost and quality standard.
• To ensure efficient utilization of production
facilities.
• To coordinate the production activities of
different departments.
• To maintain adequate but not excessive stock of raw
materials, work in process and of finished goods to
meet production requirements and delivery schedules
at the most economical level.
• To ensure production of right product in right quality
at the right time.
• To maintain flexibility in manufacturing operations, to
accommodate rush jobs or to meet contingencies.
• To co-ordinate labour, machines and equipment in the
most effective and economic manner.
• Ensuring smooth flow of materials by eliminating
bottlenecks if any, in production.
• Establishing targets and checking it against
performance.

• To provide alternative production strategies in

case of emergencies.

• To determine the nature and magnitude of

various input factors to manufacture the desired
output.

• In short PPC regulates and controls “how”,

“where” and “when” work is to be done.
 FUNCTIONS OF PRODUCTION PLANNING AND
CONTROL

The various functions of production planning

and control can be classified into three main
categories or phases as follows:

• Planning phase.
• Action phase.
• Follow up or control phase.
FUNCTIONS OF PPC
 Fore casting

Prior Planning Order writing

1. Planning Phase
Product design

Action Planning Process planning

and routing

Material control

Tool control

Loading

Scheduling

2. Action Phase Dispatching

Data Collection
Progress Reporting
3. Control Phase Data Interpretation

Expediting
Corrective action

Replanning

Figure: Functions of PPC

• These three phases as mentioned above make
up the main body of functions of PPC.

• There are other secondary functions which

are essential contributors to the efficient
performance of production, planning and
control.
Prior Planning: Prior planning implies that a
course of action is established in advance.
The whole activity must be planned and exists
on paper before the very first action takes
place.
– Fore-casting (Estimation of future work): Fore-
casting is defined as the estimation of future
activities i.e., the estimation of type, quantity and
quality of future work. These estimates provide
the basis for establishing the future requirement
for men, materials, machines, time and money.
• Order writing (Preparation of work authorization):
If the work is to be controlled, it must begin with a
specified documents authorizing it. So it means
giving the authority to one or more persons to do a
particular job.

• Product design (Preparation of specifications):

After work authorization has been prepared the
next step is to collect the information necessary to
describe the work in details. This includes blue
prints or drawings, a list of specification, a bill of
material and so on.
Action Planning:
– Process planning: The determination of most
economical method of performing an activity, all
factors being considered.
– Routing: The arrangement of work stations is
determined by the route.
– Material control: Determination of material
requirements and control of material (inventory
control).
– Tool control: Tool control may be subdivided into
two categories:
• Design and procurement of new tools.
• Control storage and maintenance of tools after
procurement.
• Loading: Determination and control of
equipment and manpower requirements.
Loading may be defined as the assignment of
work to the facility. The facility may be
equipment, manpower or both.

• Scheduling: Determination when the work is to

be done. Scheduling consists of time phasing of
loading (workload) i.e., setting both, starting and
ending time for the work to be done.

• The common practice dictates that routing,

loading and scheduling be performed
simultaneously.
 Action Phase:
• The work is started in the action phase. There
is only one production planning activity in
action phase i.e., dispatching. Dispatching is
the transition from the planning phase to
action phase.
• It consists of actual release of detailed work
authorization to the work centres.
 Follow-up or Control Phase:
• Once the work is started in an activity it is necessary to
evaluate continuously the progress in terms of plan so
that deviations can be detected and corrected as
quickly as possible. The control phase accordingly
consists of two parts:

• Progress reporting : (Data collection). The first step in

progress reporting is to collect data for what is actually
happening in the activity (Progress of work).

• Data interpretation: After the data has been

collected, then it is necessary to interpret it by
comparing the actual performance against the plan.
 Corrective Action:

• Expediting: If the data collected from the production

unit indicates that there is significant deviation from
the plan and the plan cannot be changed, then some
action must be taken to get back on plan.

• Replanning: It should be emphasized that the plan is

not to be changed but to be followed, however, if after
expediting to correct deviation it is found that, it is
impossible to perform according to plan. It would be
necessary to replan the whole affair. It may also be
found that there were errors made while developing
the original plan. In all such cases replanning is
necessary.
 ORGANISATION OF PPC DEPARTMENT

Plant Manager
Manufacturing

Process Factory Production Planning & Plant

Engineering Production Control Maintenance

Material Tool Control Estimating Scheduling Order Dispatching

Control & & Write up &
Routing Control Follow up
TYPES OF PRODUCTION (MANUFACTURING) SYSTEM
Modes of manufacture, which may affect
production planning and control system,
include three main relevant factors:
• The type of production i.e., the quantities of
finished products and regularity of
manufacture.
• Size of the plant.
• The type of industry i.e., the field of
specialization of the plant.
 The types of production systems can be
broadly grouped into three headings
according to the volume of production and
the regularity of manufacture:

• Job production.
• Batch production.
• Continuous production.
Job Order Production: Job order production
is the manufacture of products to meet
specific customer requirements of special
orders.
The quantity involved is small.
• This type of production is mainly concerned
with special projects, models, proto-types,
special machinery or equipment to perform
specialized and specific tasks, components, or
subassemblies to provide replacement or
repairs in existing machinery etc.

• Examples, turbo-generators, large engines,

material handling systems, shipbuilding and
many other manufacturing activities are of the
job production group.
• Three types of job production can be defined,
according to the regularity of manufacture:

– A small number of pieces produced only once.

– A small number of pieces produced intermittently
when the need arises.
– A small number of pieces produced periodically at
known intervals of time.
• When the order is to be executed only once,
there is little scope of improvement of
production techniques by employing costly
method studies, research, special tools, or jigs
and fixture, unless the technical requirements
justify it.

• But, if the order is repeated, tooling and jigs as

well as specially designed inspection gauges
should be carefully considered because the
effort on production time may be considerable.
• In this type of production, the products are
made when orders are received from
customers. One order may be all together
different from the other.

• Therefore, prior planning becomes complex.

Skilled labour is necessary to handle variety of
jobs. General purpose equipment is used
since it can handle variety of jobs.
• The output of the shop in job production is
mainly governed by plant capacity and as soon
as the load presented by incoming customer
orders exceeds this out put, a queue of orders
is formed.

• When immediate increase in plant capacity is

impracticable, the length of the queue is a
major factor governing the sales policy of such
plant and a certain amount of discrimination
in order selection may be essential.
Characteristics of Job Order Production
– Small production runs: Job order production is
characterized by the manufacture of one or few
numbers of single product designed and
manufactured strictly to customer’s specification.

– The flow of materials: The flow of materials and

components between different stages of
manufacture is highly discontinuous due to
imbalanced operation wise work content.
• Manufacturing cycle time: Relatively long delays
occur at the assembly as well as at the material
processing stages due to lack of materials or
components, imbalanced work flow, design changes,
design errors detected during manufacturing etc.

• Moreover, at times, the time needed to design the

special project undertaken exceeds its
manufacturing time. All these factors tend to
lengthen the manufacturing cycle time.
– Layout of plant and equipment: The machines
are arranged according to process layout.
Because the operations and their sequence
change from product to product.

– Skill required: Highly skilled and versatile workers

are necessary. They are expected to do the work
independently and display a great deal of initiative
and judgment.
– Quality of supervision: Highly competent general
engineers are usually engaged as supervisors,
practical men with thorough training, capable of
taking independent charge of each contract are
employed to work at site. Close supervision is
also necessary.

– Cost of production: The unit cost of production is

high. Since the firm cannot take the advantages
of large scale buying and automation.
Batch production
• Batch production is the manufacture of a number of
similar articles, either to meet a specific order or to
satisfy continuous demand.
• When the production of the batch is terminated the
plant and equipment are available for the production
of similar or other products.

• If the order is to be executed only once, there will be

less justification for providing elaborate production
aids than when the order is repeated.
• Batch production can be classified into three
types
• A batch produced only once.
• A batch produced repeatedly at irregular intervals
when the need arises.
• A batch produced periodically at known intervals
to satisfy continuous demand.
Characteristics of Batch Production

• Short runs: Batch production is characterized

by short production runs and frequent changes
in set ups.

• Investment: Needs high investment. The

production is generally made to stock.

• Planning: Planning, routing and scheduling

changes with fresh batch of order.
• Skill of labour: Skilled labour capable of handling
variety of jobs is required.

• Quality of supervision: The supervisors need

considerable knowledge of specific process. The
amount of supervision required in batch production is
lower than that of job order production.

• Plant layout: Plant and equipment are procured and

arranged to obtain flexibility. General purpose
machines and handling equipments capable of
performing variety of operations with minimum
setup times are installed according to process layout.
• Material handling: Material handling in batch
production is less as compared to job order
production.

• Flexibility in production schedule: Disruptions due

to machine breakdown or absenteeism do not
seriously affect production as another machine can
be used or another operator from another machine
can be shifted.
Continuous Production
• Continuous production is the specialized manufacture
of identical articles on which the equipment is fully
engaged.

• Continuous production is normally associated with

large quantities and high rate of demand.

• Since identical articles are produced, the operations

are repetitive, production of auxiliary aids, such as
special tools, jigs and fixtures material handling
system, inspection devices can be used
advantageously.
• Continuous production can be classified into
two types:

–Mass production.
–Flow production.
• In mass production, a large number of identical
articles are produced, but inspite of advanced
mechanization and tooling, the equipment need not
be specially designed for this type of article only.
Both plant and equipment are flexible enough to
produce other products involving same production
processes.

• If the management decides that a certain line should

be discontinued, the machinery can be switched over
to produce another article. Such change in policy
usually does not involve major modifications in plant
layout but change in tooling may be quite possible.
• In flow production, the plant, its equipments, and
layout are primarily designed to manufacture a
particular product. Flexibility in selection of products
for manufacture is confined to minor modifications
in layout or design of models.

• Notable examples are automobiles, engines,

household machinery, chemical plants etc.
• A decision to switch over to a different kind of
product may not only result in extensive
tooling (this is often needed even when only
the model is changed) but also in basic
changes in layout and equipment policy
especially when special purpose machines and
complex material handling systems are
involved.
• Production planning and control in continuous
production is usually far simpler than in job or
batch production.

• Extensive effort is required for detailed

planning before production starts, but both
scheduling and control need not usually be very
elaborate.
Characteristic of Mass and Flow Production
– Flow of material: The flow of materials is
continuous and there is little or no queuing at any
stage of processing.
– Machines and plant layout: Special purpose
machines are used and plant and assembly stages
are laid out on the basis of product layout.
– Material handling: Material handling is
comparatively less firstly because materials move
through a short distance between stages and
secondly the material handling activity is mostly
mechanized by conveyors and transfer machines.
– Skill of labour: Relatively low skilled labor is
necessary.
– Manufacturing cycle time: The manufacturing
cycle time is very short. The machine capacities
are balanced by line balancing.
– Quality of supervision: Supervision is relatively
easier as only few instructions are necessary only
at the starting of the job; since standard jobs are
produced.
• Flexibility in production schedules: Interruptions
due to breakdowns and absenteeism seriously affect
production as stoppage of one machine in the line
usually disturbs the working of other machines.
Systematic preventive maintenance is necessary to
prevent interruptions in production.
Relation between production planning and control

PRODUCTION OBJECTIVES
ACTIVITY
Men
Goods and
Materials
Services
Machines

CONTROLLER COMPARISON PRODUCTION

PLAN

Modify Plan
 INTERNAL ORGANIZATION OF PPC
DEPARTMENT
The PPC department must be carefully
organized to carry out the activities and
procedures established in the planning
system.