Gaafar 2005Production and Inventory Control- Introduction (1)

Production Planning and Control

Introduction

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Overview

• The main components of the PPC system

• Qualitative/quantitative forecasting

•Steps In PPC

•Aggregate planning

• Material requirement planning

• Inventory control

• Scheduling

• The theory of constraints and its applications

• Push and Pull production systems

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PPC

• MEANING:- Production planning and control can be viewed as the nervous system of the production operation. It comprises planning, routing, scheduling, dispatching & follow up in the productive process. Production/Operations Planning and Control: Planning, direction and co-ordination of the firm’s facilities to achieve the predetermined production objectives in the most economical manner

Definition: “The highest efficiency in production is obtained by manufacturing the required quantity of the product at the required time, by the best & cheapest method”

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Production Planning and Control

Demand forecasting

Sales and order entry Customer

Production

Inventory Vendors

Aggregate planning

Inventory management

Shipping and

receiving

Materials requirement

planning

Shop-floor scheduling and control

The Production Control System

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STEPS OF PRODUCTION PLANNING ANDCONTROL

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Scope/steps of Production Planning and Control

PPC encompasses• Materials• Methods• Machines and Equipments• Manpower• Routing• Estimating

Loading and SchedulingDispatchingExpeditingInspectionEvaluatingCost control

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Main Functions of Production Planning and Control Department

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PRODUCTION PLANNING.

• It may be defined as the technique of foreseeing every step in a long series of separate operations, each step to be taken at the right time & in the right place & each operations to be performed in maximum efficinecy.It helps producers to work out the quantity of material , man power , machine & money required for producing predetermined level of output in given period of time.

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><<>Routing:

Under this, the operations, their path and sequence are established. Toperform these operations the proper class of machines and personnel required arealso worked out. The main aim of routing is to determine the best and cheapest

sequence of operations and to ensure that this sequence is strictly followed. Insmall enterprises, this job is usually done by entrepreneur himself in a ratheradhoc manner.

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LOADING

• Assignment of work to manpower, machinery etc.It includes the assignment of the work to the operators at their machines or work places.It will determine who will do the work as routing determines where scheduling determines when it shall be done.

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Loading:

The next step is the execution of the schedule plan as per the routechalked out it includes the assignment of the work to the operators at theirmachines or work places. So loading determines who will do the work as routingdetermines where and scheduling determines when it shall be done. Gantt Chartsare most commonly used in small industries in order to determine the existingload and also to foresee how fast a job can be done. The

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Scheduling:

It means working out of time that should be required to perform eachoperation and also the time necessary to perform the entire series as routed,making allowances for all factors concerned. It mainly concerns with timeelement and priorities of a job. The pattern of scheduling differs from one job toanother which is explained as below:

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Production schedule:

The main aim is to schedule that amount of work whichcan easily be handled by plant and equipment without interference. Its notindependent decision as it takes into account following factors.(1)Physical plant facilities of the type required to process the material beingscheduled.(2)Personnel who possess the desired skills and experience to operate theequipment and perform the type of work involved.(3)Necessary materials and purchased parts.

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Production control:

Production control is the process of planning production inadvance of operations, establishing the extract route of each individual item partor assembly, setting, starting and finishing for each important item, assembly orthe finishing production and releasing the necessary orders as well as initiating thenecessary follow-up to have the smooth function of the enterprise. The productioncontrol is of complicated nature in small industries. The

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Dispatching:

Dispatching involves issue of production orders for starting theoperations. Necessary authority and conformation is given for:1. Movement of materials to different workstations.2. Movement of tools and fixtures necessary for each operation.3. Beginning of work on each operation.4. Recording of time and cost involved in each operation.

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Follow up:

Every production programme involves determination of the progress of work, removing bottlenecks in the flow of work and ensuring that the productive operations are taking place in accordance with the plans. It spotsdelays 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.

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Inspection:

This is mainly to ensure the quality of goods. It can be required as effective agency of production control.

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Corrective measures:

Corrective action may involve any of those activities ofadjusting the route, rescheduling of work changing the workloads, repairs andmaintenance of machinery or equipment, control over inventories of the cause ofdeviation is the poor performance of the employees. Certain personnel decisionslike training, transfer, demotion etc. may have to be taken.

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Classification of Production Planning and Control Functions

The functions of PPC can be classified under the following :i. Materials ii. Methodsiii. Machines and Equipments iv. Routingv. Estimating vi. Loading and Scheduling

Schedulingvii. Dispatchingviii.Expediting or Progressingix. Inspection x. Evaluating or Controlling

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Production Planning and Control

Purpose1.Effectively utilize limited resources in the production of goods so as to satisfy customer demands and create a profit for investors. 2.Resources include the production facilities, labor and materials. 3.Constraints include the availability of resources, delivery times for the products, and management policies. 4.Receiving orders for customers5.Direction and control of the movement of materials through production process..6.Maintaining stocks of materials and parts.7.Analyzing the orders

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High Profitability

LowCosts

Low UnitCosts

High Throughput

Less Variability

High Utilization

LowInventory

QualityProduct

HighSales

Many products

Fast Response

MoreVariability

High Inventory

LowUtilization

ShortCycle Times

High CustomerService

Production Objectives

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The Production/Operations Management Cycle

Role of Production Planning and Control in Operations Management

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Material Requirement Planning

• Objective: Determine all purchase and production components needed to satisfy the aggregate/disaggregate plan.

• Issues:

– Bill of Materials: Determines components, quantities and lead times.

– Inventory Management: Must be coordinated with inventory.

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Sequencing and Scheduling

• Objective: develop a plan to guide the release of work into the system and coordination with needed resources (e.g., machines, staffing, materials).

• Methods:

– Sequencing:• Gives order of releases but not times.

– Scheduling:• Gives detailed release times.

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Materials Requirements planning

Materials Requirements planning (MRP-1 or mrp): Computer based information system for ordering and scheduling of dependent demand inventories.

Objectives of MRP1. To improve customer service by meeting delivery

schedules promised and shortening delivery lead times.2. To reduce inventory costs by reducing inventory levels.3. To improve plant operating efficiency by better use of

productive resources.Three main purposes of a basic MRP system are to:

• Control inventory levels• Assign operating priorities• Assign capacity to load production systems.

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Manufacturing Resource Planning (MRP II ): Broad-based resource co-ordination system involving other areas of a firm in the planning process, such as marketing, finance and the human resource.

Three important functions of MRP are:• Order planning and control• Priority planning and control• Providing a basis for planning capacity requirements.

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Enterprise Resource Planning Enterprise Resource Planning (ERP); A software

package developed for optimum use of resources of an enterprise in a planned manner. It integrates the entire enterprise starting form the supplier to the customer, covering, logistics, financial and human resources.

• Features of ERP1. Accommodating variety2. Integrated Management Information3. Seamless integration4. Supply chain management5. Resource management6. Integrated data model

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• Scope of ERPa. Financialsb. Logisticsc. Human resourcesd. Work flow

• Application of ERPERP is gaining popularity in India at a rapid pace. This is mainly due to the need for reducing costs especially when the sales are sluggish in the sub-merging markets.

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TECHNIQUES OF PRODUCTION CONTROL

• GANTT CHART

• PERT & CPM

• BAR CHART

• LINE OF BALANCE.

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